Reevaluating tourism improvement districts and sales tax anticipated revenue bonds in northern Nevada: A review of the Cabela's and Legends at Sparks Marina STAR bond projects

This paper provides an evaluation of the Cabela’s and Legends at Sparks Marina retail projects in the Reno/Sparks area of Northern Nevada. The projects are the first two development projects to be designated as tourist improvement districts and to receive sales tax anticipated revenue bonds, also known as STAR bonds. STAR bond projects represent a new direction in tax incentives for economic growth in Nevada. This paper includes a historical overview of economic development strategies, a legal review of Nevada’s tourism improvement district law, and an analysis of the fiscal and economic effects of the Cabela’s and Legends projects. This paper questions many of the assumptions and projected effects made during the approval process for both projects. The analysis includes a review of the initial projections for the development projects and provides adjusted fiscal and economic effects. In addition, the paper includes the results of a license plate survey that estimates the percentage of out of state shoppers at both locations. The paper concludes that both projects may not be performing as initially projected and that many of the methods and estimations used to make the projections were questionable.