Reno City Council Supports Ballpark Refinancing
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Image Courtesy: Reno Aces
The significance of Wednesday's vote to refinance the Reno Aces baseball stadium was made clear when Reno Mayor Bob Cashell tuned in via telephone to vote on the deal, as he recuperates at home from open heart surgery.
With his voice bouncing off the walls of the council chamber, almost like the great and powerful Oz, the mayor pleaded with the city council to support the deal.
"The economy got us all," he said. "To not do it is turning our back on our partner. There's an image we've got to look at. There's a way to figure this out."
It cost SK Baseball $103M to build the stadium, and the $55M loan it took out to finance the project is due next December.
But partners Herb Simon and Jerry Katzoff are no where near repaying that debt.
The original plan was to repay the stadium debt with downtown property taxes, but the economic downturn drastically reduced that revenue stream.
Now, the company is considering moving the Aces if it can't refinance, despite the team's recent Triple A Championship title.
The owners want Reno to contribute $1M a year from the general fund for the next 30 years.
Washoe county would also contribute $500,000 a year for that same time period.
Collectively, that's $45 million dollars in taxpayer money going towards the baseball stadium.
"The perception that we're coming here to ask you to take over our debt is not really reality. We're asking you to loko back at what we were offered. The world changed and said partner Jerry Katzoff:
Last night, councilmembers discussed using a current $750,000 loan with team owners and $100,000 from the Redevelopment Agency to pay that $1M per year.
But the city did not know where the additional $150,000 would come from.
That's why Councilmembers Dwight Dortch, Jessica Sferrazza and Sharon Zadra voted against the deal.
Dortch says the city is dealing with too many other financial concerns right now, like the SAFER grant that's funding the city's fire department, which expires in two years.
"There's a lot of things on the table for us and to commit frunds from the genreal fund for this project is scary to me. I can't go there," Councilman Dortch said.
In order to finance the deal, Washoe County has proposed increasing the rental car tax to offset the money it would take from its general fund.
But Alan Cieniuch with Enterprise Car rental opposed the idea.
"The car industry is not a crutch for this burden," Cieniuch said at Wednesday's meeting.
The Reno-Tahoe Airport Authority has also expressed concerns with the rental car tax increase.
Now, the refinancing deal isn't entirely on the backs of local government--it would also include private funds.
Herb Simon said he would contribute some of his own money, and there's talk of adding a ticket tax to generate additional revenue.
Councilwoman Jessica Sferrazza also expressed her opposition to the plan on a basis of principle.
"We told the public we would never use general fund for this project," the councilwoman said.
But Councilman Dave Aiazzi says the city needs to step in like it did with the downtown movie theatre.
"There's all sorts of restaurants in the downtown area and the movie theatre is their base. We gambled $16M on that theatre. The Redevelopment Agency takes risk, and I understand this is the general fund. But it's the same thing," Aiazzi said.
Councilmembers Dan Gustin and Pierre Hascheff also voted for the measure with the mayor.
The first of two votes was last night. The final vote will be November 7th. At that meeting, the city will also discuss a condition that the Aces cannot leave Reno until this 30 year debt is paid in full. Then, the baseball stadium would become publicly owned. Washoe County will also vote on its part of the deal in the next few weeks.