The money comes from Proposition 1C, the big housing bond approved by voters in 2006. 

In March, the Sacramento City Council asked the state to designate that money for a project called Township 9, between downtown and the American River. 

But Railyards developer Thomas Enterprises thought it deserved that money, too.  So it went over the city’s head and filed a separate application with the state – for the same chunk of funds.

A request for comment from Sacramento city officials is still pending.