In Hill RHF Housing Partners, L.P. v. City of Los Angeles, published June 29, 2020, the Second District Court of Appeal, Division 1 affirmed a trial court's decision denying petitions for writ of mandate and related declaratory and injunctive relief challenging the defendant city's establishment of two business improvement districts. Article XIII D of the California Constitution and the Property and Business Improvement District Law of 1994 authorize cities to establish property and business improvement districts to levy assessments on real property. The constitution and law establish a comprehensive procedure cities must follow to create a business improvement district. The city must mail property owners notice of the proposed assessment and conduct a public hearing not less than 45 days after mailing the notice. The city must provide property owners with assessment ballots. At the public hearing, the city shall consider all objections or protests, if any, to the assessment. Any person can provide oral or written testimony. At the conclusion of the hearing, a ballot counter shall tabulate the ballots that have not been withdrawn. The agency shall not impose the assessment if there is a majority protest to it. The plaintiff property owners returned ballots opposing the establishment of the districts. The city held the noticed public hearings. At the hearings there no written protests received. Based on the hearings and ballots received, the city established the districts. The owners then petitioned for writs challenging the establishment of the districts. The trial court denied the petitions on their merits.
The appellate court did not reach the merits of the petitions. Instead, it ruled that the plaintiffs did not exhaust their administrative remedies. The comprehensive administrative procedure for challenging a business improvement district requires not only that protesters return ballots against the district, but also present to the agency the owner's specific reasons for its objection, in a manner that the city can consider and either incorporate into its decision or decline to act on. They can do that either orally or in writing at the public hearing. Since the owners here did not do so, the court lacked jurisdiction to grant their petitions.
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