Why Reno’s broke, broken
The Reno City Council hired a new city manager without a national search. It’s OK. Who doesn’t love state budget director Andrew Clinger? He’ll be worth nearly $200,000 a year. He’ll have his work cut out for him.
Reno’s in a bit of a budgetary pickle. Projected deficit for 2011-2012: $10.1 million.
No matter. At a meeting last week, the city forgave a smooth-talking developer’s back rent—around $800,000—owed for a parking garage at the old Fitzgerald’s Casino in downtown Reno. The city owns the garage. The developer is Fernando Leal, whose credits include the failed Montage condo-plex on Sierra Street. Leal defaulted on the loan, and the Montage went back to the bank.
Now Leal’s back at the wheel with plans for a gee-whizzy project to build the Tallest Rock Climbing Wall in the World (!) on the derelict Fitz. Architectural sketches include plenty over which to drool. Hip micro-eateries, indoor bouldering park and a non-gaming hotel. Phase 2 includes BMX/skate park and zip lines crossing Virginia Street.
The council boys’ excitement was palpable. Zip lines! Edgy! Reno will be cool!
What’s $800,000 in rent with so much delicious hipness at stake?
Leal and his partner bought the Fitz in 2007, when the casino was still running. Leal had big refurbishment plans. The partners hired Rob “Son of a Reno Mayor” Cashell to run the joint. Cashell was a likely candidate, given his experience running the Alamo truck stop in Sparks.
The casino failed. The Fitz became another vacant hulk in downtown Reno.
Why does the city own its parking garage? Back in the ReTrac train trench glory days, the city condemned and purchased the Fitz’s parking garage. It needed the under-garage land for the project. Later, the city used the garage as collateral to borrow a pile of money from Depfa, an Irish bank owned by the German government. The city now owes $6 million, much more than the garage is worth.
Leal needs the garage to pursue his exciting plans. Not enough to pay rent on it, but hey. Times are hard. “We cannot suffer any more!” Leal cries, promising the Council that he’ll open the climbing wall before Labor Day. In a couple of years, Leal & Co. could buy the parking garage for $2.5 million.
That would leave the city owing only $3.5 million to Depfa.
Councilwoman Jessica Sferrazza, her logic not yet goo-ed over by the wall’s allure, expressed concern. If Leal pays $2.5 million for the garage and the city owes $6 million, is that not a problem?
Councildude Dave Aiazzi quickly baffled Sferrazza with bull. If the city doesn’t sell the garage for $2.5 million, it’s still $6 million in the hole.
Aiazzi’s argument wasn’t quite valid. For one thing, the folks who sublet the Souvenir Station, a T-shirt shop in the garage, offered $3 million for the property—during public comment.
The Council boys, however, refused to consider Souvenir Station’s offer. T-shirt shops are passé. Bouldering is hot. BMX! Mmm! Zip line! Tasty! Climbing tall phallic edifices! Using fake rocks! Grunt, moan, ejaculate.
(Why does the money-pittesque Reno Aces Stadium come to mind?)
The Council did not know if the Irish-German bank would be OK with the garage’s short sale. But they voted “OK” anyway.
In other news, half an hour later, the Council voted—with no discussion or public comment—to further harass homeless people for camping by the river, making it a misdemeanor.
Leal’s failures can be forgiven. The poverty of failed men and women living on the banks of the Truckee River is inexcusable.
Reno. Financially and morally bankrupt? Maybe. But our tremendous 167-foot climbing wall’s going to rock.