City Hall plans win support

Las Vegas officials lined up behind plans for a new City Hall, saying Wednesday that the building and other planned developments related to it would remake downtown with little upfront cost to taxpayers.

City Council members acknowledged the current economic picture, however, and the fine line they must walk in pursuing a big-ticket building project while the city is cutting services and holding positions vacant to make ends meet.

A combative Mayor Oscar Goodman said that when the bill comes due for the $150 million building, it will be money well spent.

"It couldn't be spent better," he said. "This isn't going to be an ordinary City Hall. This is going to be a civic center.

"I can't see any reason why we shouldn't go through with this. This is a no-brainer. I don't believe anybody's at risk on this one."

The council backed him unanimously in approving a preliminary agreement with Live-Work Las Vegas LLC, which sets the stage for the ambitious set of projects to go forward. A final deal will be before the council next month.

Even Councilwoman Lois Tarkanian, who earlier was the lone vote against pursuing a new City Hall, supported the idea Wednesday.

"I am now viewing this issue somewhat differently," she said.

Tarkanian said her research had changed her mind, as well as an economic presentation on Monday that encouraged the city to use its assets -- namely, downtown real estate -- to spur economic development and job creation.

The new City Hall would be a 251,000-square-foot building on the block of First Street between Lewis and Clark avenues. The 2.8-acre parcel would have room for future expansion.

"I don't feel we need a new City Hall right now, but we will need one eventually," Tarkanian said.

The proposal has many intertwined parts.

Live-Work Las Vegas would build the new building, with the city projected to move in, and start paying rent, in 2011. Business development director Scott Adams estimated the annual rent at $10 million. But for the first five years, $8 million a year of that would be deferred, leaving $40 million plus interest due at the end of that period.

Some or all of that could be covered by the sale of the existing six-acre City Hall site, along with 12 neighboring acres the city owns next to the highway, or the city could bond for the amount or roll it into the existing lease, Adams said.

Las Vegas would essentially be an anchor tenant for a five-block office/retail development along First Street, where Live-Work would build an additional 1.3 million square feet of space over several years.

"City Hall is a must-do project for this thing to work," Adams said. "They will transform those five blocks."

In exchange for the ground under the new City Hall, Live-Work would receive a parcel in the city-owned Union Park development on which it would build a 1,000-room casino-hotel. When that's online -- about the time the deferred lease period is over -- tax revenue from the new resort would cover about half the annual City Hall lease payment, Adams said. The city would also have the option of buying the new City Hall.

The Live-Work development includes a new transit station for public transportation, relocating the existing station on Stewart Avenue. That, in turn, opens up property next to the Lady Luck casino, which is being redeveloped by a separate company.

Adams said the projects would inject an estimated $4.1 billion in investment downtown, eventually generating $16 million to $20 million in additional tax revenues a year and creating 13,400 jobs.

That's "impressive," said Councilman Steve Wolfson. But, he noted, "anything can happen," and wondered what risks existed for the city if the dominoes didn't fall as expected.

Adams said the main risk is that the casino-hotel won't get built, which would reduce the number of jobs created and the amount of new revenue for the city. But he insisted the city would still see benefits even without the new resort. And, he noted, the city would still have a parcel of land approved for unrestricted gaming.

Hanging over Wednesday's discussion was the city's current financial picture. The economic downturn has hit city revenue hard, with officials cutting $18.5 million from this year's budget while staring down the barrel of an expected $40 million deficit next year.

Knight Allen, a professional investor and longtime government spending watchdog, said city leaders were showing symptoms of what he called an "insider mentality."

"It's a disease. They get into government, and they're into the upper echelons of Enron," Allen said.

"They're already talking about slower growth for Las Vegas," he said, and yet the council is willing to take on a large, long-term obligation.

While Allen gave the city credit for its successes in Union Park, he predicted "they're going to get their building, and we're going to get reduced services."

City leaders gave two reasons for pushing ahead with a building project now: The city doesn't have to put up any money until the building's done, and the economy is expected to improve by then. And waiting to start likely means higher construction costs.

"Yes, we are in an economic crisis," Councilman Ricki Barlow said, but, he added, "we're in a position to place ourselves in a beautiful spot.

"We're going to take our hits. I'm willing to take those hits."

Councilman Larry Brown said "the safe way" would be to put off making a decision.

"Unfortunately, the more we defer decisions ... all we're doing is passing that burden on," he said. "That's the safe way. This council has not taken the safe way."

Contact reporter Alan Choate at achoate@reviewjournal.com or (702) 229-6435.