CORONADO, CA – The State officially abandoned its appeal today of a Superior Court ruling issued last year that found loans the City of Coronado made to its now-dissolved redevelopment agency are enforceable obligations.
The Department of Finance decision to drop its appeal means the July 2014 ruling is final and binding, and that the City’s loans to the former Coronado Community Development Agency may be paid back.
“We are happy with the State’s decision,” said City Manager Blair King. “We followed the law carefully and we felt the judge in his decision agreed with the City’s position that the loans are valid.”
The City sued the Department of Finance over its determination that a series of loans totaling $32.8 million the City made to the former Coronado Community Development Agency could not be recognized as enforceable obligations under redevelopment dissolution laws. Sacramento Superior Court Judge Michael Kenny adopted a ruling in favor of the City and the Successor Agency to the former Community Development Agency. The Court found that the loans are enforceable obligations.
In a letter dated today, the state’s Department of Finance said it “will no longer seek to reverse lower court rulings upholding “reentered” agreements that oversight boards authorized between February 1, 2012, and June 27, 2012,” and that it will comply with applicable court orders and cease litigation on the issue.
The State’s decision follows several recent decisions regarding redevelopment loans, including the State Supreme Court’s refusal last month to hear a similar case involving loans the City of Emeryville made to its then-redevelopment agency. Additionally, a Sacramento Court of Appeals upheld a decision in favor of the City of Riverside regarding loans it also made to its former redevelopment agency.
The ruling allows the Successor Agency to repay the loans to the City. The first installment of approximately $1 million is expected to occur in the near future.
