Risk Reward Routine – Redevelopment Funding Held Hostage

Update:  The bill discussed here, which would have required STAR bond developments to pay into a rainy day fund for education, was vetoed and not overridden.  Tax giveaways for developers have lived to see another legislative session.

Kudos to Downtown Makeover.  Lately, he’s been following what’s going on in the Nevada Legislature with an eye toward the implications for redevelopment – and it doesn’t look good.  Legislation has passed the session which would funnel money away from redevelopment districts statewide in increasing amounts as the years progress, to the point where redevelopment districts would merely be debt service funds, unable to start any new projects.

To a watcher of redevelopment efforts in Reno, this is a big deal indeed.  Redevelopment has actually accomplished a fair amount of things in downtown Reno:  a nice river walk, a movie theater, a bowling stadium, a baseball park, a whitewater park, covers over the train trench, the parking gallery, West Street Market, and I’m sure more that I’m not listing here.

However, it’s important to take a step back, I think, and look at the goals of redevelopment and the tools a city should already have available to itself in order to accomplish those goals.  Let’s take the perspective for the moment, that tax assist financing is not the way to go for new infill projects in the urban core.  And let’s assume for a moment that the city can legislatively bring about the accounting that it will need to perform to act in the manner prescribed herein.

The way things are done today, the redevelopment agency is banking on declining future property values in order that it may use existing property tax revenues to purchase declining value property, selling it off to developers for less than it’s technically worth – for the purpose of the developer improving the property to the point where it essentially drives comps up, and thus the tax valuation of the district, and thus the public revenue.

Over the years the redevelopment toolbox has added a few drawers containing all kinds of tax incentives for developers.  The money that those developers are making, off the books, for bringing in the investment, has just now been eyed by the state legislature, under the leadership of Barbara Buckley.  There is a strong chance Buckley could end up governor next time around.

Buckley decided that it was time for an education savings account for the state to help it weather economic calamity with an intact public education fund.  This savings account was to be funded out of the previously uncollected ad valorem tax paid by projects in redevelopment districts.  (If I’m reading this right).

Now it’s one thing to be able to celebrate the accomplishments of a redevelopment agency – in fact that is what I do here.  The accomplishments of the agency are listed above and are great.  But the history of redevelopment deserves a look.  And history will show – redevelopment agencies were not meant to be the permanent face of an evolving downtown landscape.  The original thinking on the lifespan of the agency was 25 – 30 years – a time which fast approaches.

In short, it’s time to take a look at how money can be raised for public projects in the future and how the city can be redeveloped in the future without resorting to special named districts that get special attention.

It’s called the city government doing its job.

If I think back over the years on all the great projects the redevelopment district has been engaged in, my mind inevitably wanders to a few things that the redevelopment agency hasn’t done – some things others (others in the city included) did and some things, in the absence of the city doing them, nobody did.

• Beautify Wells Ave
  • Seems the people of Wells Ave got that in motion with the help of their councilmember
• Start building community in the Oliver/Montello area
  • Again the people of the community and the city council got that one going
• Widen and modernize sidewalks and streetscaping citywide including in older districts with less private investment
  • You’d be right if you thought that was one of the things nobody did in absence of the city doing it.
• Improve park connections in old city neighborhoods and grow park space citywide
  • Some parks have gone in, like the one in South Reno which just recently opened.  Some old city neighborhoods have had parks grow, other city neighborhoods have big empty lots right in the middle of their main streets.

Thinking about the last two items, imagine hundreds of millions of dollars having flowed into public works & parks department budgets over the past 25 years.  Imagine a South Virginia Street from Plumb Ln to the University that is one way and has incredibly wide sidewalks.  The city could have built that without a redevelopment agency, it is only now being seriously considered – if it can be done as part of a BRT system.  Imagine a similar treatment on East Fourth Street.  Just wide sidewalks, street trees, nice lights, garbage cans.  Paid for as part of needed regular maintenance and upgrades of public facilities.

No reason public works can’t be enlisted to do these things at broader scale – no reason why the city can’t put to the ballot during a legislative year whether it should raise money for the widening of sidewalks citywide.  No reason more parks levies could not pass.

I’m not here to argue against public subsidy for the upkeep of a city – including using public funds to build attractions or kick start development in underdeveloped areas.  I just see that there are several ways to do that without huge public subsidies directed toward enterprises which ought to be able to profit in their absence – at the expense of basic upkeep on existing public infrastructure.

The redevelopment agency in Reno has a few projects to complete and a few years to get them completed.  But if redevelopment budgets are going to be taxed out of existence, the city will need to find a way to continue to make improvements and public investments.  It’s time to start thinking about what that looks like now.

Comments

[Kyle Weiss]

Excellent research, speculation and intent. As I totally agree (and you well know), sidewalks are very important. You cannot have proper pedestrian growth, commerce and future without a place for people to walk, to get to places for people to go, and for businesses to assess risk of potential foot traffic (or lack thereof). I have also been a fan of making some one-way action throughout certain streets from Midtown to downtown. Reno is really opening up a lot of multi-use possibility (train trench coverings, anyone?) and that is going to require people, proper traffic and the planning, yes, that too will come...

...I do have to say, I hate the Bowling Stadium. I don't consider that among the fine things the Reno Redevelopment Agency has done at all. Considering the size and location versus the overall usability, frequency of use and value draw to Reno, it's a serious red herring, if you ask me. I think that was the agency's training wheel era. I have a feeling with the success of the Aces stadium close by, people are (and should) ponder the reason such a thing is there. All in good time.

Funds, whether they be public, specific taxes or private investment always needs to be used wisely. Overtaxing one thing to float another is not the way to get things done, it is usually a quick fix to one end that buries another. That's usually when public subsidies come in to "rescue," something maybe something someone, somewhere, cares about. Which really isn't a fair game.

The Reno Redevelopment Agency is on a good roll, no... a GREAT roll. Downtown is throwing it some tough decisions, the economy is making it a fuzzy outlook, but clarity is being had, which is great.

KW

[Infra]

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