Nevada's first 'land bank' deal up for state approval this week

The first "land bank" deal on the Nevada side of Lake Tahoe goes before the state's Board of Examiners on Tuesday.

The deal will transfer 100,000 square feet of "coverage rights" from the Incline Village General Improvement District to the state of Nevada. Those rights will then be permanently retired -- guaranteeing the 2.3 acres of land will be protected from development in the Incline Village area.

Because of development restrictions in the Tahoe Basin, homeowners, businessmen and developers are limited in how much of any piece of property they can cover with buildings, driveways, parking lots and other structures restricting the natural flow of water.

The requirements were installed because experts say land coverage is responsible for increasing runoff and other pollution problems in the basin. The Tahoe Regional Planning Agency, in fact, sets thresholds for the total amount of land coverage in any section of the basin.

In practice, what the restriction has meant on the Nevada side is those landowners with excess "coverage rights" have been selling them to developers and homeowners who need to expand but lack the coverage rights to do so.

Many times, a homeowner who just needs extra coverage rights will pay the Tahoe Regional Planning Agency an "excess coverage mitigation fee."

Those fees are being used to buy the "coverage rights" from the Incline improvement district. The contract on Tuesday's Board of Examiners agenda is for $1,005,000.

Dan St. John, improvement district public works director, said the coverage rights being sold to Nevada are from the golf course and they will be permanently removed from potential sale.

"The state is using excess coverage mitigation fees collected by TRPA for the sole purpose of buying coverage to retire it forever," he said.

St. John said it's the first major transaction of this kind on the Nevada side of the lake, but that the practice has been used numerous times on the California side to increase the amount of guaranteed open space.

He said appraisers worked out the value of the sale and the deal should help stabilize the market on the Nevada side where "coverage" prices have been much higher and more volatile than on the California side, he said.

"A big sale like this is going to say, boom, here's what we're going to base future fees on," he said. "It adds some stability to the pricing."

St. John said, however, the improvement district isn't selling anywhere near all of its excess coverage rights to the state.

"There's over a million square feet of potential coverage in one form or another," he said. "We've got hundreds of thousands of square feet of surplus."

He said much of that, improvement district will hold on to for its own future needs.

Some of it, he said, will be sold to private parties. He said, however, it won't be sold for use on commercial projects.

"The major need is public service," he said pointing to the new elementary school of a planned post office at Incline as examples.

"Those kinds of projects have the largest needs that we can estimate," he said.

He said individual residential projects may also need some of that coverage when they expand or modify an existing home.