Appendix — City of Rohnert Park v. Landrieu

Supreme Court brief1980

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DAK, JR., CLERK

In the Supreme Court of the

United States

Octoser Term, 1979

N-€9-105 1

Crry or Rounert Park, a municipal corporation,

Petttioner,

vs.

Moon Lanpriev, as Secretary of the United States

Department of Housing and Urban Development,

Crry or Santa Rosa, a municipal corporation,

Urnpan Renewat Acency of the City of Santa

Rosa, a public body, corporate and politic, and

Ernest W. Hany, Inc., a California corporation,

Respondents.

Appendices A through Z

Petition for a Writ of Certiorari

to the United States Court of Appeals

for the Ninth Circuit

Wuutum M. Brinton

Ricarpo J. Hecur

1400 Alcoa Building

One Maritime Plaza

San Francisco, California 94111

Attorneys for Petitioner.

Cotton, Seticman & Ray

Of Counsel

SORG PRINTING COMPANY OF CALIFORNIA, 346 FIRST STREET, SAN FRANCISCO 94105

‘ Appendices

TABLE OF CONTENTS

, Appendix Page

A Complaint for Declaratory and Injunctive

Relief 1

B Answer of James T. Lynn, as Secretary of

the United States Department of Housing

and Urban Development 42

C ° Answer of Ernest W. Hahn, Inc. 48

D Answer of City of Santa Rosa and Urban Re-

newal Agency of the City of Santa Rosa.... 60

E(1) Motion and Notice of Motion for Summary

Judgment of Ernest W. Hahn, Inc............ ope

(2) Affidavit of John M. Gilchrist, Jr. in Support

of Motion for Summary Judgment.............. 80

. (3) Memorandum of Points and Authorities in

Support of Motion for Summary Judgment 84

F(1) Notice of Motion for Summary Judgment

and Motion to Dismiss of Secretary of the

Department of Housing and Urban Devel-

opment 97

(2) Memorandum of Points and Authorities in

Support of Secretary’s Motion for Sum-

mary Judgment ~ 99

G(1) Notice of Motion for Summary Judgment

and Motion to Dismiss of City of Santa

Rosa and the Urban Renewal Agency of

. the City of Santa Rosa ame sons’ Lae

TABLE OF ConTENTS

Appendix Page

(2) Brief of City of Santa Rosa and Urban Re-

H(1)

M(1)

(2)

newal Agency of the City of Santa Rosa in

Support of Motion for Summary Judgment 124

Affidavit of R. Dean Stalar.w occ ccecceeene 169

Affidavit of Roland L. Brust..... 173

Affidavit of Claude Gren oo... e.cececccececceececoeee 179

Order Granting Summary Judgment Filed

November 24, 1976 183

Judgment filed December 6, 1976...................... 189

Notice of Appeal Filed December 16, 1976...... 190

Opinion of Court of Appeals Filed May 9,

1979 : 192

Petition for Rehearing Under Rule 40, and

Suggestion of a Hearing In Bane Under

Rule 35, Federal Rules of Appellate Proce-

dure, filed May 22, 1979 202

Order Denying Petition Filed July 24, 1979.... 219

Opinion of Court of Appeals filed July 24,

1979, as corrected by Order of Court dated

October 26, 1979 (Appendix R).. 220

Petition for Rehearing Under Rule 40, and

Suggestion of a Hearing In Bane Under

Rule 35, Federal Rules of Appellate Proce-

dure, filed August 6, 1979.......... 241

Order Denying Petition, Filed October 26,

1979 . iss 254

: AA _— - -

—— - —

TABLE OF ConTENTS lil

Appendix Page

P(1) Plaintiff-Appellant’s Motion for Judgment of

Civil Contempt Upon Defendants-Appel-

lees Pursuant to Rule 27, Federal Rules of

Appellate Procedure 255

(2) Points and Authorities in Support of Motion 296

Order Denying Contempt Judgment................ 306

Order Correcting Opinion filed by Court of

Appeals October 26, 1979 307

Plaintiff-Appellant’s Motion for Stay of

Mandate 309

Order Staying Issuance of Mandate filed

November 7, 1979............. 312

Order Recalling Stay of Mandate filed No-

vember 9, 1979.. sia 314

Appellant’s Reply to Objections of Appellees

Ernest W. Hahn, Ine. City of Santa Rosa

and Its Urban Renewal Agency to Appel-

lant’s Motion for a Stay of Mandate............ 315

Pertinent Statutes:

W(1) Sherman Act, 15 U.S.C. 1 et Seq., and more

particularly §§1 and 2 341

(2) Clayton Act, 15 U.S.C. 12 et seq., and more

particularly § 26 .... 343

(3) Administrative Procedure Act, 5 U.S.C. 551

et seq., 9 U.S.C. 701 et seq. and more par-

ticularly §§ 702 and 706(2)(A), (C) and

(D) 344

iv TABLE OF CONTENTS

dpe Page | In the Supreme Court of the

(4) National Housing Act of 1949, as amended, e

42 U.S.C. 1441 et seq., and more particu- , United States

larly 5 U.S.C. 1460(c) (4) 346 Ocroser Term, 1979

Regulations:

x Urban Renewal Handbook, Department of } RA rae

Housing and Urban Development, 7214.1

Rev. 8/74, Chapters 1-3 347

Crry or Rounert Park, a municipal corporation,

Depositions and Exhibits: | Petitioner,

Y(1) Pages 7, 9 and 24 of Exhibit 30 to Deposition bis

of James K. Burns (Ratcliffe Re-Use Ap- | Moon LanprieEv, as Secretary of the United States

praisal of November 15, 1972) 368 | Department of Housing and Urban Development,

| City or Santa Rosa, a municipal corporation,

(2) Pages 114-115 of Exhibit 1 to Deposition of oe Urnsan Renewat Acency of the City of Santa

Rosa, a public body, corporate and politic, and

Michael J. Daugherty (HUD Environ-

Ernest W. Hany, Inc., a California corporation,

mental Impact Statement of July, 1975) .... 371

. RO en a oo

(3) Pages 1 and 6 of Exhibit 6 to Deposition of el Bessa

Ernest W. Hahn (Agreement between

Teachers Insurance and Annuity Associa- Appendices A through Z

tion of America of March 18, 1976, and to

Ernest W. Hahn, Inc.). 374 Petition for a Writ of Certiorari

to the United States Court of Appeals

Note: for the Ninth Circuit

Exhibit attached to Affidavit of R. Dean

Stahr has been omitted.

Page numbers on all original pleadings ap-

pear in brackets [] at end of the last word

or sentence of said pleading.

Page numbers for the appendix appear at the

top of each page thereof.

: Appendix A

Original Filed

Nov 19 1974

Clerk, U.S. Dist. Court

i] San Francisco

iaae Sa i ss OC

Wuu1am M. Brinton

Ricarpo J. Hecut

Corron, SELIGMAN & Ray

Alcoa Building, Suite 1400

One Maritime Plaza

San Francisco, California 94111

| Telephone: (415) 397-4600

Attorneys for Plaintiff

United States District Court

Northern District of California

Civil Action No. 74 2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, as Secretary of the United States

Department of Housing and Urban Development;

City of Santa Rosa, a municipal corporation;

Urban Renewal Agency of the City of Santa Rosa,

a public body, corporate and politic,

and Ernest W. Hahn, Inc., a California corporation,

Defendants.

COMPLAINT FOR DECLARATORY

AND INJUNCTIVE RELIEF

Plaintiff, by its attorneys, alleges:

(a) This action arises under various laws of the United

States, more particularly The Housing Act of 1949 as

amended (42 U.S.C. 1441, et seq.), the Sherman Act (15

U.S.C. 1 and 2), the Clayton Act (15 U.S.C. 26), the

2 Appendix

National Environmental Policy Act (42 U.S.C. 4321, et

seq.) and the Administrative Procedure Act (5 U.S.C. 701,

et seq.).

(b) The matter in controversy exceeds, exclusive of in-

terest and costs, the sum of ten thousand ($10,000) dollars.

(28 U.S.C. 1331.) [1]

ant to the provisions of 28 U.S.C. 2201, for the purpose of

determining a question of actual controversy between the

parties, as hereinafter more fully appears, and for injunc-

tive relief.

| II

Plaintiff, CITY OF ROHNERT PARK, is and was «+

all times herein material a municipal corporation, organ-

ized pursuant to Part 1 of Division 2 of the Government

Code, and is situated in the County of Sonoma, State of

California. Said plaintiff is hereinafter referred to as

“Plaintiff City.” Plaintiff City, its inhabitants, taxpayers

and property owners have been injured in their business

and property, and are threatened with further injury to

their said business and property as the result of the acts

and conduct of the defendants hereinafter named as more

particularly appears hereinafter.

(a) Defendant JAMES T. LYNN is the Secretary of

the United States Department of Housing and Urban De-

velopment, and is sued herein solely in his official capacity.

Under the provisions of the Housing Act of 1949, said

defendant may sue and be sued. The duties of this defend-

ant, as said Secretary, are performed in the County of

Sonoma by surbodinates based in the San Franciseo Area

office of the Department which is located in the Northern

District of California. Said subordinates are and were at

all times herein material acting in accordance with the

Appendix 3

policies of said Department, not contrary thereto. They

include without limitation, James H. Price, Area Director;

Julian A. Fitzhugh, Program Manager, Area B, and

Stephen B. Sachs, Assistant Program Manager, Area B.

Said defendant is hereinafter referred to as “Defendant

Secretary.”

(b) Defendant CITY OF SANTA ROSA is and was at

all times herein material a municipal corporation organ-

ized under a freeholders charter adopted and amended

pursuant to the provisions [2] of the Constitution and laws

of the State of California, and is also situated in said

County of Sonoma in said State. Said defendant is herein-

after referred to as “Defendant City.”

(ec) Defendant URBAN RENEWAL AGENCY of the

City of Santa Rosa, is and was at all times herein mate-

rial, a public body, corporate and politic, organized by

Defendant City on or about March 28, 1958, pursuant to

Part 1 of Division 24 of the Health and Safety Code of

the State of California, and has its office in Defendant

City. Said defendant is hereinafter referred to as “De-

fendant Agency.”

(d) Defendant ERNEST W. HAHN, INC., is and was

at all times herein material a California corporation, hav-

ing an office for the transaction of business in the City of

Hawthorne, County of Los Angeles, State of California.

Said defendant is and was at all of said times engaged

in the business of “shopping center developer” in said

County of Sonoma as hereinafter more fully appears. Said

defendant is hereinafter referred to as “Defendant De-

veloper.”

(a) Defendant City is located some seven (7) miles north

of Plaintiff City. The principal and most convenient means

4 Appendix

of vehicular ingress and egress for both of said cities is

United States Highway 101.

(b) On or about October 10, 1966, Plaintiff City adopted

a general or master plan for the City of Rohnert Park

pursuant to the requirements of Chapter 3, Title 7 of the

Government Code. Said master plan, inter alia, designated

certain real property within its boundaries as a site for

the development of commercial facilities including a re-

gional shopping center. Some of the real property so des-

ignated is and was at all times herein material owned by

Plaintiff City. The development of this site for commercial

purposes has been and will be financed entirely [3] with

private capital. The site is located on both sides of U.S.

Highway 101 at the Rohnert Park Expressway.

zoned portions of the property designated as aforesaid

consistent with the requirement of Section 65860, Govern-

ment Code, which requires generally that city zoning ordi-

nances shall be consistent with the general or master plan

of a city, including Plaintiff City.

(d) The purpose of Plaintiff City in designating, zoning

and developing said site has been to further its proprietary

interests; to increase its retail sales tax revenue, and to

further the interests of its inhabitants, property owners

and taxpayers.

(a) During the period 1966-1972, Plaintiff City spent

the aggregate sum of $1,207,000 for street construction,

sewer and water mains and other improvements to prepare

said site for the purpose for which it was designated in

its said general plan. The money required to finance this

work was raised by special assessments levied on the vari-

ous owners of the site.

Appendix 5

(b) There is currently in the Rohnert Park Area a

demand for approximately 627,000 square feet of retail

floor space requiring the use of some forty-five (45) acres

of land. There are developers who are ready, willing and

able to fulfill this demand in said site, but they are inhib-

ited from so doing by the threat of a federally subsidized

competing shopping center planned by Defendant Agency

as hereinafter alleged.

(a) On December 5, 1961, Defendant City adopted a re-

development plan for a redevelopment project area within

its boundaries known as the Santa Rosa Center Project

(California R-45). This area is immediately adjacent to

U.S. Highway 101. [4] This redevelopment plan has been

amended from time to time, and the last of these amend-

ments was adopted on March 10, 1970. Defendant Agency is

and has been at all times herein material vested with the

responsibility for carrying out the redevelopment plan with

the approval of Defendant Secretary and his subordinates.

Defendant Agency, pursuant to an agreement with Defend-

ant Developer, has been engaged since March, 1972, in a

scheme to develop a regional shopping center, which is to

be subsidized with federal funds. This shopping center is

to occupy some thirty-two (32) acres in the downtown area

of Defendant City, theretofore acquired by Defendant

Agency with funds furnished by Defendant Secretary. This

site had been originally destined under the redevelopment

plan as last amended for land uses not compatible with such

a center. Accordingly, on October 29, 1974, Defendant City

purported to again amend said plan to provide for said

center and at the same time approved a land disposition

agreement designed to subsidize Defendant Developer, as

alleged in paragraph VII, infra. No provision whatsoever

6 Appendix

has ever been made in this redevelopment plan for per-

manent family housing (Housing Act of 1949, U.S.C. Titie

42, Sections 1441-1441a).

(b) The said redevelopment plan initially adopted by

Defendant City on or about December 5, 1961, was approved

by the United States Housing and Home Finance Agency

(predecessor of United States Department of Housing and

Urban Development) on January 15, 1962. Thereafter and

on March 9, 1962, said Housing and Home Finance Agency

received an application for a Loan and Grant from Defend-

ant Agency. Pursuant to said application, and on June 2,

1962, a loan and grant contract was entered into between

Defendant Agency and said Housing and Home Finance

Agency whereunder the United States was to defray three-

fourths (34) of the net costs of the redevelopment project

and Defendant City was to defray by means of grants-in-aid

one-fourth (14) of the [5] said net costs of the project. This

contract authorized redevelopment activities in approxi-

mately forty (40) acres of the downtown section of Defend-

ant City. This contract provided for a Federal Temporary

Loan in the sum of $4,922,616, and a Federal Project Grant

of $2,625,023.

and all of these amendments have been for the purpose of

increasing said loans and grants, so that by the last or

eighth amendment, executed on November 27, 1973, the

temporary loan was increased to a total of $16,557,309, and

the grant to a total of $12,236,717. The sixth amendment to

the contract, executed on September 14, 1970, increased the

total grant from $3,263,332 to $8,318,497 (an increase of

$5,055,165), and increased the temporary loan from $5,908,-

880 to $13,223,939 (an increase of $7,315,059. The purpose

of this amendment to said loan and grant contract was to

hg apna

Appendix 7

provide Defendant Agency with funds to acquire, as afore-

said, said thirty-two (32) acres. This action was taken after

the effective date of the National Environmental Policy

Act, but Defendant Secretary did not at any time prepare

an Environmental Impact Statement on said redevelop-

ment project (California R-45).

Vil

Said agreement between Defendant Agency and Defend-

ant Developer is an “exclusive” agreement, and was entered

into with the knowledge and consent of Defendant Secre-

tary. This agreement provides, inter alia, that Defendant

Agency will sell said thirty-two (32) acres only to Defend-

ant Developer for the sum of $2,000,000, and that Defend-

ant Developer will build thereon a massive shopping center

containing approximately 760,000 square feet of retail sales

space. This acreage was acquired and cleared [6] by De-

fendant Agency at a cost of some $7,000,000. The fair market

value of the property for the highest and best uses per-

mitted under the redevelopment plan is approximately

$12,000,000. The effect of the agreement will be therefore

to subsidize Defendant Developer by the use of public funds

to the extent of about $10,000,000. This phase of the agree-

ment, if carried out, will constitute a violation of the Hous-

ing Act of 1949 and the Community Redevelopment Law of

the State of California, both of which require that property

in the urban renewal area be sold for its fair market value

for uses in accordance with the urban renewal plan, all as

set forth in 42 U.S.C. 1460(c) (4); Urban Renewal Manual

Handbook 7214.1 Rev., Chapter 1, p. 1, Chapter 3, p. 9; and

Health and Safety Code, Section 33433.

8 Appendix

Vill

The facts alleged in paragraph IX hereof, infra, estab-

lish that the natural and probable consequences of this

agreement when implemented as alleged in paragraph VIT

hereof, supra, will be the following:

(a) To enhance and render impregnable the already

dominant position which Defendant City and its merchants

have in the retail merchandising industry in Somona County

generally and more specifically in the Santa Rosa Trade

Area;

(b) To eliminate actual and potential competition from

merchants located in other communities, including Plaintiff

City, all to the irreparable loss or damage of Plaintiff City,

its inhabitants, taxpayers and property owners;

retail sales tax dollars collected in Sonoma County and to

increase the burden of property taxes in other communities,

including Plaintiff City, all to the irreparable loss or

damage of [7] Plaintiff City, its inhabitants, taxpayers and

property owners;

(d) To unduly restrain the trade and commerce among

the states and with foreign countries.

(a) A substantial part of all merchandise sold in retail

outlets in Sonoma County is imported into that County from

states other than California and from foreign countries.

(b) Defendant City is the hub of the Santa Rosa Trade

Area and attracts trade and custom in substantial numbers

from the following neighboring cities : Plaintiff City, Clover-

dale, Heaidsburg, Sebastopol, Cotati, Petaluma and

Sonoma, as well as the unincorporated territory adjacent

to these cities.

