MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
May 28, 2003
The Committee on Government Affairswas called to order at 9:14 a.m., on Wednesday, May 28, 2003. Chairman Mark Manendo presided in Room 3143 of the Legislative Building, Carson City, Nevada. Exhibit A is the Agenda. Exhibit B is the Guest List. All exhibits are available and on file at the Research Library of the Legislative Counsel Bureau.
COMMITTEE MEMBERS PRESENT:
Mr. Mark Manendo, Chairman
Mr. Kelvin Atkinson
Mr. Chad Christensen
Mr. Pete Goicoechea
Mr. Tom Grady
Mr. Joe Hardy
Mr. Ron Knecht
Mrs. Ellen Koivisto
Mr. Bob McCleary
Ms. Peggy Pierce
Ms. Valerie Weber
COMMITTEE MEMBERS ABSENT:
Mr. Wendell P. Williams (excused)
Mr. Tom Collins (excused)
GUEST LEGISLATORS PRESENT:
Mr. Bernie Anderson, Assemblyman, Washoe County District No. 31
Ms. Barbara E. Buckley, Assemblywoman, Clark County District No. 8
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
JoAnn Aldrich, Committee Secretary
OTHERS PRESENT:
Bruce Breslow, former Mayor of Sparks, representing Sierra Nevada Baseball
Joe Crowley, Ph.D., former President, University of Nevada, Reno, representing Sierra Nevada Baseball
Branch Rickey, President, Pacific Coast Baseball League
Ricky Rees, Vice President, Southwest Sports Group
Stephen W. Driscoll, Assistant City Manager, City of Sparks
Bill Gregory, Gregory & Associates, representing Enterprise Rent-A-Car
Chairman Manendo welcomed the Committee and guests to an informal meeting on Senate Bill 497, which would address issues related to financing the construction of a baseball stadium.
Chairman Manendo said he announced yesterday, on the Floor, that there would not be a meeting today on the issue because he had not yet received the bill from the Senate. However, as a courtesy to out‑of‑town visitors, who were involved in the effort to bring minor league baseball to northern Nevada, they decided to hold an informational meeting. Chairman Manendo said he could not take motions or votes on the issue until S.B. 497 was in the Committee’s possession. Therefore, it was more than likely he would hold another hearing soon.
Senate Bill 497: Authorizes imposition of fee on rental cars and issuance of revenue bonds in certain counties to finance minor league baseball stadium. (BDR 20-1356)
Chairman Manendo asked the Sierra Nevada Baseball group to come forward and present their bill.
Joe Crowley, Ph.D., Sierra Nevada Baseball, and former President, University of Nevada, Reno, stated that he had been working with the Sierra Nevada Baseball initiative for several years, which had now taken the form of S.B. 497. The proposed bill was enabling legislation that would allow Washoe County to assess a surcharge on rental cars to help finance a baseball stadium that would allow a Triple-A baseball team to relocate to the Reno-Sparks area.
Mr. Crowley said that the Sierra Nevada Baseball group had been working on this project, with help from people in Reno, Sparks, Carson City, and Washoe County, for over two years. He listed some of the people they had worked with:
· Branch Rickey, President of the Pacific Coast Baseball League, which was the league to which Sierra Nevada Baseball would belong, should their efforts be successful.
· Don Logan, Vice President, Pacific Coast Baseball League
· Bill Rhoda, a financial analyst for Conventions, Sports, and Leisure International (CSL) in Dallas, Texas, one of the nation’s top stadium financing organizations
· Ricky Rees, Vice President, Southwest Sports Group, an organization that had developed business parks and assisted with economic development projects connected with sports facilities around the country.
Mr. Crowley said that Sierra Nevada Baseball group was secure in its ability to attract a Triple-A franchise to northern Nevada, which would also benefit people living in northern and eastern California. Mr. Crowley said that the favored location was the Sparks Marina, which lent itself nicely to the development of a multipurpose stadium that would be family-friendly.
