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Galt banking on transportation funds

City hopes Sacramento Area Council of Governments will still help pay to finish C Street improvement projects

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Posted: Thursday, March 7, 2013 12:00 am

The city of Galt hopes the Sacramento Area Council of Governments will still pay to help complete C Street improvements, despite the city's loss of some of the matching funds due to the dissolution of the Redevelopment Agency.

The project was part of the original redevelopment plan, but has been waylaid by a lawsuit the city filed against the state over redevelopment funding. The bond proceeds in question are necessary to finish that project, according to City Manager Jason Behrmann.

The transportation improvements are related to the proposed downtown entertainment complex, but the city is seeking to reduce the project scope, since it can't afford to pay the entire matching funds, Behrmann said.

Instead of improving the entire length of C Street, Galt is proposing the upgrades begin west of Lincoln Way.

A letter was sent last week to Council of Governments making this request. The group's transportation committee will review the request today with a recommendation to the full Council of Governments board on March 21.

The California Supreme Court in December 2011 ruled that lawmakers acted legally to dissolve redevelopment agencies, a move that in part eased the state's budget shortfall.

Cities and some counties were then put in charge of winding the agencies down, relinquishing hundreds of millions of tax increment dollars to schools, counties and other tax-sharing entities. But it wasn't long before a tug of war began with the state Department of Finance over whether a portion of the tax increment money could be retained to satisfy some redevelopment debts.

In its lawsuit, scheduled for an October trial date, Galt believes the state has no basis to deny $7.4 million in redevelopment funds already collected by the city and set aside through bonds issued last year. The city contends the statutes dissolving redevelopment agencies specifically authorize the use of 2011 bond proceeds if the original purposes remain feasible.

One of those purposes was a proposed 60,000-square-foot entertainment complex that could include a six-screen, all-digital, stadium-seating cinema, a 20-lane bowling alley, dining and concessions, a laser tag arena, amusement games and meeting/party rooms.

In the event that the city is successful in its lawsuit with the state regarding redevelopment money, these additional funds would be used to complete the full project, which includes the C Street improvements.

The Council of Governments previously awarded the $2 million grant to the city because of Galt's investment in the area, which also includes Galt Place.

The city had the entertainment complex project in the pipeline before the Redevelopment Agency dissolved, and Behrmann said the oversight committee and Department of Finance both approved the project in May 2012.

In October, the city's Community Development Department hired a consultant to prepare the mandated environmental analysis for the project and met with the development team to discuss floor plan issues. The project was scheduled to go before the Planning Commission for approval last month.

Meanwhile, a similar entertainment center to be constructed by the same groups — Sacramento-based D&S Development Inc., Lodi-based Diede Construction Inc. and Wyoming-based American Family Entertainment Centers LLC — is moving forward in Rancho Cordova.

Developers in 2011 proposed building a $28 million, 73,000-square-foot entertainment center that would include movie theaters, bowling, laser tag, a ropes course, video arcades, a themed restaurant and other amusement activities.

Under a financial agreement expected to be approved by the Rancho Cordova city council next month, that city plans to contribute more than $6 million worth of cash and land to the project. In return, the city would share in the profits and proceeds if the developers later sell or refinance the project.

Contact reporter Jennifer Bonnett at jenniferb@lodinews.com.

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