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West Street Market RAAB Meeting Part 2

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.
Annual: $0.

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.

Thoughts?

Comments:

Post your comments
Posted by: Clint Jolly - 4/12/2010 11:20:22 PM
I'm glad to see that the tenants came forward with a plan that made sense. As I said at last week's meeting I don't see the RDA having the staff or the drive to make the changes needed to show success. It seems like they have created a plan that will answer the major issues including marketing, licensing and leasing out the empty spots. I will do my best to support them as they move forward.

Posted by: renogab - 4/13/2010 10:04:19 AM
what a trainwreck. more proof that the city and the agency are in chaos. what's more alarming is that no one seems to see that and understand just how hopeless and helpless the position of the agency and the city is. mark my words and remember this date - by this time next year the redevelopment agency will have defaulted on its debt and will be shutdown - permanently.

Posted by: Downtown Makeover Dude - 4/13/2010 10:28:00 AM
Yo Kelly S! That was so not a cool comment, I deleted it. You can revise and resubmit if you'd like. It's fine if you criticize projects and the govt, but I draw the line at attacking other folks commenting. Renogab has the right to be gloom and doomy. The city is facing a $30 million budget shortfall next year, and the number could go even higher, since we couldn't make it through the last budget cycle without laying off even more people because it was worse than projected. I understand your point though, it's much more constructive to band together as residents and focus on the positive of what we DO have downtown, because millions of tourists still visit Reno each year and we don't want to make things worse for ourselves than they already are, just IMO. That's why I feel RDA needs to step back a bit, and let the tenants have a go at this. Closing it would be VERY costly.

Posted by: DowntownFan - 4/13/2010 11:49:19 AM
Hello reality check. Last time I was in the market, Earthly Delights had to nuke their food because they had no cooking facilities, and trucked in their food from Truckee, and the bakery shared that same microwave to heat cinnamon rolls for customers, and couldnt even bake bread or cake (only pies and cookies.) It wasnt impressive to a customer. I did like Reno Envy and the greek place, but the market needs more than that. They need another high end concept to compliment the wine bar. Hot dogs and wine and Greek food and a Mohito? Maybe not the right blend for a market. What about a season smoothie shop? Ice cream parlor? Juice Bar? A juice bar like Kava Juice would be nice in that space. Why not approach Butcher Boy to open a smaller location in there?

Posted by: Nevadagal - 4/13/2010 1:06:44 PM
This is for Downtownfan. It has obviously been a while since you have had the opportunity to check out the West St. Market. For one, Earthly Delights makes the majority of their food now and they are baking everything. Cakes, cookies, bread and even high end dessert. The bakery has been closed for quite some time and Earthly Delights has moved up to the front and given life back to the old bakery space. West St. Market was going after other marketplaces like Pikes Place, Ferry Building Marketplace and other great marketplaces. All of these locations have a variety of tenants. That way people could have a great glass of wine with a plate of Greek or a whiskey with their hot dog. All your ideas about other tenants are great but when businesses are going out of business left and right it is hard to justify opening a smaller location in a struggling economy. You should try to come down more often and see all the great things that West St. Market has going for it. Se7en has great drinks, West St. Wine has the best wine list in town, Reno eNVy has the most interesting shirts, Nikos has the freshest greek, Downtown Marketplace is serving up all sorts of yummy food, Earthly is still serving great food (even if you have to microwave it yourself) and soon there will be an amazing Gallery to spend a lazy Sunday afternoon. Buy Local, Shop Nevada and play close to home...

Posted by: urbanblog - 4/13/2010 10:12:31 PM
I think it's great that the tenants have come forward to run the place. The smart thing to do is to get the city out of the day to day operations of the thing. Still gotta insist that to feel like a market, it's going to need to be a little more "bustling" during a variety of day parts. That should be one of the top principles in anything they do moving forward.

 

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