• Redevelopment Plan Invalidated Because Findings of Blight Were Not Supported By Substantial Evidence
  • August 12, 2010 | Authors: Mona Ebrahimi; Jon E. Goetz
  • Law Firms: Kronick Moskovitz Tiedemann & Girard A Law Corporation - Sacramento Office ; Kronick Moskovitz Tiedemann & Girard A Law Corporation - San Luis Obispo Office
  • In County of Los Angeles v. Glendora Redevelopment Project, (--- Cal.Rptr.3d ----, Cal.App. 6 Dist., June 15, 2010), a court of appeal considered whether an ordinance adopting a redevelopment plan should be invalidated because there was insufficient evidence to support the findings of blight. The court of appeal found no substantial evidence of physical blight and upheld the trial court’s order invalidating the ordinance.

    Facts
    The City of Glendora, the City Council of the City of Glendora, and the Glendora Redevelopment Agency (collectively, “Glendora”) adopted redevelopment plans for five project areas within the City, with the first plan being adopted in 1974 and the fifth one in 2006. One project area, Project Area 4, is no longer operational. In 2006, Glendora adopted Ordinance No. 1845 approving the Redevelopment Plan for the Merged Glendora Redevelopment Project (“Merged Plan”). This plan amended the redevelopment plans for existing project areas (Project Areas 1, 2, and 3), created a new project area (Project Area 5), and merged the project areas “‘for financing purposes’ under the Community Redevelopment Law and to ‘extend the period during which the power of eminent domain is available to’ Glendora’s redevelopment agency.” The ordinance incorporated findings that blight remains in Project Areas 1, 2, and 3, and that blight exists in Project Area 5 and declares that elimination of blight “would not reasonably be expected to be accomplished by private enterprise alone without the aid and assistance of the [Glendora Redevelopment] Agency.”

    The County of Los Angeles (“County”) filed a reverse validation action in a superior court challenging “the approval and adoption of the [Merged Plan] adopted by Ordinance No. 1845.” County alleged Glendora violated the Community Redevelopment Law and that there was a lack of sufficient evidence to support the blight findings. The superior court invalidated Ordinance No. 1845 because the administrative record contained insufficient evidence of blight.

    Decision
    A finding that a project area is blighted is the absolute prerequisite for redevelopment. A “finding of blight is subject to judicial review in a validation action, and if there is insufficient evidence that the area is indeed blighted, the court must issue a judgment invalidating the redevelopment plan.” The court of appeal found Glendora’s redevelopment plan must be invalidated because there was insufficient evidence of blight.

    Blight findings are required upon creation of a new redevelopment project area and upon amendment of an existing project area that utilizes tax increment revenue. An ordinance adopting an amendment to an existing project must “‘contain findings that both (1) significant blight remains within the project area and (2) the blight cannot be eliminated without the establishment of additional debt and the increase in the limitation on the number of dollars to be allocated to the redevelopment agency.”

    An area must satisfy the following four criteria before it can be found to be blighted: (1) “the area must be ‘predominantly urbanized,’” (2) “the area must be ‘characterized by’ one or more conditions of physical blight, as statutorily defined,” (3) “the area must be ‘characterized by’ one or more conditions of economic blight, as statutorily defined,” (4) “these ‘blighting conditions must predominate in such a way as to affect the utilization of the area, causing a physical and economic burden on the community.’” There is no dispute that the merged project area at issue here is “predominantly urbanized” and meets the first criterion. However, the court found there was no substantial evidence that physical blight existed. Therefore, the project area did not meet the second criteria.

    There are four possible conditions of physical blight: (1) Buildings are unsafe or unhealthy to work or live in because of “serious building code violations, dilapidation and deterioration, defective design or physical construction, faulty or inadequate utilities, or other similar factors;” (2) factors are present that “prevent or substantially hinder the viable use or capacity of buildings or lots” because of a “substandard design, inadequate size given present standards and market conditions, lack of parking, or similar factors;” (3) “[a]djacent or nearby uses that are incompatible with each other and which prevent the economic development of those parcels or other portions of the project area;” (4) “[t]he existence of subdivided lots of irregular form and shape and inadequate size for proper usefulness and development that are in multiple ownership.” The record did not demonstrate any of the four possible conditions of physical blight. It was unnecessary for the court to reach the question of economic blight or the burden on the community because of the failure to show physical blight.

    The court also addressed the post-judgment enactment by the Legislature of Health and Safety Code section 33333.13 “which includes a legislative finding that the redevelopment plan for Project Area 3 ‘contains an unrealistically low dollar limit on the receipt of tax increment’ that ‘severely restricts’ Glendora’s ability ‘to address conditions of blight which remain within its Project Area No. 3.’” Glendora urged the court to treat section 33333.13 as evidence of blighted conditions. Section 33333.13 did not become law until February 2009. Glendora brought its appeal in May 2008. The court concluded section 33333.13 was not applicable.