San Diegans etc. v. City of Oceanside
D069561M
| Cal. Ct. App. | Nov 7, 2016Background
- City of Oceanside negotiated a TOT (Transient Occupancy Tax) subsidy agreement with developer S.D. Malkin to build a 360-room luxury hotel; city agreed to remit up to $11,335,250 in TOT subsidies (nominally higher before discounting).
- The TOT Agreement provided for 100% of hotel-generated TOT to be paid to the developer for the first four years of each phase, then declining percentages until the subsidy cap was met.
- The city council agenda for the September 10, 2014 meeting listed items including a use-restrictions agreement, an agreement to share TOT generated by the project, and a subsidy report (AB 562/§ 53083) documenting subsidy amount, term, public purpose, tax revenue and jobs.
- San Diegans for Open Government (SDOG) sued, alleging Brown Act agenda defects and that the § 53083 subsidy report was deficient; trial court ruled for the city and judgment was appealed.
- The Court of Appeal affirmed, holding the agenda substantially complied with the Brown Act and the subsidy report substantially complied with § 53083.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Brown Act agenda adequacy | Agenda failed to give adequate notice that council would approve a substantial, ongoing TOT subsidy to developer | Agenda listed TOT-sharing, guarantee of resort development, and the statutorily required subsidy report — giving fair notice of the nature of the action | Affirmed: substantial compliance; agenda gave fair notice of essential nature of council action |
| § 53083 subsidy report sufficiency (amount) | Report did not clearly show present-value calculation and therefore failed to disclose subsidy amount | Report provided a good-faith, reasonable estimate of present-value subsidy (present-value sum of discounted annual subsidies) | Affirmed: substantial compliance; giving public a reasonable present-value estimate satisfied the statute |
| § 53083 jobs estimate | Report estimated jobs attributable to project, not specifically jobs attributable to the subsidy; omitted certain job breakdowns | Where subsidy is a condition of project construction, project job estimates reasonably reflect jobs attributable to the subsidy; statute does not require additional breakdowns SDOG sought | Affirmed: substantial compliance; job estimates acceptable and required breakdowns were met |
| § 53083 requirement to account for displacement/competitive job loss | SDOG argued the agency must estimate jobs lost elsewhere due to competition from the subsidized project | City argued statute does not mandate estimating displaced jobs or competitive losses | Affirmed: statute does not require estimating jobs lost to competitors; not read into § 53083 |
Key Cases Cited
- Moreno v. City of King, 127 Cal.App.4th 17 (2005) (agenda that gave no clue about contemplated public-employee dismissal was inadequate under the Brown Act)
- Castaic Lake Water Agency v. Newhall County Water Dist., 238 Cal.App.4th 1196 (2015) (substantial compliance standard for Brown Act agenda requirements; de novo review where facts undisputed)
- North Pacifica LLC v. California Coastal Com., 166 Cal.App.4th 1416 (2008) (definition of substantial compliance and its application to public-notice statutes)
- Carlson v. Paradise Unified Sch. Dist., 18 Cal.App.3d 196 (1971) (agenda language inadequate where it failed to reveal scope of action affecting public interests)