$1.28 billion development unveiled
May 12, 2016
The Don J Clark Group (DJGC) recently unveiled its proposal for a $1.28 billion downtown development called the West 2nd District.
The development as presented to the Reno City Council and northern Nevada community in late April, consists of 30 new mixed-use buildings, a new park, plazas and walkable streets as well as 1,900 residential units, 450,000 square feet of office space and 250,000 square feet of retail space. The proposed development also includes an on-site central plant and wastewater treatment infrastructure. The 17-acre proposed development would be located in the City's Redevelopment Agency District 1.
The area would include gigabite fiber connectivity and the buildings will be built to seismic standards to help create a downtown with economic, environmental and community sustainability, according to a press release.
DJCG projects that the development will create more than 6,500 construction and permanent jobs. The developers plan to build the development in a series of phases over the course of the next six- to 10-years.
The developers are using their own capital to fund the project through a mix of capital investors and individual investors who will take on the debt.
In a phone interview with NNBW, Colin Robertson, partner at DJCG and the director of communications and strategy, explained that if all the buildings are built according to their master plan then it will cost a net of $97 million. They estimate that the development will be worth $1.28 billion dollars at the end of the 10 years.
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Unlike many other developments, they are not asking the city for a bond to pay for the infrastructure.
"We will take on the risk and spend (the money for the infrastructure) up front," Robertson said.
However, since the property tax value on the properties will increase in value by a wide margin after the development of the area, DJGC is asking the City to reimburse them for the infrastructure. If approved, the increase of property tax values will first go toward paying off the $23.5 million of debt in the Redevelopment Agency District 1 and then after that is paid down, DJGC will start gettig reimbursed. If the development is not successful the City would not have to reimburse the money.
DJCG has created a team of local and national architects, developers, engineers and contractors many of which spoke at the April 27 city council meeting.
Robertson called the project a "community built by a community," during the presentation to the city council.
Several members of the business community spoke in favor of the project during the public comment period of the meeting.
"I am truly excited about the timeline of this project because the city needs to change sooner rather than later," Jens Peter Clausen, vice president of the Tesla Gigafactory, said at the meeting.
"This project really has vision," Doug Erwin, vice president of entrepreneurial development for EDAWN, said. "It has solid core values and resonates with entrepreneurs and Millennials."
Other business members who spoke in support of the development included Jennifer Cunningham, interim managing director for the Reno-Sparks Convention and Visitors Authority (RSCVA), Mike Kazmierski, CEO and president of EDAWN and Mark Anderson, head of general affairs for Panasonic.
However, the project is not without concern and skepticism from the council and the community.
Chris Harper, a downtown apartment owner within the 17-acres DJCG is planning to develop, expressed concerns about his property and effects the development will have on his own personal plans to develop his property.
According to Don Clark, founder of DJCG and founder of Cathexes Architecture, DJCG already owns or is in control of many of the properties within the 17-acres where the West 2nd District will be developed. They are working with other property owners to acquire the rest of the properties.
However, it is not an all or nothing deal. According to Clark, even if they do not acquire all of the properties they will still go ahead with as much of the development as they can.
They are already preparing to break ground on their first building within the next two- to three weeks. The building is designed to be a 28-unit upscale condominium building located at 235 Ralston St., with retail space on the first floor. Since each building in the development will be its own LLC, they will not need approval for the full development before starting on their first building.
"We are in full stride," Clark said.
For the public to learn more about the project, the DJCG staff will host a series of open houses every Thursday through June 2 from noon to 1 p.m. at their offices at 250 Bell Street. DJCG will also host walking tours Saturdays, April 30-June 4 with the exception of Saturday, May 28.
With many failed developments in Reno's history, Mayor Hillary Schieve and the council members are approaching the project with cautiousness before agreeing to a legal agreement with the developers. The council said it was important to fully understand the exposure to both the City of Reno and the developers as well as the exposure to the public.
"I still have a healthy amount of skepticism about it as everyone in this room should have," Councilman David Bobzien said after the presentation.
The council members said they expect the presentation to be the first of many discussions about the development at future Reno City Council meetings.
"I would like to see this process very transparent," Councilwoman Jenny Brekhus said.
At the April 27 meeting, the City Council passed a motion with a 4-to-2 vote directing staff to come back at the next Redevelopment meeting on May 25 with more information from the project team to help move staff through the due diligence period and better inform the city's decision of whether or not to move forward with drafting a Disposition and Development Agreement (DDA).