General fund dollars

Any notion that the business community was solidly behind pouring more money into the Reno Aces took a beating last week at a Reno City Council workshop meeting.

For that matter, the idea that downtown businesspeople were united on the matter was also dispelled. The proposed new city deal for the Aces involved using general fund money, which made people on both sides of the issue—and on the County Commission—nervous.

“If we were a community that was flush, I would certainly be more open minded toward allocating those dollars,” said Java Jungle coffee house owner Matt Polley.

By contrast, Jeff Peterson said because of the Aces, his firm chose to relocate to the downtown.

“It represents a comeback for downtown Reno,” he said, and letting it get away represents “a step backward.”

For audience members, keeping the lines straight was difficult. It was not always clear whether speakers were talking about the original Aces deal or a new proposed deal. Some spectators were confused why the workshop was needed at all. They were under the impression that the new deal had been killed by the incoming City Council. And others were taken aback as they learned more about the original contract.

Meanwhile, some were raising questions about the process under which major projects like the Aces and their stadium are approved.

At issue is a deal under which the Aces are asking for a $1 million-a-year subsidy paid over 30 years and backed by general fund money to partially refinance a $55 million construction loan that built the ballpark, a deal prompted by the recession-drop of property values in Reno and the city’s resulting inability to make its payments under the original deal. At the end of the 30 years, the ownership of the then-aging stadium will revert to the public. On Nov. 14, shortly after the outgoing City Council approved the deal, the incoming Council put it on hold through a reconsideration motion in order to give the public a chance to be heard at the workshop. Holdover members Sharon Zadra and Dwight Dortch, who oppose the new deal, voted for it in the first meeting, making them eligible to move reconsideration when the meeting continued with the new members.

Last week, Pacific Coast League president Branch Rickey threatened to let the Aces start looking for a new city if the Reno deal is not approved.

“While such permission has not yet been sought, we fully understand that the club is being given virtually no alternative,” Rickey wrote.

The “no alternative” language suggested to critics that Rickey has heard from only one side and has not been briefed on the city’s situation.

Supporters of the Aces talked about both downtown revival and the glories of baseball.

John Sande IV, an attorney for Aces owner SK Baseball, said, “We moved our office from West Liberty to across from the ball park. … On game day, there’s nothing like downtown.”

Downtown restaurant owner David Silverman said, “I opened a business … across from the stadium because of the promises that were made” and said “the consequences of not doing [the new deal] are great.”

Former County Commissioner and state legislator Bob Rusk, who owns a hotel downtown: “I’ve been involved in every successful venture in downtown Reno” since the Redevelopment district was created. He urged the Council not to go to the ballot with the issue. “Don’t put it to a vote of the people because I can tell you right now what the decision will be—no, and hell, no.”

Though the new City Council has been criticized for slowing the process down after the previous Council had speeded it up, Nevada Assembly Republican floor leader Pat Hickey said he had no problem with that: “I applaud you for wanting to study this issue yourself.”

But Hickey also said “what a terrible loss this would be” if the team left Reno, and he urged the Council to “find a way” to make it work.

National Federation of Independent Businesses spokesperson Randi Thompson said, “We’ve got a lot of businesses that have moved downtown.” The team, she said, “perpetuate a part of our town that is coming back.”

Jim Galloway said the Council “gave its word … so I don’t see how Reno can renege” on the deal.

The other side

Galloway was one of many speakers who suggested the new Council was toying with the city’s good name, that by not keeping the Aces afloat, the city risked losing corporations who will believe that the city does not keep its commitments to businesses.

But opponents said the Aces supporters were deliberately mixing up two sets of promises to the Aces—the ones that were made originally in 2008-2009 and the promises the Aces are trying to extract from the city now. The original promises have been kept, they said—it’s new promises that are now at issue. The Aces are “coming back now asking for a new deal,” said economics author Helm Lehman.

Lehman added, “Who really benefits from Triple A baseball in Reno? It’s the Diamondbacks, in this case.” The Aces are an Arizona Diamondbacks team.

Larry Moore said it was the Aces that failed to keep their commitments, citing the way the SK Baseball once touted in national publications its plans to commercially develop the former site of the Mizpah Hotel, which has never happened.

Attorney Michael Alonso, speaking for Monarch Casino Resort Inc., said it’s nonsense that the city would be reneging on its commitments to the Aces if it killed the general fund deal. The city has kept its commitments to the Aces, he said, and now is being asked for additional commitments. He said the Council took the right step in “slowing this thing down.”

“But we just don’t support the use of general fund dollars,” Alonso said.

He went on, “The city has lived up to the commitments. The developer wants a brand new deal.”

Alonso said the Aces have a dream deal with the city—“The developer gets relieved of all its obligations” if the city misses a single payment in the next 30 years.

Sharon Honig Bear said neither Aces nor city have done anything to save the historical Freight House building other than using its name. The real Freight House—which is along the railroad tracks on the Aces parcel—is becoming a victim of “demolition by neglect,” she said.

Some critics said they would like to see some independent appraisal of whether the ballpark is actually contributing to downtown revitalization rather than anecdotes and isolated instances of this business or that moving to the downtown.

The more some audience members learned about the original deal between the city and the team, the more outspoken they became that it was a bad deal. For one thing, though Nevada has experienced recessions five times in the last 31 years, the contract with the Aces made no provision for contingencies if another recession hit. The original Aces contract was approved in May 2007. The start of the national recession is generally regarded as December 2007, though given Nevada’s highest-in-the-nation foreclosure rate, the recession probably began earlier in this state.

Daniel O’Keefe complained about difficulty in getting information from the city on the deals. “We couldn’t get a lot of information other than what we got from the Gazette,” he said.

After the workshop some community figures said the original Aces deal should have been given more of an airing before the community, that the city should have affirmatively sought out opinion rather than just relying on the normal public hearing process. Michael Graham, a member of the city’s Old Northwest Public Advisory Committee, said all the city’s advisory boards should have been brought into the process.

“I think there are eight or nine boards with an average of nine to 13 people on the board,” he said. “It would have brought in a lot of skilled questions to the dialogue. I’m willing to bet 100 percent that someone on one of the boards, if they’d been brought into the process would have said, ‘But we’re in a boom now. What happens when we’re in a bust?’—which appears to be a consideration.”

Mayor Bob Cashell said this week he cannot recall why there were no contingencies made for an economic downturn in the original deal: “I really can’t. I know that things were put together so fast because Senator [William] Raggio, if you’ll recall, had put a drop dead date on the car rental tax.” The mayor said the city had about a 60-day period during which it had to act quickly. He said another factor that led to the speed of the original deal was the RED Development—developers of the Legends shopping center—were also negotiating to get the Aces in Sparks.

In an echo of Vietnam policymaking, one workshop speaker argued that the city, having invested so heavily already, should not pull out now.

In milling about before the meeting began, some residents expressed puzzlement that the issue was still alive, having assumed that the newly elected Council had killed the deal. On Nov. 15, the Reno Gazette-Journal reported that the new Council “rescinded” the previous Council’s approval of the deal, which was not the case.