State Ordered to Pay Residents Displaced by Garden Grove Waterpark Hotel

Construction at the Great Wolf Water Park in Garden Grove. (Photo credit: Largo Concrete)

Construction at the Great Wolf Water Park in Garden Grove. (Photo credit: Largo Concrete)

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With less than a year to go before the Great Wolf Lodge Waterpark Hotel is expected to open in Garden Grove, 27 poor households displaced by the development finally will receive relocation payments, ending a six-year battle in county and state courts.

A Sacramento County Superior Court last week ordered the California Department of Finance to approve $141,150 in relocation assistance and funds for 38 affordable replacement homes, after the government agency attempted to block the funds under a law that dissolved redevelopment agencies statewide.

The court’s ruling ends a long battle for the Travel County RV Park residents, who are owed amounts ranging from $250 to $10,000, that started in 2003 when the former Garden Grove Redevelopment Agency initiated the process of seizing the Harbor Boulevard property using its powers of eminent domain.

The residents, who are mostly low- and very low-income families, first sued Garden Grove in 2009 in Orange County Superior Court over how much they should be compensated for losing their homes.

The court ruled in their favor in 2014, requiring the city to pay the relocation money and construct replacement affordable housing units.

But in December,  the state Department of Finance rejected the funding, arguing that in general, the agency lacked the authority to enter into that settlement, which was approved by an OC Superior Court judge in September 2013 and “retroactively approved” by the city’s Oversight Board in 2014, according to a letter from state officials to the city.

The Finance Department also said construction of new, affordable housing units must be financed through the city’s Housing Authority, not the former redevelopment agency.

Nisha Vyas, an attorney with Public Counsel, one of the pro bono law firms that has been representing the residents since 2009, said the money would bring stability to the displaced residents.

Jose Sanchez, who lived with his wife and three young children at Travel County RV for 13 years, said he would use the money to provide for his family.

Vyas said Sanchez is currently paying $200 more a month in rent, while many other residents are paying double in rent and living expenses since leaving the park.

“We’ve had clients with health complications, from the stress and difficulty of moving, that this judgment is finally going to go through will hopefully bring some stability back to their lives,” Vyas said.

For decades, cities have used redevelopment agencies to divert property tax revenue toward special projects and other uses intended to reduce blight.

Garden Grove’s redevelopment agency seized a number of properties along Harbor Boulevard, including the RV Park and other low-income housing, to build hotels, pitching the plan as an economic engine that would draw Disneyland Resort visitors out of nearby Anaheim and into Garden Grove.

But following a major state budget crisis, Gov. Jerry Brown dissolved the agencies in 2011 to recapture portions of that tax revenue for the state, requiring cities to wind down their current affairs and not issue any new debt.

The Great Wolf Lodge Waterpark Hotel resort, one of Garden Grove’s major projects, has continued to move forward with $45 million in financing approved in 2013 and a groundbreaking in May 2014.

Attorneys for displaced residents argue the relocation money is just a “drop in the bucket” compared to the $45 million in bonds the state approved for the project already.

Meanwhile, city officials are hoping the opening of the Waterpark Hotel in the summer of 2016 will bring in much needed hotel tax revenue and eliminate a stubborn budget deficit.

Contact the author at thyanhvo@gmail.com.