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1 [PROPOSED] STIPULATED FINAL JUDGMENT
ROB BONTA
Attorney General of California
DANIEL A. OLIVAS
Senior Assistant Attorney General
CHRISTINA BULL ARNDT (SBN 175403)
DAVID PAI (SBN 227058)
Supervising Deputy Attorneys General
1515 Clay Street, 20th Floor
P.O. Box 70550
Oakland, California 94612-0550
Telephone: (510) 879-1300
Fax: (510) 622-2270
E-mail: [email protected]
Attorneys for the People of the State of California and California Department of Housing and Community
Development
[EXEMPT FROM FILING FEES -
Pursuant to Government Code
Section 6103]
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF ORANGE
PEOPLE
OF THE STATE OF CALIFORNIA,
and CALIFORNIA DEPARTMENT OF
HOUSING AND COMMUNITY
DEVELOPMENT,
Plaintiffs,
v.
CITY OF ANAHEIM and CITY COUNCIL OF
ANAHEIM,
Defendant.
Case No.
[PROPOSED] STIPULATED FINAL
JUDGMENT
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Plaintiffs, the PEOPLE OF THE STATE OF CALIFORNIA, by and through ROB BONTA, Attorney General of the State of California, and the CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT, and Defendants CITY OF ANAHEIM and CITY COUNCIL OF ANAHEIM, having stipulated to the entry of this Final Judgment and Order (“Judgment”) without the taking of proof and without Defendants admitting any liability, and with all Parties having waived the right to appeal; and the Court having considered the pleadings and good cause appearing:
IT IS HEREBY ORDERED, ADJUDGED AND DECREED THAT:
PARTIES AND FINDINGS
1. Plaintiffs are charged with the enforcement of, among other state laws, California Government Code section 54220 et seq. (“Surplus Land Act”). On behalf of the People of the State of California, ROB BONTA, as the Attorney General of California, is empowered by the California Constitution to take whatever legal action is necessary to ensure that the laws of the State are uniformly and adequately enforced, and is statutorily authorized to bring actions to enforce the Surplus Lands Act. (§ 65585.1.) The CALIFORNIA DEPARTMENT OF HOUSING AND COMMUNITY DEVELOPMENT (“HCD”) is a legal subdivision of the State of California, whose mission is to promote safe, affordable homes and vibrant, inclusive, sustainable communities for all Californians. (§ 12804.) Among other things, HCD is responsible for enforcing state housing laws—including the Surplus Land Act. (§§ 65585, 65585.1.)
1. Defendant CITY OF ANAHEIM is a political subdivision of the State of California.
The City is a local governmental agency charged with regulating and controlling land use and development within the City of Anaheim, including but not limited to complying with all applicable provisions of state law, including the Surplus Land Act. Specifically, the City is the “local agency” as defined under Section 54221. Defendant CITY COUNCIL OF ANAHEIM is the elected governing body of the City of Anaheim. Collectively, Defendants will be referred to as “the City.”
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2. This Judgment is entered to fully resolve an investigation of the City’s sale of approximately 151 acres of land located at 2000 East Gene Autry Way and 2200 East Katella Boulevard in the City (collectively, the “Angel Stadium Property”), to SRB Management, LLC (“SRB”), for alleged Surplus Land Act violations.
3. The Surplus Land Act requires a local agency to prioritize affordable housing, parks, and open space when disposing of its surplus lands. To that end, a local agency like the City is required to declare the land it wishes to dispose of under the Surplus Land Act as either “surplus land” or “exempt surplus land,” supported by written findings. (§ 54221, subd. (b).) “Surplus land” generally refers to properties owned by a local agency that are not necessary for the agency’s use. “Exempt surplus land” is limited to exemptions specifically defined under the Surplus Land Act. (See § 54221, subd. (f)(1).)
