Costa Mesa-based firm argues for coalition

Cities statewide saw their redevelopment agencies officially dissolve Wednesday after a Sacramento County judge refused to put a hold on the process during a court hearing last week.

Attorneys from the Costa Mesa-based Rutan & Tucker law firm argued Friday that portions of a state law that dissolved the RDAs were unconstitutional and exceeded the governor's powers during a fiscal emergency. They were seeking an emergency stay on the law, which took effect Wednesday.

The firm represented a coalition of 10 Southern California cities that did not include Costa Mesa. If the coalition's lawsuit seeking to throw out the Sacramento legislation and restore the agencies is successful, it would be felt by cities across California like Costa Mesa.

But because the Sacramento judge refused to halt the RDA-killing law from taking effect, the best cities can hope for now is some piecemeal reinstatement of the status quo if the lawsuit is successful, said Rutan & Tucker attorney Bill Ihrke.

Ihrke said the coalition's suit could end up in front of the state Supreme Court. The Supreme Court ruled Dec. 29 that the RDA-killing law was constitutional; the coalition's suit, however, argues the case on different grounds, Ihrke said.

RDAs oversaw blighted or struggling neighborhoods within cities. They were funded by property tax streams meant to improve neighborhoods by eliminating blight and replacing it with strong economic uses.

A simple majority of legislators last year approved breaking up the agencies so more money could be funneled into state coffers.

Costa Mesa had several projects lined up that will now have to compete with other city projects for funding. The city's Finance Department is looking to file paperwork with the state ensuring that the $10-million loan Costa Mesa gave its RDA will not be swallowed up by Sacramento and can instead be repaid.

joseph.serna@latimes.com

Twitter: @JosephSerna