LV OKs city hall project

On a series of near-unanimous votes Wednesday, Las Vegas City Council members approved construction of a new city hall, a project that stirred up high hopes, vitriol and even lawsuits on its long road to the final vote.

Mayor Oscar Goodman called it a "mini-stimulus" and "the keystone of a new downtown" while critics said it's nothing more than a $185 million bet that the economy will recover by the time the construction bills start coming due.

"I feel very, very confident that we did the right thing for the future of this city," Goodman said. "This is the way you get our economy back. This is the way you start to have optimism and confidence and not negativism."

The one vote against came from Councilman Stavros Anthony, who has maintained that the project is too risky for the city to take on when the economy is uncertain.

"The big question right now is, how much impact is this city hall going to have on our operating budget?" Anthony said. "I believe it's going to have a significant impact. I think we're potentially going to put ourselves in a position where we're going to have to lay off more employees, cut more."

Councilman Steve Ross abstained because the building's developer, Forest City, has agreed to use union labor on the project. Ross is secretary-treasurer of the Southern Nevada Building and Construction Trades Council, which promotes union labor.

More than a dozen construction union members were in the audience Wednesday and cheered when the final vote was taken.

The site will be a block bordered by Main Street, First Street, and Lewis and Clark avenues. Construction should start next month with the demolition of the existing buildings there, Goodman said.

Construction of the 310,000-square-foot building is expected to take two years.

The city is using what is known as "lease-purchase" financing, which is similar to bond funding but carries a little more risk because the city technically has the option of walking away from the deal. The financing is backed by Build America Bonds, a federal stimulus program that rebates some of the borrowing costs to the city. With the rebate, the city obtained an effective interest rate of 5.26 percent.

The city had a "very successful" bond offering Wednesday morning, Finance Director Mark Vincent said. The council approved the deal just before 1 p.m. with less than five minutes to spare before the bond markets on the East Coast closed.

The city's first payment of $3.5 million on the building will be due in the 2013 fiscal year, followed by payments of $9.3 million in 2014, 2015 and 2016. Thereafter, the amount due will be $13.4 million annually for the remainder of the 30-year financing period.

The expectation is that the new city hall will give a boost to other planned developments downtown. Forest City has plans to build 900,000 square feet of office and retail space next to the new municipal building and would get access to a parcel in Symphony Park for a hotel-casino when the building is complete.

The existing City Hall site will be combined with other city-owned land fronting Las Vegas Boulevard and Stewart Avenue. The Cordish Companies is examining the 19-acre parcel for use as a sports arena and entertainment district, and it sent a letter to the city recently saying that the existing City Hall site would have to be vacated for its plans to work.

Also, hope exists that the remodeling of the closed Lady Luck casino will gain momentum, with development planned around the under-construction Mob Museum.

"I look at this as a golden opportunity for us ... to do what other cities wish they had the opportunity to do. This vote today is our CityCenter," Councilman Steve Wolfson said in a reference to the massive hotel-casino complex opening on the Strip.

Councilman Ricki Barlow was optimistic too.

"This is going to be a turning point for the downtown," Barlow said. "This development will be the first domino of very many dominoes to come."

At one point in the debate, the Culinary union filed ballot measures to stop the project and then went to court when the City Council would not put the measures before voters. A court ruled that the measures were flawed and that the city could reject them.

The city and the union have made peace, with the union agreeing not to challenge downtown projects for a new ordinance that would require hospitality projects that have a city connection to contract with unions.

If none of the expected development occurs, the costs of the new city hall would be borne by the city's general fund, which is in sorry shape.

The recession has brought steeply reduced tax collections, and the city is holding positions vacant, laying off some workers, delaying capital projects and contemplating dramatic wage cuts: an 8 percent slice across the board and the elimination of all raises, including merit and cost-of-living.

The city should not be counting on revenues to recover, said Dean Fletcher, head of the Las Vegas firefighters union. He worried that the city was borrowing money for a new city hall while delaying other capital projects, such as fire stations, and keeping positions vacant even in public safety departments.

"God, I hope it works," said Fletcher, although he was skeptical that it would.

"It's a gamble," he said, pointing to existing downtown projects such as Neonopolis and the Streamline and Juhl condominium towers. "There's empty retail in all of them."

Anthony felt the same way.

"Capital projects have been put on hold because of our budget," he said. "Is the city hall payment going to exacerbate that? Is it going to make it worse? That's what I didn't want to take a chance on.

"I hope that when this thing gets built, everything I said doesn't come to pass. But that's hope. I don't deal with taxpayers' money, and health and safety, on hope," Anthony said.

Goodman called that a false comparison: The current budget cuts would be taking place whether or not the city pursued a new city hall, he said.

But he has acknowledged several times that if the economy has not recovered sufficiently in five to seven years, the city could be in a hard place.

"If redevelopment can't pay for this," he said, "we are in deep doo."

Contact reporter Alan Choate at or 702-229-6435.