The leaders of the Sierra Nevada Baseball group included:
· Clarence “CJ” Jones, Managing Partner
· Jim Davenport, Assistant Managing Partner, Stadium Project Manager
· Phil Zive, Community Relations Director
· Garrett Sutton, Corporate and Securities Counsel
· Bruce Breslow, Marketing and Public Relations Director
Mr. Crowley said that Mr. Breslow would describe the details of the effort to date. Later, Mr. Rickey, Mr. Rees, and perhaps others, would testify.
Chairman Manendo asked Assemblyman Bernie Anderson, Chairman of the Judiciary Committee, to speak first, since he had pressing responsibilities elsewhere at the time.
Assemblyman Bernie Anderson, Washoe County District No. 31, said that S.B. 497 represented a great opportunity for the region and for the economy in northern Nevada. Mr. Anderson said northern Nevada had great attractions with skiing, hiking, hunting, and fishing, but having professional baseball would develop a different aspect of the community. He remembered the excitement of the Silver Sox games. Mr. Anderson understood that taking the risk was worrisome for some, but since the economic opportunity was available, he said:
If you don’t take risks, you don’t move forward. We have to step up to the plate here. This is the right thing to do, the right time to do it, and we have the right mix of people to do it with.
Bruce Breslow, representing Sierra Nevada Baseball, said that trying to pass legislation for Washoe County, with no representation on the Committee from Washoe County, was intimidating. [He was corrected by Mr. Knecht.] Mr. Breslow thanked the Chairman for the chance to do an informal presentation and said he realized that no action could be taken since the Committee did not yet have the legislation. He noted that legislative packets (Exhibit C) were distributed to the Committee members’ offices yesterday.
Mr. Breslow said that, about two years ago, the City of Reno met with an out-of-town group that wanted to bring baseball to the city. The City of Reno hired Conventions, Sports, and Leisure International (CSL) in Dallas, Texas, one of the top firms in the country, to do a feasibility study to determine if professional baseball would be successful in northern Nevada. They looked at both Double‑A leagues and Triple-A leagues. The feasibility study clearly showed that baseball would be likely to work in northern Nevada. The PCL (Pacific Coast League), however, was not satisfied with the study commissioned by the City of Reno, so they hired another great firm, ERA (Economic Research Associates), to conduct another feasibility study. The results were also very favorable for northern Nevada and northern California, and, about a year ago, the PCL endorsed northern Nevada as a potential site.
Mr. Clarence Jones assembled a group of volunteers, including Mr. Breslow, who said he was taking the day off from being a state employee to make this presentation. Mr. Breslow said they currently had a Stadium Committee, a Franchise Committee, and various other committees. They discovered that it was not possible to secure a franchise unless they had a stadium. A “Triple-A” baseball stadium could host a minor league team, which ranked right below the major league baseball leagues. He said that major league players were often on the roster at minor league games.
Mr. Breslow said that Sierra Nevada Baseball was about to secure a franchise from the PCL, which currently held more than two-thirds of the Triple‑A franchises. Initially, they would purchase the franchise from another city, because there could not be more than 30 Triple-A teams in the country at any one time. Because of the potential economic impact to that city, by law they were forbidden to discuss which team they were negotiating for. Nevertheless, the franchise would come with a team, although the team that actually relocated to the area might be different when the bidding was all done. The franchise and the team were separate issues.
Mr. Breslow said that they were before the Committee today to ask for enabling legislation so that the Washoe County Commissioners could explore the project and evaluate the details: the franchise, the financing, the ownership, the revenue, the contract, the construction, and so forth. Once the franchise and other arrangements were secure, he said the team would enter into a contract, pledging annual payments to pay off the debt.
Chairman Manendo asked if the payments would be $500,000 annually.
Mr. Breslow said that in the pro forma, it said $500,000, but the payment amount could go up or down, depending on what Washoe County and the Bond Council negotiated. He said it could be a sliding scale, where, if the rental car contribution dipped, the team’s contribution would go up to compensate. The City of Sparks was looking to pledge some of their redevelopment increment because the Sparks Marina was located in a redevelopment district. If so, the payments would not go into the General Fund, but into the redevelopment district fund, which would help to feed the project.
