The opening of the World Market Center this week represents the first taxpayer-subsidized redevelopment of downtown through tax increment financing. In the first of a two-part series, KNPR's Ky Plaskon reports on the public's return on that investment.
PLASKON: At the opening of the World Market Center, Mayor Oscar Goodman explained Tax Increment Financing. The World Market Center developers get control of some taxes.
GOODMAN: Tax increment financing, 18 percent goes to affordable housing and then we made a deal where we split the remaining 82 percent, 42 percent goes to the city and 41 percent to the Furniture Mart and they have to take that and put it into the roads, landscaping. It is not a situation where they can put it in their pocket.
PLASKON: The deal allows the developer to pay less taxes for 20 years. The idea is that the developer reinvests the money in the neighborhood to make it a better place, subsequently increasing the surrounding property values. If this week is any indication, the public subsidy is paying off.
SOUND: INSIDE BUILDING
PLASKON: More than 53-thousand visitors made the pilgrimage to Furniture Mart. Escalators were so jammed, some were stopped for safety reasons and it took 30 minutes to make it from the top floor to the bottom of the 10-story windowless building. Benches near the elevators were full of people waiting for the crowds to subside.
PASHA: I own a furniture company and I am seriously considering getting a permanent showroom in the next building that they are going to open in 2007. This is better than any show I have ever seen.
PLASKON: Sam Pasha has been to furniture shows all over the US, Europe and the Far East.
PLASKON: If you had a choice between here and anywhere else where would you choose?
PASHA: Oh here, really no need to think twice, this is going to be, everybody is talking about it it is going to be the show of the world in 5 years.
PLASKON: That doesn't spell good news for other cities with furniture shows like High Point North Carolina.
CUTLER: The infrastructure in high point just can't compete in the long run.
PLASKON: According to Ivan Cutler, a self-described furniture blogger, Furniture Mart will steal away the 1-billion dollar furniture market in North Carolina.
CUTLER: In high-point there are 250 buildings of which 4 or 5 are large ones but they are all under independent management, not all under one management. As a result it is fragmented, it is a microcosm of the industry.
PLASKON: The consolidation is exactly what appeals to Pat Ried who came to The World Market Center to stock his Portland Oregon furniture store.
RIED: I think it will help the market a lot just having everything in one place. The selection is going to be much better than what has been available before.
PLASKON: According to an economic impact study by UNLV, Furniture Mart could bring in 60 million dollars annually in local and state tax revenue, create 35,000 jobs and impact personal incomes by 1.5 billion dollars. To meet the goal, the Related Companies plans a total of 7 buildings on the downtown site with 12 million square feet of showrooms. About 1 and a half million square feet will be dedicated to one specific industry.
WACKROW: Today in the United States there is no centralized location where hotels can go.
PLASKON: Ron Wackrow is Related's executive vice president.
WACKROW: That is what is amazing about it, it is a never ending business. After a hotel room is 5 years old you begin your remodeling program and every 10 years you go for a whole new look.
PLASKON: And he expects it to grow.
WACKROW: Because the investment dollars have been going into residential development over the past 5-7 years there has been a lack of development in hotels and so now you are starting to see a re-emergence and a whole new growth trend in hotel development that will go on for the next 5-7 years.
PLASKON: The people and growth potential make the taxpayers' subsidy a slam-dunk for Mayor Oscar Goodman.
GOODMAN: This being here will cause people to buy homes in the area, shop in the area, eat in the area, it is just a win, win, win.
PLASKON: Furniture events like these drawing tens of thousands of people are only scheduled twice a year. The rest of the year the building goes dark except for the first two floors. They stay open for business. Las Vegans looking for a deal on a sleeper couch will be disappointed though. The World Market Center doesn't do business with the general public, only wholesalers.
Ky Plaskon, News 88-9 KNPR
TAG: Tomorrow KNPR's Ky Plaskon explores how The World Market Center fits in with the community of downtown and if the taxpayer subsidized building fits in with the redevelopment concept of making downtown a destination for Las Vegans.
In a previous story - High Point, North Carolina, has long been regarded as the 'furniture capital of the world.' Now some think the new Las Vegas center could pose a threat. The view from North Carolina.