Appendix 9

tail sales was in excess of forty-four percent (44%) in 1973.

(d) General merchandise taxable retail store sales (in-

cluding drug stores) amounted to $70,900,000 in 1973, for

Defendant City, as compared to $94,000,000 for Sonoma

County as a whole.

(e) Defendant City captured in excess of seventy-five

percent (75.4%) of all taxable general merchandise sales

made in Sonoma County in 1973.

(f) All taxable retail sales in Defendant City in 1972

totalled $179,381,000.

(g) Retail sales tax is applicable not only to residents,

but to non-residents of the community where it is levied.

Thus, this tax helps broaden the tax base and contributes

to relieving the local property tax burden. The following

table showing sales tax distribution in Sonoma County,

1973-1974, establishes the outstanding trade and fiscal ad-

vantages now enjoyed by Defendant City and its merchants,

inhabitants and taxpayers: [8]

County of Sonoma

Sales Tax Distribution

Adjusted Net Sales Tax 1973-74

Percent Increase

Sales Tax of Over Prior Population

Dollars Total Year Total

Cloverdale ............ $ 88,373 1.30% 27.19% 3,440

CTI Giariennscnsincsaants 90,124 1.32 23.91 2,830

Healdsburg .......... 455,109 6.67 96.40 5,900

Petaluma ................ 795,855 11.67 17.09 31,150

Rohnert Park ........ 138,774 2.03 38.07 11,500

Santa Rosa ............ 2,616,780 38.37 15.10 60,800

Sebastopol .............. 200,616 2.94 10.90 4,480

OIE icctccatimsatoed 187,206 2.74 11.41 4,850

Sub-Total .............. $4,572,837 67.05% 20.82% 124,950

Unincorporated

P| DRE nee $2,247,868 32.96% 6.89% 100,450

Entire County ...... $6,820,705 100.00% 15.84% 225,400

Sources: State Board of Equalization

State Department of Finance

10 Appendix

(h) There are now approximately 748,000 square feet of

general merchandise space available in Defendant City.

Under the terms of said agreement Defendant Developer

will construct an additional 438,000 square feet of general

merchandise space in the proposed shopping center, thus

increasing the total of such space in Defendant City to

1,186,000 square feet. Defendant Developer will also build

pursuant to said contract 322,000 square feet of other retail

space in the shopping center. The excess retail space capac-

ity to be so created will not be absorbed by the demand

therefor until some time after the year 1980. Hence, this

publicly subsidized project will render noncompetitive and

therefore impractical any project for a retail center not

similarly subsidized in the proximity of Defendant City.

(i) The said contract also requires that this subsidized

shopping center shall provide free offstreet parking in a [9]

garage with approximately 1,250 stalls for patrons of the

center. The natural and probable consequence of providing

such free parking will be to induce customers to trade only

at the regional shopping center of Defendant Developer

and to reduce or eliminate actual or potential competition

from retail merchants in surrounding communities including

Plaintiff City. According to the contract the parking struc-

ture in which these stalls are to be located will be built by

Defendant Developer for Defendant Agency at a cost not

to exceed $2,000,000, and this cost is to be defrayed from

the proceeds of the sale of not less than $4,200,000 in tax

allocation bonds issued pursuant to the California Com-

munity Redevelopment Law (Health and Safety Code,

Section 36670). The probable and natural consequence of

this additional tax subsidy will be to divert for a period of

approximately twenty (20) years the major portion of the

property tax collected in the redevelopment area to pay the

———————

Appendix 11

principal and interest due on said bonds, and to require

that the burden of the deficit thereby created be borne by

other taxing authorities, including Plaintiff City. The addi-

tional tax subsidy to be so created will also serve to dis-

courage and to make impractical any project for a retail

center in the proximity of Defendant wii which is not

similarly subsidized.

(j) The contract also provides that Defendant Agency is

to acquire and sell additional acreage in the redevelopment

area to Defendant Developer. The cost of acquiring and

clearing said property is $6,000,000. Under the terms of

the agreement this property will be conveyed to Defendant

Developer either without charge or for the sum of $1,000,000,

all at the option of Defendant Agency. Plaintiff City, on

information and belief, alleges that said property will be

acquired with federal funds, This additional subsidy will

also chill and smother any competitive project for a retail

center in the proximity of Defendant City, which is not

similarly subsidized. [10]

(a) In early September, 1973, Plaintiff City became

aware of the salient features of the contract between Defend-

ant Agency and Defendant Developer, and at about that

time it also learned that Defendant Secretary had received

an application from Defendant Agency requesting that its

total grant be increased by an additional $1,800,000 and that

its project temporary loan be also increased by an addi-

tional $1,800,000. Plaintiff City likewise learned that the

purpose of this application was to procure funds to defray

the costs to be incurred in implementing the contract between

Defendant Agency and Defendant Developer. Realizing that

this contract and its implementation would entirely frus-

trate its plan for a regional retail center to its injury and

12 Appendix

that of its residents and taxpayers, Plaintiff City deter-

mined to request Defendant Secretary not to approve the

land disposition provision of the contract and not to approve

any further applications for federal funds. To this end,

Plaintiff City on or about October 29, 1973, addressed a

letter to Defendant Secretary outlining its objections to the

contract and its further implementation with federal funds,

and requesting an administrative hearing. A true copy of

said letter is attached hereto marked Exhibit A and made a

part hereof.

(b) On November 27, 1973, Defendant Secretary heed-

less of Plaintiff City’s said letter, granted Defendant

Agency’s application for said additional funds.

1973, granted Plaintiff City’s request for a hearing and

scheduled for this purpose an informal conference to be

held on January 15, 1974. In this letter Defendant Secretary

also requested that Plaintiff City’s further comments be

submitted in writing to one of his subordinates. A true copy

of this letter is attached hereto, marked Exhibit B, and made

a part hereof. On January 11, [11] 1974, and in compliance

with the request of Defendant Secretary, Plaintiff City sub-

mitted a letter containing its further comments. A true

copy of said letter is attached hereto, marked Exhibit C,

and made a part hereof.

(d) Said informal conference was held as scheduled be-

fore said Mr. Julian A. Fitzhugh, a subordinate of Defend-

ant Secretary. During the course of the conference the

question, among others, was raised as to whether Defendant

Secretary could legally continue to advance further funds

to Defendant Agency without first preparing an Environ.

mental Impact Statement, as required by The National

Environmental Policy Act (42 U.S.C. Sections 3431, et

Appendix 13

seq.). At the conclusion of the conference, the matter was

submitted for decision to Defendant Secretary’s said sub-

ordinate,

(e) By letter dated May 16, 1974, Defendant Secretary

informed Plaintiff City, in substance, that it found its

objections to the contract and its implementation entirely

without merit. A true copy of this letter is attached hereto,

marked Exhibit D, and made a part hereof. In said letter,

Defendant Secretary, in effect, admitted that it was required

to prepare an Environmental Impact Statement before

making further funds available to Defendant Agency, but

then went on to state “. . . the Department will still have

substantial ability to eliminate or mitigate any adverse

environmental effects determined during the environmental

clearance process prior to approval of disposition and plan

change activities, which are the activities that determine

the actual reuse of project land” (Exhibit D, p. 6).

(a) Defendant Secretary has not prepared said Environ-

mental Impact Statement but has nevertheless since May,

1974, advanced additional funds to Defendant Agency in

a sum in excess of $500,000. [12]

(b) Defendant Agency and Defendant City on Septem-

ber 24, 1974, filed an action in the Superior Court of the

State of California in and for the County of Sonoma

against Plaintiff City. The purpose of the action is per-

manently to enjoin any development of Plaintiff City’s

commercial site, and to this end it challenges the validity

of procedures taken by the governing body of Plaintiff

City to rezone portions of said site. The pleadings on file

disclose that Defendant City and Defendant Agency claim,

in effect, the sole and exclusive right to develop a regional

14 Appendix

shopping center in said County, and that any erosion of

this alleged right will result in “irreparable injury” to

them. Said action is without merit and was brought to deter

Plaintiff City from authorizing and implementing the de-

velopment of its commercial site in accordance with its

general plan adopted as aforesaid on October 10, 1966.

the cost of said litigation is being defrayed with funds

obtained by Defendant City from Defendant Secretary.

XII

All of the offenses and other conduct charged above

against defendants herein, including said litigation, were

in furtherance of said conspiracy in restraint of trade and

of their attempt to monopolize said trade in Sonoma

County, all in violation of Sections 1 and 2 of the Sherman

Act (15 U.S.C. 1 and 2), and said offenses and other con-

duct threaten irreparable loss or damage to Plaintiff City,

its inhabitants, merchants, property owners and taxpayers.

WHEREFORE, Plaintiff City prays for judgment as

follows:

1. A declaration that the sale of land to Defendant

Developer by Defendant Agency at less than the fair mar-

ket value of the land for its highest and best uses permitted

under the urban renewal plan of Defendant City is illegal

and in violation [13] of 42 U.S.C 1460(c)(4) and Section

33433, Health and Safety Code;

2. “A declaration that Defendant Secretary is acting

illegally and in excess of his authority in approving the

agreement between Defendant Agency and Defendant De-

veloper for disposition of said land to the latter;

3. A declaration that the issuance by Defendant Agency

of tax allocation bonds to finance construction of all or any

Appendix 15

part of the urban renewal project in accordance with said

agreement will cause irreparable damage to the various

taxing agencies of Sonoma County, including Plaintiff

City;

4. A declaration that Defendant Secretary has acted

and continues to act illegally and in excess of his authority

in approving payments of public funds to Defendant

Agency without an Environmental Impact Statement pur-

suant to the provisions of The National Environmental

Policy Act;

d. A declaration that Defendant Secretary has acted

and continues to act illegally and in excess of his authority

in approving payments of public funds to Defendant

Agency without first ascertaining that action and conduct

of Defendant Agency and Defendant City complies in all

respects with the laws of the State of California;

6. A declaration that the agreement between Defendant

Agency and Defendant Developer, if carried out, repre-

sents a combination and conspiracy in unreasonable re-

straint of interstate trade or commerce in Sonoma County;

7. A declaration that the agreement between Defendant

Agency and Defendant Developer, if carried out, repre-

sent an attempt to monopolize, or a combination or con-

spiracy to monopolize interstate trade or commerce in

Sonoma County or some part thereof;

8. A declaration that Plaintiff City, its inhabitants,

merchants, property owners and taxpayers are threatened

with loss or damage bv violations of the antitrust Jaws,

which loss or [14] damage greatly exceeds the sum of

$1,207,000 ;

9. A declaration that Plaintiff City is entitled to sue

for and have injunctive relief against said threatened loss

16 Appendix

or damage by the violations of the antitrust laws and the

Housing Act of 1949;

10. Plaintiff City further prays for an injunction per-

manently restraining:

(a) Defendant Secretary or any of his subordinates

from approving the land disposition agreement between

Defendant Agency and Defendant Developer;

(b) Defendant Agency from selling, transferring or

otherwise disposing of all land covered by and described

in the disposition agreement with Defendant Developer to

said defendant, its successors, heirs and assigns;

otherwise disposing of all land acquired or to be acquired

by it for sale, transfer or other disposition to Defendant

Developer for use by it in connection with or as part of the

regional shopping center contemplated by Defendant

Developer ;

(d) Defendant City from taking any action of any kind

whatsoever, including without limitation, the exercise of

its powers of eminent domain to condemn or otherwise

acquire any real property with public funds for eventual

resale to Defendant Developer;

(e) Defendant Secretary, Defendant City and Defendant

Agency from taking any further action of any kind what-

soever, including without limitation, authorizing or issuing

any obligations, securities or notes by Defendant Agency

which are guaranteed by Defendant Secretary, until or

unless said Defendant Secretary first complies with all

requirements of The National Environmental Policy Act;

(f) Defendant Secretary from authorizing the [15] pay-

ment, either by loan, grant or guaranty of any further pub-

lic funds to Defendant Agency until or unless said Defend-

ao 8 sme geen =

Appendix 17

ant Secretary first complies with all requirements of The

National Environmental Policy Act;

(g) Defendant Secretary from authorizing, approving

or taking any action whatsoever without first complying

with The National Housing Act—42 U.S.C. 1460(e) (4)—

and the California Community Redevelopment Law; Sec-

tion 33433, Health and Safety Code;

(h) Defendant Secretary, Defendant City and Defend-

ant Agency from taking any action of any kind whatsoever

the effect of which will cause or threaten irreparable loss

or damage to Plaintiff City by reason of any violation of

the antitrust laws of the United States—15 U.S.C. 1, 2 and

the Housing Act of 1949.

11. Plaintiff City further prays for judgment awarding

it all costs sustained by it in bringing this action, including

without limitation, reasonable attorneys’ fees.

12. Plaintiff further prays for such other relief as is

proper in the premises.

Dated: November 19, 1974.

WILLIAM M. BRINTON

RICARDO J. HECHT

By Wru1am M. Brinton

Of Counsel

COTTON, SELIGMAN & RAY [16]

18 Appendix

EXHIBIT A

October 29, 1973

Mr. James H. Price, Area Director

Department of Housing & Urban Development

One Embarcadero Center, Suit 1600

San Francisco, California 94111

RE: SANTA ROSA CENTER PROJECT

(CALIFORNIA R 45)

ADMINISTRATIVE COMPLAINT

Dear Mr. Price:

We represent the City of Rohnert Park, a city organized

and existing under and by virtue of the laws of the State

of California. Rohnert Park is situated in the County of

Sonoma, in said State, some seven miles south of the City

of Santa Rosa.

Reference is hereby made to the application for amended

Loan and Grant Contract for Santa Rosa Center Project

No. 1 (Calif. R. 45) filed in the San Francisco area office

of the Department of Housing and Urban Development.

This application was filed by the Urban Renewal Agency of

the City of Santa Rosa, a public agency designated by the

City of Santa Rosa to carry out the functions, objectives,

duties and purposes of the Santa Rosa Urban Renewal

Project. Under this [1] application, said Agency seeks to

obtain additional financing from the Department in the

amount of two million dollars ($2,000,000) for said Project.

This additional grant is to be used to finance a downtown

regional shopping center which is to be built and developed

by Mr. Ernest W. Hahn, a private developer. As part of the

scheme to finance the construction of said center, the Agen-

cy will authorize the issuance of tax allocation bonds. These

bonds, it has been estimated, will be paid off in approxi-

Appendix - 19

mately ten (10) years. The said center is to be built on land

to be acquired by the Agency in the exercise of the power of

eminent domain. This land, when acquired and cleared, will

be sold to Mr. Hahn at a substantial discount from the cost

of acquisition to the Agency. Thus, it can be seen that the

Agency plans to subsidize a private developer in the build-

ing of this center by the use of federal and local tax money.

. Mr. James K. Burns is and has been for some years past,

the Executive Director and Secretary of the Agency. On or

about September 23, 1973, Mr. Burns publicly announced

that the Department would on or about March 10, 1974,

give its final approval to said Project and that thereupon

said additional [2] federal financing would become avail-

able. :

The implementation of this Project through the Depart-

ment’s approval and by the use of federal and local tax

funds will cause our client, and its residents and taxpayers

great economic injury, measurable in the hundreds of

thousands of dollars. The following is a brief outline of the

factors that indicate that such economic injury is reason-

ably certain to ensue if said Project is thus implemented.

1. Our client has planned a regional shopping center

which is to be developed. with private capital, and

which is not to be subsidized by federal, state or

local tax moneys. Obviously, our client’s project

cannot compete with one that is to be funded with

public money, and accordingly, our client will not

- only lose what it has invested in the planned proj-

ect, but wiil also be deprived of the tax revenue

that its project might have generated when made

effective.

2. (a) All the land included in the Agency’s Project

in Santa Rosa has been frozen at its current [3] de-

Appendix

pressed assessed valuation. All of the increased

property taxes generated by the shopping center to

be developed by Mr. Hahn will be pledged to pay

for parking garages and other improvements bene-

fitting the shopping center. Thus, while the tax allo-

cation bonds remain unpaid as to interest and

principal (approximately ten (10) years), neither

Sonoma County nor the local school districts will

receive the benefit of the increased taxes to be gen-

erated by the center, as these will all be ploughed

back into it.

(b) Moreover, the development of this center, as the

evidence will show, will require the use of at least

fifteen million ($15,000,000) dollars of federal tax

money. Additionally, the increased property and

other taxes to be thereby created, estimated at

approximately two million ($2,000,000) dollars per

year will, as the evidence will also show, be used for

the benefit of the Project alone. This sum is in effect

diverted tax money which [4] will have to be made

up by all taxpayers in the County, including each

and every taxpayer in the City of Rohnert Park.

Also, this Project will evitably divert retail sales

tax producers into Santa Rosa who otherwise might

have spent their money in Rohnert Park or else-

where in the County.

. On June 11, 1973, the Urban Renewal Agency

adopted a resolution of intention. It declared its in-

tention to sell one million, eight hundred thousand

($1,800,000) dollars in tax allocation bonds, the

proceeds of which are intended to be used to provide

public parking for the purpose of providing the

local share of project costs for Project R-45. This

—

Appendix 21

resolution is not sufficient on its face to support any

grant whatsoever from the United States Depart-

ment of Housing and Urban Development. See

Urban Renewal Handbok (REM 7216.1).

In connection with all the foregoing, we would like to call

your attention to an anomaly that should not be over- [5]

looked. In 1972, our client obtained from the United States

Economic Development Administration a grant for fifty

(50%) percent of the cost of a freeway overpass at the

Rohnert Park Expressway (total cost, $800,000). In order

to obtain this grant our client was required to demonstrate

that as a result of the construction of this overpass, the

community would be able to generate additional jobs

through the development of neighboring commercially des-

ignated property including a planned regional shopping

center which was to be built as stated above, with private

capital, Clearly, the grant that the Department may accord

to the Santa Rosa Project will entirely defeat the objective

sought to be achieved by the Economic Development Ad-

ministration when it made its grant to our client. We sub-

mit that agencies of the United States should not work at

cross-purposes.

