The Urban Blog

Reno’s Broke

A few months back, this blog groused after Reno put itself on the hook for more subsidies to the owner of the Reno Aces baseball team, to help get the second phase of the ballpark district project built:

One thing that’s been missing all along – a methodical, programmatic approach, is just one thing.  Another thing is the lack of foresight with the allocation of funding resources to projects.  Projects sit in the imagination of some plan or official for 25 years or more, and it’s frequently an emergency, or some stroke of luck which allows them to proceed. […] This is one reason to celebrate that Reno is now committed to truly subsidizing the baseball project, the second phase of which is due to begin construction, the developers tell us, any day now.

I still agree with my line of reason there, as draconian as it sounds.  (This is not a particularly sunny subject, it turns out.)  Which makes all the more dispiriting the news from the RGJ yesterday that Reno is broke and won’t be able to make its million dollar payment to the owners of the Reno Aces due to declining property values downtown.  (Reno Comes Up Short In Payments To Reno Aces Owners, Susan Voyles, January 25, 2010)

When this project has hit on hard times before, this blog has often suggested renegotiating in good faith with the baseball developers.  The only renegotiations which have occurred have been the kind of renegotiations that result in more money out of the public coffers for the baseball owners, thus far.  Which makes this quote from the article galling:

“We cannot renegotiate,” Jerry Katzoff, a partner in the SK Baseball and Nevada Lands LLC companies that bought the baseball team and built the stadium, said of the property tax share, because that was the basis for a bank loan for the project.

According to another RGJ article, (3 Things That Will Change Reno Entertainment in 2010, Jason Kellner, January  22, 2010), the Aces sold 466,000 tickets last year in the inaugural season.  Let’s do the math:  $1 million / 466,000 = $2.15.  Even if attendance were off by over a quarter this year, the average price per ticket to make the payment would be $3.  But let’s go back to the original quoted RGJ article:  the city does have $290,000 toward its commitment.  $710,000 divided by 400,000 = $1.78.

For a price increase of about 2 bucks per ticket, the ballpark developers can pay the bank, the city can keep its team, and everyone, residents and visitors alike, can enjoy the new attractions currently under construction at the ballpark.  Problem solved.

Cautionary note to Carson City:  former Reno Redevelopment Director Mark Lewis, architect of most of this deal, is the lead consultant on the Nugget Foundation plan to revitalize downtown Carson City to the tune of a public contribution of $40,000,000 dollars, out of – wait for it – that city’s declining tax revenues.  The CC Board of Supervisors would be well advised to take a step back and look north 30 miles and see what is happening with deals like this.

Seattle: The Stranger Finds the Loophole, But Proposes the Wrong Way of Closing It

Today on The Stranger’s blog SLOG, Dominic Holden proposed a course of action to resolve something that’s been afflicting Seattle in the past decade.  There, developers and real estate investors will buy old buildings downtown prior to those buildings being listed as historic.  The developer or investor at that point will order some changes to the building – usually to the building’s historic facade.  After these changes, the building will have no chance of being listed as historic, and the developer or investor can then build a skyscraper full of condos for the affluent urbanite.  Holden is ready to throw down the gauntlet and say, “Enough!”

My love for The Stranger, Seattle’s Only Newspaper(tm), is well known to the one or two people who actually read this blog regularly.  The reason I like The Stranger so much is that not only do they aggressively cover events, but they also advocate for their own opinion.  More people should be out there advocating for their opinions.  But, sometimes The Stranger is wrong.  This is one of those times.

I can’t fault Holden.  What developers have been doing is a pretty lousy trick to pull on people who want to see history preserved.  Which makes this case – this particular instance – seem absolutely absurd to use as a gauntlet case.  Let’s get into the details of the case:

In August of this year, Holden reported that a building at Eighth Avenue and Lenora Street downtown was having its “very striking terra-cotta cladding skin [which] is surprisingly intact” removed by a workman.  In August, at the time of the report, nobody from the owner of the building would claim knowledge of any plans to replace the building with a new development.

Fast forward to just recently, when the Seattle Daily Journal of Commerce reported the owner/investors of the property had intended to do just that.  Holden maintains that now is the time to put a stop to all this – that the development must be held up by either the City Council or the Mayor.  But I can’t help thinking there’s too much nuance in this case for it to be that simple.  Here’s why.

First – modifying the facade of a building – especially those in cities – is not something you do just willy nilly.  You need a permit.  In his original piece Holden contacted the Seattle Department of Planning and Development and found that while distasteful, the actions of the owner were perfectly legal.

