High noon for redevelopment today
Today will be a big day for Redevelopment Area No. 2, but it may not be the last one.
Douglas County commissioners are scheduled to discuss the future of the redevelopment area at their 1:30 p.m. meeting in Stateline.
The agenda item was requested by Commissioners Dave Nelson and John Engels, who have both been vocal opponents of the redevelopment area.
So far, Commissioners Barry Penzel, Wes Rice and Larry Walsh have voted for the area, but considerable political pressure is being applied to get them to change their votes.
The redevelopment area was proposed to help pay to build an events center at Stateline next to the MontBleu.
An indoor events center has long been a goal for South Shore businesses to help stem the loss of visitors to Lake Tahoe.
In Douglas County, redevelopment has been used to convert property tax into sales tax revenues in an effort to make the county self-sustaining.
In March, the state reported the county raised $759,749 in consolidated taxes, which includes sales tax, but it received $1.233 million from counties such as Washoe and Clark County.
That $473,558 a month subsidy is the largest amount given to any of Nevada’s guaranteed counties.
But that also means the county doesn’t really benefit from trading property tax for sales tax revenues.
And Redevelopment Agency No. 2 definitely will put a dent in property tax collections during its lifetime.
The agreed-upon figure of $113 million in property tax generated over 30 years is really just an educated guess. It would require a tsunami to prevent the improvements at Beach Club or Edgewood from increasing in value over the next three decades, but very little of that money has been generated in the less than three years the redevelopment area has existed.
According to the county, the redevelopment agency will generate slightly more than $1 million during 2019-20. That’s half of what Redevelopment Agency No. 1 was generating when it was repealed July 1, 2018.
Looking ahead over the next 30 years, assuming the redevelopment district was eliminated, 27 percent of that $113 million would go to the county’s general fund. A quarter of it would go to the school district and 18 percent would go to Tahoe Douglas Fire District, according to county figures.
There are 16 different taxing districts covering Stateline, according to the Clerk-Treasurer’s Office.
The area was proposed in Fall 2016 to help revitalize Stateline, which has long been a source of revenue for Douglas County.
The casinos generate the majority of Douglas County’s gaming and lodging taxes. They account for more than 5 percent of the county’s total $3.31 billion assessed valuation, according to the Douglas County Assessor’s Office.
They are the largest single generator of taxable sales in the county, generating most of the $7.6 million for the first three-quarters of this year in the food services and drinking places category of taxable sales, according to the Nevada Department of Taxation. That’s out of $33.9 million countywide for the same nine months.
The year before a plan to implement redevelopment was proposed, Connectivity Champion Jacques Etchegoyhen said 37 percent of the county’s property tax and 85 percent of the county’s room and gaming taxes were generated at Tahoe Township, which includes Stateline. The Connectivity Plan suggested in 2015 that it would cost $29 million to renovate Stateline.
Nevada law requires that to be eligible for redevelopment, an area must be declared blighted, and in 2017 there were some examples of blight in the casino core.
Tahoe Shores Mobile Home Park sat on the land that was slated for $1 million condos. The casinos themselves have seen better days and consultants showed slides of the areas behind the casino corridor that showed some neglect.
That presentation was sufficient to convince Douglas County commissioners to approve the redevelopment agency.
The redevelopment area in northern Douglas County has been credited with bringing Best Buy, Walmart, Home Depot, Target and Trader Joe’s to here.
Located near the Carson-Douglas line, it was approved in response to threats by the Legislature to eliminate the sales tax subsidy the county receives from the state.
How much will it cost?
While estimates of the cost of the Events Center have landed around $80 million, that’s also a guess. The real cost including reserves would probably be closer to $90 million, assuming the Tahoe Douglas Visitors Authority paid cash.
Proponent Lew Feldman said even that estimate might be low because the current economic boom has increased the price of materials.
He confirmed the authority plans to seek a bond to pay for the center, which depending on interest rates will increase the cost.
And the authority hasn’t skipped any potential sources to pay off those bonds.
The passage of Senate Bill 461 in the Nevada Legislature guaranteed the authority would have $5 for every hotel room rented in Stateline.
According to testimony on April 9 at the Senate Committee on Government Affairs, the authority was established in 1997 independent of the county or any other tourism entity.
The authority’s chief funding sources are a share of the 10 percent hotel room occupancy test and 4 percent lodging licensing fee.
On Wednesday, Feldman told chamber members that the redevelopment authority is only supposed to raise $25 million or about a quarter of the cost.
When asked what the rest of the money raised by the authority could be used for, Feldman said that would be up to Douglas County commissioners who sit as the redevelopment board. Commissioners heard at their May 16 meeting that they could shorten the time redevelopment is in effect, but they can’t reduce its size.
Until the approval of Senate Bill 461, the authority did not have the authority to go to bond.
Feldman told state senators Stateline generated $350 million a year in gross gaming revenues in 2000, and is down to $200 million a year now.
Feldman said the events center could hold 6,000 people. The largest venue at Stateline currently seats 1,200 people.
He claimed the center could increase Stateline’s revenue by $60 million a year. According to minutes of the Senate committee hearing, the redevelopment district would provide a quarter of the funding for the center and the lodging license fee would generate 20-22 percent. The room fee would generate $50 million. He told senators the authority’s gross bonding capacity would be $100 million.
The meeting is at the Tahoe Transportation Center, 169 Highway 50, Stateline.