There were many ways to guarantee this money, but before the Washoe County Commission would be comfortable enacting such a tax, they would have a litany of questions that the Sierra Nevada Baseball group and the team would have to answer. Mr. Breslow said that they could not ask the Washoe County Commissioners to take a formal position on this until the public process was concluded. However, he had gathered individual letters from Washoe County Commissioners Dave Humke, Jim Shaw, Bonnie Weber, and Jim Galloway that stated their support for the overall concept (Exhibit D).
Chairman Manendo asked if the team’s contract would commit them to pledging $500,000 on a sliding scale for a specific number of years.
Mr. Breslow replied that Washoe County Commissioners would probably negotiate a commitment to guarantee payment for the length of the bonds, which was 30 years. He would expect the team could agree to that.
Chairman Manendo asked if it was realistic that the team could do that.
Mr. Breslow said that the pro forma agreement allowed a team to pledge much higher, but that each team was also a separate entity. In order to make a little money or at least break even, the lower the debt payment, the better for the team. Negotiations were very critical with the county, the team, and all other parties. He said that it would not be a government obligation bond but could be either a revenue bond or special revenue bond.
Chairman Manendo asked what would happen if the team left after a few years.
Mr. Breslow said there would be local ownership of the team that came with a guarantee that they would not leave. A Portland team had an agreement with the city that it could not be moved for a specific number of years. He also anticipated an agreement between Washoe County and the ownership group that they would commit to remaining in Washoe County for a specific number of years.
Chairman Manendo asked for how many years.
Mr. Breslow replied that it would probably be for 30 years, for the length of the bond, and/or until the stadium debt was paid off.
Branch Rickey, President, Pacific Coast League (PCL), said in new stadium construction the obligation was normally the responsibility of the club. The effect of long-term agreements, however, had been to lock the PCL into its affiliated cities. Each stadium project minimized the ability of the league to move to new cities. He said there was a window for northern Nevada to participate now, and it would be a long-term commitment by the team.
Despite recent weather disturbances, Mr. Breslow said that minor league baseball set an all-time attendance record in April 2003, and the PCL had an extraordinary year.
In the legislative packet, Exhibit C, was a cover sheet describing the contents, which were:
Mr. Breslow said the Sparks Marina site was chosen for many reasons. Since access was a high priority, this site was ideal because it was located next to Interstate 80, with two off-ramps leading directly to the site. It was also next to a brand-new lake marina with 100 acres of empty, but potentially developable, land right on Interstate 80. In a poll conducted by the team, this site was the overwhelming favorite, and over half of the affirmative votes came from Reno residents. The project would be both a community development and an economic development project. Other candidate sites did not have equal potential for economic development. The Sparks Marina site was also a redevelopment district, because they had restored land that was formerly contaminated by mining waste.
The estimated project costs, which would be negotiated with Washoe County, were as follows:
ESTIMATED COSTS
Construction of the ballpark $25.0 million
Construction contingency $ 2.0 million
Design and engineering $ 5.0 million
Land $ 3.5 million
Infrastructure $ 2.0 million
Parking $ 1.5 million
Estimated Total $ 39.0 million
ESTIMATED REVENUE (for 30-year bonds)
Rental Car 2% Tax $ 23,966,000
$1.00 per Ticket Surcharge$ 5,498,000
Rent Payments by the Team $ 6,364,000 ($500,000/year - negotiable)
City of Sparks $ 3,500,000 (toward infrastructure costs)
Estimated Total: $ 39,328,000
Chairman Manendo asked what the discussion was regarding the 2 percent rental car surcharge. He asked if there were other funding components, and what the rationale was for targeting car rental companies.
Mr. Breslow said that the group looked at many options that different states had used for facilities construction and chose a tourist-based tax. He said most rental cars were rented by tourists, and a stadium would attract tourists. Many cities had used rental car taxation for constructing sports facilities, particularly in Arizona and Texas. According to the Washoe County (Reno/Tahoe International) Airport, the larger rental car companies, like Hertz and Avis, received 95 percent of their business from tourists, whereas rental car companies that were not located at airports, like Enterprise Rent-A-Car, and companies that local people used when their cars broke down, received only about 50 percent of their business from tourists.
