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At the heart of Nevada - a working capital.

Nugget Economic Development Project. At the heart of Nevada - a working capital. Project Status. Last month, the Board of Supervisors directed staff to return with specifics regarding the proposed Nugget Economic Development Project, to include:

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At the heart of Nevada - a working capital.

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  1. Nugget Economic Development Project At the heart of Nevada - a working capital.

  2. Project Status Last month, the Board of Supervisors directed staff to return with specifics regarding the proposed Nugget Economic Development Project, to include: • Further justification of the project’s underlying premise of job creation • Details of the scale of the project • Possible uses on the Carson Nugget’s properties • A complete fiscal and economic impact analysis • An intended work schedule • A summary of partnerships and community outreach • Verification of sufficient interest from master development community • A preliminary public/private finance plan

  3. Meridian Business Advisors Report

  4. Nevada’s economy has changed forever. Carson City’s economy is struggling. Highly Concentrated Economy • 42% of payroll from government jobs • 31% of payroll manufacturing, trade & • education/health services jobs • These sectors had the highest job losses. • NOTE: in 2008, retail made almost 12% of Carson City payroll.

  5. Nevada’s economy has changed forever. Carson City’s economy is struggling. Payday dollars are earned by commuters. • Over 40% of government employees don’t live in Carson City and spend elsewhere. • Over 50% of Carson Tahoe Regional healthcare employees don’t live in Carson City and spend elsewhere.

  6. Nevada’s economy has changed forever. Carson City’s economy is struggling. Declined Sales Tax • Lack of local spending • Lack of visitor spending • NOTE: FY 2008 – 2009 saw sales tax reduced by 17.2%

  7. Nevada’s economy has changed forever. Carson City’s economy is struggling. Negative Impacts on Business:20.4% of Carson’s Commercial space is empty. • 21.4% vacant industrial • 19.7% vacant retail • 29.7% vacant medical • 17.2% vacant general office

  8. Nevada’s economy has changed forever. Carson City’s economy is struggling. Unemployment – above the national average • September 2009 unemployment at 11.5% • Nearly double the historic high in 1998 (5.9%).

  9. Potential Partner Transactions How it works: City/Redevelopment Authority: • Public Facilitates including • Knowledge and Discovery Library • Business Incubator / Digital Lab • Public Infrastructure: plaza / transit / parking • Private Sector/Developer: • Office Buildings • Retail • Residential • Entertainment • Hop and Mae Adams Foundation: • Funding community partnerships related to the project • Land contributions • Long-term lease to developer for private pieces • Land contributions to public uses

  10. The transaction could create a true working capital Getting back to work Immediately: An average of 561 annual construction-related jobs for 5 years - 820 in the first year alone.

  11. A true working capital Getting back to work Long - term: At build out, 465 permanent high-paying jobs in 5 years – from this project alone.

  12. A true working capital • Helping the economy • Regional impact of $164.3 million through 1st full year of operation, 2016 • Approximately $14.4 million annually starting in 2016 • Carson City Property Tax Revenue from Project - $33.6 million over 20 years • Carson City Sales Tax Revenue from Project - $4.7 million over 20 years

  13. A true working capital A Review of Current Carson City Objectives: • Create sustainable economic engine that drives new jobs • Energize downtown with definable town center and hub for the community • Diversify economic base through new industries • Educate and train youth for high paying jobs • Build, attract and create new companies NET: *more jobs *higher paying jobs *new companies *increasing our tax base from these equals a healthy economy

  14. Path to Addressing City’s Objectives: 8+ acre downtown project Various entities proposed including 3 anchors:1) Knowledge and Discovery Library 2) Business and Technology Incubator 3) Digital Media Lab

  15. Growing our own with a high-tech foundation: a knowledge and discovery library Anchor building: knowledge and discovery library • Learning begins before schooling • The public library offers Carson City's only FREE pre-k learning program • Good schools require a good community library • People in a learning society need libraries throughout their lives • Public support of libraries is an investment in people and communities • Downtown central libraries are catalysts for economic and business development

  16. Growing our own with a high-tech foundation:Anchor building: business and technology incubator Purpose: Accelerate successful development of entrepreneurial companies – start ups and early-stage companies taking products & ideas to commercialization • Incubators develop new companies that create jobs, diversify local economies and create wealth in the community • Incubator services are the Entrepreneurs tool box – • Link business, education & government to create jobs • Provide strategy, advise & link potential business partners, networking activities • Offer access to funding sources including angel and VC capital • Offer marketing, accounting & legal assistance • High tech facilities offering variable rents • Management Assistance • Use – Media, Renewable energy, Technology & Internet, Healthcare

