Irwindale Offers to Finance Redevelopment in Azusa

The Irwindale Redevelopment Agency has offered to issue millions of dollars worth of bonds to finance commercial and industrial projects in the city of Azusa under a novel proposal that has drawn a mixed reaction from Azusa city officials.

The plan outlined in a letter from Irwindale City Manager Charles Martin to the Azusa city administrator would give the Irwindale Redevelopment Agency authority to develop 700 acres in Azusa. The two cities would split any property-tax gains that would remain after paying Irwindale’s expenses.

Azusa Councilman Bruce Latta called the proposal exciting. Irwindale has the expertise and financial resources to undertake redevelopment projects that are beyond Azusa’s reach, he said.

“They’ve got the money. We’re talking millions of dollars,” Latta said.

Another Azusa councilman, Jim Cook, said many details must be ironed out, but he is intrigued by the prospect of Irwindale developing land that Azusa could not afford to develop for many years, if ever.

“It’s almost a gift to us because it’s an area of our city that we might never get around to developing,” he said.

Azusa Mayor Eugene Moses had a different reaction. He said Azusa should control its own redevelopment instead of handing the responsibility to Irwindale.

“We don’t need them,” Moses said.

Azusa City Administrator Lloyd Wood and City Atty. Peter Thorson said they are studying Irwindale’s proposal but have not had time to formulate recommendations. They said they know of no similar redevelopment arrangement by other cities.

Upgrading Irwindale’s Image

Fred Lyte, Irwindale’s development consultant, said the arrangement’s main benefit to that city would be the improvement of a run-down section of Irwindale Avenue that lies in Azusa but is bordered on three sides by Irwindale. Most people erroneously think that the property is in Irwindale, Lyte said, and its appearance reflects badly on the city.

Lyte said Irwindale proposes issuing about $65 million in bonds to finance redevelopment of a 100-acre area, including both sides of Irwindale Avenue between Gladstone and 1st streets. The existing mixture of aging industrial and commercial buildings would be replaced by large, high-quality developments, he said.

A second proposed redevelopment area would involve about 600 acres of commercial and industrial land in the western part of Azusa, north of the Foothill Freeway, also bordering Irwindale. Lyte said he could not estimate the cost of redeveloping this area. He said construction of a hotel is one possibility.

Lyte said Irwindale has gained more than $700 million in commercial and industrial development in the past 10 years, producing $7 million a year in revenue for the redevelopment agency.

By contrast, Wood said, Azusa has sold $10 million worth of bonds for redevelopment programs but has no revenue to finance any additional projects.

Lyte said the proposed arrangement between Irwindale and Azusa has not been approved by the Irwindale City Council and is still in a preliminary stage.

Martin, who is city manager and city attorney of Irwindale as well as executive director of the redevelopment agency, could not be reached for comment, but said in his letter to Wood that the proposal he outlined was not intended as an agreement but “is exploratory only.”

Martin proposed that Azusa continue to receive sales taxes, business license fees and the current level of property taxes from the proposed redevelopment areas and also continue to provide municipal services.

Increased Taxes to go to Irwindale

However, increased property taxes generated by new businesses would go to the Irwindale Redevelopment Agency to pay for bonds, consultant fees, relocation costs and other expenses connected with redevelopment.

Councilman Latta said that although it might take years for Azusa to gain increased property taxes from the projects, the city would benefit immediately from sales taxes and business license fees generated by new businesses.

Latta said the idea of Irwindale helping Azusa in its redevelopment efforts grew out of a casual conversation he had with Lyte last month. Latta, Cook and Wood then met with Irwindale officials, including Lyte and Martin, to discuss redevelopment.

Subsequently, Martin formulated a proposal which was distributed to Azusa council members last week.

Moses accused Latta of hatching the redevelopment plan in secret with Lyte.

Moses said while Latta is always “saying I’m making deals behind people’s backs,” that is exactly what Latta has done in this case.

And, Moses noted, one of the major beneficiaries of the proposal would be Lyte, whom the Azusa City Council fired as its redevelopment consultant in 1984.

Part-Time Work

Both Lyte and Martin were hired by Azusa in January, 1983, for part-time assignments while they continued to work for the city of Irwindale.

Martin served for several months as city attorney and city administrator before resigning. Lyte was hired as redevelopment consultant at $3,500 a month and was given a two-year contract in November, 1983.

The council terminated the contract in May, 1984, after Moses accused Lyte of failing to use his best efforts to develop projects for the city. Lyte sued for breach of contract and won a $75,000 settlement last summer.

Lyte has a contract with the Irwindale Redevelopment Agency that earns him a fee of 3% of the building-permit valuation of each project he brings into the city, with 10% of that amount going to a scholarship foundation.

The contract, which went into effect in June, 1985, replaced another contract under which Lyte had earned more than $3 million for bringing projects into Irwindale.

Lyte said he does not know whether his contract would apply to projects brought to Azusa, but assumes that it would.

He noted that he would continue working for the Irwindale Redevelopment Agency and thus would not work directly for Azusa.