A Tale of Planning, Profits, Property Taxes and most of all, Poop.

Reno recently approved a land use change for a parcel just southwest of the Robb and I-80 interchange.  Whether or not the developer will be allowed to fill in the major drainage way (ravine) for his 310,000 SF retail project will be determined later at the Special Use Permit phase.  Many of the community comments against this project (and the adjacent now-dead Flying J truck stop) focussed on the “gateway” nature of this intersection and its importance to the region.  It made me realize that most people don’t know about or have forgotten about the plans for the true Western Gateway project for Reno – 3000 units of new housing and several million square feet of commercial and retail space stretching from the East Verdi exit all the way to the California border.

What started as a simple land use dispute has grown into a plan to completely alter and develop was is now west Reno.  Driving east on I-8o coming out of the Truckee River Canyon, the fields and open space you see to your right is Quilici Ranch.  The Quilici family ranched this land for generations, but as ranching became less profitable and interest by the later generations of the family to continue the ranching operation waned, subdivision of the ranch became the primary focus.  The model was taken from the other ranches in the area that had subdivided for residential development – Blue Heron (Carano) and Belli Ranch.  Each are 1 acre minimum lots with equestrian zoning, wells, and septic systems.

In the late 1990’s, the impact of the region’s septic systems on the Truckee River ecosystem and ground water became a hot environmental issue.  Washoe County increased the minimum lot size required for septic systems from 1/3 acre to 1 acre county-wide, and to 5 acres in sensitive areas of the Truckee water shed.  The Quilici’s lost 80% of their developable parcels overnight!  5 acre parcels don’t sell for 5 times the price of 1 acre lots, so this was a huge financial blow.  The only hope was to some how, any how, get hooked up to the Reno sewer system which was 10 miles away at the time, as was the City border.

Then Somersett came along with their contentious annexation, and the Reno border was extended west more than 5 miles.  Mortensen Ranch was directly west of Somersett, and the Mortensen’s, the Carano’s at Boomtown, and the Quilici’s had family ties stretching back generations.  They concocted a plan to annex a 4 mile long strip of land into Reno stretching from Somersett all the way to the Quilici ranch at the California border.

Why was annexation into Reno so important?  The  County is much stricter about increasing the density of development, and the residents of unincorporated Verdi would NEVER consent to the scale of development.  In the County, a developer is required to dedicate water rights for each parcel and pay a sewer connection fee at the time of the final subdivision map – in Reno, these expense that can easily run to $30,000 per lot are delayed until the permit for the actual individual home is pulled.  This is a huge incentive.  The City can form a General Improvement District (GID) and issue bonds for the construction of road and utility infrastructure.  The bonds are paid off with special assessments on each individual lot.  I’m not sure if Washoe has this same ability, but it is a huge financial incentive to develop within Reno city limits.

And what’s in it for Reno?  In two words, property taxes.  Given our arcane property tax structure in Nevada with land valued at market, but improvements depreciated, a NEW $300,000 home can generate 2 or 3 times the property tax of an older home.  Commercial development adds some tax basis, and the city gets a spit of sales tax revenue, but property taxes from new residential construction is the holy grail.

Summit Engineering completed the Mortensen Developement Standard Handbook in January 2004 (Part 1 and Part 2).  The Land Use Plan maps out the general layout and density of the planned development.

Planning Area 1 is the Mortensen Ranch Property.  It was purchased by Reynen & Bardis for a 680 unit development.  they also purchased the 160 +/- Canyon Ranch project just to the west.  Both were foreclosed upon and are currently going through an auction sale with the current bid $1.5M.  Just south of Area 1 is the 132 unit River Bend project proposed by R & K Homes, also foreclosed.

Planning Area 2 is Boomtown and the new Cabela’s store.  Boomtown (PNK) also controls the right hand pan handle of Area 3.

Planning Area 3 includes the Santerra property purchased by the Landmark Homes / Silverstar joint venture and now in default in the upper 2/3, and the Quilici property in the lower 1/3 plus the business park, also in default.  Search the Recorder’s site for Santerra and take a look at the troubled history of this project!

So the developers pushed through an annexation for 3000 homes and a boat load of commercial development, but there was still a big problem – there was nowhere to put the poop.  Enter the Lawton-Verdi sewer interceptor extension.  The existing limit of the Reno sewer system ended at W 4th Street and White Fir Street (Mayberry Park).  Everyone knew that the existing septic situation in Verdi and Mogul would have to be addressed at some point, and I have documents showing an easement for it from the early 1980’s.  But, damn, it was going to be expensive just to protect the Truckee River water quality.

Reno managed to corral the $15M needed to extend sewer service partway, but not into Verdi proper.  That will be a $4M future phase to allow the original goals of the project.  The sewer extension runs past the River Inn on 4th (who will tie in if development ever occurs), along the railroad tracks, then along Old US 40 (now called W. 3rd Street), to west of the existing River Oaks subdivision, under the river, then south to Boomtown and Cabela’s.  The private sewer system at River Oaks failed a couple of years ago, and they were allowed to tie into the new system at $7000 per house.  Other than that, the Lawton Verdi sewer extension services exactly 2 properties – Boomtown who removed their existing private system for additional development area, and Cabela’s.  Planning Area 1 (Mortensen) would be able to tie into the sewer, but there will still be a lot of work and expense to extend it to Santerra Planning Area 3.

TOD doesn’t always mean time of death.  In this case it stands for Transit Oriented District. Reno has created several of these, the latest being the W 4th Street TOD.  The concept is noble – focus development along corridors and increases density so that mass transit can be sustained.  Reno’s version not only suggests but demands density.  I can’t find the actual legislation right now, but I remember it as a fascinating read.  But W 4th Street as a TOD?  Talk a look at the plan.  You can make a case for downtown to McCarran, but there is almost no usable land west of that to the district end at the River Inn.  We are aways constrained by the river, railroad and I-80 on the west side.  The one project that tried to use the TOD zoning was crushed by neighborhood opposition (Bluff Courts Apartments) on zoning technicalities.

So as iffy as the W 4th Street TOD is, Reno is trying to extend it to the state line in the Gold Ranch area and the Gateway Plan.  The TOD has to get on the freeway for a couple of miles, since it can’t go through Verdi proper.  The Verdi Area Plan  is diametrically opposed to EVERYTHING Reno’s TOD stands for.  Verdi wants cute western and no development, Reno wants a transit hub on the border.  It is interesting that all of Reno’s TOD legislation has had to incorporate the Mortensen – Garson development agreement in toto:  any deviation would open the entire development agreement up to scrutiny again, and that would get ugly and expensive, and embarrassing to a lot of prominent people.

So I actually applaud Reno for looking at what the Western Gateway should be.  Unfortunately, their vision only extends to what they can easily manipulate for presumed property tax gains, and not what the Quilici meadows will look like as an industrial park.  Santerra and the entirety of the Moretensen-Garson plan will someday come to pass.  I hope we can all take this break caused by the depressed real estate market to step back and really think what the Western Gateway to Reno should grow up to be.

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