Las Vegas City Council let cronyism cloud judgment

Thank heavens state officials rejected former City Councilman Michael McDonald as unworthy of about $7 million in tax credits, which, let’s hope, puts to rest the idea of giving tax dollars to a totally inexperienced developer.

Thank heavens state officials looked at the issues and weren’t swayed by cronyism.

With luck, McDonald’s project will remain dead and any efforts to resurrect it through appeals will die with it.

McDonald’s total lack of experience as a developer was the main reason the Nevada Housing Division said no to giving him about $7 million in tax credits, which – combined with nearly $4 million in redevelopment subsidies from the city – would cover the $11 million cost to build 60 apartments for low-income senior citizens.

The housing division officials said the main issue was that McDonald has no experience as a developer. None. Nada. Not a whit.

Yet he sought $11 million worth of subsidies and tax credits from the city and state to underwrite his first development effort, relying on former City Councilman Frank Hawkins, who has developed projects, to serve as his “consultant.”

The city didn’t go seeking low-income apartment housing, this wasn’t put out to bid. This was McDonald’s baby and, with the exception of Councilman Bob Coffin, who raised no-bid concerns, six others on the council went merrily along, handing over $4 million to two men who once sat on the council themselves.

McDonald was one of Mayor Carolyn Goodman’s active supporters when she ran in 2011, and she and her husband have known him many years.

Previously, Goodman told the Las Vegas Review-Journal’s Ben Spillman, “I know he has had a lot of issues. Very often people who have had issues can make something great happen if just given the opportunity.”

Hawkins’ involvement – and like McDonald he had past ethical issues – only bolstered her confidence in McDonald’s project. She told Spillman, “Let’s give them a chance.”

Give them a chance with your money, Mayor, not mine.

Apparently, she and the others were not concerned about McDonald’s lack of experience or his ethical challenges, or his Chapter 7 bankruptcy from 2009, which erased more than $333,000 in claims against him.

McDonald’s finances are so tenuous he didn’t have the money himself to pay $140,000 to the city in May to get the ball rolling. Instead the money came from a Hawkins friend.

“Who would have thought he didn’t have the money to throw down for the deposit?” said Coffin, who is pleased about the state’s action. “This wasn’t the proper use of the land, and maybe this makes our staff look better. Our staff really vetted this.”

Bill Arent, the city’s economic and urban development director, in April had recommended the city reject McDonald’s request for $3.9 million in redevelopment funds, saying the cost of the project was too high for what McDonald planned. However, the council approved it anyway.

I’m familiar with that area near the corner of Vegas Drive and Decatur Boulevard. I pass it regularly and watched most of the businesses die out on that corner, except for a small strip facing Vegas Drive. It’s a sad sight, and I think McDonald is sincere in wanting to see it improved. But he’s not qualified.

Coffin is the only one who comes out of this with his head held high, although Councilman Bob Beers has told me he regrets that vote.

For the others on the council, they should be embarrassed that they let friendships drive their votes and approved a project that, as Coffin and their own staff said at the time, just didn’t make good business sense.

If your crony isn’t qualified and the project is iffy, don’t stick your neck out for him or you end up looking foolish. Or easily manipulated.

Jane Ann Morrison’s column appears Monday, Thursday and Saturday. Email her at Jane@reviewjournal.com or call 702-383-0275. She also blogs at lvrj.com/blogs/morrison.