Lawsuit Raises Questions About $577K Reno Grant To Private Company



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(Sacramento, CA)
Wednesday, March 12, 2014

The City agrees to reimburse Garlock Printing up to $577,500 ($3,300 per primary job up to a minimum of 105 jobs) based on the number of employees hired by Garlock Printing within four fiscal years following the effective Date of the Agreement.

The Catalyst Fund Proceeds shall be used to reimburse Garlock Printing for a portion of its costs to relocate and expand its West Coast headquarters from Gardner, Massachusetts to Reno.

This program, Nevada Catalyst Funds, is administered by the State of Nevada’s Governor’s Office of Economic Development. The Catalyst Funds do not come from the City of Reno’s General Fund.

Tuesday, March 12, 2014

Reno City Council will consider a plan Wednesday that would give more than a half-million dollars to a company that has promised to bring jobs to the city. But a lawsuit questions whether such deals are allowed under state constitution.

The Reno City Council is considering a $577,000 grant to a Massachusetts company to move to Reno. Its part of a $10 million state incentive program. 

The Nevada Policy Research Institute had already filed suit to stop similar agreements in which cities use state funds as incentives to companies. The suit says Nevada’s constitution doesn't allow taxpayer money to be used that way.

Reno Deputy City Attorney Johnathan Shipman says the city’s proposed contract has been changed so Reno will have no obligation if the subsidy is ruled unconstitutional.

“And what we have in the agreement now is that if that happens, then the agreement terminates and both parties walk away,” he says.

Shipman says it’s not clear how the state would get money back if the court finds the subsidy unconstitutional. So far, no money has been dispersed and the Research Institute plans to file an injunction to prevent that from happening. 

03-12-14 Reno City Council Agenda

 

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