Sales & abandonments of City property
Selling City parcels to Jacobs, a hearing on the Riverside Ave. apartments & more
Like finding a $20 bill underneath your sofa cushion, Reno City Council is back with a bonus meeting this coming Wednesday, July 28. They’ll return to alternating weeks with the Planning Commission after that, but in the meantime we get a packed meeting just one week after the last one.
There are several development-related items on the agenda, which you can view along with staff reports, presentations, and attachments, here. Two of the most notable involve Jacobs Entertainment and the proposed apartment building at 700 Riverside Drive—both projects involving sales and abandonments of City property—and I’ll briefly review some of the others after that.
Selling City-owned parcels to Jacobs Entertainment
Most perplexing to me are the proposed changes to Jacobs Entertainment’s options to purchase two City-owned parcels. To be blunt, the proposed revised terms don’t seem at all in the public interest—and there’s no explanation of why the original terms for these options should be changed at all.
Both options appear twice on the agenda—as Items C.4 and C.5 and again as items L.5.1 and L.5.2—because they have to be reviewed and approved by Reno City Council and again by the Council sitting as the Reno Redevelopment Agency. One parcel is at 290 Keystone Avenue and the other (identified as O West Second Street) is on West Second Street, just northwest of St. Thomas Aquinas Cathedral.
Under the original agreement, Jacobs Entertainment (or their subsidiaries, who are the entities named) had two years to purchase each parcel. And now, time’s up. The deadline to exercise the option on 0 West Second Street is July 31, 2021, and it seems to me that time was actually up for 290 Keystone a while ago, since the option for that one was originally adopted on February 27, 2019.
At one point, the company had a potential buyer lined up to build a residential and retail project on the Keystone parcel, as reported by Downtown Makeover in February 2020, but by February 2021, that sale had fallen through. There has never been any reported plan for the parcel on West Second Street.
So now the company’s options on these parcels are expiring (or expired), they’re not ready to buy them yet, and they want to make another deal.
How much would Jacobs pay for them?
This is where things get odd. The staff report is recommending that the City adopt two Resolutions—one for each parcel—to extend the options on each one for another three months (okay, fine) and to set the price of them (this is the actual wording) “at a purchase price of $____.” The Resolution also includes a reminder that the City has the discretion to sell its property for less than market value and without a public auction.
The Resolution does specify that the fair market value will be established by appraisal before Jacobs can exercise the option to purchase, but not that the purchase price will be that value. In case that wasn’t clear, the staff report for each item states that “The proposed revisions would discount the previously agreed upon purchase price.”
As a reminder, that agreed upon purchase price two years ago--for both parcels—was full price, or “the appraised value of the property,” as the City of Reno phrased it. And the fact that Jacobs was promising to pay the full appraised value of the property is why they got an exclusive two-year option on these parcels in the first place.
Jacobs’ own presentation on July 31, 2019 made it very clear that the company intended to pay “fair market value based on appraisals in accordance with Nevada law (no discounts)” for 0 West Second Street. The same language (“fair market value” and “no discounts”) had appeared in their presentation about 290 Keystone in December 2018.
So what’s going on here?
It’s hard to say. You might recall that purchasing these two parcels for shockingly less than their appraised value was part of the proposed Development Agreement that Jacobs brought to the City back in April—a proposal I previewed on April 13 and analyzed after the presentation on May 2 (News4 has a nice summary here). At that time, Jacobs’ representative Garrett Gordon proposed that the company be able to purchase the parcels (which had appraised separately for $2.44 million and $620,000) for just $25,000 each, a prospect that made several Councilmembers including Councilmember Neoma Jardon balk.
Giving a major discount to Jacobs for these parcels would have been shocking for the City to do even as part of a Development Agreement, for several reasons:
Jacobs secured the two-year options by promising to pay full value.
The profits from these sales is earmarked for important City projects like the Moana Pool and Public Safety Center (and no, finding funds for those elsewhere doesn’t mean the City no longer needs $3 million+ from the sale of these).
