The Reno City Council today advanced a new $54M bond to provide utilities to the Stonegate development at the foot of Peavine Mountain. This will show up as $54M on Reno’s books. The proponents expect that the cost of the bond will be more than offset by fees from developers when construction begins. The Stonegate developer’s lobbyist said he wanted to see bonds issued in June 2019. Deborah Louchner said the initial cost for appraisals and surveys will be borne by the developer. The developer would reimburse expenses from a $150k account set up by the City. This will be the cost to set up the Assessment District there and see if it’s a viable project for the City and the developer (Barnes). This is not a recommendation for the project, but rather a recommendation to see if this is in the City’s best interest. Ms Louchner said the developer is very motivated to move forward. She expects issues in the process to come before the City Council maybe every other meeting.
Councilwoman Jenny Brekhus was vociferous in her opposition pointing out that the residents will be paying for the bond if the development does not come to fruition. She pointed out examples of other bonds that ended up burdening the taxpayers. She also made the argument that Reno has no way to extend services so far from the city center. There is presently a single Reno police officer assigned to cover the area north of Parr Blvd.
Councilwoman Brekhus raised the following questions and made the following points.
- Does the project achieve the goals of the City of Reno?
- Do we want to set a precedent of underwriting development and the associated risk?
- The developers used to pay for roads and sidewalks. Why should the City pay now? Historically, the developer pays for infrastructure 99% of the time.
- We need a city policy regarding city bond financing of development.
- Has this funding process been used elsewhere successfully?
- Can you find case studies where this worked and where it didn’t?
- We should have transparency with all the related documents and communications received by the City on the City’s website.
- This is a 10,000 unit development. We only built 2,000 units in the region this past year. The costs of this development will reach far into the future.
- How affordable will these new homes be after the Special Assessment District costs and the Homeowners Association costs? The master plan did not envision $700k homes here.
- She is very concerned about the black-box environment that can be created around the issuance of these bonds.
- Should the City become the financial partner of the developer?
Councilwoman Weber said she disagrees with Councilwoman Brekhus. She thinks we should move through this process to develop the policy as we go.
Deborah Louchner, Reno Staff, said there were case studies showing success with this approach from Clark County.
Voting “yes” to execute the agreement were Delgado, Schieve, Jardon, Duerr, and Weber.
Voting “no” was Brekhus.
Link to meeting video (5:40:00 mark)