Reno Still on the Go

Reno-Sparks Activity Report

Several major projects are sustaining the Reno construction market, including Legends at Sparks Marina, The Montage, a new baseball stadium and especially the Tahoe-Reno Industrial Center.

By Christia Gibbons

Sagging gaming revenues and recessionary economy aside, the Reno-Sparks area in Nevada has got some stuff goin’ on.

When completed, Legends at Sparks Marina will encompass 1 million sq ft of retail and entertainment space, including a 1,000-room hotel/casino.

Image courtesy RED Development

The end of September and beginning of October saw the grand openings of major retailers in the $1.2 billion Legends at Sparks Marina destination development; luxury condo living became a reality with the opening of The Montage at 380 units; and there will be baseball in the spring when the Reno Aces suit up at the $80 million, 10,000-seat AAA Baseball Stadium.

Through all this, the Tahoe-Reno Industrial Center - the nation’s largest industrial park at 107,000 acres - continues to sign up tenants.

All indicators are that continued population growth will be strong in the state, with an additional 1.3 million people in the next 20 years. While the Census Bureau projects the U.S. will expand by 22% by 2028, Nevada’s growth is projected at 49%.

Jeff Hardcastle, the state’s official demographer, says the Tahoe-Reno Industrial Center in Storey County is a key driver.

Meantime, a new funding mechanism is finding some takers for projects in Reno. STAR (Sales Tax and Revenue) Bonds were used to build the 295,000-sq-ft Scheels All Sports store at The Legends. Brian Bonnenfant, project manager with the University of Nevada, Reno Center for Regional Studies, says these bonds require that “51% of the clients be from out of state and that’s good because instead of exporting, we want to bring visitors from the outside.”

Bonnenfant adds that Californians make up 55% of the people coming to Reno.

Candace Evart, president of Meridian Business Advisors, a Reno-based company specializing in economic analysis, says her firm is helping four other possible projects for the area get STAR bond financing, which allows 75% of sales tax revenue to be retained for the project.

“We have the outdoor life, the gambling and entertainment, but we need that one more little tug,” Evart says.

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When completed, The Legends at Sparks Marina will encompass 1 million sq ft of retail and entertainment at Interstate 80 and Sparks Boulevard, complete with a multiscreened movie theater and bowling alley.

RED Development’s Legends, being developed out of the company’s Kansas City office, is anticipated to be complete within six years. It will include a 1,000-room casino resort and spa from Las Vegas-based Olympia Gaming and T-Rex, a prehistoric-themed family adventure restaurant.

Casey O’Looney, Legends marketing director, says while RED Development isn’t slowing construction, in some cases tenants haven’t gotten their financing, or their vendors have had difficulties, so the broader grand opening has been delayed to spring. Target is the only retailer opened now.

“We have one national electronic retailer whose manufacturer can’t give them flat- screen TVs,” O’Looney says. “They can’t get their inventory, so they’ve had to delay.”

The Montage and baseball stadium represent downtown Reno redevelopment projects.

The Montage is a 22-story adaptive reuse of the former Golden Phoenix Hotel and Casino, complete with below-grade parking for 560 cars. The project will include 40,000 sq ft of retail.

Fernando Leal’s L3 Development of Chicago and Reno built the project and recently bought Fitzgeralds Casino/Hotel with the intent to convert it into a boutique hotel in the next two to three years.

Peter Wallish, economic development manager with the city of Reno’s Redevelopment Agency, says he looks to projects like The Montage and stadium as foundations on which to build on. “At a time when most American cities are seeing a downturn in construction, Reno is experiencing the opposite,” Wallish says. “We are fortunate to have several cranes in the air and have the momentum we see in the major projects downtown.”

As for the stadium, the Tucson Sidewinders have morphed into the Reno Aces and will play in the public/private stadium with phase one set to open for spring training. When completed, the project will include 125,000 sq ft of retail. It is owned by the Redevelopment Agency of Reno and Nevada Land LLC.

The Reno office of Devcon Construction is the general contractor and HNTB Architects of Kansas City the designer.

In all of the projects, the Tahoe-Reno Industrial Center is the granddaddy.

Len Gilman of L. Lance Gilman Commercial Real Estate Service says the Tahoe-Reno Industrial Center is in year four and “We’re just spoiled” by all the interest in the park. Focused on the first phase, Gilman says 4,000 acres of the first 30,000 developed have been sold. Infrastructure construction costs are estimated at $100 million.

While big companies, such as Wal-Mart and PetSmart, have built distribution centers on 100 acres at 500,000 sq ft, in the current climate, tenants are more interested in 10- to 50-acre parcels at 100,000 sq ft to less than 500,000 sq ft, Gilman says.

“People are seeing that this is a safe place to put their money,” Gilman adds.

Useful Sources:

www.experiencelegends.com
www.themontagereno.com
www.renoaces.com
www.lancegilman.com (Tahoe-Reno Industrial Center)

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