Chairman Manendo asked them to name a current stadium project paid for by taxes of rental car companies.
Mr. Breslow said there were none in northern Nevada, but pages 6 and 7 in the legislative packet (Exhibit C) listed cities, stadiums, and funding sources. The highlighted portions showed that stadiums funded by rental car taxation had been built in Maricopa County, Bexer County, Harris County, King County, and in the Cities of Detroit, Dallas, Charlotte, Houston, and Phoenix.
Chairman Manendo said that he needed to research rental car company taxation, because he understood that the business tax load was already high. He invited Mr. Breslow to continue.
Mr. Breslow turned to page 5 of the legislative packet (Exhibit C), which was prepared by CSL. The top section detailed the property taxes that would be generated by commercial development of the Sparks Marina area surrounding the ballpark. Southwest Sports Group, whose parent company was owned by Tom Hicks, owner of the Texas Rangers, the Dallas Stars, and the Mesquite Rodeo, worked with Mr. Jones to develop the Sparks Marina project. Based on an estimated construction cost of $250 million, the City of Sparks Redevelopment Agency would receive a net present value of approximately $58 million over the life of the bonds. That money would go to the redevelopment district to help fund infrastructure projects.
The key reason the Sparks Marina was the preferred location was because of its retail development potential. The projection was to build 500,000 square feet of retail space, but the figures in the legislative packet (Exhibit C) were based on 200,000 square feet of retail space. That conservative estimate included only one business, a large home store business that would fill up the entire 200,000 square foot area and was ready to proceed. Using the conservative estimate of 200,000 square feet of retail space, Mr. Breslow estimated the 30‑year net present value of sales taxes would realize:
· $17.0 million in property taxes to the state of Nevada
· $19.5 million to the Washoe County School District
· $ 4.3 million to Washoe County for roads and transit
· $ 2.165 million to Washoe County for floods and to the City of Reno for the trench project
· $10.6 million to Washoe County from sales tax
· $ 6.5 million to City of Reno sales tax
· $ 2.3 million to the City of Sparks sales tax
Those figures did not include revenue from ticket sales, which was itemized at the bottom of page 5, and included:
Nontaxed Tickets / Taxed Tickets
Ballpark spending, ticket sales,
concessions, merchandise $5 million / $15 million
Assemblyman Goicoechea asked if the 100-acre site was public or private land. Mr. Breslow replied that it was all privately owned, except for a tiny piece and the lake, which were owned by the City of Sparks. He added that Sierra Nevada Baseball’s Managing Partner, Clarence Jones, currently had an option to purchase 40 of the 100 acres.
Mr. Breslow said that taxing rental car companies had been proven to not harm their business. He referred to an article in the Arizona Republic, dated December 5, 2002,regarding a Supreme Court ruling that said rental car taxation could be used to fund stadium projects. He also referred to other articles included in the packet (Exhibit C).
The last items in the packet (Exhibit C) were two polls: The Reno Gazette Journal conducted a one-day poll that showed, of the 496 people who voted, 73 percent supported the idea of bringing baseball to northern Nevada. A poll was also conducted on the Web site of Sierra Nevada Baseball. Results showed that, out of 149 votes, 96 percent supported baseball in northern Nevada. The poll’s security system could verify computer IP addresses of voters in order to identify invalid votes. He said someone in Boomtown voted 1,700 times in one day, and 1,699 of those votes were invalidated.
Lastly, attached were e-mail contacts, comments, letters, and other expressions of support that had been received by Sierra Nevada Baseball since the inception of the project: Some supported the stadium, some supported the tax, others wanted the stadium in downtown Reno, but almost all supported the concept. He said the variety of opinions was valuable in itself.
Branch Rickey, President, Pacific Coast League (PCL), said that 2003 was the 100th Anniversary of the PCL, the largest of the minor leagues. He emphasized that over half of the players in the major leagues today had roots in the PCL. The players coming up through the league would be players and stars in the major leagues in the near future. He said they exchanged players with the major leagues on a daily basis, and that they currently had 40 players in the Baseball Hall of Fame who started in the PCL. He said the PCL strove to bring excellence to baseball. The cities that hosted PCL teams ranged from Edmonton, Alberta, Canada, to New Orleans, Louisiana. He said that the cities in their league also gained significant recognition by virtue of their PCL sister cities, such as Sacramento, Fresno, Portland, Memphis, Nashville, Las Vegas, Oklahoma City, and Salt Lake City.
