MINUTES OF THE meeting
of the
ASSEMBLY Committee on Government Affairs
Seventy-Second Session
June 1, 2003
The Committee on Government Affairswas called to order at 12:22 p.m., on Sunday, June 1, 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.
Note: These minutes are compiled in the modified verbatim style. Bracketed material indicates language used to clarify and further describe testimony. Actions of the Committee are presented in the traditional legislative style.
COMMITTEE MEMBERS PRESENT:
Mr. Mark Manendo, Chairman
Mr. Wendell P. Williams, Vice Chairman
Mr. Kelvin Atkinson
Mr. Chad Christensen
Mr. Tom Collins
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:
None
GUEST LEGISLATORS PRESENT:
Mr. John Marvel, Assembly District No. 32, Humboldt County (part), Lander County (part), and Washoe County (part)
Ms. Sharron Angle, Assembly District No. 26, Washoe County
STAFF MEMBERS PRESENT:
Susan Scholley, Committee Policy Analyst
Eileen O'Grady, Committee Counsel
Pat Hughey, Committee Secretary
OTHERS PRESENT:
Joe Crowley, Ph.D., representing Sierra Nevada Baseball
Bruce Breslow, representing Sierra Nevada Baseball
Shaun Carey, City Manager, City of Sparks
Steve Driscoll, Assistant City Manager, City of Sparks
Gary Wolff, Citizen
Susan Fisher, Citizen
Clarence Jones, representing Sierra Nevada Baseball
Chairman Manendo:
Assembly Government Affairs, please come to order. Madam Secretary, please call the roll. [Roll taken.] There were several requests to have this bill [Senate Bill 497] heard in the afternoon. Some folks wanted to go to church in the morning, and some folks from the media requested an afternoon hearing so they could be here and could report back to their constituents.
Senate Bill 497 (2nd Reprint): Authorizes imposition of fee on certain rental cars and issuance of revenue bonds in certain counties to finance minor league baseball stadium. (BDR 20-1356)
Chairman Manendo:
On the agenda is Senate Bill 497 that was introduced on May 22, 2003. I believe it had nine days of work in the Senate. We did have an informational hearing on this bill. It is now in its second reprint. For the listening audience, this bill has been around for a little while, but we just got it yesterday. I’m not sure who’s going to lead off on the bill and walk us through the second reprint.
Joe Crowley, Ph.D., representing Sierra Nevada Baseball:
[Introduced himself.] I am part of a group that has been working on the matter of obtaining Triple-A baseball for northern Nevada. There was an informational hearing a few days ago that you were generous enough to schedule for us. We covered most of the bases at that hearing. Bruce Breslow, my colleague in this effort, is here. We can talk about the second reprint. I would like to add that in the audience today is Clarence Jones, who is our leader, and Shaun Carey, from the City of Sparks. There may be others who will wish to come up and say “me too.” With that, let me turn it over to Bruce Breslow.
Bruce Breslow, representing Sierra Nevada Baseball:
Thank you very much for affording us a hearing this afternoon. We really appreciate it. We know your time is short. Because of that, we did present packets to all of you within the week and had the informal presentation where we went through the entire packet. At your pleasure, we’re here to answer questions. Some other people would like to testify rather than go through the whole thing again, unless you would like that.
Chairman Manendo:
Can you tell us what changed from the original bill to the second reprint?
Bruce Breslow:
There were two things added on the Senate side. One further protected residents from having to pay this tax. It’s generally accepted that approximately 90 percent of rental car users are tourists. With some of the larger companies like Hertz and Avis, the number is up to 95 percent. However, there are some companies like Enterprise Rent-A-Car, in which about 50 percent are rented by locals. They have many, many contracts with local car dealers. If you’re a local resident and your car breaks down, they will get you a rental car. It’s part of your insurance plan. It’s part of what the dealership will do. The first amendment that was added would exempt residents who had to rent a car when their car needed repair and to exempt dealerships from having to pay when they had to rent a car for a local resident when their car went into repair.
The second amendment was brought forward by the industry and would return an extra ½ percent of the total tax on the industry back to the industry. I believe they receive 3½ percent or 3 percent and it’s going up ½ percent, but I believe the members of the industry are here and can explain that. I think it’s 3½ percent that comes back to them and now it’s another ½ percent. Those are the only two amendments that the Senate entertained.
