Downtown Reno Ups and Downs
A lot of people have been emailing me, asking me what I thought of the recent downturn in real estate, if I would keep running my site now that some of these projects are on hold, and what the overall status of downtown is. No matter which direction downtown heads, I will be there to cover it, the good and the bad. As more projects are either completed or cancelled, you'll find my site taking more of a support role for businesses and residents downtown, instead of a more report style role like I am now. So let's get started on some updates and rants.
1. THE DOWNS - Condo Craze Over? What does that mean?
I think it's safe to say some of the projects as proposed aren't going to happen. Let's get those off our chests first.
- Denovo - With the Kings Inn going up for auction July 12, at 11:00 a.m. on the courthouse steps, for $3,500,000, it's safe to say Denovo, as proposed, is dead. Suffering a series of setbacks, partnership changes and never really settling on a final solid design (another tower was added to the mix toward the end of its life), this project just couldn't get off the ground. There were mumblings of Denovo becoming apartments, however I'm sure that plan wouldn't have looked like Denovo in concept, it would be way too expensive for apartments. It doesn't matter anyway, the property is up for auction/sale. The Kings Inn looks worse now than it did 3 years ago, after abatement was done on the building, and the building was then abandoned completely, with broken windows, faded paint, and pigeon poop everywhere.
- Arterra - As I mentioned on another blog, Arterra is on hold while Capstone recasts the project to meet demand for larger units. According to Chris Nelson, they overestimated the amount of young professionals wanting smaller 1 bedroom units and studios, and underestimated the amount of empty-nesters who contacted them looking for larger units. So, deposits were returned to folks to reserved, and Capstone scrapped the 2008 groundbreaking date. He did however, reassure me the project s NOT cancelled indefinitely. They are still breaking ground on their large Capstone Center in the Museum Tower, and they own the land, so they can afford to sit out the market if necessary.
- Wingfield Towers - I was a HUGE fan of this project, but as time progresses, I have my doubts about this project. First, the developers stopped returning my emails months ago regarding the status of the project. Second, their domain name http://www.wingfieldtowers.com, used to go to a coming soon page with their logo, now it goes to one of those 'this domain name was just purchased' style pages. No more coming soon. Also, the project claimed bankruptcy in order to close on the land, yet that was a month ago and the land is still not owned by them according to assessor data.
- Waterfront Project - I mentioned quite some time ago I felt this project is officially dead. Other than some rumors here and there that they are retooling the project to start with the retail and mixed use portion first, this project still pretty much seems stalled. The plusses? They own the huge huge chunk of land still, they paid the $12,000-per-parking-space in lieu fees to close First Street between 2nd and Lake, and they halfway finished a sales office; so they definitely have a financial stake in building SOMETHING there, however they can afford to sit and wait out the market if necessary. The term 'Waterfront District' has been thrown around a bit, including their web site.
- Village at Idlewild - Midway through completion, and citing less than half the sales originally anticipated, the remaining 6 unreleased buildings will be leased out, rather than sold. I've heard both positive and negative comments on this. If you look up 'apartment/condo hybrid' into google, you'll find quite a few projects that combine both concepts into one building. We'll see how this pans out, but from the sound of the letter mailed to residents of Village, they didn't really have a choice in order to finish building amenities and common areas already promised.
Whew ok, now that we got the negatives out of the way, let's look at the positives.
- Belvedere Towers - Sales are still going strong considering the market, common areas will be completed by mid-summer, and they hope to move the first 4 floors in by August, while construction continues on the upper floors. They will be constructing the lofts soon, which I believe will be overhead where the casino used to be.
- Invasion of the Smaller Projects - 8 On Center is more than half sold. Most people thought they wouldn't even sell one unit. Modern on Cheney, a 4-unit modern project by Jack Hawkins and Baron Hershberger, is sold out. 3 smaller projects are planned for downtown; 275 Hill Street will start construction any day now, all permits are pulled for the necessary rehab. State Street Retail Center just submitted their tentative map for review, and should go before the planning commission in July. Ponte Vecchio is on schedule to start construction this summer as well.
- Grant's Landing - Construction slated to start in July, they spent 6 months doing ground work, laying sewer lines, flood drainage system, landscape irrigation, and a sales office. Grant's Landing will really help fill in the neighborhood, especially coupled with the twin mystery Ryder projects.
- Montage - The saving grace of this project is its variety in models. From what I have heard, most floor plans have been selling well, with the tower units only doing so so.
- Palladio - The units were going to be ready on June 15, but where are the residents? I see SOME lights on at night, but about the same in proportion to Riverwalk Towers. Some good news here is a couple of the 'Available' signs on the retail portions, particularly the one on Sierra St and the other one on First Street, are gone, meaning MAYBE those spaces are spoken for with new retail coming.
- There is activity again on the site of Truckee River Townhomes over on Dickerson Road west of Idlewild Park.
2. THE UPS - The condo craze may have died down, but there are positives signs elsewhere of life downtown.
- 100 North Sierra has some major retailers interested in its space (I am sworn to secrecy beyond that, don't want to jinx the deals), and I heard a rumor from two sources they are waiting for the lease of the Antique Mall to expire to start construction on the remodel in August.
- There is activity going on inside La Bassola's old space, it looks like an art gallery is going in?
- Empty spaces inside Ross Manor have become an art gallery as well.
- I heard a rumor Blind Onion is taking a serious look at the old Liquid Lounge spot on West Street.
- A new 600-room hotel casino will be built on the west side of town. Property is already being demo'd for it, and zoning changes are nearly in place.
- Farmer's Market begins July 6.
- If a location can be pinned down, we may be getting a baseball stadium downtown.
- The Redevelopment Agency's key priority projects are all proceeding as planned, in most cases faster than an anticipated, including acquisition of the Post Office, creation of a permanent urban market, finally getting retail built at 10 North Virginia, the facade improvement project for Virginia between First and Commercial Row, negotiations with a Casino Owner to build a parking garage downtown.
- More people are enjoying downtown than ever each sunny summer day, and the main summer events haven't even started yet.
So there you have it, a massive post about the negatives and positives happening downtown. What are your thoughts? Post a comment! Not just mindless criticism either, let's get a real dialog going about the status of downtown. Have any ideas for City Staff to keep the momentum going? This read this site, you know ;)
Post your comments
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.