Reno City Council discusses STAR Bonds

3/11/09 - CITY COUNCIL MEETING TICKER - STAR BOND DISCUSSION - I am typing this real-time as the city council meeting is going on so excuse any typos or errors. The redevelopment agency has been following the changes that have been rumored in legislation since last september. Since that time there has been hearings on star bonds and redevelopment agencies in general, although no specific bill has been proposed at this time. They do expect some sort of changes to be proposed in the next couple days. The biggest word of the day being floated around at the legislature is 'accountability' including during the construction phase and 2 years after completion of the project…also prevailing wage requirements not just at the development agreement stage, Jessica Jones also mentioned stronger no-compete requirements than what is currently in legislation - also rumored is pulling schools out of the 75% sales tax retention, also also limiting the layering of the funding of the project - legislation is looking at if you get STAR Bond funding, you don’t get Tax Increment funding as well at the same location. Bill deadlines are coming up this month.

Jessica Sferrazza then asked if staff had opportunity to look at impact of layering of types of taxes given to developers.."for example you could technically right now have a project that is in a Tax Increment Finance district and then also collect sales tax revenue on top of that?" She then asked if staff does analysis on what impacts would be to safety, school, state, etc as a whole with developers who might receive layered funding.

Jessica Jones responded by saying fiscal analysis by Meridian Business Advisors showed the breakdown of what funds were being used from what funding sources. However they have not commissioned Meridian to look beyond STAR Bond processes, but they could easily make that a requirement for a broader reach.

Jessica Sferrazza then mentioned she reviewed Nevada Land LLC's proposal - and didn't see what impact would be to have TIF and Sales tax going to one developer.

Jones responded by saying they haven't brought the STAR Bond proposals before council yet but should have ample time to include that analysis before bringing to council.

Jessica Sferrazza then asked if there something in the clause to see how long they have to maintain the 250 job requirement for Cabella's The City Attorney piped in and mentioned the Council imposed that on Cabella's, and had to meet that at the opening of Cabella's, and there was no enduring covenant they had to maintain 250 jobs for any period of time. They had to be open for a week in normal course of general business and have 250 people as of that date. Bob Cashell mentioned when they opened they had over 250 for quite a while.

Jessica Sferrazza then asked regarding estimated tourist generation, if there is any to verify they are actually bringing in 50% of the revenue for tourists, "how do we actually verify this?"

Jessica Jones responded by mentioning Summit Sierra Mall, even though they aren't a STAR Bond project, reports sales by zip code, we can include in accountability section in future STAR Bonds.

Jessica Sferrazza then asked "How did we verify with Cabella's?"

The City Attorney mentioned there is no requirement to maintain tourist sales numbers under current state law, so they are not requiring that data from Cabella's It only refers to a point-in-time 'opening' which involves the span of a week. They haven't released that information. State Law requires if it's reported it has to be in a confidential manner.

Since this was a report, there was no motion.

 

Comments:

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Posted by: Devin Sommerton - 3/11/2009 9:23:00 PM
Very accurate post Mike and I watched the meetings as well. Dead on, and one of the most important clues to the weaknesses of STAR bonds. At the Citys own admission, no steps were taken by anyone in the Cabellas STAR bond deal post-opening to track and verify at least 50% of the shoppers are truly from out of state, nor does the state require that information be tracked for any period of time. According to your post, any employment number requirements are only applied to when a STAR Bond project first opens, and not tracked over a period of time. Wonderful! The government should just make it easier and say No accountability is required by developer except for the first week of operation.

Posted by: Quinn - 3/11/2009 10:27:15 PM
We do an outside report that in a perfect world, these are what our numbers would be at the time the project opens? Who cares what the economy is like 5 years after the STAR project opens right? Then there is no accountability on the developer to make sure the project lives up to the intentions of the legislation? Is that what I get out of this STAR bond discussion? No wonder why developers are eager to rush their STAR Bond projects through before legislators change it. God forbid they be held accountable for their projects after they actually open! Ridiculous. Absolutely ridiculous.

Posted by: Mason - 3/11/2009 11:09:52 PM
I recall that Nevada Land is applying for a STAR bond in the near future. Is that not included in layering of finances since this is already a TIF district?

Posted by: Yancy - 3/12/2009 9:17:44 AM
I can see why congress wants to modify the star bond tourism legislation now. Thanks for the post guy, very informative. So now it's a race to see what STAR bonds can be pushed through before the legislation changes.

 

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