Development of the new Exit 118 area is one of the most significant growth issues for Mesquite right up there with the opening of the Peppermint Casino in the 1990s and the decision to allow Sun City Mesquite to prosper. The kicker is that key parcels of land on the new I-15 interchange are owned by the City of Mesquite giving the city council the opportunity to set the conditions for development.
The council wisely selected the “direct sale” method for selling some of the key property. Two competing companies want the full 104 acres the city owns with one business seeking a smaller five-acre portion to add to its adjacent property.
What the city hasn’t wisely done is adopt a clear set of standards that the competing companies must meet. The council has repeatedly said it likes the Economic Development Incentives matrix that it accepted earlier this year. To date however, none of the specific incentive standards have been codified by ordinance or subjected to a public hearing on exactly how they will be used.
The council needs to ask itself in advance of a decision to sell the Exit 118 land what will happen when one developer follows the incentive committee standards to the letter and the other developer decides to take a different approach. While Nevada state statutes give broad latitude to the city in selecting a project for the direct sale method, the law is just that – a broad statute that any number of potential developers or development proposals could meet.
We doubt interested developers are going to “go away” if there is a short delay in the council’s consideration of the three offers for the Exit 118 property. Taking a few weeks to discuss and adopt a specific ordinance, with public input, would go a long way in preventing controversy with the council’s ultimate choice.
After all, rushing projects through a council vote is what got us really bad contracts during previous administrations; something this council has railed against for four years.
It would also go a long way toward letting the applicants and the public know the criteria upon which purchase offers are judged. Codifying the economic development matrix will also set the standard for future city-owned land sales and level the playing field among potential purchasers. The council, city, public and developers will have a clear understanding of what’s expected when evaluating purchase proposals.
There are other issues.
Currently the city has no written guidelines outlining time limits on when and how an applicant must perform. The city may want flexibility in the time limit depending upon the type of enterprise. However, there should be a process for establishing the time limit (the Incentives committee recommended no more than five years) and for monitoring the developer’s progress.
For example, the city should firmly outline what the progress reports will include, when they will be completed and to whom they are given. Can the time be extended by administrative action or does it require city council approval?
Assessment of likely completion is a must criteria. A perfect example is the two proposals currently before the council. Neither have a franchise established for the property and in essence both are speculating that they can attract one if they have control of the property.
A reasonable ordinance would require at least a letter of intent if a franchise is involved or a letter from a bank or proof of financial assets adequate to develop the proposal.
An ordinance would require the council to determine that a proposal is in conformance with the adopted Master Plan for the area and the zoning.
As the city does not provide all services, an ordinance should require applicants to demonstrate they have agreements for services (so-called will-serve letters in the case of water) from service providers. The city should require a letter from NDOT on adequate freeway access depending on location. (This could potentially eliminate Exit 120 as a Travel Center site and keep the dispute out of council politics which is another reason for having ordinances).
The ordinance should list which securities are acceptable before a project can receive discounted land. For example, are deeds of trust, letters of credit or escrow accounts acceptable? Applicants should know in advance whether a business plan is required or not.
The ordinance should require a statement by the developer showing past experience in the kind of project proposed. That is essentially the issue in the current case before the council who seems prepared to simply take public testimony from the applicants regarding their experience.
The bottom line is that the city should recognize that this is a financial transaction and that the city is a partner with the applicant until the project is completed. Every partner has an obligation to have in writing a full agreement. A developer has a right to know what is expected to successfully partner with the city and what will happen between purchasing the land and building the product.
And finally, the city should establish by ordinance that 25 percent of the sales price will be placed in a segregated fund for future economic development.
Without an ordinance, the process is a lawsuit waiting to happen.
It’s exciting to see Mesquite’s economic opportunities finally becoming real. The city has its heart in the right place but its head in the dirt at Exit 118.