When Congress enacted the Housing Act of 1949, it com-

manded that the Department ef Housing and Urban Devel-

opment should exercise its powers so as to encourage and

assist the production of housing of sound standards, and

while so doing, it declared that this objective should he at-

tained whenever possible through private enterprise (42

U.S.C.A. [6] Section 1441). Santa Rosa Center Project No.

1 (Calif. R.45) has nothing to do with either housing or pri-

vate enterprise.

22 Appendix

Please consider this letter as an “administrative com-

plaint” opposing said project in its present form, and the

Department is hereby requested to hold a hearing in con-

nection therewith at which our client may submit oral and

documentary evidence in support thereof.

Sincerely,

COTTON, SELIGMAN & RAY

Se yc aidicsasaaadbtuedtabiitbenesinendicmaclore:

William M. Brinton

ec: Mr. James K. Burns

ee ee ee

ee cin ae Bal oe

Appendix 23

EXHIBIT B |

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

SAN FRANCISCO AREA OFFICE

ONE EMBARCADERO CENTER, SUITE 1600

SAN FRANCISCO, CALIFORNIA 94111

REGION Ix

450 Golden Gate Avenue

P.O. Box 36003

San Francisco, California 94102

IN REPLY REFER TO:

Dee 27 1973

Mr. William M. Brinton

Cotton, Seligman and Ray |

#1 MaritimePlaza

San Francisco, California 94111

Dear Mr. Brinton:

This is in response to your request for an “administrative

hearing” concerning the Santa Rosa Center Project No.

Calif. R-45.

Neither the Administrative Procedures Act, nor any of

the program statutes under which the Department of Hous-

ing and Urban Development functions provides for the

processing of an “administrative complaint” or the holding

of an administrative hearing in connection with any applica-

tion. The Department, however, does consider complaints

by interested parties before it acts on matters which come

before it.

In accordance with this policy, the Department has sched-

uled an informal conference for January 15, 1974 at 9:00

A.M. to receive any comments you and your clients may

wish to present concerning Project No. Calif. R-45. You

should submit your comments in writing to Julian Fitz-

24 Appendix

hugh, Program Manager, Area B, by January 11, 1974. At

the meeting you will then be given an opportunity to discuss

those points with my staff and you will be informed at a

later date of our decision on the matters raised.

The meeting will be held at One Embarcadero Center,

Sacramento at Battery Streets, San Francisco, on the

Seventeenth Floor. If you are unable to attend at the

scheduled time, please call Mr. Fitzhugh to try to arrange

a mutually acceptable meeting time.

Sincerely,

JAMES H. PrRicE

James H. Price

Area Director

April 1973

Sth Anniversary U.S. Fair Housing Law

Support It—Work For It

January 11, 1974

Mr. Julian Fitzhugh, Program Manager

San Francisco Area Office, Area

Department of Housing and Urban Development

One Embarcadero Center, Suite 1600

San Francisco, California 94111

RE: SANTA ROSA CENTER PROJECT

(CALIFORNIA R-45)

ADMINISTRATIVE COMPLAINT

Dear Mr. Fitzhugh:

We represent the City of Rohnert Park.

On October 29, 1973, we mailed to Mr. James Price, Area

Director of the Department of Housing and Urban Devel-

2 i ee a

Appendix 25

opment, an administrative complaint on behalf of our client

concerning Santa Rosa Center Project No. Calif. R-45.

This complaint appears to have been received in Mr.

Price’s office on October 30, 1973. In it we manifested

our client’s opposition to an application for an amended

Loan and Grant for said project filed with the Department

by the Urban Renewal Agency of the City of Santa Rosa

whereby the Agency sought additional financing in the

approximate amount of $2,000,000 to subsidize the con-

struction and development of a downtown regional shop-

ping center which was to be built by a private developer.

The reasons underlying our client’s opposition to the appli-

cation were set forth in detail in the complaint.

Mr. Price responded to this complaint by letter dated

December 27, 1973. In this letter Mr. Price stated, inter

alia, “The Department, however, does consider complaints

by interested parties before it acts on matters which come

before it.” (Emphasis added.) On January 8, 1974, we

learned for the first time that the Department had on

November 23, 1973, [1] approved the application of the

Santa Rosa Agency to the extent of $1,800,000.

In his letter Mr. Price informed us, in effect, that pur-

suant to our complaint he had scheduled an informal con-

ference for January 15, 1974, at 9:00 a.m. to receive any

comments we might wish to present concerning said Proj-

ect No. Calif. R-45. In this connection, Mr. Price directed

in his letter that we submit our comments to you in writing

by January 11, 1974.

Preliminarily we submit to you as part of this written

commentary a copy of the said administrative complaint

mailed as aforesaid to Mr. Price on October 29, 1973.

Please note that a copy of this complaint was mailed to

Mr. James K. Burns, the Executive Director and Secretary

26 Appendix

of the Urban Renewal Agency of the City of Santa Rosa.

We request, therefore, that any written comments which

Mr. Burns may have addressed to the Department with

respect to our complaint be made available to us at said

conference.

At pages 1-3 of our complaint, we state in substance,

that our client has conceived a plan to develop a regional

shopping center with private capital, and that this plan

will be brought to naught if the Department grants to the

Santa Rosa Agency tax money in the approximate sum

of $2,000,000 to finance a competing regional shopping cen-

ter in downtown Santa Rosa which is to be built and devel-

oped as aforesaid by a private developer. With respect to

this we said, in part, the following in our complaint:

“ .. Obviously, our client’s project cannot compete

with one that is to be funded with public money and

accordingly, our client will not only lose what it has

invested in the planned project, but also will be de-

prived of the tax revenue that its project might have

generated when made effective.” (Emphasis added.)

We have attached hereto marked Exhibit A, a schedule

[2] showing the tax revenue that our client might derive

from its shopping center, but for the subsidy which the De-

partment intends to grant to a private developer at the be-

hest of the Santa Rosa Agency. Moreover, if the Depart-

ment does in fact grant this subsidy to this developer, the

tax revenue will inevitably inure to the benefit of the City

of Santa Rosa.

In our complaint we also call attention to the fact that

as part of the scheme to finance this downtown Santa Rosa

shopping center, the Santa Rosa Agency will authorize the

issuance and sale of tax allocation bonds, and that this

mode of financing will affect every taxing agency and every

ei eel

a en ee pe ween eee

Appendix 27

taxpayer in the County of Sonoma. In this complaint we

likewise show that the Santa Rosa Project will inevitably

divert retail sales tax producers into Santa Rosa who

otherwise might have spent their money elsewhere in the

County. (Complaint, p. 1); paragraphs 2(a) and (b), pp.

3-5.) , 3

For the purpose of intelligently discussing our conten-

tions at the conference with Mr. Price’s staff, we will use

the tax data which is contained in the following schedules:

1. County of Sonoma Assessed Valuations;

2. Approximate Property Tax Receipts;

3. Sales Tax Distribution. —

Copies of these schedules are enclosed for your use. —

The Redevelopment Plan approved by the.City Council

of Santa Rosa which is the cornerstone of the Loan and

Capital Grant Contract,.as amended from time to time,

between the Urban Renewal Agency of Santa Rosa and

the Department does not provide for a downtown regional

shopping center. This approved plan has been, in effect,

abandoned by the Santa Rosa Agency in favor of a new

and radically different plan providing for such a center.

We are informed that the new and different plan has not

received the sanction and approval of either the City Coun-

cil or the Department. We believe, therefore, that [3] the

approval given by the Department to the application for

additional financing to subsidize the construction and de-

velopment of this shopping center is violative of the Hous-

ing Act of 1949 [42 U.S.C.A. See. 1455(h)].

In our complaint we point out that Congress in enacting

the Housing Act of 1949 declared that the Department of

Housing and Urban Development should exercise its powers

so as to encourage the production of housing and that this

objective should be attained whenever possible through

28 Appendix

private enterprise (42 U.S.C.A. Sec. 1441). There, we also

pointed out that the Santa Rosa shopping center project

has nothing to do with either housing or private enterprise.

Accordingly, we submit that the provisions of the Housing

Act should be strictly and narrowly construed when applied

in connection with the commercial enterprise now being

oats hatin: Sse

Appendix 29

EXHIBIT A

ESTIMATE OF REVENUE THAT ROHNERT PARK

WOULD REALIZE FROM AN UNSUBSIDIZED

REGIONAL SHOPPING CENTER DEVELOPED

WITH PRIVATE CAPITAL ALONE.

sponsored by the Santa Rosa Agency. I. Property Taxes

Sincerely,

COTTON, SELIGMAN & RAY

RJH

IT}

Enclosures [4] II

Assuming a $30,000,000 market value de-

velopment, which is conservative, this would

create an assessed valuation of $7,500,000.

At Rohnert Park’s 1973-74 tax rate of $1.57

this would raise in annual property tax reve-

nues for Rohnert: Park ......................... $117,000

. Sales Tax

750,000 sq. ft. at 75¢ per S/F

$560,000

RECAP OF ESTIMATED REVENUES

Annual City Property Tax 200.02... $117,000

AMBMBL AICS LAK to csislone niecissince csc batches 560,000

$677,000

Note: This does not include other revenues that would

be realized such as from business licenses, water

and sewer service charges, etc. Also the amount

of cigarette tax that the City receives from the

the State is partially based on sales tax re-

ceipts so that the amount of cigarette taxes the

City would receive will also be affected. [1]

30 : Appendix

COUNTY OF SONOMA

Assessed Valuations

Assessed(1} | Sonoma(2) Assessed

Value County Value per

1973-74 Population Capita

Cloverdale .........---.--- $ 5,929,080 3,430 $1,729

Cotati 5,387,244 2,500 2,154

Healdsburg ..........--.- 13,524,828 5,775 2,342

Petaiiwin: -........,...,... 68,547,389 30,650 2,236

Rohnert Park .......... 18,288,364 9,725 1,880

Santa Rosa .............- 185,833,548 60,700 3,061

Sebastopol ................ 12,111,203 4,340 2,790

EE de Rea ee 15,452,273 ~ 4,790 3,226

Sub-Totals ..... $325,073,929 121,910 $2,666

Unincorporated

Area $377,631,305 108,790 $3,471

Entire County ........ $702,705,234 230,700 $3,046

Rank on

Per Capita

Basis

[rm Rwaoranre

(1) Sonoma County Assessor’s Report on 1973-74 Assessed Values

issued September, 1973.

2) Population Figures were furnished by the Department of

x pines Population Research Unit, State of California, and

are based on their figures as of April, 1973 as established for

ith [2] COUNTY OF SONOMA

Assessed Valuations

Assessed(1) Sonoma(2) Assessed

Value County Value per

1972-73 Population Capita

Cloverdale ..........------ $ 5,419,356 3,440 $1,575

Cotati 3,702,143 1,650 2,244

Healdsburg ..........---- 13,051,012 5,700 2,290

Petals, o-nceccccencocen 62,385,506 29,500 2,115

Rohnert Park .......... 12,288,533 7,450 1,649

Santa Rosa ........... .. 159,777,312 57,300 2,788

Sebastopol .............--- 10,939,854 4,140 2,642

Sonoma 13,771,638 4,850 2,839

Sub-Totals ..... $281,335,354 114,030 $2,467

i ated

re $343,092,543 108,570 $3,160

Entire County ........ $624,427,897 222,600 $2,805

(1) Sonoma County Assessor’s Report on 1972-73 Assessed Values

Issued September 19, 1972.

(2) Population

a aa

| rm

Figs res were furnished by the Department of

Finance, Population Research Unit, State of California, and

are based on their figures as of February 1, 1972 [2a]

atten neal

Appendix

APPROXIMATE PROPERTY TAX RECEIPTS

Agency

Sonoma County .................c-cecsese

Sonoma County Water Agency

Santa Rosa Jr. College District

Santa Rosa School District ........

Sonoma County Schools Service

City of Rohnert Park ................

Petaluma High School District

Cotati-Rohnert Park School

SP saswibcane tae netn the teak sana,

9. Petaluma Hospital District ......

10. Coyote Valley Dam ....................

Go SS ST 98 PO

Fiscal Yr.

1971-72

$19,540,000

650,150

3,007,000

1,397,000

1,169,000

164,000

2,500,000

465,000

30,000

184,000

Fiscal Yr.

1972-73

$20,270,000 (a)

792,690 (a)

3,413,000(a)

1,635,000 (a)

1,264,000(a)

208,000 (b)

3,160,000(c)

567,000 (d)

2,000 (a)

174,127

Source: (a) Sonoma County Auditor’s Office; (b) Rohnert Park

City records; (ec) Petaluma High School District office;

(d) Cotati-Rohnert Park School District office. [3]

COUNTY OF SONOMA

Sales Tax Distribution

Sonoma(2) Sales Rank on

County Tax Per Per Capita

Popuiation Capita Basis

3,430 $20.27 7

2,500 29.09 5

5,775 40.13 2

30,650 22.18 6

9,725 10.36 9

60,700 37.45 3

4,340 41.68 1

4,790 35.08 4

121,910 $30.99

108,790 $19.38 8

230,700 $25.49

Adjusted(1)

Net Sales

Tax 1972-73

Clavtraale $ 69,520

Cotati .. 72,731

Healdsburg .............. 231,726

Petaluma .................. 679,714

Rohnert Park .......... 100,511

Santa Rosa .............. 2,273,447

Sebastopol .............. - 180,901

Sonoma 168,026

| ES $3,776,576

Unincorporated

Area $2,103,050

Entire County ........ $5,879,626

Based on 1973-74 Budget

Rohnert Park .......... $ 105,000

9,725 $10.80

(1) Net Sales Tax Figures were furnished by the State Board of

Equalization, State of California, per telephone call on June 22,

1973 and include fiscal year allocation of sales tax paid on

taxable transactions in the four quarters,of 1972-73 fiscal year.

(2) Population figures were furnished by the Department of

Finance, Population Research Unit, State of California, and

are based on their figures as of April, 1973 as established for

SB-90, [1]

32 Appendix

EXHIBIT D

DEPARTMENT OF HOUSING AND

URBAN DEVELOPMENT

SAN FRANCISCO AREA OFFICE

ONE EMBARCADERO CENTER, SUITE 1600

SAN FRANCISCO, CALIFORNIA 94111

REGION IX

450 Golden Gate Avenue IN REPLY REFER TO:

P.O. Box 36003 9.1G

San Francisco, California 94102

May 16 1974

Mr. William Brinton

Cotton, Seligman & Ray

One Maritime Plaza

San Francisco, California 94111

Dear Mr. Brinton:

This is in reply to your letters of October 29, 1973 and

January 11, 1974 and your comments at the informal con-

ference of January 15, 1974 concerning the Santa Rosa

Center Project, No. Calif. R-45.

Your first point in our letter of October 29, 1973 is as

follows:

1. Our client has planned a regional shopping center

which is to be developed with private capital, and

which is not to be subsidized by federal, state or

local tax moneys. Obviously, our client’s project

cannot compete with one that is to be funded with

public money, and accordingly, our client will not

only lose what it has invested in the planned proj-

ect, but will also be deprived of the tax revenue that

its project might have generated when made effec-

tive.

It is our understanding that you represent the local

government of the City of Rohnert Park. If no local tax

Pe ee

ne sn mean

Appendix 33

money has been or is to be used to develop or make possible

a regional shopping center in Rohnert Park, we fail to see

how your client, Rohnert Park, can have invested any

money in this project since cities raise the money which

they spend through taxes.

Nevertheless, the question of any possible loss of tax

revenue by Rohnert Park is a question of state and local

law. The State of California has chosen to pass its Com-

munity Redevelopment Law, California Health and Safety

Code, §§ 33000 et seq., and the City of Santa Rosa has

chosen to undertake a redevelopment project pursuant to

that law. The tax consequences of these actions were ar-

ranged by the California state government, and HUD has

no power or desire to interfere with the state tax system.

[1]

The second point of your letter of October 29, 1973 is as

follows:

2. (a) All the land included in the Agency’s Project

in Santa Rosa has been frozen at its current de-

pressed assessed valuation, All of the increased

property taxes generated by the shopping center

to be developed by Mr. Hahn will be pledged to

pey for parking garages and other improvements

benefitting the shopping center. Thus, while the tax

allocation bonds remain unpaid as to interest and

principal (approximately ten (10) years), neither

Sonoma County nor the local school districts will

receive the benefit of the increased taxes to be

generated by the center, as these will all be

ploughed back into it.

(b) Moreover, the development of this center, as

the evidence will show, will require the use of at

34 Appendix

least fifteen million ($15,000,000) dollars of federal

tax money. Additionally, the increased property

and other taxes to be thereby created, estimated at

approximately two million ($2,000,000) dollars per

year will, as the evidence will also show, be used

for the benefit of the Project alone. This sum is

in effect diverted tax money which will have to be

made up by the taxpayers in the County, including

each and every taxpayer in the City of Rohnert

Park. Also, this Project will evitably divert retail

sales tax producers into Santa Rosa who otherwise

might have spent their money in Rohnert Park or

elsewhere in the County.

Once again, you are challenging the provisions of state

law. HUD cannot change those provisions and therefore

has no power to change the circumstances of which you

complain.

Your third point of your letter of October 29, 1973 is as

follows:

3. On June 11, 1973, the Urban Renewal Agency

adopted a resolution of intention. It declared its

intention to sell one million, eight hundred thou-

sand ($1,800,000) dollars in tax allocation bonds

the proceeds of which are intended to be used to

provide public parking for the purpose of provid-

ing the local share of project costs for Project R-45.

