Bond Analysis Firm Downgrades Burbank Redevelopment Rating : Credit: The shift is prompted by Lockheed’s pending move. Officials said the city’s overall standing is strong.

Lockheed Corp.’s planned departure from Burbank has prompted concern that the loss of property taxes paid by the company will somewhat weaken the city’s ability to pay interest due on its redevelopment bonds.

The concerns caused Fitch Investor Services, a small New York bond analysis firm, Tuesday to downgrade some redevelopment bonds issued by the city from an A+ to an A rating. The move does not affect the city’s overall credit rating.

A lower rating normally means that the bond buyer is assuming more risk and that the bond seller, therefore, must pay a higher interest rate on the bonds. But city officials and David M. Breen, a senior analyst for Fitch, agreed that Tuesday’s action will only affect current bondholders and then, only to a slight degree, because even the lower rating remains good.

“This is still a strong rating, especially for a Redevelopment Agency,” Breen said. “Burbank obviously has very good credit. We just feel that with the uncertainties surrounding the Lockheed move . . . an A+ rating for this type of bond issue is a little rich.”

Lockheed has announced that it will vacate about 200 acres it owns in Burbank and relocate by the end of this year to Marietta, Ga. The land is in a part of Burbank designated as a redevelopment area and the taxes Lockheed and other landowners there pay help retire bonds issued by the city to finance capital improvements.

In its announcement of the rating change, Fitch said the aircraft giant’s departure would result in an $850,000, or 10%, loss of tax increment revenues.

Tracey Hampton, Burbank’s financial services director, estimated that Lockheed’s leaving will initially reduce the Redevelopment Agency’s tax increment revenues by $100,000 this year, the amount the company pays on such personal property as computers and equipment.

Of greater concern to city officials is the possibility that the Pasadena-Glendale-Burbank Airport Authority will take over about 100 acres of the Lockheed property. The airport would not have to pay taxes on the property and, as a result, the Redevelopment Agency could lose about $1.5 million in revenues annually.

In any case, both Breen and Hampton said, the city has plenty of revenue to pay its obligations to the holders of its redevelopment bonds.

If the land is sold, Hampton said, it could even be a boon to the city. It is presently taxed on values established when Lockheed bought the land in the 1930s, she said.

Breen agreed with that assessment. “We don’t anticipate anything would cause any further downgrading of the bonds at this time,” he said. “In fact, it may well be that if Lockheed sells these properties to other people, it would be very beneficial to the Redevelopment Agency.”