Downtown Dirt

italian-capThe tea leaves were right – the Standard@Reno student/housing (they never confirmed their intent) project is dead, and the site is on the market.  At $80/SF raw land cost!  That’s a cool $9.6M for a 2.75 acre blighted city block.  The Tessera properties must be worth DOUBLE that.

The W 2nd Street District has picked up their permit for their initial 28 unit condo project at 235 Ralston, and admitted that they are pursuing 2 avenues of funding when they addresses the RAAB (Redevelopment Agency Advisory Board) yesterday.  You don’t pick up a permit unless you are pretty close to funding, but it is generally a requirement by the lender.  This one is a little lest costly because the sewer connection fees are being deferred until Certificate of Occupancy.  In a blow to the District, 3 more parcels seem out of the developer’s hands.  The 7-11 Motel sold, and The Siegel Group is marketing their 2 vacant lots on 2nd Street as Build To Suit (“Great Location for Franchise” – they really don’t get Reno yet, do they?).  I have no indication that Reno is warming to selling their parking lot or abandoning Stevenson and Church Streets for this project (maintaining the Urban Grid is a core value), and I’ll believe the purchase of the UNR Nelson property for $7M when it records.  In blue, the properties owned.  In red, the properties that seem out of play now.

Casket Truck stuck at Sierra Canyon in the last storms.  No comment – it would be shooting fish in a barrel.

sierra-casket

 

Smaller Stuff

  • 214 Lake Street is the 17,206 SF parking lot on the corner of 2nd and Lake, kitty corner from our newest hash house.  Purchased for $1,365,000 by Lake Street Property LLC, whose address happens to be the Aces Ballpark.  This makes me think that Simon Properties may be about ready to fire on their Truckee River parcel just to the south at 1st and Lake.
  • Remember the game changing Standard@Reno student housing project that was going to single-handedly rejuvenate Downtown?  Home Depot quality For Sale signs have now been posted on the property.
  • If the West 2nd Street District is about ready to release “ground breaking news”, why are they 2 months late repaying their $55,000+ sewer lean on the Town House Motel?
  • The Wells District has proposed new parking non-requirements to match Midtown.  No parking will be required for bars, restaurants and retail establishments.  Go to page 16 for the specifics.  I generally support this change to get Wells out of its ugly sister position when competing with Midtown.  Cafe Deluxe was erased due to parking requirements.  The huge danger to the City is opening up the Neighborhood Plan for parking revisions without addressing the Residential sections.  I suspect the developers will not support this without a sensible reduction in Residential parking requirements.  All the City has to do is agree to round down on parking requirements (as Sparks has codified).  Their current policy to round-up makes urban residence actually have higher parking requirements than Somersett!
  • TCA is once again starting to terra forming their property at Robb and 80.

 

Big Stuff

big-stuffHere are some scoops and fun facts to know and tell:

  •  Charles Schwab is moving their Headquarters from San Francisco to Rancharrah.  No joke.  No news about the actual size of the development or the number of departments / staff involved in the move.
  • The Switch SUPERNAP Building 1 has gone live.  This is the first hosting building of what will become the world’s largest data center.
  • Apple has submitted a permit for Project Isabel, a 372,893 SF data center and administration project at their existing data center east of Sparks.  This will add over 60% capacity to their existing facility, and they are doing it on one permit. (note – permit now shows as Withdrawn)
  • DR Horton has purchased the West Meadows Estates project out near Verdi for $11.5M.  Not my 1st choice, but certainly a step up from the developer who entitled the project.

 

Permits and Applications

9825-svaReno, Sparks, and Washoe are now all on the same Accela permit tracking software.  The URL has been updated, and you can find the search page HERE.  It still has a LOT of bugs to work out, but it is fascinating getting all the information in one place.

Tracking submitted permits is one thing, but tracking actual issued permits is another thing.  Washoe has their weekly Permit Statistical Data, but Reno fell off the charts for a couple of months when the Accela upgrade went south.  DECEMBER reports are starting to show up for Reno.

