Parched pocketbooks

Financing redevelopment sucks money from schools, but how else are you going to get a brand spanking new convention center?

The proposed downtown convention center holds the dream of saving downtown Reno. But will it come at the expense of education?

On Tuesday, July 10, while the Reno City Council decides how the $65 million convention center will be funded, the Washoe County School Board will take up the issue of the city expanding its redevelopment area—draining more money away from schools at a time when state education funding is tight.

State lawmakers in recent years have passed legislation that enables the raising of room taxes and the creation of special assessment districts to buoy the city’s redevelopment agency. The money is needed for a downtown convention facility. The facility is needed for Baltimore developer David Cordish’s envisioned revitalization of downtown. The revitalization is needed as Indian gaming threatens Reno’s tourist-based economy.

The facility’s funding has become a bone of contention between casinos downtown and outlying areas. The facility would largely benefit the downtowners. But room taxes from all the casinos would be used for the construction—and to subsidize the facility, which is expected to lose hundreds of thousands of dollars annually. [See Guest Comment]

Now, recent talk of expanding the city’s 323-acre redevelopment district from downtown to Park Lane Mall in the south, as far west as Keystone Avenue, and east to Wells Avenue, is gaining opposition as well.

Last month, critics began circulating a concerned letter, signed by a state legislator, two county commissioners and other former elected officials, as well as a few folks from the teacher’s union. The letter notes how redevelopment takes $5.6 million from city, county and school district coffers and complains that nearly a quarter of the $113 million the agency has spent since its creation in 1983 has gone toward administrative expenses.

When city staff first asked for the extension of the redevelopment district to accommodate the new convention center, council members began talking about extending the district into older, blighted areas, said Reno City Councilman Dave Rigdon.

“This thing is being driven by David Cordish,” he said.

Rigdon, though critical of redevelopment, likes the idea of an extended district. His ward represents the Park Lane and Shoppers Square area. But he’d also like to see changes in the redevelopment agency. The agency, he said, should be independent of the City Council. That would protect it from the whims of whatever political wind is blowing and the influences of special interests.

The agency should also be independent of some city staff, Rigdon said. “The city manager should not be executive director of the agency.”

Reno insurance broker Mike Robinson, one of the letter’s circulators, questioned the timing of the city’s move to annex 3,015 acres in Boomtown and Verdi. Since redevelopment districts don’t have to be contiguous, perhaps Boomtown Casino could one day be included in a redevelopment district, he theorized.

The redevelopment agency, Robinson said, has been a prime instigator of fiscal inequity in our area.

“One group of taxpayers is paying for another group of taxpayers,” he said.

Reno City Councilwoman Jessica Sferrazza-Hogan agreed.

“Some council members are attacking the fiscal inequity with the county,” she said. “What about fiscal inequity caused by the redevelopment agency in terms of the rest of the city?”

Reno Redevelopment Administrator Robert Ryan, hired by the city in January, said that a cost-benefit analysis conducted earlier this year showed that the $6.6 million spent by the redevelopment agency since 1993 could have been covered by the city’s general fund. In the mid-1990s, the agency had plenty of cash on hand and paid for things like downtown maintenance while the city faced tight times.

Since the agency’s inception, redevelopment brought $31.5 million in new sales taxes into the city and $21 million into the school district, Ryan said. During that time, $10 million in property tax that would have gone to the city came to the agency. The school district also received $20.9 million in sales taxes during the period versus $9.3 million in property tax directed to the agency.

“To me, it is a flawed argument that [the agency] is taking away money from the county and schools, since most of the new increment would not have occurred without redevelopment,” he said.

Before the council makes any decision on changing the redevelopment area, it would have to pass through the school district.

Last year, the city of Sparks agreed to pay up to $1 million over the next few years for improvements to older schools in the Rail City. Some Reno officials seem eager to come up with a similar arrangement. School district spokesman Steve Mulvenon said he was encouraged by Reno’s apparent willingness to compensate some of the lost revenue.

"Our arrangement with Sparks does not—and any arrangement with Reno would not—make us whole," said Mulvenon. "But it would be a positive step."