After months of debating the merits of extending the city's tax incentive program in redevelopment areas, Carson City's Board of Supervisors unanimously approved on Thursday a 50 percent sales tax rebate for three companies looking to fill a combined 270,467 square feet of vacant commercial space.
The largest chunk belongs to the former Kmart in north Carson City that has been vacant for nearly a decade. The new owners - Jiangson Duke LLC., of Reno - say they want to open a multi-use events center and other retail outlets inside the 170,000-square-foot building that sits on an 18-acre parcel of land that is owned by a Delaware-based investment group. The company has said it may purchase the ground lease before it expires in 2025.
Representatives from the capital's lodging properties and the Carson City Chamber of Commerce lauded the plan on Thursday, with Jonathan Boulware of the Gold Dust West calling it, "a game changer."
Mayor Bob Crowell cautioned that the 15-year-long tax incentive package, which city officials say will be the last of its kind, will cost the city money down the road.
"The bottom line," Crowell said. "This is an expenditure of taxpayer money. It may not be out of pocket, but this is an expenditure of taxpayer money."
Other applications that were approved Thursday include the Riberio Company's Carson Tahoe Quail Park, which has 27,897 square feet of vacant retail space in south Carson City, as well as the 72,570 square foot former Gottschalks in the Carson Mall, which is owned by the Eureka, Calif., based Carrington Co.
The proponents of the Capital City Events Center, meanwhile, presented their ambitious plan to refurbish the exterior and interior of the blighted building in north Carson City, adding 20,000 square feet of meeting space and an 80,000-square-foot ballroom that could be used for indoor soccer tournaments or large banquets. Architect Jeff Frame said the ballroom would include a ceiling that reaches 40 feet in height, which would include major improvements to the building.
Whether or not the companies are granted the tax incentive is dependent on a number of provisions, namely filling the space by the summer of 2012.
According to the agreement approved by the Board of Supervisors on Thursday, "The participant agrees to make all necessary improvements to the properties so that its tenants can fully operate their businesses in the property by no later than July 1, 2012."
Other restrictions include no restaurants or businesses relocating from within Carson City, Lyon and Douglas counties. Each company needed at least 15,000 square feet of vacant space to qualify.
John Mulder, a Realtor who has been representing Jiangson Duke since the company bought the building in June 2010 for $1.5 million, said the events center is not contingent on the sales tax package and that Jiangson is working with a number of companies to potentially manage the events center.
"We intend this to be a for-profit enterprise," Mulder said. "We also understand that for us to succeed, this project may evolve into a bona fide private-public project, dedicated to becoming a win-win for all of us."
Joanne Holmes, a property manager for the Carrington Co., said a number of national retailers have expressed interest in the former Gottschalks, which closed in 2009, and that the tax incentive would give the company one more bargaining chip to attract them.
"I'm not proud to say it, but yes, we have a big empty box," Holmes said. "The center is quiet and our tenants are suffering."
She said the sales tax reimbursement would come back to the Carson Mall in the form of tenant improvements. Holmes added the company is considering repainting the exterior of the mall, "getting it vibrant again."
The 13,584 square feet of vacant store fronts in the mall would not qualify for the tax incentive.
The supervisors denied the application for the Carson Quail Park, the shopping center in south Carson City developed by the Riberio Company that includes Keva Juice and Ming's Chinese Cuisine and Bar.
While 18,000 square feet of the shopping center is vacant, the store fronts in it are owned by 10 companies, which means they would have to file for their own applications to qualify for the reimbursement.