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STATE CONCEDES PROJECT PHOENIX BOND PROCEEDS TO CITY OF TWENTYNINE PALMS

More than four years ago, the City of Twentynine Palms devised a plan to keep the state of California from taking away redevelopment money when all local redevelopment agencies in the state were dissolved in mid-2011. The city stuck to its strategy through a succession of legal battles. Reporter Dan Stork says that it looks like their persistence has paid off…

In February of 2011, we reported that the City Council of Twentynine Palms decided to issue bonds that would finance the downtown redevelopment project known as Project Phoenix. It did this to create a debt obligation that it could repay only by following through on project plans. The California Department of Finances disputed this plan, insisting that the City had to return to the state millions of dollars in tax increment revenues without using them locally. A sequence of sometimes favorable, but inconclusive, legal encounters followed. According to Twentynine Palms City Manager Frank Luckino, on Thursday, the Governor’s Budget Revise was issued, and it included legislation to continue the wind down of the former redevelopment agencies. But at the same time, the Department of Finance issued a letter to Twentynine Palms indicating that it has decided to concede the litigation related to the Project Phoenix bond proceeds. The DoF confirmed that the City can use 100 percent of the bond proceeds (approximately $10 Million) for the Project Phoenix area. Mayor Joel Klink said, “It has been a long four-year fight with the state; however, the city prevailed with conviction and a dedication to improve the lives of every citizen of Twentynine Palms by developing the Project Phoenix area utilizing the bond proceeds that the State wanted to take from us.”

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