California Eminent Domain Report

The City of Milpitas plans to expand its redevelopment area to encompass more than 600 additional acres.  The County of Santa Clara, however, claims that the proposed expansion area has very little "blight."  Because of the potential for diversion of tax dollars and the significant financial impact the expansion may cause, this apparently has led to a brewing dispute between the County and the City.

According to a Milpitas Post article, "County to Milpitas: revisit RDA expansion plan or face lawsuit," the County has threatened the City with a lawsuit if the City moves forward with its planned expansion of its redevelopment area.  The County claims that the City's proposed expansion violates redevelopment laws and the California Environmental Quality Act in that the City has not sufficiently supported its "blight" findings in the proposed expansion area.  Thus, the County feels there has been no showing as to why the City needs to extend its eminent domain powers.

Apparently, the County has become involved because the City's proposed redevelopment area expansion would "divert an estimated $343 million away from the County over a more than 50-year period," and it would also "divert about $1.23 billion over the same period away from Milpitas public schools."  The County claims that the City is proposing this expansion in order to justify the need for more tax monies.  The City, on the other hand, points out that any tax revnue collected would not be a tax increase, but instead would divert collected property tax revenues toward greater redevelopment activities.

The City's proposed expansion will be decided at its April 20 City Council meeting.  If it is approved, the County has between 30 and 90 days to challenge the decision depending on whether it sues under the redevelopment laws or CEQA.  Stay tuned.