Taxes from City Project to Benefit Education : Redevelopment: Fending off a lawsuit, council members agree to give schools $51 million of the funds that will be generated by the San Fernando Road overhaul.

Faced with the threat of a school district lawsuit that would have stalled a prized redevelopment project, the city has agreed to give schools a bigger share of revenues generated by the overhaul of run-down San Fernando Road.

The Glendale Unified School District will receive an estimated $51 million over the 35-year life of the San Fernando Road redevelopment project, which is expected to generate $712 million in property tax revenue.

City and school officials Tuesday reached agreement over the division of property tax revenues from the project after months of negotiations. That day was the deadline for the school district to file a lawsuit to seek a higher share of redevelopment revenues.

“We would have lost time,” said Councilman Richard E. (Dick) Jutras, head of the Glendale Redevelopment Agency. “Depending on the outcome of the lawsuit, the project may not have been viable.”

“The fact that there isn’t a lawsuit benefited the city,” said Charles Whitesell, a school board member. “Just the delay itself would have devastated the project.”

Under the agreement, the school district will receive most of the $51 million from the redevelopment project after seven years.

Schools Supt. Robert A. Sanchis said he intends to use the money to build and upgrade school buildings. The redevelopment agency plans to use its share of the $712 million to refurbish sidewalks and storm drains, build low- and moderate-income housing across the city, and help investors and developers qualify for redevelopment grants and loans.

The 750-acre San Fernando Road redevelopment corridor is a manufacturing hub and an important part of Glendale’s industrial base. It borders Burbank to the north, Los Angeles to the south, the Golden State Freeway to the west and a line roughly a block east of San Fernando Road. By designating the corridor for redevelopment, the city will be able to collect new tax revenues resulting from an increase in property values.

The council approved the redevelopment project last December. The project is designed to increase manufacturing in the area, and plans call for construction of four light-rail transit stations.

Tuesday’s agreement marks the first time that Glendale schools will receive a portion of agency funds from a redevelopment zone.

In August, school officials began pressing for financial assistance from the redevelopment project, which they contend will add to the district’s budget problems by attracting up to 16,000 students.

The city estimated no more than 468 students will be added because of the redevelopment project.

School officials had consulted with their legal counsel about filing a lawsuit in case the talks fell through, but by last Wednesday both sides had come close to an agreement, Whitesell said.

“There has been give and take along the way,” said Councilwoman Eileen Givens. “Now, we have an understanding of how school funding works.”

Both sides are expected to approve a final draft of Tuesday’s terms by the end of March.

“Going to court is just not the way to resolve issues,” Councilman Larry Zarian said. “We serve the same parent, the same children and the same constituency.”