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Suit Filed Against Midnight Backroom Deal

A complaint was filed in Sacramento Superior Court Friday to set aside the late-hour, hush-hush deal that gives Centre City Development Corp. authority to boost its borrowing power as a way to make way for the downtown Chargers stadium proposal that would cost the City at least $500 million and probably closer to $700 million. Simon Moghadan sued the California State Board of Equalization, Department of Finance and Department of Housing and Community Development over the deal. The plaintiff's law firm is Aguirre, Morrison & Severson. The suit seeks to restore property taxes that would otherwise be diverted from the City of San Diego to the Redevelopment Agency, according to Mike Aguirre, former city attorney and lawyer for the firm.

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A complaint was filed in Sacramento Superior Court Friday to set aside the late-hour, hush-hush deal that gives Centre City Development Corp. authority to boost its borrowing power as a way to make way for the downtown Chargers stadium proposal that would cost the City at least $500 million and probably closer to $700 million. Simon Moghadan sued the California State Board of Equalization, Department of Finance and Department of Housing and Community Development over the deal. The plaintiff's law firm is Aguirre, Morrison & Severson. The suit seeks to restore property taxes that would otherwise be diverted from the City of San Diego to the Redevelopment Agency, according to Mike Aguirre, former city attorney and lawyer for the firm.

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NOTE: SECOND SUIT FILED AGAINST BACKROOM DEAL. A second suit has been filed against the backroom deal that was set up to sneak through a massive gift to the Chargers. San Diego attorneys Catherine Rodman and Scott Dreher, and a Pasadena attorney filed suit on behalf of low-income residents against the Redevelopment Agency, which is the city council. The suit charges that the last-minute deal, kept secret from the public, violates the state Constitution and redevelopment law. Among other things, the suit charges that the City should have amended its downtown development law before the deal was slipped through, the bill was passed only one day before being read when there should have been a three-day delay, and there was no official finding of blight. (The no-blight finding is also made in the Aguirre suit.) The lawyers explain that in 1992, a $3 billion cap was placed on how much property tax revenue could be collected and reinvested in the downtown area. But that wasn't enough to permit the Chargers deal to go through.

Nov. 19, 2010
  1. CCDC's Blight study is nowhere near completed. They just recently got the OK to "fund" their $500,000 Blight Study, and it will take a long time to complete.

  2. I DO believe that the Brown Act* was violated because there was NONE of the proper noticing or public oversight that the Brown Act requires.

  3. http://www.sandiego.gov/planning/community/pdf/cow/brownactppt.pdf

  4. This was clearly an "end run" attempt to get this passed just before many Leaders left Office and probably would not have been even possible without the huge potential benefit down the road for all of them to get into the good graces of the Ultra Wealthy Chargers Owners...

  5. CCDC has been "giving away" much of its Low and Low-Mod 20% required set aside money for use in other areas of San Diego (instead of building that housing Downtown).

BTW: NTC is another San Diego Redevelopment Area that has given ALL it's its Low and Low-Mod 20% required set aside money away to other ReDev. Projects Areas, instead of providing that housing at Liberty Station! Our Leaders are selectively insuring that certain portions of San Diego will have more or less Low and Low-Mod housing, which affects property values and Quality of Life in those neighborhoods!

Nov. 20, 2010

A lot of laws were violated in this deal. I hope some of those laws are criminal ones, and somebody will pursue them. Best, Don Bauder

Nov. 20, 2010

My question is does this suit accomplish anything? Does it just give them the money back to build more ugly "non-affordable" housing? Im all for suing them but we need massive reform in regards to what redevelopment agencies can do w/ the money.

They currently owe California over 51 billion dollars and the LA Times article last month claimed their investigation found barely any affordable housing was created w/ this money. It just simply paid developers for private development.

Will this suit just propagate that behavior by returning the reigns to the corrupt "affordable housing" developers?

http://www.coalitionforredevelopmentreform.org/references/morrreport.php

Nov. 20, 2010

There are two suits -- Aguirre's and Dreher's. You are absolutely right that affordable housing is a requirement of development. In San Diego, it hasn't happened -- at all. Criminal prosecution? Best,Don Bauder

Nov. 20, 2010

Prop 22 also was a HUGE power grab for the developers. It said that in order to deal w/ the budget crisis you could not take 1 penny of their massive 10% of property tax revenue. Any cuts have to come from schools or other neccessary things but can NOT come from private developers.

My issues are 3 fold: 1: The quality of garbage they are building w/ these tax dollars. they are paying themselves as if they are giving us the Taj mahal while delivering "tenement slums" (as they were described in Orchids and Onions. Thus they are using money intended to fix blight to build blight.

2: They are destroying amazing quality historical homes and buildings, 100s of original craftsmans that could be rehabbed as affordable housing and beautiful buildings like Gustafson Furniture store and the old 7 up bottling plant and on and on.