  17. Growing our own with a high-tech foundation: Anchor building: business and technology incubator Existing Models of Incubator Success: • Jump Start Incubator, Ohio, 4 years, 40+ companies, $65m economic impact, generated $8.3m tax revenues • Clovis, Calif. – Central Valley Business Incubator – raised $20M, created 2,030 new jobs • Austin Texas Incubator – 1989, 70 companies, 3,000 jobs, 4 NASDQ companies, created $1.0B in 20 years • University of Central Florida – 125 companies, 1,600 jobs, workforce earned total $70m • Columbia South Carolina – 1998, 51 companies, raised $29m, created 650 jobs • Incubator company national average of 8.3 incubators per state with average of 110 companies per state • Nevada incubators – Henderson Business Resource Center, Reno’s now C 4 CUBE

  18. Growing our own with a high-tech foundation: a business and technology incubator Business Incubator Success Rates • Incubators are proven business & technology models with 1,000 in U.S. have grown 33,000 companies, 5,000 incubators globally • 5,400 companies in incubators in the U.S. equating to an average of 110 per state • Incubators provide up to 20 times more jobs than building roads, bridges, water & sewer infrastructure projects • 85% of graduated companies stay in the community creating mass in new industry sectors • Incubator’s Life Cycle - start up company enters, funded, project commercialized, graduate, grow, create jobs in community, new company enters incubator cycle

  19. C 4 CUBE • Executed Letter of Interest (LOI) with C4CUBE Incubator, as potential Carson City operator. • Ky Good – Managing Director • Norman Smith – Executive Director • Management – senior executives and business leaders with strong backgrounds in start-ups and business incubators • In-depth knowledge in grants, well-connected in angel and venture capital community

  20. Entrepreneurs = Jobs = More disposable dollars • According to the Ewing Marion Kauffman Foundation**: • Startups are responsible for more than a third of all new jobs created in the U.S., and • firms less than five years old accounted for all net job growth between 1980 and 2005. • Entrepreneurs follow 3 elements: • Access to expertise (i.e. mentoring) • Access to capital • Access to talent **Kauffmann Foundation: world's largest foundation devoted to entrepreneurship

  21. Incubators: • Act as a nexus: • for best of breed Service Providers in: • Finance, Legal, Marketing, Technology, etc. • as a single point of access to local angel investors and outside venture funds, • as a single point of access to fundable deals, and • to attract knowledge workers and innovators.

  22. Who are we? • Key Management Team: • Ky Good, Managing Director • Norman Smith, Executive Director • Lynne Keller, Director of Communications • Lexi Fox, Director of Events and Public Relations • Larry Udell, Director Industry Relations • Robert Unmacht, Director Broadcast Media • Entrepreneurs in Residence: • Dr Nelson Publicover, Science & Technology • Greg Carr, Finance • Richard Newman, Business and Market Development • Wesley Kikuchi, Sales and Marketing • Board of Advisors, 20 academic and industry leaders • from NV, CA, WA, MA • Networks: local, regional, national, world-wide

  23. What value do we bring? • Opened a 14K SF facility effective 9/09 • “Inventors and Entrepreneurs Workshop”; • Mar/09, Mar/10 (planned) • Licensing Executives Society - Nevada • Conducted first Entrepreneurial Boot camp. • Developed Internship Program • Produced educational lecture series to TMCC and SNC. • Business Opportunity Forums. • Established close relationships with major tech transfer programs at University of Nevada Reno, Siemens Transfer to Business (TTB), and University of California Berkeley. • Ground work that started in 2005 to develop the local, regional, national, and world-wide networks with a single focus of job and new business creations.

  24. How does it work? • Business Opportunity Forums: (Investor Presentations) • Attract high quality deals (new ventures ready for investment) • Since July - Canada, Mexico, Brazil, NV, CA, MA, NY, NM, AZ, CO • Introduce them to high quality investors in Northern Nevada • Bootcamp: (Educational sessions on • What to do and How to do it) • Local “garage” inventors and entrepreneurs • Disciplined approach to success • Access to experts and training • 1st/Sept09; 2nd/Mar10 • Mentoring: Daily Guidance • Milestone based business development plan with deadlines. • Community Involvement: (Networks and support Infrastructure) • Nevada Inventors Association Governor’s Cup Mentoring • Nevada Black Chamber of Commerce NCET Advisory Board • Licensing Executives Society Nevada TMCC, UNR Entrepreneur Class

