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Statement: “If you’re named then you simply can’t be in redevelopment no matter what,” Mayor Jerry Sanders said in an interview July 11, referring to a lawsuit aimed at overturning new redevelopment laws.
Analysis: State lawmakers created two laws in June that city and redevelopment officials are calling unconstitutional. The first law killed all redevelopment agencies. The second allowed cities to resurrect redevelopment agencies by paying the state some of their local taxes.
San Diego city officials have called the move akin to extortion or ransom, but have still agreed to pay a state-mandated $70 million this year and $16 million every year thereafter to keep redevelopment. Other cities, such as San Jose and Union City, say they can’t afford to pay the state and have joined a lawsuit to overturn the laws instead.
Eliminating or scaling back redevelopment complicates some of San Diego’s biggest proposals like building a downtown Chargers stadium or expanding the Convention Center. Mayor Jerry Sanders has verbally endorsed the lawsuit but says San Diego won’t join it or file its own petition. The reason, Sanders says, is a so-called “poison pill” included in each of the laws.
“The legislation says that if you’re party to a lawsuit then you can’t do redevelopment at all,” Sanders said in an interview following a July 11 press conference. “If you’re named then you simply can’t be in redevelopment no matter what.”
So, the mayor’s argument goes, San Diego doesn’t want to join a lawsuit that would jeopardize its redevelopment dreams down the road no matter the outcome in court.
The argument has gained traction locally. It’s appeared in stories and interviews about the redevelopment laws in the Union-Tribune, the Daily Transcript, KPBS and KUSI. Job Nelson, City Councilwoman Lorie Zapf’s chief of staff, echoed Sanders’ assertion on Twitter.
“The law … automatically kicks u out if u sue,” Nelson wrote.
But that’s not true. The law doesn’t contain any language to that effect.
The “poison pill” provision outlines a scenario that could punish cities for winning in court. If a lawsuit successfully overturns part of the new laws, the provision says redevelopment agencies would be prohibited from issuing new bonds — the primary way agencies now pay for projects. It’s unclear whether that ban would apply only to cities named in the lawsuit or the entire state.
However, the language clearly includes an important distinction from Sanders’ description of it. The poison pill would only be triggered after a victorious lawsuit. Sanders said the lawsuit’s outcome would hurt redevelopment in San Diego “no matter what.”
The provision doesn’t say cities can’t do redevelopment if they sue. They can continue redevelopment while the lawsuit progresses even if they are a party. If they lose in court, the status quo doesn’t change. If they win, there’s disagreement about whether the poison pill would likely affect them and other agencies not named in the lawsuit.
For that reason, we’ve called Sanders’ statement False.
It’s also worth noting that worst-case scenario also wouldn’t completely halt redevelopment either. It would prohibit agencies from issuing new bonds, which are a major financing tool, but the agencies would keep collecting tax revenue that could be spent on improving blighted neighborhoods, affordable housing and other projects.
That’s a less extreme outcome than Sanders described at a press conference July 18, again talking about the poison pill and its potential impacts.
“What they’re saying is not only are we sticking a gun to your head and taking your money, but if you try to fight at all, then we’re taking away your ability to do anything locally,” Sanders said. “It is the most arrogant piece of legislation I’ve ever seen.”
Last week, the Mayor’s Office did not return emails or phone calls about this Fact Check. However, Gina Coburn, a spokeswoman for City Attorney Jan Goldsmith, said the poison pill wasn’t the reason San Diego decided not to join the lawsuit against the redevelopment laws. She wrote in an email:
Our interests are represented by the association petitioners and only two cities were selected (for strategic reasons) to join the associations as petitioners. It would be duplicative for us to file our own lawsuit since the petition was filed in the California Supreme Court.
Both San Jose and Union City told the court they can’t afford to continue redevelopment under the state’s requirements. San Diego’s already written its check.