3: the emminent domain abuse as in the Grantville case where elderly citizens are being tossed from a wonderful mobile home community that they have lived in for years, a community that is by no means blighted. So they are lying and fabricating blight.

This has to stop. there is no accountability.

here is a great quote from the above website for redevelopment reform....

This unknown government currently consumes 10% of all property taxes statewide - $2.1 billion in 2001. It has a total indebtedness of over $51 billion. It is supported by a powerful Sacramento lobby, backed by an army of lawyers, consultants, bond brokers and land developers. Unlike new counties, cities and school districts, it can be created without the vote of the citizens affected. Unlike other governments, it can incur bonded indebtedness without voter approval. Unlike other governments, it may use the power of eminent domain to benefit private interests. This unknown government provides no public services. It does not educate our children, maintain our streets, protect us from crime, nor stock our libraries. It claims to eliminate blight and promote economic development, yet there is no evidence it has done so in the half century since it was created. Indeed, it has become a rapidly growing drain on California's public resources, amassing enormous power with little public awareness or oversight.

Nov. 20, 2010

RE: "Indeed, it has become a rapidly growing drain on California's public resources, amassing enormous power with little public awareness or oversight."

ReDev. has become the new "Back Door" to leveraging money for payoff projects that get awarded to City Councilmember supporters and all those friendly Consultants that are already on the City's contract list. These folks get to do all the "work" while also supporting all the Planning Firms and their booster Org.'s like Walk San Diego, whose feel good message is walkability; but translates to Density in linear ghettos located nowhere near the wealthy and demands ongoing Redev.

Nov. 20, 2010

Real estate developers and the politicians to which they pay money have completely hijacked and distorted the entire concept of redevelopment. It is supposed to create affordable housing. It is not doing so. It is supposed to relieve blight. It doesn't because they use fraudulent methods to state that there is blight. It is time for criminal cases to stop this fraud. It won't come from San Diego, but might from Sacramento. Best, Don Bauder

Nov. 20, 2010

The San Diego real estate establishment, which has the mayor in its pocket, is abusing San Diego in many ways, as your post points out. Isn't it time to abolish CCDC? Launch criminal cases against real estate developers and their politicians? Make San Diego for San Diegans? Best, Don Bauder

Nov. 20, 2010

Citizens HAVE to revolt against these lawyers. Best, Don Bauder

Nov. 22, 2010

Hi Don,

Are you in contact with Brian Peterson of the Grantville Action Group?

http://grantvilleactiongroup.com/

Don, you may want to give Brian a call and hear what happened at the hearing last week. As you may know, they're suing CCDC, the City, and the County for the illegal transfer of redevelopment funds from Grantville to downtown.

Here's a short video explaining the situation:

http://www.youtube.com/watch?v=k9Tczeiw0lU

Best,

Fred

Nov. 20, 2010

Maybe it Brian Peterson that should get in touch with Mike Aguirre, Morrison & Severson...

Nov. 20, 2010

Good idea. The law firm's phone number can be reached through information. Best, Don Bauder

Nov. 20, 2010

I am painfully aware of that Grantville fraud. Remember, a major victim of the redevelopment scam is education. Best, Don Bauder

Nov. 20, 2010

and there was no official finding of blight. (The no-blight finding is also made in the Aguirre suit.)

The term "blight" should be removed from government redevelopment authority.

It has become a flat out J-O-K-E. Blight can be a 5 star Ritz hotel today. It is a vague, ambiguous and overly broad term that can fit anything the government, or it's redevelopment department wants it to be.

I am so grateful for a guy like Mike Aguirre. He steps up to the plate-not matter what the odds-and takes a swing.

No one else will even step up to the plate, much less take a few swings at the curve balls these elected officials throw at the poor and middle class.

Nov. 20, 2010

BLIGHT is really bought and paid for, in most cases, by the selection of a high priced "consultant firm" that knows how to bury reality in reams of paper!

Now that an EIR is a required addition to the Blight Study things have become much harder and studies require more time (spelled delay of the Blight finding)...

Nov. 20, 2010

Good idea. Citizens should demand a realistic definition of blight. Is downtown San Diego blighted? of course not. Is Coronado (where real estate values are among the highest in the countyu) blighted? It is time to end the blight fraud.

Nov. 20, 2010

It is moral and ethical blight. Best, Don Bauder

Nov. 20, 2010

Through the hijacking of redevelopment, the rich are blatantly stealing from the schools, while the city council, which is paid off by developers, looks the other way. Best, Don Bauder

Nov. 20, 2010

Three cheers for Aguirre, Morrison & Severson... Good things DO come in threes!

It's about time that CCDC gets its butt kicked for all the monkey business it has been trying to pass off as "Redevelopment"!

I think that the entire City Council who are also THE Redevelopment Agency, should resign or risk being kicked out because of their $UPPORT of what their Redevelopment agency is doing downtown and to a lessor degree all around San Diego!

