On Monday, pull a Tyson on an earmarked empire


If the U.S. Treasury offered to sell you hundred-dollar bills for $41 each, would you buy some?

Show up at Sparks City Hall tomorrow to learn how.

At 3:30 p.m., the council will rubber stamp a seemingly innocuous item called a "memorandum of understanding" with Syufy Enterprises, putting the theater chain in charge of the entire Victorian Square downtown redevelopment project.

Syufy is already building a 14-plex movie theater on "C" Street. It sits on land acquired by the city and appraised at $585,555. It was deeded to Syufy for $575,000 minus up to $10,000 to buy water rights. The property cost Sparks another $1.4 million to acquire through negotiation or condemnation, then prepare for Syufy. The $575,000 purchase price represents about 41 cents on the dollar of the city's cost. Some might call it corporate welfare. City government calls it redevelopment in the best interests of the community. Any businessperson would call it one helluva deal.

Syufy also paid the city a "development fee" of $1,175,000, but that amount explicitly had nothing to do with the land acquisition. According to the contract, that fee was "intended to cover the site's share of off-site improvements relating to the project." Such improvements include parking lots and the new garage the city built next door.

The "memorandum of understanding" (MOU) is in fact a binding contract. It's only nine pages long and quite vague. Teams of lawyers will draw up a full agreement later. I see some real dangers and ask the council to address them for the record before tomorrow's vote.

WHY SO VAGUE? Too many items are left to conjecture for a project of this size. What happens if the city and Syufy cannot agree on the big picture? With this binding preliminary agreement in Syufy's hands, will the city have painted itself into a corner for purposes of final contract negotiation?

In order to avoid another money-loser like the moviehouse, shouldn't the deal bar any sale below cost? The MOU says "in no event shall the land value exceed the price paid per square foot by Syufy Enterprises for the cineplex theater parcel." I wouldn't peg the sale of my house to the price of the vacant lot across the street. Would you?

The Sparks Town Center Amended Redevelopment Plan states that "to the extent permitted by law, the (city) is authorized to dispose of real property by sale or lease or by negotiation without public bidding."

WHY THE RUSH? The agreement was only finalized about July 3 and originally scheduled for release on July 8. The taxpayers have simply not been allowed adequate time for review. The city should have published the proposal in at least one newspaper. Copies should be made available at no charge, rather than at the city's document fee of 25 cents per page.

WHY THE BLANK CHECK? The agreement says "the parties agree that the Developer (Syufy) not receive any developer's fees but will be allowed an estimated rate of return of 15 percent on Developer's investment in Phase I and an estimated rate of return of 13 percent in Phase II." That language seems to either place Syufy in the same comfortable position as a utility monopoly (but without regulation) or gives them a Pentagon-style guaranteed cost-plus markup. Either way, the provision raises serious issues which should be clarified before a vote.

THE $50 MILLION QUESTION. The city has devoted some $50 million in property taxes toward downtown over the past 20 years. We stand well past the time for asking "is all this really a very good idea?"

Across the nation, redevelopment agencies have departed from their original purpose of rescuing "blighted areas." Government condemnation power has been abused for the profit of private business. Hearst, Tex., seized homes to build a schlocky shopping center. Las Vegas had to declare its downtown casino district a public park in order to keep shoveling money into the Fremont Street Experience. Now, security guards have replaced police. LV recently lost in the Nevada Supreme Court for illegally taking away private property and handing it over to casinos for a parking garage.

THE PUBLIC EAR. For almost a decade, I've quoted local activist Orland Outland, who views earmarking taxes for downtown projects as backdoor tax increases on the rest of us. Taxpayer subsidies help create new jobs. But the costs (e.g., roads, parks, schools, police and fire protection) of all those new people don't get covered. Property taxes generated by the new businesses stay downtown to subsidize more development. We non-downtown taxpayers get stuck with the tab.

Washoe County has too many earmarked empires which jealously guard their monetary turf. The Regional Transportation Commission, the airport and convention authorities and the Reno and Sparks redevelopment agencies act like sovereign nations. Ironically, Sparks officials last week rightly screamed for return of their room tax money from the wasteful convention authority.

Take a serious bite out of an earmarked empire. Call your favorite Sparks official with questions at home today. Get a copy of the MOU at Sparks city hall tomorrow morning. Show up and say a few words Monday afternoon. It's your city and your money.

As of this writing, nobody has printed or broadcast the story of the MOU vote tomorrow. The city has certainly done little to inform the public. It's no secret that I'm a union member and activist. I've walked the picket line in front of the Syufy theater construction and conducted union research on Sparks redevelopment issues. The opinions herein are my personal ones alone.

IN YOUR FACE AND YOUR LIVING ROOM: The 3:30 p.m. Monday Sparks council meeting will run live on SNCAT cable. TCI (owners of this newspaper) subscribers should tune to channel 13, Continental cable customers to channel 20. The session will rerun next Wednesday and Saturday at 10:30 a.m.

IN YOUR FACE, PART DEUX: Join me and the usual suspects on Sam Shad's Nevada Newsmakers on KOLO TV-8 this Saturday at 2:00 p.m. We'll perform a postmortem on the rape and pillage perpetrated by the recently adjourned Nevada legislature.

TRAVUS SIGHTING: Travus T. Hipp, the greatest talk show host in the world, now working in California, comes back to Reno for one week only. He'll do 10 a.m. to noon on KRNV 101.7-fm tomorrow through Friday. Tune in and tell a friend. It's going to be an interesting week.

Be well. Raise hell.


© Andrew Barbano
Andrew Barbano is a Reno-based syndicated columnist and 28-year Nevadan.
Barbwire by Barbano has appeared in the Sparks Tribune since 1988. This column originally published 7/13/97.

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