State again rejects county, Santa Rosa redevelopment plans

State finance officials again have rejected bids by Sonoma County and Santa Rosa to continue with several high-profile redevelopment projects, a move that may trigger them to join the growing list of local governments suing the state.

The latest rejections from the Department of Finance will likely prompt the county to proceed with its lawsuit against the state, a county attorney said.

"At this point, I don't think we have any choice but to move forward with it," said Steve Shupe, a deputy county counsel.

Meanwhile, Santa Rosa leaders met behind closed doors Wednesday to consider their city's legal options after again being rebuffed by the state. Officials declined to say what was discussed, but said they will not be complying with a state order to turn over $6.3 million in unused housing development funds by today.

"We are in the process of evaluating the letters from the DOF, and we will not be releasing any money until we have completed that analysis," City Attorney Caroline Fowler said.

The county had held out some hope that its negotiations would clear the state's previous objections to the county's bid to continue with its two signature projects: street and sidewalk improvements along Highway 12 north of Sonoma and overhaul of a former shopping center in the Roseland area of Santa Rosa.

The multimillion dollar projects and other smaller county efforts along the Russian River, as well as dozens of city redevelopment proposals in Sonoma County, were thrown into limbo after the state legislature shut redevelopment agencies in February.

The county had argued on several fronts that it could continue with the projects and keep more than $16 million in accumulated or anticipated tax funds associated with them.

Before this week, state finance officials three times rejected those arguments, deeming that contracts between the county and its former redevelopment agency did not meet the requirements of the state legislation. Their letter Tuesday did not budge from that stance, according to John Haig, the county's redevelopment manager.

A similar ultimatum is going out to cities and dozens, if not hundreds, of the 400 local governments that once had redevelopment agencies statewide.

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