County of Santa Clara v. Redevelopment Agency of the City of San Jose

I. Introduction

In this case we hold that the provisions of nine San Jose redevelopment plans do not prohibit indebtedness extending beyond the plans’ expiration dates, and thus the projects may be financed with bonds which mature after those expiration dates.

The County of Santa Clara (County) and the Santa Clara Unified School District (District) filed separate lawsuits challenging the validity of a proposed $80 million bond issue by the Redevelopment Agency of the City of San Jose (Agency). The trial court consolidated the lawsuits, severed certain causes of action for breach of contract, and rendered summary judgment for the Agency on the other causes of action. In this appeal from the summary judgment, the County contends the proposed bond issue is invalid because it contravenes provisions in the underlying redevelopment plans that purportedly prohibit indebtedness extending beyond the expiration dates of the plans. The District contends the bond issue is invalid due to noncompliance with the California Environmental Quality Act (CEQA).

II. Background

This case involves 15 separate redevelopment projects in San Jose, which were commenced between 1968 and 1991 and…