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Streetcar Named In Lawsuit: Project Draws Legal Challenge From Midtown Property Owners

SACRAMENTO (CBS13) — The controversial Sacramento streetcar project is now being challenged in court.

Earlier this week, three Midtown property owners filed a lawsuit against the city alleging part of the funding plan for the project violates the state's constitution.

"It's unfairly targeting specific landowners who will be stuck with this huge tax burden," said Steven Bourasa with the tax watchdog group Eye on Sacramento.

He says the $200 million project, if constructed, will be funded through state and federal grants and a special tax on more than 300 property owners that are near the streetcar route.

"The city gerrymandered specific land owners to force this vote through," said Bourasa.

Bourasa says what the city did was illegal and three other property owners including Horizon Capital Investments, William Gekakis and Delphine Cathcart agreed and filed suit.

"It's a challenge to the validity of the tax and the ability of the city to levy it," said Eric Benink with the law firm Krause Kalfayan Benink and Slavens, LLP.

Benink says the city purposefully cut out certain property owners from being able to vote on the project.

The plaintiffs argue that all property owners within this special voting districts should have a chance to vote. Not just the large commercial owners, but the smaller homeowners too.

"The language of the constitution demands that all the voters in the city are able to vote on this rather than just the land owners who are subjected to the tax," said Benink

This is the latest hurdle for the streetcar project which has been pushed by Sacramento Councilman Steve Hansen since the beginning.

"I know that it's not everyone's favorite project, but in the city, it's a very important project," said Hansen during a transportation board meeting in 2015.

Back then, he promised to move forward despite an initial losing vote.

"We can't be a car dependent city and region," said Hansen, "we really need to get people out of their cars, and this is a main way to do that."

Hansen and the Sacramento city attorney were unavailable Thursday for comment about the new lawsuit.

After the city secured the needed funding for the project to move forward in June; this new legal challenge could derail Sacramento's streetcar dreams.

The final design is scheduled to be completed by January 2018 with construction expected to begin in next summer.

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