Jacobs Entertainment is a commercial developer that has paid at least the appraised value (and likely more) for scores of private parcels in the surrounding area (they bought the adjacent Town House Motor Lodge site in March 2020 for $1,725,456 and the UNR property on the other side in September 2020 for $4.8 million). But the City of Reno, struggling for redevelopment funds, is not supposed to benefit from the rising value of its own property by selling it to a for-profit company that’s clearly capable of paying full price for it?
Back in July 2019 when City Council voted to give Jacobs an option on 0 West Second Street (you can view that discussion here, where it’s item D.6) it was stated repeatedly that should Jacobs decide to exercise their option to buy, three things would happen:
Jacobs would show City Council their plans for the parcel
The City would set the price of the parcel via appraisals of its fair market value
The City could decide to impose any desired conditions on the sale at that time
That last point was important for a number of reasons. Councilmember Oscar Delgado, for instance, was very concerned that affordable housing be part of Jacobs’ plans, and was assured that he could bring that up as a condition of sale when Jacobs came back to exercise their option on 0 West Second Street. You can watch his remarks on July 31, 2019 and Garrett Gordon’s reply below.
When Gordon pointed out some of the affordable housing Jacobs had already provided, Delgado made the important distinction that while Jacobs might independently arrange for affordable housing to be part of its private projects (like the 10% affordable housing at Renova Flats) the only place the City could require it would be on its own parcels, as a condition at the point of sale. Gordon agreed that when and if Jacobs came back to purchase the parcel, the City could have the option of imposing a condition for workforce housing, and that the company would “look into it.”
At that same meeting, Father Chuck Durante, representing St. Thomas Aquinas Cathedral, also suggested a few possible conditions to be considered should Jacobs exercise their option. He expressed concerns over the loss of the City parking lot (the longtime function of 0 West Second Street), which is used by many church parishioners and others, and was assured that discussions about including public parking in any new development on the site could be discussed at the point of sale.
How is the public interest best served by these Resolutions?
The staff recommendation appears to be for City Council to agree to a three-month extension on the options, set the price of the parcels, and let the City Manager finalize the rest of the terms of sale. From what I can tell, that means that the City Council could decide in this meeting to set a price for the parcels and authorize the City Manager to finalize those terms behind closed doors.
That would clearly not appear to be in the public interest, for all the reasons stated above. There is nothing in the staff reports or Resolutions to indicate why the price of these parcels should be discounted or why this sale should be expedited without the ability to add conditions of sale or see what Jacobs’ intentions are for the sites.
In the absence of a larger Development Agreement (which is not up for discussion here), the sale of these properties must be considered independent of anything else Jacobs is doing or has done, just like any other sale of City property would be. Nothing else should be relevant but these parcels and what they plan to do with them—not donations to an affordable housing fund, or toward the renovation of historic properties, not implementing affordable housing in their other projects, or opening an events plaza, or installing a row of sculptures on private property. Just these parcels.
And let me just interject here that I’m hoping that Jacobs Entertainment doesn’t intend to reveal their grand plans for these parcels to City Council during Wednesday’s meeting (and if they do, please refer back to my previous post on Renderings vs. Reality) without allowing the public to see them in advance and weigh in on how they should impact the deal. Our City Council, as our elected representatives, should want to know what our thoughts would be—and, frankly, would themselves deserve more time to consider them and their implications.
What would be in the public interest would be to retain the terms of the original option and sell these parcels to Jacobs at their full appraised value. If City Council wants to extend Jacobs’ options for another three months while retaining those original terms, then fine. The City would be guaranteed the full appraised value, Jacobs would have to present their plans for the site at the point of sale, and the City could discuss any desired conditions of sale at that time.
If Council can’t agree on whether to do that, why not just let the options expire? The reason Jacobs wanted those options in the first place was to give them time to acquire the surrounding properties in order to plan something of substantial size in each location, without having the City sell them to someone else. Well, Jacobs has now succeeded in doing just that, spending millions of dollars to acquire the properties adjacent to each parcel.
So why not just let Jacobs come back when they’re ready to reveal their plans to the public, make an offer, and negotiate the terms of sale then? After all, even if the City gets another offer for either parcel, they can decide to sell them to whomever they want, if they deem it to be in the public interest.