Second – Holden would like to see some of downtown’s surface parking lots turned into skyscrapers first.  Wouldn’t we all!  But in our system of private property and free enterprise, a willing buyer and a willing seller are required parties to any transaction.  A few years back, I happened to catch a forum of green/infill/density builders (including Peter Steinbrueck) on TV and one of the participants joked about wishing they could turn those parking lots into something – but no dice, the little old lady in Spokane who owns this parking lot isn’t selling.  The audience laughed, but some jokes are a little too close to home.

So… even though it’s unsavory, what the developers are doing to their buildings is perfectly legal.  The proposed solution to the problem – use parking lots for this kind of stuff instead – would require powers of eminent domain no American city can hope to have.  Maybe it would benefit us to take a step back and ask a few questions.

One – if a building is in candidate status for historic preservation – can the DPD issue permits for changes to its facade?  And if so, why?

Two – what makes a building historic?  The Stranger doesn’t like cars – they have made no secret of that.  So what makes an old car dealership so historic that no more historic buildings like it may be torn down in Seattle from this point forward?  Should actual history had to have occurred in a building for it to be deemed historic?

The politically feasible solution would seem to be to make it much harder to get building permits to modify the historically significant details of any building which is a candidate for listing on the historic register.  The historic preservation people would actually have to go inside the buildings they are surveying and might be prodded to consider history as something bigger than simply the presence of some terra-cotta facadework from the 1920s.  (Though I happen to love terra-cotta facadework from history.)  And the developers would be required to prove from an engineering standpoint – if we don’t tear this facade off this building right now it’s going to fall over in the next windstorm! – that the modifications they seek to make are indeed required.

The people who are planning to put up this condo skyscraper for future Yuppies (today we’re calling them… I believe… Generation Y people), are not actually doing anything wrong, and as such don’t deserve to be punished.  If permission is denied to build their tower to “punish” them, they might decide to get religious about holding a grudge – and keep their building just up to code enough, keep the taxes current, and let the thing sit vacant and boarded up for how many unforeseen decades.

But more importantly, if we punish people who are not breaking the law then we’re setting a worse precedent yet.  We will have taken the funhouse mirror that is the US justice system – where we prosecute people for breaking laws that exist to criminalize activity that harms no one – and bent it around to where we’re also punishing people who are not breaking any laws.

It’s hard to imagine something more absurd.  Let this incident serve as the impetus for bringing about a correct and defensible solution to the problem.  Things are not nearly out of hand enough for the solution to this problem to emerge from a line drawn arbitrarily in the sand.

Reno: Woolworth’s Renovation Rendering

Downtown Makeover linked a while back to a NNBW article stating that the Woolworth’s building in downtown Reno is slated to undergo some changes – ripping off a bunch of bad facade to bring it up to more modern standards, and to make the building marketable for retail and other uses.

It’s about time!  Recently a commenter over there mentioned having seen people already working on the building.

A tiny amount of digging around on the internet found the Collier’s page about the building.  If you look at the flyer for the project, you can even get a look at what the building will look like at night empty and lit up.

Woolworth’s Building after Renovation – Reno, NV source:  Colliers Int’l

Reno: Redevelopment Strategies Get a Good Hearing At City Council

This blog has been harping on the approach to redevelopment in Nevada, and in Reno in particular, for a while.  While it is encouraging to note positive developments such as Aces Ballpark, the movie theater complex, the West Street Market, and the kayak park, it’s somewhat disheartening to find that downtown, all over, businesses are barely able to stay open.  Retail is almost nonexistent downtown, and several blocks of Virginia Street, on one side or the other (thankfully not both sides) are severely blighted.  There are vacant buildings all over the place.

Recently, La Bussola boutique was evicted from its storefront.  La Bussola responded to this incident with a public statement posted on God Hates Reno, and the business’ owner, Meredith Tanzer, was lucky to have just recently opened a bar on 4th Street called Treehouse Lounge – providing a location for much of her former stock until it could be cleared out, and a business to run in the meantime.  She, however, cited problems with her landlord in the eviction and problems finding a new retail space downtown because of inflexibility on the part of property owners regarding reasonable terms of occupancy.

Also recently, Cavanaugh’s Fine Furniture announced it was closing.  In the Reno Gazette-Journal, Richard Oppio, the store’s owner, cited the inflexibility of his building’s owner, The City of Reno, in adjusting his lease rate downward to help him in a time of down sales.

