Las Vegas’ redevelopment agency could redirect millions of dollars it spends financing debt to downtown area businesses under a proposal before the state Legislature.
Assembly Bill 50 would extend by 15 years the lifespan of the city’s first redevelopment agency, now set to expire in 2031. It’s scheduled for a hearing Wednesday before the Assembly Government Affairs Committee, led by Assemblywoman Teresa Benitez-Thompson, D-Reno.
By pushing the expiration date to 2046, the agency would have more time to refinance existing debt, said Bill Arent, director of the redevelopment agency.
“We think we could reduce our recurring expenses by $1.5 million annually,” he said. “Over time that adds up.”
The agency, which started the year with about $109 million debt, could use savings on financing costs to expand the popular Quick Start and Visual Improvement programs, which offer grants of as much as $50,000 to small businesses to help bring old buildings up to code or upgrade facades.
Crashing real estate values have taken a toll on the agency. Revenue, which comes from property tax assessed within the agency boundaries, has dropped from a peak of $28 million in 2010 to a projected $13 million this year.
If revenue and expense trajectories continue in the same direction, the agency could have trouble paying its bills after 2017, Arent said. He added that is an unlikely scenario because even if property values remain stagnate, the agency is due to benefit from the opening of the Downtown Grand in the former Lady Luck building and the renovation of the former city hall for Zappos.
City officials tried, and failed, to get the redevelopment agency extended in 2011, when Gov. Brian Sandoval vetoed a bill that included it.
In his veto message, Sandoval didn’t object to extending the life of the agency but said that the bill contained overly restrictive preferential hiring requirements for redevelopment projects.
AB50 doesn’t have those requirements, but it has run into problems. A draft of the bill includes a provision to extend a 2 percent room tax on downtown hotels. The tax was originally a funding mechanism for construction of the Fremont Street Experience canopy and scheduled to expire when the debt is retired.
Downtown hotel owners objected to the extension, and city officials are expected to ask for its removal.
“It lacked support among the properties who would be paying it,” said Terry Murphy, president of the Downtown Las Vegas Alliance, a nonprofit business booster group. “It was not tied to any specific project of any kind. When somebody pays a specific tax like that, they like to know where it is going.”
Murphy, however, will be among city leaders and business owners pushing on behalf of AB50 today and Wednesday, with Mayor Carolyn Goodman and City Manager Betsy Fretwell.
In addition to extending the life of the redevelopment agency, AB50 authorizes loans to private businesses. Arent said that would enable the agency to turn grant programs into loans so the funds can become self-sustaining.
Benitez-Thompson said she is going to the hearing with an open mind.
“I’m eager like everyone else to hear the city of Las Vegas talk about the redevelopment plans and about how they intend to use this bonding capacity to grow the city,” she said. “So I’ll wait for the hearing and see what kind of support they get and opposition they get and go from there.”
Review-Journal writer Sean Whaley contributed to this article. Contact reporter Benjamin Spillman at firstname.lastname@example.org or 702-383-0285 .