By CBS13 Staff

SACRAMENTO (CBS13) — The $1 billion Aggie Square project set to break ground in Sacramento next year is facing a lawsuit.

Mayor Darrell Steinberg calls the project the biggest economic investment Sacramento has seen in decades. The 10 acres along Stockton Boulevard and 2nd Avenue would be used to build labs for UC Davis researchers, classrooms and student housing.

The city says the project could create nearly 5,000 jobs.

But a local community group behind the lawsuit, Sacramento Investment Without Displacement Inc., claims it would displace people in the surrounding neighborhoods.

The city says Mayor Steinberg and other councilmembers have negotiated with community and advocacy groups over the past few months “to ensure that Aggie Square directly benefits the surrounding neighborhoods by providing jobs without pricing current residents out of housing.”

In a joint statement, Steinberg and Councilmembers Jay Schenirer and Eric Guerra called the lawsuit “both unfortunate and, ultimately, unproductive.”