Glendale exits joint lawsuit

State officials appear to make efforts to help cover debts from redevelopment.

August 09, 2012|By Brittany Levine,

Glendale is withdrawing from a joint lawsuit filed against California to protect property tax revenues meant to help cover the cost of winding down redevelopment-related debt, citing signs that the state is loosening its hold on avenues for recouping the money.

After the state Legislature abolished local redevelopment agencies earlier this year, Glendale joined 11 other cities in filing a joint lawsuit claiming the state was unfairly pulling the property-tax-revenue rug out from underneath them, leaving municipalities with no way to pay down prior debt obligations.

But state officials have since eased their stance on how much money cities with existing debts related to redevelopment activities will get, prompting Glendale's decision to pull out of the lawsuit, according to a statement released Thursday.


“In dismissing this suit at this time, we are recognizing that we achieved our immediate goals; yet we are conserving our resources for a future fight in case the state decides to try again to cause further damage to local communities,” City Manager Scott Ochoa said in the statement.

Redevelopment agencies in Glendale and the other cities, such as Pasadena, had used the increases in property taxes that came as a result of redevelopment, known as incrementally higher property taxes, to support new development. But that all ended in February when the state dissolved those agencies and redirected redevelopment assets and property taxes to cover education and other public agencies left in the lurch by a multibillion-dollar budget shortfall.

City officials initially filed the lawsuit in May, claiming they were promised millions of dollars with which to pay off leftover redevelopment-related debt, but received mixed messages about the forthcoming payments.

Glendale has since received some payments, but the first one came as an I.O.U. of sorts. Last week, the City Council approved plans to ask for an additional $44 million. That request must still be approved by state finance officials.

The city has had to issue 14 layoff notices since losing redevelopment money, which paid for roughly $6.6 million worth of salaries and benefits, in addition to bringing the Americana at Brand and Disney Creative Campus to Glendale.

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