News 6-21-09 The Big Land Exchange
Post your commentsPosted by: Paul - 6/21/2009 8:10:49 AM
So is it 40 years or since the early 80's?
Posted by: DowntownMakeoverDude - 6/21/2009 8:21:33 AM
Early 80s sorry my bad! I finished this write up at 1:00 a.m. last night so it was a little late.
Posted by: Jimmy - 6/23/2009 12:22:27 PM
The end of the Blog suggests that the purpose of a Redevelopment Agency is to, "ACQUIRE land for redevelopment using what limited means it has." I could not disagree with this statement more. Where is it written that a Redevelopment Agency must take title to real estate in order to affect a policy goal. Government agencies (including redevelopment agencies) are notorious for making uneconomic real estate deals. In many other jurisdictions, redevelopment agencies have no interest or ability to take title to real estate, rather they provide non-cash financial incentives (e.g. TIF, bond credit enhancement, etc) to the private sector in order to provide an incentive to create projects that the city wants and users (tenants) will occupy. Since when is it the objective of Redevelopment to compete with the private sector? The city has proven to be a horrible owner of real estate. I can't see how that is going to change any time soon. I would suggest that redevelopment should focus their efforts on issues which the private sector cannot fix like public safety, homelessness, and public infrastructure. These are the issues that prevent more business and employers from locating downtown. PS: If there is a concern that the private sector will reap huge windfalls in such a scenario there are very easy mechanisms that will allow the City to profit (yes, MAKE MONEY) if and when a project is successful (look up "Carried Interest").
Posted by: DowntownMakeoverDude - 6/24/2009 9:25:52 AM
Hi Jimmy it says right on the City of Reno's Redevelopment Agency page that 'The Redevelopment Agency has the power to: buy private property for resale; reallocate property tax “increment” in order to finance the redevelopment program of the community; and use eminent domain (condemnation) to acquire property' In fact go to ANY redevelopment agency (including SFO, San Jose, Los Angeles, NYC) and you will find that one of the primary goals of a redevelopment agency is to acquire land in blighted areas, then either sell that land, or assist in its redevelopment. I agree, a government agency isn't the most ideal to hold real estate, however the intent here is not to hold onto the land indefinitely but to sell it/trade it/whatever to a private party for development when the time is right. The Redevelopment Agency is not acquiring any new land here, it is simply trading some land it already owns along the reTRAC corridor, which it acquired when the ReTRAC project was complete. This land was previously owned by Union Pacific.
Posted by: Jimmy - 6/24/2009 9:37:51 PM
Thank you for making my point. What effort has been made to get the this RETRAC real estate back on the tax rolls? Is it for sale, are they taking offers? Haven't seen much in the way of marketing on those properties. If this trade partner wants these parcels so badly, that would seem to indicate that there is value there? If my point wasn't clear in the first post, I apologize. Let me try to be succinct. Any policy goal of the city would be better achieved by providing appropriate incentives to the private sector, rather then entrusting a public agency to undertake their own real estate deal. I will trust you when you quote the enabling legislation for the redevelopment agency. But, just because that is how it is written doesn't make it right. Maybe that should be the focus of our attention, changing the mandate and charter of the redevelopment agency. You are entitled to your own opinion Mark. And so am I.
Posted by: DowntownMakeoverDude - 6/25/2009 7:49:00 AM
Hi Jimmy, first my name is Mike not Mark :) I agree with you on a lot of points. To clear up some confusion: The reTRAC properties are already on the city's tax rolls. The City Council does have concern that they would be trading properties with guaranteed lease agreements for properties with less revenue coming in, and they want to make sure that the property tax value/lease revenue is enough to continue paying off the bonds the agency is committed to paying off. The last things the city council wants to do is lower their revenue stream right now. The land trade, when and if its done, will have exact or near exact value. From the city's standpoint, no one is approaching the city asking to develop on its ReTRAC land, however there are parties interested in redeveloping the properties that Golden Eagle owns. It's very strategic for the city to own that land, as it connects downtown to the university. The Council however was not comfortable with this land exchange without knowing how it pencils in, including property tax revenue from both sets of properties as well as lease revenue. GEI is specifically after property with lease revenue coming in, so the city would be trading occupied properties for a bunch of blighted rental properties. However, that's one of the purposes of a redevelopment agency. One interesting side effect, is that the city discovered a bunch of unparcelled land downtown which if parcelled will bring in additional revenue into the redevelopment district.
Posted by: Jimmy` - 6/25/2009 9:45:21 AM
Sorry for being snarky. Much of what I read in your post sounded like it came from someone who had a vested interest in the continued growth in funding of the Redevelopment Agency. You can guess who I was referring to. I understand your viewpoint and agree with the underlying objective - continued revitalization of the downtown core. Where I differ with you (I think I understand you perspective?) is with respect to the best avenue to achieving this goal. From my viewpoint, the positives developments in the downtown area have occurred "in spite of" the Redevelopment Agency, not "because of". Give the private markets the appropriate encouragement and incentive to take on the ENORMOUS risks of speculative development and they will do it. A market driven solution is going to result in superior projects relative to the heavy hand of a government planned real estate development.