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Grand jury: Santa Ana may have broken law with tax district

June 28, 2012 |  5:13 pm

Fiesta
A special downtown Santa Ana tax aimed at “gentrifying” a predominantly Latino shopping district may have been illegal and should be investigated by county prosecutors, a grand jury panel announced Thursday.

The grand jury is calling on the Orange County district attorney’s office to investigate if the city legally established a property tax district in downtown Santa Ana in a 2008 election.

The report noted that Santa Ana has been placed on notice on “numerous occasions” for their lack of compliance in creating and managing special assessment districts.

The downtown tax has become a source of conflict in the city, with some accusing civic leaders and developers of leading a “forced gentrification” of a historic downtown core called Fiesta Marketplace, once a haven for Latino shoppers.

There are still restaurants, western wear and quinceañera dress shops off 4th Street, but many property owners complained that the  tax money generated by the district was benefiting only a select few rather than the entire business district. The district doubled property tax bills for some owners.

Some merchants have singled out Irv Chase, a property owner who owns much of the newly dubbed “East End,” where new restaurants and a hip barber shops have sprung up in recent years. 

Chase was accused of trying to push out Latino business owners. In a high-profile incident last year, Councilwoman Claudia Alvarez accused the developer of leading an ethnic cleansing campaign.

Property owners “were being assessed monies that were being used to change the identity of the very area that they had long cherished,” the grand jury said.

Chase has said he’s only trying to bring more people to the area's restaurants and nightclubs, and wants to keep longtime shoppers, many of them Latino immigrants.

Despite a low turnout by property owners in the tax assessment election, the city moved ahead with establishing a special tax district. The next year, when property owners received tax bills, some had doubled or tripled.

The report also draws attention to the city’s handling of complaints from property owners, criticizing the council for “continuing inaction,” which has “aggravated an already serious situation.”

“Continuing to ignore this matter can only result in further discourse, both conversationally and legally, which will be detrimental to all,” according to the report.

The report also cited an “appearance of impropriety” between Chase and Downtown Inc., the nonprofit established to distribute funds from the district.

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-- Nicole Santa Cruz

Photo: Alberto Rodriguez and family shop along 4th Street in Santa Ana's Fiesta Marketplace.  Credit: Al Schaben / Los Angeles Times 

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