Water Authority to consider renting building downtown

Thursday, Dec. 16, 2004 | 8:14 a.m.

The Las Vegas city council this morning approved and the Southern Nevada Water Authority on Thursday will consider a deal that would put a new 14-story building and more than 300 water agency workers on what is now city-owned land downtown.

The water authority board is scheduled to consider renting the new building downtown for its employees who now work from increasingly crowded offices on West Flamingo Road.

The city council voted 7-0 to amend a development agreement with the Molasky Group of Companies, so the company will pay $1,000 instead of just under $2 million for the roughly three acres the building will be built on. The building will go next to the company's new IRS building, which is expected to open next month.

The discount was contingent on several conditions, including that there be free parking in the building's parking garage for nighttime events at a planned performing arts center, and that the building house a major tenant, expected to be the water authority.

Irwin Molasky said the $2 million discount will be passed on the water authority in through discounted rent for the first two years.

The water authority will be charged $1.8 million for their first year, which is expected to begin in mid-2007, then $2.4 million for the second year, and $3.6 million for the following years, Richard Worthington, Molasky Group president, said.

"The incentive is being passed directly through to the SNWA," Worthington said.

Mayor Oscar Goodman and Councilman Lawrence Weekly praised the project. The mayor said the planned building, along with the IRS building, will bring hundreds of people to the area to support the planned development of the nearby 61 acres.

Construction on the new $75 million building at Grand Central Parkway and F Street, which would include six floors of parking and eight floors of office space, is scheduled to be completed in 2007. The water authority also would have an option to buy the new building.

The offices now used by the water authority are in addition to the offices shared by the water authority and Las Vegas Valley Water District at Valley View and Charleston boulevards. Those offices, which are home to the top brass, many of whom work for both the water authority and water district, would not be immediately affected by the move.

Richard Wimmer, water authority deputy general manager, said the move would increase the 81,000 square feet now used at the West Flamingo offices to 129,000 square feet.

He said the rental cost for the new building would be about $2.20 a square foot per month compared to the projected cost of $2.02 a square foot at the old building. The approximate yearly cost of the lease of $3.6 million does not take into account an agreement to cut half the rent for the first year of the move and a third of the rent the second year, Wimmer said.

"It's a good business deal for the authority," he said. "It gives you total flexibility to grow however you want to grow."

The authority would spend about $2 million annually for rent at the old offices if no more space there were rented, according to Wimmer. He added that as the water authority hires more people in its continuing effort to bring more water to the Las Vegas metropolitan area, more space will be needed.

The water authority's offices on Flamingo are running out of room for expansion, he said.

Wimmer said another advantage is that it takes what is now a 25-minute drive from the Valley View offices to the Flamingo offices and trims it to less than 10 minutes.

Las Vegas City Manager Doug Selby said the move would "bring a lot of talented, well-paid people" downtown and aid the city's efforts to encourage investment in the center city.

The city would rapidly recoup the discount on the land through new property taxes, Selby and Worthington agreed.

Selby said the property taxes from the project would generate about $500,000 annually.

The land now is generating nothing in terms of property taxes, Worthington noted.

"It's a quick return," he said. "It's a productive use of government assets and it benefits another public agency."

Worthington said the Molasky Group has had a 25-year commitment to downtown development, of which the new project is the latest chapter.

"It's really the realization of the city's vision that they've been working on for years."

Selby and Wimmer said that Las Vegas Mayor Oscar Goodman, who also is a member of the water authority board, did not initiate or promote the proposed move.

Worthington, Selby and Wimmer said another benefit of the new building is that it would be constructed to a national standard for energy and water efficiency.