In 2003, the Nevada Legislature enacted, and the Governor signed into law, Assembly Bill 205.  This legislation, subsequently codified in Chapter 432, Statutes of Nevada, Sec. 6.6 to 6.9, imposed an additional tax at the rate of two and half percent (2.5%) on the gross receipts from the rental of transient lodging in the City of Sparks (“Lodging Tax”).  The Lodging Tax is paid to the Reno-Sparks Convention and Visitors Authority which distributes the proceeds to the City Council of Sparks.  The City Council may expend these proceeds after obtaining the “advice and recommendations” of the Sparks Tourism Facility and Revitalization Steering Committee (“Committee”), which is created per Sec. 6.8 of Chapter 432.

The Committee’s current membership is as follows:

-  Julia Ratti, Sparks City Council, Chair

-  Mayor Geno Martini, Vice-Chair

-  Jennifer Cunningham, Interim Managing Director and Executive Director of Marketing, RSCVA

-  Kevin Winters, Vice President and Assistant General Manager, Harrah’s Reno

-  Mark Sterbens, General Manager, Nugget Casino Resort

The Committee is required, per Sec. 6.9 of Chapter 342, to develop a master plan that identifies:

• Proposed projects or capital improvements in Victorian Square, or that would provide a direct benefit to Victorian Square, that the Committee has determined would be advisable to promote tourism in Washoe County.
• Method(s) pursuant to which the proposed projects and capital improvements identified in the plan will be financed.

The Committee first adopted a master plan in 2004, amended it in 2008 and most recently amended it again on June 10, 2016.  The new plan is referred to as the 2016 Master Plan.

The Victorian Square Master Plan identifies proposed projects or capital improvements that would be advisable for expenditures of the Lodging Tax.  Including receipts for the period through May 2016, the City has $3,360,672 in cash on hand for such expenditures.  City staff project that this amount, plus receipts for the next three fiscal years (i.e., through the end of fiscal year 2019), will total approximately $5.66 million dollars.

On June 10, 2016, the Committee approved amendments to the Victorian Square Master Plan and adopted Resolution No. 2 by which the Committee formally is advising and providing recommendations to the Sparks City Council regarding expenditures of the Lodging Tax.  The sections that follow describe the master plan and resolution respectively.

Victorian Square Master Plan

The proceeds of the Lodging Tax must be used for projects and capital improvements that are intended to attract and expand tourism and are located in Victorian Square or elsewhere within the Town Center Redevelopment Area, if the project or capital improvement provides a direct benefit to a project or capital improvement located within Victorian Square.

The purpose of the master plan is to guide the Committee in providing advice and recommendations to the Sparks City Council regarding expenditure of proceeds from the Lodging Tax.  The 2016 Master Plan replaces the 2008 Master Plan in its entirety.

Like the 2008 version, the 2016 Master Plan reflects the current iteration of the Redevelopment Agency’s Victorian Square Development Plan, approved in 2015.  While the 2016 Master Plan also permits Lodging Tax proceeds to be used to attract or upgrade retail and entertainment facilities, it allows the funds to be used for a broader range of purposes, all of which are permitted by Sec. 6.7 of Chapter 342.  The proposed projects and uses are as follows:

1. Victorian Square Infrastructure Improvement Project.  This project involves capital improvements for rehabilitation of the streetscape along Victorian Avenue between 15^th Street and Pyramid Way, Avenue of the Oaks between 11^th and 14^th Streets, a portion of 13^th Street and the areas adjacent to Victorian Square Plaza. The project will not involve wholesale replacement of but rather, on as needed basis, repairs or replacement of: concrete surfaces, pavers, curbs, kiosks, street furniture such as benches, planters, bollards, fencing, trees and water zurns.  The Victorian Square Infrastructure Improvement Project will be undertaken in sections, as identified in Exhibit 1.  Section 1, proposed for City of Sparks fiscal year 2017, is along Victorian Avenue between 10^th Street and Pyramid Way.  Subsequent sections will be undertaken over a period of approximately 3-6 years, as funding is recommended by the Committee and approved by the City Council.  The cost of Section 1 is estimated at approximately $400,000 with the total cost (in 2016 dollars) of the seven sections estimated at approximately $2.0-2.1 million.

