The concept grew from a pitch by Councilman John Drayman to scrap the on-site option entirely and require the fee instead after city attorneys determined that plan could be challenged by developers.
City Council members last week lauded the framework and directed city officials to bring back a more detailed version of the amended proposal for a vote.
Drayman said the move was a major step for Glendale, which has lagged behind neighboring cities in providing civic arts programs.
"We have many artists in our community and many arts organizations in our community … but it hasn't been a city priority," he said. "It has been important to me to help make that change."
Similar programs in other Southern California cities support public concerts like those at the Santa Monica Pier and in downtown Los Angeles, and urban art installations in Little Tokyo.
Drayman said he hoped the funds could help pay for renovations at the Brand Library art galleries or city subsidies to the historic Alex Theatre, which will lose a key funding source when the central redevelopment area expires.
"If we are taking it citywide, I want to make sure there is a broad area we can at least consider," he said.
Still, it could be a few years before a significant amount of money is collected in light of the construction slowdown brought on by the protracted recession, officials said.
Other development impact fees imposed by the City Council in 2007 had generated only $116,000 as of December 2009, according to a city report.
"It's going to take time to build up that reserve," Councilman Dave Weaver said.