Sonoma County's lawsuit seeking to retain about $14 million in tax revenue to complete two high-profile redevelopment projects is set for its day in court Friday.
The county is staking claim to both future tax receipts and accrued cash for the long-planned Highway 12 street and sidewalk upgrades north of Sonoma and the proposed residential and commercial complex on an abandoned shopping center in Santa Rosa's Roseland neighborhood.
The county sued the state of California in January after finance officials in Sacramento determined funding for the two projects was subject to redistribution to other taxing agencies under Gov. Jerry Brown's 2012 statewide dissolution of redevelopment agencies.
County officials claim the contracts set up by the county's former redevelopment agency to carry out the projects are valid and should shield the funds from redistribution.
John Haig, capital programs manager for the county Community Development Commission and its former redevelopment manager, called the case "extremely critical" for the future of the two projects.
Loss of the funds could jeopardize some Highway 12 improvements, including parking, street art and pocket-park plans, and stall the Roseland project at its initial cleanup phase, county officials said.
"It's definitely worth fighting for," said Supervisor Susan Gorin, whose district includes Sonoma Valley, where the Highway 12 upgrades have been in the works for more than two decades.
"We were so close to the completion of the final phase and then this happened," Gorin said of the dissolution of redevelopment agencies.
Brown's move was meant to free up tax dollars for other public needs and end cases of redevelopment waste and abuse, chief among them a $17 million upgrade of a Palm Desert golf course.
In roughly 120 lawsuits, cities and counties across the state have sought to hold onto tax dollars meant for breathing life into stagnant downtowns and blighted areas. Sonoma County's case mirrors many of those fights and could be decided by a higher court, regardless of what happens in Judge Eugene Balonon's Sacramento County courtroom today.
The county claims it has properly followed state law guiding the wind-down of former redevelopment agencies. After the February 2012 dissolution, a local oversight board of county, city and school officials voted to continue with the Highway 12 and Roseland projects, making contracts between the county and its former redevelopment agency valid, county officials say.
Officials with the state Department of Finance, however, have continued to say that the intra-county contracts were not an "enforceable obligation" with a third party and therefore aren't valid.
The stance could result in the redistribution of $7.3 million attached to the Highway 12 project and $6.5 million for the proposed Roseland village. The combined sum includes about $7 million in future tax receipts and $6.8 million in cash on hand.
The money would come back partly to the county's general fund, and to special districts and schools.
The county Board of Supervisors already has tapped some of the redistributed funds it did not dispute to proceed in the interim with the Highway 12 work, set to get underway next spring, and to start environmental cleanup of the former Roseland shopping center.
The combined discretionary spending, including several other former redevelopment ventures, totals $11.5 million this fiscal year.