October 25, 2012 - 10:24 am
RENO – The City Council has given tentative approval to a plan to use general fund money to help owners of the Reno Aces baseball team refinance a
$55 million loan used to build Aces Ballpark.
Mayor Bob Cashell, who called in to the meeting from home where he is recovering from heart surgery, cast the tie-breaking vote in favor of the deal Wednesday after making a plea to work out a refinancing agreement to keep the Reno Aces in town, the Reno Gazette-Journal reported.
“To run this out of the park and not do it is to turn our back on a partner,” Cashell said. The mayor said Reno would be left with a black eye if the stadium closed.
The primary financial backer of the Reno Aces, billionaire Herb Simon, has said he would move the team elsewhere if a new public financing deal isn’t cut to refinance the $55 million loan that will come due in December 2013.
Originally, the ballpark loan was going to be mortgaged by using assumed increases to downtown property taxes. Instead, that revenue collapsed during the recession as casino revenues declined.
Now the plan is to use general fund financing from Reno and potentially Washoe County and new private funding from the Aces owners, to issue new private debt to refinance the $55 million loan. That private debt will be guaranteed by Simon.
Washoe County is being asked to chip in $500,000 a year for the next 30 years. That vote is expected to happen in the coming weeks. The city also wants a guarantee the Aces will stay in Reno until the stadium debt is paid off 30 years from now.
If approved, the direct public contributions from Reno and Washoe County will amount to $45 million over 30 years. Once the stadium is paid off, it will become a publicly owned building.
The City Council will take a second vote on the plan Nov. 7.
Council members opposing the deal said they couldn’t support using general fund dollars to refinance private debt when budgets were tight and other businesses weren’t asking for public help.
“We told the public we would never use the general fund for this project,” Councilwoman Jessica Sferrazza said.
Councilman Dwight Dortch said the city faces financial challenges in the years to come, including the expiration of a $14 million grant that is underwriting the Fire Department. The city is struggling to pay for core services such as parks and police.
“It’s scary to me. To me that’s where the challenge is,” said Dortch, who was joined by Councilwoman Sharon Zadra and Sferrazza in voting no. “To commit our general fund dollars, to me I just can’t go there.”
Joining the mayor in voting yes were Councilmen Dave Aiazzi, Pierre Hascheff and Dan Gustin, who are stepping down Nov. 14 when their terms end.