Tribune file/Debra Reid - Citizens Against STAR, including Christina Knapp and Brianna Edgerton, protested publicly funded STAR (Sales Tax Anticipated Revenue) bonds outside the Legends at Sparks Marina project in September, 2008. STAR bonds were approved to help subsidize the retail complex.
The Reno City Council gave its OK Wednesday for the financing mechanism to move forward on a project that would add retail, restaurants, hotel, night clubs, a music hall, office space, a health club as well as residential and student housing in a five-block area in downtown Reno that is bordered by Interstate 80 to the north, North Virginia Street to the west, Fourth Street at the Reno Events Center and Ballroom to the south and Evans Avenue to the east.
Sales Tax Anticipated Revenue bonds are a state-approved funding mechanism meant to lure developers into Nevada. The bonds allow developers to use 75 percent of any sales tax their development earns to pay off construction costs. After a fixed number of years, the sales tax revenue goes to the city.
These specific bonds would help pay to expand development around the Aces Baseball stadium in downtown Reno.
Developer Jerry Katzoff envisions a six-block retail, restaurant and club development wrapping around the stadium.
However, the Reno council approval was only the first step for Katzoff and his proposed project.
The Nevada Commission on Tourism must now review the project to see if it meets one of the requirements for STAR bonds. According to state law, STAR bond developers must prove that more than 50 percent of their guests will come from out of the area.
If the project is able to jump that hurdle, it must then appear before Gov. Jim Gibbons for his signature. The Reno City Council will then have the final say on the project.
According to a release from Reno spokeswoman Terri Hendry, the item must appear before the Reno city council for the last time before Oct. 1.
If approved, the project will be built in phases. The housing part of the project could be built after 2013, if the economy dictates, Hendry said. Build out on the retail component should start in the summer of 2010 and is expected to take four years.
The Reno City Council accepted a fiscal impact analysis and market study on the proposed Tessera Project District at its Wednesday meeting.
The report states that the project would generate an estimated $25 million from various revenue sources over 20 years. It would also generate an estimated $159 million in property tax revenue as well as an estimated $142 million in sales tax revenue over 20 years. According to the report, the project is expected to create $72 million in sales tax revenue for the cities of Reno and Sparks as well as Washoe County and the Washoe County School District. Regional economic impact is estimated at $1 billion through the first full year of operation with regional employment impact estimated at 6,200 jobs, of which 3,400 will be permanent.
The Washoe County School District will also receive a portion of the sales tax generated through the project that would be used for general structural improvements to schools located within the McCarran Boulevard ring.
STAR bonds have been used to finance the Legends at Sparks Marina project as well as Cabela's in Verdi.
The funding mechanism came under fire at the most recent Legislative session. Assemblywoman Debbie Smith, of Sparks, tried to pass legislation tightening the requirements for STAR bonds. However, the bill died in a mire of last minute additions and amendments.
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