A redevelopment plan covering more than 10,000 acres in San Jose has been upheld by the Sixth District Court of Appeal. The court ruled that the city had proven that blight existed in the six sub-areas of the project.

The court dismissed many of the arguments presented by the redevelopment opponent because she did not offer them while the city was considering the redevelopment plan. The court determined the opponent had failed to exhaust her administrative remedies regarding most of the contentions.

In 1999, the San Jose Redevelopment Agency began surveying neighborhoods for inclusion in a new redevelopment project area. Eventually, the proposed area contained 22 neighborhoods in six, non-contiguous sub-areas. Most neighborhoods, but not all, were in or near downtown.

The city formed an advisory project action committee and prepared a preliminary report assessing blight. In May 2002, the advisory committee endorsed the “Strong Neighborhoods Initiative (SNI) Project Area” but recommended limiting the redevelopment agency's eminent domain power.

The following month, the City Council (which also heads the redevelopment agency) agreed to limit use of eminent domain, removed two neighborhoods from the project area and adopted the redevelopment plan. On July 24, 2002 - 29 days after the City Council's decision - attorneys for Elaine Evans (who owns three downtown properties) delivered to the city a 12-page letter detailing objections to the redevelopment plan. A city attorney responded with a letter saying that Evans had raised the objections too late and that the city had met the requirements of the Community Redevelopment Law (Health and Safety Code § 33000 et seq.).

Evans then filed a lawsuit alleging that there was not substantial evidence in the record to support the city's findings of blight, that the city had improperly included non-blighted property and non-contiguous property in the project area, that the plan did not include specific projects, and that there was no evidence that private enterprise alone could not accomplish redevelopment. Santa Clara County Superior Court Judge Leslie Nichols found that Evans had failed to exhaust her administrative remedies by not raising specific challenges before the city adopted the redevelopment plan. On the merits, Judge Nichols ruled that the city had complied with the redevelopment statute.

In its decision upholding Nichols, the Sixth District dealt at length with the administrative process. According to statute and case law, a public agency must have the opportunity to respond to factual issues and legal theories before the agency's actions are subjected to judicial review, the appellate court pointed out. The plaintiff in a lawsuit need not raise the issues during the administrative process, but someone must do so before a court may consider them, the Sixth District said.

Evans argued that the agency had been put “on notice” as to the nature of the issues. But that was not enough for the Sixth District. “[F]or the most part the objections raised regarding the SNI redevelopment plan during the administrative proceedings were too general to alert the agency to the host of alleged technical deficiencies in the [existing conditions] report that were asserted in the trial court,” Justice Patricia Bamattre-Manoukian wrote for the unanimous three-judge panel.

Evans contended that a letter from a property owner in an area known as the Mitchell Block and her own July 24, 2002, letter preserved her rights in court. However, the Sixth District quickly dismissed the “Mitchell Block letter” because it related to a specific part of downtown that the city ended up deleting from the project area. And the Sixth District, like the trial court, refused to consider the July 24 correspondence and the city's response because they were not part of the administrative record.

“Appellant's letter was not only received 'after the hearing,' it was received after all of the written responses had been approved and the ordinance had been passed adopting the SNI redevelopment plan. Thus the agency could not have responded to her objections 'before adopting the redevelopment plan,'” Bamattre-Manoukian wrote, citing Health and Safety Code § 33363. “Appellant [Evans] offered no explanation why her letter of July 24, 2002, could not have been submitted sooner, particularly since she contends she was actively involved throughout the administrative process and had discussed her objections to the blight analysis with other residents.”

Still, while the court refused to consider the July 24 letter's specific objections to methods and data in the existing conditions report prepared by Keyser Marston Associates, the court conceded “there were various general objections made during the administrative proceeding to the finding of blight in the SNI project area. There were also objections that non-blighted property was improperly included … .” So the Sixth District considered the merits of Evans' arguments - but without her specific objections to the existing conditions report.

Evans sought help from a string of cases in which courts threw out redevelopment plans because the city failed to prove that blight existed. In each of the cases from Murrieta, Mammoth Lakes, Diamond Bar and Upland, redevelopment opponent had successfully challenged the methods and findings of existing conditions reports. But those cases were not applicable here because Evans had failed to challenge the report during the administrative process, the court ruled. Thus, the city could rely on the Keyser Marston report, which provided enough evidence of blighting conditions in the project area, the court ruled,

As for non-blighted areas being included in the project area, the court found that objections had been raised administratively regarding inclusion of the Naglee Park neighborhood near San Jose State University. However, the city responded by saying that Naglee Park was part of a larger area that had deteriorated buildings, poor site conditions and a lack of parking. That response was good enough for the court.

The Case:
Evans v. City of San Jose, No H026802, 05 C.D.O.S. 3620, 2005 DJDAR 4905. Filed March 29, 2005. Ordered published April 28, 2005.
The Lawyers:
For Evans: Michelle Madriaga, Howrey, Simon, Arnold & White, (650) 463-8100.
For the city: Sandra Lee, city attorney's office, (408) 277-4454.