The project originally was intended to rely upon redevelopment funds. But because the state dissolved all redevelopment agencies, that funding now is problematic.
Phil Lanzafame, the city's economic development manager, said Glendale found a way to provide funds to cover any losses the so-called “taxing entities” might incur from the project moving forward.
To do that, the city council approved using $728,050 in a tax-revenue-sharing agreement with the city, Los Angeles County, Glendale Unified School District and Glendale Community College in 4-1 vote, with Mayor Dave Weaver opposed.
“It's worse for them to develop the project [than dissolve its development agreement], so what we have proposed is we write a check to each of the taxing entities with the dollars that are generated from our share to make them whole,” he said.
Under the original agreement approved by the redevelopment agency, the project would receive $3.6 million — $2.6 million in direct financial assistance from redevelopment funds currently in a holding account, and a piece of land valued at $1 million.
The first iteration of the agreement contained only $1.5 million in financial assistance, but the city later moved to add an additional $1.1 million so the project could add the parking structure.
Getting approval for that additional $1.1 million is what triggered the review of the whole project, Lanzafame said Friday.
With the end of redevelopment, the money that would have funded the project was redirected to the local school district, community college and the county, as well as other entities.
Under the revised agreement, those entities would give up that funding due them. Los Angeles County would forgo $1.39 million, Glendale Unified would give up $735,615 and Glendale Community College would chip in $140,341.
Based on city calculations on how much they would receive in tax revenues from the Laemmle Lofts, that would leave them with shortfalls of $377,175, $76,383 and $38,039, respectively, while the city would make a profit of $884,551.
Instead, the council approved giving the supporting entities $728,050, divided among the county, school district, college and some smaller entities.
Lanzafame said this arrangement had been vetted by his counterparts at those entities, but still needs to be formally approved.
City Manager Scott Ochoa said the fact that the city had been able to create a road map for the completion of the project showed that the tangled situation left in the wake of the dissolution of redevelopment agencies statewide can be navigated.
“What we have is a complex project that was made more complex by dissolution of redevelopment,” he said. “It's at this point a true testament … that the Glendale Successor Agency can still do economic development.”