  25. Walton Global Green: Moved to C4CUBE from Napa, CA • Metal Recovery: Moved to northern NV from Berkeley, CA • Greg Carr; CPA/CFO 20 years exp; Moving to NoNV • Rich Newman; Publisher, Author, TV Producer, CPA; Moving to NoNV • Glenn Hanson (Boston, MA); Sent 2 companies from MA to BOF • 37 new ventures presented to Accredited Investors • Video recorded all investor presentations and secured online • Video recorded entire 3-Day Bootcamp for future training. • Talking with Investor Groups about televising to remote locations • 8 Clients entered into C4CUBE; 8 Term Sheets Pending Review; • Over 40 potential Clients being reviewed

  26. Digital Media –production in a downtown neighborhood

  27. Growing our own - experts in the Industry Paul Siegel z Co-produced first ESPY awards, first MTV awards z Distributed Family Feud and Hollywood Squares • Produced TV dramas - Fame, Baywatch and Tales from the Darkside • Produced Live specials - Return to the Titanic, Mysteries of the Pyramids (Omar Shariff) z Produced Animation projects: Care Bears Movies, Inspector Gadget, He-man and Master of the Universe TV series

  28. Our Vision • Develop a business community for growing businesses to produce entertainment programs and create software for video games, Internet and television • Bring together professionals to create the latest digital/media technologies • Focus on building at least one leading, state-of-the-are, software / technology facility

  29. What is Digital Media? The creative convergence of arts and science, technology and business for human expression, communication, social interaction and education. Some Key Examples of Digital Media • Hi Definition / Digital Television • Mobile Phones • Internet • Video Games • Online Games/Social Gaming • E-Books • E-Commerce • Digital Video

  30. Digital Entertainment • Digital entertainment refers to the use of digital technologies such as computer graphics in the production of films, videos, TV programs, animation, video games, edu-tainment software and other digital multimedia content. • It is a new, evolving industry worldwide, cross-cutting various service and production sectors, cross breeding new and conventional media. • Digital entertainment is repidly becoming a major value-added, creative industry. It is also instrumental in the deployment of high-speed, broadband network platforms. • The potential is enormous and there are numerous business opportunities to be explored. As the market grows new technologies are being developed to meet this demand.

  31. Facts about the Global Market for Digital Entertainment • The worldwide computer animation industry is estimated to be worth $25 billion (film, TV, multimedia, games and merchandise);

  32. Getting Started in Carson City NOW! Projected Projects and Job Creation at an Interim Facility • Television series • a. International TV co-production - 26 half hours • Action sequences filmed overseas - 2nd unit • 7 minutes per show overseas • 15 minutes per show filmed in Carson City • Beginning April/May 2010 • Crew of 100 to 120 for 6 months • b. 2 to 3 pilots for new TV series – • Start in April or May – 20 to 30 people • Video Game development – online games • 10 to 20 flash animators • Produce 2 games /month – • 12 games in 6 months starting in April or May 2010

  33. All together the Nugget Development project could include: • Carson City Knowledge and Discovery Library • Business & Technology Incubator Center • A Digital Media Lab • Class A Office Space • Commercial / Retail Spaces • Residential, market based in-town housing • Entertainment venue like an IMAX Theater • Public Transit Hub • Central Public Plaza • Shared, de-centralized parking

  34. The Public Plaza Artist renderings illustrate activities that are possible in a public plaza with proper infrastructure like lights, sound, seating, signage, water features etc.

  35. The Public Plaza Carson City already enjoys downtown activities in make shift parking lots and streets. Friday’s @ 3rd Saturday Morning Arlington Square Outdoor Concerts Farmer’s Market Ice Skating Rink June – August June – October November - January

  36. Community Outreach – to date Carson City Chamber of Commerce - Board Downtown Business Association Carson City Library Board of Trustees Redevelopment Authority Citizens Sierra Sierra Nevada Association of Realtors Rotary (Noon) Lions Clubs

  37. Key Stakeholders Each has dedicated pre-development effort in terms of understanding the project and beginning to consider potential shared benefits, needs and contributions • Carson City Public Library • State of Nevada • Western Nevada College • Northern Nevada Development Authority • Public/Charter/Private K – 12 education community • Carson Tahoe Regional Healthcare

  38. About Mae B. Adams The Carson Nugget. Inc. and Mae B. Adams have been driving the Nugget development project. The real property of the Nugget Development Project will eventually be owned by the Hop and Mae Adams Foundation. The Nugget development project with the library and business incubator system is the sole selected project being supported by Carson Nugget, Inc. and Mae B. Adams at this time. Mae B. Adams Trustees: • Steve Neighbors / Trustee • Andrew MacKenzie / Trustee It is expected that the actual work of the Foundation will coincide with the date of completion of the construction project.

