Glendale to see drop in Americana revenue
The city will receive 17% of the outdoor mall's property tax revenue.
American Idol Haley Reinhart performs at the Americana in Glendale. (Cheryl A. Guerrero / Staff Photographer / August 23, 2012)
Rather than getting 80% of property tax revenue from the high-end outdoor mall, Glendale stands to get about 17% of property tax revenue in the future, with Los Angeles County and the Glendale Unified School District gaining 57% and 21%, respectively, according to a city report presented at City Hall on Tuesday.
That means although the Americana is performing better than expected — its assessed value of $526 million is more than double original projections — the city won’t be reaping as much of its benefits as it had planned.
The drop in Glendale’s share stems from a state mandate in February redirecting property taxes that once went to City Hall to Sacramento in order to close a yawning state budget gap.
“The rhetorical question is: Would we have made that deal today if we knew that we weren’t going to get the tax increment return?” said Councilman Ara Najarian. “That is the real factor that we relied on as an agency and a city in making this deal.”
He added that the city gave developer Rick Caruso the land for the mall on the assumption that future city revenues from increased property taxes would benefit other projects.
While some on the dais disagreed on whether the Americana was mainly designed to be a moneymaker for Glendale or a community draw, Councilman Dave Weaver said he wouldn’t have changed his vote to green-light the project, no matter the current state of redevelopment.
“It’s the best vote I ever made in this city,” Weaver said.
The city may be losing out on property taxes, but the revenue it makes from sales taxes won’t be affected by the loss of redevelopment. While sales tax revenues were impacted by the recession, officials expect they will increase with the recovering economy and a new Nordstrom, the opening of which is planned for next year.
Sales taxes generated at the Americana last year totally roughly $1.6 million, according to a city report.
Glendale won’t be able to use all 17% of its property tax revenues from the Americana until it pays off all redevelopment obligations, which will take years, officials said.
In addition to property and sales taxes — as well as roughly $71,000 in shared revenue from the parking garage — the city is supposed to get 50% of excess revenues once the mall hits a certain rate of return. That would be 11.75% for the commercial area and 8.5% on the apartments, thresholds that have not been met.
And Philip Lanzafame, officer for economic development and asset management, said they may never be met.
“I’m under no illusion that this city will receive a dime in revenue participation,” said Mayor Frank Quintero.