So we’ve seen that the RDA is capable of good, even great work, and it’s clear they’re not slackers.  But, working to improve the overall business climate in the city seems to be something they don’t consider their mandate today, as evidenced by a recent exchange between Councilwoman Sharon Zadra and Redevelopment Director John Hester, at the 10/7/09 City Council Meeting.

Zadra asked Hester if the RDA was doing anything to help the downtown business community in terms of helping them identify what would be lucrative business opportunities for them in these down economic times.  She didn’t go into detail but with what we know from the two previous examples, let’s say a furniture store accustomed to dealing in particularly high end merchandise is on the rocks.  This is due to the recession and the fact that nearby residences aren’t filing up nearly as quickly, nor with the sort of clientele, upon which the business plan for the store originally rested.  Does the RDA as an entity function in any kind of advisory capacity?

Hester’s answer was telling.  The RDA, he said, is helping prospective businesses in the West Street Market to identify sources of funding and business assistance.

Zadra at that point had to follow up.  No, she meant the entire downtown business community existing within the bounds of the redevelopment district.

Hester replied that the RDA will sometimes help an interested party determine whether they could obtain financial assistance through the city’s Opportunity Growth Fund (OGF), and will put them in touch with UNR’s Nevada Small Business Development Center (NSBDC).

After I was done viewing the meeting, I went in search of a web page about the OGF.  Multiple search engines do not display a summary web page about this resource – they display PDF files which are minutes or agendas from prior meetings where it was discussed.  The NSBDC is focused on providing technical assistance to small businesses statewide.

Big projects – big developments like the theater complex and the ballpark represent important lynchpins for downtown in the form of attractions.  It’s possible that a model like the West Street Market provides some glimpse into a future for other blighted properties. 

But the problem today seems to be the lack of a methodical approach on the part of the RDA to organizing a groundswell of entrepreneurship to help fill the vacant real estate downtown.  RDA could well act as a broker – helping property owners access funds to assist with beautification and tenant improvements, while helping entrepreneurs access funding and other resources. 

In the case of Cavanaugh’s, a furniture store located in a city owned parking garage, if the business plan had been altered in line with Zadra’s question, the store itself might have been able to function as a draw to downtown pulling customers from around the city looking for a different product.  Yes, it takes something on the part of the business owner to identify that market and that opportunity or at least go looking for it and help finding it.  But, to use an old advertising slogan, you could have heard a pin drop at news of La Bussola’s closing, and Cavanaugh’s closing, if you were on the line waiting for the city, or the RDA, to say or do something to help either.

There are other unanswered questions.  What exactly is Downtown Reno envisioned as?  Is it an evening entertainment district?  Bars and restaurants don’t seem to be having trouble.  Is all that to be encouraged at the expense of any kind of decent daytime street life or retail activity?  Is the new “ballpark retail” currently under construction some sort of panacea?  Will the myriad of business associations downtown merge or otherwise give way to a single downtown association capable of providing what the RDA will not, or cannot?

That the discussion is happening in council meetings is a good sign.  The future success of downtown Reno depends on the discussion producing some positive results.

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.

My Last Reno Ballpark Webcam Post

It’s been fun watching this construction.  The park looks great in action.  Good work, Reno!

Reno Aces First Homestand via Oxblue Reno AAA Ballpark Webcam

Reno Ballpark: Lights On!

OxBlue Reno Ballpark Cam, 03/26/2009 7:54 PM

I promise I still have actual things to say, sorry I’ve been phoning it in via someone else’s darn webcam, but it is terribly exciting to see this park go up downtown.

I’ve been waiting for the lights on the grass for a while!

Ballpark Construction Gallery

OxBlue Construction Camera, Reno AAA Ballpark

The lights will be on soon enough.

Until then, enjoy this gem from sunrise on 3/16/09.

Scaffolding Down @ Reno Ballpark

Reno AAA Ballpark Construction Camera – OxBlue

Always nice to see some good progress.

Ballpark Construction Gallery

I continue to phone it in via the Oxblue Construction Cam but at least this time I have something relevant to say!

Looking out over Reno at dusk, Feb 3, 2009 
Image from OxBlue Construction Camera

The thing I like best about the Reno baseball stadium is that it forces us to look at another side of Reno we might not otherwise look at a lot.  It makes us look east from downtown, east over Wells Ave, east to Renown Medical Center and the Grand Sierra Resort, and Sparks!  Click the picture for the big version to really get a sense for what I’m saying.