COSTA MESA, Calif., October 7, 2014 – Partner Mark Austin with Rutan & Tucker, LLP, California’s largest full-service law firm based in Orange County, recently achieved a significant victory in a superior court lawsuit for its client the City of Anaheim.
The Orange County Superior Court gave a resounding victory to the City of Anaheim by validating the City’s approved financing of the much-needed expansion of the Anaheim Convention Center. The Court concluded that the Anaheim Public Financing Authority properly acted in approving issuance of up to $300 million in bonds for this project, which benefits the City, the region and the community.
On May 12, 2014, local organization CATER (Coalition of Anaheim Taxpayers for Economic Responsibility) submitted its lawsuit in opposition to the City’s financing mechanism for the Convention Center expansion project. The lawsuit caused the cancellation of the bond sale, delayed the project, and caused the City to be liable for increased construction fees as well as legal expenses. The City now intends to proceed with the financing.
“I am thankful that the Court recognized the need to expeditiously review this matter and confirmed what the City and most people knew all along: That this case, brought by outside special interests and a handful of community members, was entirely frivolous and of great harm to the City’s economic prosperity. This meritless action by CATER and the Inland Oversight Committee unfortunately has cost the City tens of millions of dollars in increased construction and financing costs,” said City Attorney Michael R.W. Houston.
The bond approval is intended to support the Anaheim Convention Center expansion, refund debt at a lower interest rate and finance other community improvements. Since opening in 1967, revenues generated by the Anaheim Convention Center and related activities have consistently supported overall City services, thereby improving the quality of life for Anaheim’s residents. The proposed Anaheim Convention Center expansion project encompasses the addition of 200,000 square feet of flexible meeting space for hosting concurrent events, capturing new meeting groups and retaining the large annual events, plus the replacement of Car Park 1. The current Anaheim Convention Center has limited meeting space opportunities and limits the ability to accommodate concurrent events. It is conservatively estimated that the City’s General Fund would be better off by $115 million over the next decade and $320 million over a 30-year period by expanding, as determined by an outside consultant (Crossroads Consulting Services).
Each year the City generates millions of dollars due to the large annual events booked at the Anaheim Convention Center. Attendance over the past five years averages nearly 1.1 million guests at Convention Center events alone. This translates to hotel room stays, dining, shopping and entertainment for those guests, many of whom use the opportunity to plan a family vacation or extend their stay to enjoy Anaheim and Orange County’s many amenities.
In 2010, the City Council, by Resolution, established the Anaheim Tourism Improvement District (ATID) for the promotion of local tourism and convention-related programs. Hoteliers in the Anaheim Resort agreed to self-assess 2% of hotel room rent within the ATID boundaries for projects in the Anaheim Resort. The creation of the ATID relieved the City’s General Fund of $6 million annually, beginning in 2010, and freed-up these dollars to pay for this Anaheim Convention Center expansion project. Assuming TOT revenues would grow at a conservative estimate of 3%, it is estimated that the value of the ATID would be approximately $450 million, and is greater than estimated lease payments on the bond issuance. To ensure that the incremental new revenues would be available for General Fund programs, the City Council approved a financing plan that keeps the General Fund’s annual lease payment obligations for capital improvements where they are today.
“This is a tremendous victory for the City, allowing it to move forward with a very important project. The Judge was accurate and fair in his decision. Although the case involved some unique facts regarding the dissolution of redevelopment agencies, the City’s actions fell well within the principles of existing law, as the judge so held,” said Mark Austin, attorney for the City of Anaheim.
About City of Anaheim –The City of Anaheim, founded in 1857, is one of the nation’s premier municipalities and is one of California’s most populous cities. Anaheim covers 50 square miles with more than 346,000 residents and more than 2,900 City employees. The municipal corporation’s annual budget is $1.6 billion. Anaheim supports a thriving business community with companies such as Carl Karcher Enterprises, Inc., L-3 Communications, Pacific Sunwear, and Disneyland Resort. Successful sports franchises call Anaheim home, including Angels Baseball, Anaheim Ducks, the U.S. Men’s National Volleyball Team, and the 2012 Olympic Games Silver Medal winning U.S. Women’s National Volleyball Team. Anaheim also boasts world-class meeting and entertainment venues with the Anaheim Convention Center, LEED-certified and the largest on the west coast, Honda Center, City National Grove of Anaheim, Anaheim GardenWalk, and Angel Stadium of Anaheim. In addition, Anaheim embraces its vibrant cultural arts community, including the world-renowned Anaheim Ballet. Annually, Anaheim welcomes millions of visitors to the city, truly making it where the world comes to live, work and play. For more information, please visit www.anaheim.net.
About Rutan & Tucker LLP
Rutan & Tucker is California’s largest full-service law firm headquartered in Orange County, California with offices in Costa Mesa and Palo Alto. Primary practice areas include corporate and securities law, business and real estate litigation, labor and employment law, intellectual property, real estate, government and regulatory law, land use law, bankruptcy, condemnation and property valuation, environmental law, and taxation and estate planning. Detailed information about the firm is available at www.rutan.com.