Council approves up to $35 million in STAR bonds to defease prior Legends at Sparks Marina obligations

Sparks City Council on Monday approved an ordinance authorizing issuance of sales-tax-anticipated revenue (STAR) bonds in a maximum aggregate principal amount of $35 million for Tourism Improvement District No. 1, the Legends at Sparks Marina.

City bond counsel told the council the proceeds will reimburse RED Development for eligible project costs incurred years ago under the original development agreement; the city is not using general-fund money to pay the bonds. The district was created in July 2007 and the STAR bonds must mature no later than June 2028, the staff presentation said. The ordinance authorizes staff to proceed with issuance, with closing expected in mid-November if market conditions permit.

The speaker emphasized legal constraints: STAR bond debt service may be paid only from sales taxes generated within the Legends project area and no other city revenue sources are allowed. By law, up to 75% of sales taxes generated in the district may be used for STAR bond debt service; the remainder is distributed through normal sales-tax allocations once the district’s obligations are satisfied.

Councilmember Anderson asked whether the issuance would affect the city’s credit rating or debt capacity; staff said these bonds are unrated and historically had little or no impact on city ratings. Councilmember Vanderwell asked how the bonds will be repaid; staff reiterated the repayment is strictly from sales taxes generated within the Legends district. Several councilmembers noted the city was not “giving away” $35 million; rather the ordinance authorizes reimbursement of prior eligible costs under a decades-old agreement.

Motion details: Councilmember Anderson moved approval of Bill No. 2841 to authorize the STAR bond issuance; Councilmember Rodriguez seconded. The council voted unanimously to adopt the ordinance as if an emergency exists to allow flexibility in timing of the bond sale.