This resolution is not sufficient on its face to sup-

port any grant whatsoever from the United States

Department of Housing and Urban Development.

See Urban Renewal Handbook (RHM 7216.1). [2]

The Department of Housing and Urban Development has

not relied on a resolution of intention of the Local Agency.

Appendix 35

The City and Redevelopment Agency have agreed to pro-

vide the local share of Project Calif. R-45, by adopting a

Cooperation Agreement which supports the total amount

of loan and grant funds committed to the Santa Rosa

Agency under Contract No. Calif. R-45(LG), as amended.

Such a Cooperation Agreement is the assurance of local

share required by the Urban Renewal Handbook, RHM

7216.1.

You also point out the Heonomie Development Admin-

istration granted $400,000 to Rohnert Park in 1972 for

construction of a freeway overpass. At the time the EDA

grant was made, Santa Rosa’s renewal project had been in

progress for a number of years, If you feel the HDA spent

its money unwisely in trying to divert growth from Santa

Rosa where HUD’s project was underway, you should take

your complaint to them. HUD has aided Santa Rosa’s re-

development program since the early 19608 and sees no

reason to terminate its aid because of EDA’s later action.

In reference to your last point in your letter of October

29, 1973, §110 of the Housing Act of 1949, as amended

permits nonresidential renewal projects if the Local Agency

determines that such redevelopment is necessary, Thus the

determination of the Santa Rosa Renewal Agency to re-

develop # nonresidential project must be accepted by the

Department of Housing and Urban Development, The land

for the shopping center will be bought, developed, and

owned by a private corporation, thus demonstrating the

incorreciness of your assertion that private enterprise will

not be involved,

In your letter of January 11, 1974 you again raised the

points concerning state tax law and the question of housing

and private enterprise in the renewal project, Those points

have been answered above,

36 Appendix

In our discussion of January 15, 1974, you first contended

that the Santa Rosa Renewal Agency had not adequately

guaranteed its local share to support the project, As stated

above, the amended Cooperation Agreement is adequate

under the terms of the Urban Renewal Handbook to guar-

antee the local share of the project. [3]

You also challenged the validity of the Cooperation

Agreement as a matter of state law, claiming it violated the

provisions of Article XIII, Section 40 of the California

Constitution since it had not been approved by a two-thirds

vote of the voters of Santa Rosa,

In the Cooperation Agreement, as amended, the City has

agreed to make up any deficiencies in the financing of the

local share if the Redevelopment Agency is unable to pro-

vide the local share through its own efforts to finance the

required improvements, This liability of the City is con-

tingent on failure of the Agency to provide the local share,

At the present time its amount is uncertain, as is the time

at which it might become due, Such a contingent obligation

does not become a debt until the contingency occurs,

McBean v, City of Fresno 112 Cal, 159, 168 (1896); Ops.

Atty. Gen, 21 (January 10, 1952),

The Cooperation Agreement provides that the City may

pay any deficiencies that may arise eventually from its

contingent liability “from whatever source it may legally

do #0.” Certain methods of financing, such as issuance of

revenue bonds, could be used to pay the debt if it arises and

such bonds are not an indebtedness within the meaning of

Article XITI, Section 40 of the California Constitution

City of Santa Clara v, Von Raesfield 3 Cal, 3rd 239, 247

(1970),

The Department of Housing and Urban Development

therefore accepts the Cooperation Agreement as creating a

Appendix 87

valid contingent liability on the City of Santa Rosa under

the procedures by which the City and Redevelopment

Agency have adopted it.

Your second point again challenged the tax provisions of

California law. You are referred to our above answer on

the same subject.

Your third contention was that the amendment to the

Redevelopment Plan in 1970 was not valid because the

City did not make a finding that the project was eco-

nomically feasible as required by Section 33367 of the

California Health and Safety Code.

Section 33367 applies to initial adoption of a plan, Amend-

ments to a plan are governed by Sections 33450-33458, and

no such finding is required under those sections. Therefore

the amendment is not invalid. [4]

Your fourth contention was that Santa Rosa was not

proceeding in accordance with its adopted and amended

Urban Renewal Plan,

The Urban Renewal Plan for Calif, R-45, as amended,

permits the land to be used for commercial facilities such as

those which will make up the proposed shopping center,

Section C, Land Use Plan, provides for three Central

Business land use zones: Central Business “C”, Central

Business “D”, and Central Business “1”, Kach of these

land use areas permits among other uses, retail stores;

personal and business service establishments; restaurants

and other places serving food and drink; and public and

private parking lots, None of the uses included in the pro-

posed shopping center are in confliet with the permitted

land uses of the Urban Renewal Plan,

The plan does not need to be amended to allow the use

of project land for a shopping center, Thus this contention

is also without merit,

38 Appendix

Your fourth point also raises a contention of possible

fraud with respect to the issuance of tax allocation bonds

by the Agency, This is a question for bond counsel and need

not concern HUD, since HUD relies on the Cooperation

Agreement’s pledge to provide the local share from any

legal source. Thus if one method were to be foreclosed, the

City and Agency could provide the local share by another

means.

You also contend that the Urban Renewal Plan is not in

conformance with the City’s General Plan and Central

District Development Plan,

There is no language in either plan which forbids develop-

ment of a Regional Shopping Center, The documents were

prepared six years ago, before the Urban Renewal Plan was

amended and were designed to allow for subsequent changes

in specific land uses,

There is no indication that the Planning Commission of

the City of Santa Rosa commented that the amended

Renewal Plan would conflict with the general plan. Under

Section 33455 of the Health and Safety Code, a lack of

adverse comment by the commission is all that is required.

Thus the plan has been validly amended and your asser-

tions are incorrect,

Your fifth contention is again that the local share has

not been adequately provided, You are hereby referred to

our earlier answer on this same issue, [5]

If the Clean Air Act were to prevent the building of a

garage, the Agency and City would be bound to provide the

local share by some other means under the terms of the

Cooperation Agreement,

Your sixth contention merely restates your concern that

in 1972 the EDA granted your client, the City of Rohnert

Park, $400,000 to build a freeway underpass, and that such

Appendix 39

grant promoted a policy that worked counter to the pur-

poses of a renewal grant and loan program to Santa Rosa

that HUD had already been funding for a number of years.

Once again you are referred to our earlier answer on this

point.

Your seventh and final contention is that HUD is in viola-

tion of the National Environmental Policy Act because it

has not completed an Environmental Impact Statement on

the Santa Rosa Center Project No. Calif, R-45.

In compliance with the National Environmental Polieyv

Act the Department of Housing and Urban Development

is preparing an Environmental Impact Statement on the

Santa Rosa Center, Project Calif, R-45. A group of technical

and administrative staff members, with expertise in all

areas of environmental and program concerns have formed

an Environmental Task Force to prepare the statement.

The Task Force received the Applicant’s Environmental

Information form, completed by the Santa Rosa Agency,

in March of 1974, and at the present time the Task Force

is in the process of evaluating this information and prepar-

ing an Environmental Impact Statement.

On April 4, 1974 the Department of Housing and Urban

Development received an application from the Santa Rosa

Redevelopment Agency requesting an increase in both the

loan and grant in the amount of $435,868 for a total loan

of $16,933,177 and a total grant of $11,356,599. The purpose

of this request is to provide funds to pay the interest costs

involved in refinancing the project notes through the com-

pletion of the project. Processing of this application is

presently being undertaken.

The project notes finance acquisition and site prepara-

tion activities but not the development of structures on the

site. Thus refinancing of project notes or providing more

40 Appendix

money for interest costs on the notes will do nothing to

further one particular reuse plan over any other; the

Department of HUD will still have substantial ability to

eliminate or mitigate any adverse environmental effects

determinec during the environmental clearance process

prior to approval of disposition and plan change activities,

which are the activities that determine the actual reuse of

project land.

The Department of Housing and Urban Development is

also processing a land disposition contract which the Santa

Rosa Redevelopment Agency [6] has submitted for its ap-

proval and it is anticipated that the Redevelopment Agency

will request HUD to approve a further Amendment to the

Redevelopment Plan. The Department of HUD will not

approve any further land disposition contracts or plan

changes for the proposed shopping center use or for any

other use in the 31.2 acre area added by the 1970 Contract

and Plan Amendments until an Environmental Impact

Statement has been prepared in accordance with the Na-

tional Environmental Policy Act.

In conclusion, we have reviewed all of your contentions

in your letter of October 29, 1973 and January 11, 1974 and

at the informal conference of January 15, 1974. As stated

above, certain HUD actions will not be taken until an

Environmental Impact Statement is completed on the Santa

Rosa Center Project. We have discussed your other com-

plaints and contentions above and have found each of them

to be without merit. We therefore find that you have raised

no issues which will cause us to halt or delay any activities

of the U.S. Department of Housing and Urban Develop-

ment or the Santa Rosa Renewal Agency with respect to

the Santa Rosa Center Project No. Calif. R-45, except those

et ~—

Appendiz 41

outlined above as being delayed until completion of the

Environmental Impact Statement.

Sincerely,

StevEN B, Sacus

for Julian A. Fitzhugh

Program Manager, Area B [7]

42 Appendix

Appendix B

JAMES L. BROWNING, JR.

United States Attorney

PAUL E. LOCKE

Assistant United States Attorney

16th Floor Federal Building—Box 36055

450 Golden Gate Avenue

San Francisco, California 94102

Telephone: (415) 556-5134

Attorneys fer Defendant James T. Lynn

United States District Court for the

Northern District of California

CIVIL NO. C-74-2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

Vv.

James T. Lynn, as Secretary of the United States

Department of Housing and Urban Develop-

ment; City of Santa Rosa, a municipal corpora-

tion; Urban Renewal Agency of the City of

Santa Rosa, a public body, corporate and politic,

and Ernest W. Hahn, Inc., a California corpora-

tion,

Defendants.

ANSWER OF JAMES T. LYNN AS SECRETARY

OF THE UNITED STATES DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT

JAMES T. LYNN, Secretary of the United States De-

partment of Housing and Urban Development, defendant

herein, by his undersigned attorneys answer the complaint

on file herein as follows:

Appendix 43

Defendant denies each and every allegation in Paragraph

I of the Complaint.

Defendant is without knowledge or information sufficient

to form a belief as to the truth of the allegations of the

first paragraph of Paragraph II of the Complaint and

therefore denies same.

(a), (b) and (c). Defendant admits the allegations of

subparagraphs (a), (b), and (c) of said Paragraph II.

(d) Defendant is without knowledge or information suffi-

cient to form a belief as to the truth of the allegations of

Paragraph II(d) of the Complaint and therefore denies

same, [1]

III

There is no Paragraph III in the Complaint.

Defendant is without knowledge or information sufficient

to form a belief as to the truth of the allegations of Para-

graph IV and therefore denies same.

Defendant is without knowledge or information sufficient

to form a belief as to the truth of the allegations of Para-

graph V and therefore denies same.

(a) Defendant answers Paragraph VI(a) as follows:

Defendant admits the allegations set forth on Page 4, Line

29 to Page 5 to the first period on Line 6. Defendant admits

the allegation that there is no plan for permanent family

housing; however, alleges that there is no requirement

therefor. Defendant denies each and every other allegation

in said Paragraph VI(a).

44 Appendix

(b) Defendant denies that part of Paragraph VI(b)

alleging the United States will defray three-fourths of the

net costs of the project, on the contrary the United States

will defray three-fourths of the net “eligible” corts not to

exceed the amount in the Loan Grant Contract. In all other

respects, the defendant admits the substantial truth of said

subparagraph except that the loan and grant contract was

entered on June 6, 1962.

least eight (8) times as alleged in Paragraph VI(c) and

defendant alleges that he is now in the process of prepar-

ing an Environmental Impact Statement.

Vil

Defendant denies the first sentence of Paragraph VII of

the Complaint and as to the remainder of said paragraph

Defendant is without knowledge or information sufficient

to form a belief as to the truth of the remaining allegations

as pleaded therein and therefore denies same. [2]

VIiil

Defendant is without knowledge or information sufficient

to form a belief as to the truth of the allegations of Para-

graph VIII and therefore denies same.

(a-i) Defendant is without knowledge or information

sufficient to form a belief as to the truth of the allegations

of Paragraph IX (a) through (i) and therefore denies

same.

(j) Defendant denies the allegations of Paragraph IX(j)

on the basis that no federal funds are involved.

Wan EAR Be Se

Appendix 45

».4

(a) Defendant admits that portion of the allegation of

Paragraph X(a) commencing with the word “Plaintiff”

on Page 11, Line 17 through and including Line 22, By

way of further answer to said subparagraph (a), defend-

ant alleges that he has no knowledge about Plaintiff’s city’s

awareness of the provisions of the 8th Amendatory and

specifically denies that the process of the application was

to defray costs incurred in contract between defendants’

agency and developer.

(b) Defendant admits that on November 27, 1974, the

8th Amendatory to the Loan and Grant Contract was

executed.

graph X(c) and (d).

(e) Defendant admits that the letter of May 16, 1974

referred to in Paragraph X(e) is a true copy but it denies

that he admitted that he was required to prepare an Envi-

ronmental Impact Statement before making further funds

availab.e.

(a) By way of answer to Paragraph XI(a) Defendant

alleges that he is presently in the process of preparing an

Environmental Impact Statement and that since May 1974

he did cause to have advanced additional funds to defend-

ant agency in the sum in excess [3] of $500,000.00, but said

sums were advanced under amendatory land and grant

contracts preceding May 1974.

(b) Defendant is without knowledge or information suf-

ficient to form a belief as to the truth of the allegation in

Paragraph X(b) and therefore denies same.

XI(c).

46 Appendix

XII

Defendant denies the allegations in Paragraph XII.

AFFIRMATIVE DEFENSES

As Affirmative Defenses to the Complaint, defendant

alleges as follows:

FIRST DEFENSE

The Complaint fails to state a claim upon which relief

can be granted.

SECOND DEFENSE

This is in fact a suit against the United States to which

it has not consented, and therefore the Court lacks juris-

diction over the United States and its officer sued herein

as defendant.

THIRD DEFENSE

Plaintiff does not have standing to bring this action.

FOURTH DEFENSE

Plaintiff is not entitled to maintain this suit by reason

of laches.

WHEREFORE, Defendant prays:

1. That the Complaint be dismissed ;

9. That Plaintiff take nothing by its complaint herein;

3. That all specific relief against defendant be denied;

4. The Judgment be entered in favor of defendant and

against plaintiff ; [4]

5. That defendant may have Judgment for costs;

6. For such other and further relief as the Court deems

proper.

Appendix 47

DATED: January 20, 1975

JAMES L. BROWNING, JR.

United States Attorney

By Pavt E. Locke

Paul E. Locke

Assistant United States

Attorney

Attorneys for Defendant

James T. Lynn, Secretary of

the United States Department

of Housing and Urban

Development [5]

48 Appendix

Appendix C

William N. Willens, Esq.

Law Offices of

Barrett, Stearns, Collins, Gleason & Kinney

A Professional Corporation

1150 Union Bank Tower

Del Amo Financial Center

Torrance, California 90503

370-3581 and 772-4347

Attorneys for Defendant, Ernest W. Hahn, Inc.

United States District Court

Northern District of California

Civil Action No. C 74 2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, as Secretary of the United States

Department of Housing and Urban Development;

City of Santa Rosa, a municipal corporation;

Urban Renewal Agency of the City of Santa Rosa,

a public body, corporate and politic,

and Ernest W. Hahn, Inc., a California corporation,

Defendants.

ANSWER OF ERNEST W. HAHN, INC.

TO COMPLAINT

Defendant, Ernest W. Hahn, Inc., a California corpora-

tion, hereinafter sometimes referred to as Developer, by its

attorneys, for itself alone, answers the Complaint on file

herein by admitting, denying and alleging:

Appendiz 49

1. Denies each and every allegation contained in para-

graph I.

2. In answer to paragraph II, admits that plaintiff City

of Rohnert Park, hereinafter sometimes referred to as

Plaintiff is, and at the times mentioned in the complaint

was, a municipal corporation organized pursuant to the

Government Code of the State of California and is situated

in the County of Sonoma, State of California. Denies that

plaintiff, its [1] inhabitants, taxpayers, or property owners,

have been injured in their business or property, or are

threatened with injury to their business or property, as a

result of any acts or conduct of defendants.

(a) Admits that James T. Lynn was the Secretary of

the United States Department of Housing and Urban De-

velopment, at the time of the filing of the complaint herein,

and that some of the duties of said Secretary are, and were

at the times mentioned in the complaint, performed by sub-

ordinates based in the San Francisco area office of the

Department which is located in the Northern District of

California. Admits that among such subordinates of the

Secretary based in the San Francisco area of the Depart-

ment are James H. Price, Area Director; Julian A. Fitz-

hugh, Program Manager, Area B; and Stephen B. Sachs,

Assistant Program Manager, Area B.

(b) Admits that the City of Santa Rosa is, and was at

all times mentioned in the complaint, a municipal corpora-

tion organized under a freeholders charter adopted and |

amended pursuant to the provisions of the Constitution and

laws of the State of California; and that the City of Santa

Rosa is situated in the County of Sonoma, State of Cali-

fornia. |

of the City of Santa Rosa, hereafter the Agency, is, and

50 Appendix

was at all times mentioned in the complaint, a public body,

corporate and politic, organized and existing by virtue of

Resolution No. 5552 of the City Council of the City of

Santa Rosa, dated March 27, 1958, adopted pursuant to the

provisions of Division 24 of the Health and Safety Code

of the State of California and the Charter of the City of

Santa Rosa and that said Urban Renewal Agency has its

office in the City of Santa Rosa.

(d) Admits that Ernest W. Hahn, Inc. is, and was at the

times mentioned in the complaint, a California corporation

[2] having an office for the transaction of business in the

City of Hawthorne, County of Los Angeles, State of Cali-

fornia.

