A couple weeks back, I had a chance to sit down and chat with Mr. Leal about a few of his upcoming projects, his ideas on downtown, and how the Montage is progressing.
He revealed a lot of information, some of which was ‘can’t leave this room’ type material. Some of the information he revealed already came true, which at least in my mind, helps fortify the other information we discussed regarding his future plans. I like the guy; he put a lot of trust in me, a non-official-journalist, by telling me both on the record and off-the-record items.
I first asked him how the Montage project was going. He mentioned about 200 construction workers are on site every day building up the interior, adding balconies, and building up the Penthouse levels.
They are now putting a significant focus on the southern section of the building (The 2nd Street/Sierra intersection-facing side) whereas before, their plans were to finish up the tower first. Of course I asked why the change in plans, and its partially due to massive interest in their retail spaces slated for the bottom floor of the 2nd/Sierra corner. The retail sections, unlike the Palladio, have been reverse-engineered to cater to the exact type of tenant they are looking for. The developers made sure the spaces have all the mechanical capacities required, so the tenant can move in with minimal modifications to the space. So what type of tenant do they have in mind? The main restaurant pace will be a high end eatery, and a smaller café style bistro will occupy the other space. They are not interested in any traditional retail stores; Fernando wants dining experiences in his bottom floor, he says it ‘caters to the type of people buying our units more than traditional retail stores.’ He doesn’t anticipate having a problem getting the tenant he envisions, and admits turning down quite a few applicants who want the space who didn’t meet Leal's strict criteria and prerequisites. Nice!
Before we switched to another subject, I asked Leal about a comment one of my readers had made, regarding the color change of the Montage's decks and window trim from gray to white. The commenter seemed dismayed about it, yet I had a feeling there was more to the decision than just saving money or being lazy. According to Leal, the concept of gray paint was replaced with a white high-poly powder coated resin, because it won't begin peeling like paint does in a couple of years of abuse under the sun and cold, and withstand the test of time much longer. He said it was actually far more expensive to do the poly-coating than to paint it.
As you know by now, L3 Development is one of the 2 developers who pulled out of the 10 North Virginia Project. It’s a good thing the final developer left has a great reputation in Northern California (John Pappas, sorry if sp. Is wrong.) We talked about this at our meeting. Leal believes it’s a great project, however both L3 Development and Union Capital Investments both want to focus on their current projects (Source, CAC Meeting). Union Capital is doing the 100 North Sierra building, and L3 is of course doing the Montage. During our conversation, it was apparent that he has his little neighborhood of downtown that he really wants to focus on. And that makes sense, when one is about to acquire a hotel/casino right across the street from their development. A tens-of-millions-of-dollars rehab to the Fitz would surely make a residence at the Montage more appealing.
In reference to his 'neighborhood', we talked about some projects surrounding the Montage, starting with the Kings Inn. Unfortunately, L3 Development doesn’t have anything to do with the Kings Inn, and from his tone it seems he won’t be pursuing it as a side project. He did however have a great idea for the space. He thinks the Kings Inn building wouldn’t work well for residential purposes, and instead would be perfect for an office building, with office space for start-up companies at amazingly cheap rents…it would give smaller companies or businesses just starting out a chance to have space downtown, no major infrastructure would have to be in place to house smaller businesses, and it could be a start-up incubator of sorts. Or, Leal said it would be a great extension building for UNR. In either case, 'Given the cost of construction and availability of empty lots, I don’t think it should be demolished unless there is a plan in place to replace it or until all plans to rehab for another use have been exhausted," Leal mentioned.'
Our discussion then moved to the train trench cover. In a recent City meeting, Dave Aiazzi directed to staff to see the feasibility using a kind of future tax revenue from the Montage to bridge the funding gap in completing the trench (correct me if I am wrong on this Dave). At the time I interviewed Leal, I didn’t know about this. At the time, Leal smirked at me and said ‘The city will find a way to fund the train trench cover. That project will happen.’ It makes sense that it happens too. The plaza would be directly north of both the Montage and the Fitz, so it substantially impacts his property. It wouldn’t be a stretch to say that the plan to cover the trench was one of the selling points when he bought the Golden Phoenix. Leal spoke in detail and showed me his vision of the trench cover, which was one of those ‘can’t leave this room’ items. I can tell you that the long wait we’ve endured will be worth it, and that there will be a much higher chance of people utilizing the plaza. Hopefully any 'new' designs will be released to the public soon.
Our discussion then turned to the Fitz. I’m excited that this project is staying as a hotel/casino and not converting over to condos. I can’t reveal his plans, but I can tell you they are intricate, with everything being remodeled. ‘You will not be able to see any sign of Fitzgerald’s when we’re done.’ And the plans are grand, indeed. When/if they come to fruition, the Fitz will be unlike any other hotel in the country.
We wrapped up our discussion by talking about downtown in general. Leal has a unique view on downtown Reno. Many studies and staff reports indicate that first you must build up the residential, and then the retail. Leal feels that to bring residents downtown, you first must have the amenities that they seek in an urban life before they will even consider, such as fine dining, great entertainment, shopping and convenience.
In Leal's own words on a successful downtown: "A successful urban neighborhood has people walking to/from work, restaurants, coffee shops, and other retail establishments that are a necessity of life. Reno ’s downtown is evolving into an urban neighborhood. Look at the number of people that are out on the streets around the riverfront restaurants and businesses. This number has changed significantly in the 2 ½ years I have been here and will change even faster as people start to move in to the various projects going forward and as more and more businesses start to consider downtown a good investment.
I believe the two critical components that are missing in downtown is the presence of UNR, faculty, facility and students and regular visitation of Renoites that live in all of the great areas that surround downtown. Attracting participation from residents and students will be crucial to sustaining a vibrant downtown so that we are not so dependent on tourists. We must continue to give residents and UNR a reason to come downtown. Those reasons must come in the form of safety, cleanliness and enough retail options to create some critical mass. The area will continue to get safer and cleaner as more people move in and begin to govern their neighborhood. This in my opinion makes attracting new retailers and supporting existing retailer the critical path to our long-term success."