Chairman Manendo:
Those were not done in Committee? They were Floor amendments?
Bruce Breslow:
At the very end of the Senate Committee on Government Affairs meeting, the industry brought the amendment that we brought to you Wednesday informally, and that was quickly brought back to the Senate before they passed S.B. 497. They amended that on the Floor, correct?
Assemblyman John Marvel, Assembly District No. 32, Humboldt County (part), Lander County (part), and Washoe County (part):
[Introduced himself.] I’m here to speak in support of the baseball stadium for northern Nevada. My district does not encompass much of rural areas, and most of it is in the Sparks and Washoe County area. Anything that we can do to be host to attractions like a Triple-A baseball team would be of much benefit to of all of us for diversification of our economies. From what I’ve seen of the area and what I’ve seen of the mock-ups, I think this would be a tremendous asset not only for northern Nevada, but also for the whole state of Nevada. I would urge your support of this bill [S.B. 497]. I think this is something that we need and I appreciate the people who have been instrumental in getting this brought before you at this time of the legislative session. I appreciate the former president of the University of Nevada, Reno, Dr. Crowley. He’s been one of the major players, and of course, Mayor Breslow.
Shaun Carey, City Manager, City of Sparks:
[Introduced himself.] I wanted to place before you the unanimous support of the Mayor and City Council of the City of Sparks for this bill [S.B. 497]. We believe it is essential that northern Nevada receive your support and would promise to use these new funds in the best interests of the public. We have a great record in our community of looking at all of these issues in detail through the public hearing process and would work very closely with Washoe County to bring the stadium forward in the best interests of the public.
Steve Driscoll, Assistant City Manager, City of Sparks:
[Introduced himself.] For the record, I’m here for support and in case there are any questions.
Chairman Manendo:
Could you talk to us about the types of baseball that are currently out there, Double-A, Triple-A, in case some of the Committee members aren’t familiar with how that works.
Bruce Breslow:
There are many levels of professional baseball. There are rookie-level leagues, short-season leagues, full-season rookie leagues, then Single-A baseball, Double‑A baseball, and Triple-A baseball. After that, you’re a major leaguer if you’re fortunate enough to get a promotion. There are currently no Double-A leagues on the west coast. It is not the intention of Sierra Nevada Baseball or the community to build a Double-A stadium. The question came up of why it is in the bill [S.B.497].
When Senator Raggio asked me to hand him a bill within 24 hours, I called up John Swendseid and we started working on it. I had a fear that, at some point, major league baseball might reletter the system and do away with a layer to save money. In case they do reletter them, I put Double-A and Triple-A in S.B. 497, but there is no Double-A league on the west coast.
The intention of Sierra Nevada Baseball is to, within the next 2 to 4 months, bring a franchise and the Pacific Coast League to the Washoe County Commission and go through a public process to answer all the questions and to make sure proper revenues are pledged, so that this would not burden any existing programs or existing taxpayers and leave it in their hands. If they feel this is a good project, they’ll enact this tax. What we’re asking you to do today is just an enabling measure. If they don’t, then this project won’t go forward. This will be a Triple-A league.
The team we brought here, included Commissioner Branch Rickey of the Pacific Coast League, which is only Triple-A, and all of our negotiations, have been with Triple-A. Again, the only reason Double-A is in there is in case the letters of the alphabet change in the future, we wanted to be covered. It could be removed, but I would urge you at this late date to please not accept any amendments because of the time frames that we’re under. We will make sure that this is Triple-A, and we will only bring Triple-A to the Washoe County Commission. Las Vegas has a Triple-A team and the northern Nevada group is looking forward to having a great rivalry with the Las Vegas 51s minor league team. They were here the other day to support this measure as well.
Gary Wolff, Citizen:
[Introduced himself.] Today I’m here to speak on behalf of myself, my four daughters, and my boy. I wholeheartedly support this project as a parent and a grandfather. I’ve spent a lot of happy, fun hours with my children in ballparks and I urge you to support this project.
