Katzoff, alongside Washoe County finance director John Sherman, made his case for a financial boost from Sale Tax Anticipated Revenue (STAR) bonds to the Washoe County Commission Tuesday, asking for their comments and concerns about the project.
The comments will be forwarded to the Reno City Council, which is the authority that must approve the financing.
Using STAR bonds would allow the developer to keep 75 percent of his development’s sales tax in order to pay off hefty construction costs. The other 25 percent of sales tax would flow into city coffers. After many years, sometimes as many as 20, the 75 percent will hit its sunset and all of the sales taxes will go to the city.
Katzoff told the commission that his Aces baseball stadium generates about $5 million in annual taxable sales revenue. He estimates that the first phase of STAR bond-funded restaurants will generate $10 million in taxable sales.
The Aces stadium cost about $50 million to build.
The proposal will be discussed in detail at a city of Reno Redevelopment Agency meeting on July 1.
“I am not opposed to these projects,” said commissioner John Breternitz, “but I would ask that part of our comment (directed toward the Reno City Council) might be that we see some historical information. I think we need historically accurate information on benefits instead of estimates. We need something for the citizens to hang their hat on.”
In order to qualify for the STAR bond program, a developer must prove that more than 50 percent of a project’s business will come from tourists. An economic impact study has been done on the project, which claims that the Aces complex will pull 57 percent of its business from tourists starting in 2012. Study-producer Meridian Business Advisors estimated that this number would eventually jump to 67 percent.
“This project will bring folks down there and at that point in time those folks will want these facilities,” said commissioner Bonnie Weber.
Commissioner Kitty Jung also agreed that the project could be beneficial to the area, but added that she would want to make sure that the Washoe County School District benefited in some way from the generated sales taxes.
Commissioner David Humke echoed a much-spoken phrase from Sparks Mayor Geno Martini regarding Sparks’ use of STAR bonds for the Legends at Sparks Marina project.
“It has been said that 25 percent of something is better than 100 percent of nothing,” Humke said. “Let’s gather that 25 percent.”
Katzoff’s vision depicted a 1.2 million-square-foot district filled with more than 229,000 square feet of retail, 14,000 square feet of night clubs, 65,000 square feet of hotel and 731,000 square feet of residential development.
The night clubs and restaurants would be a hybrid, according to Katzoff, melding dining with dancing.
“This district should be of assistance to our tourism economy,” Humke said. “They (tourists) require a fresh product and this will produce this freshened product.”
While the entire project buildout is expected to take five years, Katzoff hopes to have the first phase up and running by next baseball season.
“Each new development breeds the next new development,” Katzoff said. “So if the stadium is working well, then …”
According to the Meridian report, the development is expected to create 5,700 jobs over the construction period and create 3,200 permanent jobs, with the understanding that these might be jobs directly linked to the project or jobs created as an aftereffect.
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