The issue of back property taxes — a cloud hanging over the finances of the Reno Aces (Class AAA; Pacific Coast League), Aces Ballpark and Washoe County — may be settled in a deal negotiated by team owners, developers and county officials.
The deal is simple: the ballpark developers are offering to pay some $2.8 million in back taxes and penalties if the county can figure out how to take Aces Ballpark off the tax rolls. Now, most professional sports venues aren’t on the tax rolls: adding the cost of property taxes to the cost of doing business, paying rent and more isn’t a cost pro teams of all sorts want to avoid.
And while the developers of Aces Ballpark were willing to take on that cost when the ballpark was planned, the original deal called for a public subsidy as well as additional development around the ballpark. The subsidy disappeared, the development dried up due to the recession, and the developers stopped paying property taxes.
But now a deal appears to be on the table, per the Reno Gazette-Journal:
Although the details of the negotiations are not public, elected officials familiar with contours of the discussion confirmed the ballpark developers — retail billionaire Herb Simon, New York restauranteur Jerry Katzoff and his son Stuart Katzoff — are seeking a property tax exemption as part of the deal to pay off the tax bill they have so far disputed owing.
The negotiations are part of a years-long effort by the developers to replace the original public subsidy that fell victim to the economic recession. Adding urgency to the discussion, at least for the developers, is a looming deadline to refinance a $55 million construction loan that comes due this year.
Simon and his partners had been counting on a new subsidy from Washoe County to help refinance that loan. But the political will to provide a payment from county coffers has evaporated, leaving the developers to argue for a new tax exemption.
There are plenty of potential tools to take the ballpark off the tax rolls: transferring the ballpark to an existing convention authority or create a new stadium authority, or transfer the ballpark to the city.
“A large majority of the municipalities that have Triple-A teams assess no property tax whatsoever on the ballparks,” Simon said in a statement. “With that said, we are continuing to negotiate in good faith with the county and the city to arrive at a fair and reasonable solution to the complicated dispute over taxes. There are great fans here and I am personally committed to seeing these issues resolved.”
Whether the city or county will go along with some sort of deal remains to be seen: there are certainly some elected officials approaching any deal with a great deal of trepidation.
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