Don’t Count Just Yet on that Anaheim Convention Center Expansion Vote Surviving

Anaheim Convention Center - Expansion

Anaheim Convention Center: Expanding, perhaps, but not without a vote

OJB has obtained an e-mail from my fellow Government Accountability Attorney Cory Briggs to the Anaheim City Council, to which they probably should have paid more attention before last Tuesday’s vote.  I’ve taken out the e-mail addresses not to ward off people, but bots that scan the web for them.

From: Cory Briggs
Sent: Tuesday, March 11, 2014 3:06 PM
To: [each city council member]
Cc: [amezzacappa; City Clerk]
Subject: Opposition to Item 9 on City Council’s Agenda for March 11, 2014
Importance: High

Dear Mayor and City Council:

On behalf of The Inland Oversight Committee, I am writing to urge you not to approve the items before you tonight.  Your approval of these items would be illegal.

First, the Anaheim Public Financing Authority (“APFA”) does not have the legal authority to issue the bonds contemplated by this agenda.  The City nay not incur this level or length of indebtedness without obtaining the voters’ consent, and the Anaheim Redevelopment Agency’s authority to transact business or exercise powers has been fully withdrawn by the Legislature. See HEALTH & SAFETY CODE § 34172(b).  Significantly, even the ARA’s successor agency’s “rights, duties, and performance obligations under [any Joint Powers Agreement] shall be limited by the constraints imposed on successor agencies by [Assembly Bill X1 26 (2011)].”  Id., § 34178(b)(3).  The APFA does not have the authority to issue bonds under the Joint Powers Agreement or, even if the Agreement were to purport to give that authority, the APFA would no longer have the authority because neither of the parties to the Agreement has the authority at this point.  In short, the APFA has no more legal authority to issue the bonds than the City or the ARA does.

Second, the proposed financing structure is an obvious attempt to get around the debt limitations in City Charter Sections 1209 and 1210, which require a vote of the electorate before the City incurs any general- or revenue-bond indebtedness.  Indeed, Sections 3 and 4 of the Site and Facility Lease confirm that the transaction is being structured for the purpose of giving the APFA an interest in City property that APFA then uses as collateral for the bonds, the proceeds of which the City will direct.  The Purchase Agreement for the bonds would have no effect without the City executing it.  The other transaction documents confirm the scam being pulled on the public without a vote of the City’s electorate: namely, this is a debt being incurred by the City in substance, even if not (entirely) in form.  Unless this transaction is put to the voters, it is illegal.

Third, the proposed financing structure also violates Section 18(a) of Article XVI of the California Constitution, which essentially prohibits the City from incurring any debt that cannot be serviced by the current year’s income and revenue.  The $300 million the City seeks cannot be paid back in any fiscal year, much less the one in which the money is received.  Without a vote of the electorate, the structure is illegal.

Lastly, it appears that you have not subjected the “2014 Project,” as described in the agenda materials and defined in the Indenture, to environmental review under the California Environmental Quality Act.  The Indenture’s definition is specific enough to allow for meaningful review in connection with this attempt to generate the financing for the 2014 Project.  Accordingly, to approve the project before subjecting it to environmental review would violate CEQA and render your actions invalid.

For these reasons, I urge you not to approve the items before you today.

Cory J. Briggs

Briggs Law Corporation
San Diego County and Inland Empire [contact info redacted]

Important Notice: This message contains confidential information intended only for the use of the addressee(s) named above and may contain information that is legally privileged. If you are not an addressee or the person responsible for delivering this message to the addressee(s), you are hereby notified that reading, disseminating, distributing, or copying this message is strictly prohibited. If you have received this message by mistake, please immediately notify me by replying to this message and then delete the original message and your reply immediately thereafter. Thank you very much. 

Internal Revenue Service Circular 230 Disclosure: Nothing in this message is intended or written by Briggs Law Corporation (including its attorneys and staff) to be used and cannot be used for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing, or recommending to another party any transaction or matter addressed in this message.

Despite the confidentiality warning, this is now a public document — though out of courtesy I’ve sought and received permission to publish it here.

Let me translate for the City Council: you’ve broken the law and you’re going to get sued over it.  Briggs already beat you in a recent Brown Act case.  This one is going to hurt even more than that — especially if you act on it.  There’s still time to put it to a public vote in November.

I’ll also add some comments by Cynthia Ward, someone who (like me) is not automatically opposed to any version of an expansion of the Convention Center, but has learned not to trust Anaheim’s Council and the mercantilist portions of it staff.

They almost had me, and I am the biggest skeptic of the Council majority an their Chamber of Commerce enablers. I can see the value in expanding the Convention Center, if we can do an event while the next one is loading in it eliminates downtime. But i also knew based on who was selling this truckload of snake oil that it was too good to be true. Really, parking elsewhere? And how do we know how much it takes to move forward and bond for if we don’t have a plan for, or price for, the parking elsewhere? Perhaps this might have something to do with the Stadium development rights? All of these projects fit together, beginning with the lobbyist behind them, and they all stink to high heaven. Thanks Register, I knew I was missing something reading through the City’s docs, now I know where to look.

By the way, can anyone from Anaheim’s government explain to me what the ramifications are of the inclusion of conditions for capital appreciation bonds being listed in the indenture documents for the convention center expansion?  What are the conditions?  Beyond that — what is the size of the contemplated bonds?  Voters will want to know — once Cory Briggs gets paid for forcing the city to put the question on the ballot.

About Greg Diamond

Somewhat verbose attorney, semi-retired due to disability, residing in northwest Brea. Occasionally runs for office against bad people who would otherwise go unopposed. Got 45% of the vote against Bob Huff for State Senate in 2012; Josh Newman then won the seat in 2016. In 2014 became the first attorney to challenge OCDA Tony Rackauckas since 2002; Todd Spitzer then won that seat in 2018. Every time he's run against some rotten incumbent, the *next* person to challenge them wins! He's OK with that. Corrupt party hacks hate him. He's OK with that too. He does advise some local campaigns informally and (so far) without compensation. (If that last bit changes, he will declare the interest.)