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Clark County official critical of creating tourism district

Clark County may lose out on millions in sales tax revenue over the next two decades if a special district is created south of Palace Station.

The Las Vegas City Council is considering creating a tourism improvement district, which would divert some sales tax revenue to developer Fisher Brothers to create Area 15, an art and retail project envisioned as “an immersive bazaar.” The move doesn’t require county approval, but commissioners heard a presentation about the plan on Tuesday.

The district would divert up to $13.7 million from local government coffers, slightly more than half of which would otherwise have been collected by Clark County. So the proposal did not sit well with commission Chairwoman Marilyn Kirkpatrick.

“Philosophically, I hate this,” she said. “I’m opposed to it. I was opposed to it in the Legislature. I think it’s a bunch of crap, to be honest.”

For Kirkpatrick, the issue goes beyond the loss of tax dollars. She worries whether the developer could prove that most visitors were tourists, as required by the process. She questioned the notion of underdevelopment in the area and said the city should capitalize instead on the project’s inclusion in a federal opportunity zone as an incentive for developers.

Other policymakers were interested in how much sales tax revenue might be realized over the same period if the project did not move forward. Bill Arent, the city’s economic development chief, replied with a short answer: zero.

Incentives needed

From the city’s perspective, the incentive to build in a long-neglected area is reasonable. The 15-acre project is expected to include a curated, interactive common area from the art collective Meow Wolf; indoor and outdoor event space; and food cart and retail kiosk spots. The location, north of Desert Inn Road and west of Interstate 15, once held a Scandia miniature golf complex but has been fallow for years.

There would also be protections in place. The proposed incentive to Fisher Brothers is capped at 3.13 percent of gross sales tax revenue or $688,000 annually, whichever is less. And it would apply only to the first phase of the project and not affect taxes that go to schools, according to Arent.

“The way we look at it, very simply, is: But for the city’s involvement, would this project get done and would this project get done at this level and at this quality?” Arent asked commissioners.

Commissioner Larry Brown, a former Las Vegas councilman, agreed. Unlike the county, which doesn’t have to offer much incentive because of its hallmark Strip, he said the city must seek to appeal to developers to diversify entertainment projects beyond Fremont Street. Often, he added, those opportunities lie in older areas.

“This is an example of where they’re getting outside the box, trying something that hasn’t been done,” Brown said.

Big tourist draw

Fisher Brothers estimates that there will be a million visitors a year to Area 15, according to consultant Terry Murphy, noting that 340,000 people annually visit the Meow Wolf site in Santa Fe, New Mexico.

“The developer took a risk in creating something that’s never been done before, that we’re aware of, in the world,” she said.

Murphy added that the company would use revenue distributed back to the district to attract tenants and to address homelessness and other problems in surrounding neighborhoods.

The City Council must adopt an ordinance to put the plan into effect and may consider the matter as early as October following a public hearing with the Nevada Commission on Tourism, according to documents supporting Arent’s presentation.

If approved, the new district would add to two that exist already, one in Symphony Park and the other near the Mob Museum.

“I think it’s exciting,” Brown said.

Commissioner Justin Jones, whose district overlaps with the project area, said he hopes the commission would support it. He added, “I am taking a leap of faith.”

Contact Shea Johnson at sjohnson@reviewjournal.com or 702-383-0272. Follow @Shea_LVRJ on Twitter.

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