Except as expressly admitted, alleged, and denied herein,

alleges that it is without knowledge or information sufficient

to form a belief as to the truth of the allegations contained

in Paragraph II of the complaint.

3. In answer to Paragraph IV, admits that the City of

Santa Rosa is located approximately seven miles north of

the City of Rohnert Park and that United States Highway

101 is a principal means of vehicular travel to the north or

south from both cities and in some instances the most con-

venient means of travel to the north or south from such

cities.

(a) Admits that the City of Rohnert Park has purported

to adopt a general plan for the City and that such plan

allows for the development of land for commercial purposes

on both sides of U.S. Highway 101 in the area of the

Rohnert Park Expressway, hereafter the Rohnert Park

site. Denies that the development of the Rohnert Park site

has been, or will be, financed entirely from private capital.

(b) Admits that on or about September 3, 1974, the City

Council of the City of Rohnert Park purported to rezone

portions of the property within the Rohnert Park site but

‘

Appendix 51

denies that said purported rezoning complied with, or was

consistent with, the requirements of Section 65860 of the

Government Code or other applicable laws of the State of

California.

Except as expressly admitted or denied herein alleges

that it is without knowledge or information sufficient to

form a belief as to the truth of the allegations contained in

Paragraph IV of the complaint.

4. Denies that the Agency has planned a federally sub-

sidized shopping center and denies that such a shopping

center planned by the Agency has inhibited potential de-

velopers of the [3] Rohnert Park site from proceeding with

such development. Except as expressly denied herein,

alleges that it is without knowledge or information sufficient

to form a belief as to the truth of the allegations contained

in Paragraph V of the complaint.

5. Admits and alleges that the City Council of the City

of Santa Rosa, by its Ordinance No. 1036 dated December 5,

1961, adopted a redevelopment plan for the redevelopment

project known as Santa Rosa Center Project (Calif. R-45),

hereafter the Project; that the area encompassed by the

Project, as described in the presently effective amended

redevelopment plan, approaches to within approximately

one block of U.S. Highway 101; that the redevelopment

plan for the Project has been amended from time to time

and that amendments to said plan were adopted by the

City Council of the City of Santa Rosa on or about March

10, 1970, and October 29, 1974; that the Agency is, and

has been at all times mentioned in the complaint, respon-

sible for carrying out the redevelopment plan for the Proj-

ect on behalf of the City of Santa Rosa; that since 1971

the Agency has been considering proposals for the develop-

ment of a shopping center within the Project area; that on

52 Appendix

or about March 27, 1972, the Agency entered into an agree-

ment with defendant Developer, hereafter the Negotiations

Agreement, whereby the Agency agreed to negotiate with

no developer except the Developer for a period specified by

the Negotiations Agreement, with respect to the develop-

ment of a shopping center within the Project area; that the

Developer has prepared a proposal to develop approximately

30.05 acres, exclusive of streets, within the Project as a

shopping center, hereafter the shopping center site; that

the Agency has acquired and cleared some of the property

within the shopping center site with funds furnished to the

Agency by the defendant Secretary; that the amendment of

the redevelopment plan for the Project adopted by the City

Council of the City of Santa Rosa on October [4] 29, 1974,

enlarged the Project area to include a portion of the shop-

ping center site not previously within the Project area; that

on October 29, 1974, the Agency approved a land disposition

agreement between the Agency and the Developer, hereafter

the Land Disposition Agreement; and that present pro-

posals for the implementation of the redevelopment plan for

the Project do not contemplate the development of perma-

nent family housing within the Project area. Defendant

alleges that the redevelopment plan is not required by law

or regulation to make provision for permanent family hous-

ing and alleges that no federal funds have been used, or will

be used, to acquire or clear property located within the area

added to the Project area by the amendment to the rede-

velopment plan adopted October 29, 1974.

Except as herein expressly admitted or alleged, denies

each and every allegation contained in Paragraph VI(a)

of the complaint.

(a) In answer to Paragraph VI(b) defendant admits

that portion of Paragraph VI(b) commencing with the word

Appendix 53

“The” on page 5, line 21, and ending with the words “Home

Finance Agency” on page 5, line 29, and admits that portion

of Paragraph VI(b) commencing with the word “This” on

page 6, line 1, and ending with the figure “$9,625,023.” on

page 6, line 5. Defendant alleges that said Loan and Grant

Contract provided that the United States would defray

three-fourths (34) of the eligible costs of the redevelopment

project, such federal share of eligible project costs not to

exceed the amounts specified by the Loan and Grant Con-

tract, and allege that, by approval of the original Loan and

Grant Contract, the Housing and Home Finance Agency

authorized federal loans and grants for redevelopment with-

in the entire Project area, which at the time said contract

was approved in March of 1962 encompassed approximately

40 acres.

Except as expressly admitted or alleged herein, [5] de-

fendant denies each and every allegation contained in Para-

graph VI(b) of the complaint.

(b) Defendant alleges that the Loan and Grant Contract

has been amended nine times and that eight of such amend-

ments increased the amount of the temporary loan and seven

of such amendments increased the amount of the Project

grant. Defendant admits that the eighth amendment, execut-

ed on or about November 27, 1973, increased the temporary

loan to a total of $16,557,309 and the Project grant to a total

of $12,236,717 and that the sixth amendment to the Loan

and Grant Contract, dated September 14, 1970, increased

the total Project grant from $3,263,332 to $8,318,497 and

increased the temporary loan from $5,908,880 to $13,223,939.

Defendant alleges that a portion of the increase in federal

funding made by the sixth amendment to the Loan and Grant

Contract was intended and used for the purpose of acquir-

ing, clearing, and preparing for development, property with-

54 Appendix

in the area of that portion of the Project known as Phase IT,

which area includes approximately 21.21 acres of the shop-

ping center site. Defendant admits that September 14, 1970

is after the effect of the National Environmental Protection

Act (NEPA), Defendant alleges that the Defendant Secre-

tary is presently preparing an environmental impact state-

ment for a portion of the Project financed, in part, by federal

funds, but denies that the preparation of an environmental

impact statement for the Project is required by the National

Environmental Protection Act. :

Except as expressly admitted, denied, or alleged herein,

alleges that it is without knowledge or information sufficient

to form a belief as to the truth of the allegations of Para-

graph VI of the complaint.

6. Defendant alleges that the Land Disposition Agree-

ment provides that the Developer will construct a shopping

center containing approximately 713,500 square feet of retail

[6] sales space; that the Agency has acquired and cleared

some of the property within the shopping center site;

that the Agency, to date has expended approximately

$4,980,430.00, for acquisition, and $119,919.00 for clearance

of such property; that the consideration to be received by

the Agency from the Developer for the property of the

shopping center site exceeds the fair market value of such

property; that as part of the consideration for such prop-

erty Developer is required by the Land Disposition Agree-

ment to construct public parking facilities having an esti-

mated cost in excess of $5,000,000 to bear the costs of

constructing such facilities im excess of $2,000,000 to re-

convey or dedicate to the Agency or the City of Santa Rosa

certain parts of such property for public parking purposes,

and to make annual payments of $401,000 to the City of

Santa Rosa. Defendant alleges that the Land Disposition

;

i le a lh a ae .

Appendix 55

Agreement has been submitted to Defendant Secretary but

has not been approved, or consented to, by Defendant

Secretary. [7]

Except as expressly alleged herein, denies each and every

allegation contained in Paragraph VII of the complaint.

7. Denies each and every allegation contained in Para-

graph VIII.

8. Alleges that it is without knowledge or information

sufficient to form a belief as to the truth of the allegations

contained in Paragraphs IX(a), IX(b), IX(e), TX(d),

TX(e), [X(f), and [X(g) of the complaint.

(a) Admits that there are now approximately 748,000

square feet of general merchandise space in the City of

Santa Rosa and allege that the shopping center proposal of

the Developer provides for the construction of approxi-

mately 356,500 square feet of general merchandise space.

Admits that the shopping center proposal provides for the

construction of 347,000 square feet of retail space other than

general merchandise space. Except as expressly admitted or

alleged herein, denies each and every allegation contained in

Paragraph IX(h) of the complaint.

(b) Alleges that the shopping center proposal provides

for the construction of 1,256 off-street parking stalls for

patrons of the shopping center; that the Land Disposition

Agreement provides the Developer will construct a parking

structure having estimated cost in excess of $5,000,000.00

and a cost to the Agency not to exceed $2,000,000.00; that

the Agency presently intends to defray the local share of

total cost for the Project, including costs related to parking

facilities, by the issuance of Agency bonds, which may be

parking lease revenue bonds, tax allocation bonds, or a com-

bination of both such bonds; that pursuant to Article XIII,

Section 19 of the California Constitution, the California

56 Appendix

Community Redevelopment Law (Health and Safety Code

Section 3600 et seq.) and the redevelopment plan for the

Project, the Agency is authorized to issue tax allocation

bonds and to have paid into a special fund of the Agency

[8] established to pay the principal and interest on loans,

monies, advanced to or indebtedness incurred by the Agency

to finance or refinance the Project in whole or in part a

portion of the property tax revenues collected on property

within the Project area; and that the parking structure will

be operated and maintained by the City of Santa Rosa con-

sistent with the operation and maintenance of all other off-

street parking facilities owned by the City in downtown

Santa Rosa. Except as expressly admitted or alleged herein,

denies each and every allegation contained in Paragraph

IX (i) of the complaint.

(ec) Alleges that the Land Disposition Agreement between

the Agency and the Developer provides that the Agency will

acquire, and sell to the Developer, certain land within the

Project area not presently owned by the Agency and that the

anticipated cost of acquisition and improvements for such

land is $4,959,000 plus $332,100 for site clearance; that part

of such property is within the area added to the Project area

by the amendment to the redevelopment plan adopted by

the City Council of the City of Santa Rosa on October 29,

1974; that the terms of the Land Disposition Agreement

provide that the property for the shopping center site with-

in the area added to the Project area by said amendment will

be conveyed to the Developer for $1,000,000.00, or equivalent

or greater consideration, at the option of the Agency.

Except as admitted or alleged herein, denies each and

every allegation contained in Paragraph IX(j) of the com-

plaint.

9. Denies that the implementation or performance of the

Land Disposition Agreement will frustrate the planning or

Appendix 57

development of a regional retail center at the Rohnert Park

site or injure the City of Rohnert Park. Admits that on or

about November 27, 1973, the Defendant Secretary approved

the Agency’s application for an amendment to the Loan and

Grant Contract. [9]

Execpt as admitted herein, alleges that it is without

knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph X of

the complaint. .

10. Defendant alleges that the Defendant Secretary 1s

presently in the process of preparing an environmental im-

pact statement for a portion of the Project financed, in part,

by federal funds and that on or about November 1, 1974, the

Agency received a capital grant progress payment in the

amount of $773,982.00 and a relocation assistance payment

in the amount of $335,965.00 such sums being monies allo-

cated to the Agency by amendments to the Loan and

Grant Contract previously approved by the Defendant Sec-

retary.

(a) Admits that on or about September 24, 1974, the

Agency and the City of Santa Rosa filed an action in the

Superior Court of the State of California for the County of

Sonoma against the City of Rohnert Park. Denies, on infor-

mation and belief, that the purpose of said action was to

permanently enjoin development at the Rohnert Park site,

and that the pleadings on file in said action disclose that the

Agency and the City of Santa Rosa claim the sole and exclu-

sive right to develop a regional shopping center in the

County of Sonoma or claim the erosion of the said alleged

right would result in an irreparable injury to them, and

that the action is without merit or was brought to deter the

Plaintiff from authorizing and implementing the develop-

58 Appendiz

ment of the Rohnert Park site in accordance with its general

plan.

Alleges, on information and belief, that the purpose of

said action by the Agency and the City of Santa Rosa was to

determine the adequacy, under California law, of an En-

vironmental Impact Report prepared in connection with

a zoning change for property located at the Rohnert Park

site, and, if such Environmental Impact Report was deter-

mined by the Court to be inadequate, to enjoin a zoning

change with respect to certain [10] property located within

the Rohnert Park site until an adequate Environmental Im-

pact Report had been prepared; and alleges, on information

and belief, that the pleadings and papers on file with the

Court in such action disclose that the Association of Area

Governments concluded a regional shopping center should

not be developed at the Rohnert Park site because of adverse

consequences to the environment of the area.

Denies, on information and belief, that the cost of litigat-

ing such suit on behalf of the Agency and the City of Santa

Rosa is, or was, defrayed with funds obtained by the City

of Santa Rosa or the Defendant Secretary.

Except as expressly admitted, denied, and alleged herein,

denies each and every allegation contained in Paragraph

XI of the complaint.

11. Denies each and every allegation contained in Para-

graph XII.

FIRST DEFENSE

The complaint fails to state a claim against defendants.

or any of them, upon which relief can be granted.

Appendiz 59

SECOND DEFENSE

The complaint fails to allege a beneficial interest which

would entitle plaintiff to bring suit against defendants, or

any of them under the Sherman Act, the Clayton Act, the

Housing Act of 1949, the Administrative Procedure Act, or

any other statute or legal entitlement.

THIRD DEFENSE

Plaintiff’s claim is barred by laches.

WHEREFORE, this answering defendant prays that

plaintiff take nothing by reason of its complaint, for costs

of suit incurred herein and for such other and further relief

as [11] the Court deems just and proper.

BARRETT, STEARNS, COLLINS,

GLEASON & KINNEY

By Wuuum N. Wiens

William N. Willens

Attorney for Defendant,

Ernest W. Hahn, Inc. [12]

60 Appendix

Appendix D

THOMAS B. CONROY

City Attorney

City of Santa Rosa

P.O. Box 1678

Santa Rosa, CA 95403

Telephone: (707) 528-5261

McDONOUGH, HOLLAND, SCHWARTZ & ALLEN

A Professional Corporation

555 Capitol Mall, Suite 950

Sacramento, CA 95814

Telephone: (916) 444-3900

Attorneys for Defendants City of

Santa Rosa and Urban Renewal Agency

of the City of Santa Rosa

United States District Court

Northern District of California

No. C74 2429RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

VS.

James T. Lynn, as Secretary of the United States

Department of Housing and Urban Development;

City of Santa Rosa, a municipal corporation;

Urban Renewal Agency of the City of Santa Rosa,

a public body, corporate and politie,

and Krnest W. Hahn, Inc., a California.corporation,

Defendants.

Appendix 61

ANSWER OF DEFENDANTS

CITY OF SANTA ROSA AND URBAN RENEWAL

AGENCY OF THE CITY OF SANTA ROSA

Defendants, City of Santa Rosa and Urban Renewal

Agency of the City of Santa Rosa (hereafter collectively

referred to as “Defendants”) answer the complaint herein

as follows:

Defendants deny each and every allegation contained in

Paragraph I.

Defendants admit that plaintiff City of Rohnert Park

(hereafter sometimes referred to as “Plaintiff”) is, and at

the times mentioned in the complaint was, a municipal cor-

poration organized [1] pursuant to the Government Code

of the State of California and that Plaintiff is situated in

the County of Sonoma, State of California. Defendants

deny that Plaintiff, its inhabitants, taxpayers, or property

owners, have been injured in their business or property, or

are threatened with injury to their business or property, as

a result of any acts or conduct of Defendants.

Ta) Defendants admit that James T. Lynn was the Sec-

retary of the United States Department of Housing and

Urban Development, at the time of the filing of the com-

plaint herein, and that some of the duties of said Secretary

are, and were at the times mentioned in the complaint, per-

formed by subordinates based in the San Francisco area

office of the Department which is located in the Northern

District of California. Defendants admit that among such

subordinates of the Secretary based in the San Francisco

area of the Department are James H. Price, Area Director:

62 Appendix

Julian A. Fitzhugh, Program Manager, Area B; and

Stephen B. Sachs, Assistant Program Manager, Area B.

(b) Defendants admit that the City of Santa Rosa is, and

was at all times mentioned in the complaint, a municipal

corporation organized under a freeholders charter adopted

and amended pursuant to the provisions of the Constitution

and laws of the State of California and that the City of

Santa Rosa is situated in the County of Sonoma, State of

California.

Agency of the City of Santa Rosa (hereafter “the Agency”)

is, and was at all times mentioned in the complaint, a public

body, corporate and politic, organized and existing by virtue

of Resolution No. 5552 of the City Council of the City of

Santa Rosa, dated March 27, 1958, and adopted pursuant to

the provisions of Division 24 of the Health and Safety Code

of the State of California and the Charter of the City of

Santa Rosa and that said Urban Renewal Agency has its

office in the City of Santa Rosa. [2]

(d) Defendants admit that Ernest W. Hahn, Inc. (here-

after “the Developer”) is, and was at the times mentioned

in the complaint, a California corporation, having an office

for the transaction of business in the City of Hawthorne,

County of Los Angeles, State of California,

Except as expressly admitted, alleged, and denied in

Paragraph II of this answer, Defendants allege that they

are without knowledge or information sufficient to form a

belief as to the truth of the allegations contained in Para-

graph IT of the complaint.

iil

The complaint contains no Paragraph ITI.

cil ein Cake LA ow een oe

Appendix 63

(a) Defendants admit that the City of Santa Rosa is

located approximately seven miles north of the City of

Rohnert Park and allege that United States Highway 101

is a principal means of vehicular travel to the north or

south from both cities and in some instances the most con-

venient means of travel to the north or south from such

cities.

