Alrighty so we moved onto part 2 of the West Street Market meeting. There was just as much turn out as before, in a much less hot room.
Here's the breakdown:
Public Comment section was up first:
Matt Polley - owner of Java Jungle and Riverwalk Merchant Association member, said that the West Street Market was "Proven to be viable asset to downtown Reno" and that they have the "complete and full support of RWMA."
Everyone else passed their opportunity to speak at the beginning of the meeting in favor of discussion later on.
Dick Scott said based on discussions he's had, the leases 'may not all be the same' and that some work needs to be done on that. City staff is looking into the leases.
So here are the cost estimates that were introduced to the group by Gillian for each of the options to be presented to city council for the market.
Not included in all the costs below is the $350,000 that the Redevelopment Agency would have to give back to HUD if approximately 10 more jobs aren't produced by the market within the next year or so.
Capital is a one-time cost (such as improvements etc).
Option 1: Maintain Original Vision of the Market:
Capital: $55,000 would have to be invested to fix the roof (which leaks when it rains), finish floor etc
Annual: $192,000 this year, but $185,000 ish or less in the next year, as many of the costs included in the first year's operating cost won't be present. The lease itself is $142,000, plus the cost of utilities, maintaining the building, and providing security.
Option 2: Change vision of market to reflect tenant desires - including adding cabaret
Capital: Includes SUP, fee schedule, relocating bathrooms, installing firewall or sprinkler, security beyond 10 p.m $115,000 (however see below, the RAAB Board feels much of this capital cost can be avoided)
Annual operating costs: $220,000
Option 3: Develop non profit incubator -
Capital - $6500- Includes fixing floor and roof but not doing sunshades.
Annual - $135,000
Sublease entire space to Entity:
Capital: $350,000 to pay back to HUD since the required job quota would not be met. If the entity who subleases it can create the jobs in lieu of RDA, city staff explained HUD would probably be willing to negotiate on who exactly is creating the jobs, especially in this economy.
Close Market Down:
Capital: $1,532,500 (worst case scenario for cost of getting out of lease). Cost of 8 year of lease left.
In the worst case scenario, in all of these options the $350,000 would have to be paid back if 10 additional jobs aren't created within a year.
Dick Scott chimed in and feels there is potential in the market with the right tenants and business plan.
Then there was a 6th option, one the tenants drafted in between this meeting and the prior meeting.
6th Option from Tenants:
Rick Martinez mentioned he met last Friday with most of the tenants. The gist of their proposal is increasing revenues and lowering expenses. They feel the original vision of the market is a sound vision. They would like to help aggressively seek out tenants, and propose daily management and operation of the market, from scheduling events to handling security to handling their own marketing. They understand the Redevelop Agency's situation regarding lack of staff to run the market, and want to step in as much as possible to help alleviate the pressure of running the market. The West Street tenants believe they don’t need security - and would like to eliminate it completely on a trial basis. The Security is there typically from 5 to 10 pm. daily. The tenants willing to contribute custodial duties and suggested the city take another look at their custodial contract for West Street because they notice a lot of waste going on in that area. Rick also suggested putting locks in thermostats so customers can't adjust heat, and mentioned on many occasions the heat was left overnight due to a lack of any one person being in charge of checking to see if customers toyed with it. They also suggested landscaping the courtyard and providing better seating, a cost estimated to be around $10,000, which they are hoping the agency would contribute. The tenants mentioned they are designing a directory to mount outside the gate - they are doing that at their cost. The tenants also propose taking over the marketing, including web site, Facebook, submitting events to local papers, etc. This was estimated to be a cost of $60,000 when there was actually a marketing budget.
After hearing from Rick, the board continued to discuss the situation. The discussion often morphed between getting Se7en a cabaret license, setting the hours of operation, and dealing with the financial status of the market as a whole.
