The Jacobs Development Agreement needs more public input

The draft scheduled for an October 13 vote is vague, imbalanced, and incomplete.

Oct 12, 2021

I’m posting this Brief with a bit of urgency. In my October 3 post, I asked the City to release the Development Agreement (DA) with Jacobs Entertainment that is scheduled for consideration at City Council tomorrow (Wednesday), October 13. Finally, on October 8, an incomplete draft was posted with the agenda, and after reviewing it, I’m even more concerned about how quickly it is being brought forward.

This Development Agreement would be a binding contract between the City of Reno and Jacobs Entertainment, with a proposed duration of 20 years. And yet the public has only been able to access a draft (missing key attachments) for five days before a possible Council vote. There has been no public workshop or discussions about it at any prior public meetings—not the Neighborhood Advisory Boards for Wards One or Five (where the purported development would be located), not the Planning Commission, not the Arts & Culture Commission, nothing.

[EDIT: It’s just after 9:00 a.m. on Tuesday, October 12 and the missing Exhibits were posted on the City website sometime within the last hour or so. So this link should take you to them now. This just proves my point that the public has not had enough time to review the entire Agreement, with key Exhibits posted just 24 hours before the meeting.]

And there’s a lot to review and consider. I wrote about the initial Development Agreement that Jacobs introduced last spring in my April 13 Brief, and although this new version is a bit different than what was proposed then, much remains the same. I also explain there what Development Agreements are and how they are intended to formalize a give and take of mutual benefit. The ultimate goal is to reduce risks for a developer while providing desirable benefits for the jurisdiction.

In order to do that, you would expect such an Agreement to clearly explain what will be constructed on the property in question, and what those public benefits would be. But that’s not the case here. In fact, the Agreement specifies nothing that will be constructed on any of the 70+ parcels that Jacobs owns or controls. It doesn’t commit the company to any timelines for construction. What it does do is outline a wide array of fee deferrals, incentives, and rights to be granted by the City of Reno with no clear indication of how the City would benefit in return, and I can’t see why the City would even consider it without some substantial modifications.

Although there are not as many proposed elements as there were in the April version of the DA—and notably no Tax Increment Financing—there are some significant provisions here that would lock in a few things now and also lay the contractual groundwork for a lot more to happen in the future, potentially out of public view.

What is in this new Development Agreement?

Let me say at the outset that it’s difficult for anyone who is not a land use attorney or City planner to fully discern the ramifications of all aspects of this proposed Agreement in such a short period of time. Without the opportunity to ask a lot of questions and have them answered in full—something that’s impossible during a Council meeting—a lot remains unclear, and it’s those gaps in public understanding where unforeseen consequences (unforeseen to the public, anyway) can seep in.

That’s why we need opportunities for free discussion regarding any legally binding agreement that concerns significant amounts of public space and public rights-of-way, as this one does.

Like I said, the posted draft of this document is incomplete; some of its key provisions refer to “Exhibits” that are completely missing (and that still have not been added as of Tuesday morning, October 12). Those missing Exhibits include conceptual designs of proposed streetlights, signage, and even basic Property Maps, a necessity.

As you read through my quick overview, you can follow along with the draft that I’ve posted online for easy viewing here and also with what the Staff Report says about them. The main provisions of the Agreement are found in the first ten pages, and as you’ll see, prompt a lot of questions that I think we need answered.

2.01 - Legal Description and Assessor’s Maps

There is from the outset a confusing array of terms regarding the project area, confusion that is exacerbated by the absence of Exhibits A-1 and A-2, which are supposed to contain a Property Description and Property Map. On page 3, the “Project” is described as “a mixed-use, entertainment district that the Master Developer is calling Reno’s Neon Line District in downtown Reno, Nevada.”

[Update: Exhibit A-2, the missing Property Map was finally posted sometime after 6:00 a.m. on Tuesday, October 12. I’ll post it below.]

