Legislation to extend downtown hotel-room tax raises questions

By Joe Schoenmann

Tuesday, Feb. 19, 2013 | 2 a.m.

The city of Las Vegas' proposed state legislation regarding downtown redevelopment now includes extending a 20-year-old room tax an additional 25 years.

And it's raising questions among downtown businesses.

The tax was first imposed in the mid-1990s to pay off bonds sold to construct downtown’s Fremont Street Experience. Now the city wants to extend the tax beyond the date it was to expire from 2015 to 2040.

But businesses want to know why — what will the tax be used for? Road improvements? An arena or a stadium?

Bill Arent, Las Vegas economic and urban development director, said he and others have been meeting with casino owners to discuss extending the tax and how those revenues might be spent.

The $1.4 million brought in annually by the tax on hotel rooms “is significant,” he added, but isn’t enough for building anything as expensive as an arena or a stadium “without additional partners.”

Mayor Carolyn Goodman has bandied about the idea of a stadium or an arena as viable for downtown.

Other potential uses for the money, Arent suggested, include improvements to the electric canopy, building a better connection between the Fremont Street Experience and the growing Fremont East District, and more green space/parks downtown.

Extending the tax surprised some because the original bill request simply asked the Legislature to extend the downtown Redevelopment Area’s life from 45 to 60 years.

About three weeks ago, Arent said, city staffers added language to also extend the life of the room tax.

Although sources say most downtown businesses agree the redevelopment area needs to exist beyond 2015 — certain benefits accrue to businesses within the area — they are less certain about extending the room tax by up to 25 years.

The tax is added to a room’s cost at the rate of 2 percent for hotels within the Fremont Street Experience and 1 percent for other hotels in an area from Main Street east to El Cortez, which is between Sixth and Seventh streets.

With support from downtown hotels, the tax originally was imposed to pay for the Fremont Street Experience, a five-block section of street sealed off from vehicular traffic that begins on the west at Main Street and includes a computerized canopy that projects visuals coordinated with music at night.

The canopy, which was built only after Paramount Pictures refused to give permission to build a life-sized Starship Enterprise resort downtown, was completed in late 1995.

In 2015, bonds sold to pay for the Fremont Street Experience will be paid off. That's when the room tax originally was scheduled to end.

Arent said the bill would act only as enabling legislation, meaning a tax would not be extended without approval of the City Council.

City Councilman Bob Beers, a former state senator, said he supported the idea of enabling legislation because of the state’s strong control over the ability of local government to levy taxes.

Downtown businesses aren’t certain about the idea, said Richard Worthington, president/CEO of Molasky Group of Companies and former chairman of the Downtown Las Vegas Alliance, a coalition of downtown business owners.

“They need more information,” Worthington said. “The alliance won’t support anything that’s conflicting with the support of our members, and right now we haven’t had the chance to get their opinions to weigh in on this legislation.”

In the four-month sessions of the Legislature, which meets once every two years, Beers said bills are introduced, then quickly modified and modified again.

The fate of the city’s redevelopment bill, he noted, will depend largely upon the input and feedback the city gets from downtown businesses.

“More bills die than make it through,” he said.

Joe Schoenmann doesn’t just cover downtown, he lives and works there. Schoenmann is Greenspun Media Group’s embedded downtown journalist, working from an office in the Emergency Arts building.