Report puts costs on development

Dan Kulin

Thursday, Sept. 2, 2004 | 9:45 a.m.

In North Las Vegas, new office, industrial and most residential developments bring more money to the city than the city spends on services for those developments, according to a report presented Tuesday to the City Council.

In contrast, retail and apartment developments are financial drains on the city, the report from the private firm Tischler & Associates said.

The results surprised some on the council, and Mayor Michael Montandon said he wasn't convinced that retail development is a financial loser for the city.

In general, council members said they won't turn to the report to help them decide individual requests for zoning changes, and instead will use the report to help with long-term land-use planning.

"It's a great starting point," the mayor said of the report, which cost the city about $55,000.

The mayor also noted that the report looked solely at the financial impact of development on the city.

"Expenses that are not municipal were not taken into account, mainly education," Montandon said.

Councilwoman Shari Buck said the report gives some insight into how growth does or doesn't pay for itself.

Buck said that the report should be useful when the city staff and council work on a new land-use plan for the city, known as a comprehensive plan.

The report looked at the financial impact of 10 kinds of development, estimating typical revenue from taxes and fees vs. expected expenses, which were primarily in public safety.

According to the report:

The two land uses identified as drains to city funds were apartments, which were said to cost the city $289 more to serve than each apartment meant in new revenue. Also, retail space was said to cost the city $2,084 more than it generated in revenue per 1,000 square feet.

Tischler representatives said the retail figures were largely the result of how sales tax revenue is distributed in Nevada, where sales tax is distributed based on population, and not where a store is.

Also, the residential uses were boosted by the state's tax distribution system, which is largely based on population.

Montandon said if the report's findings were put into practice, the city would discourage any new retail development. But the mayor said that is not likely to happen because residents need stores near there homes.