Do incentives to the big guys trickle down?

By Sam Skolnik

Saturday, Oct. 10, 2009 | 2 a.m.

The Las Vegas Redevelopment Agency has used tax breaks to lure to downtown several massive projects, hailed by city officials as evidence that efforts to revitalize the city’s core are succeeding.

Included in the deals that attracted The World Market Center, Premium Outlet Mall, Molasky Corporate Center and other projects were programs intended to benefit residents of surrounding neighborhoods through contracts to help build and jobs to help staff the facilities. Unlike the developers’ tax breaks, which the city is legally bound to provide, these programs relied on the “best efforts” or “good faith” of the owners, developers and contractors.

More than a decade after they were enacted, the programs simply have not worked, say community activists and some city officials.

Las Vegas officials acknowledge that their goals for minority contracting and local employment have not been met and concede they don’t know how short they have fallen because they don’t track the results.

City Councilman Ricki Barlow, whose Ward 5 includes much of the roughly 3,900-acre downtown redevelopment area, including some of the city’s poorest neighborhoods, says the programs have been disregarded because no one believed the city truly cared about seeing its goals realized.

“Residents haven’t gotten what’s due them,” Barlow said. “The city as an enforcing agent has not done a good enough job.”

That might be changing. A community activist named Stanley Washington — who’s been prodding local officials to push developers to meet these goals for more than a decade — now has the attention of top city officials, including City Manager Betsy Fretwell.

In the end, Washington said, nothing will change if developers and business owners believe city leaders don’t care whether the city’s objectives are being heeded.

“There must be a cultural change, from the top down,” Washington said. “If it’s not from the top down, it isn’t going to happen.”

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In 1992, the city adopted its first employment plan to try to make sure that more than half of the jobs created by Redevelopment Agency-sponsored projects were filled by residents of the city’s mostly poor redevelopment area. A year later, the city adopted a contracting program to urge developers to hire a specific share of businesses owned by racial and ethnic minorities (25 percent), women (5 percent) and disabled veterans (2.5 percent.)

Five major projects have been completed in the city in roughly the past decade that have been subject to both programs: The World Market Center, the Molasky Corporate Center adjacent to Symphony Park, the Premium Outlet Mall, Allure Tower and Edmond Town Center, a strip mall on Owens Avenue.

The companies have agreed to try to meet the city’s guidelines in return for receiving Redevelopment Agency tax breaks. But neither the city nor the owners of the developments contacted for this story could say that the city’s guidelines were being met.

“As the city’s largest taxpayer, World Market Center’s significant infrastructure investment helped jump-start ... new development” downtown, Andrew Maiden, the center’s public relations manager, said in a written statement.

The World Market Center’s employment plan says the company will coordinate with the city’s minority business officer and Redevelopment Agency representatives, advertise in local newspapers and hold a job fair. The plan does not call for specific numbers or percentages of minorities or local residents to be hired.

Maiden didn’t answer questions about whether the center had met the city’s goals regarding local employment or minority contracting. But he did say that from its inception, it had “made good faith efforts to satisfy applicable employment parameters and requirements.”

Maiden also said that when the market center’s planned expansion is complete, it will have created about 35,000 additional “direct and indirect” jobs, which will generate more than $60 million in local and state tax revenue.

In 2008, the center received from the city’s Redevelopment Agency tax breaks worth $828,000.

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Bill Arent, acting director of the city’s Business Development Office, acknowledged that minority contracting goals generally haven’t been met. The range of minority-owned businesses hired by contractors has ranged from 2 percent to 12 percent, typically, nowhere close to the city’s goal of 25 percent.

These goals are important, said Katherine Duncan of the Las Vegas Ward 5 Chamber of Commerce because small, minority-owned businesses haven’t been part of the “good old boys” clubs in the local union and contracting worlds. Those “clubs” have been difficult to penetrate, she said.

“You can imagine what some of those dollars would do for our community,” Duncan said. “We just want to have an equal chance to make a living.”

On Sept. 25 Duncan and several minority subcontractor owners met with Arent, Kathy Rainey, the city’s purchasing and contracts manager, and a representative of Whiting-Turner Contracting Co., the main contractor for the Smith Center for the Performing Arts.

Though there were questions about whether Whiting-Turner was trying to meet city guidelines regarding minority contracting, Arent said the issue was largely moot. The Smith Center is classified as a public works project — despite its being funded, in part, through RDA bonds — and is thus subject to state law mandating that the lowest and most responsive bidders be hired, regardless of race or gender.

Rich Worthington, president of the Molasky Group of Companies, said he’s sympathetic to Duncan’s concerns. He worked “very hard” on the issue with then-Ward 5 Councilman Lawrence Weekly when the Molasky Corporate Center development agreement with the city was drafted.

He said his company had hired minority-owned contractors but couldn’t say how many. “We didn’t get the numbers we were looking for, but we worked at it.”

He also said he didn’t know what percentage of company employees live within the redevelopment area.

But Worthington said that’s not the point. The city’s contracting and employment goals are unrealistic, he said, and should be scrapped. A better way for the city to help, he said, would be to bolster and guide minority owned businesses so that they have a better shot at succeeding when they compete for work.

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The employment and contracting program goals were established “quite some time ago,” and might need revising, Arent said.

“I’d like to work with the City Council and the mayor to see what the right policy would be for today,” Arent said.

He suggested that ultimately a “carrot approach” might work better than a stick. That could include tax breaks for companies that show they are meeting the city’s guidelines.

Washington is also pushing for change. He plans to meet this month with city officials, including top administrator Fretwell, to get the city involved with a committee he’s looking to form, to be called the Employment Plan Compliance Committee.

He said his goal is to bolster the city’s commitment to enforcement so that developers feel more obligated to heed the city’s employment plan, last amended in 2001.

“It’s like, if there are no police officers out there on the street, you might do things you wouldn’t ordinarily do,” Washington said. “The same thing applies here.”