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September 15, 2014

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DAILY MEMO: CITY GOVERNMENT:

City hall plans moving forward, behind the scenes

Image

COURTESY CITY OF LAS VEGAS

Artist’s rendering of Las Vegas city hall project. The 310,000-square-foot city hall will be at First Street and Clark Avenue.

Oscar Goodman

Oscar Goodman

Two months ago Mayor Oscar Goodman said the City Council needed to take a step back and evaluate its proposal for a new city hall.

“We hope the times are less challenging, and then we’ll decide whether or not we’re gonna pay for it, and whether we can pay for it,” Goodman said at the council’s July 1 meeting.

The mayor asked staff members to determine whether the city could sell special certificates of participation, which are similar to bonds, to pay for the project, originally estimated to cost a quarter-billion dollars or more. Goodman wanted answers by September, and it seems he will be getting the answers he hoped for.

Despite public uncertainty, it appears by several key indicators that the city is moving forward with plans for a new city hall — a 300,000-square-foot building near First Street and Clark Avenue.

Goodman said last week that the city and its main developer, Forest City Enterprises, are getting appraisals and bids to see “whether it makes economic sense.” He predicted the construction bids would be “a lot lower” than previous estimates — translating to a lower overall price tag.

A lower price for the project would improve the city’s chances of selling the certificates of participation at an affordable interest rate. (Under the proposed lease-purchase agreement, the city would sell the certificates to investors to pay Forest City. The city would then lease the building, and tenant payments would be used to repay certificate holders with interest.)

Original financing projections assumed the certificates would be sold at an interest rate of roughly 5 percent. In June, Goodman lamented that the best rate the city could get was an unacceptable 7.5 percent.

Forest City spokesman Jeff Linton said that although “we can’t speak for the city,” Forest City remains optimistic that the new city hall soon will move forward.

Several things still need to fall into place, Linton cautioned, but Forest City is confident that construction could begin by the end of the year.

The main construction contractor, Whiting-Turner Contracting Co., is collecting estimates on building costs and should have them by the middle of this month, he said.

The plan for a new city hall has been controversial. Critics have called it overly expensive and unneeded, particularly in a deep economic recession that has hurt city tax revenue.

Goodman and other proponents have argued that the project could provide a needed shot in the arm for the downtown economy. Much could be lost by delaying it, they say — without a new city hall, several other potential developments connected to the deal could falter, including two new casinos and a sports arena.

Though the overall project is theoretically on hold, the City Council recently awarded a $107,800 contract to a structural engineering firm to design a parking garage on South Main Street for the new city hall. According to a city spokesman, money was set aside several months ago and the garage is being constructed, in large part, to service Symphony Park, which will connect to the structure via a pedestrian bridge.

As the recession lingers, the council’s once-unanimous support for the project has weakened.

Newly elected Councilman Stavros Anthony made the new city hall a campaign issue and continues to oppose it outright. Two others, Lois Tarkanian and Steve Wolfson, say they are reserving judgment.

But for now, at least, the center is still holding.

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