CAC Meeting Report - Various Projects Downtown
1/7/09 - CAC MEETING REPORT - This was one of the more contentious CAC meetings we have had in a while. Take a few newbie CAC members and add a dash of overwhelming badly timed agenda items, and you get quite a lively discussion. The meeting went so long I had to leave 2.5 hours into it. I think maybe it might have been a good idea to first brief the new CAC members on the redevelopment districts, how they work, priority projects for each district, how and what a redevelopment agency does. These new CAC members had no idea what they were stepping into, and didn't have a chance to really review the issues before them.
So let's get into the issues. We'll start with the easy ones.
1. CVS Pharmacy - As reported before, CVS Pharmacy acquired the Longs Drugs brand, just as Longs Drugs was starting to make strides towards opening their downtown store, located on the corner of 2nd and Sierra. Once CVS acquired Longs, they halted any expansion plans to assess their situation and develop a new plan for expanding stores. Because Longs Drugs technically never occupied the space, they consider it an expansion and not an existing store. CVS right now is focusing on rebranding the existing Longs Drugs stores into CVS stores. Once that is done they will look at expansion plans. Redevelopment director Mark Lewis was confident they would eventually open the store, as CVS Pharmacies were known for opening stores in inner-city and downtown areas. However a coalition representing a large number of condo associations and rental projects including Riverwalk, Palladio, Arlington Towers, spoke up about putting a boutique grocery store like a Fresh and Easy into the space instead. They were disappointed Longs was bought out, since Longs has a respectable grocery section and CVS Pharmacies don't. CVS has an 8 year lease, however they can sublet the lease to another company if they choose not to open the store. There are currently no incentives the CAC could think of to present to CVS to encourage them to open the store faster. Jessica Jones, redevelopment staffer extraordinaire, had a fabulous idea to postpone or waive building permit fees for new developments to encourage development, and will be presenting her idea to the Council on the 14th.
2. Sierra Spirit - Downtown residents attending the CAC meeting were dismayed Sierra Spirit would be halting service as soon as March 1, and offered to do anything possible to keep it, including paying a fare to ride the bus in order to keep it in service. Mark Lewis mentioned it's not too late to approach RTC with options/solutions to keep the bus route operating.
3. Baseball Stadium - 70% complete, still on tap to open in April.
4. Presentation of L3 Development's proposed STAR Bond District - Believe it or not, this WASN"T the most debated issue at the CAC. An independent firm conducted two studies to see the feasibility of STAR Bond Districts for both the northeast Tessera Project and L3 Development/Montage area. I'll start with L3. L3 Development's proposed STAR Bond District includes the Montage (including unfinished retail portions), the Fitzgeralds, the eastern block of Sierra Street, and the ReTRAC Cover. It wasn't stated how any bond money would be divided up between those three entities, but it was stated the entities involved would be L3 of course, then Corus Bank who now owns the Montage, and the Redevelopment Agency itself, which owns the land the ReTRAC Cover created. This project was in the $247,000,000 construction estimate range, however the city council decides how much of that is paid with bonds. The L3 Development project would create approx. 2,900 jobs, 300 of which would be permanent. The project consists of 760,000 square feet, broken down as 465,000 residential (Montage), Lucky Strike retail at 153,000 s.f., Montage retail 19,000 s.f. , a Virginia St. entertainment 32,000 s.f., ReTRAC retail 20,000 s.f., and something called the Lucky Strike Garage at 54,000 s.f. The study showed a positive fiscal analysis over a 20 year period, with 85% of sales tax revenue being generated from out of state visitors (one criteria for STAR Bond). Both Dick Scott and Nat (owner of Peppermill Casino) were heavily against the STAR Bonds being used for a casino, but Mark Lewis reassured them opening a casino wasn't part of L3's STAR Bond plans.
