Something about Tapestry project didn’t sit well with ‘Show-Me’ State county

If Tapestry Group officials were looking for an endorsement, they can forget about calling Boone County, Mo., Commissioner Skip Elkin's office.

Elkin voted to reject Tapestry's creative financing proposal for a residential care facility in Columbia in 2006. After the Missouri community's Industrial Development Authority had adopted a resolution calling for the Arizona nonprofit company to be issued up to $8 million in revenue bonds, Elkin and his fellow commissioners turned down Tapestry's request.

There was something about the idea of underwriting the project of the private foundation, which has been in existence since 1999 but has a sparse track record, that didn't sit well with Elkin.

"We basically denied them their request for the use of industrial revenue bonds for their project," Elkin said in a recent interview. "It was mostly about job creation, and what they were doing wasn't going to create a lot of jobs. They were basically buying a nursing facility and were going to make modifications to it. The numbers they were throwing out just seemed like an awful lot of money for what they were asking to get financed compared to what they were proposing to do. In my opinion, they were looking to use the Industrial Development Authority as the source of a low-interest loan."

It wasn't a scandal exactly, Elkin said. In fact, he told me he believed Tapestry followed the letter of the law. But, well, the slick deal just wouldn't fly in Boone County: Not enough bang for the buck.

If the Tapestry name sounds familiar, it's because the Las Vegas City Council on Nov. 21 voted to give it the opportunity to purchase and develop 15.25 acres of federal land for affordable housing apartments at a fraction of its estimated $14.5 million value. The fact the city decided to deal exclusively with Tapestry instead of soliciting proposals has added to the audacious appearance of the deal.

Just imagine what they'd say in Boone County.

Informed that the council had voted 4-3 to move forward without putting the land out to bid, Elkin appeared to lose his breath.

Back in 2006, Tapestry was asked by Boone County to prove it had exhausted all other means of private financing as part of their required due diligence before attempting to tap into the government pipeline.

"They did not do that," Elkin said. "It was a very different kind of transaction."

Although Tapestry has its success stories, it also has a list of sputtering projects and outright disappointments. A Tapestry project in Panama City, Fla., for instance, looks better on the company Web site than on the ground. Its Village Place project in Marion, Iowa, has relied on government bonding assistance but appears to be doing better -- certainly better than the foundered Missouri purchase.

Former U.S. Sen. Richard Bryan represents Tapestry Group in its Las Vegas negotiations. (He also represents the city of Las Vegas in Washington.) He reminded skeptics the city doesn't own the land, and the purchase is a pass-through from the federal government to the developer, and a long list of commitments must be kept in order for Tapestry to eventually take possession. Tapestry, he added, would add much-needed affordable apartment housing to the valley.

As for the lack of a bidding process, something Clark County requires, Bryan said the company has been in negotiations for 30 months with the city and there hasn't exactly been a gaggle of developers lining up to compete for the rights to create affordable housing.

"I think they've gotten a bit of a bad rap ..." Bryan said. "At this point, they really have nothing from the city other than the right to go forward."

Bryan also said the company wouldn't, as some have feared, be allowed to grab the property at a bargain-basement price and then flip it. (It's something no longer allowed since the 99 Cents Store discounts that took place at McCarran Airport.) The development would remain rental housing for 50 years, according to the development agreement, he said.

So, you see, bid or no bid, whopping discount or no whopping discount, it's not such a bad deal.

Especially not for the Tapestry Group, which has done better at making friends and influencing politicians in Southern Nevada than it did in Boone County.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295.