Reversal could mean return of $3M to city

Rebecca Neipp

News Review Staff Writer


News Review Staff Writer

A Dec. 10 ruling by the Third Court of Appeals could result in the return of some $3 million to the city of Ridgecrest, according to City Attorney Keith Lemieux.

The development is just the latest chapter in a legal battle that began nearly seven years ago.

In 2011 California dissolved redevelopment districts across the state, forcing Ridgecrest and other municipalities across the state to liquidate assets and move then into successor agencies. The assets that were not tied up in existing obligations were subsequently directed back to the California Department of Finance.

In March 2011 the Ridgecrest Redevelopment Agency approved a $3 million loan commitment for a local developer, who used the money to build a senior housing project on South Downs Street. The dissolution of RDAs was not implemented until June 2011.

The city filed in March 2013 for the DOF to return the $3 million, which counsel believed qualified as an existing obligation exempt from dissolution and transfer.

In 2015 the Department of Finance maintained that the commitment letter presented by the city did not qualify as an enforceable obligation. The trial court denied the city’s petition and entered the judgement in favor of DOF.

Lemieux noted that the latest ruling reverses the trial court opinion and orders that the city’s writ be granted against the state.

“It could mean we get that money back, but the state still has the ability to file an appeal,” said City Manager Ron Strand. “We will know more in the next couple of months.”

He said that the city has also requested that the state repay some $280,000 in attorney fees which were accrued since 2013.

Any money returned is likely to come back through tax increment, said Strand, meaning that it will be paid back over a period of several years.

Lemieux gave an update at Wednesday night’s council meeting that he had heard from a deputy in the Attorney General’s office that the state does not intend to appeal the reversal.

Story First Published: 2019-12-20