Glendale City Hall
GLENDALE: Joining just about every other city in California, today Glendale moved to squirrel away $480 million for community redevelopment projects, all part of an attempt to keep the money out of Governor Jerry Brown's hands. The special meeting, held at Glendale's City Hall, brought out a handful of members of the public, some of whom weighed in on developer Rick Caruso's plans to attempt to purchase Ray Patel's Golden Key Hotel, which falls in a redevelopment zone, for his Americana at Brand expansion. (Earlier this week, Caruso reached an agreement with property owner Henry David to buy his building, so Patel is the only hold-out at this point.)
Patel appeared before the Council to reiterate that he "would like to stay in his present location" and continue to operate his hotel. And Patel brought along a special guest, attorney Robert Silverstein. Yes, that Robert Silverstein, the lawyer known for bringing Hollywood developers to their knees. (Silverstein hasn't officially been hired by Patel on a long-term basis, but represented Patel at today's hearing.) During his public comments to the City Council, Silverstein raised the issue of the role of redevelopment agencies, criticizing subsidies handed to developers and stating that the process perpetuates "a system that has become increasingly abusive to the public."
As other cities have done, Glendale City Council quickly approved the agreement to protect its planned developments, a list which covers roughly 60 projects, developments ranging from affordable housing to parking structures to library renovations to hotels. Each project is broken down by cost.
No funds are allocated for the Americana expansion because the redevelopment agency “is in the preliminary stage of seeing what will be presented,” said Philip Lanzafame, Chief Assistant Director of Community Development at Glendale. (But the agreement does grant $15.125 million for Americana, specifically for “ongoing and future obligations associated with the Americana project, including potential litigation costs, liability and consulting." Those fees will help pay for two lawsuits against the city and Americana, including one brought by Patel, according to Lanzafame. UPDATE: Here's an update on the other lawsuit: David, the building owner who took a buyout from Caruso, testified in court yesterday.
Last November, the Glendale City Council told Patel, whose hotel sits next to the Americana, to negotiate a sale price or present his own plans for redevelopment for the Golden Key hotel, or face possible eminent domain proceedings. Patel has a January 27th deadline to submit a plan for redeveloping the Golden Key.
But if Patel does present a plan, and the redevelopment agency chooses his project, then redevelopment money could be allocated towards his proposal, according to Lanzafame. But no expenses were allocated for a possible Patel plan under today's agreement. (By contrast, CRA-LA's $1 billion agreement covers just about every development proposal under the sun.)
Caruso, whose $6 million offer to buy the Golden Key hotel was recently rebuffed, has publicly said he won't use redevelopment money for the expansion. “Not one bit of taxpayer money, nor would any redevelopment funds would be used to purchase land for the Americana,” said Rick Lemmo, Senior Vice President of Caruso Affiliated Communications, and a member of the Glendale Chamber of Commerce, who was at today's hearing. Nor would redevelopment agency money be used for legal fees if the fight over the Golden Key reached the eminent domain stage, according to Lemmo.
Meanwhile, as the council moved to protect the tax revenue today, numerous questions remain about the future of redevelopment zones, and the process of eminent domain if those zones disappear.
Governor Brown’s budget proposal in regards to the CRAs is “light on details," said Jim Dantona, Chief Deputy to CRA-LA CEO Christine Essel. “If we are eliminated, what happens to the redevelopment zones, do they get eliminated? he asked rhetorically. "Or do those areas stick? Do you still retain eminent domain powers in those zones, and who has the power to eminent domain?” he added.
“If there is no redevelopment project area and no community redevelopment agencies, Glendale could have problems acquiring property for re-development for Americana at Brand," said John Peterson, an eminent domain lawyer at Peterson Law Group, a downtown law firm, in an interview this afternoon. In other words, how can the Golden Key Hotel be termed "blighted" if it no longer sits in a redevelopment zone? But Peterson added that local agencies will likely work around whatever new rules are handed down, and "develop solutions to the redevelopment legislation that is adopted."
In a statement yesterday, a rep for Caruso Affiliated didn't think that the Glendale Redevelopment Agency will be eliminated as proposed by Gov. Brown. "There has been such opposition to this plan from local jurisdictions," said the representative.
And there's a shot of Silverstein testifying before the City Council.