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April 21, 2015

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City’s redevelopment grants meeting their mark, helping businesses open downtown


Leila Navidi

Pamela Dylag, left, 28, and her sister Christina Dylag, 25, are co-owners of the soon-to-be-opened Velveteen Rabbit, a bar in the Arts District in Las Vegas. The Dylag sisters were photographed inside the bar on Thursday, February 14, 2013.

Velveteen Rabbit

Pamela Dylag, 28, and her sister Christina Dylag, 25, are co-owners of the soon-to-be-opened Velveteen Rabbit, a bar in the Arts District in Las Vegas. The Dylag sisters were photographed inside the women's bathroom at the bar on Thursday, February 14, 2013. Launch slideshow »

Pamela and Christina Dylag thought they’d found the perfect spot to open their bar in downtown Las Vegas in a vacant one-story building along Main Street a block south of Charleston Boulevard.

The blue-and-green painted building had room for parking, a spacious interior and a great location along a major street in the city’s burgeoning Arts District.

Sure there was graffiti on the walls and a hole in the roof, but the sisters signed a lease anyway and set to work rehabbing the former furniture store, gutted by a fire several years ago.

Once the work began, bills began piling up. Plumbing and air conditioning needed to be replaced in the decades-old building at 218 S. Main St. Bathrooms had to be expanded to meet Americans with Disabilities Act compliance. New sinks, faucets and toilets had to be installed, each coming with a $1,700-per-fixture sewer-connection fee.

The Velveteen Rabbit

The sisters, who work at a restaurant on the Fremont Street Experience, spent their life savings and hundreds of thousands dollars more from a private investor getting the space up to code and ready to open next month.

The endeavor also got some help from the city, which awarded the bar $84,000 in grant funding through its Las Vegas Redevelopment Agency, the most recent allotment coming this month, and waived a one-time $50,000 bar license fee.

“We want to support the Arts District and the community here. … We want it to be somewhere where you can engage in good conversation and enjoy a craft cocktail,” Pamela Dylag said. “We need to pay back our investors. We won’t be quite as stressed knowing we have this astronomical amount of money to pay back. The city’s support alleviates some of that.”

Although small projects like the sisters’ bar, the Velveteen Rabbit, don’t generate the same buzz as major projects like World Market Center, Smith Center or the Mob Museum, they are equally important to downtown’s success, said Bill Arent, Las Vegas economic and urban development director.

“(Small businesses) play a huge role strategically,” Arent said. “There’s a surging interests in restaurants and taverns coming into downtown, and we didn’t have the spaces. A restaurant would come into a former antique store or auto shop or laundromat and the expense to renovate that space for a restaurant would be astronomical. … We said for every four dollars you put in, we’ll put in a dollar, up to $50,000.”

Since July 2012, the Las Vegas Redevelopment Agency has distributed more than $600,000 to 15 projects in the downtown area in the form of small grants, nearly doubling the spending compared with the year before, even as its budget has shrunk by half in the wake of the recession.

To further spur business in the downtown area, the city has been waiving one-time licensing fees, which range from $20,000 to $50,000, for bars that open in the Fremont East or Arts district. Through that program, the city has waived licenses for 16 businesses at a total cost of $540,000 since 2010.

Arent said outside of monetary grants, the RDA also provided support services for businesses, including doing site visits to help business owners determine what needs to be done to get a building up to code.

The redevelopment agency is funded using revenue from incremental increases in property taxes in the redevelopment area, which covers about 4,000 acres generally stretching east from Interstate 15 to Maryland Parkway between Washington and Sahara avenues. In 2012, the city created a second redevelopment area, which can benefit from the program that covers the area along Charleston Boulevard and Sahara Avenue west of the I-15 to Decatur Boulevard.

The amount spent on the Visual Improvement Program, which provides matching grants for exterior improvements like signage, windows and paint, and the recently created Quick Start Program, which provides funding to bring old buildings up to code, pales in comparison to the amount the RDA spends on land acquisitions and staffing.

The city has spent nearly $4 million across dozens of projects, including bars, restaurants, hotels, motels, a tattoo shop and even a couple of strip clubs, since it began the visual improvement grant program in 2004. Each grant requires matching funds from the business owner to be invested, often at a ratio of four private dollars for every dollar the city contributes.

Those small investments often yield large returns and provide support for entrepreneurs like the Dylags, who struggle with the high costs of starting a business in an older building.

“We’re trying to repopulate and repurpose all of these buildings downtown. There’s some nice buildings, but getting into them is hard because they’re 50, 60, 70 years old and their guts need repaired,” Councilman Bob Coffin said. “People are spending a lot of money and finding out there is more and more to do. It’s a heartbreaking experience if you don’t go in with your eyes wide open.”

Maintaining and improving the appearance of the downtown area is important, Coffin said, because it will attract more businesses. By providing matching grants, the city is encouraging people to invest in downtown, he said.

“You have to put in money to get money back out,” Coffin said. “The downtown population is increasing … these services inevitably are going to be needed, and entrepreneurs know that. That’s why they’re investing here.”

Up the street from the Velveteen Rabbit, Mark Ableman sits behind his desk at his design studio Inside Style and watches cars pass by on Main Street through the window.

Ableman estimates he spent $300,000 relocating his business in 2011 from Valley View Boulevard to the Arts District and transforming the space that once housed a church into a modern office befitting an interior designer.

But after the interior was done, Ableman was reluctant to spend the money needed to put a sign on the building and to fix the windows near his desk that rattled whenever traffic went by outside.

With $25,000 from the city to improve the façade, Ableman gave the building a new coat of paint, installed some exterior lighting, replaced the windows with an energy efficient model that didn’t rattle and installed a large new sign that proudly announces the business’s presence.

“I don’t know if we would have done the façade right away (without the grant). … I think the façade was a key component for us, people literally didn’t know we were here,” Ableman said. “The redevelopment agency funds are much needed. We’re just on the tip of the iceberg in terms of our community being refurbished.”

Las Vegas Redevelopment Spending

View City of Las Vegas redevelopment Spending in a larger map

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  1. Main Street is in Dire need of Streetscaping from Downtown to the Stratosphere Tower. it still has a long way to go from Urban Trashy to Urban Chic. For right now a Trolley Bus from the "Sahara" Monorail up Main to the Smith and Outlet Center on to Downtown may fit the bill. This could be Huge During Events and Conventions.

  2. It's great to see the city doing this! Though would be nice to see some investment in high-tech, low-tech and other non-hospitality focused businesses (perhaps they have but this article only mentioned hotels, bars, restaurants and strip clubs).

    One thing though, the media needs to watch the incendiary language. Saying "the city has waived licenses for 16 businesses at a total cost of $540,000" is irresponsible reporting. The cost, in GAAP terms, is negligible. It is simply forgone potential immediate tax revenue (which likely would never have been realized anyway as the businesses simply wouldn't have opened). By waiving a tax, at practically no real cost (defined as an outlaying of taxpayer money, something that appears on a P&L as an expense) the city gains jobs, a solid stream of sales & employment tax revenue, increasing property values (and hence even more tax revenue), future business license renewals, and an improved foundation for continued metro growth.

  3. Hey here's an idea. Rather than having such high fees that clearly discourage business, why not just substantially lower all the fees CITYWIDE, not just the preferred downtown area?