News 6-27-07 - The Ups and Downs of Downtown
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Posted by: Justin - 6/28/2007 7:52:42 AM
It's really disheartening to see so many condo projects fall by the wayside. I can't say I'm suprised though. They were a bit too upscale/pricey for our market IMO. Not a single condo project proposed for downtown was aimed directly at the local market (e.g. average joes, many of which work in casinos).
On a side note, have you heard anything new on the ice rink canopy/retail building? I'm tired of all the talk......they need to get to work already.
Posted by: ModGirl - 6/28/2007 9:55:49 AM
First of all, what downtown DIDN'T go through this phase before it became "the place to be"? It seems like these condo projects that pulled out, or put things on hold have decided to just dip their toe in before taking the plundge. As a result you can see that they may be thinking it's "to soon". Perhaps they are waiting for the other developments to finish up (such as the montage) before they get started. Look what happened to 8 on Center (on a small scale), Not one unit sold, but once they took down that chain link fence and project was complete, BAM, 7 sold within 2 months! It is hard for people to put down that much money on a rendering. It takes a lot of trust on the buyer's part, to know that what they are purchasing is worth it. How many people buy a car or home online? Same thing... they need to physically see it, experience it. the reason why the Belvedere and the Montage are more successful, so far, is because they have an actual unit set up. The buyers can visualize themselves drinking a beer on a hot summer night out on their balcony. I believe that's the secret here... It's called marketing..... (Arterra was on the right track, building their sample unit and sales center)
On a positive note, the more retailers, restaurants, bars, clubs, entertainment, ect. go in, the more desirable it is to live downtown. It's just going to take time. I guarantee a year from now, when the Montage completes, we will see ground breaking right and left. The Montage is a guini pig, and it seems to look pretty successful so far! Lets go back in time to last summer...... and look what's new today!!! I swear my crystal ball never lies. I see nothing but good things happening downtown.
Posted by: Tom - 6/28/2007 10:15:00 AM
One piece of good news worth mentioning is the opening of the Wild River Grille in EJ's old spot. Very nice place with a fantastic patio for dining by the river. I've been a couple of times and like it a lot. Seems pretty busy most of the time as well.
Posted by: Robert - 6/28/2007 10:17:05 AM
Great update. It is with mixed emotions that I read this post. As a homeowner in the Southwest area, I have watched in dismay as the value of my house has declined. This is in part due to the rise in interest rates, but it is also because of the excessive inventory on the market. I would rather see stable demand and less development, especially the sprawling variety. The condo development is great because it makes use of an existing footprint.
Posted by: Faust - 6/28/2007 10:18:58 AM
I've always pondered the condo stuff. It's seemed a little too much, too many, and the first to fall in a housing bubble. I'm a little concerned that the absense of perfect planned profit doesn't cause the builders to go cheap in finishing or managing the properties too. Reno has too many junky looking buildings from the get rich quick plans of the old days. The last place we need looking cheap is downtown (again). Indian gaming is taking its bite out of Reno. The housing crunch continues to hurt both Reno and the people who want to sell elsewhere to move here. If I were to suggest a strategy it would be to blow off the flashy short term schemes and invest heavily in long term infastructure around downtown while we weather a slower economy. Think long term and of the legacy future residents will enjoy.
Posted by: Bugsy - 6/28/2007 11:28:57 AM
I love the updates like that, thanks Mike. Im assuming that there is still no word on the ground floor of the riverwalk towers and if the urban market is going there or any other business going there. Have you heard an update yet?
Posted by: Mike Van H - 6/28/2007 12:22:18 PM
Good points everyone. Wild River Grill is awesome. I think you are right Modgirl, people want to see some of these finished first. But there is a definite stall in the market no one can argue with....That's why some of these smaller projects are successful, less units to sell to a smaller market. Also it extends to the surrounding neighborhood. You can have the coolest condo in the world but if you are staring out your window at the Kings Inn, or a bunch of burnt-out bygone casino-era buildings on Virginia, then people may think twice about it. Modern on Cheney, 8 on Center, Ponte Vecchio, the State Street project are all in established neighborhoods with views of Mt. Rose even being a few stories tall. This is why I think the FACADE IMPROVEMENT PROGRAM PILOT is so absolutely essential...a make or break. Sure, the street improvements were nice but look at the facades of the buildings on Virginia from Commercial Row to First Street. Are you out there Gillian? Please please let this happen.
Bugsy, no word yet on where the urban market will go, I do know that a sales person for the Belvedere told me it will NOT be going in their bottom floor.
I'm glad most of you still have a positive outlook, I do too. It may not happen as fast as we like sometimes, but it's still headed in a positive direction.
Posted by: Christian Fey - 6/28/2007 12:55:05 PM
Well I suppose I have to say that it's sad to see the loss of all of the projects that were going to come downtown and really revamp our downtown economy and demographic. I am glad though that a lot of the projects are still around or at least still working to make it to the final phase. Keep up the good work Mike!
