Week in review
CITY HALL
Fiscal conservatives seized upon the dread of tax day Wednesday to protest what they characterized as the overreaching bailout of corporations and the propensity of lawmakers to balance budget gaps on the backs of taxpayers.
More than 300 protesters amassed on the steps of Glendale City Hall as part of a nationwide Boston Tea Party-styled campaign to vent over the billions in federal aid spent to prop up corporate giants like AIG and General Motors.
Across California, frustrations also extended to the slate of upcoming state ballot propositions hashed out as a linchpin in a deal to close a $42-billion budget gap.
On May 19, California voters will decide the fate of Propositions 1A through 1F, which were hammered out between state lawmakers and Gov. Arnold Schwarzenegger as part of an effort to break a three-month budget stalemate.
Taken together, the measures would increase the size of the state’s rainy-day fund, extend recently enacted temporary tax hikes by two years, backfill current cuts to education spending, borrow $5 billion against the lottery and reduce voter-approved funds for early child education and mental health services, all while trying to keep future spending in check.
Hundreds of residents from throughout the region clogged the steps of City Hall with signs that ranged from the benign — “Where’s my bailout?” — to the unrestrained — “Proud to be a Tea Party terrorist.”
Residents face tight water-rationing regulations this summer after the Southland’s major water wholesaler announced Tuesday that it would reduce deliveries for the first time since 1991.
The board of the Metropolitan Water District of Southern California, citing the effects of years of drought and tightening regulatory conditions, voted to cut water shipments by 10% effective July 1, sending local agencies in Glendale, Burbank and La Crescenta into the final stages of planning for imposing strict restrictions on their customers this summer.
Under the wholesale structure approved alongside Metropolitan’s delivery cuts Tuesday, member agencies who use more than their designated allotments would have to pay higher penalty rates on top of the nearly 20% across-the-board rate hike that takes effect Sept. 1.
For consumers, the trickle-down effect will mean tiered rate structures to induce conservation combined with mandatory watering restrictions, such as lawn irrigation schedules.
PUBLIC SAFETY
Two men pleaded not guilty this week to installing several hundred yards of irrigation and growing more than 1,000 marijuana plants in the Verdugo Mountains.
Isai Salazar, 21, and Hector Castillo, 35, were both charged with cultivating marijuana, said Castillo’s attorney, Michael Ramirez-Mares.
Castillo faces the additional charge of resisting a peace officer because he ran away from Glendale police officers as they tried to arrest him and was bitten in the arm and leg by a police dog, his attorney said.
The pair were being held in lieu of $10,000 bail at a Los Angeles County jail. Castillo and Salazar are expected to appear Tuesday in Burbank Superior Court for a preliminary hearing.
A Glendale-based physical therapy company, Interstate Rehabilitation LLC, agreed to pay $233,345 to resolve allegations in a lawsuit that it fraudulently billed Medicare for services that it did not perform, according to court documents.
The lawsuit was filed by two whistle-blowers, Janine Gostel and Sonia Sarmiento, who formerly worked for the company.
The pair filed a lawsuit against their former employer, claiming that it fraudulently billed health-care facilities between 1998 and 2002 for work that was supposedly performed by a licensed physical therapist, but was not, according to court documents. The pair alleged the health-care company then submitted bogus claims for payment to Medicare.
POLITICS
Local utility managers voiced support Tuesday for a bill that would force them to produce a third of their energy from renewable sources by 2020.
The proposed law would help speed the development of power plants and transmission lines in California that could cut down on greenhouse-gas emissions, the managers said.
While many of the state’s 46 utilities are not on track to meet the proposed mandate, Burbank Water and Power and Glendale Water & Power are both expected to meet the 33% goal by 2020 because they have joined with other utilities to build green energy plants in other states and transmit that power back to the Los Angeles area, managers said.
Phone dialing will get four digits more complicated today, when residents will have to start making calls using 11 figures.
Callers will have to dial 1, along with the area code of each desired number, because the 818 area code is running out of available numbers to offer to phone service providers, a development that prompted a plan to overlay a new code in the same area.
The North American Numbering Plan Administrator will begin issuing the new 747 area code phone numbers in May, said Joe Cocke, senior area code relief planner for NeuStar Inc. The private company has been contracted by the Federal Communications Commission to give out the numbers.
Residents living in the region, which includes Glendale, Burbank and most of the San Fernando Valley, will not have to change their 818 numbers because of the new 747 code, although they will have to make calls by dialing 1 and then the area code of each desired number, even if it is within the 818 zone, Cocke said.
But for the fact that he had been served with recall papers five days earlier, Monday was business as usual for Republican Assemblyman Anthony Adams.
The lawmaker returned to Sacramento after a weeklong legislative recess, during which a political activist who visited a fundraiser for Adams gave him the notice.
“You can never afford not to take a recall seriously,” Adams said. “You must always treat it with all the gravity it deserves, but I won’t allow it to distract me from doing the work of the people.”
