RENO, Nev. — The wheels of commerce have all but ground to a halt across Nevada, but that's not stopping two local developers from kicking off a large industrial and retail project this summer.
Reno Land Inc. and Dermody
Properties recently announced plans to construct 1.13 million square feet of
industrial space and 35,000 square feet of retail at The Park at McCarran.
Last fall, Reno Land Inc. President and CEO Chip Bowlby purchased 104 acres east of Mill Street and McCarran Boulevard from the University of Nevada, Reno in an $18 million deal.
The Park at McCarran encompasses
60 acres, with the rest of the land devoted to water retention and floodplain
mitigation. The main entrance for the project will be from Mill Street, with an
additional entrance off Capital Boulevard at the south end of the site.
The 7.5-acre retail component
will serve as the gateway to the industrial portion of the project and likely
will include a mix of convenience stores, a gas station, bank, car wash,
fitness center, and drive-through eateries, Bowlby says. There's already been
strong interest in leasing retail space at The Park at McCarran from many
high-rated credit tenants, he adds.
The 1.13 million square feet of
new Class A industrial space will be split among five buildings ranging in size
from 147,000 square feet to 317,000 square feet; however, they could be
divisible to smaller sizes depending on user interest. The first two buildings
are scheduled to break ground this July with delivery in the second quarter of
Developing during the pandemic
While it's an unlikely time to
begin a development of this size, Bowlby is bullish on The Park at McCarran,
mostly due to its location.
“It's probably the last large
piece of infill property outside of the North Valleys for an industrial and
retail master planned development,” Bowlby said in an early April interview.
“It has its challenges, but it's so well located with its proximity to Interstate
80 and the Southeast Connector that it will really serve the city well.
“This is ground zero,” he adds.
“Companies looking at Reno for manufacturing, distribution or anything, if you
had to pick a spot this is where you want to be — it's the wow factor. Even
with what's going on with the coronavirus, this is going to be a winner.
“We have a lot of interest from
the industrial and retail (sectors) since it's such a prime location, and we
are keeping our fingers on the pulse of the industrial, retail and financial
markets and analyzing them as well.”
Bowlby says the development
partners spent between $300,000 and $500,000 performing due diligence on the
property. Much of that work centered on soils conditions — the site has long
been part of the university's Main Station Farm — and addressing flood
Building in a floodplain
It's no secret the site sits in
perhaps the largest floodplain in the Truckee Meadows, and that much of the
land in that area was inundated during the flood of 1997 and other major flood
Grade for all the buildings will
sit above the floodplain, says John Ramous, Nevada partner with Reno-based
Dermody Properties. And the majority of the parcel purchased by Reno Land will
remain undeveloped in order to incorporate water retention areas and address
other floodplain issues.
“We feel comfortable with how we
designed it,” Ramous says. “We assumed the worst and planned for it. We will
have to bring on offsite material to raise grade. It's not insignificant, but
it's the right thing to do and it's how we have to address (the flooding)
Bowlby says there are
approximately 37 acres on site where they can take fill to raise grade within
the development footprint.
“We have analyzed many
engineering and development methods to ensure the project complies with local
zoning and flood control measures,” he says.
And since most of the easily
developed industrial sites already have vanished around the Truckee Meadows,
the additional grading costs are actually minor compared to other potential
industrial development sites, Ramous adds.
Partnering with Dermody
Reno Land's core business
strengths lie in developing retail, multi- and single-family residential
developments, Bowlby says, which is why it made sense to partner with an experienced
Reno Land interviewed several
regional developers but ultimately partnered with Dermody Properties, which
constructed many of the adjacent industrial buildings west of McCarran
Boulevard over the past few decades.
“We felt that aligning ourselves
with the best industrial developer in the area would be the key to success; the
fit is perfect,” Bowlby says. “Dermody has an extreme and educated interest in
the property, and they are the experts in industrial (development).”
Ramous says Dermody has already
fielded a proposal from a tenant seeking 50,000 square feet of space and
there's yet to be a single spade of dirt turned at the site.
Class A industrial space in the
50,000-square-foot range and smaller has been scant in recent years, and The
Park at McCarran could accommodate a variety of users, he adds.
“A lot of growth on the
industrial side has really catered to larger tenants,” Ramous says.
“Unfortunately, given increased land and construction prices, initial demand
and risk, a lot of smaller to mid-sized companies have been looked over. This
project, based on its location and the value of the land, could accommodate
larger tenants in the back buildings and the front buildings could cater to
smaller tenants who have been challenged to find opportunities (for new space).
“We think there will be strong
demand for that (size range), and I wish we had even more to offer because
there will be continued demand for it.”
Buildings will be constructed
with 32-foot to 36-foot clear heights to accommodate e-commerce users and
last-mile distributors. Each building also will have 4,000 amps of power, which
could prove attractive to a variety of users in the manufacturing sector as
well, Ramous says.
United Construction will be the
general contractor on the project. Other companies with local offices that are
involved with The Park at McCarran include CFA Engineers & Surveyors, RHP
Mechanical, Jensen Electric Company, Desert Fire Protection, BJG Architecture &
Engineering, L&L Plumbing and Heating, Krater Consulting Group, DC
Engineering, Headway Transportation, and Cardno Engineering.
CBRE's Eric Bennet, Dan Buhrmann
and Greg Shutt will handle industrial leasing, while Shawn Smith will handle