Healdsburg's bid to assume ownership of two downtown parking lots acquired by its defunct redevelopment agency has been rejected by the state.
In a bit of good news/bad news, the state Department of Finance determined the city is entitled to four properties formerly owned by the redevelopment agency, but not the downtown parking lots.
The ones granted to the city include City Hall, Giorgi Park, West Plaza at 17 Matheson Street and the Purity property on North Street.
But in a Nov. 14 letter, the state said the city can't keep the Mitchell Center parking lot at 434 Healdsburg Ave., or Center Street parking lot, located between 228 Healdsburg Ave. and 225 Center St.
"The Department of Finance said unless parking lots are attached to an existing government use like a park, or something like that, it's not for existing government purpose," said City Councilman Gary Plass, chairman of the oversight board for city's redevelopment successor agency.
"To me, it doesn't sound like a legitimate explanation," he said.
If the decision stands, it raises the possibility that the lots would have to be sold, along with uncertainty over whether they would remain for parking. Healdsburg officials are drafting a letter of appeal, according to Assistant City Manager David Mickaelian.
Among the arguments, he said, is that for decades business owners have paid into a downtown parking and improvement district with the expectation that the lots would exist into the future for public parking.
Plass said the city is reluctant to file a lawsuit against the state as some cities and counties have done in attempts to recover millions of dollars lost when redevelopment programs ended.
Redevelopment agencies were established more than 60 years ago to combat urban blight, but critics said they strayed from their original purpose. Gov. Jerry Brown dissolved more than 400 redevelopment agencies in 2011, redirecting the property tax revenue they generated to schools, counties, special districts and other taxing agencies to relieve pressure on the state budget.