Reno Aces ball park deal amendment details

3/11/09 -SK BASEBALL AMENDMENTS - THE 'OFFICIAL' RELEASE - Reno, NV---The Reno City Council gave initial approval to changes to the existing agreement with SK Baseball and Nevada Land, LLC. to loan them money to ensure development of properties adjacent to the new Triple-A ballpark for restaurants, nightclubs and outdoor entertainment venues.
SK Baseball has invested $60 million in the stadium project so far, and is requesting City support to secure additional funds for further development. None of the money will be taken from the City’s General Fund, and the team has agreed to stay in Reno for a minimum of 15 years.
There are currently up to 275 construction workers employed to build the baseball stadium and this plan is designed to keep up to 125 of those people working past April and creates over 150 new jobs in the new restaurants and clubs.
In addition, the changes to the agreement will reduce the City’s total investment in the project by $6.6 million.
From the very beginning, the new stadium was viewed as a “catalyst project” that would stimulate the development of new businesses surrounding the stadium and have the potential to further change the face of downtown Reno. Due to the current economic climate, Council wants to work with SK Baseball and Nevada Land, LLC. to assist them in securing funding for the next phase of the project, keeping the momentum of stadium construction going.
This phase of the project will create a new outdoor venue for entertainment, provide new restaurants and nightclubs, and create additional retail space in the downtown, all within walking distance of several parking structures, existing businesses, the whitewater park, gaming, and the university.
The current agreement allowed for restricted funds to be used to finance a portion of the stadium project from the Redevelopment Agency’s property tax increment revenues generated from the project. By law, Redevelopment property tax increment funds cannot be used for any other use other than redevelopment. These funds cannot be used for schools, public safety, or any other governmental use.
These changes to the agreement will provide for a loan, if needed, to ensure that at least one million dollars a year is available for debt service until the project becomes self-sustaining. Once the project is self-sustaining, the tax increment will repay the Redevelopment Agency any funds it loans the project.
The agreement will not encumber taxpayers with debt or take money away from other governmental services. Due to the current economic climate and credit crunch, the amended agreement is necessary to allow the developer to secure financing for further development.
The stadium is projected to generate $480,000 in property tax value this year, compared to less than $35,000 the same land generated last year. This tax increment will be applied toward the first $1.0 million. Even with conservative estimates, any loaned funds are projected to be repaid within the first five years.

The details of the amendment are:

●    Phase two of the stadium project-the entertainment district-will start now, rather than in future years.
●    The changes remove a requirement in the current agreement that the City guarantee the first $5.0 million in tax increment in the first five years.
●    The agreement increases the eligible annual tax increment payment to the developer from the existing $2.0 million to $2.5 million and ensures a minimum of $1.0 million is available each year. The additional $500,000 is to help finance the entertainment district.
●    If those increment funds fall short of the $1.0 million minimum, the Redevelopment Agency will provide a loan using money from tax increment generated from the Agency’s Redevelopment Districts. We expect that loan to be less than $500,000 a year for three years.
●    When the stadium project generates more than $1.0 million in tax increment, the excess will be used to repay the loan.
●    If funding from the redevelopment districts is not available, the responsibility will accrue to the next year.
●    If the amount cannot be generated within 20 years, the developer will forgive any obligation.
●    In exchange, the developer will increase the minimum time for the team to stay in Reno from 10 to 15 years.
●    Another new benefit is that the developer has also agreed to purchase the Regional Transportation Commission CitiCenter site for $6.6 million when it begins development.

The last point is significant as it saves the City of Reno’s Redevelopment Agency $6.6 million, reducing the entire investment by the City to about half of what it originally was. Under the original agreement, the Agency would have had to purchase this site for the Ballpark District development.
The stadium and related development is helping to further diversify the City’s economy and-according to a report by Economic Research Associates-will generate more than 15,000 new lodging room nights annually and $19.4 million in annual economic impacts.
Redevelopment projects, such as the West Street Market and Cabela’s, and downtown improvements, such as the whitewater park, have helped to create recreation and shopping opportunities for tourists and locals alike. This month it was reported that Reno gaming was slightly better than last year at this time, while Las Vegas experienced a 16% drop over last year.
The Baseball stadium alone is generating hundreds of jobs. In addition to the construction jobs and 50 positions at the team’s headquarters; SK Baseball anticipates hiring approximately 200 people to work on game days, and an additional 175 for concessions. The opening game is still set for April 17, 2009.
SK Baseball reported today that $1.9 million in season ticket sales has been generated so far exceeding their expectations, and 15 of the 20 boxes are sold.

