Endangered CRA Projects Get Some FundingFriday, June 1, 2012
EDITOR'S NOTE: The full version of this story will appear in the Business Journal's June 4 weekly edition.
Several hundred projects in the city of Los Angeles halted by the death of redevelopment agencies will move forward anyway, apparently giving them a reprieve, at least for now.
The state’s Department of Finance, which is deciding the fate of thousands of such development projects across California, has approved $318 million in payments to the city through the end of the year.
Among the prominent projects receiving money is the proposed CleanTech Manufacturing site downtown, slated to receive at least $13 million; a Grand Avenue mixed-use project by Related Cos., which will receive $6 million; and billionaire Eli Broad’s planned Grand Avenue art museum, which will receive $8 million.
The decision by finance officials was welcomed by local developers and L.A. officials. It stands in marked contrast to the disappointment felt last week by Glendale, Pasadena and several other cities when a Sacramento Superior Court judge refused to bar the state from taking millions of dollars of redevelopment funds.
A law last year backed by Gov. Jerry Brown dissolved California’s roughly 400 local redevelopment agencies.
The agencies subsidized local construction projects by keeping some property taxes that normally would have gone to the state, schools and other taxing entities. Brown’s move last year was aimed at taking back some of that money to help balance the state’s budget. However, the finance department is reviewing projects on a case-by-case basis and allowing those that already had entered into firm development agreements to move forward.
It is not clear exactly how many building projects will be saved. But the $318 million Los Angeles is receiving will go toward at least 830 financial obligations, which also include employee salaries and payables as small as $1,500. More than $206 million was approved for obligations incurred between January and June, and an additional $111 million will be paid in installments between July and December.