Furniture mart developer wins tax-rebate support

Mathis Winkler

Thursday, Aug. 30, 2001 | 9:34 a.m.

The city's advisory body on redevelopment issues Wednesday gave cautious support to a tax proposal by developers of a planned $1 billion furniture mart.

The proposal asks the city to rebate half of the property taxes the downtown project is expected to generate over the next 15 years.

In return, the developer would not ask the city to contribute money for the project up front. The 57-acre World Market Center is planned for the corner of Grand Central Parkway and Bonneville Avenue.

Three of four board members of the seven-member City Centre Development Corp. who were present at the meeting voted to recommend to the City Council to keep negotiating about the tax sharing deal.

Although a new state law requires a majority of an elected board to approve an item, some appointed bodies, such as the City Centre, are not affected by this rule, City Attorney Brad Jerbic said.

Council members are expected to discuss the proposal at their meeting on Wednesday. They rejected an earlier proposal by the developers for a rebate on all of the property taxes over the next 25 years.

If the council votes in favor of the new plan, city officials will continue to work with the developers on a final agreement. A July 2002 deadline has been set for that document.

Representatives of World Market Center told the City Centre's members that their proposal would change the way the city has previously handled agreements with developers.

"Every other project has said, 'We want you to borrow money, give it to us and we'll build the project,' " said Richard Jost of Jones Vargas, the law firm acting as legal consultant for the developers. "This project is putting at least 50 cents of every dollar into your pocket right from day one."

World Market Center officials said they expected to receive about $45 million in tax rebates from the city over 15 years.

"We don't even get enough to cover the cost of parking structures," said Shawn Samson, a managing partner in the project.

City Centre Chairman Nick Niarchos, who voted in favor of the deal, said the city had money to gain and little to lose.

"Giving away 50 percent (of property taxes) is probably creating a lot of money that we wouldn't have," he said. "It's a (project) that would take downtown Las Vegas to a whole other level of sophistication."

But board member Gary Vause, who opposed the tax sharing plan, said the developers could do well without the city's help.

"I just think it can be viable on its own," Vause said. "They don't need participation from the city."

Samson said 350,000 square feet of the center's first phase of 1 million square feet were already leased. The developers were also negotiating with furniture companies for leases of the remaining 650,000 square feet, he added.

Another 300,000 square feet could also be filled immediately, and Samson said his team was considering building more than they had initially planned for the first phase to satisfy customer demand.

The developers have to purchase the first 20 acres of land from Union Pacific Railroad at a cost of $654,400 per acre by Sept. 11. Construction is scheduled to begin in April 2002 on the first phase, with a December 2007 completion date estimated for the entire 57-acre project.