The Nugget Project: Can the redevelopment turn around Carson City?
Nevada Appeal Staff Writers
The $87 million redevelopment project proposed by the Carson Nugget has garnered its share of controversy in the months since it was introduced in late 2009.
While the project – described as the largest city project in Carson City history – has gained the support from many in the community, including the Office of Business Development and Northern Nevada Development Authority, others have withheld their support, including the Chamber of Commerce and some city leaders.
Steve Neighbors, formally installed as the Carson Nugget’s president after Thursday’s Gaming Commission meeting, has driven the project behind the scenes and before the city.
“People want clear, distinct answers now, but we’re not quite there because we don’t quite have it all formulated,” Neighbors said. Consultants working on the project say more information will be available in about two weeks, but they would not go into further detail.
The proposal’s advocates say a new library, business incubator and digital media lab would improve the fortunes of the capital city by adding new industry. They say the project has the potential to generate new jobs, where unemployment hovers around 12 percent and gaming revenues continue to suffer.
Detractors argue there are still too many unknowns for them to confidently support the project, which they fear could risk taxpayer dollars if the development ultimately is not successful.
Supervisor Pete Livermore, who has openly called for a public vote to determine whether the Nugget Project is suitable for Carson City, said he is concerned about the complexity of the project as well as the long-term debt that the community may be required to carry.
“There are lots of questions and too many finance questions,” he said. “They keep telling us the details will come, but I’ve been playing with this since November and I haven’t seen anything yet.”
But Neighbors, who runs a business consulting firm in Boise, Idaho, said the project is being proposed on the Nugget’s land, which means the casino is entitled to continue with its own private development regardless of where the city stands on the public portion. He adds that a vote on a proposed 1/8-cent sales tax increase to pay for a portion of the project would be unnecessary.
“When I go into a business I don’t ask the entire employee base for decisions on everything; I wouldn’t get anything done,” Neighbors said. “It’s subject to all kinds of spin and political gobbledygook.”
Too soon to determine funding options
Most of those involved in the proposal tend to agree that it is too early to discuss a specific finance plan or form an opinion as to whether the project will work financially for Carson City.
As proposed, the private portion could include office buildings, high-end retail space, an entertainment venue and residential lofts, but those are decisions that will be determined by a developer, who has not yet been selected. Estimated costs for the private portion are $46.4 million.
Neighbors said there could be one or two developers who would work on the project, one on the private portion of the project and the other on the public.
He wouldn’t disclose their names, but said there are developers in Boise, Portland, Ore., and Salt Lake City who are interested.
“We are looking for somebody who has experience with public-private partnerships because they are a unique animal,” Neighbors said. “We have some people who have expressed some interest and are quick to the table.”
Now that Neighbors is in charge of the Carson Nugget, the casino will donate about eight acres of its land for the project to the Mae B. Adams Foundation, which will in turn essentially give it to the developer for a substantially discounted price in the form of a long-term, low-price lease.
What the value of that land would be with the project, however, is harder to tell. The taxable value for 2009-10 is $15.7 million, and $14.8 million for 2010-11, according to Dave Dawley, the city assessor.
The public portion
Most proponents agree on the public pieces, which would include a knowledge and discovery library, business and technology incubator, digital media lab, public plaza and transit hub. Cost for the city’s portion is estimated at about $41 million.
Funding could conceivably come from at least two sources.
The board of supervisors has the authority to enact a 1/8-cent sales tax increase without going to the voters, an amount that would cost the average family about $26 a year and has the potential to generate about $12.4 million over the course of 30 years.
Projected higher property values within the project area could also generate about $13.5 million over 30 years, according to the preliminary plan.
Those numbers, however, represent only potential funding sources if the project moves forward.
For example, the city denied the project $2.1 million in community development block grants last week.
Supervisor Shelly Aldean said that while she is for the project in concept, she is waiting until details can be hammered out before making a decision.
“I, like a lot of people, are waiting for the nitty gritty details in order to make a final evaluation,” she said. “I really think part of the problem is, and I’ve shared this with Steve Neighbors, that a lot of these details should have been worked out in greater detail before the formal presentation was made to the public.”
“I think that’s what is stirring the controversy and that’s why people are concerned about the fiscal ramifications. And frankly, we don’t know a lot of the details,” she said.
A meeting of the Nugget Project Advisory Committee was cancelled, she said, because a developer for the project has not yet been identified.
Neighbors hears concerns
“I’m not trying to tell the city what to do, I’m not trying to tell them who they should be,” Neighbors said. “I’m just saying here’s an opportunity to try to create an economic machine, and if you want to do that, then we’re game. If you don’t, then we’ll go back to being a casino.”
He said he wanted to bring the project to the public to “give a big-picture concept” as early as possible – not to ask for funding commitments or bonds. He said his next step is bring builders to the table.
Carson City’s Office of Business Development Director Joe McCarthy agreed.
“It was so that we could begin the process, with much closer scrutiny over a period of time, to determine viability,” McCarthy said.