City posts redevelopment debt figures

For the first time, the Redevelopment Agency posted a list of its debt obligations this week as part of a new state requirement for local governments.

The payment schedule shows $441.8 million in debt that will eventually have to be paid back as the city’s redevelopment zone — which covers a large swath of the Burbank’s central corridor — eventually winds down.

Ruth Davidson-Guerra, assistant community development director, said in many cases a redevelopment agency has up to 10 years after a zone expires to pay off the debt.

“Technically it’s the first step in the procedure to unwind redevelopment — what we’re legally and contractually obligated to pay,” Davidson-Guerra said. “Obviously, we hope that doesn’t happen.”

Redevelopment agencies across the state were asked to submit a payment schedule, essentially a list of the debts and projects each agency has on its agenda, before Aug. 28.

Burbank has four redevelopment project areas, or zones, three of which were consolidated into one area. The merged area allows flexibility in how funding is used in any of the three zones, Davidson-Guerra said.

But the four areas each retain their own sunset dates.

The Golden State redevelopment project area ends in 2013; the City Centre project area in 2014; West Olive in 2019; and South San Fernando in 2028, Davidson-Guerra said.

The majority of council members expressed the desire to keep the agency going, noting the various improvements that redevelopment helps to fund, as well as its role in providing affordable housing to low-income families.

Davidson-Guerra said the redevelopment process is a bit counterintuitive and does call for debt, but she said the upfront costs are eventually paid.

Burbank’s agency has been around for more than 40 years and has invested more than $265 million in community betterment projects, she said.

Agencies are funded by a portion of the tax revenues generated when property values rise with new development.

Councilman Dave Golonski said he was disappointed that redevelopment had come under siege, despite pleas from city leaders.

“This is dysfunctional government at its worst,” Golonski said. “We’re at a stalemate; the state can’t do anything without the money and cities can’t do anything because they are fighting with the state. The current status is bad for everybody.”

In attempting to balance the state budget, Gov. Jerry Brown has said ending redevelopment agencies would be one way to help meet the state’s $1.2-billion shortfall.

Laws were passed in June that would eliminate redevelopment agencies by Oct. 1 unless cities made “voluntary” payments to continue operating.

Burbank would be required to pay $18.4 million to the county auditor controller next year, beginning with a $9.2-million payment by Jan. 15. A second payment would be required by March 15 to continue the redevelopment agency.

However, on Aug. 11, the state Supreme Court agreed to hear the challenge brought by the California Redevelopment Assn., the California League of Cities and other plaintiffs challenging the legislative moves.

Now redevelopment agencies and cities are proceeding cautiously. Many, like Burbank, are taking the steps necessary to continue operating, including sending the payment schedule to the county as required by the latest court ruling.

“It’s a no brainer, we have to move forward,” Mayor Jess Talamantes said.