Huntington Beach wins redevelopment beef, gets $25M from Sacramento
Case relates to loans issued by defunct agency decades ago
Huntington Beach — a city that in recent months has taken on a high-stakes ideological battle against state housing authorities — is claiming a tangible victory after securing a $25 million reimbursement from Sacramento coffers.
“This is a great legal victory for the City of Huntington Beach,” the city’s mayor, Tony Strickland, said in a release. “Like so many in our community, I find this to be one more reason why we are proud of Huntington Beach — we fight for our community, and we win.”
The funds will head to Huntington Beach as a result of an earlier lawsuit: In 2018, the city sued the state’s finance department, arguing that it should be repaid funds related to California’s former local redevelopment agency program.
The program was first enacted after World War II and was intended to spur new development in blighted zones throughout the state by allowing cities to set up their own local agencies, which raised funding by issuing bonds to help finance private developments. But in 2011 then-California Governor Jerry Brown, arguing the hundreds of local agencies were plagued by waste and a lack of transparency, managed to dissolve the entire state program.
Huntington Beach saw some waterfront redevelopment through the program, but the city’s 2018 lawsuit claimed that it had also wrongly been left on the hook for tens of millions of dollars that were never repaid. Earlier this year a state judge agreed, ruling the State of California should reimburse the city for roughly $25 million, for one $22.4 million loan — issued in 1988 — plus interest.
Last week, in a letter to the city, the state’s Department of Finance said it would not appeal the ruling.
The $25 million reimbursement follows another $5.2 million reimbursement the city submitted as a result of a similar 2021 ruling.
The financial victory, however, comes as the city and its new, hardline council is waging several other, potentially costly battles against Sacramento authorities related to housing policy. Last month, in the latest salvo, the council voted against adopting a state-mandated housing document, which prompted the state attorney general’s office to amend a pending lawsuit it has against the city.
“California is in the midst of a housing crisis” Calif. Attorney General Rob Bonta said in a statement at the time, “and time and time again, Huntington Beach has demonstrated they are part of the problem.”
“If we lose this fight,” countered mayor Strickland ahead of the vote, “the city that people love here in Huntington Beach — the suburban community that they love — is gone.”