On April 27, 2018, the California Attorney General published an opinion (No. 17-702) concluding that a City of Hollister resolution approving the execution of an agreement to sell real property for development, pursuant to an approved plan for disposing a dissolved redevelopment agency’s property, is not subject to referendum.
The question arose following the City’s adoption of a resolution authorizing its city manager to enter into a disposition and development agreement for the sale and development of real property that would implement the Long Range Property Management Plan approved by the oversight board and the state Department of Finance. (Interestingly, the resolution was adopted by the City Council rather than the Successor Agency, a separate legal entity charged with winding down and completing the activities of the former redevelopment agency). The project would consist of two buildings: one two-story, 9,000 square foot philanthropic center and new headquarters for the Community Foundation for San Benito County; and a second, three-story building with 8,000 to 11,000 square feet of ground floor commercial retail space and 14 to 22 condominiums.
The mayor led a successful referendum drive, collecting nearly 2,500 signatures to prevent the sale and development of the property. After the City Council voted to place the referendum on the November 6, 2018 ballot, the Attorney General was asked whether Hollister’s resolution is a proper subject of a referendum petition.
The Attorney General’s analysis began with an overview of the referendum power, the electorate’s constitutional authority to reject legislative enactments, along with relevant limitations on the power. In particular, the Attorney General explained the general distinctions between legislative acts subject to referendum and administrative (i.e., non-legislative) acts not subject to referendum. In general, legislative acts generally are those that declare a public purpose and make provisions for the ways and means of its accomplishment. Administrative acts, on the other hand, are those that are necessary to carry out the legislative policies and purposes already declared by the legislative body.
The Attorney General noted that when the legislature has enacted a statewide policy and has assigned to a particular local body the duty to implement that policy, the legislature thereby places implementation of the statewide policy beyond the reach of initiative and referendum. In the Attorney General’s opinion, “[w]e think this captures what the Legislature did in assigning a successor agency, following approval by its oversight board and the Department of Finance, the duty to dispose of a dissolved redevelopment agency’s property.” More bluntly, the Attorney General concluded that [t]he redevelopment dissolution law leaves no room for voter input on a settled long-range property plan.”
The Attorney General also explained that it is appropriate to characterize local agencies as administrative arms of the state when they act to implement redevelopment wind-up matters. And, more interestingly, the Attorney General provided an helpful discussion of the potential consequences if a referendum could be applied under these circumstances:
“If Hollister’s resolution were subject to referendum, the disposition and development of the property pursuant to the approved long-range plan could potentially never happen. The electorate could indefinitely prevent the sale of the property for development (as set forth in the approved long-range plan) by rejecting every attempt by Hollister to implement the plan. That would completely thwart the redevelopment dissolution law’s purposes to dispose of redevelopment agencies’ property expeditiously in order to fund core government services. It would also conflict with the statutory requirement that the dissolved agencies’ property be disposed of as provided in a long-range property management plan approved by a successor agency’s oversight board and the Department of Finance. ”
The conundrum the Attorney General outlined is, in fact, the same problem that exists today under City of Morgan Hill v. Bushey, 12 Cal.App.5th 34 (2017), a case we wrote about here and here, under which the electorate in a given community can subject local land use decisions to the same endless spin cycle by rejecting every attempt to legislate.
The Attorney General also rejected the suggestion, by proponents of the referendum, that the City’s resolution is legislative because Hollister could have chosen a different way to implement the plan. The Attorney General was not persuaded, however, noting correctly that “because even administrative acts can involve the exercise of some limited discretion, the limited amount of discretion used to implement the plan is insufficient to characterize the resolution as a legislative act.”
The Attorney General’s conclusion on the question posed in his opinion is spot on—long-range property management plans are not subject to referendum—and the reasoning is even better—the referendum power could be abused to accomplish the rejection of every attempt to implement the plan.
Questions? Please contact Bryan W. Wenter, AICP of Miller Starr Regalia.
For more than 50 years, Miller Starr Regalia has served as one of California’s leading real estate law firms. Miller Starr Regalia has expertise in all types of real property matters, including full-service litigation and dispute resolution, transactions, acquisitions, dispositions, leasing, financing, common interest development, construction, management, eminent domain and inverse condemnation, exactions, title insurance, environmental law, and land use. Miller Starr Regalia attorneys also write Miller & Starr, California Real Estate 4th, a 12-volume treatise on California real estate law. “The Book” is the most widely used and judicially recognized real estate treatise in California and is cited by practicing attorneys and courts throughout the state. For more information, visit www.msrlegal.com.