Nov. 20, 2010

CCDC is one of San Diego's most corrupt institutions. Best, Don Bauder

Nov. 20, 2010

I am really glad to see this has gotten the attention of Mike Aguirre. I still think he is our best hope and you are right Don, this is something that needs to be fixed in Sacramento. We will never fix it here because they will continue to illegally pervert and distort redevelopment law....why because there are NO consequences for breaking the law locally.

We have to get creative. I say we appeal to the teachers and the State Parks and get them on board and seeing how all our State Parks have to be closed and budget cuts have to be made to schools because private developers have managed to divert more and more tax money to themselves w/ NO oversight.

I still think we need an investigation of now assembly woman Toni Atkins and her personal finances and how she personally was enriched by redevelopment projects that she gave to her long time partner Jennifer LeSar.

I hope Aguirres' wheels are turning.

Nov. 21, 2010

You are correct on all points. Redevelopment law has been hijacked at the expense of schools, the county, etc. Citizens should fight back on behalf of schools and state parks. Toni should definitely be investigated. But there will be no local investigations. They are part of the local corruption. Best, Don Bauder

Nov. 22, 2010

As for the 2nd suit "San Diego attorneys Catherine Rodman and Scott Dreher, and a Pasadena attorney filed suit on behalf of low-income residents against the Redevelopment Agency, which is the city council"....that suit doesnt do us any good at all.

These slime balls are the same slimeballs that continue to give us the low quality affordable housing projects that dont even go to low income people so a victory for them is a loss for us.

Incidentally I have noticed most of the redevelopment projects are still empty 2-3 years later. Is there any financial incentive for them to leave them empty? I would think they would at least rent them out. So of course Im thinking that they are receiving some sort of subsidy if they are empty or its part of the stimulus giveaway to developers that gives them cash back and allows them to write off losses from 09-and 10 going all the way back to 05.

Nov. 21, 2010

Yes, the redevelopment projects have been failures, except for the developers, and those getting under-the-table payoffs. Best, Don Bauder

Nov. 22, 2010

Don, Their have been some successes at least in North Park that I know of but I'll grant you that much of the ReDev. money has gone to questionable Proj.'s that have been of great benefit to the Developers, the Business District itself and the elected City Leaders they all have supported Kehoe, Atkins and now Gloria!

The Stadium (Guacamole Bowl) Deal has gotten a great many folks upset, especially since many saw it coming and when CCDC reps were asked about it (before it happened), we were told that in effect that no projects were ready for prime time...

Nov. 29, 2010

Check this out... Why is Atkins still allowed to lobby for her partner Jennifer LeSars development firm while she is an elected Assembly Member?

http://lesardevelopment.com/about-us/

This seems like a blatant conflict of interest especially since State Assembly votes on Redevelopment issues.

Nov. 21, 2010

Great Question and one that makes me think that a "solution" to ReDev. will not be found in Sacramento unless it is the Courts as most of our elected Leaders have both hands in the ReDev. leveraged pot of MONEY...

Nov. 21, 2010

Too true. Best, Don Bauder

Nov. 22, 2010

Of course it is a blatant conflict that should have been investigated long ago. But remember: this is San Diego. Best, Don Bauder

Nov. 22, 2010

Another concept to point out is that when a ReDev. Area is started, it is funded by Tax increment, which is the difference between what the Property values were when the ReDev. Area was started and any future increases in those same Property values. It is possible to have property values go down and in that case the ReDev. Area actually goes into debt and this has happened at least once here in San Diego! A financial "snapshot" is taken when the ReDev. Area is started and that amount is then subtracted from the current tax financial picture.

This tax increment is then split up with 20% set aside, which must be spent for Low and Low-Moderate income housing but left unsaid is that this money can be spent outside the ReDev. Area with some restrictions!

Here is more on ReDev. Areas and how they are funded: http://www.sandiego.gov/redevelopment-agency/pdf/faqredevelopment.pdf

Note: That if a ReDev. Area is NOT started then that money (and the leveraging of it) would go to the State which doles some of it back to the City and County. Lately the State has not given the ReDev. Area the amount that is due because of its own shortage of funds...

Nov. 21, 2010

"Lately the State has not given the ReDev. Area the amount that is due because of its own shortage of funds..."

Yeah but Prop 22 changed all that. The state has to pay them whatever they are due. Its a huge sham and every group that is experiencing cuts should demand an end to this redevelopment sham. We are closing almost all of our state Parks. I just dont think citizens are putting these pieces together. I always ee the teachers protesting and I think "you guys should be focusing all your energy on how your $ is being stolen by the redevlopment agencies". They have powerful unions so I wish their guys would address this.

Nov. 22, 2010

The hijacking of redevelopment has been blatant theft, and should be dealt with appropriately. Trouble is, prosecutors are controlled by the thieves. Best, Don Bauder

Nov. 22, 2010

I guess you could call it "San Diego's Bridge to Nowhere" as much of the intended money goes into Developers pockets!

Nov. 23, 2010

Yes, and the construction unions go along with the scam. Best, Don Bauder

Nov. 23, 2010
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