Susan Fisher, Citizen:
[Introduced herself.] I am a resident of northern Nevada. I want to go on record stating that I think this is a fabulous project for this region, for all of northern Nevada, and even for the people around the Sierra Nevada. This will be a nice draw and a nice opportunity for all of them. As the mother of a baseball kid, I think this is a very nice thing for the economics of our region. I think the time is right to stop looking at this and to turn it over to the Washoe County Commissioners to look at it.
Clarence Jones, representing Sierra Nevada Baseball:
[Introduced himself.] I’m the person identified by Dr. Crowley and thought it was time I stepped forward. I think it’s essential to understand that what has been brought before you has been brought by a group of people who have lived in northern Nevada. It is our home. It is our lives. The young people of that community and the young families are what it’s all about. Not one of us has dedicated ourselves to it because we’re going to make a lot of money. We dedicated ourselves because we are businessmen. We do know business. We love our community and we’re dedicated to making this another level for our community for young people to grow up with Triple-A baseball and to grow up with idols. We want to involve every school. We want to involve every program for young people that we can.
It’s about northern Nevada. It’s not about us making money. Of course, as businessmen, we have to make sure that the team is protected, that it does turn a profit. If it doesn’t turn a profit, it can’t serve the community. We also must make sure that bonds are liquidated. If we don’t liquidate bonds, it cannot serve the community. That is our goal. We have 22 solid businessmen involved. We’re not going to abandon that. We’re not going to walk away from it, and we’re not going to let outside people come from the east coast, as they are trying to do right now, take the ownership because they don’t care about our kids and they don’t care about our community. We do.
Chairman Manendo:
How long have you lived in northern Nevada?
Clarence Jones:
I was born and raised in Elko. I’ve lived in the Reno-Sparks area for 35 years.
Chairman Manendo:
So you’ve seen other franchises go belly up. Why do you think that this time something will be successful?
Clarence Jones:
We looked at it very carefully. As businessmen, we’re not attempting a project that we believe will fail. We’re attempting a project that we’re absolutely confident will succeed.
Chairman Manendo:
I’m sure that’s the case with these other franchises as well.
Clarence Jones:
The area has grown tremendously since there was a legitimate minor league franchise. We are continuing to grow. We have done the studies that show that baseball in northern Nevada can succeed.
Bruce Breslow:
Baseball has not folded in northern Nevada. The California League was successful for 22 to 25 years. The team did not fail. The League pulled their affiliation because the stadium was in such disrepair that two of their prime prospects had fractured facial bones. It wasn’t safe. It was the Reno Parks Department that ran the stadium. This has to be up to major league standards.
Sierra Nevada Baseball and the franchise that will negotiate this will negotiate with Washoe County and will pay all fees to maintain the facility to major league standards. There was a hockey franchise that came in for two years and was very successful. It did not leave and did not fail, but the RSCVA (Reno‑Sparks Convention and Visitors Authority) decided they didn’t want to have any ice at the convention center anymore because they were focusing on conventions. They tossed the hockey franchise out the window and now there’s a movement to build an ice rink. There has not been a failure.
Chairman Manendo:
You had mentioned about the kids going out to the ballpark from the schools. How is that going to take place? Is it field trips? Who’s paying for them?
Clarence Jones:
We intend to hire professional marketing personnel right out of baseball. My dream is that every school will have their night when it’s a free night for them to come.
Chairman Manendo:
Is the intention to have a free night for every elementary school, or all the schools in Carson City, Reno, Sparks?
Bruce Breslow:
With minor league baseball, every night is not only one special event, but many special events. It’s incumbent upon the team to have the players go out and visit the schools and the communities. You get sponsorships through local banks, through local car dealers, et cetera, who buy blocks of tickets and give them away to children. The Boys and Girls Club has approached me about having a section at the stadium for underprivileged children. It’s a marketing/advertising sponsorship, a whole combination that makes this available to the people who can afford to come and those who can’t afford to come. The projected ticket prices in this endeavor would be $5 for family seats in the outfield, all the way up to skyboxes.
Chairman Manendo:
Wonderful.
Assemblyman Grady:
From what I understand reading the material, this can be a multiuse stadium. You’re looking at baseball as the tenant, but it can be used for many other things in the community, and it’s in a perfect area right there at the park and all. Is that correct as far as multiuse?
