A group, known as La Jolla Benefits Association, LLC, filed a lawsuit on Dec. 28 in San Diego Superior Court. Former San Diego city attorney Michael J. Aguirre is representing the Association.
The Association's suit challenges the MAD, which passed by a 56 percent to 44 percent margin by mail ballot to residents and businesses within La Jolla's downtown Village in November 2016.
“Our property taxes pay for the things the MAD wants to do,” argued Association spokesman Lincoln Foster, a Village landlord, who added, “The city is not doing what they have already collected money to do. So basically, the MAD is an effort to collect money by taxing a second time all the property owners, to do what property owners have already paid for to the city, which has not done what it's supposed to do.”
A MAD is a legal mechanism by which property owners can vote to assess themselves to receive enhanced maintenance, landscaping, and lighting services above and beyond the City’s baseline general services. There are currently 61 MADs throughout San Diego.
Attorney Aguirre noted that “we're (plaintiffs) not asking for something the city shouldn't already be providing us. We're just asking for something above what is the baseline (standard services).”
Aguirre said the Association's lawsuit has been filed, but added the City has not been served with the suit as the plaintiffs are “waiting to get back our public records request on the tabulation of the vote.”
Aguirre said there are a couple of other legal questions to be answered.
“When they (Enhance) mailed ballots out, they didn't say when they had to be returned,” he said. “Also, they didn't disclose that the governance by Enhance La Jolla's board has several people on it from different civic groups who are not assessment payers.”
Enhance La Jolla, a new non-profit, was formed to lobby for the proposed MAD, and was sanctioned by La Jolla voters to administer the new MAD should it become operative. Half of the approximately 1,300 parcels within the Village voted on the MAD. Besides voting yes or no on the district's creation, voters were asked who they wanted to run it: the City or Enhance La Jolla. The vote was 85 percent for nonprofit management versus 15 percent to allow city management.
Enhance La Jolla spokesman Bill Tribolet minimized the significance — and impact — of the Association's lawsuit seeking to block the new La Jolla MAD.
“We are confident this will be resolved without going to court,” Tribolet said. “We worked closely with the City, and professional, experienced consultants to be certain to process the application properly. We are excited about the possibilities the MAD makes available to our community, and look forward to getting started.”
Enhance La Jolla has said the new MAD will privately fund and construct projects in public spaces. Its purpose is to ensure ongoing maintenance services, help to create and maintain inviting public spaces and enhance the Village's beauty and quality of life. The new MAD is intended to leverage property owner assessments to generate supplemental funds from the City, with the goal of improving property values.
Landlord Foster cited a successful challenge of a MAD elsewhere recently in the city.
“A MAD was proposed and passed in Golden Hills, and was dissolved by the court,” Foster said. “So there is a precedent already from that case invalidating a MAD, for the same reason we want to invalidate — and overturn it — in La Jolla,” Foster said.
According to Foster, the California Constitution says “any assessment has to be a special benefit to the general public. There's a difference between special, and general, benefits. Special benefits are over and above general benefits.”
In excerpts from the Association lawsuit, it's stated that,“The City's committed to establishing MADS all over San Diego in order to off-load maintenance costs onto residents motivated in large part by the City's decades-long pension funding crisis … MADs save the City hundreds of thousands of dollars per MAD per year in maintenance costs … no assessment shall be imposed on any parcel which exceeds the reasonable cost of the proportional special benefit conferred on the parcel.”
The Association lawsuit also asks that “a reassessment of all properties within the LJ MAD be conducted to reflect the separation of general from special benefits and assessment only for special benefits.”