The company redeveloping the Lady Luck hotel-casino is seeking a rebate of 75 percent of its sales tax from planned development adjacent to the old downtown post office, a city official said.
The CIM Group is in the process of applying to develop the city's first Tourism Improvement District, a designation that allows retail and other tourist-drawing projects to issue sales tax anticipation revenue, or STAR, bonds for construction, said Steve Van Gorp, the deputy director for the city's office of business development.
The dollar amount CIM would be rebated, if approved, has yet to be determined. The project is expected to generate about $50 million in new taxes over the next 23 years and result in 2,500 jobs downtown, CIM said in a July statement.
"CIM is drafting an economic study. (The approval) would have to be done in the next year because there are a series of public requirements that have to be met," Van Gorp said.
CIM officials declined to comment.
Tourism improvement districts have to be completed before the Oct. 1 expiration date set by the Nevada Legislature. The city has already put in a bill draft request to the 2009 Legislature seeking an extension of that deadline but is planning as if its request won't be approved, Van Gorp said.
The Las Vegas City Council, Clark County Commission, the Clark County School District Board of Trustees and the Nevada Commission on Tourism are among the bodies that must approve the tourism improvement district tax rebates. The sales tax rebates would otherwise go to state and local governments.
Van Gorp said the city believes the tax rebates are necessary to get the area redeveloped.
"It's a new project that is creating tax dollars. It's not a project with existing tax dollars." Van Gorp said. "If the project doesn't get built, there are no tax dollars."
The city has agreed to sell the land around the post office building on Stewart Avenue to CIM as an incentive for the company to redevelop the Lady Luck on Third Street. Under the agreement approved in July, CIM has to put at least $100 million into renovating the hotel-casino beyond the $92 million purchase price.
The proposed tourism district is between Fourth Street and Casino Center Boulevard and includes a small park, the post office site and the planned city-funded Mob Museum. CIM is proposing a mixed-use and retail project on the site, which is across the street from the Lady Luck. That would include some 100,000 to 200,000 square feet of shops.
The city's tax breaks are necessary, said John Knott, executive vice president of CB Richard Ellis.
"Will retail development be done on that site without that? Probably not on that site," he said. "Look at Neonopolis. That is not what people want to see."
Contact reporter Valerie Miller at firstname.lastname@example.org or 702-387-5286.