Bruce Breslow:
It’s a multiuse, multipurpose facility. It can be used for concert venues, high school graduations, special events. With Mr. Collins’ permission, if it works out, we’ll put a rodeo there, too. The infield will be grass, but the outfield will be turf grass, so that we can have many other activities on it.
Assemblyman Goicoechea:
Remember, you promised me Eureka Night.
Bruce Breslow:
You can have a Eureka Night. You’ll have to fight it out for Battle Mountain Night and all the others that would like to have their nights, but absolutely. This is not only for all of northern Nevada. I didn’t bring it up here, but I have a piece of paper that came yesterday, as part of the e-mails that we get, from a guy in Ashland, Oregon, who said that we are closer than going to Triple-A in Portland, and he wants to know when he can buy tickets. This is a regional project. It isn’t a Sparks project. It isn’t a Sierra Nevada Baseball project. This will draw from all over northern Nevada, California, and apparently Oregon.
Assemblyman Hardy:
I feel obligated to say that I am for baseball, apple pie, and motherhood. I’m ready.
Assemblywoman Sharron Angle, Assembly District No. 26, Washoe County:
[Introduced herself.] I am in favor of S.B. 497. My son is a baseball player, a true fanatic. He has been since before he went to school. He was four years old when he first decided the San Diego Padres were his team. The year he was a sophomore in college, he came home with a tattooed “SD” on his arm, which wasn’t a real pleasure to me, but I wanted you to know the depth of fanaticism for baseball in my home. It’s with that kind of enthusiasm that I come to support this bill.
However, I am passing out among you some amendments [Exhibit C] that I think would make this bill much better and would give people some confidence that some of the things that have happened in Washoe County in the past years related to bonding and causing Washoe County residents to have to be the ultimate guarantor for some of these great ideas that don’t always come to fruition. We’ve had several projects in our city like that I’m sure you’ve heard about. Our bowling stadium is one. Our trench is another. They have caused some real community ire because the people have not been asked. I would have liked to have brought this amendment in when we did the enabling for the ¼ percent sales tax, where we said this could go to a vote of the Washoe County Commission or to a vote of the people, but because of the time frame that we’re working with, we couldn’t get it to a vote of the people before this had to be put together because I’m understanding that contracts need to be entered into.
I’m hoping if anyone’s listening on the Web this morning, or those in the audience, who are concerned about baseball in Reno, Sparks, Washoe County, and throughout northern Nevada, will take an opportunity to participate in all of the public hearings that go on so that their concerns will be addressed, because I know they are very concerned. We’ve had surveys taken of the interest in baseball. The main concern is that they don’t want to be left as the ultimate guarantor for something that’s going to go down the tubes and then their property taxes, their sales taxes, and their tax base will go up and they’ll be left to pay for this.
That’s why I’m bringing these amendments [Exhibit C], for an assurance that this won’t be one of those kinds of projects. I want this project to succeed and I want us to put in place those things that will ultimately guarantee the success of this project.
The first one is the references to Double-A. We’ve already hit upon those, but since the success of this ultimately depends on a Triple-A team coming here, I don’t want there to be any discussion about Double-A ball coming to our area. Triple-A is the one that succeeds. Triple-A is what makes this thing happen. To ensure the success of this project, I would like that to be the consideration that Triple-A ball comes.
The second amendment I’d like you to consider is deleting the words “equip, operate, and maintain” from the use of the money that we’re going to be bonding. When we pay interest on a long-term bond, I believe this could be as much as 30 years. In the bill [S.B. 497], you have that language until it’s paid off or 30 years. I don’t think we want to pay interest on maintenance, equipment, and operation costs. Those should come from the lease. I’ve had some assurances that that’s exactly where that money will come from to pay from those costs, from the lease.
I would feel much more comfortable and I know my constituency would feel much more comfortable if they knew that we weren’t paying interest on bonded money for maintenance. Also, it ensures the end of it. If this is for construction costs, improvement costs, or things like that, then there’s an ending time for these ongoing costs. They aren’t ongoing is what I’m trying to say, but when you build in ongoing costs, then you’re using tax dollars to pay for ongoing costs, and that’s another matter. I would like you to consider that.
