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County sues state over Hwy. 12 project

Sonoma County filed its long-awaited suit against the state over a dispute in funding both the Highway 12 project and the Roseland Village shopping center Tuesday.

The suit was filed in the Superior Court in Sacramento County after the county’s Board of Supervisors approved the filing last October. The suit resulted from the state’s failure to approve $9.5 million for Phase 2 of the Highway 12 project and $6.6 million for Roseland Village in Santa Rosa. The suit also seeks to recover more than $2.2 million that the state demanded from the county without any written explanation.

Both Highway 12 and Roseland were part of the now-dissolved county Redevelopment Agency projects. When Redevelopment Agencies were dissolved in February 2012 as the result of a state Supreme Court decision in December 2011, the two projects, both long in the works, were thrown into limbo. The Highway 12 project, which was for sidewalks, streetlights and turn lanes, among other improvements, was only a couple of months from going out to bid.

County officials had two face-to-face meetings with state Department of Finance (DOF) officials to plead their case – to no avail. The county has also had conference calls with DOF officials to plead their case for the two projects and the administrative expenses the DOF has disallowed.

The state contends that all contracts between two county entities are null-and-void, even though the legislation abolishing redevelopment agencies apparently allowed the county’s Oversight Board, which was created to dispose of and finish any redevelopment agency projects, the authority to re-enter into contracts. But the DOF has steadfastly insisted that the null-and-void is permanent and that the Oversight Board can’t re-enter into contracts with other county entities.

In December, the Supervisors committed $450,000 to finish the design plans for the Highway 12 project so that it would be shovel ready in case any funds were found.

The $450,000 is money that would have gone to the redevelopment agency, but is the county’s share coming back from the state. It could take until July to finish the Highway 12 plans.

The suit claims that when the former redevelopment agency was dissolved on Feb. 1, 2012, Phase 2 of the state Highway 12 improvement project was incomplete. “Presently, and at all times material to this action, the condition of State Highway 12 is and has been a public safety hazard, and continues and has continued to limit economic development and redevelopment of the Springs Redevelopment Area,” the suit says.

The suit wants the court to rule that the agreements between the Oversight Board and the county for Highway 12 and Roseland Village are valid contracts and that the Oversight Board can use future tax revenues from the “Redevelopment Property Tax Trust Fund” and cash on hand to complete the projects.

It’s not known whether the county will seek an expedited hearing on the suit.