Activists End Fight Against Anaheim Convention Center Bonds

Print More

Anaheim activists who were waging a court battle against the city’s bond sale to pay for a $180-million convention center expansion have decided to drop the fight, thus ending a legal dispute that could have derailed the project.

The activists – who formed a group called the Coalition of Anaheim Taxpayers for Economic Responsibility (CATER) – had accused city leaders of embarking upon an illegal financing scheme designed to circumvent the state constitution’s requirement to have general fund bonds go to a citywide vote.

The crux of the activists’ case, which was argued by San Diego-based attorney Cory Briggs, was that a joint powers authority that issued bonds for the convention center expansion could not enter into new debt after the state dissolved redevelopment agencies in 2011.

Attorneys making arguments on behalf of the city argued that state law delineates powers to a JPA that are greater than the sum of its parts, including the ability to float bonds, irregardless of Gov. Jerry Brown’s successful effort to end redevelopment.

At first, CATER’s legal challenges were successful in scuttling the proposed bond sale. City leaders then formed a new JPA using the city’s housing authority instead of the redevelopment agency to attempt a new bond sale.

CATER then filed a lawsuit challenging the new JPA.

But last Fall, Superior Court Judge Randall J. Sherman sided with the city and ruled that the first JPA’s bond sale was legal. Activists attempted to appeal the ruling, but ultimately decided against it.

“CATER and IOC’s abandonment of their litigation against the City confirms what I have said all along – that these challenges were legally meritless,” City Attorney Michael Houston stated in a city news release. “It is unfortunate that the City has had to spend more than $220,000 in attorneys’ fees to vindicate itself.”

Greg Diamond, CATER’s general counsel, said the activists decided to drop their appeal because a similar case Briggs is arguing in San Diego against that city’s convention center expansion appears to have a better chance of winning an appeal.

Diamond said the group’s goal to is to set precedent against a “crazy idea” — financing schemes designed to evade voters’ approval.

“If the San Diego judge had acted like the Anaheim judge, an the Anaheim judge had acted like the San Diego judge, it would be the Anaheim case that would be appealed instead of the San Diego one,” Diamond said.

Diamond also questioned Houston’s assertion that the legal fight cost Anaheim taxpayers over $220,000, and said the activists had filed a request under the California Public Records Act to verify Houston’s claim.

Last year, Voice of OC published articles  questioning city leaders’ claims that the convention center expansion would ultimately bring millions of dollars in new revenue to city coffers.

Voice of OC’s reporting revealed that the city-commissioned consulting study appeared to have overinflated revenue estimates and contained sections that were copied word-for-word from past studies.

Please contact Adam Elmahrek directly at aelmahrek@voiceofoc.org and follow him on Twitter: @adamelmahrek

 

 

  • californian_aware

    Sounds like good reporting compared to SD’s KPBS…

  • Greg Diamond

    Dear Norberto, Adam, Thy, Nick, et al.:

    I’ve looked over your “discussion policy.” I find parts of it quite compelling:

    Unfortunately, some users have used this space to hijack conversations with personal attacks and unrelated rants that verge on hate speech. So in July 2014, we switched to a Facebook-only commenting system to encourage a more transparent and civil conversation.

    And:

    We encourage users to react and reply to others’ comments. Here’s a rundown of the Disqus features that will help you participate in moderating and organizing the conversation:

    Flagging: Users can flag comments that violate our community guidelines. Comments that are flagged several times will be hidden from view.

    Up and Down Votes: Comments with the most “up” votes will be moved up the queue. Use this feature to help other readers find the most relevant, insightful and interesting comments. Conversely, comments with a large number of “down” votes will be moved to the bottom of the comment thread.

    And:

    While some news organizations employ full-time web moderators, Voice of OC does not and cannot actively moderate comments on our website. Voice of OC is not responsible for the content posted by its users. However, we have the right (but not the obligation) to review, screen and delete any content posted on our website.

    We respect your right to participate in the conversation, but we also reserve the right to ban any users and IP addresses that abuse and violate our community rules.

    And:

    Here are our Community Guidelines:

    Stay on Topic. Comments should be relevant to the article. Our website is not a place for users to have one-on-one arguments and free-ranging conversation. Don’t use public forums for individual communications. …

    Be Respectful. Focus your remarks on positions, not personalities. No personal attacks, name-calling, libel, defamation, hate speech, obscene or pornographic language.

    We hope this system facilitates the vibrant and creative civic discussion that you deserve.

    Well, having been interviewed for this story, I’ve been having what I think is a pretty vibrant and creative discussion here with David Zenger — someone of an opposing political philosophy with whom I can still discuss matters usefully and in a way worth others’ notice. But it’s getting kind of hard because of a commenter that — despite rolling with the punches and giving him chance after chance — I’ve had to suspend and ban several times from Orange Juice Blog.

