With redevelopment money frozen, cities forced to tap into general fund

Burbank and Glendale have committed to spending a combined $1.3 million in general fund money on projects and programs that would normally have been paid for with redevelopment funds — a consequence of the legal standstill over Sacramento’s budget plan, officials say.

The activities of local redevelopment agencies have been suspended for months as the California Supreme Court reviews a lawsuit filed by city advocacy groups challenging the constitutionality of a state law that would redirect more redevelopment money to schools and other public agencies.

Glendale and Burbank have so far had to allocate about $1 million and $309,000, respectively for community programs and projects after a court stay halted redevelopment activities in the state, according to city reports.

“We’ve not experienced something like this in the history of redevelopment,” said Philip Lanzafame, Glendale’s chief assistant director of community development.

Gov. Jerry Brown led the call to eliminate the nearly 400 local redevelopment agencies in California that keep incrementally higher property taxes that arise from new developments. Redirecting that money into state coffers, Brown argued, could mean an extra $1.7 billion for the cash-strapped state.

Redevelopment advocates say the move amounts to raiding local municipalities to solve the state’s budget problems and harms economic development.

The state Supreme Court is set to decide the matter in January, but Burbank and Glendale have found there are some things that need funding before then. Both have opted into a program that allows redevelopment work to continue if they pay the state millions of dollars, but activity under that program also is frozen by the court’s order.

“It’s just a mess,” said Ruth Davidson-Guerra, Burbank’s assistant community development director/housing and redevelopment. “We sure hope the Supreme Court lets us get back to the business of serving the community.”

That Burbank and Glendale have the means to move forward with some projects despite the freeze is unusual, said Jim Kennedy, interim executive director of the California Redevelopment Assn., an advocacy group suing the state over Brown’s plan.

“Most communities are having their own financial challenges. They are not in a position like this to use financial resources,” Kennedy said, adding that Burbank and Glendale “have some discretion and they’re evidently able to use that discretion.”

This week, the Glendale City Council approved spending about $1 million in undesignated general fund money on an architectural design plan for renovations at Central Library. The project includes changing the library’s façade, updating its open-air spaces and adding handicap accommodations and new furniture, according to a city report.

The library was last remodeled in 2004, said libraries Director Cynthia Cleary.

If the Glendale Redevelopment Agency gets back on track, the project, estimated at $9.95 million, will once again be under its purview. If it gets eliminated completely, the city could use bond money set aside for capital improvement projects or money the Redevelopment Agency owes the city, said Public Works Director Steve Zurn.

Over the past two months, Burbank’s City Council has approved similar measures, agreeing to pay about $309,000 for community programs and real estate and economic development work once paid for by the Redevelopment Agency, according to city records.

Both cities slashed their budgets earlier this year due to reduced revenue from property and sales taxes and rising employee pension costs.

Davidson-Guerra said she doesn’t expect redevelopment officials to ask for another general fund infusion in Burbank. But in Glendale, Lanzafame said officials are reviewing projects for their timing and importance to decide if more of them need to move forward before the court decision.