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Union City, San Leandro file lawsuits against state over redevelopment funds

Union City and San Leandro have become the latest East Bay cities to file lawsuits to prevent the state from confiscating millions of dollars still in dispute following the dissolution of redevelopment agencies.

Last February, Gov. Jerry Brown dissolved about 400 redevelopment agencies to narrow the state’s budget deficit. Most cities created successor agencies to wind down the agencies’ former functions, settle debts and close the books.

In separate lawsuits, San Leandro has taken issue with the money the state says is still owed by the city’s successor agency, while Union City is saying that its successor agency should be allowed to use $54 million in disputed development funds.

Union City officials twice met late last year with the state Department of Finance and argued that they need the money — comprised of bond money and federal and state grants — to complete several crucial transit-oriented projects and to continue social programs that help the city’s seniors, people with disabilities and low-income residents.

But the Department of Finance rejected the arguments and blocked the city from using any of the disputed money. That prompted Union City’s lawsuit, which was filed Tuesday against the California Department of Finance, the State Controller and the Alameda County Auditor-Controller.

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Chris DeBenedetti