Mr. Rickey said that minor league baseball was experiencing a renaissance that began about 10 years ago. Coming from a family tradition of baseball, Mr. Rickey said he was completely caught by surprise. It had long been his conviction that minor league baseball was a sport to be enjoyed and supported by long-term minor league fans, such as Assemblyman Bernie Andersen. He emphasized that that was not the state of minor league baseball today.
Mr. Rickey said that the baseball renaissance was rooted in the construction of new stadiums. The new architecture and better quality of the facilities had changed the fan base. He explained that they recently opened a new stadium in Albuquerque, New Mexico. Prior to that, they had been drawing about 2,500 to 3,000 fans per game in Albuquerque. The weekend before last, they played three baseball games that were not associated with any particular promotions or high-profile events. Unexpectedly, they drew crowds of over 11,000 to each game.
Mr. Rickey said this was not because they had suddenly manufactured new baseball fans, but it was because the stadiums were more conducive to family entertainment. With the prices they charged, they were attracting families, and parents were bringing their kids to the stadium because of its wholesome and family-oriented entertainment environment. In addition, the stadiums were used to endorse programs that were educational and anti-drug. Parents valued quality time together, time to talk with their kids, and enjoyed watching the sport at the same time. He said he did not believe there was a comparable venue to minor league baseball.
Mr. Rickey said that the stadiums were equally healthy to the development of metropolitan areas because they were being sponsored and developed by large corporations such as Pacific Bell in San Francisco, and Coors Field, north of Denver. He said that minor league baseball was completely different in character from major league baseball because they were not at the top of the pyramid. They did not seek to develop “gold-crested” superstars. They encouraged the upcoming young players to gain experience playing in pristine new facilities to crowds paying affordable prices. Mr. Rickey said he believed that the PCL had no peer when it came to affordable family entertainment.
Mr. Rickey added that, geographically, with cities already spread throughout the west, it made very good sense to locate a Pacific Coast Team in northern Nevada. A successful enterprise would be dependent on commercial airline services which were already established in the Reno area. He also believed that a northern Nevada team would fit well with the Sacramento, Fresno, Las Vegas, and western Portland clubs. He said they strongly supported locating a team in northern Nevada because they considered it a very desirable market, and they believed it would attract northern Californians, as well.
Chairman Manendo said the Committee would need to have another meeting when they formally received the bill. He said he had tried to accommodate the out-of-town visitors and that he appreciated their taking time to make the presentation.
Rickey Rees, Vice President, Real Estate Development, Southwest Sports Group, said that he was part of the out-of-town contingency, and thanked the Committee for the chance to appear. Mr. Rees said that Southwest Sports Group was the holding company for the sports and entertainment assets controlled by Tom Hicks. Those assets included the Texas Rangers, a professional baseball team, the Dallas Stars, a national hockey league team, the Mesquite Rodeo, and the Frisco Roughriders, a Double-A baseball team affiliated with the Texas Rangers, as well as several other entertainment-related and sports assets. Through its affiliated companies, Southwest Sports Real Estate Development team were involved in the development of sports facilities and commercial real estate projects that surrounded those facilities. It was their experience that sports facilities, because of the traffic they attracted, were perfect anchors for mixed-use commercial real estate developments, much like a national retail store would anchor and draw traffic to a regional mall. He said that Southwest Sports was currently involved in similar projects.