4. Once a land is declared surplus land, the disposing agency must post a notice of availability of the declared surplus land to qualified entities developing housing for low- and moderate-income households, and allow qualified entities at least 60 days to respond. (§ 54222, subd. (f).) If and when any qualified entity expresses interest, the disposing agency must then negotiate in good faith with those entities for a minimum of 90 days. (§ 54223, subd. (a).) Where no bidders express interest, or if a price or terms cannot be agreed upon after the 90-day negotiation period, the local agency may dispose of the land without further regard for the Surplus Land Act. However, such lands previously declared surplus, but without purchase bids or an agreed upon price or terms, shall have a recorded restriction whereby 15 percent of any future housing development of 10 or more units shall be sold or leased to lower income households. (§ 54223.)
5. The failure to dispose of land in accordance with the Surplus Land Act after receiving notification from HCD shall subject the disposing agency to a penalty of 30 percent of the final sale price of the land. (§ 54230.5, subd. (a)(1).) Substantially, these provisions became effective on January 1, 2020, when the Surplus Land Act was amended significantly by the passage of AB 1486 (2019).
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6. On or about December 20, 2019, the City entered into a purchase and sale agreement to sell Angel Stadium Property to SRB. A restated and amended sales agreement was approved by the City Council on or around September 30, 2020, and the disposition and development agreement was approved by the City Council on or around October 6, 2020. Prior to entering into these agreements, the City did not declare Angel Stadium Property to be surplus or exempt surplus lands, nor did the City issue a written notice of availability to the required list of entities.
The City contends it had no legal obligation to declare Angel Stadium Property to be surplus or exempt surplus land nor a legal obligation to issue a written notice of availability to the required list of entities.
7. On December 8, 2021, HCD issued a Notice of Violation of the Surplus Land Act regarding the sale of Angel Stadium Property.
8. In response, the City notified HCD that it did not believe the Surplus Land Act applied to the sale of Angel Stadium Property. On February 4, 2022, the City explained its good faith belief that: (1) because the initial sales agreement was entered into in 2019, it had broad discretion under the prior version of the Surplus Land Act to not define Angel Stadium Property as “surplus land;” (2) Angel Stadium Property was sold to create an “economic opportunity,” which the City believes is a statutory alternative to the Surplus Land Act; (3) the current Surplus Land Act did not apply because the applicable parties were parties to a “constructive” exclusive negotiation agreement before September 30, 2019; (4) the existing lease of Angel Stadium to Angels Baseball, which expires in 2029 and can be extended by Angels Baseball to 2038, subjects Angel Stadium Property to valid legal restrictions that would prohibit qualified entities from developing housing; and (5) the continued enforcement of the Surplus Land Act against the City would be an unconstitutional impairment of its contractual obligations.
9. The City expressly denies the allegations in the Complaint in this action, concurrently-filed herewith, including: (i) that it violated the Surplus Land Act in failing to declare Angel Stadium Property to be “surplus land” or “exempt surplus land,” and (ii) that it 1 2
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failed to comply with any of the posting and noticing requirements in the current Surplus Land Act prior to entering into the sale of Angel Stadium Property to SRB.
10. The City stipulates to this Judgment for the purpose of resolving HCD’s investigation, the applicable Notice of Violation issued on December 8, 2021, and the Complaint concurrently-filed herewith.
11. The parties agree, solely for purposes of entry of this Judgment, that this Court has jurisdiction of the subject matter hereof and over the Parties, venue is proper in this County, and this Court has jurisdiction to enter this Judgment.
12. This Judgment shall apply to all claims under the Surplus Land Act as alleged in the Complaint.
13. This Judgment is made without trial or adjudication of any issue of fact or law. The Parties voluntarily enter into this Judgment in order to avoid the time, expense, and uncertainty of litigation.
14. The Parties agree to resolve the allegations through this Judgment.
APPLICABILITY
15. All provisions of this Judgment shall be binding upon, and apply to the parties, including their agents acting within the scope of their agency as well as its successors and assigns with respect to the conduct described in this Judgment.
16. The City has and will maintain the full power and authority to undertake the duties and obligations set forth in this Judgment.
17. The City shall use reasonable efforts to notify its City Councilmembers, elected officials, officers, directors, employees, and agents responsible for carrying out and effecting the terms of this Judgment and the requirements therein.
