Council, state have different ideas on property ownership

Despite navigating a curveball thrown by the state finance department last August, Claremont officials remain optimistic that plans for the city’s latest housing development will continue to move forward as planned.

Claremont representatives—including Claremont City Manager Tony Ramos, Finance Director Adam Pirrie, Director of Community Development Brian Desatnik and Successor Agency Counsel Tom Clark—traveled to Sacramento late last month to dispute the department’s ruling that the proposed Towne Avenue and Baseline Road development be turned over to the state. Though the final decision based on the meeting will not be announced for at least another week, city administrators feel confident about the results.

“We presented a strong case and the 2 representatives from the Department of Finance [we met with] were fairly receptive to what we had to say,” Mr. Pirrie said. “We are optimistic that it will work out in our favor.”

Last July, the Claremont Planning Commission conducted a preliminary review of the proposed 6.2-acre development, whose scope includes the city’s strawberry patch on the southeast corner of Base Line and Towne. City Ventures LLC proposed the mixed-use residential community, which would consist of a total of 98 townhomes and 3 live-work townhomes, a portion of which would be offered as affordable housing.

A month after the commission’s positive review, the state’s Department of Finance offered a different take. As prescribed by rules outlined after the dissolution of California’s Redevelopment Agencies (RDAs), finance department officials believed the property should be turned over to Los Angeles County for distribution to taxing entities.  

Assembly Bill 26—which effectively eradicated the RDA—and Assembly Bill 1484 put into place a series of measures governing the RDA’s wind down and the distribution of tax increment revenues relating to former RDA projects. One such action prescribed in that legislation included allowing a city to retain former RDA housing assets in performing low- and moderate-income housing functions should the city choose to serve as the successor agency to its former RDA. The city of Claremont chose to do so in January 2012.

AB 1484 further required the city to send the finance department a listing of those housing assets that the former RDA had transferred to the city. The city did so last July. However, in a letter sent the following month, the department of finance asserted that the Base Line Road project did not comply for a variety of reasons city officials found to be invalid and inconsistent, according to Mr. Pirrie. For one, he said the finance department’s main argument was that the property was not restricted by a covenance, or agreement, to provide housing assets, but Mr. Pirrie pointed out that the part in the code that the finance department was speaking of made no reference to the need for such an agreement.  

“[The property] doesn’t have to be encumbered by a covenance to provide affordable housing,” he explained. “What they were claiming for reason to deny the city was irrelevant.”

The real reasoning behind the finance department’s decision to attempt to strip the property from the city was simple to Mr. Pirrie.

“The state wants more money,” Mr. Pirrie put it plainly. “And they want that property to be sold, for redistribution. I think the Department of Finance basically received directive to get as much money as they can out of this dissolution of redevelopment and making some determinations that aren’t fully supported by the law.”

Mr. Pirrie and other city officials immediately set up a meet-and-confer with department representatives. Though the end result of that meeting is not yet known, Mr. Pirrie remains hopeful the results will come back in their favor and doesn’t believe the unexpected delay will be detrimental to the development of the housing project as it moves forward with escrow.

“We are confident that our argument was sound and based on law and are expecting them to reverse the determination,” Mr. Pirrie said. “We are optimistic that it will work out in our favor.”

The city reports it is prepared to sue the state finance department should a ruling in Claremont’s favor not be reached. The city expects a decision on the matter within the next couple weeks. The resulting decision will be published in an upcoming edition of the COURIER.

—Beth Hartnett


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