Council erects fence around redevelopment funds

The City Council on Tuesday raced to issue $50 million in bonds through a redevelopment agency that could end up being eliminated in the coming days as part Gov. Jerry Brown’s proposed budget plan.

The bonds would help pay for a range of projects in the center of the city, including Glendale Central Library upgrades and a new open-air passageway from Brand Boulevard to the library grounds.

But under Brown’s proposal, which the state Legislature could vote on as early as this week, Glendale and roughly 400 other local governments throughout California could lose their redevelopment agencies, and with them, the ability to collect the difference in higher property taxes on improved land to pay off bond debt.

Officials in Glendale and other cities say redevelopment power is needed to fund affordable housing, parks and more, while the governor says the agencies unfairly divert as much as $5 billion in tax revenue from schools and county programs.

City officials on Tuesday painted a grim picture of the potential impacts of the governor’s proposal, with the state potentially taking over some city properties — such as the Alex Theatre — and selling them off to pay debts and balance the budget.

But the quick move to issue an additional $50 million in redevelopment bonds could all be for naught, depending on what the state Legislature does, or on what happens with a legal fight brewing between cities and the governor.

Mayor Ara Najarian asked officials if approving the new $50 million bond was a responsible action, since the governor’s proposal almost certainly would invalidate the effort.

“Does anyone really think this is going to work?” he asked.

Bond experts and city officials at the hearing said the move was Glendale’s only shot at protecting more local revenue from Sacramento. The council, acting as the Redevelopment Agency, voted unanimously to approve the bonds.

Council members also voted unanimously to spend as much as $10,000 to help fund a lawsuit by the California Redevelopment Assn. to block Brown’s proposal if it passes.

Philip Lanzafame, the city’s chief assistant director of community development, said the governor’s proposal is legally suspect on several grounds, including the fact that voters passed Proposition 22 in November to stop state raids on local government finances.

But Evan Westrup, a spokesman for the governor, decried the efforts of Glendale and other cities to build fences around their redevelopment funds.

“It is unfortunate that local elected officials and redevelopment agencies are working in concert to sequester billions of taxpayer dollars and fast-track redevelopment projects while simultaneously making cuts to core services like education and public safety, “ Westrup said.

A report by the state controller’s office this week found that local redevelopment agencies improperly shortchanged schools by more than $40 million last year and spent millions more on non-blight related projects. Glendale was not listed in the report, but lawmakers have been using the findings to bolster their backing of Brown’s proposal.

State Sen. Carol Liu (D-La Cañada Flintridge) and Assemblyman Mike Gatto (D-Silver Lake), whose districts include Burbank and Glendale, have publicly supported the plan.

Should cities sue to prevent Brown’s proposal from becoming law, “legal obfuscation and obstruction won’t move us any closer to balancing the state’s budget,” Westrup said. “We are confident our proposal is legally sound.”