- Wow what a finale to a long spirited debate on whether the council should move forward in seeking money to fill a gap involving the refinancing deal for the Reno Aces.
The agenda item began with a comment period where Basin Street Properties mentioned they are days away from financing a $25,000,000 hotel next to their Jones Vargas Tower across from the ballpark, and that the Reno Aces have been a huge asset to his tower and the tenants inside.
Then two car rental companies came forward saying they were against the car rental tax increase, and then essentially called out by Jessica and Dave, saying they are possibly violating state law by charging local residents the extra car rental tax fee at the airport. Was an interesting little twist in the conversation!
Then, a convincing presentation by Jerry Katzoff on why the Reno Aces should receive the refinancing deal. All of his points were valid, including an estimated $25,000,000 impact to the local economy via a University of Nevada Reno impact study report. Another reason of course,e they are Triple AAA champions!
After a few more comments against the deal, it went back to council.
Sferrazza and Dortch then quite candidly pointed out the situation the city's parks are in and a $25,000,000 shortfall in public works repair, and then pointed out that the city is currently not in default in the current agreement with SK Baseball as it stands. Dortch also pointed out that the new city council can essentially null any agreement the current city makes. He also pointed out that Herb Simon personally backed the deal, and if he takes the Aces from Reno prematurely prior to the 15 year agreement, the city gets the stadium debt free. Zadra then asked 'where is the money going to come from?'
Hascheff then went to state very good points as to why to take the deal, because of additional benefits to the city with the new deal, including not defaulting on the fire station loan.
Zadra pointed out other people have come forward for help, including Summit Sierra Mall, and the city didn't help them. And that Tessera and Silver Legacy didn't come forward and ask for help from the general fund. Ouch it's take no prisoners tonight!
Some more memorable quotes from the discussion:
Dortch: "To commit our general funds, I just can't go there."
Gustin: "We close this down, we put 738 people out of work."
Mayor: "Why in the world would you ever want to turn your back on your partner or someone like Herb Simon or Katzoff. We need to honor our commitment to baseball"
Sferrazza: "At what point do we say, we just can't do it? (to Hascheff) You can't compare committing general funds to fix Moana fields, a public park, to something where you charge admission."
Sferrazza pointed out that in the completely hemorrhaged state the RDA is in, only bringing in $400,000 in tax increment and owing five times that in bond payments, it could conceivably be until the year 2020 when the RDA could finally afford to pay the Reno Aces their first $1.2 million annual tax payment owed to them under the current deal, and questioned where this money would come from for the new deal.
She also pointed out that in 2009, Sk Baseball came to the City Council with essentially the same argument in order to receive additional tax increment financing to build out the Freighthouse portion of the stadium, and that if they are breaking that agreement now, what's to stop them from approaching a future city council threatening to once again leave if more asisstance isn't given, particularly when this new refinancing deal stretches the commitment of both parties over a period of 30 years? And will the Aces really stay here another 30 years? Is there a precendent for that with other teams in the AAA league? What's the longest any AAA team has stayed at any one city? I don't know enough about baseball to answer those questions.
After some more discussion, and convincing 'for' speeches by Gustin and Aiazzi, ultimately Sferrazza, Zadra, Dortch voted 'no', and the Mayor via phone, Aiazzi, Hascheff and Gustin voted 'yes' to move forward with exploring the refinancing deal. Now they have to find the $150,000 to fill the gap between the fire station loan forbearance agreement that was coming out of the general fund, and iron out details in the contract before the final decision on Nov 6 or 7 (I think it was the 7th.)
No one seemed to compare the point that paying $1 million a year for 30 years is a lot different than paying $750,000 a year until we pay off a $3.2 million fire loan remaining. However, the $30 million SK Baseball wants from the city is in some ways 'cancelled out' by the fact the Reno Aces will pay $1 million a year for the land lease over the course of 30 years, instead of the current $1 a year agreement, and in the end, the city would own the stadium. In the original deal, the developers would own the stadium at the conclusion of the agreement.
To me the most interesting part about all of this is, the new incoming city council can essentially say no to the appropriation, and nullify everything that the current city council talked about. Dortch and Sferrazza repeatedly brought this point up, and Jessica mentioned that according to an article in RGJ, 6/7ths of the current city council candidates weren't for the deal. So, it will be interesting to see what happens down the line for sure.
In the meantime, city staff will now look for the gap in what the Reno Aces are asking for.
Excellent summation, Mike!