An interesting application that showed up is WDCA16-0001 for 9825 SVA, a 10.6 acre parcel adjacent to the Southcreek retail complex and across the street from New Yawk Pizza.  The application refers to Section 302, which is Washoe Development Code for permitted uses.  9825 is in the SVA Transit Corridor Zoning already (but where is the transit?) and has pretty much Carte Blanche, so I am a bit confused.  My guess is that additional lands are being proposed to be added from the adjacent Washoe County lands to the SVA Transit Corridor.  We just need to train the permit techs to include more info!

 

Summit Club NOD

summit-clubIs there trouble brewing for the proposed 584 unit Summit Club apartments next to the Summit Mall?  The developer received a Notice of Default today on their $7.25M loan.  This project is notable because it includes using some State bond funds that allow for a 20% workforce housing component.  The default is notable (“only a flesh wound”) since Reno Land Development is also the force behind the Rancharrah and Park Lane Mall projects – they are mostly out of Meridian 120 at this point.  I have no inside information, but it appears they couldn’t cover their short-term financing.  In the dignified world of commercial real estate, this would normally generate a Tsk Tsk from the lender and not a speedy NOD as seen here.

auto-musuemWant to buy 4.58 prime acres on the Truckee River in downtown Reno that includes a 77,836 SF building, and have a budget of $160,000?  It worked for the Harrah Automobile Foundation, who just wrapped up the purchase of the National Automotive Museum at 10 S Lake Street from the Reno Redevelopment Agency.  They have to maintain ownership for 15 years, but then could sell or redevelop the property, and that’s a sweetheart deal I’d take in a heartbeat.  The Foundation owns/controls the adjacent former Grant’s Landing site, and their stated intent is to expand the museum (Google ranson webster porsche), but there are absolutely no guarantees in the purchase agreement.  This proposal has been working its way through the process for a couple of years now, and the current Council may not have been aware of the commitments made by the former Council in their final days, or cared enough to stop this egregious deal.

Bad Hobbits

hobbit-house-frontThe Hobbit House at 885 Hill Lane in Verdi just (re) listed for $2,890,000.  I wrote about it a couple of years ago which turns out to be 6 years ago HERE , and the link to the Business Insider article is still live.

My recollection is that it went on and off the market a few times, and the price was eventually reduced to $3.2M or so.  Then it got posted on Concierge Auctions, and “sold” for $1.4M on July 29.  I don’t recall ever seeing any local advertising for the auction.

Is the new owner trying to flip for a $1.5M+ profit?  Or is this a shill deal at its core with the auction being a sham insider deal all along?  The listing photos seem to be the same as from the Business Insider story (weird deer thang crouching beneath the grand piano) which were taken from the Sotheby’s listing.

Any intel from you smarter than me people?

Stuffed Poodles in the Window house on Warrior now has a for sale sign up, though it isn’t on the MLS yet.  There are stories to tell!

038-132-12

 

Developer Darwin Awards

darwin-award

  • Our winner this week is the W 2nd Street District.  With a land acquisition budget of $35/SF, they have an “agreement” to buy the UNR parcel at 3X that.  The Reno RDA parcel next door just jumped to $4M+ based on the comp, and everyone else in the “district” will now be holding out for $100/SF+ for land.  This would just be a comical developer snafu except it has changed ALL the expectations on property value in the downtown core to unsustainable heights.  Nothing will get done as the owners hold out for values that can never be economically achieved.  Instead of invigorating downtown, W 2nd is killing it.

 

  • Shit Costs Money -Kudos to Kelly Rae for going after the Sewer Connection Fee system imposed by COR.  A new studio in Midtown is charged the same $6300+ fee as a 9000 SF ArrowCreek mansion.  They are also charged +/- the same RTC Traffic Impact Fees at the same $4240 rate per unit.  Fees for a small infill project = about 15% of construction cost.  Fees for a new custom home = about 2% of construction cost.  The system is broken if you assume the goal is to encourage urban infill and affordable housing.  As Dad always said, “Assume” is Ass out of You and Me.

