Sale of redevelopment property goes through | RecordCourier.com

Sale of redevelopment property goes through

by Susie Vasquez

Riverwood developer Jay Timon paid $3.35 million for three parcels of north county land recently, including the 4.8 acres owned by Jim McCowan and Kay Capurro.

He purchased a separate 2.6-acre parcel from the Huntzinger Family Trust for $950,000, the property located on the east side of Highway 395 just south of the other two, according to the Douglas County Assessor’s Web site.

The purchase was just the first step toward a proposed development that will include 600,000 square feet of retail space on about 100 acres just east of Carson Valley Plaza and Wal-Mart in north Douglas County.

Douglas County commissioners approved the expenditure of the $24.7 million to subsidize the project in December, the money used to pay for a land “write down” over 16 years, through the increase in property taxes realized as the property is improved.

With the drop in room tax revenues, a cap on property taxes and numerous unfunded mandates from state and federal officials, Douglas County’s revenue base is flagging. Revenues from sales and property taxes could offset that loss, commissioners said.

From 2008 to 2027, the project could bring an estimated $45 million in revenues, according to a report by Meridian Business Advisors.

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Carson City officials said this future development means their city may not be able to compete for large national retailers, who could be more attracted by the cheaper land costs across the border, according to an article in the Nevada Appeal.

The game is redevelopment and according to Chris Norby, one-time Orange County, Calif., supervisor, these economic incentives often bear little relation to the benefits realized. Developers pit government entities against each other to get the best deal, part of a troubling national trend, Norby said in a report on redevelopment abuse.

Redevelopment has resulted in a vast over-building of vacant commercial space stimulated more by tax subsidies than actual consumer demand. As cities become more predatory, financial “incentives” are needed not just to attract new businesses, but to keep long-time retailers from moving to neighboring cities, Norby said.

“Drive any stretch of freeway in San Diego, Los Angeles, Santa Clara or other urban counties and you’ll see redevelopment-funded auto malls, with their hopeful reader boards and carefully graded and vacant dealer sites,” Norby said. “They’re a product of a bitter fiscal free-for-all, as cities coax each other’s dealerships away with ever-sweeter giveaways.”

At a recent county commission meeting, Timon said Douglas County’s approach to redevelopment is conservative when compared to other counties he has dealt with.

Reno approved $25 million for retail growth at Mount Rose and $54 million for Boom Town, Timon said.

“In most cases, the county installs the infrastructure and otherwise improves the areas for development,” he said. “Carson City has used current funds to buy land and offer it free for future auto dealerships.”

Douglas County’s redevelopment agreement is different because it is structured so the money is paid only if the project moves forward. Without this redevelopment agreement, the parcel and surrounding commercial site will remain as it is indefinitely, Timon said.

“For each year the completion and buildout of this project are delayed, Douglas County’s general funds lose a revenue surplus of at least $2 million a year,” Timon said. “Potential retailers will located elsewhere, like the Kmart in north Carson City.”

According to the redevelopment agreement, payment of the $24.7 million is tied only to development owned by Timon, a small fraction of the 100-plus-acre development. The agreement stipulates that 25,000 of the 30,000 square feet of commercial the commercial space on that property must be regularly leased.

“Timon could lease the space to himself for offices or non-retail business. He could stay through the entire life of the agreement,” said Douglas County resident Jack Van Dien. “In maintaining that lease, he could qualify for the $24.7 million.”

Susie Vasquez can be reached at svasquez@recordcourier.com or 782-5121, ext. 211.

BREAKOUT

A leading critic of redevelopment agencies, Norby has been politically active since he served on the Fullerton, Calif., city council in 1984.

He was sworn in as the supervisor of Orange County’s Fourth District on Jan. 6, 2003, representing Fullerton, La Habra, Placentia, Buena Park and Anaheim (west of the 57 freeway). Norby was chosen by his colleagues as Vice Chairman of the Board of Supervisors in 2006.

The study, Redevelopment: The Unknown Government, is published by Municipal Officials for Redevelopment Reform through a grant from the Fieldstead Institute, Irvine, CA.

The report can be accessed through the Web at http://www.redevelopment.com/norby/index.html