The Silicon Valley Voice

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County Gets “Best of Both Worlds” in RDA Clawbacks

Santa Clara taxpayers paid for the land on which the Hyatt, Hilton, Great America, Techmart and Irvine properties sit. In return, $14 million in lease revenues pad for public services like street maintenance, libraries and parks.

Now the County gets all of it as “clawbacks” under the law shutting down California’s redevelopment agencies (RDAs), per an October 2014 Sacramento Superior Court ruling.

The judge ruled that because the Santa Clara Redevelopment Agency’s (RDA) name was on the deed, the City didn’t own the property. The value of the properties, which the City acquired in the 1960s and 1970s, was estimated to be $300 million in 2012. The City put the property in the RDA’s name because that offered increased flexibility for leasing, according to City officials.

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On July 14, the Council authorized the property transfer to the RDA Successor Agency, as well as $34 million in lease revenues from the properties. The Successor Agency’s – which is the City of Santa Clara – actions are directed the RDA Dissolution Oversight Board.

Made up of appointed and retired County staff, the board takes its direction from County Finance Director Emily Harrison, County Executive Jeffrey Smith and Deputy County Executive James Williams. Board members are supposed to be neutral, but at least one member of the Santa Clara and San Jose Oversight Boards allegedly has a connection to Smith.

Former county Finance Director John Guthrie retired in 2010 with a $133,407 pension. He then became an advisor to Smith’s County Center for Leadership and Transformation (CLT) for $124.50 an hour, according to a January 2012 San Jose Mercury News article. The CLT’s mission, Smith said in a 2010 news release was, “identifying challenges and strategies to make immediate and long-term improvements in the way the County of Santa Clara government operates.”

Since the Successor Agencies are directed to pay debts, and liquidate assets and distribute the proceeds to county taxing entities – there is no provision for them to operate as property managers or investors – it’s unclear what happens next.

However, taking ownership of some of Silicon Valley’s most valuable real estate at the height of a real estate boom and at no cost is, as Santa Clara’s representative on the County Board of Supervisors, Ken Yeager told Smith in an email concerning Santa Clara’s decision in April to continue to fund operations of the disputed Convention Center, the “Best of all worlds” for the County.

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