Posted by: Denise - 6/28/2007 2:14:17 PM
Thanks for your update Mike. I think the art in La B and Ross Manor are temporary displays for the Dada Hotel event going on this weekend. If you don't know about Dada, it is a many venued, multi-meduim art event starting today and going on thru 6/30. From what I understand, the largest or central part of the show takes place at the El Cortez hotel.
Posted by: ModGirl - 6/28/2007 2:43:58 PM
Today I had lunch with a good friend of mine down at the Wild Grill. Excellent. Anyway, he brought something to my attention as we were talking about the development of the downtown. I wanted to know any opinions on this matter, bring some light on the subject. He told me that EDAWN's (Economic development Authority of Western Nevada) budget was cut in half because of the lack of business coming to Northern Nevada. He then went on to say that people are taking jobs elsewhere because salaries aren't paying high enough to compensate for the cost of living. There is a domino effect going on here. The way I see it, there are a lot of fence sitters out there... too many in fact. Yes, we got the Montage taking a chance, but here is the thing..... Start up Business' (such as retail) looking to locate downtown are being effected greatly by this whole slump we are in. Loans aren't being handed out on these calculated risks. They will look over a business plan and scrap it because they are seeing projects fall through right and left arguing with the fact that they overestimated the market size. SO..... no business. no new jobs created, still a vacant building with potential. Every time a project falls through, or puts itself on hold, it slows down the progress of the downtown. Here is a thought, I hope to see the Reno Redevelopment Agency award more grants (do they already do this?) and loans to small start up business'. Maybe add more incentives to business owners willing to locate downtown... something. I know things take time, just have to figure out ways to keep the improvements moving forward. Thanks for the down low on these projects Mike, you do a great job. It really helps me stay on top of things when it comes to getting my project started. Gotta be one step ahead! I just realized.... I post alot on this site..... huh.... I do have a job, I swear!
Posted by: Ken - 6/28/2007 3:22:03 PM
On the failing projects - the skyscrapers in particular - that's a matter of simple economics. When steel and concrete prices are rising, that means that other, richer places, need the material more, to contribute to their own local boom. Cities always go out before they go up, that's another matter of economics -- every skyscraper is different. Every subdivision is the same. Special cases are anathema to bottom line especially in small markets where demand for the specialty item cannot be proven. That explains what Justin says about the prices of the units. The cost of the development does have to be spread amongst the buyers. Less buyers = higher per unit costs. I'm glad to see the smaller developments proliferating and I hope downtown starts to fill up with real, sustainable, 6 - 8 story developments which are priced to move. That'll help fill downtown.
Also I'm not in favor of the Keystone casino but what can ya do. I do think it's funny that while gaming analysts say there's no room for growth in the Reno market, developers are lining up to build new casinos all over town. Who's working for whom?
Posted by: Aaron - 6/28/2007 3:40:58 PM
I believe now is a fantastic time to purchase property downtown. I own a condo in Park Tower and I can tell you that I am not selling any time soon. I believe the construction of these mega projects were just not 'Reno', where as the smaller more eclectic variety are much more up our alley. Once the supply from the existing condo conversions is sold my belief is that property values for condos downtown will see a sharp increase. We have attained a critical mass downtown, and once the projects underway are completed and being lived in there will be more demand than ever for properties downtown with very little supply coming on line. If you buy now, in five years time you will be very very happy you did.
Posted by: Brian - 6/28/2007 9:58:28 PM
Well I am bit of a dreamer about things. I like the popular saying,If you build it they will come.
Its true. You cannot expect people to come if nothing is materialized and static. I see downtown as a chessboard. The developers are making their moves based on what others are doing. with larger scale projects
being checkmate, no one seems to be willing to take that move except perhaps Montage.
I look at the Waterfront project and see a project that has stalled out for over a year, by this time we should have seen steel soaring into the air. The public has been notified little about what is really reality here.
We have little information on the developer. this makes it hard to fuel any information to us to increase positive feedback.
Wingfield towers is different. we have been notified of a fall ground break. But with them in bankruptcy we
shall see. I hope for the best.
Reno is doing much better then years past,but still a stigma lingers, something always seems to snag here. Reno needs landmark developments. Reno must learn to be innovative. Reno has lost its identity. Too much history has been upturned for empty stagnant lots.
Place something meaningful and different in reno and see it really grow. I have faith in this town.
Ok that is my rant. Mike you have given us here in Reno an invaluable tool to speak and get the real news on projects. Thanks.
Posted by: battlmnkey - 6/29/2007 3:10:39 PM
I'm a little sad the projects are getting canceled but I would have been totally shocked had they all gone in and sold. I feel like since I bought a condo in Park Tower that I talk to people EVERY day about living downtown, and buying, and there's just not enough people with the money (that don't have dogs or kids or want garages, etc.) for condos. There are a lot of us, though.
I think that the growth of downtown has been amazing and steady, not exponential like these crazy condo projections were, so I don't see anything wrong.
I love downtown and I wish everyone would just move here already so I never had to drive again!! I totally agree with that 5-year thing said earlier.