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Irvine to get $292 million in settlement of redevelopment lawsuits

The city of Irvine is receiving $292 million in exchange for dropping three lawsuits against the state Department of Finance in an attempt to recoup more than $1.4 billion in redevelopment funds.

Because the money is property-tax revenue, it is expected to be paid over 12 years, depending on property-tax rate increases.

The settlement comes after a long legal battle — similar to ones waged in other cities around California — sparked by the state’s 2011 decision to dissolve redevelopment agencies, which had allowed cities to keep a bigger share of property-tax revenue to help fund major projects in certain redevelopment zones.

About $14 million of the settlement is designated for the Irvine Community Land Trust, which oversees the city’s construction of affordable housing.

The city originally had planned to spend the $1.4 billion on the Great Park on the former site of the retired El Toro Marine base.

“The city had no reason not to bank on it,” said City Councilwoman Beth Krom. “It was real money that would have come in through the redevelopment agency that’s been lost in the wake of the [dissolution].”

Krom said she wants to funnel the settlement money back into the Great Park.

In the lawsuits, Irvine leaders argued that development agreements — including one with FivePoint Communities, which has been chosen to develop areas surrounding the Great Park — constituted “enforceable obligations,” meaning they were projects already under contract with a redevelopment agency when the agency was dissolved. The state disagreed.

Funding to develop the sprawling park was initially planned before the state Legislature dissolved redevelopment agencies. Now those funds are discretionary.

The Great Park originally was envisioned as similar to New York’s Central Park or San Diego’s Balboa Park, but the recession and housing-market collapse whittled away the budget. Gov. Jerry Brown’s elimination of redevelopment agencies was perhaps the biggest hit, costing Irvine more than $1 billion in anticipated funding.

Before the dissolution of redevelopment agencies, developers mapped out ambitious plans including carving a canyon out of the earth, creating a man-made lake and installing a wildlife corridor. Developers spent more than $200 million on planning, but little construction has taken place. An ongoing forensic audit is examining that process. So far, the most visible manifestation of the plans is the park’s iconic orange hot-air balloon beside a 27-acre “Preview Park.”

Now, scaled-back plans include a 227-acre golf course and dozens of ball fields, tennis and volleyball courts that could be built by 2017, according to a FivePoint Communities presentation in September 2013.

Councilwoman Christina Shea agreed with Krom that the settlement money should serve as a boost to the Great Park.

With careful budgeting, Shea said, “we could conceivably build out the rest of the park.”

Shea said the settlement was a true compromise.

“It’s not the best deal, but it’s a lot better than what we were looking at,” she said, “which was zero.”


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