By Ted AYALA
With redevelopment monies now being siphoned off from cities by the state, local projects that were in progress are being pressed to find new alternatives for funding. Glendale, which in 2010 allowed the use of $10 million in bonds to cover costs for improvements to the Central Library, is now grasping for other options in order to cover the costs.
At a special meeting of Glendale City Council on Tuesday afternoon, the city voted to explore what City Manager Scott Ochoa referred to as the “exotic” alternative of New Markets Tax Credits (NMTC).
Philip Lanzafame, the city’s chief assistant director of Community Development, admitted before presenting the option that it is “like everything having to do with the [Internal Revenue Service]: complex.”
“We started looking for other tools to accomplish the same goals [as redevelopment] to improve the community,” he said. “We’re looking to leverage our tax credits with bond funds.”
The NMTC Program was enacted late in the Bill Clinton administration by Congress in 2000. Then-vice president Al Gore praised the program’s push to revitalize low-income areas by stating that “[the] greatest untapped markets in the world are right here at home, in our distressed communities.” The program provides federal tax credits to encourage investment in areas that would not otherwise receive private investment. It also helps augment traditional funding resources.
Lanzafame pointed out to the council that the city had previously experimented with the NMTC Program when pooling funding for the Doran Gardens project. That project which, according to its website, is “a 60-unit, mixed income, affordable homeownership project” to be built adjacent to Downtown Glendale, was spurred by the program.
He also noted that, since 2001, the federal government had parceled out $33 billion through the program with NMTC projects in all 50 states. With the sluggish economy and cities stressed to find new sources of funding, NMTCs have increasingly been accepted by municipalities. But Lanzafame reminded that this also resulted in increased competition for NMTCs.
The complexity of the program also needs oversight by high-ranking staff with experience in managing the intricacies of the program.
“We can’t have them learning as they go,” said Lanzafame.
Exploration of the program would be supervised by Lowe Enterprises Real Estate Group of Los Angeles, which has had experience dealing with NMTCs.
When quizzed by Councilperson Laura Friedman as to what a “worse case scenario” could be if the program were implemented, Lanzafame said he was “hard pressed” to find one, citing successes in Desert Hot Springs, Los Angeles and South Carolina as evidence.
The Glendale Central Library revamping would include the addition of study and conference rooms, a redesign of the façade, and moving the entrance from its current position at the east side of the complex to the north facing Harvard Street.
An estimate for the project’s total costs are pending the final design of the project.