18. If a separate entity is established or reorganized so that its functions include overseeing or otherwise reviewing the operations of the City or any aspect thereof, the City agrees to ensure these functions and entities are consistent with the terms of this Judgment and 1 2
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will incorporate the terms of this Judgment into the oversight or review functions of the entity as necessary to ensure consistency.
DEFINITIONS
The following definitions shall be used in construing the Judgment:
19. “Effective Date” means the date on which a copy of the Judgment, duly executed by the Parties, is approved by and becomes a Judgment/Order of the Court.
20. “Payment” means funds to be deposited into a local housing trust fund in accordance with payment provisions set forth below.
21. “Full Purchase Price” means $319,812.179.00, or the final full purchase price of Angel Stadium Property should the City later amend, in good faith, the purchase and sale agreement with SRB Management, LLC.
PAYMENT PROVISIONS
22. The City shall deposit an amount equal to 30 percent of the Full Purchase Price of Angel Stadium Property to SRB, estimated to be approximately $95,943,653.70, into a local housing trust fund administered by the City. Notwithstanding the City’s denial of wrongdoing, the parties acknowledge that the City’s payment into this fund is intended to be consistent with the penalty provisions set forth in Section 54230.5 of the Surplus Land Act.
23. The Payment shall be deposited in a local housing trust fund created by the City, subject to public noticing and City Council approval, and disbursed in accordance with the requirements set forth under Section 54230.5, subdivision (a)(2) of the Surplus Land Act. The amount shall be deposited within fourteen (14) days after the City’s close of escrow with SRB regarding Angel Stadium Property. Thereafter, the City shall commit and expend the moneys deposited into the local housing trust fund within five years of deposit for the sole purpose of financing newly constructed housing units that are affordable to extremely low-, very low-, or low-income households within the City of Anaheim, subject to reasonable administration fees in accordance with HCD’s guidelines on the administration of local housing trust fund programs. 1 2
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24. After five years, any remaining funds yet to be disbursed shall revert back to the People, and be deposited in the Building Homes and Jobs Trust Fund or the Housing Rehabilitation Loan Fund for the sole purpose of financing newly constructed housing units that are affordable to extremely low-, very low-, or low-income households located in the City of Anaheim.
REPORTING PROVISIONS
25. Disbursement of the Payment, and the tracing of such funds to specific affordable housing development projects, shall be monitored by the Attorney General, with annual reporting requirements set forth below. The parties agree that, to the extent reasonably possible, the allocation of funds to be disbursed should include a cross-section of extremely low-, very low-, and low-income households disbursed throughout the City.
26. The City agrees to implement and maintain appropriate financial statements, schedules, and accounting records, in accordance with generally accepted accounting principles.
27. Thirty (30) days after Payment is deposited into the local housing trust fund, the City shall provide the Attorney General with an accounting of the Payment funds in the local housing trust fund, along with activities planned to be undertaken in the next reporting period with respect to how the City intends to disburse the funds. Thereafter, the City shall submit annual reports, no later than July 31
st of each year, to the Attorney General until the Payment funds are fully disbursed or reverted back to the People.
28. Annual reports, certified by the City Manager or designee, to the best of their knowledge, as accurate and complete based on generally accepted accounting principles, shall include the following information:
a) A financial statement of the local housing trust fund, including:
i. The amount of Payment funds available at the beginning of the reporting period;
ii. The amount drawn down to date;
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iii. The amount expended on eligible projects, separately categorized for extremely low-, very low-, and low-income households; and iv. Remaining balance
b) A narrative summary of the local housing trust fund’s activities, including:
i. The location, number, type, and unit count of eligible projects that have applied for, received, and will receive Payment funds, including the duration of affordability restrictions for each unit;
ii. Disbursements planned for the next reporting period; iii. Description of any problems encountered in the disbursement, implementation, and management of eligible projects receiving funds; and iv. Description of how such problems may impact the ability to timely complete the project
c) A detailed spreadsheet, produced in native .xlsx format, listing eligible projects assisted during the reporting period by project name, location, type of housing (e.g., multifamily, single family), number of units, income level restricted in each unit, bedroom count of each unit, duration of affordability restrictions, and amount of Payment funds expended per unit.
