Henderson to issue redevelopment bonds

Valerie Miller

Wednesday, April 19, 2000 | 11:14 a.m.

The city of Henderson, strapped by limited funds, is planning to issue bonds to finance its proposed redevelopment expansion, with downtown's Fountain Plaza, the Landwell Co.'s Provenance community and Palm City all seeking redevelopment dollars.

Henderson will likely issue redevelopment bonds through its Redevelopment Agency to aid in financing some of the projects included in its proposed tripling of the redevelopment area, Finance Director Steve Hanson said. The city also hopes to assist projects slated for its struggling downtown.

"The Redevelopment Agency would be obligated to pay back the redevelopment bonds, but only through tax increment revenue that would be generated from the redevelopment area," Hanson said. "The bond holders or purchasers would probably be financial institutions or private investors."

One proposed downtown project, the Phyllis Thompson Co.'s $100 million, three-phase Fountain Plaza, could see redevelopment dollars right away without the need for bonding, Hanson said.

The project planned near Water Street and Basic Road could get close to $1.1 million from the city's existing redevelopment fund for its first phase if the project is approved by the city's Redevelopment Agency.

"(The Fountain Plaza project) is getting closer to what we are looking at, and funds could be available almost immediately if they go ahead," Hanson said. "But it would probably have to be generating revenue before receiving funds for its next two phases."

The current redevelopment fund has about $5 million in it, but $3.7 million of it is already earmarked for the planned Water Street utility and flood control improvements. The $1.1 million for the Fountain Plaza project could come from the approximately $1.3 million left over in the fund, Hanson said.

The city's redevelopment money is limited by the amount of revenue generated by the redevelopment area itself, causing a need to issue bonds to help finance projects that would be economically beneficial to the area, Hanson said.

The city expects to have $1.8 million in the fund for fiscal year 2001, Hanson said. That amount is predicted to grow over the next few years.

"Projecting out, the fund should have $2.3 million for 2002 and $2.8 million for 2003," Hanson said. The increases in the fund will come from growing tax increment revenue generated from developments in the area, he added.

LandWell, the real estate arm of Basic Management Inc., has said it hopes to receive close to $40 million in redevelopment funds to offset the cost of closing and moving the Timet Co.'s active toxic ponds near Boulder Highway and Pabco Road. Once the cleanup is completed, LandWell hopes to add the site to its Provenance development. "I think that if we couldn't get assistance, we couldn't pay to remove those ponds," Stephanne Zimmerman, LandWell's director of financial services, said. "We would have to rethink our plan to close and remove the Timet ponds."

Zimmerman said she doesn't expect to see any redevelopment funds from the city until at least five years, when the project starts generating revenue.

"It is LandWell that is taking the financial risk with this project, not the city," she said.

Hanson has said the very earliest Provenance could see any substantial funds would be two years.

Developers of the 590-acre Palm City project near Lake Mead Drive and Olsen Street will also seek redevelopment dollars for the proposed master-planned community. Although no figure has been arrived at for the project, Redevelopment Advisory Committee Chairman Barry Fieldman said a request for redevelopment funds would likely be made to the city in 30 to 40 days.

Fieldman has publicly disclosed that he and his partner, fellow Redevelopment Advisory Commissioner Bob Unger, have a financial interest in Palm City, which is now owned by Commerce Associates. Neither has voted on Palm City issues, Fieldman said.

Developments included in the redevelopment area are eligible for up to $1 of private redevelopment funds for every $10 of private funds invested according to city policy.

"Adding areas like Provenance and Palm City to the redevelopment district will bring in additional revenue that can go to support projects such as the state college, the Pittman area and projects in downtown," Hanson said.

Valerie Miller is a reporter for the Sun. She can be reached at (702) 259-2319 or by e-mail at valerie@lasvegassun.com