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State denies Glendale millions to pay for redevelopment obligations

The decision will leave the city open to a lawsuit. Glendale official says the community will suffer if library and transportation projects are put on hold.

December 22, 2012|By Brittany Levine,
  • The state's decision to deny Glendale millions of dollars to pay for redevelopment obligations could affect planned improvements to the Glendale Central Library.
The state's decision to deny Glendale millions… (Times Community…)

Glendale and state officials have locked horns for months over spending money for redevelopment obligations, but this week, a decision handed down from Sacramento escalated the fight.

In a letter this week, the California Department of Finance denied tens of millions of dollars that Glendale had requested to pay for the obligations of its former redevelopment agency, which like others across the state was dissolved by the state earlier this year.

The decision to withhold some of the money Glendale requested will leave the city open to a lawsuit if it can't pay its obligations — a sticky situation forewarned by redevelopment attorneys months ago.

“We don't have any administrative recourse,” said Philip Lanzafame, Glendale's officer for economic development and asset management, at a City Hall meeting Wednesday.

In addition, the state's decision puts $10 million in Central Library improvements on hold and ties up about $3.5 million in transportation funds.


“The Glendale community had made plans for those funds and this whole thing has changed that,” Lanzafame said. “It's the community that's going to suffer.”

The possible lawsuit Glendale is preparing for may come from Union Bank, which lent the city's affordable housing development arm $1.5 million to build Vassar City Lights in South Glendale.

Every six months city officials must ask for money from the state to pay the obligations of its former redevelopment agency. State and city officials have been arguing over the most recent request of $47 million — which covers January through July 2013 — since October.

But this week, the state Department of Finance said it was denying loans, bonds and other administrative line items, and released $11 million to Glendale.

“It's wacky. At nighttime you don't deny the existence of the sun,” said City Manager Scott Ochoa, who also serves on an oversight board made up of officials from the city, Los Angeles County and Glendale Unified School District, which was created to oversee the wind-down of redevelopment obligations.

Last February, Gov. Jerry Brown effectively killed redevelopment throughout California, moving the property tax revenue that Glendale had tapped to develop the Americana at Brand and Disney Creative Campus to Sacramento's coffers to close a multibillion-dollar budget gap.

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