Roughly $10 million in bonds issued in 2010 to improve the Central Library may not be enough to cover the revamp, and with redevelopment money constricted, the City Council plans to review an “exotic” alternative.
Glendale officials say they may be able to use federal tax credits typically given to developers who invest in low-income communities to fill in funding gaps for the library project.
“We don’t do this on an everyday basis,” said Philip Lanzafame, the city’s officer for economic development and asset management.
On Tuesday, the City Council approved hiring Lowe Enterprises Real Estate Group, a consultant, to guide officials through the complex world of tax credits. But the decision on whether to ultimately apply will come several steps down the line.
“Complex” has been the name of the game lately at City Hall as officials trudge through the end of redevelopment and search for new ways to support city projects.
In February, local redevelopment agencies across the state were forced to send property tax revenues from redevelopment projects to Sacramento after lawmakers there voted to use the money to fill a multibillion-dollar budget gap.
After redevelopment was dissolved, several Glendale projects, such as the Central Library improvements, were put on hold.
At first, Glendale officials were unsure if the state law killing redevelopment allowed them to use the bonds they issued in 2010, but now they believe they will be able to do so. But the city may need more money for the library project, as initial costs were arrived at by an estimate.
The library project includes moving the entryway to the library from the east side to the north on Harvard Street, or to the south facing the Adult Recreation Center. It would also add study and conference rooms, improve the exterior design, relocate the computer lab and reconfigure a teen area.
City officials won’t know how much extra money they may need for the project until it’s designed, but they expect $6.5 million can be raised through tax credits by next spring, according to a city report. They need at least $5 million to make the process worthwhile, Lanzafame said.
If the city receives roughly $6 million in tax credits, it can expect to spend half of that on investor fees, consultant fees and other costs, officials said.
If the project cost doesn’t exceed the $10 million in bonds, the extra money could pay for other community projects.
“You would have that level of flexibility,” said City Manager Scott Ochoa.
The situation, which sounded rosy, prompted some council members to ask for worst-case scenarios.
“I’m hard-pressed to find one,” Lanzafame said, adding that officials reached out to cities such as Los Angeles and Desert Hot Springs, which have used tax credits to fill funding gaps.
But officials at other cities said more municipalities are applying for tax credits, increasing competition, Lanzafame said.
The federal government distributes about $3 billion to $5 billion in the credits annually.