(b) Defendants admit that the City of Rohnert Park has

purported to adopt a general plan for the City and that

such plan allows for the development of land for commer-

cial purposes on both sides of U.S. Highway 101 in the area

of the Rohnert Park Expressway (hereafter “the Rohnert

Park site”). Defendants deny that the development of the

Rohnert Park site has been, or will be, financed entirely

from private capital.

the City Council of the City of Rohnert Park purported to

rezone portions of the property within the Rohnert Park

site but deny that said purported rezoning complied with,

or was consistent with, the requirements of Section 65860

of the Government Code or other applicable laws of the

State of California.

Except as expressly admitted or denied in Paragraph IV

of this [3] answer, Defendants allege they are without

knowledge or information sufficient to form a belief as to

the truth of the allegations contained in Paragraph IV of

the complaint.

Defendants deny that the Agency has planned a federally

subsidized shopping center and deny that such a shopping

center planned by the Agency has inhibited potential devel-

opers of the Rohnert Park site from proceeding with such

64 Appendia

development. Except as expressly denied in Paragraph V

of this answer Defendants allege they are without knowl-

edge or information sufficient to form a belief as to the

truth of the allegations contained in Paragraph V of the

complaint.

(a) Defendants admit and allege that the City Council

of the City of Santa Rosa, by its Ordinance No. 1036 dated

December 5, 1961, adopted a redevelopment plan for the

redevelopment project known as Santa Rosa Center Proj-

ect (Calif. R-45) (hereafter “the Project”) ; that the area

encompassed by the Project, as described in the presently

effective amended redevelopment plan, approaches to

within approximately one block of U.S. Highway 101; that

the redevelopment plan for the Project has been amended

from time to time and that amendments to said plan were

adopted by the City Council of the City of Santa Rosa on

or about March 10, 1970, and October 29, 1974; that the

Agency is, and has been at all times mentioned in the com-

plaint, responsible for carrying out the redevelopment plan

for the Project on behaif of the City of Santa Rosa; that

since 1971 the Agency has been considering proposals for

the development of a shopping center within the Project

area; that on or about March 27, 1972, the Agency entered

into an agreement with the Developer (hereafter “the Nego-

tiations Agreement”) whereby the Agency agreed to nego-

tiate with no developer except the Developer, for a period

specified by the Negotiations [4] Agreement, with respect

to the development of a shopping center within the Project

area; that the Developer kas prepared a proposal to

develop approximately 30.05 acres, exclusive of streets,

within the Project as a shopping center (hereafter “the

shopping center site”); that the Agency has acquired and

- — Non pine i eal AO

Appendix 65

cleared some of the property within the shopping center

site with funds furnished to the Agency by the defendant

Secretary; that the amendment of the redevelopment plan

for the Project adopted by the City Council of the City

of Santa Rosa on October 29, 1974, enlarged the Project

area to include a portion of the shopping center site not

previously within the Project area; that on October 29,

1974, the Agency approved a land disposition agreement

between the Agency and the Developer (hereafter “the

Land Disposition Agreement”) ; and that present proposals

for the implementation of the redevelopment plan for the

Project do not contemplate the development of permanent

family housing within the Project area. Defendants allege

that the redevelopment plan is not required by law or reg-

ulation to make provision for permanent family housing

and allege that no federal funds have been used, or will

be used, to acquire or clear property located within the

area added to the Project area by the amendment to the

redevelopment plan adopted October 29, 1974.

Except as expressly admitted or alleged in Paragraph

VI(a), Defendants deny each and every allegation con-

tained in Paragraph VI(a) of the complaint.

(b) Defendants admit that portion of Paragraph VI(b)

commencing with the word “The” on page 5, line 21, and

ending with the words “Home Finance Agency” on page 5,

line 29, and admit that portion of Paragraph VI(b) com-

mencing with the word “This” on page 6, line 1, and end-

ing with the figure “$9 625,023.” on page 6, line 5. Defend-

ants allege that said Loan and Grant contract provided

that the United States would defray three-fourths [5] (%4)

of the eligible costs of the redevelopment project, such fed-

eral share of eligible project costs not to exceed the amounts

specified by the Loan and Grant Contract, and allege that,

66 Appendix

by approval of the original Loan and Grant Contract,

the Housing and Home Finance Agency authorized federal

loans and grants for redevelopment within the entire Proj-

ect area, which at the time said contract was approved in

March of 1962 encompassed approximately 40 acres.

Except as expressly admitted or alleged in Paragraph

VI(b) of this answer, Defendants deny each and every

allegation contained in Paragraph VI(b) of the complaint.

has been amended nine times and that eight of such amend-

ments increased the amount of the temporary loan and

seven of such amendments increased the amount of the

Project grant. Defendants admit that the eighth amend-

ment, executed on or about November 27, 1973, increased

the temporary loan to a total of $16,557,309 and the Proj-

ect grant to a total of $12,236,717 and that the sixth amend-

ment to the Loan and Grant Contract, dated Sepember 14,

1970, increased the total Project grant from $3,263,332 to

$8,318,497 and increased the temporary loan from $5,908,880

to $13,223,939. Defendants allege that a portion of the

increase in federal funding made by the sixth amendment

to the Loan and Grant Contract was intended and used

for the purpose of acquiring, clearing, and preparing for

development, property within the area of that portion of

the Project known as Phase II, which area includes approx-

imately 21.21 acres of the shopping center site. Defendants

admit that September 14, 1970 is after the effect of the

National Environmental Protection Act (NEPA). Defend-

ants allege that the Defendant Secretary is presently pre-

paring an environmental impact statement for a portion of

the Project financed, in part, by federal funds, but deny

that the preparation of an environmental [6] impact state-

ment for the Project is required by the National Environ-

mental Protection Act.

Appendix 67

Except as expressly admitted, denied, or alleged in Para-

graph VI of this answer, Defendants allege they are with-

out knowledge or information sufficient to form a belief as

to the truth of the allegations of Paragraph VI of the

complaint.

VII

Defendants allege that the Land Disposition Agreement

provides that the Developer will construct a shopping cen-

ter containing approximately 713,500 square feet of retail

sales space; that the Agency has acquired and cleared some

of the property within the shopping center site; that the

Agency, to date, has expended approximately $4,980,430.00,

for acquisition, and $119,919.00 for clearance, of such prop-

erty; that the consideration to be received by the Agency

from the Developer for the property of the shopping center

site exceeds the fair market value of such property; that

as part of the consideration for such property Developer

is required by the Land Disposition Agreement to construct

public parking facilities having an estimated cost in excess

of $5,000,000, to bear the cost of constructing such facilities

in excess of $2,000,000.00, to reconvey or dedicate to the

Agency or the City of Santa Rosa certain parts of such

property for public parking purposes, and to make annual

payments of $401,000 to the City of Santa Rosa. Defend-

ants allege that the Land Disposition Agreement has

been submitted to Defendant Secretary but has not been

approved, or consented to, by Defendant Secretary.

Except as expressly alleged in Paragraph VII of this

answer, Defendants deny each and every allegation con-

tained in Paragraph VII of the complaint.

VIiil

Defendants deny each and every allegation contained in

Paragraph VIII. [7]

68 Appendix

(a) Defendants allege they are without knowledge or in-

formation sufficient to form a belief as to the truth of the

allegations contained in Paragraphs TX(a), IX(b), IX(e),

IX(d), [X(e), IX(f), and IX(g) of the complaint.

(b) Defendants admit that there are now approximately

748,000 square feet of general merchandise space in the City

of Santa Rosa and allege that the shopping center proposal

of the Developer provides for the construction of approxi-

mately 356,000 square feet of general merchandise space.

Defendants admit that the shopping center proposal pro-

vides for the construction of 347,000 square feet of retail

space other than general merchandise space. Exeept as

expressly admitted or alleged in Paragraph IX(b) of this

answer, Defendants deny each and every allegation con-

tained in Paragraph IX(h) of the complaint.

provides for the construction of 1,256 off-street parking

stalls for public parking; that the Land Disposition Agree-

ment provides the Developer will construct a parking strue-

ture having estimated cost in excess of $5,000,000.00 and a

cost to the Agency not to exceed $2,000,000.00; that the

Agency presently intends to defray the local share of total

cost for the Project, including costs related to parking facil-

ities, by the issuance of Agency bonds, which may be park-

ing lease revenue bonds, tax allocation bonds, or a combina-

tion of both such bonds; that pursuant to Article XITI,

Section 19 of the California Constitution, the California

Community Redevelopment Law (Health and Safety Code

Sections 36000 et seq.). and the redevelopment plan for the

Project, the Agency is authorized to incur indebtedness and

to have paid into a special fund of the Agency—established

Appendix 69

to pay the principal and interest on loans, monies, ad-

vanced to, or indebtedness incurred by the Agency to

finance or refinance the Project in whole or in [8] part—a

portion of the property tax revenues collected on property

within the Project area; and that the parking structure

will be operated and maintained by the City of Santa Rosa

consistent with the operation and maintenance of all other

off-street parking facilities owned by the City in downtown

Santa Rosa.

Except as expressly admitted or alleged in Paragraph

IX(c) of this answer, Defendants deny each and every

allegation contained in Paragraph TX(i) of the complaint.

(d) Defendants allege that the Land Disposition Agree-

ment between the Agency and the Developer provides that

the Agency will acquire, and sell to the Developer, certain

property within the Project area not presently owned by

the Agency and that the anticipated cost to the Agency of

acquisition of land and improvements is $4,959,000, plus

$332,100 for site clearance; that part of such property is

within the area added to the Project area by the amendment

to the redevelopment plan*adopted by the City Council of

the City of Santa Rosa on October 29, 1974; that the terms

of the Land Disposition Agreement provide that the prop-

erty for the shopping center site within the area added to

the Project area by said amendment will be conveyed to the

Developer for $1,000,000.00, or equivalent or greater con-

sideration, at the option of the Agency.

Except as admitted or alleged in Paragraph IX(d) of

this answer, Defendants deny each and every allegation

contained in Paragraph IX(j) of the complaint.

Defendants deny that the implementation or performance

of the Land Disposition Agreement will frustrate the plan-

70 Appendix

ning or development of a regional retail center at the Rohn-

ert Park site or injure the City of Rohnert Park. Defend-

ants admit that on or about November 27, 1973, the Defend-

ant Secretary approved the Agency’s application for an

amendment to the Loan and Grant [9] Contract. Except as

admitted in Paragraph X of this answer, Defendants allege

they are without knowledge or information sufficient to

form a belief as to the truth of the allegations contained

in Paragraph X of the complaint. 7

(a) Defendants allege that the Defendant Secretary is

presently in the process of preparing an environmental

impact statement for a portion of the Project financed, in

part, by federal funds and that or or about November 1,

1974 the Agency received a capital grant progress payment

in the amount of $773,982.00 and a relocation assistance

payment in the amount of $335,965.00, such sums being

monies allocated to the Agency by amendments to the Loan

and Grant Contract previously approved by the Defendant

Secretary.

(b) Defendants admit that on or about September 24,

1974, the Agency and the City of Santa Rosa filed an action

in the Superior Court of the State of California for the

County of Sonoma against the City of Rohnert Park.

Defendants deny that the purpose of said action was to

permanently enjoin development at the Rohnert Park site,

deny that the pleadings on file in said action disclose that

the Agency and the City of Santa Rosa claim the sole and

exclusive right to develop a regional shopping center in the

County of Sonoma or claim that the errosion of the said

alleged right would result in an irreparable injury to them;

deny that the action is without merit or was brought to

Appendix 71

deter the Plaintiff from authorizing and implementing the

development of the Rohnert Park site in accordance with

its general plan.

Defendants allege that the purpose of said action by the

Agency and the City of Santa Rosa was to determine the

adequacy, under California law, of an Environmental Im-

pact Report prepared in connection with a zoning change

for property located at [10] the Rohnert Park site, and, if

such Environmental Impact Report was determined by the

Court to be inadequate, to enjoin a zoning change with re-

spect to said property until an adequate Environmental Im-

pact Report had been prepared. Defendants allege that the

pleadings and papers on file with the Court in such action

disclose that the Association « Bay Area Governments

concluded a regional shopping center should not be

developed at the Rohnert Park site because of adverse con-

sequences to the environment of the area.

(ce) Defendants deny that the cost of litigating such suit

on behalf of the Agency and the City of Santa Rosa is, or

was, defrayed with funds obtained by the City of Santa

Rosa or the Agency from the Defendant Secretary.

Except as expressly admitted, denied, and alleged in

Paragraph XI of this answer, Defendants deny each and

every allegation contained in Paragraph XI of the com-

plaint.

XIT

Defendants deny each and every allegation contained in

Paragraph XII.

FIRST DEFENSE

The complaint fails to state a claim against Defendants,

or any of them, upon which relief can be granted.

72 Appendix

SECOND DEFENSE

The complaint fails to allege a beneficial or legal interest

which would give Plaintiff standing to sue, or entitle Plain-

tiff to bring suit against Defendants, or any of them, under

1949, the Administrative Procedure Act, or any other

statute, with respect to the conduct and activities referred

to in the complaint.

THIRD DEFENSE

Plaintiff has known since at least as early as September,

1970, the Defendant Agency would receive federal funds to

defray [11] the costs of redevelopment with the area added

to the Project area by the amendment to the redevelopment

plan adopted by the City Council on March 10, 1970, and

since at least as early as August, 1973, that the Agency and

the Developer intended to enter into the Land Disposition

Agreement and of the terms and provisions of such agree-

ment. Plaintiff failed during the periods of time from the

dates mentioned to the time of filing of this suit to seek a

judicial determination of the validity of Defendants’ acts

and of plaintiff’s legal rights. During such periods Defend-

ants, with the knowledge of plaintiff and with the belief in

good faith of the propriety of their actions, spent substan-

tial funds to accomplish the redevelopment of the Project

area and those acts necessary to allow performance of the

Land Disposition Agreement. Therefore, plaintiff is barred

by laches from claiming that the acts of Defendants, or any

of them, under the circumstances are wrongful or in viola-

tion of any of the laws referred to in the complaint.

Appendix 73

FOURTH DEFENSE

The alleged controversies referred to in the complaint are

hypothetical, moot, or political and are not justiciable

controversies under 28 U.S.C. 2201.

FIFTH DEFENSE

Plaintiff should be denied the injunctive relief prayed

for because such injunctive relief will cause irreparable

harm to Defendants.

SIXTH DEFENSE

On or about September 3, 1974, Plaintiff purported to

make a zoning change, initiated upon the application of

Codding Enterprises and Hugh Codding, of a portion of

the property located at the Rohnert Park site. By such zon-

ing change Codding Enterprises and Hugh Codding sought

to carry out plans to develop land owned by Codding Enter-

prises as a regional shopping center to be owned [12] and

operated by Codding Enterprises. Codding Enterprises and

Hugh Codding are the developers and owners or part

owners of all regional shopping center facilities in the

County of Sonoma and such interests constitute a monopoly

of regional shopping center facilities in the said county.

The development of the Rohnert Park site as a regional

shopping center would meet, and fill, the demand for such

facilities in Sonoma County for the next twenty years and

would inhibit and discourage potential developers of

regional shopping center facilities, which would compete

with the regional shopping center facilities developed and

owned by Codding Enterprises and Hugh Codding, from

developing such facilities at the shopping center site located

within the Project area or at any other location within

Appendix

Sonoma County. Under the circumstances, the shopping

center proposal of Defendant Developer, the Land Disposi-

tion Agreement, and the actions and conduct of the De-

fendants referred to in the complaint will promote, and not

restrain, competition in trade and commerce.

WHEREFORE, Defendants pray;

(a) That Plaintiff take nothing by its complaint

herein, that Plaintiff be denied the relief prayed

for in the complaint, or any other relief, and

that this action be dismissed or in the alterna-

tive, if the Court determines that an adjudication

of rights and obligations herein is proper;

(b) That the Court enter judgment:

(1)

(2)

(3)

Declaring that the sale of land to De-

fendant Developer by Defendant Agency

is not a conveyance for less than fair

market value of the land for its highest and

best uses permitted under the redevelop-

ment plan and is not illegal or in violation

of 42 U.S.C. 1460(c)(4) or Section 33433,

Health and [13] Safety Code;

Declaring that Defendant Secretary will

not be acting illegally or in excess of his

authority if he approves the agreement

between Defendant Agency and Defendant

Developer for disposition of said land to

the latter ;

Declaring that the issuance by Defendant

Agency of tax allocation bonds to finance

redevelopment costs and indebtedness in-

curred by the Defendant Agency in connec-

tion with the Project will not cause damage

(4)

(5)

(6)

Appendix 75

or harm to the various taxing agencies of

the County of Sonoma or to Plaintiff City;

Declaring that Defendant Secretary has

acted legally and within his authority in

approving payments of public funds to De-

fendant Agency without completing an

environmental impact statement pursuant

to the provisions of the National Environ-

mental Policy Act and that Defendant

Secretary may continue to approve such

payments of public funds to the Defendant

Agency without preparing such environ-

mental impact statement;

Declaring that Defendant Secretary has

acted legally and within his authority in

approving payments of public funds to the

Defendant Agency without ascertaining

that action and conduct of Defendant

Agency and Defendant City complies with

the laws of the State of California and that

Defendant Secretary may continue to ap-

prove such payments of public funds to the

Defendant Agency without ascer- [14] tain-

ing that actions and conduct of the Defend-

ant Agency and Defendant City comply

with the laws of the State of California;

Declaring that the agreement between De-

fendant Agency and Defendant Developer,

if carried out, will not be, or represent, a

conspiracy or combination of interstate

commerce or commerce in Sonoma County;

76 Appendix

(7) Declaring that the Agreement between De-

fendant Agency and Defendant Developer,

if carried out, will not be, or represent, an

attempt to monopolize, or a combination or

conspiracy to monopolize, interstate trade

or commerce in Sonoma County, or any

part thereof.

