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State’s Claim that City Land was “Owned” by RDA is Questionable

Santa Clara’s redevelopment agency (RDA) wasn’t just an agency for fostering city improvements. It was also used – in an entirely legal and above-board way – by the city as its leasing agency; allowing the city’s property revenues to be run as enterprise businesses, similar to the city’s publicly-owned electric utility.

The arrangement whereby the title to city-owned property was transferred – not sold – to the RDA (as a California joint powers agency) reduced city liability, and increased leasing flexibility as well as the terms for hiring contractors, according to Santa Clara Mayor Jamie Matthews. Also, it ensured that enterprises on the property operated as private businesses – in other words, the city wouldn’t be in the hotel or the amusement park businesses.

Now, California’s Great RDA Unwinding threatens to appropriate property – with revenues from the sale or operation to be divided among the county’s taxing entities – that is indisputably owned by the City of Santa Clara. One example is Great America, which was purchased by the city in 1983 to prevent its sale to a developer. The land was retained by the city, while the amusement park assets were subsequently sold to Marriott.

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Another example is the property that’s home to the Santa Clara Convention Center, the Hyatt Regency Hotel, the Techmart office building and part of Great America’s parking lot.

In 1965, Santa Clara’s electric utility bought 180 acres of land bordered by Coffin Rd. (Great America Parkway) and Santa Clara Alviso Rd (Lafayette St.) for $1.65 million from A.O. and Marguerite Skankey, according to the deed recorded by the Santa Clara City Clerk in Oct. 1965.

Two decades later, in 1982, the city bought 65 acres of that land from the electric utility for the hotel-convention center complex, paying $1.58 million from the city’s general fund, according to a Sept. 14, 1982 memo from the City Manager to the City Finance Director. The hotel-convention center was subsequently transferred to the RDA.

Other parts of the “Skankey property were destined to become the municipal golf course, the youth soccer park, the 49ers training camp, and the rapidly ascending 49ers stadium. These properties, however, weren’t managed by the RDA, but instead by Santa Clara’s Sports and Open Space Authority (SOSA).

“When we restored the titles [of RDA-operated properties] to the city [in March 2011], we were simply restoring what we already owned,” says Matthews.

While county entities are greedily eying this highly valuable real estate, certain practical problems with selling it present themselves. For example, a builder might love the opportunity to develop the 110 acres of Great America. But were it sold, the new owner would have to get it rezoned – by the same people from whom it was taken in a highly acrimonious fight. And that’s a fight that might give prospective developers second thoughts.

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