The Grantville settlement will go ahead, the City Council decided in closed session yesterday.

The council directed the city attorney and the Redevelopment Agency counsel to sign the settlement papers related to Grantville redevelopment within five days.

The council also specifically directed its counsel not to open the kind of legal challenge the City Attorney’s office proposed, nor to “take any other action which seeks to challenge or obtain judicial review of the Grantville Settlement.”

The vote was unanimous on those two motions, with council members Donna Frye and Toni Atkins absent.

City Attorney Mike Aguirre had raised concerns about the specifics of the settlement:

[Aguirre] 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 council approved the settlement on July 29 to resolve a lawsuit filed by the county in May 2005. Here’s a description:

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.

Some Grantville business and property owners assembled as the Grantville Action Group have retained an attorney who is investigating whether they have grounds to sue over the specifics of the settlement.

KELLY BENNETT

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