City Council hopes it can retain $15 million for community projects

About $15 million in redevelopment funds intended for capital improvement projects could still remain available for several community development projects, including the Lundigan Community Center and improvements to Johnny Carson Park, despite efforts by the state Legislature to sop up the money.

The Burbank City Council this week voted to keep the money where it is, despite it being under threat by the state's liquidation of local redevelopment agencies and its plans to send the wealth north to Sacramento to help plug a multibillion-dollar state budget gap.

Pending legislation would set aside about $1.4 billion in redevelopment funds statewide for low- and moderate-income housing, and includes a provision that would allow city-agency-type debt incurred for certain projects to remain valid, said Ruth Davidson-Guerra, assistant community development director.

Redevelopment agencies typically issued bonds to raise money for improvements. After blighted land is improved, agencies then use the higher tax valuation and income, called a “tax increment,” to pay back the bond debt.

“If that were the case, then the City Council is saying, ‘Let's keep the debt there' and hope for the best, if you will, to preserve the debt,” Davidson-Guerra said in an interview. “Preserving the debt is a good thing, because it's all about keeping the money in the Burbank community.”

The agency made certain findings under the law, specific to these projects, and the projects were funded with the law that was in effect at the time and should remain with the community, Davidson-Guerra said. But Burbank, like other cities, would have to wait and see, she said.

Until the proposed legislation is passed, or some other legislative fix is agreed on, the risk remains that the money may eventually flow to the state, she added.

“Leaving the money there means there is the possibility the funds can still be used,” Davidson-Guerra said. “We will find out together if those actions will be challenged.”

Councilman Dave Golonski said during the meeting Tuesday that it was a “complicated equation” with many unknowns.

“I don't think it's a good bet to give up $15.4 million,” Golonski said Tuesday, adding that the current political environment makes it difficult to determine if the funds could be used for other projects.

Councilman Gary Bric said he supported putting the money aside to protect, but was not ready to move forward on a specific project.

Golonski said that if the council didn't move forward with committing the money to a specific project, they could be giving the money up to the state.

“We're trying to keep the money in the community versus returning it to the state,” he noted.

Davidson-Guerra noted some of the funds for various projects are already under contract with third parties for design.

“I definitely want the money available to the community — our money — to stay in the community,” Mayor Jess Talamantes said. “Yes, I voted for [those projects], but it's a completely different world.”