Glendale plans to spend $750,000 of its own money to cover a budget shortfall for a $4.4 million plan to expand the Alex Theatre, even as the future of the historic venue remains uncertain.
The theater, which has long been dependent on Glendale's Redevelopment Agency, has faced several obstacles since state officials terminated the property tax program aimed at developing blighted areas last year to fill a multi-billion-dollar budget gap.
Not only has it put the venue at risk of being sold, but now the cumbersome process of unraveling local redevelopment agencies across the state has added a wrinkle to an expansion project years in the making, prompting Glendale to put up some of its own funds to get construction going.
To move forward with redevelopment projects planned before Sacramento lawmakers killed redevelopment, such as the theater expansion, Glendale needs the green light — and greenbacks — from the California Department of Finance.
But the process for requesting money is out of whack with the theater's tight construction schedule.
About six months before Glendale officials want to spend money on former redevelopment projects, they must give an estimate to state finance officials. When Glendale's redevelopment team submitted an estimate for the Alex Theatre project months ago, a full cost analysis wasn't complete, hence the gap.
Last week, the coalition of city, Los Angeles County and Glendale Unified officials that reviews redevelopment decisions before they are sent to Sacramento — known as the Oversight Board — approved of the $750,000 loan to close the gap.
The hope is that the state will reimburse the city for the loan later on.
Philip Lanzafame, Glendale's officer for economic development and asset management, said he's reached out to state officials and lawmakers to back the loan, but can't say for certain that the money will be returned.
"We've got everybody saying yes, but this is something that's a discretionary approval every six months," he said.
Despite the risk, Carl Raggio, a former City Council member and chairman of the Oversight Board, supported the loan because "the end result is an improvement to the community."
"I think this is a good thing," he said.
The other option would be to wait until October to ask state officials for more money, but the first phase of the expansion — which includes new dressing rooms, passenger and freight elevators and a rebuilt loading dock — must be completed during the summer, when theater activity is slow and construction will least impact revenues, according to a city report.
"This is our window, from July to November," Lanzafame said.
The goal is to finish all improvements by March 2014, before the nonprofit that runs the venue, Glendale Arts, becomes self-sufficient in 2015. Until then, the organization will continue to receive an annual $415,000 "management fee," or redevelopment subsidy.
"Glendale Arts needs as much time with its new theater as it can get before that agreement ends," Lanzafame said.
Meanwhile, the theater is still at risk of being sold by the state if it's determined that the asset doesn't belong to the city.
Glendale officials transferred the theater to the city's books to try to prevent a future sale and recently changed the zoning of the land beneath the venue to prevent a new buyer from turning it into a church, recreation center or banquet hall. But the state could still sell the theater.
It could be months before the state's final decision is made.
City officials want to push forward with the improvements despite the ownership uncertainty because they believe that in the end, the theater will be owned by the city, by Glendale Arts, or by someone who wants to operate a performing arts center.
"Whether we own it or somebody else does, [the improvements are] necessary to be done for the theater to retain its use as a regional performing arts center," Lanzafame said.