Pennington, Apple, and Ramblings

457001[1]Yeah, the Pennington mansion at 2490 Manzanita just sold to a TRIC investor.  What the RGJ couldn’t tell is for how much.  $8M, far below the original $18,500,000 asking price.  The house sits on over 20 acres of land. With an additional 15 acres next door potentially available, this is looking like a buy and scrape land deal to me.

Apple just applied for permits for 4 new 20,000 SF modular data center cluster buildings at their cloud farm east of Sparks.  This is there single biggest commitment ever, and should silence the folks that say Apple has given up on Reno.  By the way, the rumors that Apple was driving trucks of servers to a site in Tessera to get their tax breaks without ever unloading the truck or hiring the technical staff/consultants is false.  Apple has not applied for their approved tax breaks.

Cottage Row @ Midtown just raised their asking prices 5% or about $25,000 today.  But wait, they raised the prices on the properties that were already on the MLS as “Active/Pending”.  I have suspected that their pendings were a sham, and this backs that up.  Show me a closing.  show me a comp.

If you want to buy the Ramada Inn, tours start next week.  Does anyone know why this property ever got built in East Jesus?

Pulled up all the Siegel Group properties this week, and there are no pending permits in the system for any of them.

Reno Shake and Bake.  Director of Parks and Recreation “retired”.  Police Chief called it a day after getting publicly Schievie’d for sending officers to the Ukraine.  Director of the whole Community Development Department is leaving with no stated reason, no even to “peruse family matters” or to “peruse private sector opportunities”.  And now Fire Chief Hernandez may be off to Plano, TX where 2 in 2 out plays to a more receptive audience.  Your take on this upheaval?  Is Hillary cleaning house or are key personnel bailing on her?

Great discussion and debate in the last thread on gaming and Reno.  Keep it up!  Circus Circus is destined to close as is Harrah’s.  How do we rethink downtown now?

The New Downtown Plan

PAVICHNorthern Nevada Urban Development aka Tessera South just received a NOD on their 128 E. 6th Street property.  This following almost losing 595 Lake Street at a tax sale last week (it is unclear if the owner or the lender paid off the delinquent taxes) and losing the linchpin corner of 6th and Virginia to foreclosure.  And they are pushing to have their STAR Bound entitlements extended!

The conventional wisdom was that downtown would transform itself from the North Virginia Street corridor outwards.  But you have Italian Capital and NNUD criminally over leveraged on their Tessera properties, Siegel Slums now anchoring the south end, and disinterested casino and Old Money Reno owners in the middle.  So it will literally take a work-around, and that is what is happening.

Yes, the Siena is changing hands and will go upscale (for Reno) and non-gaming with Nando (Montage, CommRow) at the helm.  Well funded Simon Properties owns the big lot at 2nd and Lake, and a prominent local developer just bought the sales office for the Waterfront Tower across the street on the SW corner of 2nd and Lake.  There is Startup Row growing on the West of downtown, and the Pignic distict to the south connecting to Midtown.  Development is progressing AROUND downtown, not in it.  If you have driven NVA lately, you can see that the retail element continues to decline and even the tattoo parlors are failing.

So this is a come to Jesus call for the traditional downtown core ownership.  Upgrade, sell, or die – Reno won’t wait and simply does not need you anymore.

Frankenwarehouse

Verdi Insustrial Elevation-page-0Directly on the heels of the land around Boomtown being sold, the proposed Industrial Building is wending its way towards a 1 June Planning Commission hearing.  The building is 1500 feet long and 40 feet tall (up to 45 feet with the proposed variance).  It is claimed to be 855,000 SF, but is actually 885,000 SF if you backtrack through the parking calculations.  That is 7X the size of Cabela’s.  The exhibit with the Traffic Counts is HERE, and the more graphic site plans and elevations are HERE.