As an example, Mr. Rees discussed a 75-acre project, which included a state-of-the-art training facility for the Dallas Stars, complete with a 4,000-seat arena and an 8,800 seat Double-A baseball stadium, home of the Frisco Rough Riders, in the City of Frisco, 23 miles north of Dallas, Texas. Surrounding those two facilities, the development plan called for:
· 2 hotels, including a 330-room hotel to start construction next month
· A 100,000-square foot convention center
· 75,000 feet of retail space
· 700 residential units
· 1.4 million square feet of office space
The Frisco Economic Development Corporation, the economic development arm for the City of Frisco, commissioned an independent economic impact analysis on Southwest Sports’ project about year ago. Highlights of that 10-year pro forma were as follows:
· Projected economic impact of the project - sports facility plus commercial development, $1.5 billion
· Taxes the City of Frisco and school district would receive over the 10 year period, $98.5 million
· Jobs created in the 10 year period, 3,110 jobs
Mr. Rees said the Frisco project was a 75-acre project, versus the proposed 100-acre project in northern Nevada, but there were some similar components when the two projects were compared. He said Southwest Sports was involved in the northern Nevada project because they thought that real estate development was ideal for that location. Although they did not yet have a deal, they had a concept they believed would be good for the region and were committed to the project. He thanked the Chairman for the informal hearing.
Assemblyman Goicoechea said, since this was enabling legislation, he assumed it would not rule out looking at another site.
Mr. Breslow said the bill did not determine a specific location on purpose. If something should happen to the Sparks location, and they had to find a different site, that language would allow them to change the location.
Assemblyman Goicoechea said it was always possible that someone would come up with a better package. Mr. Breslow agreed that could happen.
Assemblyman Knecht asked about the naming rights for the stadium. He wanted to know what role would stadium naming rights play and what role revenues from the stadium would play in the project.
Assemblyman Breslow answered that it would be part of the business plan for Sierra Nevada Baseball, for the investors, and for the team. They all hoped that the naming rights aspect would be successful, but, because of the recession, many groups, such as the Professional Golf Association (PGA) Tour, were having trouble securing naming rights. Because the Las Vegas Sun had recently contacted them, Mr. Breslow made the following statement for the record:
At no time, in the present nor in the past, have we been looking to move the Las Vegas franchise to northern Nevada. In fact, we have not been in contact with the Las Vegas team at all.
Chairman Manendo asked if the stadium would seat 10,000.
Mr. Breslow said that a 10,000-seat stadium was required for Triple-A baseball. The proposed facility would include: 8,000 fixed seats, 2,000 grass berm family-style seats, 30 stadium skyboxes, meeting rooms, and so on.
Assemblyman Grady complimented Mr. Crowley for bringing in Branch Rickey to help sell the program. Like Mr. Andersen, Mr. Grady said he spent many days at the old Moana Stadium. He said it was enjoyable then, and he looked forward to baseball coming to the Sparks area, so it could become a northern Nevada pastime. He said he appreciated Mr. Breslow’s leadership when he was the Mayor of Sparks and for creating the Sparks Marina, which was a beautiful site. Mr. Grady said he would encourage the Committee to take a trip there because it had all the potential in the world. He thanked Mr. Breslow and the Sparks City Council for making it happen. He supported the effort to develop the Sparks Marina, saying they had picked “an ideal site for an ideal sport” that everyone would enjoy.
Mr. Breslow noted, for the record, that he had received letters of support from all of the Washoe County Commissioners (Exhibit D), except one. Washoe County Commissioner Pete Sferrazza had called him from San Francisco and said that, as long as the bonds were not government obligation bonds, he was fine with the project, but Mr. Breslow noted that he did not have anything in writing from Mr. Sferrazza.
Mr. Breslow introduced a proposed amendment suggested by Enterprise Rent‑A‑Car, which would exempt local individuals from the stadium tax if they were renting a replacement vehicle because of damage or repairs to their own vehicle. The amendment was standard language for legislation that authorized rental car taxes to finance stadiums in various states. Because their offices were not located at airports, Enterprise Rent‑A‑Car was a rental car company that received more business from local residents that the larger companies like Hertz and Avis. Mr. Breslow said that they would support the following amendment (Exhibit E) from the rental car industry 100 percent.
The leased vehicle surcharge imposed by this section shall not apply to replacement vehicles. For purposes of this section, “replacement vehicle” means that a vehicle that is:
(a) rented temporarily by or on behalf of an individual or loaned to an individual by a motor vehicle repair facility or dealer; and
(b) used by the individual in place of a motor vehicle owned by the individual that is unavailable for use due to mechanical breakdown, repair, service, damage, or loss as defined in the individual’s applicable private passenger automotive insurance policy.
