UPDATE 8-24-09 - Council member Sferrazza, at today's council caucus meeting, requested that Item B1 (See ORIGINAL POST) which was to be discussed on Wednesday, will be moved to a date some time in September, to give staff some time to gather information requested by council members at today's caucus meeting. The Mayor said he will move it to some time in September.
The key issue is how they will apply the remaining projected funding in Fiscal Year 2010-2011 and beyond, given that property taxes are likely to continue to be affected by the economy.
The projects are being prioritized in light of those projections, so Council wants as much information as possible to make some very important decisions I discussed below. Since the projections are for fiscal year 2010-2011, they don't immediately need to make any rash or hardcore decisions, and I applaud the council for taking some extra time to deal with this. .
So remember that full-blown audit that the City Council/RDA Board requested, including a project-by-project breakdown with funding and revenue sources? Well, those documents were posted as staff reports today, and it doesn't look good.
This post will hone in on some specific wording regarding the Baseball Deal.
City documents read that 'it is projected that from FY 2010/2011 to FY 2018/2019 there will not be enough resources from the Baseball District and the remainder of RDA 1 to fund the $1 million annual payment to the baseball owners. For the same period, expenditure reductions for RDA 1 operations and maintenance (staff salaries and benefits, services and supplies, etc.) will be necessary. In addition, for FY 2010/2011 to FY 2018/2019 funds from RDA 2 will be needed to make this payment.'
So basically, how I interpret the above is 'RDA1 and the Baseball District, for the next 8 years, based on what's currently downtown, will not produce enough revenue to cover the $1 million a year payment, so we're going to have to bleed money from every available source in order to make this commitment.' I don't think any proposed revenue from Tessera or the Baseball Entertainment District were included in these numbers, so if one or both of those were built out, it could change the long term outlook significantly. But for now, Redevelopment Area 1 has zero money for projects, unless that money comes from an alternative source like the American Recovery and Reinvestment Act I spoke of in an earlier post.
How stretched-thin the Redevelopment Agency will be in order to make this baseball payment will probably be one of the interesting topics discussed next Wednesday.
The staff report goes on to talk about Redevelopment Area 2. 'In RDA 2 the general fund resources are projected to increase from approximately $1.8 million in FY 2009/2010 to approximately $9.7 million in FY 2021/2022. Due to the payment for baseball, discussed above, and the State required set aside for housing, the funds available for operation and maintenance are somewhat limited. The required housing set aside is projected to increase from approximately $856,000 in FY 2010/2011 to approximately $7.2 Million in FY 2021/2022 if no funds are expended. The projected remaining funds available for projects and additional operations and maintenance range from approximately $73,000 in FY 2016/2017 to approximately $400,000 in FY 2021/2022.'
Sooo in case you didn't know about or understand the above, the State requires the Redevelopment Agency to set aside a certain percentage of money per year specifically for low-to-medium income housing projects. A senior-apartment complex like Carriage Stone Apartments is a a good example. If this money isn't used, it builds up each year, so that's why the fund would be $7.2 million in 2021 if none of it were used for projects in that time span.
So, as you can see above, things are just as bleak for Redevelopment Area 2. Much like Redevelopment Area 1, there won't be much use of the RDA General Fund to pay for even smaller-size projects. That's not to say there won't be any projects period-end-of-story, they will just have to be either privately funded or from other sources like the Recovery Zone Bonds, STAR Bonds etc. And if a project like Tessera is built out, that could change things significantly.
But when projecting 'hard numbers' as Councilwoman Sharon Zadra calls them, I don't believe they count projected revenue from future projects that aren't built. And that's probably the right way to look at the numbers. As much as both Pavich and Katzoff are committed to their respective projects, both have mentioned in recent city council meetings finding financing in this current market is nearly impossible, and in reality, neither of them will break ground on their major district projects until they find financing.
Also, perhaps the report isn't telling the full story, and it's not as bad as it seems....but we'll find out on Wednesday when the RDA Board/Council discusses it. Do I feel the baseball stadium was worth all this headache? I'm still pondering it. My heart says yes it's worth it, especially given there were 9,263 people at Friday night's Aces game in downtown Reno.
So does that mean that's it? Finito? Heck no! There are small businesses who, as I am writing this, are defying odds by opening up shop downtown in the middle of a recession. Ole Bridge Pub in the Palladio, and Gringos Mexican Restaurant are among those. The American Recovery and Reinvestment Act may provide opportunity to fund eligible projects throughout Reno including downtown. Plus the demolition of the Reno Sparks Gospel Mission and adjoining buildings and subsequent conversion to surface parking, the huge northeast downtown Land Exchange, the South Virginia Streetscape and Rapid Transit Project, and the Attraction of Geothermal Firms are still all funded priorities. There's still the hope Tessera will become a reality, and Sk Baseball should be starting construction on the second phase of their ballpark expansion very soon.
City of Reno staff did an amazing job putting this info together, and I'm continually grateful it's available to the public.