Now hold up: “the Master Developer is calling” their project “Reno’s Neon Line District”? Where is this supposed “District,” and how can the Developer control what happens there? Included as “Exhibit C” is a “District Map” that pretty much depicts what the 2017 Downtown Action Plan labeled the “Northwest Quadrant” (see page 45), stretching from Keystone Avenue to West Street and I-80 to West Second Street.

Does Jacobs Entertainment own all of the parcels within this “District”—which supposedly constitutes the “Project”? Far from it. So how can a Development Agreement with a single Developer include parcels owned by other private entities? It’s unclear. What’s more, the agenda item and public notices identified the project area as extending north only as far as West Fifth Street (see image on my October 3 post), not all the way to Interstate 80 as this map suggests. So which is correct?

2.02 - Description of the proposed development, and statement of objectives and reasons for the request

This section is where you would expect to find a description of what the Developer is planning to build. Instead, we find mostly a description of what they already have done along with vague references to what would be included in a “District” that, as we’ve established, is much larger than what Jacobs actually owns:

As the Staff Report indicates, the two parcels that the City previously agreed to sell to Jacobs, on West Second Street and on Keystone Avenue, “have been removed from the Agreement,” but geographically would still be located in this hypothetical “District.” So are the “2,000-3,000 residential units” mentioned above referring to those parcels or to other ones, and if different ones, where would those be? Is any amount of housing, affordable or otherwise, contained within the project area actually covered by the Agreement? It doesn’t specify.

And while the description includes all the renovations and expansions that Jacobs is planning for the Sands Regency, it doesn’t indicate where this “array of other commercial, retail, plaza, green space, convention, and entertainment venues” would be located—if they’d even be along West 4th Street at all—or when they would appear. Indeed, the Staff Report indicates that “Plans are conceptual at this time and could be built at any time in the next 20 years,” admitting that “the desired term may be lengthy relative to the goal of spurring development activity,” a serious understatement.

So if there are no actual development projects being proposed here and no timeline offered, why is this Development Agreement even being brought forward now? That’s next, under 202.b:

“The reason for this Agreement is to secure certain financial incentives and regulatory adjustments for the Master Developer on Property within the District and associated construction of the Project.”

The clear goal for Jacobs here is to secure a series of financial incentives and regulatory adjustments that would make development more favorable to them. But in order to warrant the use of a Development Agreement, they should not only be directly relevant to what they have planned, but also be of recognized value to the City.

Now, I’d have to consult the City Code in much more detail to discern how each of these requests differs from standard procedure and what any potential repercussions of them might be, and there’s just not enough time for that. So I’ll just offer some highlights and encourage you to read through the rest and consider what questions you’d like to see answered in a public forum before the Council votes on it.

3.01 - Permitted Uses on the Property; Density and Intensity; Maximum Size and Height

This section makes an exception in permitted uses regarding “Real Estate Sales Offices,” having to do with the “maximum intensity, density, or building height requirement for temporary structures.” Other than that, there are no provisions regarding density, intensity, maximum size, or height.

3.02a - Streetlights

Jacobs wants new streetlights to be installed on both sides of West Fourth Street all the way from Keystone Avenue to West Street. These streetlights—which would replace the existing perfectly operational streetlights—are to be “consistent with the conceptual design shown on Exhibit D,” which is one of the Exhibits missing from this draft. So this is a branding thing, apparently, not necessary infrastructure, and we can’t even see what they would look like. As the Staff Report indicates, “Increased maintenance costs for the City should be expected.”

[Update: Sometime after 6:00 a.m. on Tuesday, October 12, Exhibit D was posted to the City website. You can view what the proposed streetlights look like here.]

3.02b - Pedestrian Amenities

The City has existing requirements that developers provide pedestrian amenities in an amount equal to a certain percentage of the overall project cost. In this section, Jacobs wants to get credit for all the costs they have already incurred to erect everything along the sidewalk on West 4th Street. And when I say “everything,” I mean everything—walls, lights, sculptures, landscaping, even consultant expenses. In Exhibit E, they have listed every single expense for a total of more than $4.6 million.