Mr. Breslow said they were hoping that Senator Raggio would amend the bill on the Floor of the Senate today before the bill reached this Committee. If he did not, they asked the Committee to amend S.B. 497. He said their only concern was how long it would take, since not much time was left before the end of the 2003 Legislative Session.
Chairman Manendo asked why this bill was introduced so late in the Legislative Session.
Mr. Breslow said they had hoped it would be introduced earlier, and he recognized that the timing was unfortunate. He said Senator Raggio wanted prior support from the entire Washoe County delegation but did not call a meeting of the delegation to hear their presentation until about 10 days ago. Mr. Breslow said that was when the legislative process picked up speed, although they had a plan and had been meeting every two weeks for over a year. Getting the green light for introduction of the legislation was the key. He said they appreciated Senator Raggio’s taking the risk and having faith in the project.
Assemblyman Knecht said, if the proponents of this bill were going to ask for taxes to cover debt service, it would be a good idea to preclude using that revenue stream for maintenance and operating costs, once the bonds were paid off. He asked if that would happen under this bill, or if it was open-ended.
Mr. Breslow said that, because of a request from Assemblywoman Sharron Angle for a sunset clause, and because Senator Raggio wanted a unanimous buy-in from the Washoe County delegation, they added a sunset clause. He said it was their opinion that it would be better not to have it, in order for Washoe County to be able to improve and invest in the facility in the future. However, if it took a sunset clause to move the legislation forward, they would include one. The bill itself was designed to finance payment of the debt service and revenue could be used to finance construction and/or maintenance.
Assemblyman Knecht said he understood that the project would only work with a Triple-A franchise, but there was a provision in the bill that would allow a Double-A franchise. He asked why that provision was included, if it was necessary, and if they should restrict the bill to a Triple-A franchise.
Mr. Breslow said he added that to the bill because he was nervous and wanted to have options and to “cover all the bases.” There was currently no Double-A league on the west coast. He said the bill would work without that option, but he felt it would be safer to include it.
Chairman Manendo asked if Mr. Breslow could give a brief history of how baseball had been supported, or not supported, in the Reno-Sparks area.
Mr. Breslow said that for 22 years, or longer, the California League had a team that played at Moana Stadium. At one time it was the Cleveland Indians and, at another time, the San Diego Padres. Many of the players who had gone on to play major league baseball were voted into the Hall of Fame had played at Moana Stadium. For a while, the California League was telling the City of Reno, which owned the facility, that the stadium was not safe, not up to professional baseball standards, and that it needed to be repaired. The City of Reno chose not to fix the problems. The California League, because of the condition of the facility and because of attendance, eventually pulled its affiliation.
In the days of the California League, Harry Plack ran the facility with one or two assistants. On game day, they hired some folks to work the snack bar and sell programs. Bathroom facilities were horrible, and it was a terrible stadium but a successful one for over 20 years. After the California League left, a couple of semi-pro teams, not associated with any leagues or with any affiliates, played at the Moana Stadium but did not draw crowds.
For 2 years, the hockey franchise in Reno drew crowds of 4,000 to 5,000 per game. They did very well but were forced to leave when the convention center needed the space. Currently, a group was looking to build a hockey arena to try to bring back hockey to the area because it was so successful.
The only franchise that was not successful, and only lasted about 2 years, was the Reno Bighorns professional basketball team, started in about 1982, which was affiliated with the Continental Basketball League. Mr. Breslow said that Ray Hagar, who now covered the Capitol Beat for the Reno Gazette Journal, became famous when Billy Martin, the notorious manager of the Yankees, punched young Ray in the nose because he wanted his notes back and Ray would not give them back, so they had a big fight. Ray ended up getting a settlement, and Mr. Martin lost his job. The Bighorns left town soon afterwards.
Mr. Breslow said it was important to note that, even though the proposed stadium would be a Washoe County facility, Washoe County would negotiate to charge the baseball team for the management of the facility. Major league baseball had much more specific requirements for their facilities.
