November 30, 1996 - From the November, 1996 issue

Glendale’s Growing Pains: A Once-Sleepy City Has Grown Up

No longer considered a sleepy suburb, Glendale is rapidly becoming a regional center for the entertainment and media industries. With office vacancy rates at three percent, the City is balancing the need for more downtown office space with a plan for new downtown open space and pedestrian-oriented development. 

The Planning Report is pleased to present an interview with Jeanne Armstrong, Director of the Glendale Redevelopment Agency, on how Glendale is coping with its growing pains.


Jeanne Armstrong: “If we are going to increase our capacity for job growth, it has to be through rail or transit.”

What is the mission given to you and the redevelopment agency by the City Council, and what are your goals? 

The first mission for Glendale is to retain the solid business base we already have within the City. Over the last five years, we have seen that change from an investment banking and insurance base to one strongly led by media-based companies. Glendale's office vacancy ranges from three to four percent. We have some of the highest office rent per square foot in the region, and we also have a variety of research and development space that provide jobs across the employment spectrum. 

The first goal the Glendale City Council has given to me is keep our current base healthy, and allow businesses to expand without having to move outside of Glendale. 

Our second goal is to bring in new business, when possible, to create new industry and new jobs. As an agency, we have not gone to our neighboring cities to steal businesses. We don't believe this type of strategy is of benefit to this region. The people in the surrounding cities, whether Los Angeles, Pasadena, Burbank or La Canada, do not recognize boundaries. We all work, live and shop in the same areas. Because a business moves a mile across a border, it will not change the underlying habits of the employees. We have not used subsidies or tax forgiveness to induce a business to move from one city to another. 

A third goal is to improve the public amenities for our residents. New businesses should not come into the city at the expense of people who live in our city. The business should be an enhancement, either through new retail sales taxes which allow us to provide increased police and fire services to our residents, or through new uses such as cinemas so our residents can find local entertainment venues. 

These entertainment uses also increase the length of our day so that we can capture a small percentage of the nearly 50,000 daytime population of office workers. If we can encourage these workers to stay and have dinner, we not only capture that business, but we also help the congestion on the freeways because these individuals are going home later.

When The Planning Report interviewed Bob Tague, Burbank's Community Development Director, he commented that Burbank's vacancy rates were down because of the success of the Media District plan and other plans. Are you facing similar space limitations, and how are you prepared to deal with that, both in terms of community relations and economic issues?

The impacts for Glendale and Burbank in the media industry demand for office space are very similar. We are both literally out of space. We have three office building sites entitled in downtown Glendale. We have been working with the various property owners, but the economy has still not reached the point where someone will build a spec building; and to date no large leases have been signed to allow the property owners to build.

The current nature of the media industry is that they need space in 12-14 months, and they cannot envision a three-year process to have a building designed, constructed, and occupied. We believe this trend is about to change. There are few other alternatives for the media industry. They are beginning to accept the three-year new construction time-frame. 

Let's take a half step back and address Glendale's definition and approach to public-private partnerships. 

Resources to redevelopment agencies state-wide have been decreasing for two major reasons. First, private property owners are appealing their assessed valuations and the assessed values of properties throughout the state are much lower. This means that redevelopment agencies receive less tax increment funding, and therefore the agencies have less money to put back into public-private partnership deals. 

Second, the State of California has limited the amount of money that redevelopment agencies get by shifting funding from redevelopment agencies to school districts or counties. Glendale has a relatively small redevelopment agency; we receive only about $13 million per year. Yet 2 years ago we lost $2.5 million that the State redirected to counties. 

Because the agencies have reduced resources, public/private partnerships are no longer questions of how much the redevelopment agency can contribute to write down the land or what kind of grant the redevelopment agency will provide. Rather, the partnerships arc focused on public improvements. By putting in public improvements, we benefit the whole area and residents as well. The redevelopment agency can also help the private interest get through the entitlement process more quickly. If the financial carry on the land, or the construction loan is 10 months rather than 18 months, reducing the length of the entitlement process can save the developer money.

