Magazine article Real Estate Issues

Urban Infrastructure and Sustainability

Magazine article Real Estate Issues

Urban Infrastructure and Sustainability

Article excerpt

Speakers:

Don Clark

Principal, Cathexes

H. Kit Miyamoto Ph.D.

CEO, Miyamoto International

Steven Straus

President, Glumac

Moderator:

Ed Friedrichs

Friedrichs Group and Partner, Donald J. Clark Group

Resiliency and sustainability are keys to creating smart cities for the 21st century and beyond.

Creating a collaborative environment among all stakeholders, the Developers, Architects, Engineers, City Officials and Staff, as well as the community at large, is the key to success with such a large, complex project.

The panel uses Reno, Nevada as the example of a city in the midst of reinvention. Each member of the panel, including the moderator, are part of a team that has designed a $1.2 billion project for a sevenblock portion of the city center that they believe will be a model of resiliency and sustainability that other cities will be challenged to emulate. This approach to planning, infrastructure development, conservation and municipal collaboration is unique.

During boom times in Reno, beautiful suburban homes and shopping centers flowed south, north and northwest, but large sections of downtown remained blighted. The 2008 recession hit Reno as hard as anywhere in the country. About 10 years ago, Don Clark, an architect and developer, began strategic planning for an area just west of Virginia Street, the main north/south axis through Reno, called "West 2nd District." Project planning took a hiatus until one and a half years ago when it began again in earnest.

Clark knew the approach to getting such a massive project accepted, funded and developed had to be different. The few endeavors that were attempted in post-recession times did not come to fruition, leaving the city, which had committed to tax increment financing redevelopment bonds, deeper in debt and development-shy. But better times and an aggressive economic development effort in Northern Nevada has attracted many new employers to the community. This has diversified the economy and promises 55,000 new jobs over the next five years.

The area of this ambitious development, which has a six- to seven-year build-out horizon, is ideal for redevelopment. It is adjacent to the casino and entertainment core down to the Truckee River and the desirable Riverwalk district. In addition to proximity to the University of Nevada at Reno and I-80 corridor, the property is close to the best public high school in the Washoe County School District. Saint Mary's Medical Center is three blocks north. A relatively new Triple-A ballpark is six blocks east. Today, the redevelopment area is characterized by vacant and blighted properties and run-down weekly motels, a throw-back to the days when Nevada was known as a quickie divorce state, the only requirement being six-weeks residency. As a private development, the group has acquired the majority of the property.

Because of Reno's history and financial situation, the conventional method of using tax-increment financing (TIF) to bond against future tax revenues to put in infrastructure and acquire land is not available. As Clark considered the project, the idea of utilizing TIF funds was virtually impossible because of the city's current debt load. Instead, the development group and partners are investing in the infrastructure upfront, taking on the risk and realizing reimbursement only when the project generates actual increased tax increments. Because it's a blighted area, the district qualifies for some New Market Tax Credits as well.

"As you do an urban project, there is incredible complexity," Clark said. "We are embracing the complexity. Our confidence in the vision, the strength and diversity in Reno's new economy, and the collaboration with the city, convince us we will be recover our investment down the road. We are also working with the city to shape the expenditure of the tax increment beyond our needs toward investments that raise the value of the surrounding community"

Clark described the project as a "totally different animal than normal development, as we construct this mixed-use area that will support 2,000 new residential units, 450,000 square feet of new office space, 350,000 square feet of retail space and two hotels. …

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