State Challenges City Parking Lot Ownership

One week before the busiest shopping day of the year, the California Department of Finance put the City of Santa Barbara on notice that the 12 acres of municipally owned downtown parking lots cannot be regarded as a legitimate “government purpose,” and as a result, it is challenging efforts to transfer ownership of the lots from the now defunct Redevelopment Agency to the City of Santa Barbara. As esoteric as that may seem, City Hall views the move as a declaration of war by a state agency that tried a similar assault this summer only to be beaten back. Should the state prevail, City Hall would be forced to sell off its downtown parking lots, most of which were built on city-owned land, financed with tax-exempt municipal bonds, and have served as the centerpiece of a massive urban redevelopment scheme 40 years in the making.

Last year, Governor Jerry Brown and the cash-strapped State Legislature abolished all redevelopment agencies throughout California in an effort to secure new revenues ostensibly to fund schools. Local governments would be allowed to hold on to properties deemed legitimate government functions, but legislation was introduced last summer explicitly excluding parking lots from such a designation. That language was rejected at the instigation of Santa Barbara’s Assemblymember Das Williams, but the state’s Department of Finance is nonetheless continuing to block the City of Santa Barbara’s efforts to assume ownership of the downtown parking lots. (It’s also blocking an effort by the city to assume ownership of a five-acre parcel by the train depot designated for a children’s museum.)

“This is something to fight over,” declared Mayor Helene Schneider, adding other cities must be experiencing similar issues. As a practical matter, parking policy has been central to the function of City Hall. For the time being, City Hall will ask the Department of Finance to reconsider. Failing that, the city would probably sue the state in court.