But the only entity to benefit from setting a purchase price now—especially one below market value—without an appraisal and without any advance revelation or informed public discussion of their specific plans for the site, is Jacobs. And that’s not the win-win we should be looking for when it comes to the sale of City property.
As I said before, these options are discussed under four separate items on the agenda (which you can view here)—Parcel 011-026-23 at 0 West Second Street under items C.4 and L.5.1 and Parcel 011-640-02 at 290 Keystone Avenue under items C.5 and L.5.2. If you want to offer public comment, it’s probably easiest and safest to comment on each one separately, to make sure your comments are recorded in the proper places. You can find information on public comment at the top of the agenda here.
I’ll be opposing each item since I think we need much more transparency and discussion about what the sales prices will be, what’s to be constructed there, and what conditions the City might place on the sales, and we’re just not getting that here.
The Apartments at 700 Riverside Drive
Item I.1 (that’s I as in Irene, and the number one) on the July 28 Council agenda is the appeal of the Hearing Officer's decision regarding the planned 34-unit apartment building on Riverside Drive in the Powning District. Residents filed an appeal of the City's decision to grant a building permit to the project this spring. On May 4 that appeal was heard by a hearing officer who upheld the issuing of the building permit.
Some important things to know:
Two of the residents have appealed the Hearing Officer's decision, so it's their appeals that are being heard by City Council now. The Hearing Officer’s decision, the appeal of that decision, the original appeals of the building permit, and letters from the appellants and their attorneys can be found here.
Be sure to read the document titled "21-07-22 Wray ltr to Mayor & Council," which was written by attorney Mark Wray on behalf of appellant Lori Burke. It clearly outlines the multiple reasons why the Hearing Officer's decision was in error, why the building permit was issued in error, and why it should be revoked.
Confusingly, the developer's attorney, Garrett Gordon, has also appealed the Hearing Officer’s decision, apparently because he is contesting the appellants’ legal standing. That makes it a bit difficult to ascertain what a statement of “support” for the item would mean, and I’ll have a few words on that in a minute.
I’ve written about this project many times (originally on March 5 in a piece called “The Powning District in Peril” and again on April 5, May 17, and June 24, and most recently here) and I’m not going to rehash all of that again now. But I do want to say a few words, from my heart.
I first learned about this project back in January, when the developer, Paddy Egan, reached out to me with a few questions about the neighborhood’s history. He described a three-story building that stepped back from the river, and I was excited. An apartment building would be an excellent, higher-density use of the vacant parcel next to the Hub Riverside and I’ve liked Paddy’s adaptive reuse projects. It seemed like a good fit and his interest in the neighborhood’s heritage was, and I’m sure is, genuine.
Then in mid-February, I learned that his plan was not just to build on the original parcel, but to extend his building all the way across the adjacent block of Washington Street. That came as a shock not just to me but to the neighbors and many others.
Using that block of Washington Street to build on is not as straightforward as it may seem. That block of City street was not granted to the previous developer to construct a building across, but to keep visually open and reserve for use as private surface parking only, with a long list of conditions. The new plan builds all the way across it, resulting in a structure twice the size of the one that garnered the street abandonment, raises its first floor three to four feet above the existing street level, and presents its neighbors to the north with the 130-foot-long wall of the raised first-floor parking garage (see my video placing the renderings in context here).
The Hearing Officer was tasked specifically with determining whether the City abused its discretion or committed any other errors in granting the new project its building permit. If that permit is revoked, the developer can come back with a plan to build a lovely apartment building on the original parcel that could help provide much-needed housing at a prime infill location—one of those win-wins we always seek.
No one is trying to prevent apartments from being constructed there, or arguing that the site should remain vacant, or be confined to single-family homes. The site was cleared in the first place in order to construct multi-family housing, a plan that received next to no opposition from neighbors, other residents, or preservation organizations. It was a good project. This one—not so much.