With Public/Private Partnerships in mind, what's been the impact on Glendale of DreamWorks SKG's decision to locate their animation studio in the city? 

The new studio will impact Glendale greatly. The decision is a validation that Glendale is no longer an "old, sleepy city," filled with senior citizens. It shows that Glendale is now a very young, dynamic community that can house some of the best and brightest of the new animation field. We did assist DreamWorks, but I often say that no matter what planning we might have done, we would never have been prepared for the call from Dream Works: "You have this land; we want to come there; can you help us locate there?"

Usually, the process involves going out and chasing a tenant for two to three years. DreamWorks called us one day and said that they had identified the site they wanted, and wanted the redevelopment agency's assistance in purchasing the site. 

The site was originally planned to be an EPA-mandated regional groundwater cleanup facility. There was a finite timeline for the treatment facility to be operational. We were able to offer City-owned land across the street so that the same wells could be used, and EPA did not have to remodel the wells. The water could be piped across the street to the new treatment facility. The treatment facility will now be built on city land, thus freeing the site that DreamWorks wanted for their campus development of 500,00 square feet.

Speculate about why there seems to be so much economic energy now in the Burbank, Glendale, and Pasadena areas, but not in the City of Los Angeles. What are the strategic and competitive advantages the smaller cities circling L.A. seem to have that Los Angeles does not. 

Smaller scale cities are easier on the psyche. Los Angeles does not have its residential areas in near proximity to either its downtown or an industrial area like the San Fernando corridor. For example, we accommodate approximately 10,000 animators who are employed in downtown Glendale and live close by.

Typically, the animator comes to work at 10:00 or 11:00 in the morning. They work for a while then go out for lunch and walk around, maybe go to a movie. The animator then goes back to their office to work. They may go to dinner later in the evening, and then work until 8:00 or 9:00 p.m. before they go home. 

If that animator were isolated in a downtown area that did not have many amenities, or a campus-industrial site such as an old aircraft site, the animator would be much too confined. Thus, the success of the smaller communities. 

Also, the animation portion of the media business is very different than the Hollywood-glitzy film, Westside environment. Animators seem to prefer the east side of the Valley and Glendale rather than the Westside. 

Is Glendale often approached by disaffected businesses coming out of Los Angeles, and looking to expand? 

We are approached all the time by businesses. We often direct the businesses to the property owners that we know have building potential and the few buildings we know of that have vacant space. We would gladly assist new businesses to come here. 

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Our goal is a new construction of buildings. We want to add to the overall square footage inventory in the San Fernando corridor and in downtown Glendale. This is the only way that we can expect to increase our property tax base, which increases our resources, increases the number of jobs, and makes Glendale a healthy city. 

Share with our readers the current and likely status of redevelopment agencies in California. What constraints are they operating under, and are they healthy organizations with a future, or merely treading water? 

Perhaps somewhere in between. Redevelopment agencies are governed by the State of California, not by the local city. The state legislature, for the last five years, has diminished the powers of redevelopment each year, whether by transferring our tax increment to another entity, or limiting the power of eminent domain. 

Two years ago the legislature passed AB 1290, which put more limits on plans including required property tax sharing agreements with school districts and counties. There is current legislation pending that would prohibit the use of eminent domain for private purpose. Right now, this is the singular distinction of redevelopment agencies. Cities can use eminent domain for a public purpose—roads. schools, firehouses. etc. Redevelopment agencies can use eminent domain for a private purpose. If a private property owner wants to improve their property and can show that this improvement will eliminate blight, increase jobs, and is for the benefit of the entire community, and the property owner needs adjoining parcels, the redevelopment agency can then use eminent domain with a private property owner who is not willing to sell their property. 

The legislature examines that power each year. One of these years, I predict that power will be eliminated. Although I expect that the courts will eventually uphold the power of eminent domain for redevelopment agencies, the use of eminent domain will likely be held in abeyance while the court case is finally settled. 

What will be the effect of state legislative action on eminent domain be on an agency such as yours?