Comments:

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Posted by: James - 3/11/2009 10:21:09 PM
As a Reno Aces ticket holder, I would like to see the restaurants and clubs get built so there is something to do beforeand after the game.

Posted by: Mason - 3/11/2009 11:06:47 PM
The dumbest thing those people could do now is to stop developing around the baseball stadium and leave it as just a stadium. I agree with you Mr. Azzi! Glad you are my councilmember.

Posted by: Holly Fogerty - 3/12/2009 9:05:41 AM
I feel that the public in this case may not know what is best for the city. If some of the residents of this city had their way nothing would ever be built or constructed and this city would be a farming community still. That might be what the 60+ crowd in Reno wants, but the 40 and under crowd wants a virbant urban city with many activities and things going on.

Posted by: Bugsy - 3/12/2009 9:16:16 AM
Hey Mason, Did council member Azzi say that he wanted the longs drug store to be built around the stadium because he did say earlier that the longs drug store downtown is just as important if not more important than the stadium. Im still baffled that a city leader ( thinks he is a leader) would say somthing that dumb.

Posted by: Hank D - 3/12/2009 9:46:09 AM
Go Jessica! She is always the most common sense council up there. Jessica for mayor!

Posted by: Stephanie Kinner - 3/12/2009 10:44:23 AM
There are some good times ahead for this city. But not before we enter the dark times.

Posted by: MikeO - 3/12/2009 11:21:36 AM
Reno does not have the interest/population to support a stadium by itself right now. It NEEDS the surrounding retail, restaurants, and bars to be successful. Halting another project before full completion is the last thing downtown needs right now.

Posted by: MattO - 3/12/2009 5:08:14 PM
Hey MikeO, yes Reno has the supporting population, if you consider Sparks and South Reno and Spanish Springs, that's almost a half million people! That's enough.

Posted by: TahoeTeal - 3/12/2009 8:05:47 PM
Holly.......I'm in that group you described as not wanting any new development. You're wrong. My wife and I spend lot's of time downtown. We appreciate the efforts to make a more vibrant urban atmosphere downtown that developers and city officials are making. We've enjoyed the restaurants, bars, theaters, etc downtown. We've enjoyed the Beer Crawl, Wine Walk, Rubber Duckie Race, and most the other activities downtown. We're quite comfortable around a younger crowd. Thanks for thinking of us though.........

Posted by: DowntownRenoFan - 3/12/2009 11:51:32 PM
Jessica is the only person who voted on this that actually acted like a representative of the people. These baseball folks got a sweetheart deal with the community subsidizing the stadium. They insult this community by asking for more before the first pitch, and these dopes that represent this community are not laying a red carpet, it's more like a golden carpet. I hope everyone who voted for this and even the cowards who abstained get voted out of office next term.

Posted by: SoutheastGuy - 3/13/2009 9:11:26 AM
Jessica Sferazza, you are amazing. I moved to Reno about a year ago from Manhattan, and you do not see the kind of healthy debate I saw in the council meeting. And you listened to your contituents, most of which I am sure was against this deal, and you battled the elements in city council for an hour. I watched the meeting on SNCAT. If you run for mayor, you have my vote.

Posted by: Mark W. - 3/13/2009 10:31:33 AM
Man, Bugsy - bit of a chip on that shoulder of yours? I kid, I kid. Seriously, though, people don't seem to realize how spectacularly a stadium (or other single-use, large scale venue) can fail if it's not supported with other uses or options. A stadium standing empty in the off-season with little else in the area will attract no foot traffic and will come off as a "one-trick pony" development. There's no real downside to developing alternative uses in this area. A stadium by itself will be dead when not in use, but adding bars/clubs/restaurants can increase the popularity of the stadium and entice "on-the-fence" spectators that would otherwise have little interest in catching a game, and keep the neighborhood alive at other times.

Posted by: Chuck U Farley - 9/27/2010 2:04:41 PM
How nice the City of Reno can afford to subsidize developers for hundreds of thousands of our tax dollars yet cannot afford to provide adequate neighborhood services and public safety. Reno City Council: "Making It Great"

 

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