I say bring it on!  If there ever was a stealth location to bury a building this size, the bench north of Cabela’s fits the bill.  The traffic study is a bit goofy and has 90% of the truck traffic arriving from the east and then departing back to the east with 46 peak hour semis.  The traffic study does not take into account the new Boomtown Truck Stop and the 415 semis per day it will generate not the 289 peak hour vehicles it will add to the Garson Intersection.

My only concern about these two mega projects is the Garson overpass.  It is a narrow 2 lanes and currently serves literally hundreds of bicycles on an average day plus the vehicular traffic and the occasional frightened poor soul on foot.  There are no pedestrian accommodations whatsoever.  RTC has a Garson/I-80 intersection rebuild project in their 2018 budget (unfunded), but it is really an NDOT issue.  So this is a plea to the Reno Bike Project, the Procrastinating Peddlers, and all the recreational cyclers out there to put the screws to NDOT to fix this woefully inadequate interchange STAT.  Reno will approve the Frankenwarehouse project, as they should, and the truck stop is already coming.  We don’t need dead people in the name of progress.

Ramada Out

Ramada RenoThe Ramada Inn at 1000 E 6th Street will go to AUCTION on 3 June.  284 keys plus banquet and meeting space, and the opening bid and reserve price are both $500,000.  The Room Pictures and Reviews for Ramada’s own site are pretty revealing.  Outstanding staff and cleanliness (usually), dated rooms, sketchy neighborhood, and pretty consistent references to plumbing issues.  The auction comes free of management and brand affiliation – Ramada is out and you would be on your own.

Diamond’s Casino is next door on a separate parcel, attaches to the Ramada, and provides most of the food services for the guests.

Meatloaf-Dinner

Verdi Mega Land Sale

boom2All the land around Boomtown that we all think of as Verdi but is really Reno just sold for $13,125,000.  The buyer is Reno Land Development Company LLC, which has the same address as Monterey Advisory Group and email address as the old Monterey Development Group (MDG – The Village at Somersett).

The purchase excluded lots 7, 8, 9, 10, and 12 from THIS offering from a few years ago.  HERE is the land uses approved under the Mortensen Garson Area Plan and HERE are the parcels involved in the sale (excluding the 300 acres of remote properties).  There is a $10M 1st Loan and a $600,000 2nd.  Note the 586.86 AF of ground water rights and up to 250 AF of surface water rights that come with the parcels.

So what’s next?  The properties north of I-80 are level, served with sewer and water, and I would expect terraforming to begin almost immediately for about 500 units.  I also expect the developer to try to densify the project from its current zoning – it has all City services and Reno loves this sort of “infill” stuff on the edges of their service area – and rezone the commercial properties just north of Cabela’s to residential.  The properties south of I-80 do not have City sewer or water, so I don’t expect development in the near future (some of it is really zoned for a high-rise casino!).

There goes the neighborhood!  At least it isn’t going to be an “Everything Included”  Lennarburger.

 

Project 8

24001[1]Project 8 was my code name for 888 Mount Rose Street, the Mapes Walker mansion (Google it for a lot of history on Gloria Mapes Walker).  Sitting on 3.18 acres on the ever growing fringes of Midtown, it is zoned SF9 for 9000 SF lots.  Across the street to the north the zoning drops to SF6.

The property is/was listed at $1.6M and is now in contract, but that made the entry price for any redevelopment really high for my guys.  The “smart” development scheme would be to scrap the mansion (it is not historic but is over 50 years old, so would have to be reviewed by Reno’s Historic Resources Commission) and build as close as possible to be maximum 15 parcels allowed (I maxed out a 12 with access easements).  My SCHEME  was to restore the mansion into 3 or 4 units (requiring a Special Use Permit in a single family zone) and build around 9 new homes.  Everyone loved the concept, but didn’t want to be the ones to disrupt the neighborhood.  I have no idea what the prospective owners plan to do, but it would actually be sad if the restored the mansion and did not redevelop.  Cities evolve, and 3 acre estates adjacent to a Transit Corridor are relics.

