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Reno Aces looking for help

According to a presentation given to Washoe County Board of Commissioners yesterday, if the Reno Aces can't refinance their deals with the City of Reno and Washoe County, there is a good chance the entire operation could go belly-up.

Check out the presentation below, in both PDF and embedded PDF format. The final three bullet points of the presentation read:

- The city/county/team will also seek legislative approval to increase the Rental Car Tax subsidy in an effort to alleviate the need for the city/county/team payments necessary to operate and maintain the stadium.

- We realize that there is opposition to using General Fund monies to support a redevelopment project, but baseball should no longer be considered a redevelopment project because of its success. It should be considered a viable community project that needs financial support to continue the long stream of benefits it provides to the city and county.

- Without this General Fund public support the team will not be a financially viable enterprise.

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The reason the Reno Aces are in such trouble is partially because the City of Reno has not been able to pay the Aces their yearly payments originally agreed upon. As much heat as the city got for their original deal with the Reno Aces, they were actually pretty smart, by saying in a nutshell, 'Well if our redevelopment districts are underperforming in terms of tax revenue, and there is no revenue to pay you, Sk Baseball, then we can just let the payments build up. Oh and if we can't pay off all those built-up payments in a certain span of time, then that amount owed is forgiven.' So when Dave Aiazzi and others publicly stated that ultimately, the City of Reno isn't on the hook for anything if the stadium fails, they were being pretty accurate. But, things have changed.

The Reno Aces, who was relying on that money to pay off their own loan, is in need of this money or the Reno Aces won't be a financially viable enterprise.

Now the Reno Aces want the City of Reno to pay at least part of the payment originally coming from the redevelopment agency, out of the general fund. The original agreement was at least $1 million in payments, now they are asking for $750,000 a year out of the general fund, but to make it easier on the city, the city could essentially 'halt' payments of the identical amount to pay off the loan to move the fire station. So instead of paying off the fire station loan, they would be paying the Reno Aces directly. I'm not quite sure what happens to the fire station loan then.

Here are some of the highlights of the new deal, as reported by Brian Duggan over at RGJ:

- Payments yearly from Reno (and Washoe County's) general funds. Reno's chunk is already defined at $750,000 over three decades.
– Almost $100,000 in yearly payments from the Reno Redevelopment Agency over the next five years.
– Expansion of the county's car rental tax that is already backing $30 million in Aces Ballpark bonds issued by Washoe County.
– A new "ticket tax", which will require approval by a yet-to-be-formed Stadium Authority. That's expected to generate $350,000.
– The Aces Ballpark owners currently pays a $1 lease payment to the Reno Redevelopment Agency to use the stadium. Under the new deal, they would pay at least $1 million a year.
– STAR Bond District - The stadium exists in a Sales Tax Anticipated Revenue district, meaning more than 60 percent of the sales taxes collected in that district could be withheld. If I recall, Phase 1 (the ballpark) did not qualify for STAR bonds however Phase 2 (Freighthouse) did, and that's why it was a big deal to not have any retail operations going on prior to its adoption as that is one of the stipulations for forming a STAR Bond District and the qualifying properties within it. I don't remember the length of time but I remember there can't be any retail activity for a certain time span before the district is adopted. The STAR bond debate went away when it became apparent SK Baseball was not in a position to complete any future phases any time soon, but now SK Baseball is asking that those Sales Tax revenues be withheld to pay development costs for the qualifying phase...I think. This crap is so complex it takes a brain surgeon to accurately follow it.

This all goes before the City Council October 24. If you read their presentation, the Reno Aces have laid out an impressive argument as to why to refinance this. The Reno Aces have brought a lot to the community indeed.

If this were a debate, the pro side would be arguing that this deal doesn't really change anything, and that the City was paying off the fire station loan with $750,000 yearly anyway, and what's another $100,000 from the Redevelopment Agency when city officials say that money is available due to an unrelated property tax settlement.
The Against would argue that the City of Reno originally set up the deal to protect themselves if the Reno Aces couldn't succeed financially, including snatching the stadium if the Reno Aces left any earlier than their 15 year contract stated. So then why would the City and County commit to helping out the Aces from their general funds? And if Herb Simon is one of the richest dudes on the planet with a net worth of $2.2 billion, why can't he absorb the loss like any other business would have to? A full-blooded conservative would argue to let the free market dictate the Reno Aces' success, and if they can't survive on the original deal, then so be it.

So what are your thoughts? Should the City and County agree to the new deal to save the Aces?

 

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