Burbank has agreed to join a state financing authority so that a private French-language prep school can obtain a $12-million tax-exempt loan to revamp a site it plans to use as a school. The move is a rare show of government-backed economic development after local redevelopment revenues were nixed.
The loan will be used by the nonprofit Lycée International de Los Angeles, or LILA, to revamp the former General Motors training facility in Burbank's Rancho neighborhood.
Mayor Dave Golonski said the loan was an economic development tool, with Burbank facilitating the tax-exempt financing and access to the loan by joining the California Municipal Finance Authority.
The city is not obligated to pay the loan back if the borrower defaults, and the interest paid is not subject to federal and state taxes, Golonski added.
Burbank agreed to become a member of the finance authority at a public hearing on May 22, which in turn enabled the school, a nonprofit organization, to secure the loan.
“The rate is significantly better,” said Iain Whyte, a trustee for the school, adding that the move “saves us a lot in interest.”
The $12-million loan will cover the cost of acquiring, renovating, furnishing and equipping the new campus, according to a city report.
Whyte said LILA anticipates closing escrow on the facility in the next two weeks.
“We are pleased that we can close escrow virtually on time,” Whyte said.
While the school anticipates opening by fall 2013, Whyte said their goal is to be able to use the property some time in February, after spring break.
“We are trying to have enough facilities and space to operate a partial school; that way, we can work out the kinks, a ‘pre-opening', with scaled down operations,” he said.