Reno is Getting Stimulated

Not being a government accountant, I'm not sure how all this actually works, but the bottom line is that the City of Reno has been authorized to issue $43.7 million in Recovery Zone Economic Development bonds under the American Recovery and Reinvestment Act (better known as the federal stimulus package). The issuer must repay the bonds, but the feds are providing a 45% subsidy on the interest costs. The Reno City Council has elected to transfer most of this to the Washoe County School District to renovate older schools and to the University of Nevada, Reno to build a new medical building. These two entities will be given the authority to issue the bonds for their projects, thus relieving Reno of repayment responsibility. Council members are keeping $10.6 million for energy conservation projects in Reno.

There is another part of this deal. According to a City of Reno press release, "In addition to the Recovery Zone Economic Development bonds, the City of Reno also has the authority to issue more than $65 million in Recovery Zone Facility bonds. These bonds offer tax-exempt rates for projects by municipal government, non-profits and private developers that would otherwise be financed on a taxable basis. Staff will announce the City's time lines for considering private projects that are eligible for conduit-bond financing at the September 23rd meeting." Interested parties should contact the Reno City Manager's office. There are strings attached, of course, such as actually having a repayment source for the bonds and completing projects within three years. Details on eligibility requirements are found in Nevada Revised Statutes 268.530-568.

Three requests for Recovery Zone Facility bonds have thus far been received. SK Baseball, owner of the Reno Aces, have applied for up to $25 million to complete the Freight House District, a retail and entertainment zone next to Aces Ball Park. Northern Nevada Urban Land Development wants $47.7 million for its Tessera Project of office and retail space between Reno's downtown core and UNR. Evans Ranch LLC is seeking $21.6 million to build wind-energy generation facilities. Since these add up to way more than $65 million, it looks to me like there will inevitable be some wheeling and dealing before anything gets going. And if more requests roll in, it will get even more complicated.

Source: City of Reno press release.

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