Adams and five other Republican legislators have drawn criticism after breaking with their party in February to vote for a state budget plan that included billions in tax increases as part of a plan to resolve a projected deficit of $42 billion by the end of 2010.
The plan included $12.5 billion in tax and fee increases, along with $14.9 billion in spending cuts.
Adams’ vote in favor of the budget plan sparked the effort to remove him from office, said Mike Schroeder, former chairman of the California Republican Party and one of the recall campaign’s organizers, who have started a website, www. RecallAdams.org.
Adams’ district includes La Crescenta and Montrose.
BUSINESS
The owner of the Glendale Galleria and more than 200 shopping malls nationwide filed for Chapter 11 bankruptcy protection Thursday, resulting in one of the largest real estate failures in U.S. history, analysts said.
General Growth Properties, a real estate investment trust based in Chicago, accrued $27.3 billion in debt on its way to becoming the second-largest mall operator in the U.S.
The company intends to continue operating all of its shopping centers, including the Glendale Galleria and Burbank Town Center, throughout the bankruptcy process, Thomas Nolan Jr., General Growth’s president and chief operating officer, said in a conference call with reporters.
General Growth owns the Glendale mall, but only manages the Burbank facility. The downtown venue is owned by Crown Realty and Development Corp.
The Glendale Galleria, with access points between Brand Boulevard and Colorado and Columbus streets, sits on a highly desirable retail site in a trade area that boasts 1.4 million potential shoppers averaging $70,547 in income. More than 250 shops and four department stores — Nordstrom, Macy’s, JCPenney and Target — anchor the property.
Large retail tenants such as Macy’s and JCPenney, which have 106 of 840 and 90 of 1,101 stories in General Growth malls, respectively, announced plans to stand by the mall operator throughout the unprecedented court process.
In Glendale, the mall’s small tenants have used the spiraling economy as an opportunity to negotiate a better lease, Kyser said.
The Americana at Brand has seen a surge in visitors since the start of February, when it began offering free parking on most weekdays, officials said Monday.
The 900,000-square-foot shopping center has seen about 30% more visitors since it changed its parking rates on Mondays through Thursdays, Senior General Manager Jack Levy said. The center still charges for parking on Fridays and weekends, said Caruso Affiliated Vice President Jennifer Gordon.
The move was not influenced by the adjacent Glendale Galleria, where many shoppers have enjoyed free parking for years and had continued parking at the mall and walking across the street to the Americana to avoid the rates there, Americana officials said.
Free parking was meant to help make the Americana become a more comfortable “town center” type of destination, Levy said.
Car sales have gone cold following a hot streak that ended in March, when consumers rushed to make purchases before the April 1 sales tax hike. Dealerships have reported a drop in business of as much as 25% since the statewide sales tax went up 1% at the start of the month.
The drop in sales came after an advertising blitz by retailers, stirring a shopping frenzy that filled stores and car dealerships late into the night March 31, dealers said.
Visitors filled Bob Smith Toyota and Scion in La Crescenta until 1 a.m. March 31, sales representative Ron Smith said. And shoppers repeatedly expressed concern about the tax hike at Lexus of Glendale, where some visitors were under the false impression, fueled by some advertisers, that the rate would jump by as high as 2%, Vice President and General Manager Johnny Harrison said.
That buildup may have persuaded buyers to make their purchases before the end of March, while also creating widespread awareness about a tax hike that seemed more substantial to customers than it really is, Harrison said.
NOTABLE QUOTABLES
“Now, it’s going to be a little bit more than voluntary.”
— Glendale Water & Power General Manager Glenn Steiger on the likelihood of mandatory water restrictions this summer due to dwindling water reserves and reduced wholesale deliveries.
“I don’t want to find out that there’s a Bernie Madoff at the top who’s taking local municipalities for a ride.”
— Councilman Ara Najarian before joining in a unanimous vote to make an additional $40 million available to the city treasurer to invest in a higher yield state investment fund.
“I didn’t come here to cut schools, or cut disability payments, but that’s exactly where I find myself.”
— Sen. Carol Liu, on the possibility of having to cut further into the state budget should a slate of ballot propositions, brokered to close a $42 billion gap, fail May 19.
“I say good, the government is too bloated anyway.”
— Jeff Bryan, a Glendale resident who took part in the anti-tax demonstration outside City Hall as part of a nationwide “Tax Day Tea Party” campaign.
“Any free parking in the downtown Glendale area is a good thing. It’s a good thing for restaurants and retailers and businesses.”
— Glendale Galleria Senior Marketing Director Janet LaFevre, discussing the impacts of the Americana at Brand’s new free parking policy for Mondays through Thursdays.
“It could have been worse. They could have changed our area code, and that’s what we did not want.”
— Gary Olson, president of the Burbank Chamber of Commerce, referring to the addition of the 747 area code to the 818 zone, which will require residents to dial 1, along with the area code, for all phone numbers beginning today.