Appellate court upholds 'Gateways' redevelopment approval

SANTA ROSA – A California appellate court has upheld the June 2006 approval of the "Gateways" plan to redevelop 1,100 acres along a four-mile stretch of central Santa Rosa.

[caption id="attachment_12630" align="alignright" width="196" caption="Gateways Redevelopment Project area (City of Santa Rosa image; click to zoom)"][/caption]

A three-judge panel of the First District Court of Appeals in San Francisco on July 17 unanimously upheld an April 2008 local court ruling that the 30-year Gateways Redevelopment Plan was based on enough evidence of "blight" to validate the redevelopment plan under state law.

The case, originally filed in August 2006, garnered national attention for claims from the plaintiffs - Kay Tokerud of the Santa Rosa Area Business Association and Concerned Citizens of Santa Rosa Against Redevelopment Law Abuse Inc. - that formation of the redevelopment district was an abuse of government power, particularly with eminent domain, and not warranted.

Chris Lynch, executive vice president of the Santa Rosa Chamber of Commerce, one of the co-defendants, said the lawsuit delayed use of tax-increment financing from properties in the district to fund needed infrastructure improvements on Santa Rosa Avenue, north of Railroad Square and around Coddingtown Mall.

"It is going to be the engine for Santa Rosa's future at this point," he said about the redevelopment plan. "Santa Rosa is largely a built-out city, and this will put the remaining pieces in place."

The venture partners of Coddingtown, Codding Enterprises and Simon Property Group, have been floating redevelopment ideas for the center but haven't submitted plans to the city.

The unpublished appellate decision becomes final after 30 days. In the meantime, the city has contacted the Sonoma County Assessor's office about receiving the property-tax increment from the Gateways district and is contacting members of the Project Area Committee about continued service, according to David Gouin, director of the city Economic Development and Housing Department.

Also, the city and redevelopment agency will be looking at whether any of the tax portion can be applied this fiscal year. That will be important as the city studies which projects and programs will be affected by an estimated $3 million in redevelopment funds the state plans to borrow from the city in May 2010 as part of budget-balancing measures, according to Mr. Gouin.

"It's challenging because we've already allocated it to projects and programs," he said.

A coalition of cities and redevelopment agencies in the state is trying to find out whether funds involved in a similar state measure last fiscal year can be locked in for current endeavors as the state pursues its appeal of a court ruling that the method was unconstitutional.

In an 11-page ruling in the Gateways case, the appellate court found Sonoma County Superior Court judge Elaine Rushing correctly ruled against Concerned Citizens' claim that an April 2006 city-commissioned report didn't substantiate a claim of physical and economic blight.

"The report shows that serious physical and economic blight conditions are found in every project area," wrote appellate judge James Marchiano. "The report also shows that the city has insufficient resources to alleviate blight conditions and that current rents and property values cannot support the level of private investment necessary to alleviate the blight conditions."

The appellate court noted that case law limited the scope of review to whether Santa Rosa Redevelopment Agency's findings and decisions on blight in the plan area were based on substantial evidence. Precedent also called for acceptance of "reasonable inferences" in the agency's decisions, "even where conflicting inferences can be drawn from the evidence," judge Marchiano wrote.

The redevelopment area report by Keyser Martson Associates documented hundreds of instances of "serious code violations" in 14 categories. It also noted that assessed property values, rents and sale prices were lower in the district area than elsewhere in the city.

The plaintiff's attorney, William Brooks of San Jose, argued that the report didn't show a connection between the violations and required proof of physical blight from unsafe or unhealthy buildings.

The defendants in the case, Tokerud vs. City of Santa Rosa (No. A121612), were the city, City Council, the redevelopment agency and its board, the chamber of commerce and Santa Rosa-based nonprofit builder Burbank Housing Development Corp.

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