(8) Declaring that neither Plaintiff City, nor

its inhabitants, merchants, property own-

ers, or taxpayers, has suffered loss or

damage or is threatened with loss or dam-

age, In any sum or amount, by reason of

any acts or conduct of the Defendants re-

ferred to in the complaint;

(9) Declaring that Plaintiff City is not entitled

to sue for, or have, injunctive or any other

form of relief by reason of any acts or

conduct of Defendants referred to in the

complaint; and

(10) Declaring that Defendants have not vio-

lated, and are not threatening to violate,

the antitrust laws, the Housing Act of 1949,

the California Community Redevelopment

Law, the National Environmental Protec-

tion Act, or the Administrative Procedure

Act;

2. That Defendants be awarded all costs sustained by

them [15] in defending this action, including without limi-

tation, reasonable attorneys’ fees;

Appendiz 77

3. That Defendants be granted such other relief as the

Court deems proper.

Dated: January 20, 1975.

JOSEPH E. COOMES, JR.

RICHARD E. BRANDT

By Josern E. Coomss, Jr.

Attorneys for Defendants City of

Santa Rosa and Urban Renewal

Agency of the City of Santa

Rosa

78 Appendix

Appendix E(1)

WILLIAM N. WILLENS

Law Offices of

BARRETT, STEARNS, COLLINS, GLEASON

& KINNEY

A Professional Corporation

1150 Union Bank Tower

Del Amo Financial Center

Torrance, California 90503

370-3581 and 772-4347

Attorneys for Defendant, Ernest W. Hahn, Ince.

United States District Court

Northern District of California

CIVIL ACTION NO.

C 74-2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, ete., et al.,

Defendants.

MOTION AND NOTICE OF MOTION FOR SUMMARY

JUDGMENT, AFFIDAVIT OF JOHN M. GILCHRIST,

JR. AND MEMORANDUM OF POINTS AND AUTHOR-

ITIES IN SUPPORT THEREOF

Defendant ERNEST W. HAHN, INC., hereby moves the

Court that it enter, pursuant to Rule 56(b) of the Federal

Rules of Civil Procedure, a summary judgment in favor of

said Defendant, on the ground that there is no genuine

issue of material fact, and that Defendant ERNEST W.

HAHN, INC. is entitled to judgment as a matter of law.

Appendiz 79

This motion is based on the affidavit of JOHN M. GIL-

CHRIST, JR., and the Memorandum of Points and Author-

ities, both of which are attached hereto, and on the files and

records of this proceeding.

Dated: August 11, 1976.

BARRET, STEARNS, COLLINS,

GLEASON & KINNEY

By WituraM N. WILLENS

William N. Willens [1]

NOTICE OF MOTION

TO PLAINTIFF, CITY OF ROHNERT PARK, AND

TO COTTON, SELIGMAN & RAY, [ITS ATTORNEYS:

PLEASE TAKE NOTICE, that on September 10, 1976,

at 9:30 o’clock AM, or as soon thereafter as counsel can

be heard, in Court Room No. 5, United States Courthouse,

Federal Building, 450 Golden Gate Avenue, San Francisco,

California, the undersigned will bring the above Motion on

for hearing.

Dated: August 11, 1976.

BARRETT, STEARNS, COLLINS,

GLEASON & KINNEY

By Wii N. WILLEens

William N. Willens [2]

80 Appendix

Appendix E(2)

WILLIAM N. WILLENS

Law Offices of

BARRETT, STEARNS, COLLINS, GLEASON

& KINNEY

A Professional Corporation

1150 Union Bank Tower

Del Amo Financial Center

Torrance, California 90503

370-3581 and 772-4347

Attorneys for Defendant, Ernest W. Hahn, Inc.

Umited States District Court

Northern District of California

CIVIL ACTION NO.

C 74-2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, etc., et al.,

Defendants.

AFFIDAVIT OF JOIIN M. GILCHRIST, JR. IN SUP-

PORT OF MOTION FOR SUMMARY JUDGMENT

State of California

County of Los Angeles—ss,

JOHN M. GILCHRIST, JR. being first duly sworn,

deposes and says:

1. Affiant is vice president in charge of development

pre-planning of Defendant ERNEST W. HAHN, INC., a

Appendix 81

California corporation (“HAHN”). Affiant is familiar with

the operations of HAHN pertaining to the acquisition,

development, construction, operation, and management of

regional and other shopping centers, including those cen-

ters presently in operation, those centers in the process of

development or construction, and those centers which are

only in the planning stage.

2. HAHN is in the process of developing a downtown

commercial shopping center as an integral part of a fed-

erally [1] sponsored urban renewal project in Santa Rosa,

California, to be known as “Santa Rosa Plaza” (“PROJ-

ECT”).

3. At the present time, HAHN does not have an interest,

as developer, owner, manager, or otherwise, in any regional

or other type of shopping center or in any retail outlet in

the County of Sonoma, other than the PROJECT. Nor

does HAHN have any plans for the acquisition, develop-

ment, construction, operation, or management of any shop-

ping center or retail oulet in Sonoma County, other than

the PROJECT.

4, The closest shopping center owned, operated, or man-

aged by HAHN to the City of Rohnert Park is a regional

shopping center in San Jose, California, known as Oak-

ridge Mall. The next closest shopping center owned, oper-

ated, or managed by HAHN is a regional center in Redding,

California, known as Mt. Shasta Mall. The closest shopping

center in the planning stage to Rohnert Park is located

in Corte Madera, California, approximately 40 miles from

Rohnert Park.

9. By Ordinance No. 1036, dated December 5, 1961,

Defendant City of Santa Rosa (“CITY”) adopted a rede-

velopment plan for the PROJECT to be implemented by

Defendant Urban Renewal Agency of the City of Santa

82 Appendix

Rosa (“AGENCY”), a public body corporate and politic,

organized and existing by virtue of Resolution No, 552 of

the City Council of Defendant CITY dated March 27, 1958.

(Since 1971, the AGENCY has considered the development

of a downtown shopping center as an integral part of the

project, and on or about March 27, 1972, entered into an

agreement with Defendant HAHN whereby the AGENCY

agreed to negotiate with no other developer for a period

specified in the agreement, and thereafter extended from

time to time, with respect to the development of such a

shopping center,

6. Following extensive planning, design, and economic

analysis, discussion and negotiations, HAHN submitted a

proposal for the development of approximately 30 acres

within the project as a [2] commercial] shopping center. (On

or about October 29, 1974, the CITY duly adopted and

approved an amendment to the redevelopment plan which

enlarged the project area to include a portion of the shop-

ping center site not previously within the project area.

On that date the AGENCY approved a land Disposition

and Development Agreement (“AGREEMENT”) between

the AGENCY and HAHN.

7. That HAHN is presently engaged in the construction

of downtown shopping centers in Redevelopment projects

in Santa Maria, California, and Hawthorne, California.

That in addition to the PROJECT, HAHN has plans for

downtown shopping centers in Redevelopment projects

located in Santa Monica, California, Pasadena, California,

Sunnyvale, California, Long Beach, California, San Diego,

California, Sommerville, New Jersey, and Ogden, Utah.

8. That the agreement between HAHN and the AGEN-

CY pertaining to the PROJECT provides for no greater

benefits to HAHN than those which HAHN has received

Appendix 83

or contemplates receiving pursuant to simailar Disposition

and Development Agreements with che Urban Renewal

Agencies in all of the other Redevelopment projects re-

ferred to in Paragraph 7 hereof.

9. HAHN entered into the Agreement with the AGEN-

CY and, thereafter, attempted to develop the project pur-

suant to such agreement without any intent to set prices

or exclude competition in the shopping center business in

Sonoma County, California, or elsewhere.

10. The statements made herein are true of my own

personal knowledge and if called as a witness I can com-

petently testify thereto.

Joun M. Giucurerst, JR.

John M. Gilchrist, Jr.

Subscribed and sworn to before me

this 10th day of August 1976.

BarBara L. Evans

Notary Public:

Official Seal

BARBARA L. EVANS

Notary Public California

Principal Office in

Los Angeles County

My Commission Expires Jan. 13, 1978 [3]

84 Appendix

Appendix E(3)

WILLIAM N. WILLENS

Law Offices of

BARRETT, STEARNS, COLLINS,

GLEASON & KINNEY

A Professional Corporation

1150 Union Bank Tower

Del Amo Financial Center

Torrance, Califonia 90503

370-3581 and 772-4347

Attorneys for Defendant, Ernest W. Hahn, Inc.

United States District Court

Northern District of California

CIVIL ACTION NO.

C 74-2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, ete., et al.,

Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF DEFENDANT ERNEST W.

HAHN, INC’s MOTION FOR SUMMARY JUDG-

MENT

Appendix 85

TABLE OF CONTENTS

Page

Number

I AR URE eee ee 1

II. Since Economie Consequences Brought About By

Governmental Action Cannot Give Rise to Lia-

bility Under The Sherman Act, The Agreement

Between Hahn and The Agency Does Not Violate

BN I I octane budcea chance sca: 3

III. Plaintiff Lacks Standing To Assert Anti-Trust

Claims Against Defendant Hahn 2.00202... 4

A. Plaintiff cannot show an injury to “business

We IE acess oh icahh tena taciaabedtircoicensdacae +

B. Even if Plaintiff suffered injury to “business

or property” it lacks standing because any

injury would not be within the “target area.” 5

C. Plaintiff cannot maintain an action as parens

le SORT We ROM DSI eR aD ION a 6

By, I sacehcCaossucctsdharinceDcaserccnindeusensdieeanbdcostapesoeiss 7B]

86 Appendix

TABLE OF CASES

Page

Conference of Studio Unions vs. Lowe’s, Inc. (1951)

193 F.2nd 51, 54-55; cert. denied 342 U.S. 919, 96

L.Ed, 687 ..... OTA INO ALE, ORE We SNE EE MEER 6

Gibson & Perin Co. vs. Cinneinatti (1973) 480 Fed.2nd

936 aac Ne ioaiaiiinieteadeoriip cath cain salabces satirabaanee eeacematiok 3

Hawaii vs. Standard Oil Co. (1972) 405 U.S. 251, 31

L.Ed.2nd 184 ....... ophicrelinsiidacidat ccisacsboancsipseaiiadnabede: 4

Hecht vs. Pro Football, Inc. (1971) 444, Fed.2nd 931,

939 UA SN NRE 3

Martin vs. Phillips Petroleum Company (1966) 365

pt Be gh” 1 Seren a ea ae oe ae 5

In Re Multi-District Vehicle Air Pollution M.D.L. No.

31 et al vs. Automobile Manufacturers Association,

Inc., et al (1973) 481 F2nd 122, 131 ... 5, 6, 7

Parker vs. Brown (1904), 195 U.S. 332, 49 L.Ed. 224 3

K. W. Wiggans Airway, Inc. vs. Mass. Port Authority

(1970) 362 Fed.2nd 52 - ww... ik 3

STATUTES |

Clayton Act (15 U.S.C. § 15 and § 26) —0000 4,6

Sherman Act (15 U.S.C. 1 and 2 -00002 2... 2[ii]

Appendix 87

WILLIAM N. WILLENS

Law Offices of

BARRETT, STEARNS, COLLINS

GLEASON & KINNEY

A Professional Corporation

1150 Union Bank Tower

Del Amo Financial Center

Torrance, California 90503

370-3581 and 772-4347

Attorneys for Defendant, Ernest W. Hahn, Inc.

United States District Court

Northern District of Califorma

CIVIL ACTION NO.

C 74-2429 RHS

City of Rohnert Park, a Municipal corporation,

Plaintiff,

James T. Lynn, ete. et al.,

Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF DEFENDANT ERNEST W.

HAHN, INC’s MOTION FOR SUMMARY JUDG-

MENT

I :

PRELIMINARY STATEMENT

Defendant ERNEST W. HAHN, INC’S (“HAHN”)

Motion for Summary Judgment is being filed and set for

88 Appendix

hearing concurrently with Motions for Summary Judgment

by all other defendants in this action. Defendant HAHN

hereby refers to all other defendants’ Motions for Sum-

mary Judgment, and the supporting Affidavits and Memo-

randa of Points and Authorities, and by reference makes

the same a part hereof.

Examination of the vague and unspecific contents of the

Complaint reveals that the only charging allegations con-

cerning Defendant HAHN consists of allegations of an

agreement between [1] HAHN and Defendant Urban Re-

newal Agency of the City of Santa Rosa (“AGENCY”) for

the development and construction by HAHN 6f a downtown

commercial shopping center as an integral part of a fed-

erally sponsored urban renewal project in Santa Rosa,

California, to be known as “Santa Rosa Plaza (“PROJ-

ECT”). This agreement is not specifically described but

apparently is the Disposition and Development Agreement

which is the basic agreement in urban renewal projects

between the agency and the developer. This agreement, it

is alleged, unduly restrains trade and commerce in viola-

tion of the Sherman Act (15 U.S.C. 1 and 2). It would

appear that no other violation of law, or other actionable

conduct, is alleged to have been committed by HAHN.

What standing Plaintiff, City of Rohnert Park, a munici-

pal corporation, has to maintain this action against HAHN

is not set forth with any degree of specificity. There is a

general allegation that “Plaintiff CITY, its inhabitants,

taxpayers, and property owners have been injured in their

business and property, .....- ” (Page 2, line 10 et seq of the

Complaint) and an equally general and vague allegation

that certain real property in the City of Rohnert Park

was designated in the Master Plan as a site for the develop-

ment of a regional shopping center, and that “some of the

Appendix 89

real property so designated is and was at all times herein

material owned by Plaintiff CITY.” (Page 3, line 27 et seq)

However, there is no allegation of what “business and

property” of Plaintiff CITY has been injured or of what

real property was owned by Plaintiff CITY or its nature

and/or use.

This Memorandum will attempt to show that Defendant

HAHN has not committed any violation of the Sherman Act

and that, assuming arguendo, it had, Plaintiff CITY has no

standing to maintain an action based thereon. [2]

SINCE ECONOMIC CONSEQUENCES BROUGHT

ABOUT BY GOVERNMENTAL ACTION CANNOT

GIVE RISE TO LIABILITY UNDER THE SHER-

MAN ACT, THE AGREEMENT BETWEEN HAHN

AND THE AGENCY DOES NOT VIOLATE THE

SHERMAN ACT

A principle established by numerous judicial decisions is

that the functions performed by a governmental agency,

and functions performed by private parties under the direc-

tion of a governmental agency which the governmental

agency could have performed itself as a public function,

are exempt from application of the anti-trust laws. Parker

vs. Brown (1904), 195 U.S. 332, 49 L.Ed. 224; FE. W. Wig-

gins Airway, Inc. vs. Mass. Port Authority (1970) 362 Fed.

2nd 52; Hecht vs. Pro Football, Inc. (1971) 444, Fed. 2nd

931, 939.

The case of Gibson & Perin Co. vs. Cincinnati (1973) 480

Fed. 2nd 936 is strikingly similar to the instant case. There,

plaintiffs alleged that they were the victims of discrimina-

tion in the form of a competitive advantage to private

parties resulting from the Redevelopment program in Cin-

90 Appendix

cinnati. They objected that the design and construction of a

Redevelopment parking facility made that facility parti-

cularly beneficial to a merchant within the Redevelopment

project and placed plaintiffs, who were located outside the

project, at a competitive disadvantage. The Complaint al-

leged, inter alia, violation of federal and state anti-trust

laws.

The trial court ruled partially in favor of plaintiffs. The

United States Court of Appeal, Sixth Circuit, reversed

that judgment and remanded the case to the trial court with

instructions to dismiss the complaint. The Court of Appeal

rejected the plaintiffs’ claims under the Sherman Act with

the concise and unambiguous comment: “Participation in an

Urban Redevelopment Project does not violate the anti-

trust laws.” Gibson & Perin Co., [3] supra, at p. 946.

III

PLAINTIFF LACKS STANDING TO ASSERT

ANTI-TRUST CLAIMS AGAINST

DEFENDANT HAHN

A. Plaintiff cannot show an mjury to “business or prop-

erty.” The words “business or property,” as used in Section

4 of the Clayton Act (15 U.S.C. § 15), which authorizes the

recovery of treble damages for injury to a “person’s busi-

ness or property” by reason of violations of the federal

anti-trust laws, refer to commercial interests or enterprises.

Hawau vs. Standard Oi Co. (1972) 405 U.S. 251, 31 L.Ed.

2nd 184.

In Hawaii vs. Standard Oil Co., swpra, the State of

Hawaii asserted various anti-trust claims against the

defendants in connection with the defendants’ sale, market-

ing, and distribution of refined petroleum products. One of

the counts of the Complaint alleged that the State brought

Appendix 91

the action as parens patriae and was entitled to recover

treble damages for injury to the State’s economy and pros-

perity. Such injury allegedly included the wrongful extrac-

tion from the State of its citizens’ revenues; increased taxes

to offset such losses of such revenues; curtailment of manu-

facturing, shipping, and commerce; and competitive dis-

advantages to Hawaiian goods in the national market. The

District Court denied the defendants’ Motion +o Dismiss,

but the Court of Appeals for the Ninth Circuit reversed and

directed the count to be dismissed on the ground that injury

to the State’s general economy was not an injury to “busi-

ness or property.”

In the instant case, Plaintiff CITY has not alleged and

cannot prove any injury to “business or property” since it

neither alleges nor has the proprietary commercial interest

which can be adversely affected by the purported violations

of Defendants. The conclusory allegation that “Plaintiff

CITY, its inhabitants, taxpayers, and property owners have

been injured in their business [4] and property .. .” is in-

sufficient to establish either “injury” or the existence of

“business or property” capable of being injured.

