City Council To Update RDA Guidelines

By VERNON ROBISON

The Progress

The guidelines governing the process of awarding Redevelopment Agency (RDA) grants in Mesquite are long overdue for an extensive revision. That was the consensus of the Mesquite City Council during a meeting held Tuesday, March 23.

Mesquite resident and commercial real estate owner Jeff Hoyt had been asked to address the council regarding struggles he had faced in applying for RDA funding to improve his Sun Valley Plaza property on Mesquite Blvd.

Hoyt also presented a list of seven suggestions on how he would streamline and improve the RDA application process.

The RDA program offers funding to commercial property owners to enhance properties within a specified Redevelepment District. Priority funding is given to redevelopment parcels within the Downtown Central Business District of Mesquite. The program is designed to reimburse owners 50-75 percent of eligible costs of improvements made.

Hoyt said that while the program was intended to incentivize property owners to update and beautify aging downtown real estate, the funds had become too difficult for many property owners to access.

“In my mind, when you’ve got a program where you are trying to give away money and you’re not being very successful at giving away money; something is not quite right with it,” Hoyt said.

Hoyt added that he had originally made the decision to purchase the Sun Valley Plaza because of the possibility of receiving assistance from the RDA to improve the downtown property. But since then, despite trying to access funding, he had been unable to do so because of the complexity of the requirements.

“Thus far, I have not received anything while spending about $75,000 out of pocket on improvements,” he said.

Hoyt’s seven suggestions illustrated ways that the application and approval process had become bogged down in unrealistic complexity and unnecessary red tape.

For example, an RDA requirement, which allows no work to begin on a project without final approval from the City, simply delays work being done and adds to the costs involved, Hoyt said.

This paired with a requirement to solicit three competing bids for all projects, makes it very costly for small businesses to get through the process, Hoyt added. Hoyt talked specifically about the difficulty in even finding three local contractors to prepare bids on a project.

“These guys are super busy right now,” said Hoyt of local contractors. “So it takes a lot of time to get three bidders to come out and do that. Sometimes it is not possible at all.”

Hoyt said that it could easily be 6-9 months in the process before the three bid requirement can be satisfied and the City’s final blessing on the project is granted. For small businesses depending on RDA funds to make tenant improvements, that is far too long, he said.

Hoyt is currently facing this scenario with a potential tenant wanting to lease 3,000 sq ft at Sun Valley Plaza for a medical health clinic. Hoyt said that the owners would need to make high-end tenant improvements to the space estimated at between $90,000-$130,000. This would only be feasible with the use of RDA funding, he said.

But the difficulty of expediting that funding in a timely manner had become the main impediment to it going forward.

“Putting a medical clinic in Mesquite would be really helpful to us here,” Hoyt said. “But it could be nine months after they’ve signed the lease before they can even pound a nail on the project. They’d be burning through money in lease payments on a property that they can’t get any revenue from.”

“Of course I’ve been willing to work with people,” Hoyt added. “But it’s also hard for me to get nothing for nine months in that space. And I don’t think it is necessary.”

Hoyt’s suggestions also pointed out discrepancies between what the RDA documentation outlines as “eligible” improvements and what City staff has interpreted as eligible.

Hoyt had looked into replacing the parking lot at Sun Valley Plaza. He had received a bid for $130,000 on the project. As parking lots are listed in the RDA literature as eligible site improvements, Hoyt said he hoped to receive RDA funds to cover half of the cost.

“I was told, and I know other people have been told this as well, that parking lots are not included,” Hoyt said.

Other impediments to the program outlined by Hoyt included the seemingly arbitrary lifetime limits on access to RDA funds, uncertainties about allocation of that lifetime limit per development rather than per tax parcel, and various other perceived inefficiences in the RDA administrative process.

“In my mind, if I’m running the program, I’m going to look for every available way to be able to use this money,” Hoyt said, “as opposed, it seems to me, like it has been kind of the opposite: looking for ways NOT to spend it.”

Mesquite Mayor Al Litman told Hoyt that he would hear no argument from him or the Council that the RDA has needed a rewrite for a long time.

“The way I see it is that we (instruct staff to) rewrite this, using a lot of your ideas,” Litman said. “And then present it to the RDA Board which is the City Council.”

City Manager Aaron Baker, who acts as RDA Director, admitted that there were plenty of process improvements that could be made to the program. He said that he would work with the City Attorney to revise the language governing the RDA and streamline the process wherever possible.

But he also stated that some of the requirements listed as impediments by Hoyt were in place to protect the taxpayers who were funding the program.

For example, Baker said he felt it was important to have an agreement in place with the RDA before work starts on a project.

In addition, the Nevada Revised Statute requires public funded projects like RDA to be place of last resort for participants after all private investment options had been expended, Baker said.

“If you’ve already done your project and then come to the RDA for money, you’ve kind of failed that test in the NRS,” Baker said.

Given the circumstances, Baker admitted it might be appropriate to reduce the requirement to allow only two competing bids on a project rather then three. But he said he would be uncomfortable with only requiring one bid.

“So (in allowing just two bids) we would be improving it, making it easier, but we’re still providing some coverage for the taxpayer because that is where this money comes from: property taxes,” Baker said.

On the subject of eligible projects, Baker said that the litmus test in the past has always been a matter of whether the project was remodeling vs. new construction.

“We are not going to pay to get your HVAC serviced or to repair your roof or slurry seal your parking lot,” Baker said. “But if it is new construction which adds value and increases your property taxes, then a parking lot might be included.”

Baker said that this had been the policy position through the years with past councils. But it could be changed by the current RDA Board with an update to the guidelines.

Baker also pointed out that work was being done to simplify the application process for business owners. “I will admit that the process right now is not very transparent,” Baker said. “But we are working at getting an online submission form to improve the process.”

During public comment, Mesquite resident David Ballweg suggested that the council look closely at how the RDA funds are spent. He pointed out that the RDA pays a portion of salaries of the city staff charged with administering it.

“That depletes the amount of money that may be potentially available,” Ballweg said. “So this needs to go very deep; not just at the surface of benefits, but how and where that money is all going to.”

In the end, Council member Bryan Wursten made a motion to accept Hoyt’s presentation and asked that Baker “go deep on this,” to create a full report of where all the money is spent.

The motion was passed with a unanimous vote of the Council.