City hall initiatives face fight - News

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Mar. 05, 2009
Copyright © Las Vegas Review-Journal

City hall initiatives face fight

Officials call ballot measures 'defective'

By ALAN CHOATE
LAS VEGAS REVIEW-JOURNAL

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WHAT IT MEANS REDEVELOPMENT AGENCY

State law lets cities and counties set up a redevelopment agency that can define a blighted area and use incentives to attract development and investment to that area.

Las Vegas' was established in 1986 and has been expanded three times. As new development raises property values, some of the resulting property tax increase pays for infrastructure and incentives.

Las Vegas' redevelopment area encompasses downtown; a corridor on Eastern Avenue from Fremont Street to Owens Avenue; both sides of Bonanza from the Spaghetti Bowl to Rancho Drive; and parcels on and around Martin Luther King Boulevard near Owens and Lake Mead Boulevard.

LEASE-PURCHASE FINANCING

Similar to bond financing. Investors purchase "certificates of participation," providing money for, say, construction of a new city hall.

The city leases the building, which provides revenue to pay back investors. The city also has the option of purchasing the building.

It differs from bonds in that the public entity doesn't have to permanently pledge certain revenues to the lease payments.

LAS VEGAS REVIEW-JOURNAL

Heath Darrel, with Laborers Local 872, watches the Las Vegas City Council meeting Wednesday. The laborers union supports a council decision to oppose two ballot measures challenging a new city hall.
Photo by Jeff Scheid.

Detractors of a new city hall for Las Vegas tried to take the fight to the ballot box, but as of Wednesday, they're going to have to duke it out with the city in court first.

That's because the Las Vegas City Council, in a series of 6-0 votes, decided that two ballot measures are "legally defective" and should not be placed on the upcoming city election ballot.

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The measures challenged the city's plans to build a new city hall as well as Las Vegas' overall redevelopment plan, which uses grants and incentives to encourage development in blighted areas.

"It's a sad day when the City Council and mayor are afraid to put an issue that's been signed by 14,000 citizens before the voters," said Chris Bohner, research director for Culinary Local 226, which instigated the petition drive. "I think they're afraid."

He said the union will review the council's action and decide on a court challenge within a few days.

The vote came after a lengthy presentation by City Attorney Brad Jerbic, who said the petitions overreach, pose serious constitutional problems and could lead to a legal quagmire.

The two measures put forth by Culinary are:

• The Las Vegas Redevelopment Reform Referendum, which would repeal the city's existing redevelopment ordinance.

• The Taxpayer Accountability Act Initiative, which would require voter approval for any appropriation over $2 million to pay back a "lease-purchase" agreement. That's the financing mechanism being considered for a new city hall.

If voters approved the referendum, Jerbic said, "you end the life of the redevelopment agency. If you repeal that, nothing survives."

That would mean that $23.3 million in bonds guaranteed by the agency would be in jeopardy, along with $50.8 million in tax increment promises to pay back developers for infrastructure improvements.

Article 1, Section 10 of the U.S. Constitution, Jerbic said, bans laws "impairing the obligation of contracts."

"The obligations of the redevelopment agency to bondholders clearly would be impaired," Jerbic wrote in a memo to council members. "The city is not obligated to put on the ballot any measure that would be invalid or unconstitutional if approved."

As a practical matter, undoing the redevelopment plan would become "a very, very, very complicated mess," he told the council.

"The chaos that would ensue ... will trigger a wave of lawsuits that will make previous civil cases in this state pale by comparison," Jerbic said. "It all goes to hell in a handbasket."

The objections to the initiative are more technical, involving a distinction between legislative and administrative functions of government.

Court decisions have held that initiative and referendum powers apply to legislative decisions -- the power to create or toss out a law.

Allocating a specific appropriation in the city or redevelopment agency budget is an administrative task, Jerbic said, and that's the duty of the City Council or people appointed by the council.

Council members offered little comment before voting. Councilwoman Lois Tarkanian was not present for the votes.

"It's not an easy thing for us to reject," Councilman Steve Wolfson said. "What you're basically telling us is not to listen to the voters, in a sense."

Mayor Oscar Goodman addressed the throng of Laborers Local 872 members who packed the room for the second council meeting in a row. Construction unions have been strongly in favor of building a new city hall, putting them at odds with the Culinary union.