    In case you haven’t noticed, here’s some of what you’ve apparently been expecting me to slog through — despite your policy — in this comments section from the widely banned Stanley Fiala (edited for compactness):

    “However, you Esq. Diamond are gravelly erring re SCATUS [sic] decision which has been struck by Ayatollah Hussein al Obama by his executive order re immigration amnesty. Please freshen up on the Unclean Fists Doctrine. [n.b., he means “Unclean Hands,” but prefers the more violent term.] Caveat: Do not forget to file your ex parte hearing today or you may be find in contempt of court. [This is made up; I have no hearing today.]”

    “Although trifling Mr. Zenger’s rant can be dismissed with prejudice as frivolous crapola, you Esq. Diamond are clearly appearing in your comment as a malpractitioner. Too often the judeo-progressive-reactionists and your OrangeJuiceBlog articles promulgate “OCCUPY” terrorism, lawlessness and anarchy which are synonymous with Mr. Hussein Obama’s regime by executive order derived from his Marxist’s madrasa indoctrination. Wherefore: [sic] You should apologize Esq. Diamond for insulting our judiciary and intelligence, filed with Judge Randall J. Sherman’s court expatriate — wailing before him profusely, reciting Kol Nidre prayer. [Note: this prayer, which I actually don’t say, is a favorite target of anti-Jewish attacks.]”

    “For some unknown reason to me Mr. Diamond is always relying on his Jewishness to make his anti-gentile and anti-christian argument. Same as Obama, Holder and Sharpton are using their race.”

    “I should add that Esq. Diamond challenged OCDA Tony Rackauckas in 2014 election. Folks, can you imagine if this racist and the enemy of the freedom would prevail?”

    And Mr. Fiala ends up with:

    “I have not violated any “discussion policy”! If I have violated any I want you to show me Esq. Diamond.”

    Well, is he right? You’re journalists; you can recognize defamation (both personal and commercial), and you’re enlightened enough people to recognize bigotry — as well as violations related to personal attack, relevance, etc. We recently went through this in another discussion with a similar comment of his.

    How seriously ought we take your “policy”? He doesn’t take it seriously at all, and I’m starting to think that he’s right. If you want productive discussions here, please understand that he wants to prevent them.

    Or you could be even-handed and toss us both out, if you construe this as a personal attack. I could live with that, especially because I enjoy a good irony. But I shouldn’t have to, should I? Unless, I suppose, you consider our “transgressions” to be equal. (In that case, see you around elsewhere.)

  • I should add that Esq. Diamond challenged OCDA Tony Rackauckas in 2014 election.

    Folks, can you imagine if this racist and the enemy of the freedom would prevail?

    Be careful who do you voting for because Esq. Diamond is perpetual candidate for various county offices including democratic party.

  • David Zenger

    So, a Housing Authority is dragooned into service to create some sort of legal technicality; a judge (i.e. high-paid government worker in a robe) fails to grasp that these bonds are paid out of the General Fund, will buy General Fund toys for the firemen and cops and are thus, ipso facto, General Obligation bonds.

    And thus, the Anaheim City Charter that emphatically states these bonds must be voted on by the electors of Anaheim, isn’t worth the bathroom tissue it’s printed on.

    Meanwhile, the City Attorney, who is hanging on by the skin of his teeth, declares victory!

    • Greg Diamond

      It’s actually a bit worse than that, David, but that’s a pretty good first approximation. What you describe was to be the second case, against the “AHPIA,” which was settled as moot after we decided not to appeal the first case and the City withdrew its plan to seek bonds using that entity instead. (All of these entities, as you know, are simply “the City Council” wearing different hats.

      The first case actually involved the Anaheim Public Financing Agency (“APFA”), which was a joint creation of the City and the Redevelopment Agency (subsequently taken over by the “Successor Agency”) as the second party to creating the JPA. The Successor Agency only had the power to wind things down. The City argued that even though the RDA was gone and the Successor Agency didn’t have the power to issue new bonds, their “offspring” the APFA had powers belonging to neither of its “parents” that were necessary for its creation and had powers that exceeded either when it came to offering municipal bonds.

      They argued that the bonds weren’t paid out of the General Fund, but only a lease payment came out of the General Fund, which was equal in value to the bond payment but was not actually the bond payment, and so was not subject to the restrictions of General Bond obligations. The City, after all, could simply refuse to pay the lease — except for the fact that the City’s contract prevents it from doing so.

      This is why I roll my eyes when people who know no law say that the case we brought was “frivolous.” I thought that their *defense* was frivolous, but the judge (who as I recall had a career background in these sorts of financial instruments) bought it. That happens.

