STAR Bond Policies
Much like prenuptial's before a marriage between rich and poor, these are the proposed policies that will soon go before the city council for discussion and approval for allocating STAR Bond funds within the STAR Bond District.
The final version of these policies will direct STAR Bond issuance within the entire baseball STAR Bond District created on the east side of downtown Reno in order to help facilitate the construction of an entire supporting retail district for the Aces ballpark.
For those aren't familiar, the baseball STAR bond district includes the Bill Miller/Grant's Landing property south of the river, Park Center Tower, the empty lot on Lake/2nd Street where the Waterfront District was to go, the former Mizpah lot(s), the bottom floor of the bowling stadium, the stadium itself, the lot to the east of the bowling stadium, and more.
So for the purpose of discussing these policies, the 'Catalyst Project' is defined as both the stadium (Phase 1) and the bars/restaurants (Phase 2A) currently under construction to open this April.
The preaudit cost of this project is approximately $72 million. When taking into account land acquisition costs for both the City and Developer, stadium construction, the fire station loan for $10 million, etc, the cost equals about $81 million. The developer, SK Baseball spent $16 million to acquire the team, roughly $7 million to acquire land, and $15 million towards the construction of the stadium. Public funding commitments of the project thus far includes rental car tax bonds totaling $30 million, and property tax increment financing totaling between $20 and $48.5 million over a 20 year period. This makes the stadium approximately 100% publicly funded.
So let's get to the policies based on those figures. There are 4 of them.
Policy 1: Catalyst Project
- No additional public funds (i.e. sales tax increment) funds for Catalyst Project (Phases 1 & 2A) except as stated in Policy 4.
Policy 2: Other Freight House District Projects
- Set maximum percent of total projects costs to be reimbursed from sales tax increment
- Set maximum percent of total sales tax increment generated in the District in a single year to be used for any single project
- Project Cost reimbursements must be in balance with total District sales tax increment.
Policy 3: Priority of Funding for Other Freight House District Projects
- Incentive for any property owner in District to complete redevelopment projects quickly
- "First come, first served"
- Later projects subordinate to earlier projects
- Funding only on reimbursement basis when project fully completed
Policy 4: Uncommitted Funds for Catalyst Project
- Sales tax increment funds not used for other Freight House projects can replace property tax increment funds used for Catalyst Project funding, and/or repay inter-fund loan Redevelopment Agency used to purchase RTC Citicenter site.
When the Redevelopment Advisory Board discussed these policies, they added some recommendations for the council, such as the bonds could only cover 25% of costs & that the developer contribute 15% of the capital required, hiring local contractors, diversity of projects (not all bars or restaurants etc).
The policy I disagree with is Policy 4. I do not think the STAR Bonds should in anyway be used to repay or replace payments to the developers for Phase 1 and 2a. Any further funding of the Catalyst Project should be with private funds. I think the City Council should reject Policy 4 or modify it to exclude paying for past baseball district projects.
I do like the idea of other property owners in the STAR Bond District getting first dibs on the bond money IF their projects are shovel-ready.