Las Vegas ready to OK city hall bond sale

By Buck Wargo (contact), In Business reporter

Fri, Nov 27, 2009 (3 a.m.)

Commercial development in Southern Nevada is stagnant, but a move next week by the Las Vegas City Council is expected to pave the way for the next wave of downtown projects once the economy recovers.

The City Council is preparing to authorize issuing bonds that would enable Ohio-based developer Forest City Enterprises to build a new city hall at First Street and Clark Avenue. It would set the stage for Forest City to build commercial projects adjacent to the city government center and swap other land with Las Vegas for a hotel and casino.

Despite the recession, developers have faith in downtown Las Vegas’ revitalization.

In November the City Council approved an exclusive negotiation agreement with the Cordish Cos. that lets the developer explore building a casino on the existing City Hall site. It would also explore developing an 18,000-seat arena and an entertainment district on 12 acres of vacant land across from the existing City Hall.

On Dec. 2 the City Council is expected to authorize bond sales to build the $179 million city hall project, using stimulus funds. Forest City would build the project and lease it to the city under a lease-purchase agreement.

Forest City owns 13 acres on five blocks that would be part of the project. Construction on the city hall is expected to start in January and is key to the development.

The plans haven’t been finalized, but Forest City intends to build an office development that would include some ground-level stores and other businesses, such as a coffee shop, copy center and dry cleaner. The developer will target attorneys and other companies that do business with the city as tenants, officials said.

What will be built depends on the market demand, Forest City spokesman Jeff Linton said. It will take 18 to 24 months to build the city hall, and Forest City has two years from that completion to start its office development or face penalties from the city, he said.

Once the city hall is completed, Forest City has up to five years to develop a casino on city land adjacent to Symphony Park. A gaming partner hasn’t been identified, Linton said.

The recession isn’t a deterrent to going forward because there is plenty of time for the economy to rebound and make that commercial development viable, Linton said. In its 80-year history the company has gone through several down cycles and although the conditions cause a “certain amount of pause,” they will improve, and it make sense to move forward, he added. The firm has a significant investment in its downtown land, he said.

Without a city hall as the centerpiece, the project wouldn’t make sense as an investment, he said.

“The times have changed, but we believe wholeheartedly in the city’s vision to stimulate downtown,” Linton said. “We believe very much that downtown Las Vegas can be revitalized. It can be a great new living room for Las Vegas, a place people can go and feel at home.”

Las Vegas Mayor Oscar Goodman said he is excited about the wave of development that will result by building a new city hall.

“All the right pieces are in place, but it is a question of economics (right now),” Goodman said. “We are not that far away once these bonds are sold … I am excited.”

John Restrepo, principal of Restrepo Consulting Group, said Forest City’s willingness to go forward says the company has a “positive view of the future of Las Vegas.” Because it will be at least two years before any adjacent development occurs, the city should be in the midst of an economic recovery by then, Restrepo said.

Just going ahead with the construction of a city hall is a much-needed boost to the local economy to provide construction jobs, he said.