Casino, mall will get Douglas close to state tax guarantee

Douglas County Manager Dan Holler says the "Beverly Hillbillies" casino and Riverwood shopping mall won't generate enough sales to get them off the list of counties receiving tax subsidies.

But it will get Douglas a lot closer to that goal.

Holler said he estimates Riverwood will generate upwards of $100 million in taxable sales a year.

The hotel/casino project, being planned by Max Baer, is much more difficult to project because gaming and hotel rooms themselves don't directly generate sales tax revenue, Holler said. It depends on what restaurants, gift shops, the casino's bars and other operations generate.

According to the Nevada Department of Taxation, Douglas County merchants collected $818 million in taxable sales during 2006.

Holler said he is estimating about $10 million a year from restaurant activity, but that will go up significantly if they install a large gift shop, several bars and the movie theater complex contemplated during discussions with the county commission.

"Right now, I'm being conservative," he said.

Each county collects 2.25 percent on taxable sales. If annual sales, after the five-year build out of the projects, reach $120 million the hotel/casino and mall would add $2.7 million a year to the Douglas general fund.

That would sharply reduce this year's state subsidy of $3.5 million.

"We were really close a couple of years ago - less than a million dollars, actually," he said. "But the sales slump pushed us out again."

If the economy recovers and sales pick up, Holler said, Douglas would very close to not needing the subsidy.

Riverwood is in a redevelopment district where the developer will receive $24.7 million for infrastructure costs providing he builds 30,000 square feet of retail space. That money would be paid back from increased property tax collected inside the district.

And that would please, in particular, Washoe, Clark and Carson City - the primary providers of that subsidy to Douglas, Lyon and seven other Nevada counties.

Lyon and Douglas, with subsidies this year of $5.2 million and $3.5 million respectively, are by far the largest recipients. The payments to the other seven on the list total just $3.7 million. That $12.4 million total statewide is only a tiny percentage of the roughly $1 billion a year the supplemental tax generates.

The subsidies were created by the 1981 Legislature as part of the tax shift. Until then, local governments had relied heavily on property taxes. Lawmakers cut back property taxes to head off a California Proposition 13-style amendment, shifting state and local dependence to sales taxes. To protect smaller counties without a retail sales base from being bankrupted by the shift, they were guaranteed a certain level of sales tax money through a formula based on population and inflation growth. That money comes out of the portion of the Supplemental City/County Relief Tax collected from out-of-state companies selling to Nevada residents and businesses.

That means it is money the nonguarantee counties - including Carson City - aren't getting. Calculations using the statutory formula indicate Douglas and Lyon this year are getting $123,600 in supplemental tax revenue that would otherwise go to the capital district.

-- Contact reporter Geoff Dornan at gdornan@nevadaappeal.com or 687-8750.