  39. Preliminary Financial Plan for every $1 of public investment brings just over $1 of private investment Preliminary Funding Plan Revenue Estimate for Public Improvements Total P/V Present Value 90% - Present Value 80% - Present Value _________ 1 – 0.125% sales tax increase $15,500,000 $13,950,000 $12,400,000 (30 yr. p.v.) 2 – TIF $16,900,000 $15,210,000 $13,520,000 3 – CDBG $2,100,00 $2,100,000 $2,100,000 __________________________________________________________________________ $34,500,000 $31,260,000 $28,020,000 4 – One time money Q18* -0- Transit Hub $2,000,000 ___________________________________________________________________________ $2,000,000 5 – City/RDA Capital Funds $1,000,000 $12,000,000 ________________________________________________ $12,000,000 ____________ TOTAL: $41,420,000 No Funding from sale of Library (estimated at $1,500,000) No New Sales Tax from site (estimated at $45,000 per year) No Grants or other one tie money (estimated between $2,000,000 and $4,000,000) Project Revenue estimated from the rental income from the Business and Technology Incubator and Digital Media Lab is $360,000 per year ($1 / sf x 30,000 ft x 12) S Sales Tax and TIF estimates are from Meridian Business Advisors Nugget Economic Development Report_December 2009

  40. Preliminary Financial Plan for every $1 of public investment brings just over $1 of private investment Preliminary Expenditure Plan Public/Private Partnership PHASE I – Public Spending Plan 1 – Knowledge and Discovery Library 50,000 sq ft x $250.00 = $12,500,000 FFE 50,000 sq ft x $100 = $5,000,000 _________________ Total $17,500,000 2 – Business and Technology Incubator 15,000 sq ft x $200 = $3,000,000 3 – Digital Media Lab 10,000 sq ft x $200 $2,000,000 4 – Public Plaza 30,000 sq ft x $100 = $3,000,000 Plus Additional Public $1,400,000 Improvements (sound / lights / year round water features) 5 – Parking System 500 spaces @ $20,000 each $10,000,000 6 – Transit Hub $2,000,000 7 – Public Infrastructure 50/50 $2,000,000 _____________________ Total $40,900,000 Phase I Private Spending Plan 1 – Office Building 80,000 sq ft x $200 = $16,000,000 2- Retail Space 50,000 sq ft x $200 = $10,000,000 3 – Evening Entertainment Venue $4,000,000 4 – Residential 80 x 1,200 sq ft x $150 = $14,400,000 5 – Public Infrastructure 50/50 $2,000,000 Total $46,400,000 ________________________________ Grand Total: $87,300,000

  41. Preliminary Financial Planfor every $1 of public investment brings just over $1 of private investment Public Pieces • Knowledge & Discovery Library =$ 17.5 m • Business & Technology Incubator =$ 3 m • Digital Media Lab =$ 2 m • Public Plaza =$ 4.4 m • Parking System =$ 10 m • Transit Hub =$ 2 m • Public Infrastructure =$ 2 m total =$ 40.9 m

  42. Preliminary Financial Planfor every $1 of public investment brings just over $1 of private investment Private Pieces • Class A Office Buildings =$16 m • High End Retail Space =$10m • Evening Entertainment Venue =$ 4m • Residential Lofts =$14.4 m • Infrastructure/Permits/Fees =$ 2m total =$46.4m

  43. Preliminary Financial Plan for every $1 of public investment brings just over $1 of private investment NO PROPERTY TAX INCREASE SMALL SALES TAX INCREASE PER HOUSEHOLD, PER YEAR, COSTS: $26 EQUIVALENT TO ONCE A YEAR TWO PEOPLE GOING TO THE MOVIES + POPCORN

  44. Next Steps • Office of Business Development to return on Feb. 18, 2010 with terms between project partners and master developer • Direct the business incubator and digital media lab interested parties to begin signing up entrepreneurial companies to incubator and contract digital media production • Forward process for implementing public financing plan • Possible shovels in ground: November 2010 • Open doors: November 2013

  45. FOR MORE INFORMATION WWW.DOWNTOWNANSWERS.COM 775.887.2101 Joe McCarthy, Director jmccarthy@ci.carson-city.nv.us Tammy Westergard, Deputy Director twestergard@ci.carson-city.nv.us

  46. Recommendation • Provide staff with authority to return with specific Business Terms on Feb. 18, 2010. These terms will form the basis for the execution of a “Disposition, Development Agreement (DDA) between the Redevelopment Authority, Board of Supervisors, Carson Nugget, Inc. and Master Developers. • Approve the following Letters of Interest (LOI). • The management firm that will run the Business and Technology Incubator • The manager of the proposed Digital Media Lab • Approve the draft, proposed finance plan. • Approve the potential project schedule, including a draft schedule of future Board actions. • Accept the Meridian Business Advisors Report: Nugget Economic Development Project, Market, Economic Impact and Financial Analyses.

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