It has been sort of amusing seeing the Marmots being dissed over at the Downtown Makeover site for not adding units when I know that they have over 10 in the permit loop.  528/538 Sinclair is my favorite.  They are digging a courtyard between two bungalows and adding wicked pisser basement units that won’t feel like basement units.  124/126 Caliente  each get an additional bedroom, bathroom and sleeping loft.  3 new units at 130 Caliente.  2 more dig downs with courtyards at 225/231 Moran.  227 Moran like you would never believe possible.

Reno Rundown

Just a bunch of random item to keep you amused:

–  For the first time in 8 years, units at Smithridge are selling north of $100K.  These were trading for $225K at the peak.

–  Single Family Homes coming to Keystone Canyon.  If you can read topo maps, so will see this will require a lot of terraforming to get in 109 houses.

–  Upstream out on Dickerson Road is Back.  Sold out of foreclosure 2.5 years go for $1.125M and included 90 vacant townhouse lots and 6 or 7 finished townhouses.  The lots just changed hands for $1.548M.  About a million and a half profit on a million dollar investment is pretty good ROI.

–  Also out on Dickerson, the Generator tried to lease option some of Reno’s Retrac land for a sculpture park, artist residences, and a new 50,000 SF co-working facility.  They ran into an absolute shit storm of unexpected opposition.  Issues ranged from the perceived sweet heart no bid land deal, to a NIMBY outpouring from the future owners of the Chism House and Trailer Park.  So the Generator is getting relocated to less desirable (but more appropriate) Retrac land east of Wells, the Chism’s get some land back.  No word on what the new owners plan to do with the trailer park.

–  Lennar is getting into the rental SFR business with their Frontera project.  Expect this to be a virtual man-camp for the Tesla factory construction crews.  They know the construction will go on for a limited time and don’t want to buy, credit is still tight, and a lot of the trades have had their credit wrecked from the effects of the Great Recession.  I think this will be a home run.

– D’Andrea Country Club is facing yet another day on the Courthouse steps (actually the County Commission chambers).  For $461,954.07, it can all be yours at the Delinquent Tax Sale on 22 April.

–  As the City Council was reviewing their Legislative agenda, a surprise new Bill was discussed.  STAR Bond Districts are in effect for 20 years after the date of the districts’ establishment.  The Bill allows that to be able to be extended in Districts that were established but no construction occurred for 5 years.  The ONLY District in the State that the Bill applies to our very own Tessera District!  Kudos to Jenny Brukhus for being the only council person to cry bullshit.

There, that should give you enough to chew on for a few days.  Next up will be a review of a couple interesting projects going up (and down!).

Parks and Rec

tennis ball–  You might not recognize HIC Investment Company LP by name, but they are the owners of the Lakeridge Tennis Club.  They have received a Notice of Default (click Log In tab) for missing the 1 December 2014 payment on their $10,700,000 deed of trust.  HIC is also in default with the Secretary of State and does not have a current business license.

Lakeridge Tennis Club sits on a prime 9.25 acre site at the corner of McCarran and Plumas.  If rezoned MF30, the site could accommodate 275 units – more if the City allows greater density, which I think they will.  I think the days of tennis being played on the site are limited.

–  The purchase of the land and water rights beneath the Somersett Golf and Country Club closed escrow last week for $2.75M.  The Somersett Owners Association are now “protected” if SGCC fails financially.  Before you get in on the dead pool on when exactly that will be, consider this:  SOA has the Right of First Refusal  to purchase the clubhouse site (club-tent).  For the first 5 years, SOA can purchase the property for 50% of any bona fide 3rd party offer.  After 5 years, SOA must match the offer 100%.  The property has a lot of encumbrances, but could easily take 10-12 new houses if zoned SF6 like the adjoining properties or hundred of units if rezoned MF – it is worth $1M+ as a development play.  The club-tent property is NOT part of the Somersett PUD, and Reno would gladly increase the density of a property already adequately provided with City services.  It will be interesting to see if SGCC makes any significant capital improvements, or takes a line of credit encumbering the property to cover operating loses.  I dib 26 February 2020 for the day the club fails.