I took a walk along West 4th Street the other week, and here’s how that feels from the pedestrian viewpoint (and keep in mind that I’m six feet tall).

Is an extremely long wall bordering the sidewalk an amenity for pedestrians? How about LED lighting that lights it up at night? Or a sign on a pole that’s raised so high that a pedestrian can’t even see it? (After all, motel signs were originally installed up high not to provide visual interest for pedestrians but to entice motorists driving past. If you want to see what I mean, watch this video I took of the same signs from a car traveling on the other side of the street.) Is $50,000 in marketing expenses a pedestrian amenity? Overall, should the public (and the City) get to have any input on what they consider pedestrian amenities to be included in a Development Agreement, or is it too late for that, as these “amenities” have already been installed?

3.02c - Sewer Connection Fee Credit Policy

For this one, please refer back to my May 12 post, when Jacobs was requesting a permanent change to the Reno Municipal Code regarding this policy. It was suddenly withdrawn back then, but it’s back for this Agreement, with some modifications including expiration dates for percentages of the credits, while retaining the earlier request for the right to spend accumulated credits anywhere “on the Property regardless of proximity to the demolished structure or the relationship between owners.” All the credits Jacobs has accumulated from demolishing motels and other residences are listed in Exhibit F.

3.02d - Pedestrian Walkway

This section indicates that Jacobs “anticipates construction of a pedestrian walkway,” or in City terms, a “skyway,” to connect the Sands to proposed (but not confirmed) future buildings located south of the train trench, between Arlington and Ralston. Although this skyway would require a conditional use permit, it might not require review by a Design Review Committee due to the changes that City Council made to the City’s Skyway Ordinance last year to allow UNR to build its skyway over Ninth Street with no Design Review. According to Exhibit G, the skyway would be 328 feet long and cross over Third Street.

3.02e - Area Identification Signage

This is a big one—literally. Jacobs wants to erect three signs that they are calling “Area Identification Signs.” This category of sign is defined as “a permanent, decorative sign used to identify a neighborhood, subdivision, commercial or office complex, industrial district or similar distinct area of the community.”

One of these three would be an “Archway Sign” that would extend over West 4th Street—a major urban corridor—somewhere between Keystone and Vine, right about here, with one footing planted in the public right-of-way, possibly the triangular pad in the middle of the road. I’d be more specific, but the draft is missing “Exhibit H,” which supposedly shows its location as well as its proposed design. In size, this “archway sign” could seriously rival or even exceed the dimensions of the iconic Reno Arch on Virginia Street, but we have no way of knowing in the absence of the relevant Exhibit.

[Update: Sometime after 6:00a.m. this morning—Tuesday, October 12—the missing Exhibits were finally posted on the City’s website. Below is one of the posted renderings of this Archway Sign.]

In order for Jacobs to erect this “Area Identification Sign,” there of course has to be a designated “area” to identify—hence the coinage of the “Neon Line District.” Without an area, they’d be regulated by other signage requirements relating to on-premises or off-premises signage or billboards. This appears to be a major reason for their longstanding attempt to make the name “Neon Line District” part of the local lexicon (and looping our state and local tourism agencies into the effort in the process).

To this end, they simply and unilaterally have imagined up a “District” and given it a name with no input or assent from local residents, including owners of all of the properties supposedly included within it. And unlike the completely private “Reno Experience District” (RED) constructed on the former Park Lane Mall site, this is a major public thoroughfare. So shouldn’t the public get a say?

I discussed the problems with branding this area the “Neon Line District” back in my May 2 post, and it’s even more problematic now that Jacobs apparently is using the term to refer to their neon-colored LED wall and the handful of recreated (not original) “tribute” neon signs they’ve placed on those tall poles around the big open space they have named the “Glow Plaza.” The intent is clearly to appeal to aficionados of neon, in deference to Nevada’s authentic heritage, along the lines of the vibrant, immensely popular Fremont East District and Neon Museum in Las Vegas.

