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Investing In The Greater Good
By DON CLARK – February 2 , 2017
Two weeks ago, I wrote about why I think we need a great downtown here in Reno—a place that reflects, celebrates, and validates us as community. Now I want to talk about why we need some community-first innovation that will help us reach that goal. I said I would share some ideas about how we’ll use the West 2nd District to make it happen. So here we go.
Our work is about much more than the transactions of buying land and building buildings.
We see West 2nd as a long term, big-picture investment in Reno, the city and region we and nearly 500,000 other people call home. To me, that means doing our part to lift up the community and make it safer, stronger, and more livable.
Downtown Reno needs new high quality infrastructure badly. Two weeks ago a mylar party balloon flew into a transformer near our building and blew out power to half of downtown, all the way to Plumb Lane. That shouldn’t happen.
The recent storms have shown why a new Virginia Street bridge was so valuable: no water backed up behind it like had happened many times previously with the historic bridge. Instead, the floodwaters flowed under it and helped to prevent more damage to downtown residents and businesses. These are good example of why good infrastructure matters so much.
We know that building good infrastructure is expensive, and we want to do what we can to help reduce the financial risk to the City of Reno. So we’re asking the City to work with us on a Developer-Financed Public Infrastructure Reimbursement Agreement. What this means is we, the developer, will pay for the public infrastructure costs (the streets, curbs, gutters, sewer pipes, signage, landscaping, etc.) the City needs but can’t afford without bonding additional debt.
The City would reimburse us for agreed upon public infrastructure expenses only after the West 2nd District is raising property tax revenues for the City as projected by a third party analysis, and after the existing senior debt in the City’s redevelopment district #1 (RDA 1) is paid off. This debt is currently about $24 million and is being paid down out of the City’s general fund because the RDA is not producing enough revenue to pay it down on its own.
If the West 2nd District project doesn’t generate enough incremental property tax revenue as projected by the third party analysis, we don’t get reimbursed for the public infrastructure expenses. Period. Plus, the current base property tax revenues are never touched—only the incremental property tax revenues generated by what we build inside of the West 2nd District above the base revenues would be used for the reimbursement of the agreed upon infrastructure expenses.
This is not a status-quo approach to development, but then again, we need some new ideas to meet the infrastructure needs of a growing community. Working with the City to create a Developer-financed public infrastructure reimbursement agreement is one way of demonstrating transparency and accountability to the City and the general public, of minimizing financial risks to the City, and of delivering demonstrable value in downtown Reno.
Thanks for reading, I look forward to sharing more with you next time.