Schools, City Face Off Over Tax Revenues : Budget: District officials want more dollars generated by the proposed San Fernando Road redevelopment project than the city is offering.

City and school officials appeared to be heading for a showdown next week after failing to reach an accord in a dispute over the division of property tax revenues from a proposed redevelopment project.

School officials have asked for nearly 10% of the $712 million in taxes projected over 35 years from the proposed San Fernando Road Corridor redevelopment project. The Glendale Redevelopment Agency rejected that proposal and countered with a 2% offer, which the Board of Education has turned down.

City Council members, who also serve as the Redevelopment Agency, certified the environmental impact report for the project this week and are expected to approve it Tuesday.

After consulting with their legal counsel Wednesday morning, school officials were scheduled to have a final negotiating session late Wednesday afternoon with representatives of the Glendale Redevelopment Agency but were not optimistic that a compromise could be worked out.

Councilman Dick Jutras, chairman of the Redevelopment Agency, said he had not given up hope for a compromise, even though “I don’t have any reason to believe that we’ll reach one.”

School Board member Charles Whitesell said the district did not plan to reduce its request for 10% of the revenues. Whitesell said the board will have 60 days after adoption of the plan Tuesday to decide whether to file a lawsuit seeking a higher share of the revenues.

During correspondence begun in August, school officials grew increasingly insistent in their pleas for financial assistance from the project, which they contend will add to the schools’ budget problems by attracting more students.

In a letter last August to Jeanne Armstrong, director of redevelopment, schools Supt. Robert Sanchis wrote: “District reserves continue to decline from 10.68% (of the district budget) in 1987-88 to a projected 3% in 1991-92. The board-approved budget for 1991-92 reflects a reduction of 100 positions.”

After the school board turned down the city’s 2% offer in an Oct. 6 closed meeting, district staff sent a letter to the city saying they were “disappointed that the city does not appear to be willing to make a reasonable settlement offer.”

The city’s redevelopment staff concluded in the environmental impact report “that the district will suffer some fiscal detriment” but dismissed the district’s predictions.

The Glendale Redevelopment Agency first considered the proposed plan in January, 1991. It would be the city’s second such project and is designed to create 7 million square feet of non-residential development, including four light-rail transit stations under review.

The 750-acre corridor is a manufacturing hub and an important part of Glendale’s industrial base. It borders Burbank on the north, Los Angeles on the south, the Golden State freeway on the west and a line roughly a block east of San Fernando Road.

By declaring the area a redevelopment project, the agency would be able to claim the new tax revenues from the area resulting from rising property values.

City officials plan to spend the projected $712 million in taxes to refurbish area sidewalks and storm drains, build low- and moderate-income housing across the city, and help investors and developers qualify for redevelopment grants and loans.

State law entitles a school district to only 2% of a redevelopment area’s tax revenues, compared to 21% of each tax dollar in other areas.

School officials say they will need more money to deal with the effects of redevelopment, especially increased student enrollment. They estimate a surge of 8,800 to 16,000 pupils over the life of the project.

“Business will generate more housing units and jobs,” Hodgson predicted. “People who will be coming in to work there will have to live somewhere. It’s impractical to assume that all those people will live in communities outside of Glendale.”

Although conceding that the school district will suffer some impact, the city’s environmental impact report described the district’s enrollment calculations as mathematical games and irrelevant data. The city estimates that no more than 468 students would be added because of the project.

“There isn’t that much housing along the corridor,” said Councilman Larry Zarian, who plans to abstain from voting Tuesday because he owns property in the area. “It’s mostly manufacturing.”