State Controller John Chiang has completed an initial review of assets transferred before the official dissolution of redevelopment agencies in Morgan Hill and Milpitas. He found a combined $343 million in prohibited transfers.

Even before Governor Brown signed a law that would eventually end redevelopment, the State Department of Finance let it be known that transfers made after January 1 2011 would be reviewed and potentially nullified. In the cases where transferred assets were not used as part of an ongoing, contractual deal, they would be returned to the redevelopment agency or its successor agency. Milpitas the Controller found that $96 million in illegal transfers were made to the city, and $50 million went to the Milpitas Economic Development Corporation. $87 million had yet to be transferred to the successor agency.

The numbers were somewhat smaller in Morgan Hill, where $108 million was left outstanding.

San Jose, along with 11 other cities, are facing a similar inquiry from the Controller’s office.

From the San Jose Mercury News:

Redevelopment agencies in Milpitas and Morgan Hill wrongly transferred hundreds of millions of dollars worth of assets before those agencies’ dissolution last year by Gov. Jerry Brown, state Controller John Chiang announced Tuesday.

Those assets, which include real estate, cash and invested funds, must now be returned to both city’s successor agencies, the mandated entities that are overseeing the end of their redevelopment agencies, according to Chiang’s office.

Read the full article here.