The RAAB wanted staff to check into the legality of requiring a cabaret license, IF the tenant association 'finds' the events to book, and then the Redevelopment Agency 'approves' the events. Because the redevelopment agency would approve the events, they would not need a cabaret license. The Event Planning department was there, and said that was walking a fine line on the tenant association requiring a Special Use Permit, something all venues with live entertainment need whether they serve alcohol or not. The Board still felt this was legally ok.
The discussion then drifted back to the occupancy issue of the back room, and the Board recommended that fire bars and exit signs be installed in the back room to increase the occupancy, thus solving that one particular issue.
The discussion then drifted to the actual activities themselves. Dave Evans Deputy Chief was there, and said he doesn't want to see West Street Market turn into what some of the other bars downtown have become, a major nuisance after 1:00 a.m. However it was pointed out by RAAB board member Mike that events at West Street Market end at 2:00 a.m. usually before downtown's problem hours of 3:00 and 6:00 a.m. Dave confirmed a single unarmed security guard doesn't do any good to take care of any major incidents...and the best bet would be to contact police directly, circling back to his original concern of West Street turning into something that would require more police intervention than it currently does.
The board discussed the tenant's proposal, with most of the board agreeing that they don't want to get in the way of the market being a success, and everyone liked the idea of tenants taking on more responsibility for the success of the market. Dick Scott added "'We're not there to be a deterrent."
All board members agreed however that the RDA would have the last word in events being planned there, both to skirt the cabaret license issue and to make sure nothing too wild goes down there. Dick Scott trusted after meeting the tenants that none of the would want to self-destruct their own business. Dick Scott added that much of this would have to be worked out with legal counsel and various city departments.
Nevada Econet mentioned they would like to sit down with tenant association and help plan out some of the events, particularly the farmer's market.
Pete Wallish from the Redevelopment Office added there could/would be some liabilities the city would have to contend with, but If tenants were able to form their own association and LLC, they could take on the liability.
Mike motions to continue original vision of the market and allow tenants to apply their plan.
Soon after though that motion was rescinded so individual motions could be made for recommendations to the council.
First motion was to increase the occupancy of the back room with tenants paying the cost to do so (approx. $500 for exist signs)
Second Motion - Maintain original vision of market with caveat with tenant association be given more responsibility with agreement for liability - RDA would have final approval with programming.
The Third motion was to have all events to be booked by the Tenant Association and not by any one tenant, and that all stages would be used as community stages.
So all in summary, the RAAB does not want to close the market down. Those words didn't even come out of anyone's mouths. They all felt that the tenants should be given a chance, and that the market hasn't been open long enough to really make it a success. They want to find a way if possible legally, to avoid paying an SUD by allowing the RDA to have final approval for events and the tenants simply presenting them for approval, and possibly avoid a cabaret license by having the Tenant Association as a single entity present events to be scheduled by RDA, instead of just one business owner, such as Se7en, scheduling events. The code enforcement officer guy confirmed this would not require a cabaret license if the group as a whole presented events and the RDA actually approved them. I'm sure city council will want Legal to confirm this.
There was a lot of seemingly gray legal areas, such as who exactly would be liable for what, and what kind of permits would have to be issued if Redevelopment Agency simply approved the events that the West Street Tenant Association scheduled or 'discovered.' It will be interesting to see how the city council reacts to this. But it was a good start, I'm really behind the tenants on this one, I want the market to work, it's one of my favrotie hangouts downtown.
I doubt they will vote to close the market at this juncture. It would be very expensive in the short term to close it now. That's my prediction. Where on earth would they come up with $1.5 million (worst case scenario) to get out of the lease? So I predict the council will give it at least another year. I feel the city council should look closely at the tenant's proposal, and I hope the tenants go to Wednesday's meeting so the council can directly ask them questions, which is often what happens at the council meetings.
I think this solution is the best chance of the market surviving. The Redevelopment Agency is in no position to try to run this market as they have in previous years. There is no staff. And an ominous sign of things to come from Mr. City Finance Accountant guy included the fact that they were still crunching numbers for next year's budget, and warned the RAAB not to rule out the RDA's budget/staff could be reduced even further. And somehow, these jobs have to be produced.