Fifth Street Shakeup

City preparing to hike rates at downtown cultural center

Since it re-opened two years ago, the renovated Fifth Street School has become what Mayor Oscar Goodman had hoped: downtown’s “cultural oasis,” regularly hosting lectures, recitals and events such as the Vegas Valley Book Festival. The building is home to the city’s Office of Cultural Affairs, the Las Vegas offices of the American Institute of Architects, the Downtown Design Center of UNLV’s School of Architecture and the Nevada School of the Arts.

To date, the tenants have gotten a great deal from the city—they pay $1 a month in rent, plus a portion of the building’s operating costs, based on how much square footage each tenant is leasing. But in a tough economy, that good thing is coming to an end. The city is planning to increase the tenants’ share of the overall cost by about 400 percent over the next two years, sources say.

The city has five-year leases with the tenants and is discussing changes that would go into effect in the 2011 fiscal year. The city, according to spokesman Jace Radke, would pass utility, custodial and other common maintenance expenses along to the tenants. The city is not breaking the leases, says Radke, who added that discussions with tenants exist within the “confines of the current leases.”

“The city has an $80 million shortfall in its budget this year,” Radke says. “Unfortunately that’s requiring the city to make some changes to services as well as talk about layoffs and other things to close that gap.”

By law, Radke adds, the city has to have a balanced budget by June, and to that end the Las Vegas City Council on May 18 unanimously approved a final budget for next year that cuts the jobs of 200 city employees.

There is no word on exactly on how big an increase these organizations face from a monetary standpoint. “Everybody knows the city is looking for ways to cut the budget and keep things as economical as possible,” Radke says. “That’s what’s happening.”

Randy Lavigne, executive director of the AIA, says that if her organization moved to another facility downtown, it would end up paying between $12 and $16 per square foot. With the new spike in operating costs (though rent will stay the same), the new monthly payments will be in line with the rest of the market.

If tenants leave, downtown could lose the heart of one of its most successful pieces of redevelopment. The building was renovated with $13.4 million from the city’s Redevelopment Agency. So far, though, no one has indicated they plan to leave. “I’ve been very pleased with the support of the city and their efforts to get us in here and make this a really great place to be,” says Robert Dorgan, who runs the Downtown Design Center. The university has had a presence in the building for a decade, before it was renovated in 2008 and was a police substation. “We have a very long tenure on this property,” Dorgan says. “We’re committed to downtown and committed to the Fifth Street School.”

“Everybody who’s down here is still working to stay,” Lavigne says. “Any increase to our budget is not good. But the value of being in the facility and having the use of the facility and having access to the public is worth staying.”