Mr. Breslow said that Las Vegas had many attractions, but that Triple-A baseball would be a “headliner act” in northern Nevada. Overall, baseball had been very successful in Reno, but there had never been an opportunity to bring this kind of talent together. The stadium would bring big name players, concerts, and entertainers into town and would provide a place for high school and college graduation ceremonies, baseball championships, and many other events. It was designed to serve as a multi-use facility.
Mr. Crowley said he wanted to add a footnote. It was worth noting that college baseball in the Reno-Sparks area had been successful, although it was not successful until they built a college baseball stadium that brought crowds of 1,200 to 1,500 per game. Those numbers were very good for college baseball and would put them in the top 25 to 30 percent nationally in terms of college baseball attendance. He said that Reno-Sparks had always been a “baseball town,” and the proposed stadium would have the same effect on organized professional baseball as the college stadium did on college baseball.
Chairman Manendo asked when was the last time a professional minor league team in Reno-Sparks area, even Single-A, affiliated with a team. Mr. Breslow guessed that it was in the mid-1980s. He said teams had tried to come in since then, but there was no stadium for them to play in.
Chairman Manendo asked what kind of attendance would a team consider successful. Mr. Breslow answered that, according to the business plan, the two feasibility studies, and the PCL attendance statistics, they were projecting 6,000 fans per game, but that they would still be successful at the 4,500 level. Weather was always a challenge, but they will design a stadium that gave as much protection from the wind as possible, in order to encourage families to attend.
Dr. Crowley graciously thanked the Chairman and the Committee for the opportunity to provide information to the Legislature. He acknowledged it was not required and he thanked the Committee for taking the time to listen to the presentation.
Stephen W. Driscoll, Assistant City Manager, City of Sparks, said that he came on behalf of the Mayor and City Council of the City of Sparks to communicate to the Committee that they viewed this project as a very viable private-public partnership for an area that, at one time, was not developable. To date, the Sparks Marina had received over five national awards. He said this project had the potential to become a great economic engine for the City of Sparks, and they supported the project and the bill.
Bill Gregory, Enterprise Rent-A-Car, said they supported the bill with the amendment to exempt replacement vehicles from the tax. He said it sounded like a good project and a great economic development opportunity, which would provide many benefits to the surrounding communities. His only concern was for local people who would need to rent a vehicle because their car had mechanical failure or damage due to an accident. With the replacement vehicle language referenced earlier by Mr. Breslow, he said they would certainly support the bill.
Assemblyman Goicoechea asked what was the present tax breakdown on rental car vehicles, and what was the current percentage.
Mr. Gregory answered that it differed, depending on whether
a person rented at the airport or elsewhere.
At the airport, a person would pay 26.75 percent
in
taxes. Elsewhere, a person would pay
16.75 percent in taxes. The difference
was a 10 percent airport fee.
Other taxes included in those figures were:
· 7.25 percent Sales Tax
· 6.00 percent Government Services Tax, goes to the State General Fund
· 3.50 percent Recovery Charge, which goes to car rental companies to defer high car registration fees in Nevada
Chairman Manendo asked what the tax formula was, if any of those taxes were due to be eliminated or due to sunset, and, if so, when would they end. Mr. Gregory said he was not sure but would get the answers for the Chairman.
Assemblyman Hardy asked if the cumulative taxes were around 40 percent. Mr. Gregory answered no. The 16.75 off-airport or the 26.75 on-airport percentages were the total taxes paid.
Chairman Manendo asked, for the record, where the amendment language came from. Mr. Gregory said that the language was the same language used, with little variation, in other states. The language of the amendment Mr. Breslow read to the Committee came from New Mexico.
Chairman Manendo asked if they anticipated a Floor amendment in the Senate. Mr. Gregory said they would encourage that.
Chairman Manendo clarified for Mr. McCleary that the Committee still did not have the bill, and, if or when it appeared, they would need to have a formal hearing.
Chairman adjourned the meeting at 10:44 a.m.
RESPECTFULLY SUBMITTED:
JoAnn Aldrich
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: