Carson City/Nugget Team member Mark Lewis, the former Redevelopment Director of Reno, was referenced in a Reno newspaper story this week as being accused of not providing “clear information” about the financial intricacies of the Reno Aces Ballpark project. And now there is big trouble, maybe millions of dollars deep.
As Reno redevelopment and city hall officials have admitted, in a story in the Reno Gazette Journal, the city is not able to make its payments due on the project. Reno City Councilwoman Sharon Zadra told reporters, “We got bad information from then Redevelopment Director Mark Lewis.” Zadra said Lewis did not properly inform the city council that property tax revenues required from two nearby redevelopment districts to help with the debt load, could fall short in helping the city meet its obligations.
Reno Redevelopment Agency Advisory Board Chairman Dick Scott also chimed in saying, “We are out of business.” Redevelopment Administrator John Hester is quoted in the RGJ article that he and Mayor Bob Cashell are asking Reno Aces owners to give back to the city some of the sales tax incentive revenues they were promised in the original contract. They said if the city can’t acquire some “give backs” from the owners the city’s redevelopment efforts in the downtown could be severely damaged. They said it could also jeopardize the financial health of the city affecting emergency services, parks, streets and more.
RGJ reporter Sue Voyles reported that the owners of the Reno Aces received a major portion of downtown property tax revenues in order to convince a reluctant bank to loan them money toward the ballpark project. The owners were also awarded up to 75% of sales taxes generated from it’s adjacent “entertainment complex” to help pay building costs. Again, the city is trying to get the owners to let loose with some of those sales tax revenues to make up for a fall in property tax revenues from adjoining redevelopment districts. City officials are also fearful of shortfalls rolling over year after year if they build up and are not paid off. Generally depressed property values all over the state do not bode well for land values to rise sufficiently anytime soon to help Reno meet it’s debt obligations on the ballpark.
Lewis served for a time as the City of Stockton California’s Redevelopment Director during which he was responsible for the construction of a huge downtown riverfront recreation redevelopment project complete with a large sports stadium, restaurants, and a performance hall. However, he was fired before the project could be completed. The Stockton City Council complained that Lewis was not transparent with them in ways that contributed to the cost of the project skyrocketing by tens of millions of dollars over budget. And that Lewis signed an agreement on behalf of the city that gave the sports teams based there subsidies that caused an operating loss of $2 million a year to the city.
Meanwhile Reno Aces Ballpark project visionary Mark Lewis is in the process of helping to craft a development agreement between the Carson Nugget, the Carson City Redevelopment Agency and as yet unnamed developer to construct a new city library, an economic incubator, a digital media lab, high rise parking garage, high rise mixed land use building, public transit hub and public square. The city’s share, $45 million. No firm financing scheme has yet been submitted to the Carson City Board of Supervisors. But project boosters optimistically say, “We’re working on it!”
#1 by dhataway on January 28, 2010 - 2:32 pm
I am somewhat troubled by the tenor of this article. Elected officials are always looking for a scapegoat. It seems the comments by Councilwoman Zadra is the ultimate in 20-20 hindsight. The Aces Project was but together in good faith and then the economy went to hell including a major reduction in property values – the taxes from which were to meet city obligations for the project. Although I am not familar with the project, the Stockton issue could possibly fall into a similar situation.
With that said, this series of events does reinforce my belief our City officials need a second independent opinion on the Nugget project to make sure all the possible issues have been addressed before $40 M is put on the table. I am not against this complex project but the financial health of the community could be at stake if a decision is made without complete information.
#2 by Dave Morgan on January 28, 2010 - 4:03 pm
Clearly stated. And I might add that before they take on an economic incubator, which seems to be the centerpiece to this endeavor, they should fully investigate what an economic incubator is, how it’s developed and gauge whether it would get the proper support and expertise to make it successful here in Carson City. Successful incubators are generally creatures of very large cities with copious quantities of high-end university research and development support, with ample engineering and industrial manufacturing expertise. And there is usually two to five year lead times before an idea translates into a viable product with a company built around it. Incubators are not “rescue machines.” They are utterly unique organizations that require long time development and investments, primarily from federal and state governments with no small quantities of start-up monies from “Angels and Venture Capital” types. Cities in financial trouble don’t fire them up like a lawnmower.
#3 by dhataway on January 28, 2010 - 4:26 pm
The incubator could be an issue for the reasons stated, however, it is possibly not a deal breaker. For example, it is a fact that the more foot traffic in a downtown core from permanent residents the more vibrant the core not only for the new planned retail but also the visual arts center, the theater, the casino and the existing retail and food establishments. But studies such as how fast X number of new residential units can be absorbed into the community in relation to the existing housing stock needs to be addressed. Many details….Hopefully the citizens committee will assist in this endeavor.
#4 by Dave Morgan on January 28, 2010 - 7:51 pm
The citizens committee’s “reason for being” as outlined in a recent Board of Supervisors agenda packet indicates that the committee is to assist the forward momentum of the project. That could include exploring the questions you outlined. However, the project has yet to pass a fundamental test – that of “will it work as defined by the elements, the support for the elements and the synergy of the elements?” Everyone is singing the praises of the economic incubator. That it will generate jobs and prosperity for the community. But the community has seen little in the way of supporting evidence that the project’s pursuit of an incubator is properly organized or vetted as to traditional supporting entities, like federal and state grants, so-called “investment angels” and venture capital groups. We have seen no record or portfolio of accomplishments of the exact people who are expected to run the incubator. No lists of supporting research and development universities and colleges, trade and manufacturing groups, and marketing experts to enhance its possible success. Simply listing WNC as “a partner” hardly qualifies. Incubators take a while to start up. It’s not like pulling the rope on a lawn mower. Secondly, many ask “why not start with the incubator and add the rest later?” Most incubators do not come wrapped in a $90 million box. Certainly not in towns our size. Many Carson City residents wonder why, as the city begins planning to lay off workers and severely cut city services, that it’s willing to roll the dice on its last remaining taxing capacity? We’ve seen Reno begin to go financially upside down with an aggressive downtown redevelopment project (Aces Baseball Park) authored and supported by Mark Lewis, one of the Carson Nugget team members. Another Lewis project, the riverfront section of Stockton, is also upside down to the tune of what the Stockton Record newspaper calls “tens of millions” of dollars. It’s great to dream big, but in the minds of some, let the private sector do the dreaming and the paying. The public wants efficient and effective municipal services without paying a lot of taxes. Aggressive redevelopment projects, although pretty to behold, can mortgage a community’s future if everything doesn’t turn out “perfect.” Reno’s getting hammered on that point, and the ballpark is only a few years old! And of course many others decry the pace of the project. They say it’s going way too fast. That to explore a project’s details while listing a firm construction start date smacks of a shotgun wedding, rather than a carefully planned future.
#5 by dhataway on January 28, 2010 - 10:37 pm
When I stated “it is possibly not a deal breaker” I meant that even if the incubator was excluded from the final project, the project may still be viable for the reasons stated.
Also I would again caution as to what may or may not have happened in other cities without full knowledge of the context in which the decisions were made at the time – not what the economic circumstances are at present. Unfortunately very few people predicted what has happened in the last 24 months so those decisions made in a different economic situation are now getting burned including the public and private partners of the Aces Project.
#6 by Dave Morgan on January 28, 2010 - 11:12 pm
Right you are. You provoked a thought in me earlier today after I read your last contribution. And that is cities and counties that operate and promote redevelopment projects should be ever-vigilant to not create something that is a local counterpart to dangerous Wall Street shenanigans. Cities and counties should find that fine line between big enough to succeed, but not be too big to fail. Because cities and counties can’t print money!
#7 by Dave Morgan on January 28, 2010 - 11:26 pm
Another thing. It is redevelopment guru’s like Mark Lewis who create a contagion that “patience is no longer a virtue.” Why wait for sluggish evolution to produce what we want? We want it NOW! Why not have your cake, eat it too, and while you’re at it, mortgage the whole darn bakery! Make that the whole city block! Hell! The whole darn town!!!! Financial conscription through redevelopment! It makes tax prisoners of us all! Would it not be more reasonable to calm down and do a little research on how European towns grew so tastefully and to human scale. They didn’t have redevelopment back then. They just believed in the historic equivalent of enlightened,community-based zoning and a sense of the village. Oh…and a few public meetings about major changes in the village were pretty healthy too.