City makes next move in high-stakes game

Officials on Tuesday transferred $32.5 million from the Redevelopment Agency to the city as they continued to take steps designed to protect the money from Gov. Jerry Brown’s state budget proposal.

The money was a hastened payment on $62.1 million the Redevelopment Agency owes the city for loans made between 1977 and 1997 to jump-start utility upgrades, acquire parking areas and fund other projects.

Roughly $50 million of the money owed is interest, according to city Finance Director Bob Elliot. Interest on the loans accrues at the rate of 7% a year, according to a report.

Philip Lanzafame, the city’s chief assistant director of community development, urged the City Council to shift the funds — including a $30-million balance from the central redevelopment zone and $2.5 million from the San Fernando Corridor area — before lawmakers in Sacramento take up a bill to kill the state’s roughly 400 redevelopment agencies.

The council voted unanimously to carry out the transfer.

Brown wants to take the property tax revenue the local redevelopment agencies now receive to pay state debts and increase funding for schools and counties. Lawmakers are expected to vote on the governor’s proposal when they take up the state budget this week.

City officials have blasted Brown’s proposal, saying redevelopment dollars pay for important city infrastructure projects.

Glendale has made several moves to protect redevelopment dollars since January, committing nearly $500 million in anticipated tax revenues to housing and economic development plans, approving a $50-million bond issue and transferring redevelopment responsibilities — such as design review authority — to the City Council.

While City Council members preside over both the city and the redevelopment agency, the agency possesses the power to improve blighted areas and to tap incremental property-tax dollars gained from those improvements to fund more projects and repay bond debt.

Several other cities have made loans over the years to their redevelopment agencies.

John Shirey, executive director of the California Redevelopment Assn., said he was not certain how many redevelopment agencies have moved in recent weeks to repay city loans, but said, “we know it is occurring in other places besides Glendale.”

“It is very understandable that many agencies are taking what may seem as extraordinary actions,” Shirey said in an e-mail. “After all, they are being threatened with annihilation by the governor and state Legislature.”