HUNTINGTON BEACH, Calif.—The City of Huntington Beach will be repaid $5.2 million after a California Superior Court judge ruled against the state’s Department of Finance on a redevelopment agency loan.
The city sued the State for just over $75 million in 2018 regarding a number of loans attained through the state’s development agency, which provided dollar matching funds to cities to upgrade blighted commercial and residential properties.
After upgrading properties, Sacramento leaders ended local redevelopment agencies in 2011 due to how expensive it was, leaving millions of dollars unpaid to participating cities, including Huntington Beach.
“The State eliminated redevelopment to reallocate and capture money set aside for cities to revitalize their communities in order to fix the State’s ailing budget,” the lawsuit reads. “Petitioners followed the [state’s redevelopment laws] to assist in revitalizing blighted areas of the City. In doing so, the City has for many years now been carrying the State’s debt.”
In an April 21 decision, Sacramento Superior Court Judge James P. Arguelles said the state will need to pay the city $5.2 million, one of the key loan repayments, and may be forced to pay $22.4 million later on for another.
The $5.2 million comes from 2009 sale of the Emerald Cove Senior housing complex.
“It was amazing and a pretty massive win for the city and for the taxpayers because other cities have tried to get money back from the state and have sued in court and have failed and we prevailed on this effort,” Huntington Beach City Attorney Michael Gates told The Epoch Times.
Gates said his team spent a lot of time building a compelling case for court and believes that is what gave Huntington Beach’s suit an edge over other cities that have tried the same.
“We have in-house attorneys here and we put a lot of resources on it, and we went through thousands of documents with a fine-tooth comb, and built up a really compelling case. We also had done some pretty amazing research and just overall had a really great presentation to the court,” he said.
Gates said he thinks there is a “good chance” the city will be able to prevail in court over the $22.4 million, which is part of the same case already being tried. The money stems from a 1989 loan by the city to purchase a Waterfront resort property near Pacific Coast Highway.
“There’s a lot of documents that we still have to go through to find those key documents that the court had requested, but I think we’re going to be able to deliver on that.”
Judge Arguelles said nine other loans that were a part of the lawsuit failed to qualify as enforceable loan agreements.