The third is this marriage proposal that we’re having, that the major league team says they want to come, they want to bring a Triple-A team, but they haven’t given us too much in the way of a promise. It’s more of a verbal promise rather than something where they have actually guaranteed us something. I would like to see them step up a little bit and say that if the ticket sales go down, and they’re not able to pay that monthly lease, it would be a comfort to me if the major league team would say, they’ll pick up that lease default and pay in their stead. If Triple-A can’t pay it, they’ll pick that up. We won’t go to the citizens of Washoe County and say that they can’t pay the lease so it’s up to you guys.
That’s basically what these four changes would do is make some comfort for the taxpayer. The last one has to do with naming rights for the stadium. As you know those can be premium funds coming in for the naming rights. When those things are negotiated, I would like a percentage of that to go to retire the bond so that we know that there is going to be money coming in to give a comfort level to the citizens of Washoe County. Since they’re not going to get to vote on this, they would know that we’re not going to be digging into their pocketbooks if this thing should start to wane.
Assemblyman Grady:
You have signed on this as a joint sponsor. Did you bring these amendments up in the Senate? They have had this bill [S.B. 497] apparently since May 23, and we just got it. Did you bring these up to them?
Assemblywoman Angle:
No, I haven’t.
Assemblyman Grady:
I don’t disagree with your ideas. I’m a “home rule” person and to me those need to be negotiated between the county and the baseball folks, not us, in all due respect. I just think it’s a home rule issue. They need to address those items, not in legislation.
Assemblyman Collins:
Are these amendments something you found in somebody else’s statutes like Seattle or Dallas or somewhere where they have a stadium contract, or is this something you created from opinions or hearings, or where did you come up with these amendments?
Assemblywoman Angle:
These are things that I haven’t gotten from anyplace else. We just discussed what the possibilities could be for creating a climate of confidence for my constituents. That’s where these came from.
Assemblyman Collins:
You represent a lot of Sparks?
Assemblywoman Angle:
I used to represent a lot of Sparks. I used to have Mr. Marvel’s area. I have none of Sparks in my district.
Assemblyman Collins:
I bring that up because this is a regional thing, a northern Nevada thing.
Assemblywoman Angle:
It is a Washoe County situation.
Assemblyman Collins:
I played football at Cashman Field in high school and I’m talking about a facility that had the rodeo, Frontier Days, and the Bishop Gorman High School football games before the stadium was built out by the swamp. I even had the opportunity to go down there and play tackle for $50 a week on a little, crummy pro team for one season, and this was back when Las Vegas was a lot smaller than Reno, and we had a lot of teams. Our high school quarterback got $125, so in construction we made more money than the football guys got back then, but it was a small team. We watched those teams come and go in that facility and there were new things coming in there.
As big as Reno is and with all this opportunity to use it for so many things, the local folks would have the creativity to keep it on the positive side. That’s why I ask where you came up with these things, because if they’re going to go out and ask their voters to pay for that, they’re going to make it work, obviously. That’s why I asked if your amendment was some kind of regulation that you had seen or statute that you had seen somewhere else versus something that is coming from your heart or your concerns. I would say if a baseball team was renting the facility or had a lease with it, they might not be as willing as the local government would be to take care of it, or to allow for carnivals and rodeos and whatever other kinds of events would be there during the off‑season, because they’re obviously concerned about their field and the grass growing just right, and so forth. So, the year-round continuity of the county being the one taking care of the maintenance of the place would be better than a part-time user, wouldn’t you think?
Assemblywoman Angle:
There are other places in statute where we have covered some of my concerns with other projects. For instance, the monorail in Las Vegas. A bond was required so the state wouldn’t be the first place they went back to if there was a default. That was where part of this came from, that kind of an assurance on this project.
As far as looking into other statutes, when we’re talking about May 23 that this came out, our Research Department was not ready to dig into this issue for me in these last few days, so I didn’t have that opportunity. I didn’t have that research background that, if we had brought this bill [S.B. 497] earlier in the session, we could have had more research on contracts and things like that. There just wasn’t time to get that kind of research together. Forgive me for that.
