Overhead view of the Keystone Commons construction site in early March.
Courtesy: S3 Development
After a lengthy COVID-19-induced delay, work has begun in earnest at Keystone Commons, the much-anticipated redevelopment project at Fifth Street and Keystone Avenue.
S3 Development and Ensemble Real Estate Investments have partnered on redevelopment efforts at the 10-acre site.
Although there’s been widespread speculation about the tenant mix at Keystone Commons, S3 Development founder Blake Smith said most retailers pulled in the reins and canceled plans last year when the pandemic shuttered regional business.
“A year ago, we were about 90% pre-leased with all the retail,” Smith told the NNBW in a mid-April interview. “Then COVID showed up. All the (prospective) tenants didn’t know which way the world was going and decided to hold off.”
“We had 90% of this center in LOIs (Letters of Intent), and overnight it went to zero LOIs,” Smith said with a wry laugh. “But the market is starting to open back up, and we are getting a slew of tenants — we are in negotiations with quite a few businesses looking to come in here.”
The current tenant mix with signed leases includes several fast-casual eateries and a Starbucks, which is located in the first building to come out of the ground at Keystone Commons. The business is expected to open early this summer.
And there’s some good news for In-N-Out Burger aficionados in the region — you won’t have to travel to Pyramid Way or South Reno to get your double-double fix. The hugely popular burger chain is in the process of securing permits to open its third Reno-Sparks location at Keystone and likely will be operating by year’s-end.
The next building to go up will be constructed to the north next to the Interstate 80 freeway on-ramp and will house an additional five to six tenants. Chipotle and Firehouse Subs already have signed lease agreements for a portion of the project.
Expected to open this summer, a Starbucks will be in the first building to come out of the ground at Keystone Commons, seen at bottom left.Another building that can accommodate additional small retailers on the ground floor, with space for a larger restaurant/ bar/tavern concept across the entire upstairs, will follow on the south side.
The upper level of that building will have several thousand square feet of outdoor decking with unobstructed views of the Sierra Nevada. That part of the buildout, along with the rest of the retail shells at Keystone Commons, is tentatively slated for development in 2022, Smith said.
A main reason why Keystone Commons will have such a strong restaurant presence is due to its proximity to the freeway and highly visible signage, Smith told NNBW.
“Once tenants see these big names, that’s a big draw that will help their businesses too,” he said.
There’s also a large residential component. A planned 305-unit multi-story apartment complex on the east side of the project could go vertical in the fourth quarter, but more likely will begin in the first quarter of next year, Smith added. The complex should be open for occupancy by 2023.
Crews are currently performing the necessary civil engineering work for all 42,000 square feet of commercial development, as well as for the apartment complex.
One of the biggest challenges they faced was re-routing the Orr Ditch, which flowed west to east through the property. It was buried using prefabricated concrete blocks at a cost of $1.9 million. The apartment complex had to be split into two separate buildings because the Orr Ditch crosses the project’s footprint.
These renderings show what retail buildings will look like upon completion.“This is 10 acres of urban land, which is a huge amount of urban land, and it’s by one of six freeway off-ramps (on Interstate 80), so it’s really special. But that was a big challenge,” Smith said of re-routing the ditch.
There’s also a 78-inch diameter water pipe that crosses the project site from north to south. Crews had to re-route the pipe to move it away from the apartments, but when they dug down to expose it, they found it wasn’t where it was supposed to be located inside the easement.
“It stopped us for a month because all our pipes were designed to come in where the easement was,” Smith said.
“We had to redesign a portion of the parking garage because the storm drain wasn’t in the right location,” added Blake Smith Jr.
The huge year-over-year cost increases for lumber, as well as materials shortages caused by adverse weather events in Louisiana and Texas in 2020, also have impacted the development timeline.
Large PVC pipe, Smith said, has proven exceptionally difficult to source due to a shortage of resins produced in the Bayou State and specialty oils produced in the Lone Star State.
“There are a lot of issues out there,” Smith said, “and those costs are not controllable. We took the risk to break ground and get going even in the middle of COVID, and I am glad we did because tenants are now showing back up.
“I think everyone realizes we are hopefully getting back to normal and people want to live their lives.”