5. Presentation of the Tessera Project fiscal impact analysis - Presentation of the Tessera Project fiscal impact analysis - This project is situated at the gateway of the city and the university in northeast downtown, from Virginia Street over to Evans Avenue, and from 5th Street up to 7th Street (and actually over the freeway to the University). Much larger in scale, this project would redevelop an area currently dominated by lower end rental properties, vacant lots and low-end weekly motels. The mixed-use project consists of an urban retail center, entertainment venues, a non gaming hotel, office, parking, gathering areas, a pedestrian bridge over I-80 connecting Lake Street to the University, and making a portion of Lake Street pedestrian only, and includes a total of 1.2 million square feet, and up to approximately 18 acres. The study found that the project meets and exceeds all the criteria required, and will produce an estimated $154 million in new property tax, $128 million in sales tax revenue and $1 BILLION in economic impact over the course of 20 years. The project will create 6,200 JOBS, 3,200 of which will be permanent.
The Meridian Business Advisor reports looked HUGE as the presenter lady (didn't catch her name) thumbed through them stating figures and numbers. I wanted to get my hands on the actual reports but didn't get a chance to.
So that's Part One of my CAC meeting report. I'll post part II this afternoon, which will include the priority project updates as well as the most hotly debated issue of the meeting; RDA2 loaning RDA1 money to acquire the RTC site.
CAC MEETING PART II - Ok, onto the second half of the meeting.
1. - Loan from RDA2 to RDA1 - Before I dive into this, some background history in case you are new to the site. We have two redevelopment districts; RDA1, which encompasses downtown, and RDA2, which are smaller separated areas which include portions of South Virginia Street, it includes Grand Sierra Resort, the area around Cabellas, parts of east downtown not in RDA1, and a couple of other areas.
As part of the agreement for the ballpark, the current Citicenter land (located between Plaza and 4th Street and Center Street) is to be handed over to the baseball folks, Nevada Land II, for eventual construction of supporting retail for the ballpark. This is already agreed to and finalized. However, now that the council is committed to fulfilling these obligations for the baseball folks, of course something happened with selling the bonds to pay for it (I just don't think they could sell them) so the Council had to scramble to find a way to buy this piece of property from RTC to be in a position to fulfill their obligations with the baseball folks. The Redevelopment Agency came up with the solution of loaning money from RDA2 to RDA1, in order to acquire the property, and also pay for the Facade Improvement Program on Virginia St. At the last city council meeting as I previously reported, this turned into a HUGE debate...with Jessica Sferazza at the center of opposition because RDA2 is mostly in her district, Ward 3. She went off on the whole idea, aggressively opposing it, and even wanting to give the baseball folks a different property in the City's property portfolio so RDA wouldn't need to buy the RTC property. I 'think' it was this discussion that sparked the idea that RDA2 perhaps wasn't fairly being represented by the redevelopment agency or the CAC.
SKIP TO PRESENT: The above events resulted in 4 new members being appointed to the CAC. They all have ties to RDA2, by either living or running businesses within that redevelopment area. This sudden shift of influence within the CAC had a profound effect on the meeting. So you can imagine the fires that were ignited when the RTC subject came up at this CAC meeting, with new members viciously opposing the idea. The debate went on for quite a while, centering around Nat Carasali (Peppermill Casino owner and new CAC member) not understanding why there are two redevelopment districts. This went on for nearly an hour. Yes, an hour. The ironic thing is the council already decided to pursue the loan (with Jessica saying no) so all of this discussion was kind of a mute point. I just wanted to scream out to the committee why there ARE 2 redevelopment districts, how and what redevelopment agencies do etc, but I restrained. The discussion ended with a special meeting being set up to brief the CAC with a walking tour of projects.
Future CAC meetings will definitely be more interesting with a larger committee and new members being placed in to specifically represent RDA2. What are your thoughts? Should the City Council and RDA take money from one redevelopment district to pay for property acquisition in a different redeveopment district? Or should they use the Sewer Fund (which has a surplus) instead to pay for it? I should add that it's perfectly legal, and even common, for redevelopment agencies to leverage funds between multiple redevelopment districts.