2. Public Art.  This proposed expenditure is to acquire artworks to be placed on public property within Victorian Square.  The selection of artworks will be based on the recommendations of the City’s Arts and Culture Advisory Committee or other advisory body to the Sparks City Council. Initial funding, in City fiscal year 2017, for the Public Art program is $150,000.  The Master Plan also proposes that beginning in fiscal year 2018, the Committee will consider resolutions recommending annual appropriations for acquisition of additional artworks in an amount equal to at least four percent (4%) of the previous fiscal year’s lodging tax proceeds plus funds for continued maintenance of the artworks inventory.

3. Victorian Square Plaza Enhancements.  This project, which the City has schematic design plans for, is intended to increase programming options for Victorian Square.  The project would add new amenities to the Plaza and provide the ability to host concerts and other performing arts events.  The proposed improvements include the addition of a tensile fabric cover to provide protection from the elements over approximately half of the Plaza, the addition of audio speaker and light towers, a mobile performing stage and a seasonal ice skating rink measuring approximately 120 by 55 feet.  The estimated cost of these Plaza enhancements is approximately $2.5 million.  Due to the magnitude of this amount, as well as uncertainty about the timing of development on the vacant parcels east and west of the Plaza, no decision has been made as to whether, and if so when, to construct this project.  Any future expenditures of Lodging Tax proceeds for the Victorian Square Plaza Enhancements need a Committee recommendation, in the form of a resolution, to the Sparks City Council.

4. Investment or Incentives for Private Victorian Square Retail and Entertainment Facilities. As in the previous plan, the 2016 Master Plan identifies incentives for privately owned capital projects with new retail uses (defined to include dining and entertainment) as appropriate for the use of Lodging Tax proceeds.  Incentives for substantial upgrades to existing privately owned entertainment venues and facilities that increase the regional appeal of such facilities would also be eligible.  Lodging Tax proceeds may also be used for off-site public infrastructure to serve private capital improvements in retail facilities, if the infrastructure is to attract private investment.  Any Lodging Tax investment or incentive for a privately owned facility is intended to fill an anticipated financial “gap” and must leverage private investment on, at minimum, a one-to-one (1:1) basis.  No specific private retail or entertainment projects are identified for funding at this time.  Any future expenditures of Lodging Tax proceeds to incentivize private retail or entertainment capital projects need a Committee recommendation, in the form of a resolution, to the Sparks City Council.

Regarding the financing of projects, the 2016 Master Plan identifies that the City anticipates paying for projects on a cash, “pay as you go” basis.  Should the City determine it wishes to utilize a credit facility to finance one or more eligible projects, it will need to seek a Committee recommendation and resolution prior to doing so.

Resolution No. 2

With Resolution No. 2 the Committee is formally advising and providing recommendations to the City Council regarding expenditures of the Lodging Tax.  Most notably, Resolution No. 2 specifies that the Committee:

• has determined that all projects and capital improvements identified in the 2016 Master Plan are advisable to promote tourism in Washoe County (Section 3 of Resolution No. 2);
• advises and recommends to the City Council that it expend up to $400,000 of Lodging Tax proceeds during City fiscal year 2017 for Section 1 of the Victorian Square Infrastructure Improvement Project (Section 4); and
• advises and recommends to the City Council that it expend up to $150,000 of Lodging Tax proceeds beginning in City fiscal year 2017 for Public Art for Victorian Square (Section 5)

Acceptance of the Committee’s advice and recommendations enables the City to expend Lodging Tax proceeds during City fiscal year 2017 for Section 1 of the Victorian Square Infrastructure Improvement Project and Public Art for Victorian Square.  Any such expenditures must conform with all requirements of the City’s procurement policies.  The Committee will further advise and make recommendations to the City Council regarding additional expenditures of Lodging Tax proceeds (e.g., for other sections of the Victorian Square Infrastructure Project) through future resolutions.

The Council could reject the 2016 Master Plan and/or Resolution No. 2 or ask to the Committee to reconsider or revise their recommendations.

I move to accept the Sparks Tourism Facility and Revitalization Steering Committee’s adopted Victorian Square Master Plan and Resolution No. 2.