As Glendale shuts down its redevelopment agency in the coming months, City Council members will have a new hat to wear — one they don’t particularly like.
Once directors of the redevelopment agency, council members are set to take the helm of a new successor agency in charge of winding down the program after the action was relucantly approved on Tuesday.
“I just think it’s a sad situation,” said Councilman Ara Najarian.
Glendale’s redevelopment agency is one of about 400 throughout the state that got the ax after the state Supreme Court upheld a law eliminating the agencies as part of Gov. Jerry Brown’s plan to fill a multibillion dollar budget shortfall. Property tax dollars that once went to help build the Americana at Brand and affordable housing units will instead go to schools and other public services.
“The stakes are incredibly high for Glendale, both in terms of financial resources and the land that exists as assets,” said City Manager Scott Ochoa.
The elimination law allows a successor agency to pay redevelopment debts and enforceable obligations first, while the rest of redevelopment money gets directed back to schools and other services.
City officials across the state have decried the dissolution as hamstringing their future ability to generate the kind of investment and economic stimulus seen in recent decades in previously blighted areas.
“I think it’s really going to be a game changer for the city in a bad way,” said Mayor Laura Friedman.
A payment schedule for the city’s $21 million in obligations is set to come before the council, acting in its dual role as the successor agency, by Feb. 1, according to a city report. The agency can begin paying the debts by May 1, the report stated.
By July 1, the county auditor-controller is required to review the agency’s assets and required payments.
Some redevelopment money, at most $1 million in Glendale’s case, can be used to cover administrative costs to dissolve the agency during the first year.
All payments must be approved by an oversight committee comprised of seven representatives selected by the mayor and school and county officials. But the state Department of Finance can overturn any action.
Despite the defined hierarchy, the waters remain murky.
City officials don’t know if the state will try to unwind some defensive tactics the council took several months ago to encumber funds, including possibly forcing the early retirement of $50 million in bonds. Some of those bonds were to pay for $10 million in Central Library improvements.
In addition, the state could try to pry away about nine properties the redevelopment agency transferred to the city, including the Alex Theatre. If the state got a hold of them, city officials fear quick liquidation.
“We are looking to fight tooth and nail,” Ochoa said in laying out a plan for litigation.
As for affordable housing, the Housing Authority, which is also led by the City Council, will continue to exist, but it is at risk of losing $6.5 million in redevelopment funds. The authority will continue to get federal aid, but affordable housing projects, including support for nonprofit homeless services and veterans rental assistance, would be scaled back, said Chief Assistant Director of Community Development Philip Lanzafame.
Officials have said they plan to look in every nook and cranny to fund nearly $25 million in at-risk projects.
Public Works Director Steve Zurn said his department has found alternative funds to pay for $5 million in Central Avenue improvements and $2 million in railroad-crossing enhancements that redevelopment funds were slated to cover.
Most of the money comes from Measure R funds, a half-cent sales tax approved by Los Angeles County voters in 2008 for transportation projects.
“I think, knock on wood, [the transportation projects] are OK,” Zurn said. “This is a priority for us. We want to make sure we improve the safety of those crossings.”