Pinole has sold two city-owned shopping centers, but what will happen to the more than $12 million in proceeds is unclear.
The Pinole Vista Crossing and Pinole Valley shopping centers were developed in partnership by the Pinole Redevelopment Agency and the shopping center's operator, The Kivelstadt Group of San Francisco. The ventures date to the early 1990s and the early 2000s, respectively.
In February 2011, as state officials worked to dissolve all redevelopment agencies, the Pinole Redevelopment Agency transferred ownership of most of its real estate holdings, including the two shopping centers, to the city.
The city successfully sought judicial "validation" in court to try to stave off future challenges to the transfer of the properties, but it is unclear whether the validation will protect the city if the state seeks to "claw back" the properties. Under Section 860 of the California Code of Civil Procedure, a public agency can obtain a court judgment that a transaction is valid, legal and binding.
In July, state legislators approved, and Gov. Jerry Brown signed, Assembly Bill X1 26, eliminating California's 400-odd redevelopment agencies.
The California Supreme Court upheld the state action in December.
On Feb. 1, redevelopment agencies statewide disbanded.
On April 20, state Controller John Chiang wrote a letter to all the state's public agencies ordering them to reverse all transfers of assets from
Exempted from the reversal order were contracts signed before June 28, 2011, to sell or otherwise encumber such assets to third parties.
Pinole signed contracts to sell the shopping centers to TKG in December.
The sale of Pinole Valley -- or more precisely, of Pinole's equity in the heavily mortgaged shopping center -- closed May 3.
In an email later that day, City Attorney Ben Reyes opined that Chiang was not properly applying the law that abolished the redevelopment agencies.
"Like many of my city attorney colleagues, I believe that Mr. Chiang ... lacks the authority to order a blanket reversal of transfer of properties without first undertaking a more comprehensive review and audit of the transfers at the local level," Reyes wrote.
The sale of Pinole Vista Crossing closed Tuesday.
Pinole's proceeds of the sales are about $2.5 million from Pinole Valley and $10.2 million from Pinole Vista Crossing.
The city has deposited the proceeds in a separate account until the legal issues are clarified or concluded, Reyes said.
Contact Tom Lochner at 510-262-2760.