Culinary sells out, taxpayers on the hook

There are legitimate reasons to oppose LV city hall plan

By Geoffrey Lawrence
  • Wednesday, December 2, 2009

In a battle that has raged for more than a year, Las Vegas city officials finally decided it was easiest just to pay off their most influential opponent. 

Under the guise of the city's redevelopment agency, the city council has been working to borrow hundreds of millions of dollars in order to construct a palatial new city hall/monument to Mayor Oscar Goodman. The proposed Oscar B. Goodman City Hall would be the centerpiece of a convoluted deal that supposedly would bring new casinos into the downtown area by forcing area residents to hand over tax dollars to private developers.

As is typically the case with redevelopment projects, taxpayers would be forced to participate in an unnecessary and expensive real-estate gamble in order to finance a new white elephant in waiting. Redevelopment projects divert property-tax dollars from public services such as education, police and fire protection in order to pay for public — or even privately owned — real-estate investments (e.g. Chelsea Premium Outlets, World Market Center).

If the initial gamble works, then property-value assessments in the redevelopment zone will increase, and its typically low-income residents will all be forced to pay more in taxes. 

Literally, this is the point. 

Property-value assessments have to increase in order for the city to pay off the new, higher debt it's incurred issuing bonds to finance or subsidize the redevelopment projects.  In the case of the new city hall, should the gamble fail and property value assessment revenue not increase, the city, to pay off the debt, would have to either slash funding of legitimate public services or increase tax rates.

City officials claim that redevelopment projects such as the new city hall impose no burden on taxpayers. They claim the projects pay for themselves because the "public investments" flow back to the city in the form of higher property-tax revenues. This is a less-than-artful way to spin the fact that residents will pay higher taxes.

Making matters worse, the city hall scheme takes on additional risk with its many moving parts. The deal involves a series of land-swaps and lease-purchase agreements wherein the developer would build the new city hall and would later build a new casino on the parcel where the current city hall sits. This deal, extending years into the future, assumes much more certainty than current economic and financial turmoil justifies. It's highly probable the city hall gamble will completely fail to catalyze further downtown development — as so many downtown casinos have failed to catalyze the area. In that case, the project would merely increase the tax burden, in a dire recession, to fund an unnecessary monument to the mayor.

Last year, the Culinary Union seized upon local taxpayers' concerns over the city hall project and feigned its agreement with those concerns.  It sponsored ballot initiatives that would have significantly limited the ability of city council members to burden taxpayers with new dept for redevelopment by making voter approval mandatory. Those initiatives were eventually defeated in court by city officials who claimed that the language thereof would have infringed upon existing contracts to which the city is party.

However, it's now blatantly obvious that Culinary's support of local area taxpayers was disingenuous from the outset — confirming initial allegations coming from the city.  Goodman and council members accused the union of cynically using taxpayer advocacy as a smokescreen to get what they really wanted — labor contracts for casinos to be built with taxpayer subsidies. Last week, Culinary validated all of those charges when it accepted the city's offer to allow Culinary to unionize workers at subsidized downtown casinos in exchange for dropping its opposition to the city hall project.

Having successfully bribed its most organized opponent, the city council is poised to descend into an egregious, irresponsible exercise in tax-dollar gluttony. Moral stewards of the community's tax dollars should know better. 

The Culinary Union has resuscitated its image, constructed over many decades, as a self-serving, disingenuous and corrupt organization. The message it cynically echoed, however, should resonate with every taxpayer in Las Vegas.

Culinary and the city council have lain down together.  Doubtlessly, both will rise with fleas.

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Geoffrey Lawrence is a fiscal policy analyst at the Nevada Policy Research Institute.

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