It’s a bit confusing, but comment in SUPPORT of the appeal should clearly indicate that in supporting the appeal, you are supporting a REVERSAL of the hearing officer's decision and therefore the REVOCATION of the building permit for the project as currently planned. If that’s your stance, you might have to write that all out for clarity.
And I hope that’s what will happen here. It’s been disheartening to hear some people characterize opposition to this market-rate project as opposition to housing, or density, or a certain demographic of residents, or apartments, or modern architecture, or change, or the developer. Anyone who does so is not listening or reading as carefully as perhaps they should. The opposition is not personal, or political, or discriminatory. Sometimes a project is just a bad project. Sometimes good people make bad decisions. And fortunately we have an opportunity here to make things right. You can find instructions for public comment at the top of the agenda.
Additional Items on the July 28 Council Agenda
B.20 This item would transfer more than $14 million toward two affordable housing projects in Reno. [Side note: one of the City-owned properties involved in this transaction—and this is no reflection on the project—has been used for years by the Reno Fire Antique and Classic Apparatus (RFACA) to store the historic Reno Fire Museum Collection, and this worthy project unfortunately is leaving them without a place for this remarkable collection, which includes historic vehicles dating back to 1904 and much more. If you have any thoughts on where this collection could be moved, please contact me for more information.]
C. 2 The item includes a phrase many of us have come to dread: “text amendments to the City Master Plan.” In this case, however, the item just includes some expected updates & revisions to bring the Master Plan in alignment with the revised Land Development Code. They were all approved by the Planning Commission. I wouldn’t anticipate the Council wanting to make any changes before approval, but if you’re interested in the Land Development Code, definitely take a look at the specific sections they pertain to, here.
D. 8 This item will discuss future redistricting of Reno wards. Census data from 2020 will arrive in September, and any redistricting of ward borders prompted by any significant population redistribution needs to happen by December. The City is eventually moving to transition from five to six wards in 2024.
L.4 This item would eliminate some restrictive language preventing a free and clear sale of the vacant parcel just east of the National Auto Museum, on the south side of the river. It’s not clear if a buyer is already lined up or not.
Updates from July 21 City Council Meeting
Just a few updates from July 21 in case you missed them:
The Lear Theater: If you somehow missed the voluminous coverage from the likes of This is Reno, the Reno Gazette-Journal, and News4) City Council voted to accept the donation of the Lear Theater and adjacent parking lot from Artown, an offer I discussed in my last post. Some details have yet to be worked out before it’s finalized, but I’m thrilled at the level and breadth of interest in the building, its architect Paul Revere Williams, and calls to make it an inclusive and accessible community space.
Daybreak/Talus Valley: Council denied an appeal related to the renamed Daybreak development, as covered by the Reno Gazette-Journal here, with a recap and analysis from Washoe Residents for Appropriate Planning here.
July 27 Ward 2 NAB Meeting
The next meeting of the Ward 2 Neighborhood Advisory Board (NAB) can be attended virtually or in-person on Tuesday, July 27 at 5:30 in the Atlantis Casino Resort Spa 3rd floor Board Room. Topics of discussion will include some potential rezoning on Warren Way near W. Peckham Lane. You can find the agenda with info on how to register, attend, and provide public comment here.
I’m disappointed not to see any NAB meetings for Ward 1,3,4, or 5 on the official City calendar yet, and I hope they’ll be scheduled soon, to give the citizens of those Wards a greater voice and opportunity to discuss everything happening where they live.
As always, you can view my previous e-newsletters, with more context, analysis, and tips, on my Substack site, https://thebarberbrief.substack.com/. Thanks for reading and have a great week!
How unfair of people to characterize asking for a project to be shorter, with fewer units and more space for cars as NIMBYism and opposition to density. I guess we should just run the city planning based on what the loudest people feel is fair rather than what is written in code and deed.
Alicia, I don't get your hating on the 700 Riverside project. It was vetted and approved under the applicable building and planning codes at the time it was submitted. Today, no parking would be required, but the unit count would be limited to 15 -would that be some sort of "win" for Reno? The Hearing Officer's report is VERY clear that the original appeals had no merit, yet you refer your readers to a response and not to the original document. Why the bias?