–  Over at ArrowCreek, there seems to be an at least temporary cease-fire in place.  The golf course owners are trying to stay a private club with a membership drive.  The proposed sale to the ArrowCreek Homeowners Association is on hold.  I’m sure my friends over at ArrowCreek411 will chime in with their take on the current situation, but the opposition to the proposed sale to the HOA was overwhelming.  Somersett has water and no clubhouse.  ArrowCreek has a clubhouse needing a lot of work and no water.  Both Clubs are shouting the mantra “a green golf course adds to your property values”, when in fact it is the open space that adds value – not the golf course.  All in all, I think Somersett Golf and Country Club has a better chance of survival than ArrowCreek does.

Downtown Drive Thrus

OLYMPUS DIGITAL CAMERADo fast food drive thrus belong in Downtown/Midtown Reno?  They are prohibited as a new use in both the Downtown Reno Regional Center Plan and the South Virginia Transit Oriented District / Midtown Commercial Plans.  These Plans emphasize walkability,  pedestrian/ bicycle amenities, and support local Mom and Pop businesses.  All noble goals.

Blakebucks 2.19This is the line up this morning at the new Starbucks at the US Bank Building.  The queueing is over twice the code minimum 140′ based on this photo from Downtown Dude (and is there another world in the English language with 5 vowels in a row?).  Reno Community Development “Fredfathered” the pre-existing bank drive thrus for fast food use, and in this case, the runaway success of the drive thru is only impacting the building owner and his site circulation.  It might not be the case elsewhere, like the Wells Fargo at California and Arlington pictured above.

Here is the paradox.  The restrictions on drive thrus are meant to promote small local businesses – 20 carloads of latte fiends in line at Starbucks equals 40 people not patronizing the Hub, Dreamers, or Bibos.  But give the populous their choice, and they will line up for 20 minutes in Idle and catch up on their email while waiting.

Do the Downtown Plans need to be revised to meet the desires of the residents, or do they need to be stringently enforced to promote the intent of the long-term community planning goals?  I’m torn, and that’s why I’m posting this and asking for your thoughts.

Dunkin

Items

BlueSketchSorry, no zippy graphics on this post.  I just wanted to let you know what I see going on.

–  The Highlands student apartment complex just sold for $40,931,513.  It last changed hand for $32,500,000 in November of 2004.  Nice hold while collecting rents!

–  Kings Inn demo is underway with a $150,000 permit.  The word on the street is that the project will be ultra-luxury and try to out Montage the Montage.

–  Montage units are on the market in record numbers.  There is a huge cash out going on.  They are actually selling north of $250 SF.

–  El Cortez construction was shut down because they forgot to apply for a window replacement permit.  “We have removed and replaced thousands of windows, and have never had to pull a permit to do so, and neither had our window supplier,” Crandall said.  Seigel might want to refer to the International Building Code which covers both Reno and Las Vegas.  Las Vegas might want to do some inspections on Siegel’s 1000’s of illegal window replacements.

–  NODs are trending WAY up.  Lots of 2009-2011 defaults showing up.  I think the first loan holders are now pretty well covered and are moving their “shadow inventory” to market in large quanties.

–  Wacko prices being paid on the Courthouse Steps for foreclosures right now.  There are a bunch of new players in the market, as well as the Caughlin Ranch dilettante housewives.

–  Stealing from the Estate – Check out 260 Wellington you data diggers.  Bought through Probate for $40,000 with a $65,000 hard money loan, and immediately listed for $109,900.  The system is truly broken if this one sells.

–  Basin Street is pushing dirt on the new Marriott Courtyard next to 300 E 2nd and across from the Aces field of dreams.

–  Pulte has pulled permits for their first houses in Sierra Canyon Village 13.

–  Watch for a significant infill development at the corner of Stewart and Sinclair, across from the UNR Drone Center and the Discovery Museum.  The first 2 permits are already in process, one approved.

I’m exhausted, and I haven’t even gotten to VAT or Project 8!  Laissez les bons temps rouler!

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