Biggest Little City

Reno Aces Agreement Restructuring

The Baseball Stadium, home to the Pacific Coast League Reno Aces, opened in 2009. Surrounding the Stadium is an exciting entertainment district called the Freight House District which houses retail, dining, and nightlife venues.

The Reno Aces are northern Nevada’s first-ever Triple-A baseball team. The Aces franchise was purchased by SK Baseball, led by managing partner Stuart Katzoff, in 2007, and relocated to Reno from Tuscon, Arizona.

To help finance the construction of the stadium and bring the Aces to Reno, the Redevelopment Agency committed up to $1 million in tax increment (tax increment is the difference in property tax between what would normally be generated by the area without the stadium, and the increased tax revenue brought about by the stadium's presence) each year to SK Baseball. Unfortunately, the nation's economic downturn negatively impacted property values community-wide, and left the Redevelopment Agency with no tax increment to provide to SK Baseball.

With no tax increment coming in, and bond payments coming due, the developer and operator of the stadium asked the Reno City Council, the Redevelopment Agency, and the Washoe County Commissioners to restructure the original agreements.

Timeline

  • October 24, 2012. The Reno City Council voted to move forward with restructuring the existing financial agreements related to the Baseball Stadium Project.
  • November 7, 2012. A final outline of the restructured agreements was brought back to Reno City Council for potential approval. The Council approved restructuring the financial agreements.

    The restructured agreements were also reviewed by the Redevelopment Advisory Board at their November 6, 2012 meeting. The Board voted to recommend the approval of the restructuring with the caveat that the City could find funding within the budget.
  • November 14, 2012. After 4 new Council Members were sworn-in, the Reno City Council asked to have the restructured agreements that were approved on November 7, 2012 be brought back to them. The Council advised they wanted to have all the information (historical, prior agreements, proposed agreements, etc.) presented to them in order to be able to make a decision.
  • November 28, 2012. A Joint Workshop between the Reno City Council and Reno Redevelopment Agency was held in order to have all the information related to baseball presented to them and the public.
  • December 12, 2012. The Reno City Council voted to continue the agenda item related to baseball in order to allow more time for finding a resolution that both Baseball and the City of Reno residents can support.
  • January 30, 2013. At a Joint Meeting with the Reno City Council and Redevelopment Agency Board, the Reno City Council voted 5 to 2 to approve restructuring the financial agreements (opposing were Council Members Brekhus and Schieve). The staff report; settlement and restructuring agreement; payment agreement; and resolutions can be read in their entirety

     

About the Restructured Agreement:

  • In the new agreement, the city is only responsible for financing 1/3 of the $55 million dollar debt. The developer is responsible for refinancing the balance. 
  • The new agreement provides a personal guaranty by the developer that was not included in the original agreement.
  • In the new agreement the Fire Station Loan would be paid-off in 5 years rather than 10 years.
  • In the original agreement the baseball team could leave after 15 years. In the restructured agreements the baseball team will remain in Reno for 30 years.
  • In the new agreement the City will have more flexibility to hold special events at the Stadium.
  • In the restructured agreements if baseball moves for any reason prior to 30 years, City gets stadium free and clear without any liens and the City has no obligation to make any further support payments. This means the City would get a $58 million stadium if team leaves early.
  • In the new agreement if naming rights are sold for more than $300,000 per year the City would receive a 10% credit against the Support Payments to be made by City each year. 
  • In the original agreement, after 20 years (2027), Nevada Land will own both the stadium and land. In the restructured agreements the Stadium Authority, Redevelopment Agency, and City will own the stadium and land.
  • Upon signing the new agreement, the Developer will immediately release any development rights or claims related to the first floor of the National Bowling Stadium (under the Retail DDA), and the RTC (under the Retail DDA). 
  • The capital improvement clause within the new agreement mandates that the developer shall operate, maintain, manage, make and pay for all necessary capital improvements ensuring that when the City of Reno gets the stadium after 30 years it will be in good shape.
  • According to a new UNR study, if baseball leaves Reno the region will lose 472 direct jobs, 119 indirect jobs, 143 induced jobs, and $28.8 million annually in total economic impact.
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