That’s why I just had to ask what things would be good to make this just a more confident, more secure place for the taxpayer to say this isn’t going to come back on us if they decide to take a team from someplace else to bring it to Reno and then they don’t like Reno, so they leave and we’ve got a nice stadium and no team. I wanted to have a few more assurances that they’re not going to just take off on us.
Assemblyman Collins:
I’ve been involved in sports a long time, Pop Warner, Little League Minors and Majors, American Legion Baseball, for several years. Teams from all over, and we put on tournaments in Phoenix, southern California, and Las Vegas all the time. Teams all want to come to Nevada. They want to come and their parents want to come. When you’ve got a big league team like this, the exposure in Nevada is a lot greater than the exposure in Pumpkin Center, or somewhere else.
Assemblyman Goicoechea:
This is enabling legislation that allows them to impose the tax. Being a former county commissioner, I know the process to adopt an ordinance. It’s going to require an ordinance for the creation of the stadium authority. I think there’s going to be more than enough opportunity for the county to get these protections in place.
Chairman Manendo:
I have a question as far as the naming rights of the stadium and how that is going to be factored into this, if someone could talk to us about how that will happen, if it happens, and where that money will go. It could be a substantial amount of money.
Bruce Breslow:
On the business plan for the team, one of the line items is sponsorship. That includes naming rights, outfield signs, and every possible thing because you’re trying to make some money so that you can have a business. However, when Washoe County negotiates with Sierra Nevada Baseball and the franchise, they are welcome to bring up any issues as part of the negotiations. You can’t really pledge that to the bonds because you have no idea if you’ll ever even get naming rights.
Also there was a comment made that one of these requests was to have the major league team guarantee payment. You don’t buy a major league team. You buy a franchise from the Pacific Coast League. The franchise you buy comes with a team. There are X number of teams and X number of franchises. They’re the same, but every 4 years, 10 years, sometimes 20 years, the teams rotate. You don’t lose your franchise. You just change from the Mariners to the Giants to the Padres. This is a contract that this group will sign with Washoe County that will guarantee the franchise will be here for the length of the bonds. That is the intent.
Chairman Manendo:
Could you please answer my question about if the sponsor does come forward and wants the naming rights, where does that money go and who would have control of it?
Bruce Breslow:
It is up to the negotiation between the Washoe County Commissioners and the team. If Washoe County says they’d like 50 percent of the parking rights, then the team could say they’d like the naming rights. If somebody wants to, they can talk about money from buying sodas and popcorn. It’s a negotiation and that will be part of the negotiation, if there are naming rights.
Chairman Manendo:
If Pepsi comes forward and says they want their name on the stadium and they want to contribute $1 million a year for that naming right for the next 30 years, where does that money go?
Bruce Breslow:
If the Washoe County Commission negotiates that that is part of what the team is able to keep, it would go into the operations of the team. If the Washoe County Commission says that they would like that to be pledged toward the bonds, it will go toward the bonds. If the County Commission says 50/50, it will go 50/50. However, $100,000 to $200,000 is currently top dollar for Triple-A type naming rights, unless you’re in the city that has Microsoft or something like that.
Chairman Manendo:
We’re going to close the hearing on Senate Bill 497. The pleasure of the Committee?
ASSEMBLYMAN GOICOECHEA MOVED TO DO PASS SENATE BILL 497.
ASSEMBLYMAN WILLIAMS SECONDED THE MOTION.
Assemblywoman Weber:
I grew up going to major league baseball team games in the Bay Area. I grew up on the Giants and the As. I remember going to Candlestick Park with my family and it was great times for my family. There wasn’t Triple-A or Double-A ball in that area, so we were fortunate to go to those games.
I do want to say that I’m in full support of a minor league team being here in the Reno area, but to avoid the appearance of impropriety, I need to abstain from the vote. My sister-in-law is a Washoe County Commissioner.
THE MOTION CARRIED. ASSEMBLYWOMAN WEBER ABSTAINED FROM THE VOTE.
Chairman Manendo:
Is there anything else to come before the Committee? The meeting is adjourned. [1:05 p.m.]
RESPECTFULLY SUBMITTED:
Pat Hughey
Committee Secretary
APPROVED BY:
Assemblyman Mark Manendo, Chairman
DATE: