GARDEN GROVE : Council Plans to Sell $62 Million in Bonds

The City Council decided this week to sell $62 million in redevelopment bonds in an attempt to reduce losses of redevelopment money to the state.

The state took $2 million in redevelopment money from the city last year and used it to help balance California’s budget. This year, the state is threatening to take up to $3 million, city officials said.

By going into debt, the state will not be able to take as much money from the city because it will owe too much, said council members who sat as directors of the Agency for Community Development. Of the $62 million, $32 million will be used to refinance existing bonds and the city will issue $30 million in new bonds.

Council members said they believe the bonds will protect the redevelopment money from the state.

Redevelopment bonds do not require approval by voters.

Councilman Bruce A. Broadwater said the money from the sale of the bonds will help pay for redevelopment projects throughout the city, including the completion of the auto mall expansion on Trask Avenue.

At Tuesday’s meeting, the council voted to create the Garden Grove Financing Authority--to be made up of council members--to oversee issuing of the bonds and hired Smith Barney, Harris Upham & Co. as underwriter. The brokerage firm will market the bonds.