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.