AFFORDABLE HOUSING COMMITMENTS ON ANGEL STADIUM PROPERTY
29. The City shall commit no less than $27,734,189.00 of the Full Purchase Price of Angel Stadium Property, separate and apart from the Payment to be deposited into the local housing trust fund, for the development of affordable housing units on Angel Stadium Property.
The City shall ensure that all affordable housing units for very low- and low-income households constructed on Angel Stadium Property shall be deed restricted for a period of at least 55 years for rental housing, and 45 years for ownership housing, as applicable.
30. The City shall make reasonable, good faith efforts to encourage the potential development of up to 466 affordable housing units for very low- and low-income households on Angel Stadium Property. However, given the uncertainty of funding and costs of future 1 2
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development, the actual number of units to be developed shall not be binding. To maximize the potential to develop the 466 very low- and low-income units, the Parties shall facilitate discussions between SRB and state and local affordable housing partners in an attempt to leverage public and private programs—such as tax credits, affordable housing bonds, private activity bonds or other bond financing instruments, grants, project- or tenant-based operating sources, local housing trust funds separate and apart from the fund described above in paragraphs 23 through 25, construction or permanent loans, and other financial tools—for affordable housing development on Angel Stadium Property. Should SRB and/or any state and local affordable housing partners refuse to participate in such discussions, such refusal shall not constitute a violation of this Judgment.
31. Good faith efforts shall also mean the City shall not unreasonably withhold approval of any reasonable request by SRB to develop low- or very low- income units on Angel Stadium Property. The City shall not withhold approval of any benefit from any available “density bonus” or other development incentives within the City’s control, provided that such request is allowed or authorized under law. To the extent any of these development incentives are subject to any discretionary approval by the City, the City shall exercise its discretion in a manner that is consistent with state law.
32. The City’s affordable housing commitment on Angel Stadium Property, as set forth in paragraphs 30 to 32, shall be reflected in any amended development agreement with SRB, or as an addendum to any operative development agreement. Further, any amended development agreement regarding Angel Stadium Property shall not require the City Manager’s prior approval to obtain such financing or development incentives. However, in accordance with this Judgment, the ultimate development of affordable housing on Angel Stadium Property shall be subject to any required approvals—either by-right or discretionary—from the City, SRB’s sole consent, and the securing of additional federal and/or state funding as set forth above.
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ENFORCEMENT AND RELEASE
33. Enforcement of the Surplus Land Act related to the disposition of Angel Stadium Property shall be limited to the terms set forth in this Judgment. Execution of this Judgment shall constitute full and final resolution of all disputes related to the City’s compliance with the Surplus Land Act regarding the disposition of Angel Stadium Property, except as set forth in this Judgment.
34. Nothing in this Judgment shall be construed to limit the authority or ability of the Attorney General to assert its right to protect the interests of the State of California or the people of the State of California. This Judgment shall not bar the Attorney General or HCD from investigating and enforcing laws, regulations, or rules against the City for conduct not covered by this Judgment. Further, nothing in this Judgment precludes or affects the Attorney General’s right to determine and ensure compliance with this Judgment.
35. This Judgment shall be deemed satisfied once all obligations under the provisions of this Judgment are fulfilled.
36. Following the deposit of the Payment set forth in paragraphs 23 through 25, above, the Attorney General and HCD release and forever discharge any civil claim for declaratory relief, damages, costs, attorneys’ fees, or penalties of any kind, against the City as prayed for in the Complaint. This Judgment also releases and forever discharges any civil claim for damages, costs, attorneys’ fees, or penalties of any kind against the City by HCD and the People related to the disposition of Angel Stadium Property.
37. The Attorney General representing both the People and HCD in this action executes this release in his, her, or their official capacity and releases only claims belonging to the Attorney General and HCD.
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MISCELLANEOUS PROVISIONS
39. Except as provided by law, nothing in this Judgment shall abrogate the confidentiality of any materials or information obtained by the Attorney General or HCD during its investigation of the City.
