City of Glendale, CA

Prior to 2011, California cities could form redevelopment agencies to reinvest in designated project areas and support economic development using a redevelopment funding structure based on growth in property taxes within the project area. Redevelopment agreements sometimes included revenue participation provisions, but these were not guaranteed.

In Glendale’s case, when The Americana at Brand was approved in 2004, the agreement included “participation thresholds” designed to provide the public agency a share of net revenue upside only after the developer achieved defined return levels. Whether any participation would occur depended on project performance and broader economic conditions.

In 2011–2012, the State dissolved redevelopment agencies due to statewide budget crisis. Successor agencies were created solely to wind down former redevelopment obligations under State oversight, including the required disposition of certain redevelopment assets and contractual rights. Because The Americana’s revenue participation structure was tied to a promissory note and redevelopment-related assets such as the Americana at Brand parking garage, the Successor Agency was required to sell the assets.

In 2015, The Americana at Brand parking garage and promissory notes were appraised and sold to the developer for $2.85 million, and the proceeds were distributed to local taxing entities through the State-required process. As a result, the City does not receive redevelopment-era revenue participation from The Americana today, even though the City may continue to receive regular municipal revenues associated with economic activity in the area, such as sales tax.

Frequently Asked Questions

1. What was redevelopment, and how did it work in California prior to 2011?

Before 2011, California cities could establish Redevelopment Agencies (RDAs) to revitalize designated project areas and stimulate economic development. RDAs operated under a unique legal and financial framework that differed significantly from traditional public/private partnerships.

Key features included:

• Use of property tax increment (the growth in property taxes within a redevelopment project area) to finance projects.
• Authority to enter into Development and Disposition Agreements (DDAs) with private developers.
• Ability to negotiate contingent participation structures, where the public agency could share in future project revenues only if specified financial thresholds were met.

These arrangements were not guaranteed revenue streams; they were dependent on project performance and market conditions.

2. When was The Americana at Brand project approved and developed?

• 2004: The Americana at Brand was entitled and approved as a mixed-use redevelopment project.
• At the time of approval, it was among the last major mixed-use redevelopment projects approved in Southern California under the redevelopment framework.
• The Glendale Redevelopment Agency negotiated a Development and Disposition Agreement that included “participation thresholds.”

These thresholds were designed so that:

• The developer would first earn a defined Developer Return.
• Only after those thresholds were exceeded would the Redevelopment Agency (and indirectly the City) participate in net revenue upside.

3. What happened to redevelopment agencies statewide?

• June 29, 2011: The California Legislature adopted ABx1 26, establishing a framework to dissolve all redevelopment agencies.
• December 29, 2011: The California Supreme Court upheld the dissolution law.
• February 1, 2012: More than 400 redevelopment agencies statewide were dissolved, including the Glendale Redevelopment Agency.

Cities were prohibited from continuing redevelopment operations.

Click here to read the Dissolution Act.

ABx1 26 (chaptered bill text, June 29, 2011).

4. Why did the State of California Dissolve the RDA’s?

The State of California ended redevelopment agencies to free up funding urgently needed to maintain essential state provided services and avoid additional taxes following a severe recession.

Eliminating redevelopment allowed the State to redirect those revenues and stabilize its finances.

This action came at the cost of locally controlled municipal redevelopment agencies and long-standing local economic development tools, effectively shifting funds that had been locally reinvested toward addressing statewide fiscal needs.

5. What replaced redevelopment agencies after dissolution?

Upon dissolution:

• Each former redevelopment agency was replaced by a Successor Agency.
• Successor Agencies were not continuation redevelopment entities.
• Their sole function was to wind down redevelopment, subject to strict State oversight.

Successor Agencies were required to:

• Pay enforceable obligations approved by the State.
• Terminate agreements that did not qualify as enforceable obligations.
• Dispose of former redevelopment assets as mandated by State law.

To learn more about the Successor Agency, click here.

6. How did dissolution affect The Americana at Brand revenue participation agreement?

The revenue participation structure for The Americana at Brand was tied to:

• A Promissory Note, which contained the Developer Return and Developer Preferred Return thresholds.
• Ownership of redevelopment assets, including The Americana at Brand parking garage.

Because:

• The participation thresholds had not been met prior to 2012, and
• Dissolution law required Successor Agencies to divest redevelopment assets, the Successor Agency could not retain or continue the original redevelopment participation framework.

7. What happened to The Americana at Brand parking garage and promissory note?

• As required by redevelopment dissolution laws (including subsequent amendments through 2015), the Glendale Successor Agency was required to sell former redevelopment assets.
• This included:
  • The Americana at Brand parking garage
  • The Promissory Note governing potential future revenue participation

Prior to sale:

• Both assets were independently appraised, including the potential future value of the participation provisions.

8. When were the assets sold, and for how much?

• 2015: The Successor Agency sold the Americana parking garage and Promissory Note to the developer.
• Sale price: $2,850,000

This sale permanently terminated the redevelopment-era participation mechanism.

9. Who received the proceeds from the asset sale?

Under State law:

• Sale proceeds were deposited into the Redevelopment Property Tax Trust Fund (RPTTF).
• Funds were then distributed to affected taxing entities, which include:
  • Local school districts and community colleges
  • The County
  • The City
  • Other local special districts

Importantly:

• There is no fixed statewide percentage split.
• Proceeds are distributed based on each entity’s existing property tax allocation share within the applicable tax rate area.

10. Does the City receive ongoing revenue from The Americana at Brand today?

No, not directly from The American at Brand.

As a result of:

• The dissolution of redevelopment agencies.
• The mandatory sale of redevelopment assets.
• The sale of the Promissory Note governing participation thresholds. The City no longer has a legal or contractual mechanism to receive direct redevelopment-based revenue participation from The Americana at Brand.

Downtown Glendale is recognized as a regional destination location, resulting in more than 50% of sales tax revenue being paid for by non-Glendale residents. 

11. Why was the lack of, or elimination of revenue, not mentioned before?

It was, and reported by the Glendale NewsPress: Glendale Council Rues Americana Revenue

12. Why does this differ from how people typically think about public/private partnerships?

Redevelopment projects:

• Often relied on long-term, contingent financial structures, not guaranteed revenue.
• Were fundamentally altered by State action, not local policy decisions.

The dissolution lawsretroactively changed the landscape, forcing cities statewide to unwind agreements and divest assets regardless of original intent or long-term projections.

LA County Analysis, click here.