Glendale to retrieve millions from redevelopment shut-down
After more than a year of hand-wringing and headaches on the part of the city, the California Department of Finance has given Glendale the go-ahead to use about $17 million in bond money and take back nearly $66 million in loans from its former redevelopment agency.
Since becoming entangled the state’s wind-down of local redevelopment agencies, Glendale has been unable able to use the bond money it issued to revamp the Central Library, improve Central Avenue and develop other projects.
And while Glendale still loses out on about $12 million after all the other various taxing entities, such as Los Angeles County, take their share, it still frees up a major blockage of money.
“This is great news for Glendale,” City Manager Scott Ochoa said in a statement, adding that the decision will allow Glendale “to take advantage of constructing important public projects with our bond funds.”
Glendale’s former redevelopment agency had used incrementally higher property taxes from new developments to help fund the Americana at Brand, Disney’s Creative Campus and other projects.
But that money source dried up last year when state lawmakers killed redevelopment, shifting the tax revenue to the state to close a multi-billion-dollar budget gap. Part of the money collected by the state from closing redevelopment agencies was meant to cover school funding gaps.
Since then, city officials have been jumping through hoops, completing an audit of the former agency’s finances, adjusting construction plans, making payments to the state and submitting requests to cover former redevelopment obligations, such as contracts, employee salaries and bond interest payments.
“Countless hours of work have gone into securing this approval,” Mayor Dave Weaver said in a statement. “The fogginess associated with the redevelopment dissolution process is beginning to clear up.”
But there is much to be done before construction can begin on the $10 million library revamp and other former redevelopment projects, such as a pedestrian paseo by the planned Museum of Neon Art.
There are also limitations on how much of the $66 million loan the city made to its defunct redevelopment agency can be paid each year. Before redevelopment ended, the city had been paying itself back between $6 million and $7 million annually, according to a city finance report. Officials expect to get back roughly $1.7 million in fiscal year 2014-15 and about $7 million the next year.
About 20% of the money the city does get back from the loan repayments must pay for affordable housing.
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