Court Rules That City of San Jose May Not Use Redevelopment Money For Construction Project


A former Mayor sued the City of San Jose when he learned that more than $50 million of redevelopment money would be used to fund its new city hall. A state law specifically forbids cities from using redevelopment money for the construction of city halls. The City of San Jose claimed that the $50 million would not be used for construction but rather for infrastructure. The trial court granted summary judgment for the City. The Court of Appeal reversed this decision and sent it back to the trial court, finding state law prohibits the use of redevelopment funds to pay for any portion of the construction of a city hall. Ballot language for the city hall project stated that redevelopment funds would be used only for site acquisition, relocation, demolition and other activities related to providing a site, not for construction itself. The parties eventually settled the case, with no redevelopment funds used for the project. McManis Faulkner sought and obtained an attorney’s fee award of $1 million due to the public benefit conferred.