Downtown redevelopment agency cites funds shortage

Diana Sahagun

Wednesday, May 2, 2001 | 11:28 a.m.

At a time when Las Vegas officials are moving full-speed ahead with plans to revitalize downtown with new housing, commercial and retail projects, the city's chief redevelopment agency is running out of money.

Lesa Coder, business development director, was expected to give a report to the Las Vegas City Council today that shows declining revenue expected this fiscal year, which begins July 1.

Coder said Tuesday that declining tax increment assessed on new properties in the redevelopment area will hamper efforts to help fund new projects at least for the next several years.

The news comes as more than 50 projects are being proposed or are under construction in the downtown area.

Coder said the lack of revenue will slow down -- but not cease -- the city's redevelopment efforts. The agency will likely be forced to cease giving financial support to developers and find creative ways to attract them to the downtown area, ideas she will present to the council today.

A silver lining may come from redevelopment projects already in the works that will bring a boost to revenue when they are completed -- the 61 acre project, an addition to the Stratosphere Hotel Casino, Neonopolis, City Centre Place office complex and three major projects at the Las Vegas Enterprise Park.

One such project that will help increase revenue this fiscal year was scheduled to be voted on by the council today. Mainor and Harris law firm is negotiating with the redevelopment agency to purchase a site at the southeast corner of Gass Avenue and Fourth Street for a parking lot, which will be used by the law firm during the day and available to the city free of charge during evening hours. The law firm is building a 27,000-square-foot law center adjacent to the site.

Under the proposal, the redevelopment agency will help cover the costs for landscaping of the parking lot for $390,000.

Randall Mainor, a partner of Mainor and Harris, said the redevelopment agency's and council's positive efforts toward downtown revitalization persuaded the law firm to build a new office downtown instead of heading to the suburbs.

"I wouldn't have chosen to move downtown had it looked like it did 6-7 years ago," Mainor said. "But I think the new project is in keeping with some of the positive things that are going on downtown."

The redevelopment agency took a hit from the Clark County Board of Equalization this year, which reduced the assessed value of several properties located in the redevelopment area. The biggest reduction was given to the Stratosphere, which resulted in a $360,000 loss to the city's redevelopment agency.

A major source of funding for the redevelopment agency is tax revenue that comes from the assessed value of properties.

Because of the decline in tax increment, the agency is expecting just enough money to cover debt service and administrative costs this fiscal year. Only $186,000 will be available for new projects, down from $542,000 last year. Coder said the agency had projected having $1.3 million available for projects when preparing the upcoming fiscal budget.

"What was projected and what we wound up with amounted to a significant loss," she said.

Future success of the city's redevelopment efforts will depend on projects that are being built and planned now, Coder said, because they will generate new taxes.

Until now, the agency has given financial incentives to various developers, like Mainor and Harris, in order to make the projects economically viable.

Those financial incentives will likely cease because there aren't enough funds available this fiscal year, Coder said.

Coder said the redevelopment agency will focus on providing other benefits, what she calls "intangible services."

"We can assist in those service-related areas that equate to money on the tail end," she said. "We will start using some of those other tools, and we will be depending on them more heavily."

For example, the agency will consider fast-tracking new development projects and providing early reviews of construction drawings, decreasing the time frame before construction.

"There won't be an immediate infusion (of finances), it may be a year or two lapse before we realize the fruits of our labor," she said. "But we are moving full speed ahead with redevelopment efforts.