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Issue Preview: Glendale Wins State Lawsuit

The city of Glendale’s recent victory over the state in an obscure lawsuit about loans it made to its defunct redevelopment agency could have major ramifications throughout California. A Sacramento Superior Court judge ruled March 16 that the former Glendale Redevelopment Agency owed the city nearly $32 million in interest payments on loans the city had made to it since 1972. The state of California had claimed that the agency owed less than $1 million. Patrick Whitnell, general counsel at the League of California Cities in Sacramento, said the decision, if it is not overturned on appeal or by legislative action, could boost the budgets of cities up and down the state. “Businesses have a strong interest in the cities having some certainty in their budgets,” he said. “It’s also possible the city could use (the money) in other ways, such as development projects.” The lawsuit is the latest skirmish in the longstanding dispute between the state and municipalities over money generated by the redevelopment agencies, which Gov. Jerry Brown and the Legislature dissolved in 2011 over accusations the agencies were wasting funds on bad projects. The estimated $1.7 billion in agency bank accounts, plus a part of the $5 billion the agencies generated annually in tax revenue, also helped plug the state’s huge budget deficit at the time. The lawsuit has its origin in the establishment of redevelopment agencies, usually decades ago by most cities. Read the full story in the April 6 edition of the San Fernando Valley Business Journal.

Joel Russel
Joel Russel
Joel Russell joined the Los Angeles Business Journal in 2006 as a reporter. He transferred to sister publication San Fernando Valley Business Journal in 2012 as managing editor. Since he assumed the position of editor in 2015, the Business Journal has been recognized four times as the best small-circulation tabloid business publication in the country by the Alliance of Area Business Publishers. Previously, he worked as senior editor at Hispanic Business magazine and editor of Business Mexico.

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