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January 22, 2009
Culinary to take beef with city to voters
Halting city hall plan, curbing redevelopment spending are union’s aims
Las Vegas Sun
by Joe Schoenmann, Sam Skolnik
A union fighting Forest CIty instead of providing it with political cover? Las Vegas really is a fantasyland.
Culinary Union officials say they will file two petitions today with at least twice as many signatures as necessary to force June 2 ballot questions aimed at not only stopping Las Vegas from building a new city hall but limiting its options for spending redevelopment money.
...[Culinary Union Political Director Pilar] Weiss said the union’s hand was forced by the city’s push — during a recession and at a time when government services to the public are being slashed — to build a $150 million city hall, which would require the city to raise $267 million through public bonds.
...The city hall financing hinges on an agreement with developer Forest City Enterprises, which would build and develop the 303,000-square-foot building at First Street and Clark Avenue. After construction, the city would lease the building for up to 30 years.
The city intends to sell bonds to finance construction. After finishing the building, Forest City would collect lease payments from the city, which it would use to pay off those bonds.
The deal also includes a one-time payment to Forest City of $7.5 million, equal to 5 percent of the building’s expected construction cost.
But a multimillion-dollar land swap is key to the deal. In exchange for giving the city a block upon which to build city hall, Forest City would get a plot of land in the highly touted Union Park development. The developer wants to build a casino on that plot.
NoLandGrab: Could this deal be more convoluted? It sounds to us like Forest City is swapping the land under the would-be new City Hall for other land owned by the City of Las Vegas, which will sell bonds to pay for construction and then lease the building from Forest City, which will use those lease payments to make payments in lieu of taxes to pay off the bonds. Oh, and the city will toss in a little cash, too.
One thing is simpler, though — by constructing a government building, Forest City doesn't have to go through the motions of trying to look like it's seeking commercial tenants before the local government becomes the biggest tenant in the building, as was the case with Forest City Ratner's MetroTech complex in Brooklyn.
Posted by eric at January 22, 2009 11:41 AM