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Merchants struggle without redevelopment funds

The money is frozen until state Supreme Court case ends.

September 27, 2011|By Mark Kellam,
  • A large sign across Kenneth Rd. in Kenneth Village Glendale on Tuesday, September 27, 2011. (Raul Roa/Staff Photographer)
A large sign across Kenneth Rd. in Kenneth Village Glendale…

Four of the five local merchant associations are reeling from a freeze on community redevelopment funds that help them pay for projects and events throughout the year.

A legal case involving redevelopment agencies is stuck in the state Supreme Court, and until a decision is made, cities cannot spend any redevelopment funds.

The City Council on Tuesday had to step in to cover a $2,000 gap for the Kenneth Village Merchant’s Assn. that could have forced organizers to cancel its Fall Festival because the money it usually gets from the city for reimbursement is not available.

Merchants in Kenneth Village have been seeking donations to help cover costs associated with the festival, which is slated for Oct. 29 and includes entertainment and a children’s Halloween costume contest, said Arsina Hartenian, treasurer of the association and co-owner of ALM Accounting Services.

Each merchant association usually receives about $15,000 from the city annually, said Philip Lanzafame, chief assistant director of community development for the city. The money comes as reimbursements to cover costs incurred by the associations.


Last spring, Gov. Jerry Brown proposed eliminating more than 400 community redevelopment agencies and funneling their funds back into state coffers. Later, cities were given the option to pay a hefty fee in exchange for their redevelopment agencies continuing to operate.

In July, the League of California Cities and the California Redevelopment Assn. filed a lawsuit in the state Supreme Court challenging Brown’s move. The court accepted the case, but froze all spending of redevelopment funds until it reaches a decision.

In the meantime, local merchants associations that depend on the money are having to scale back plans.

The Downtown Glendale Merchants Assn. won’t be able to provide monetary sponsorships for community events that it usually supports until a court decision is made, said president Helen McDonagh, who owns Massage Envy.

The Sparr Heights District Business Assn. has put any future beautification projects on hold, said president Scott Trulik, who owns Ocean View Investments Group.

Sparr Heights merchants spend their funds on projects that improve the area, such as landscaping, benches and potted plants.

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