 

  • 601 E 4th Street –  The Anchor Auctions building and surrounding properties at 601 E 4th Street just listed for $4.1M.  That’s pretty pricey for the E 4th Street corridor – $50/SF land cost.  But I’m a believer that E 4th will rapidly surpass Midtown as Reno’s entertainment hub.  Midtown is becoming far to genteel, and E 4th offers some pretty cool large spaces at more reasonable rents.

 

  • TXT17-00003 – Just starting to wend its way through Planning, this is an internally generated text amendment that relates to amending parking standards in the Wells district.  I’m presuming that parking requirements for restaurants, bars and retail establishments will be changed to match Midtown = 0.  This will be a boon for Wells Avenue merchants, whose district has been slow to redevelop partially due to the parking requirements.  I’m not sure how the Bungalow Huggers are going to react to the proposal, especially given that the proposed text amendment will open up discussion of residential parking standards in all of WANP.  Currently, a 4 unit condo or rental project consisting of 2 bedroom units requires 5 parking spaces, 3 or more off-street and up to 2 on street.  The EXACT same project designed as individual units for sale requires 8 parking spaces – accidental social engineering that is diminishing the availability and affordability of entry level housing to purchase.  Stay tuned – this will be an interesting if arcane issue to follow, with a couple of council persons doing a bit of sweating out the decision.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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Horseshoe

horseshoe_club_reno_nvThe Horseshoe building at 229 NVA just sold to Battle Born Properties aka the Keshmiri’s.  Owners of the Methderosa weekly motel and the Wild Orchid and various other strip clubs.  I’m sure the Horseshoe will be renovated for a use up to their standards. (fun fact – there is a sky bridge to 210 N Sierra, future home of On Common Grounds sliding price grocery store.  Don’t get me started on that one – I think their male stripper fundraiser got reconsidered.)

There really is no hope of saving the casino core.  The Carano’s are pouring $50M in interior improvements into their casino holdings, but not a cent that I can see into streetscape and livability improvements.  Retail is still fleeing N Virginia.  We’ve lost a hair salon and a restaurant in the 300 block and it is a ghost town.  Just wait until the Harrah’s bankruptcy gets finalized.

sc-demoFarewell, Sierra Canyon. It is done – the final 5 permits have been filed.  The sales center has been demoed to make way for 2 more units,  Pulte and the HOA were negotiating to turn the sales center into additional amenities for Sierra Canyon which could have been a win-win, but SC could only move at the pace of an HOA.  I’ll miss throwing darts at the Raisin Ranch.

betsy_caughlin_donnelly_ranch_houseMayberry Gardens  – How to try to save a failed garden center at a historic property?  Adding townhouses is going to be a tough sell.  The Reno Historic Resource Commission is already stepping WAY beyond their charter to fight this one.  This will be an interesting case to follow.

Tea Leaves

arrow-downReno Real Estate Blog will be releasing their monthly median statics in a day or so.  What’s your gut?  FYI, the median dropped 1.75 between September and October 2015.

Prices at the Smithridge Condos are something I track closely – it is an important market indicator for me.  They ballooned to $225+ in the bubble before falling back to $70K.  They have been inching towards $140K for the last couple of months, but no one has breached that barrier yet.  I feel good about that.

I just feel uneasy about the market right now.  The builders aren’t building, and the only reasonable deals I see out there are properties that have gone through at least 1 foreclosure (and I’ve even got a triple!).  None of the Ladies Who Lunch at Napa Sonoma are comparing their portfolios any more.

Montreux properties are selling below 2002 pre-bubble prices.  Somersett is recovering to 2005 or so – the lost decade.  I know we are supposed to be feeling giddy about our regional growth, but I’m not feeling it.  Are you?