Half Moon Bay Seeking $10 Million Loan From State. Although Governor Schwarzenegger said the state's wallet is empty, that is not deterring the city of Half Moon Bay from seeking a $10 million loan from the state. The Assembly is poised to approve AB 650 (Hill), which would provide the city $10 million, to be repaid with no interest over 20 years.
This money would be a bailout for a bad decision by the City Council preventing a taxpayer from developing property, precluding a previously approved residential development. A federal court said this constituted a taking of the property, and awarded the owner $37 million. A settlement with the owner obligates the city to allow development of the property or pay $18 million by August 29.
The bill would give the city the $10 million from the following accounts: $2.5 million from Proposition 1C – Infill Development Parks; $2.5 million from the Habitat Conservation Fund; $2.5 million from San Francisco Bay Area Conservancy Account within the State Coastal Conservancy Fund; and $2.5 million from the State Coastal Conservancy Fund.
The Assembly approved amendments to the bill June 2 on a 50-27 vote, signifying that the bill would not get the required two-thirds vote to pass. On June 3, the bill was returned from the floor to the Assembly Appropriations Committee. A spokesman for Assemblyman Jerry Hill told the Half Moon Bay Review that bringing the bill back to committee will permit proponents to rewrite it so it can pass with only a majority vote. Mr. Hill's office expects the bill to be back before the Assembly next week.
(Cal-Tax: This bill raises a number of issues: If the
state is broke, why doesn't it borrow this money on the same terms instead? Is
this a gift of public funds, particularly with the no-interest provision? Why
should the state be the safety net for a bad decision by an off-base city
council? It would seem that the most fiscally prudent action would be to allow
the owner to develop under the original agreement.) (Sources: AB 650; AB 650
floor analysis; and Half
Moon Bay Review, June 3.)
Cal-TaxReports, June 8, 2009
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