"I am saddened by the events that have brought us to this point," Goodman said. "You people will be back to work if this council has anything to do with it."

Bohner said he didn't hear anything new in Jerbic's arguments.

Neither side should have absolute confidence in their arguments, said Steve Johnson, a professor at the Boyd School of Law at the University of Nevada, Las Vegas.

"The city has at least a substantial argument. For anyone to declare this is a slam dunk one way or another would be, I think, bravado."

That's because the distinction between a legislative action and administrative one is "murky stuff," Johnson said.

"Policy is legislative; detail is administrative. Where do you draw the line?"

The city is on firmer ground when arguing against part of the initiative that would define the voters of Las Vegas as a "legislative body" for the purpose of approving redevelopment plans, Johnson said.

"A legislative body is defined by state law," he said.

There are different categories of ballot measure challenges, he added, some of which are heard before a vote and some after -- meaning there could be court fights before and after the June 2 vote.

Contact reporter Alan Choate at achoate@reviewjournal.com or 702-229-6435.

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Please enter your name Name: Please enter your email Email: Please enter a comment COMMENTS : (word count limit is 300) You have reached the maximum number of words allowed Current Word Count: Note: Comments made by reporters and editors of the Las Vegas Review-Journal are presented with a yellow background. Jeffrey Allen wrote on March 09, 2009 11:31 AM: I'm unclear on why representative(s) of the Culinary Union perceive the municipal redevelopment process to be contrary to the best interests of it's union members. The articles I've read don't seem to connect those dots. Can someone please offer an explanation? Thank you. Former LV Councilman Steve Miller wrote on March 05, 2009 03:10 PM: Since the advent of the canopy over Fremont Street, and the street's closure, Downtown has been in steady decline with casino properties allowing their facilities to deteriorate while they invest money elsewhere. Goodman inherited a failing city core with depressed property values caused by poor planning in the prior mayoral administration. To now want to create another sector of blight, i.e., a vacant city hall building on Stewart Ave., and the effect its closure will have on the surrounding neighborhood, is totally foolish. When Metro PD vacates the existing building, there will be plenty of space available for the city government's needs for the next two decades, and Maybe Oscar can build a new corner office with its own stripper pole. the facts wrote on March 05, 2009 01:48 PM: this project will get rammed through, because it will paid for by tax payers under the city parks documentation. just like freemont $treet experinece is a state park that no park goer can use. notice the words union park are heard over and over danfus@cox.net wrote on March 05, 2009 10:10 AM: Culinary hiring illegals, all unions do. Look for a white guy paving a road or pounding nails, yeah right,... Ken wrote on March 05, 2009 08:42 AM: For once I agree with Patrick (provided it is the same Patrick I usually disagree with). This waste of taxpayer money needs to be cutoff at the knees. Then hopefully the Culinary union will make time to explain to all of us why they do absolutely nothing to purge their membership of illegals. Patrick wrote on March 05, 2009 08:30 AM: If this was about giving these people jobs, we should just give them money - this building will cost $900 a square foot. This is really about getting a building with Oscar Goodman's name on it. Period. And the RDA should be eliminated, all that does is throw taxdollars at Goodman's friends and loyal allies. ET wrote on March 05, 2009 06:27 AM: Dissolve the Redevelopment Agency ,"The chaos that would ensue ... will trigger a wave of lawsuits that will make previous civil cases in this state pale by comparison," Jerbic said. "It all goes to hell in a handbasket."Mr Jerbic is using scare tactics and telling the Voters they are not smart enough to understand,so bend over.The Labor union reps were probably trucked in by the Mayor,he's going to put you back to work and line his pockets with gold.Do not forget what they did too the taxpayers with the RJC,we still owe 70 million for that dump.The City Hall must wait.Dissolve the Redevelopment Agency. Alan wrote on March 05, 2009 06:22 AM: You VOTED THEM IN. br wrote on March 05, 2009 06:07 AM: I smell corruption and ego stroking right here in sin city. Eric wrote on March 05, 2009 05:27 AM: "What you're basically telling us is not to listen to the voters, in a sense." Those voters probably had little idea what they were signing due to concept or language, and I would venture a guess that most of the signers were members of the Culinary coerced by union leaders to sign. So, to the city council, the petition is NOT representative of the population of the city.