Eminent domain has been the one tool to eliminate some of the old land uses-inefficient buildings from the 1940s and 1950s. If you have a site in the middle of downtown that has a four-story building, surrounded by 20-story buildings, clearly the highest and best use of the land is another office building. In Glendale we have used eminent domain wisely, but other cities have abused the power, which is why the legislature is seeking restrictions. 

Local governments in California, since the passage of Prop. 13 and its progeny, have been penalized for relying on property tax revenues and rewarded for seeking to retain enterprises which generate sizeable sales tax revenues. How has this trend affected the planning and economic growth strategics of cities like Glendale? 

The reality is that if we achieve a retail development of a site, we receive many more near-term revenues. If that retailer happens to be a soft-good clothing retailer in 30,000 square feet or an electronics retailer in 30,000 square feet, there is a vast difference in the amount of money that would return to the city through sales tax. But we are very careful in any inducement for sales tax producing because we also believe that within five to ten years that the state will probably reapportion the distribution of sales tax. We are not prepared to lure sales tax as the only revenue for our city. We feel that long-term job creation and job growth is a more solid basis for a city. 

Are you finding localities being lured away from traditional planning priorities by sales tax opportunities? 

This bias certainly affected our city five years ago when we saw cities buying auto malls and Walmart’s. The transfer of sales from the city's existing retailers to the new big-box retailers in many of these situations has not been quantified. The net gain, therefore, would vary—and it would be challenging to know if the cost to a redevelopment agency really reflected the net long-term gain to the city.

In this region, at least, retailing is nearing its capacity. People only have so much money to spend. To continue to chase these retailing dollars when we don't yet see a new retail entity coming forward, then the sales tax is likely just a transfer among existing markets.

Let's turn to the linkages between transportation and planning. What is the redevelopment agency's attitude toward plans for rail in the basin, and how it is impacting Glendale's planning?

We are very supportive of rail—particularly light rail. We have a Metrolink station, and we service over 20 trains per day. We have about 1,000 people who commute to work in Glendale and use a free local transit system called Beelines that meets every train, and has express service to most of the major downtown employers.

We are nearly at capacity on our local and regional streets. We are firmly committed not to widen those streets and give them over to the vehicle for one hour in the morning and one hour at night and have pedestrians suffer the rest of the time. 

If we are going to increase our capacity for job growth, it has to be through rail or transit. We were on the 30-year MTA plan for a light rail system. With other MTA expenditures, there is no longer a 30-year plan, and light rail no longer figures in our planning to bring employees to Glendale. 

We are looking at an expanded regional system, perhaps in conjunction with some type of express service along the 134 Freeway. In this system, commuters would have a quick transfer at the 134 and Brand or Central Boulevards and then take free express bus to the commuter's job location. 

Comment briefly for our readers on the possibilities of high-speed rail in Metro Los Angeles and its potential impact on Glendale. 

There is a plan that has been approved by the California Transportation Commission, and is on its way to Governor Wilson, that would allow for a high-speed rail line from Los Angeles to San Francisco. The rail line would probably use an alignment through Palmdale to connect with a potential new regional airport, and continue to Sacramento. 

The right of way is secured. The rail line would use existing rail right-of-way. The technology is available and proven—a system in Florida was just funded. We have the third largest capacity for ridership—the top two are a Washington-New York­Boston route, and the route that was just approved in Florida. 

This is clearly an issue your readers should watch and follow—it is not just some transportation planner's dream. It looks like it might become reality within the next ten years. 

In three years from now, what do you believe the City Council expects from the Glendale Redevelopment Agency? What, in your opinion, would constitute success?

Success will be measured by a continuation of our current low vacancy rate; two or three more office buildings in the downtown area; and two or three public projects. Glendale's program has concentrated on private development. We have built one major public project—the Alex Theater—an old, 1925 movie house, and turned it into a performing arts center. The project has warmed the hearts of many of our citizens. 

We are looking at a large public open space in the downtown; more parks in our neighborhoods; improved pedestrian amenities. In the next five years, success will be measured by an increased level of pedestrian and residential amenities.

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