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Tuesday, Aug. 12, 2008 | The Grantville-to-downtown trip via the San Diego trolley is not exactly a straight shot. But it’s the key concept holding together the legal settlement that allows the city to redevelop the community nestled near Interstate 8 and Mission Gorge.

To get from Grantville to the C Street trolley station on the trolley, a passenger must board a trolley in Grantville, stop in Old Town and transfer to another trolley line to get downtown. The trip takes about 38 minutes and costs $2.50 each way, said Rob Schupp, spokesman for the Metropolitan Transit Service.

A passenger trying to make the trip in the early afternoon on a weekday could actually reach downtown more quickly by taking the trolley to Fashion Valley mall and getting on an express bus to downtown — a 26-minute total trip at midday Monday, Schupp said. That trolley-bus combo would cost $4.75 one-way, but with a $5 unlimited day pass, either option would cost the same.

The trolley trip, though, forms what city staff calls a nexus between Grantville and downtown that is holding together a legal settlement forged last month that paves the way for a new city redevelopment area. In the complicated plan, funds would be shifted between those Grantville, downtown, the city, and the county, to settle a lawsuit brought by the county in 2005 challenging the city’s creation of the redevelopment area.

In striking the settlement, the city hoped to free itself from the long-running litigation and begin to fulfill the vision it adopted for the neighborhood in May 2005. But the terms of the settlement itself may drag the city back into a legal battle.

Even though the council approved the settlement on July 29, it will meet in closed session Tuesday morning with the city attorney to discuss it.

The settlement involves a complicated series of financial transfers in order to satisfy the county’s worry that it would lose out on tax money that would go into the city’s new zone. It sends $31.36 million in Grantville redevelopment dollars to the city for improvements along the C Street trolley line in downtown. In turn, $31.36 million from the downtown redevelopment area goes to improvements to county-owned land as part of plans to renovate the North Embarcadero.

Another $7.8 million would be set aside to fund part of the joint projects and the payments would begin to be made in 2012. The settlement means the county retains about 80 percent of the taxes it was poised to lose if redevelopment went forward unhindered in Grantville.

The creation of a redevelopment area allows the city in this case to corral any growth in property and sales tax in Grantville and reinvest in specifically in that area.

State redevelopment law allows in very limited cases money to be spent from one redevelopment project area in another. In this case, the negotiating parties bridged that gap by finding what they call a nexus between downtown and Grantville in the trolley line, allowing them to move Grantville tax dollars to another part of the region.

They argued that improvements to the trolley line downtown that the funds will be spent on are, in effect, improvements to traffic-congested Grantville, which has a recently built trolley station.

But opponents of the settlement still question whether the downtown-Grantville link qualifies as one of those limited cases where redevelopment money can be sent from one project area to another.

City Attorney Michael Aguirre said his office will propose Tuesday that the City Council consider opening a type of legal action that might allow legal challenge from those in opposition to the blight designation. He said he’s concerned about the machinations of sending money from Grantville to the city, and from CCDC to the county, to fulfill indirectly a settlement that couldn’t be carried out directly.

“I believe that there’s a legitimate issue about whether you can transfer the money in the way that it’s contemplated,” Aguirre said.

The county and a private landowner had sued the city in 2005, contending the city had loosely applied the term “blight” to the community — a term used to describe a number of characteristics in a rundown neighborhood, from abandoned houses to inadequate planning to vacant lots to bizarre juxtapositions of land uses. Municipalities must prove a finding of blight in order to declare a redevelopment area.

But Grantville is home to a couple of Starbucks Coffee locations and a variety of heavily trafficked businesses, many of which are mom-and-pops. The creation of the redevelopment area, opponents argued, was essentially an effort to grab taxes from the county, homogenize the neighborhood and funnel money to developers.

Proponents of the plan, with Councilman Jim Madaffer leading the charge, imagined a Grantville without the jumble of junk heaps, hodgepodge development and overflowing river beds they say have cast a shadow over the community.

“Does that mean all of Grantville’s blighted? Heavens, no,” he said during a recent tour of the community in his minivan. “We’re using redevelopment to be able to move forward. There’s no plan. We use the river as our back alley — it’s a travesty. … I think we can do better, and we will.”

Property and business owners in Grantville have banded together to form the Grantville Action Group to protest the redevelopment. Last week, that group passed a hat at a meeting to raise funds to retain an attorney to look at the settlement and determine whether they have grounds to sue.

Fundamentally, the group opposes redevelopment in Grantville, specifically the threat of eminent domain. That’s the legal trump card that gives governments the power and process to take land for the benefit of the community. Sometimes it’s used for development of public amenities like roads or sidewalks; other times it is given to private developers.

One landowner who had joined the county’s lawsuit was awarded in the settlement a promise that his property would not be affected by eminent domain. Other Grantville stakeholders have asked for a similar promise, but Madaffer said such a blanket promise could hamstring the development.

“That’s the $600 million question, but you have to always preserve all options in a redevelopment area,” Madaffer said. “I don’t want to use it — just for roads, not for private development.”

Settling with the county was the first big step in getting the ball rolling, said Janice Weinrick, deputy executive director for the city’s Redevelopment Agency.

“It’ll serve both purposes,” Weinrick said. “Obviously we have a beautiful trolley station there (in Grantville), and now they’ve got a destination. C Street is the area where we have the greatest need for improvements. It’ll beautify a destination from Grantville.”

And if someone starts from the premise that redevelopment is good for Grantville, the settlement means that process can start.

“Certainly I understand their concern,” she said. “But none of that money will be available if the project area is not a redevelopment area.”

The trolley line nexus is a stretch, said Brian Peterson, a veterinarian who practices in Grantville and the president of the Grantville Action Group.

“For Grantville, I don’t think it’s such a good outcome,” he said. “They sold the redevelopment to this area based on the fact that the money would stay here, and the first place it’s going is to downtown.”

The city projects the redevelopment area will garner $610 million in increased taxes because of the redevelopment. After subtracting the taxes that would still go to other agencies like schools, and the portion that would be set aside for building affordable housing, the city’s net tax increment would be $225.6 million, Weinrick said. That total does not count the $31.4 million that would go to the city or the $7.8 million for the joint projects.

Please contact Kelly Bennett directly at kelly.bennett@voiceofsandiego.org with your thoughts, ideas, personal stories or tips. Or set the tone of the debate with a letter to the editor.

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