Beers’ Statement on RDA2

As I have talked to people throughout Ward 2 about the proposed new redevelopment agency, I got a lot of basic questions about it.

Redevelopment agencies in Nevada were thought up by the 1959 Legislature, which passed NRS 279, also known as Nevada’s Community Redevelopment law. It was modeled after public policy that had emerged over the previous decade in California.
The concept is that Government can use this tool to combat and even reverse blight. It does so by using eminent domain to take small parcels from their owners, combine them and sell a big parcel to a developer. The other tool this provides is tax increment financing – from the point in time when a RDA is created, an increases in property tax are redirected away from libraries, schools, and other government service providers and instead paid to and spent by the redevelopment agency.

So goes the theory, after a few decades, the city will have reversed blight, turned around falling property values, and be ready to call its job complete. Under the law, the RDA is automatically dissolved, and then the incremental property taxes start flowing to the agencies that were supposed to be getting it all along.

When you read either the state law – I did so the last time last night – or the plan document that we have before us today – it is all about eminent domain.
Las Vegas’ experience with eminent domain has not been good – and continues to haunt us through 2012. Historically, the city has been sued and lost, and seen actual costs consistently double, and lots of ill will generated, whenever eminent domain has been used in a so-called “private-to-private” seizure. The problems continue through this year… months ago, we saw the redevelopment agency try to slip through a six and a half million dollar loss due to poor decision-making, and, in part, poor use of eminent domain, in the name of redevelopment, disguised as an affordable housing cost.

Las Vegas taxpayers and citizens have enjoyed a great decade – thanks to the Mayors Goodman. I believe Oscar’s legacy is not yet written – the hidden costs and losses of eminent domain take decades to be counted, and while his predecessor’s legacies continue to be tarnished by the slow recognition of the damage done through eminent domain, Oscars will not – because he did everything he did for us all the while steering the council away from eminent domain, and he succeeded.

You’ll hear today that the city council has resolved to not use eminent domain. I would remind you that city councils change – and it can happen fast. More than a quarter of the members of the council sitting before you today were not on the board when that resolution was passed. And a future council could just as easily resolve to start using it again.

The reliance on eminent domain is only one of the reasons why I plan to vote against this measure today.

In addition, I am concerned that the plan document itself is fatally flawed. These documents need to be extremely well crafted, because redevelopment often makes someone mad, and they have legal recourse if the plan document contains errors. I believe this one has several.

NRS 279.572 Contents of redevelopment plan: General requirements. Every redevelopment plan must show:
1. The amount of open space to be provided and the layout of streets;
2. Limitations on type, size, height, number and proposed use of buildings;
3. The approximate number of dwelling units;
4. The property to be devoted to public purposes and the nature of those purposes;
5. Other covenants, conditions and restrictions which the legislative body prescribes; and
6. The proposed method of financing the redevelopment plan in sufficient detail so that the legislative body may determine the economic feasibility of the plan.

Our document essentially promised the required details later. And its economic feasibility determination rests on assumptions of future revenue and expenses that are not reasonable. The revenue assumption is built on a minimum first year increase in assessed value of a half percent, but the budget we passed a couple of months ago forecasts a five percent decrease in assessed value during the same period. And the expense assumption says there won’t be any, although staff now agrees with me that there will be accounting and auditing hard costs in the tens of thousands of dollars right out of the gate.

Also – NRS 237.090 requires a business impact statement – and the one in here is essentially not filled out. Every single element is marked “not applicable” or “not identified” – kind of like the check mark on the agenda summary page indicating this item has no fiscal impact. It’s incorrect, and with a document like a redevelopment plan, failing to get it right at the outset can have deep and expensive consequences down the line.

Finally, I am voting against this plan today because I have concerns that the million dollars of general fund money that we have budgeted to spend by giving it to property owners in the proposed RDA is enough to accomplish the goal of raising assessed value within and around the limits of the new RDA. Especially without any large parcels of land and without any private sector “anchor tenant” anxious to invest millions in a project.

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