SANTA CLARA -- Silicon Valley cities remain anxious over pending state rulings on land transfers they had hoped would keep millions of dollars worth of municipal property out of the Capital's clutches and under local control.
In Santa Clara, officials in recent days sent an electronic newsletter to residents warning of the consequences should Sacramento win the battle over former redevelopment agency lands. Cities bought the land for economic development, but Gov. Jerry Brown last year shut down redevelopment agencies statewide in a move to divert more property tax revenue to schools and other programs.
"We're gearing up to educate our people about what's at risk," said Santa Clara Mayor Jamie Matthews. "It's not to alarm people. We feel responsible for people to have the same information we have so they can understand the next steps we have to take."
Santa Clara's electronic "important message" to the community last week warned that state authorities are expected to rule soon that the city must transfer more than $300 million in city property to fund other obligations required by the state. That figure, the city noted, is twice the value of Santa Clara's annual general-fund budget.
The properties in question, which include the Great America amusement park and the Santa Clara convention center, also deliver $13 million in annual revenue to the city from rent and lease payments, an amount that approaches the city's $15 million annual
Jacob Roper, a spokesman for State Controller John Chiang, whose office is reviewing the property transfers, had no comment and could not say when a review of Santa Clara property transfers might be completed.
Santa Clara isn't the only city awaiting a decision. A host of cities transferred redevelopment land to the city or a city-controlled agency as Brown's effort to end redevelopment moved through the Legislature.
Several of those cities' land transfers now are under the controller's review, including in San Jose, which had handed redevelopment land bought for a possible major-league ballpark to a new city-controlled agency. The city in November sold a purchase option for that land, for which the city paid $25 million, to the Oakland A's ownership.
"We're still trying to get the state to follow the law," Mayor Chuck Reed said. "The statute specifically says they respect contracts with third parties. We think that's important with regard to the ballpark site."
San Jose and county leaders have recently begun talks on how to protect the A's deal in the event the state rules against the city transfer. All told more than $100 million in city land is at issue, although Reed noted the city expects to be allowed to keep many properties.
Brown signed legislation ending redevelopment statewide on June 28, 2011. According to the controller, the law requires that all redevelopment assets transferred to a city, county or other public agency after Jan. 1, 2011, must be given to its "successor agency" unless the assets were committed to a third party before the law was signed.
The successor agency decides on behalf of the state whether the assets should be sold to pay off redevelopment obligations and redistribute excess cash to fund schools, public safety and other local public services.
Cities argue that the state law cannot block land transfers that took place before it was signed.
But the controller has disagreed in rulings on other city property transfers.
The controller in August ruled that Milpitas and Morgan Hill shouldn't have transferred assets from their redevelopment agencies to the city or a newly created city economic development corporation. The controller ruled that Milpitas owed $234.7 million and Morgan Hill owed $108.4 million in redevelopment assets to their successor agencies.
"We've seen reports they've sent out on jurisdictions around us and feel it's a one-sided argument," Matthews said, adding that it's likely the city will end up fighting the state in court over the land. "We decided that rather than wait to respond to a one-sided argument, we'd move forward and give information in a transparent way. Every impact I know, the public knows."
Contact John Woolfolk at 408-975-9346. Follow him on Twitter at Twitter.com/johnwoolfolk1.