Similarly, the allegation that some of the real property

designated as a site for the development of commercial fs

facilities including a regional shopping center was owned _

by Plaintiff CITY, is insufficient to constitute “business or

property.” In Martin vs. Phillips Petroleum Company

(1966) 365 F.2nd 629 a summary judgment for defendants

was affirmed on appeal. The Court of Appeals held that

where Plaintiff sought treble damages on the basis of

asserted combination of defendants to restrain or mono-

polize interstate commerce by taking over and replacing

Plaintiff in the acquisition of a gas plant, but plaintiff

had had no experience in the operation of a gas plant, did

92 Appendix

not have ability to finance business and made no investment

in facilities or equipment, plaintiff was not injured in his

business. The Court stated that while one need not have

an actual going business to obtain standing “. . . there must

be the intention to enter the business; ... there must be a

showing of preparedness to enter the business... .” 365

F.2nd 633.

B. Even if Plaintiff suffered injury to “business or

property” it lacks standing because any injury would not

be within the “target area.”

In In Re Multi-District Vehicle Air Pollution M.D.L. No.

31 et al vs. Automobile Manufacturers Association, Inc. et al

(1973) 481 F.2nd 122, an appeal was taken from denial, by

the District Court, of Motions to Dismiss actions under the

Clayton Act where it was alleged that Automobile Manu-

facturers conspired to eliminate all competition in research

and development of motor vehicle air pollution equipment

and in the purchase of patents and patent rights covering

such equipment. The Ninth Circuit Court of Appeals held

that where neither the Government’s individual claims or

its class claims nor its parens patriae claims alleged any

[5] injury to commercial ventures or enterprises, the gov-

ernmental entities had no standing to seek recovery under

the treble damages section of the Clayton Act, and although

farmers who alleged diminished crop yield by reason of the

anti-trust violation satisfied the requirement of injury to

“business or property,” they likewise had no standing to

seek treble damages because the injuries complained of

were not within the “target area.”

In In Re Multi-District, supra, the Court quotes from

another Ninth Circuit case, Conference of Studio Unions

vs. Lowe’s, Inc. (1951) 193 F.2nd 51, 54-55; cert. denied

342 U.S. 919, 96 L.Ed. 687 as follows:

Appendix 93

“(T Jo state a cause of action under the anti-trust laws

a plaintiff must show more than that one purpose of

the conspiracy was a restraint of trade and that an act

has been committed which harms him. He must show

that he is within that area of the economy which is

endangered by a breakdown of competitive conditions

in a particular industry. Otherwise he is not injured

‘by reason’ of anything forbidden in the anti-trust

laws.”

In the instant case, even if Plaintiff CITY had injury to

“business or property” such injury would be indirect and

collateral and would not be to a commercial enterprise of

plaintiff in the area of the economy in which the elimina-

tion of competition occurred. The target area for any viola-

tion by HAHN of the anti-trust laws would be the shopping

center business, a business in which Plaintiff has never been

an active participant. “Standing is denied ... if the claim-

ant’s commercial activity occurred outside that area of the

economy.” In Re Multi-District, supra, page 126.

C. Plaintiff cannot maintain an action as parens patriae.

Any attempt by Plaintiff CITY to represent “its inhabi-

tants, taxpayers, and property owners” must fail since a

city cannot sue as parens patriae, even for injunctive relief

based on Section 16 of the Clayton Act (15 U.S.C. Section

26). [6] As stated in In Re Multi-District, supra, at page

131:

“'..the Federal Government and the States, as the

twin sovereigns in our constitutional scheme, may in

appropriate circumstances, sue as parens patriae to

vindicate interests of their citizens... (Citations omit-

ted). On the other hand, political subdivisions such as

cities and counties, whose power is derivitive and not

sovereign, cannot sue as parens patriae,...”

94 Appendix

CONCLUSION

For the foregoing reasons, Defendant ERNEST W.

HAHN, INC. is entitled to summary judgment in its favor.

Dated August 11, 1976.

Respectfully submitted,

BARRETT, STEARNS, COLLINS,

GLEASON & KINNEY

By Wru1am N. Wittens

William N. Willens [7]

rf, ;

Appendix 95

William N. Willens

Law offices of

Barrett, Stearns, Collins, Gleason & Kinney

A Professional Corporation

1150 Union Bank Tower

Del Amo Financial Center

Torrance, California 90503

370-3581 and 772-4347

Attorneys for Defendant, Ernest W. Hahn, Inc.

United States District Couri

Northern District of California

CIVIL ACTION NO.

C 74-2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, etc., et al.,

Defendants.

ORDER GRANTING MOTION FOR SUMMARY

JUDGMENT

Defendant ERNEST W. HAHN, INC’s Motion for Sum-

mary Judgment having come on regularly to be heard this

day, and it appearing that Notice of Motion was given to

Plaintiff pursuant to Rule 56(c) of the Federal Rules of

Civil Procedure, and it appearing that there is no genuine

issue as to material fact, and that Defendant ERNEST W.

HAHN, INC. is entitled to judgment as a matter of law;

therefore,

96 Appendix

IT IS ORDERED that Defendant ERNEST W. HAHN,

INC’s Motion for Summary Judgment be, and the same is,

hereby granted.

Judge, U.S. District Court [1]

Appendix

Appendix F(1)

Original Filed

Aug 20 1976

Clerk, U.S. Dist. Court

San Francisco

JAMES L. BROWNING, JR.

United States Attorney

PAUL E. LOCKE

Assistant United States Attorney

P. O. Box 36055

450 Golden Gate Avenue

San Francisco, California 94102

Telephone: (415) 556-5134

Attorneys for Federal Defendants

In the United States District Court

for the Northern District of California

CIVIL NO. C-74-2429-RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, etc., et al.,

Defendants.

NOTICE OF MOTION FOR SUMMARY JUDGMENT

AND MOTION TO DISMISS OF DEFENDANT

SECRETARY OF THE DEPARTMENT OF

HOUSING AND URBAN DEVELOPMENT

TO PLAINTIFF and to WILLIAM M. BRINTON AND

RICARDO J. HECHT, its attorneys:

PLEASE TAKE NOTICE that on September 24, 1976,

at 9:30 a.m., or as soon thereafter as counsel may be heard,

98 Appendix

in Courtroom No. 5, of the above entitled court loce:ed at

450 Golden Gate Avenue, San Francisco, California, defend-

ant, Secretary of the United States Department of Housing

and Urban Development, will move the Court for an order

dismissing the complaint and entering summary judgment

in favor of defendant and against plaintiff. |

This motion is made under Federal Rule of Civil Pro-

cedure 56(b) on the ground that the action raises no genuine

issue as to any material fact and the defendant Secretary

is entitled to judgment [1] as a matter of law and the

ground that the Court lacks subject matter jurisdiction.

This motion is based on this notice, the pleadings, records,

and files herein, on the affidavits of Julian A. Fitzhugh and

Leevérn Johnson and the memorandum of points and au-

thorities filed in support of this motion, and on the proposed

summary judgment filed herewith.

Dated: August 20, 1976

JAMES L. BROWNING, JR.

United States Attorney

By: Pavut E. Locke

Paul E, Locke

Assistant United States Attorney [2]

Appendix 99

Appendix F(2)

Original Filed

Aug 20 1976

Clerk, U.S. Dist. Court

San Francisco

JAMES L. BROWNING, JR.

United States Attorney

PAUL E. LOCKE

Assistant United States Attorney

P. O. Box 36055

450 Golden Gate Avenue

San Francisco, California 94102

Telephone: (415) 556-5134

Attorneys for Federal Defendants

In the United States District Court

for the Northern District of California

CIVIL NO. C-74-2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, ete., et al.,

Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF FEDERAL DEFENDANT'S

MOTION FOR SUMMARY JUDGMENT

100 Appendix

TABLE OF CONTENTS

Page

Th nici cecaser cise ienmnestipncenes 1

II. Statement of Facts Not in Dispute .......................- 2

Dein NI picccea atch coadicisth fi pei tceabshdadinied citrate shila sencaiancgeeaint 3)

OU PI inition 6

A. Plaintiff has failed to state a cause of action

upon which relief can be granted in that the

plaintiff does not have standing and therefore

no case or controversy eXiSts ..........------------------ 6

1. Plaintiff has no standing under NEPA... 6

2. Plaintiff does not have standing to chal-

lenge an Urban Renewal Plan ...................- 7

B. The Court lacks subject matter jurisdiction

over the antitrust counts of plaintiff’s Com-

II Saisiisslascecaiciteacietpoxiseacitencsoeonaasa mariners 9

C. Is the Federal defendant, Secretary of HUD,

in violation of the Environmental Policy Act

eM SAA RIP SAAN Pe CMa eT A CE IN ON POO 11

D. Under the facts alleged in the Complaint

should the Court enjoin the Federal defend-

ant, Secretary of HUD, from taking any ac-

tion which could cause damage to plaintiff by

reason of any violation of the antitrust laws

of the United States—15 U.S.C. $1, 2? _..... 12

E. Has HUD acted arbitrarily in concurring in

the minimum disposition price of $2 Million

for 21 acres of land in Phase ITI of the proj-

OE panies Sessa akenietbebid costo adatnepirlacicck senecsincemtoss 13

a 15

Appendix 101

#1719

JAMES L. BROWNING, JR.

United States Attorney

PAUL E. LOCKE

Assistant United States Attorney

P. O. Box 36055

450 Golden Gate Avenue

San Francisco, California 94102

Telephone: (415) 556-5134

Attorneys for Federal Defendants

United States District Court for the

Northern District of California

CIVIL NO. C-74-2429 RHS

City of Rohnert Park, a municipal corporation,

Plaintiff,

James T. Lynn, ete., et al.,

Defendants.

MEMORANDUM OF POINTS AND AUTHORITIES

IN SUPPORT OF FEDERAL DEFENDANT'S

MOTION FOR SUMMARY JUDGMENT

I INTRODUCTION

This is an action instituted by the City of Rohnert Park

against the Secretary of the United States Department of

Housing and Urban Development, the City of Santa Rosa,

its Urban Renewal Agency and Ernest W. Hahn, Inc. The

suit seeks injunctive and declaratory relief in connection

with the Santa Rosa Center project, a federally assisted

102 Appendix

Urban Renewal Project in the City of Santa Rosa, Cali-

fornia. Specifically, plaintiff demands to enjoin the Secre-

tary of HUD from approving a certain land disposition

agreement which has been entered into between defendants

Santa Rosa’s Urban Renewal Agency and Ernest W. Hahn,

Ine., which agreement contemplates the construction and

development of a regional shopping center in the City of

Santa Rosa. Federal funds, by way of loan and grant [1]

contract, will be involved for part of the proposed regional

shopping center. Plaintiff bases its prayer for injunctive

relief on the following grounds:

1. The Secretary has not prepared an Environmental

Impact Statement (EIS) for the regional shopping center

pursuant to NEPA 42 U.S.C. § 4321 et seq.

2. The Secretary is acting in violation of the antitrust

laws of the United States. 15 U.S.C. § i, 2.

3. The Secretary is acting in violation of the Housing

Act of 1949 as amended, particularly 42 U.S.C. 1460(c) (4)

and HUD’s Urban Renewal Handbook 7214.1 Rev. Ch. 1. p.

1., Ch. 3, p. 9, as well as in violation of the California Health

and Safety Code § 33433.

II STATEMENT OF FACTS NOT IN DISPUTE

The Federal defendant submits the following facts are not

in dispute:

A. Plaintiff in municipal corporation existing under the

laws of the State of California located approximately seven

(7) miles south of the City of Santa Rosa (see Complaint,

paragraph IV(a).)

B. The Santa Rosa Center Project is a federally-assisted

Urban Renewal project in the City of Santa Rosa. The

Santa Rosa Urban Renewal Plan was adopted by the City

Council of Santa Rosa on December 5, 1961, and approved

Appendix 103

by the Housing and Home Finance Agency (HHFA), pred-

ecessor of HUD on January 15, 1962. HHFA approved the

first amendment to the Plan on January 14, 1964. HUD

approved the third amendment to the Plan on May 25, 1970.

This amendment was adopted by the Santa Rosa Redevelop-

ment Agency on March 3, 1970 and adopted by the City

Council of Santa Rosa on March 10, 1970.

The purpose of the third amendment to the Urban Re-

newal Plan was to increase the project area by 31.2 acres.

This activity was [2] commenced as a result of damage

caused by an earthquake which occurred in October 1969,

Renewal treatment of the added area was undertaken to

protect the adjacent area which had already been renewed

from the spread of blight as a result of damage and deteri-

oration caused by the earthquake.

HHFA had allocated $171,049.00 to the Santa Rosa Rede-

velopment Agency to undertake planning activities in the

downtown area of Santa Rosa. This allocation crder was

amended March 6, 1962 to increase the amount to $190,898.00

for the purpose of completing the redevelopment plan and

_ a loan and grant application. On March 9, 1962, HHFEA re-

ceived Part I of the Loan and Grant application from the

Santa Rosa Redevelopment Agency the purpose of which

was to carry out urban renewal activities in the Santa Rosa

Center Project Area under Title I of the Housing Act of

1949. On June 6, 1962 the Loan and Grant Contract was

executed which authorized the commencement of project

activities in the 39.9 acres of downtown Santa Rosa. The

contract provided for a Federal loan in the amount of

$4,922,616.00 and a Federal Project Grant of $2,625,023.00.

This contract has been amended nine times on the follow-

ing dates for the following reasons:

104 Appendix

1st Amendatory to the Loan and Grant Contract executed

June 18, 1963 increased the total grant to $2,694,263.00 and

the total loan to $4,957,945.00.

2nd Amendatory to the Loan and Grant Contract executed

February 7, 1964 increased the total grant to $3,184,594.00

and the total loan to $5,450,497.00.

3rd Amendatory to the Loan and Grant Contract executed

October 18, 1963 decreased the total grant to $3,161,108.00

and increased the total loan amount to $5,778,721.00.

4th Amendatory to the Loan and Grant Contract executed

May 10, 1967, increased total Federal Grant to $3,333,329.00

and the loan to $5,908,880.00.

oth Amendatory to the Loan and Grant Contract executed

[3] June 9, 1970, did not change the loan or grant amount

but did change allowable interest rate under the contract

terms.

6th Amendatory to the Loan and Grant Contract executed

September 14, 1970, increased the total grant to $8,318,497.00

and increased the project temporary loan to $13,223,939.00.

The purpose of this amendment was to provide for rede-

velopment of an additional 31.2 acres.

7th Amendatory to the Loan and Grant Contract executed

September 20, 1972, increased the total grant by $1,553,-

370.00 for a total grant of $10,436,717.00 and increased the

project temporary loan by $1,533,370.00 for a total loan of

$14,757,309.00. This amendment provided for increased costs

of project activities but did not increase the project area.

8th Amendatory to the Loan and Grant Contract executed

November 27, 1973, increased the total grant by $1,800,000.00

for a total grant of $12,236,717.00 and increased the project

temporary loan by $1,800,000.00 for a total of $16,557,309.00.

The purpose of the amendment was to provide for increased

ee ae

Appendix 105

cost of project activities and did not provide for an increase

in the project area.

9th Amendatory to the Loan and Grant Contract executed

August 2, 1974, increased the total grant to $12,527,017.00

and increased the project temporary loan to $16,847,609.00.

This amendment was to provide for increased cost of the

project activities and did not provide for an increase in the

project area. (See Affidavit of Julian A. Fitzhugh.)

C. That on July 22, 1975, HUD issued its Final Environ-

mental Impact Statement for the Santa Rosa Center Project

(California R-45). (See affidavit of Julian A. Fitzhugh. )

D. That on or about November 14, 1974, defendant Santa

Rosa Urban Renewal Agency, pursuant to the Loan and

Grant application approved on July 10, 1970, requested

HUD to concur in the minimum disposition price on Phase

II parcels of approximately 21 acres, [4] and to approve

the land disposition agreement to be executed by defendant

Hahn and defendant Santa Rosa Urban Renewal Agency.

(See Affidavit of Julian A. Fitzhugh.)

K. That on or about November 7, 1975, after a review of

the appraisals pertaining to the aforesaid 21 acres of land,

HUD concurred that the minimum disposition price for the

Phase II land to be devoted to a regional shopping center

should not be less than Two Million Dollars ($2,000,000.00).

HUD further interposed no objection to the execution of the

land disposition agreement referred to in D above. (See affi-

davits of Leevern Johnson and Julian A. Fitzhugh.)

III ISSUES

The issues presented in this litigation are:

A. Does plaintiff, a municipal entity located approxi-

mately seven miles away from the Santa Rosa Center Pro-

ject have standing to bring this action?

106 Appendix

B. Whether or not the Court has jurisdiction of the

subject matter insofar as it relates to plaintiff’s allegations

that the defendants are acting in violation of the Sherman

Anti-Trust Act 15 U.S.C. § 1 et seq.?

C. Is the Federal defendant in volation of the National

Environmental Policy Act of 1969. 42 U.S.C. § 4321, et seq.?

D. Under the facts alleged in the Complaint, should the

Court enjoin the Federal defendant, Secretary of HUD,

from taking any action which could cause damage to plaintiff

by reason of any violation of the antitrust laws of the United

States—15 U.S.C. § 1, 2?

EK. Has HUD acted arbitrarily in concurring in the min-

imum disposition price of $2 Million for 21 acres of land

in Phase IT of the project ?[5]

IV ARGUMENT

A. Plaintiff has failed to state a cause of action upon which

relief can be granted in that the plaintiff does not have

standing and therefore no case or controversy exists.

Plaintiff has failed to establish sufficient facts to give it

standing to raise the issues found by the complaint. As

heretofore stated, plaintiff is a municipality of the State

of California located approximately 7 miles from Santa

Rosa. Furthermore, plaintiff alleges that it, its inhabitants,

taxpayers and property owners have been injured in their

business and property (Complaint paragraph IT). The test

to determine this threshhold question is well established.

The test requires that plaintiff meets two criteria:

1. Has plaintiff suffered “injury in fact”;

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