However, here, in contrast, the reference feels empty, inappropriate, and contrived—not to mention hypocritical, considering all the neon signage the company apparently destroyed while demolishing the mid-century motels that originally brandished them. The City would be wise to engage in a bit more consulting and reflection before considering any formal or permanent association with this particular branding idea.

3.02f - Street Closures

Here, Jacobs wants to be able to have West 4th Street closed for up to 30 days per year for special events. Imagine the frequent closures of Virginia Street, but without the advantage of major thoroughfares like Center and Sierra Streets on either side where traffic can be easily diverted.

3.02g - Fee Deferral

Here, the City would agree to defer collection of some Sewer Connection and Building Permit Fees.

3.02h - Residential Construction Tax

This section specifies that if residential units are constructed on the “Property,” the Residential Construction Tax would be expended “for the establishment or expansion of neighborhood parks, improvements, and facilities within the District.” There are no specifics regarding where or what type, something else the public should be invited to discuss.

3.02i - Sustainability

There’s a lot of language in here about what Jacobs “shall strive to” do and goals they “should specifically seek to further,” but the only firm commitment regarding sustainable development is the installation of electric vehicle charging stations.

3.02j - Historic Preservation

Prior to any [more] demolitions, this section indicates that the developer “shall seek to preserve or relocate valued historic resources to be demolished” and document any historic resources “to City standards” if preservation or relocation “is not feasible.” This section desperately requires input from the City’s Historical Resources Commission, to define what is meant by terms like “seek,” “feasible” and “valued.”

I think most of the rest covers standard requirements for Development Agreements, but I encourage everyone to read through it to see if anything jumps out at you.

So again, what are the benefits to the City, the supposed reason for entering into a Development Agreement in the first place? The Staff Report sums it up this way:

“Potential District benefits of the Agreement include increased viability of redevelopment projects in the District, which could result in a transformation of a blighted area into a vibrant urban center with quality public facilities, new urban housing, increased economic activity, and additional tax revenue to the City over time.”

So what do we think? Whether or not you consider this area “blighted,” would all of these regulatory adjustments and financial incentives in fact likely lead to more rapid and desirable development on and around West 4th Street, and facilitate its transformation into a “vibrant urban center with quality public facilities, new urban housing, and increased economic activity”? And if not, could this contract be modified to provide any additional assurances to the City that it would?

PR vs. the Public Process

I just want to say a few words about an article on Jeff Jacobs and his ideas for the West 4th Street area that came out in the Reno Gazette-Journal several days ago. It’s clearly no coincidence that it appeared just a few days in advance of the scheduled Council vote on his company’s Development Agreement with the City.

However, whether deliberate or not, the timing seems likely to confuse the situation. If you were to skim the article, you’d be forgiven for assuming that everything discussed in it appears in the Development Agreement, perhaps as part of some contractual obligation to build condos, apartments, an amphitheater, even a zipline, like Vegas has on Fremont Street. Instead, practically nothing that Mr. Jacobs discusses in the article is covered by the Agreement, while many much more potentially controversial things involving the public right-of-way—which he does NOT mention—are.

As I’ve discussed before, media placement is a cornerstone of today’s PR industry. It can play a major role in generating public goodwill or enthusiasm in order to help achieve a desired outcome. But sometimes those same PR strategies can make that desired outcome sound like a done deal before it’s been properly vetted. When that occurs, any potential criticisms or concerns can get framed as “negativity” or as a step backward rather than what they actually are: perfectly reasonable and necessary lines of questioning.

When it comes to a legally binding agreement, we have to rely on more than trust or heady optimism to ensure that a deal is fair and equitable for all. We have to ask the hard questions, and make sure that we’re satisfied with the answers.

The Barber Brief

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