      They won because a Supreme Court case, applied from what I think was a very different context, made their theory plausible. So, the Supreme Court will eventually be the entity that has to clear this up — and I believe that the San Diego case will do so. Our victory here, which will play an important role in the appeal of that case, was to get Anaheim’s whole crazy theory into a black-and-white court transcript where the Supreme Court can get a load of what will happen if they don’t step in and stop this nonsense.

      Voters will be completely outraged when they understand what the City thinks that it has “accomplished” in court — which essentially, is to render them irrelevant. They may not really understand it yet, but we have plenty of time to explain it to them, as often as need be!

      • “Activists End Fight Against Anaheim Convention Center Bonds”……… Hmmmmm

        Obviously you Esq. Diamond and Mr. Zenger are both gravely wrong because your arguments and points of authority are derived from your activism rather than the case’s merits as correctly shown in the title of this article.

        Although trifling Mr. Zenger’s rant can be dismissed with prejudice as frivolous crapola, you Esq. Diamond are clearly appearing in your comment as a malpractitioner.

        Too often the judeo-progressive-reactionists and your OrangeJuiceBlog articles promulgate “OCCUPY” terrorism, lawlessness and anarchy which are synonymous with Mr. Hussein Obama’s regime by executive order derived from his Marxist’s madrasa indoctrination.

        Wherefore: You should apologize Esq. Diamond for insulting our judiciary and intelligence, filed with Judge Randall J. Sherman’s court expatriate — wailing before him profusely, reciting Kol Nidre prayer.

        • Greg Diamond

          I’ve spent much too much time over the years taking Mr. Fiala seriously enough to argue with. You have a “discussion policy” linked above, Voice of OC staff; please enforce it with respect to this comment by Mr. Fiala. and (if you’re as tired of his clever but bigoted games as I am) towards Mr. Fiala himself..

          You may consider this a standing request if you wish.

          • “bigoted games”……. Hmmmmm

            Here we go again!

            For some unknown reason to me Mr. Diamond is always relying on his Jewishness to make his anti-gentile and anti-christian argument.

            Same as Obama, Holder and Sharpton are using their race.

            I have not violated any “discussion policy”!

            If I have violated any I want you to show me Esq. Diamond.

      • David Zenger

        As a “layman” my problem is that common sense tells us that the bonds are indeed paid out of the General Fund – not a dedicated revenue stream – since the ACC seems to have no wherewithal to pay its own bills.

        The issuer seems fundamentally irrelevant. A General Obligation Bond needs to be approved by the voters. It says so in the Charter, and so I guess the Charter means nothing once the kleptocrats say it means nothing. And be-robed bureaucrat who sides with the government (quelle surprise!) gets to disenfranchise the voters of Anaheim.

        • Greg Diamond

          You’re hardly an average layman when it comes to these matters, David. What you don’t have is access to the Supreme Court case, “Rider,” on which the argument relied. I didn’t find Rider to be on point, but two judges (one sympathetic to your common-sense view) did so, so that’s why I expect this to be hashed out on appeal. Functionally, there’s no doubt that it has the effect of a General Obligation bond given that it obligates the General Fund as effectively as if it were issued by the City itself. And yes, in the City’s view, the Charter does apparently “mean nothing” in this sort of circumstance, despite taxpayers now being for a half-billion dollars for a gain that will not likely realize them anything near that amount.

          I don’t share your view or characterization of Judge Sherman. A Judge ain’t just another bureaucrat. He was given the case at the last minute when it turned out that the assigned judge was absent, he had a mountain of material to read, and he took his best shot at it. Sometimes the case law just needs to be fixed, which is the service that we (and more so Cory Briggs) will now have provided not just to Anaheim, but to every jurisdiction in California with a city government hell-bent on spending money they won’t and will never have. I don’t blame the judge City that hired the lawyer. lawyer; I blame the City that hired the lawyer. lawyer; I blame the City that hired the lawyer to achieve an undemocratic goal.

          • David Zenger

            I don’t know Judge Sherman or his predilections, but I’ve been watching judges support and defend the tyranny of Redevelopment in California for 30 years including the habitual rape of due process and equal protection in municipalities’ insatiable hunger for land grabs and sales tax generation.

            Judges almost always support government over the governed.

          • “You’re hardly an average layman when it comes to these matters, David.”……… Hmmmm

            I concur!

            However, you Esq. Diamond are gravelly erring re SCATUS decision which has been struck by Ayatollah Hussein al Obama by his executive order re immigration amnesty.

            Please freshen up on the Unclean Fists Doctrine

            Caveat: Do not forget to file your ex parte hearing today or you may be find in contempt of court.