Efforts of LV Redevelopment Agency lauded in study
Fri, Feb 13, 2009 (2 a.m.)
An independent study of the economic and fiscal efforts of the Las Vegas Redevelopment Agency praised the agency’s efforts to improve the city’s core.
The report from the Las Vegas-based consulting firm Applied Analysis was commissioned by the redevelopment agency and was presented at its recent meeting, which took place in conjunction with the Las Vegas City Council meeting.
In its summary, Applied Analysis identified the part of Las Vegas the agency has focused on as “arguably among the nation’s most successful redevelopment areas.”
Brian Gordon, analyst for Applied Analysis who prepared the report, said the company used information supplied by the city about redevelopment projects that have been completed, are under construction or are in the pipeline.
“The primary focus was to take a look at the economic benefits associated with development and reinvestment that has taken place within the redevelopment area and also to take a look at what the impact has been from a fiscal standpoint,” Gordon said, “so basically what the costs have been and what the benefits have been.
“We took a look at the ratio between those figures as well as quantifying what the economic impacts are, the number of jobs that have been created, wages paid and the amount of economic output that has been generated.”
The effect is measured from the time the redevelopment agency was created in 1986 and looked at the impact during the construction phase of projects as well as the annual recurring economic effects going forward.
The study also looked at projects in the pipeline.
“We quantified the impacts associated with those future projects, which are clearly significant,” Gordon said. “At the same time, we commented on the fact that it’s going to be difficult for some of those projects to move forward given the current economic climate today.”
And, of course, if projects don’t move forward, their benefits won’t be realized.
The assessment of the redevelopment area as among the nation’s best was based on several factors, including the number of projects completed, jobs created and the ratio of private to public dollars invested in projects.
The report identified the industry standard for that ratio as $1 to $8 and $1 to $12. The ratio for project under way or completed is $1 to $15, meaning that for every dollar of public money that is spent, $15 of private money is invested.
The report comes at a time the redevelopment agency is under fire from some local groups, including Culinary Local 226, for the way it is being run.
The union submitted petitions last month that would force ballot questions on agency projects and the city’s redevelopment plan.
Chris Bohner, research director for the Culinary, said suggesting a study done by Applied Analysis was objective is ludicrous.
“Applied Analysis has a vested interest, given that they have clients in the redevelopment area that are seeking or have received redevelopment money,” Bohner said. “The study is a piece of propaganda that looks at all of the benefits and none of the costs.”
Gordon said the company’s extensive client base was not a factor.
“At our foundation and at the core of our business were analysts and not advocates,” Gordon said. “We look at data that are available and summarize our findings in a report that is produced based on facts.”
Applied Analysis has a diverse client base that includes companies outside the redevelopment area. Its clients include the Southern Nevada Home Builders Association, Las Vegas Chamber of Commerce, most of the area’s major gaming companies, the Las Vegas chapter of Associated General Contractors and several major commercial brokerage firms.
Its market analysis reports are also referred to regularly by news organizations throughout the valley.
Gordon said Applied Analysis recognizes that any time public dollars are involved there are going to be challenges, especially with a hot-button issue, such as redevelopment agency funds. There are always arguments, he says about how money can be best used, but those public policy decisions are outside
of the scope of what was requested in the study.
“I’m just pointing out that it was reported to be an independent study and (Applied Analysis) had a conflict of interest that was not disclosed,” the Culinary’s Bohner said. “If they really wanted to do an independent study they needed to get an out-of-state company that didn’t have any local clients.”
The redevelopment agency issued requests for proposals last year and Applied Analysis was chosen from three companies.
Among findings in the analysis were the $2.7 billion in new development, and 24,348 jobs have been created since the agency was formed in 1986. The analysis also stated in the past five years the tax revenue in the agency’s area has tripled from about $8 million a year to $25 million.
One statistic that generated considerable interest among the City Council was the effect of taxes in the redevelopment area. The study determined that assessed property values within the redevelopment area have expanded by 251. 4 percent. Gordon said the increase was a function of two factors: the appreciation of existing assets and incremental value associated with improvements within the redevelopment area. He said it is hard to determine to what extent each factor contributed to the increase.
Several council members pointed out, however, that the baseline number used for the analysis is fairly flat and that, as a rule, if blight is allowed to go unchecked it will decrease property values in an area. They contend that based on that assessment, it is possible that the increases estimated as a result of redevelopment area projects are actually conservative.
Gordon said the real windfall for the city would occur in 2031, when the redevelopment agency is scheduled to cease operation. At that point, the funds generated by the agency’s efforts will go directly into the city’s coffers.
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