40. Nothing in this Judgment shall be construed as relieving the City of the obligation to comply with all local, state, and federal laws, regulations, or rules.
41. By stipulating to this judgment, the City is not intending to make any legislative changes, approve any entitlements or take any other action requiring future public process, and the City makes no representation or promise about the ultimate outcome of the process by which any such actions might ultimately occur.
42. If any portion of this Judgment is held invalid by operation of law, the remaining terms of this Judgment shall not be affected and shall remain in full force and effect.
43. Should the Brown Act litigation in Peoples Homeless Task Force Orange County v.
City of Anaheim and SRB Management, LLC (Orange County Superior Court Case No. 30-2020- 01135406), or any appeal thereto, result in the nullification of the City’s sale of Angel Stadium Property to SRB, this Judgment shall be deemed immediately null and void.
44. The terms of this Judgment shall be governed by the laws of the State of California, and shall be subject to all state laws, including state planning and permitting laws related to housing, and the California Environmental Quality Act, where applicable.
45. Each of the parties to this Judgment shall bear their own fees and costs.
46. This Judgment contains the complete agreement entered into by the Attorney General, HCD, and the City related to the conduct at issue. No promises, representations, or warranties other than those set forth in this Judgment have been made by the Attorney General, HCD, or by the City. This Judgment supersedes all prior communications, discussions, or understandings regarding the City’s course of conduct with regards to the sale and disposition of Angel Stadium Property as it relates to purported Surplus Land Act violations, whether oral or in writing.
47. The Attorney General, may, at his or her or their sole discretion, agree in writing to provide the City with additional time to perform any act required by this Judgment. 1 2
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48. The Judgment may be modified by a stipulation of the Parties as approved by the Court, or by court proceedings resulting in a modified judgment of the Court.
49. A ny failure by any party to this Judgment to insist upon the strict performance by any other party of any of the provisions of this Judgment shall not be deemed a waiver of any of the provisions of this Judgment, and such party, notwithstanding such failure, shall have the right thereafter to insist upon the specific performance of any and all of the provisions of this Judgment.
50. The use of headings in this Judgment is only for ease of reference, and the headings have no legal effect and are not to be considered part of this Judgment.
51. Jurisdiction is retained by the Court for the purpose of enabling any party to the Judgment to apply to the Court at any time for such further orders and directions as may be necessary or appropriate for the construction or carrying out of this Judgment for enforcement of compliance herewith, and for the punishment of violations hereof, if any.
52. The Parties agree and represent that any persons signing this Judgment are authorized by proper authorities to execute this Judgment on their behalf. By signing below, the City agrees to comply with all terms of the Judgment.
53. This Judgment may be executed in counterparts, and a facsimile or .pdf signature shall be deemed to be, and shall have the same force and effect as, an original signature.
54. All notices shall be provided to the following via email and overnight mail. The documents under paragraphs 26 through 34 shall be provided to the Attorney General via email:
City of Anaheim and City Council of Anaheim
Robert Fabela
City Attorney
City of Anaheim
200 S. Anaheim Blvd., Suite 356
Anaheim, CA 92805
[email protected]
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Department of Housing and Community Development
Megan Kirkeby
Deputy Director, Housing Policy Development
California Department of Housing and Community Development 2020 West El Camino Avenue, Suite 500
Sacramento, CA 95818
[email protected]
Ryan Seeley
General Counsel
California Department of Housing and Community Development 2020 West El Camino Avenue, Suite 500
Sacramento, CA 95818
[email protected]
Signatory for the Attorney General
David Pai
Supervising Deputy Attorney General
Office of the Attorney General
P.O. Box 70550
Oakland, California 94612-0550
[email protected]
Any Party may update its designee or address by sending written notice to the other Party informing them of the change.
57. The Clerk is ordered to enter this Judgment forthwith.
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APPROVAL BY COURT
APPROVED FOR FILING and SO ORDERED this _______ day of ________________, 2021.
________________________________________
Judge of the Superior Court
5095048.1