Fountain Plaza project killed after 2 1/2 years

Jeffrey Libby

Wednesday, July 18, 2001 | 10:51 a.m.

Developer Phyllis Thompson stood at the top of the steps outside Henderson City Hall. Her cheeks streaked with tears, she smoked a cigarette and stared across Water Street toward Sunrise Mountain as her attorney answered reporters' questions.

Fountain Plaza, Thompson's and the city's first large redevelopment project planned for downtown Henderson since the redevelopment agency was formed in 1995, was killed Tuesday by the agency after more than 2 1/2 years. It took several million dollars in planning expenses with it.

Since January 1999, the city has asked Thompson to secure financing for the $27 million project in exchange for an exclusive agreement to build a 6.5-acre commercial complex a block from City Hall.

Thompson, who saw herself as a local resident who understands the needs of the downtown in which was raised, began with plans that included a non-gaming hotel and convention center. At the city's request, Thompson scaled back the project to include a 105,000 square-foot office and retail complex.

The city sweetened the deal by offering Thompson 17 home lots worth $2.6 million, improvements to infrastructure worth another $1.1 million and a percentage of tax revenues over 25 years.

But Thompson never secured financial backing.

After the latest 60-day extension expired Monday -- there were letters-of-interest from two lenders but no solid commitments -- the redevelopment agency chose to let the exclusive agreement expire.

City Council members double as officers of the redevelopment agency.

"It feels like the market is saying there's something about this project that (it can't be financed)," Mayor Jim Gibson, redevelopment agency chairman, said. "As much as I like the people involved and want to be loyal to relationships, I don't see anything telling me that the project is more 'financible' today than it was 60 days ago or 60 days before that ... . Every possibility of financing has been investigated, and nothing has come to fruition."

Officials ignored requests by Thompson's attorney, Doug Malan, to consider the difficulty of obtaining financing for a redevelopment project in an untested market. He wanted yet another extension, just 30 days, he said.

If the redevelopment agency decides to distribute requests for proposals from developers the city could award a contract for a new project within four to five months, Mary Kay Peck, director of community development, said.

The new project, however, may not be built on the ashes of Fountain Plaza, Peck said.

Of the 6.5 acres at the corner of Water Street and Basic Road, the city owns little more than 2 acres. Thompson owns most of the land, including a strip mall and 10 home lots, which were purchased in the past year as part of her contract with the city.

"If someone else comes in," Malan said, following the meeting, "Phyllis surrounds them. So, Phyllis is a player regardless."

Peck declined to provide specifics for an alternate site. But the only other large downtown parcel the city has assembled is further north on Water Street, close to the corner of Lake Mead Drive and a natural entryway for traffic heading downtown.

That 4-acre parcel, across from a motorcycle dealership, played a larger role than Fountain Plaza in preliminary master plans unveiled by Clarion Associates, a consulting group, during a redevelopment meeting with downtown businesses last month.

The city acquired the lot after it purchased about 15 homes, which were built during the 1940s homes. The homes have been demolished.

Thompson, though, said she isn't finished with Fountain Plaza. She said she intends to meet with a lender today to discuss obtaining a letter-of-intent for financing. She hopes to return to the council with financing commitments and would then ask for a new contract, she said.

"I have worked for three long years. I put my whole life into this project," Thompson said. "I'm very hurt that they did this tonight. I was just inches away from financing."