A developer is looking to purchase site of former community assistance center for a six story workforce housing project.
In the upcoming Wednesday, April 10 Reno City Council Meeting, staff is seeking direction from Reno City Council on entering a purchase agreement with Bash Capital, LLC.
Staff requests direction regarding the Letter of Interest received from Bash Capital, LLC to purchase the former Community Assistance Center (CAC) properties located at 315 and 335 Record Street, (Assessor’s Parcel Numbers [APNs] 007-313-27, 007-313-28, 007-313-30, 007- 314-14, 008-350-10 [Portion], & Portion of Record Street [No Parcel Number]), which consists of five parcels totaling approximately 2.4+/- acres, to develop an attainable workforce housing project that will be six stories tall, and offer rooftop views of Greater Nevada Field and Reno Aces games. The City of Reno Management Policy covering the Disposition of City-Owned Real Property (eff. 06-25-19), Section IX. C. requires Council to determine if and how the property should be disposed of.
As the Nevada Cares Campus was completed in the Spring of 2021, and operations ceased at the City-owned properties located at Record Street, the City no longer has a public need for the facilities and the City could dispose of these properties. The City-owned buildings are generally known as the CAC, which consists of two buildings, one being 47,992 square feet in size and the other 21,937 square feet. The general area is over 2.2 acres and will require an additional portion of Record Street to be abandoned.
Currently, both buildings are in a state of substantial degradation with considerable water damage and mold from a leaking roof. The utilities encompassing the electrical; heating, ventilation, and air conditioning (HVAC); plumbing; and elevator systems have been vandalized multiple times. There have been 13 break-ins since the campus closed around November 1, 2022, and copper plumbing, fire alarm panels and devices, elevators, windows, walls, floors, doors, and electrical wiring and fixtures have been damaged and stolen. The costs to repair these components to bring the building back into operation are roughly estimated at $2,750,000. The five years of maintenance and operations costs for the CAC from January 1, 2018, to December 31, 2022, totaled $1,973,840.
Bash Capital has submitted a letter of interest and is proposing purchasing the CAC and surrounding property under two options described in the attached term sheet.
Option A: A purchase price of $1,500,000 with no development agreement.
Option B: A purchase price of $1 where the buyer will enter into a development agreement under which the development will be a multifamily project that will have at least 51% of its residential units offered at 80% (AMI) or less per Housing and Urban Development (HUD) income limits. The project developer is seeking U.S. Department of Transportation (USDOT) funding which will supply a 40-year note at 4% interest and five years of debt service abatement for transitoriented
development.
The CAC was built utilizing $3,000,000 in CDBG funds, which amounts to 15% of the project's original costs. If the property is disposed of, or changes to a use not eligible under CDBG, the City's CDBG program must be reimbursed in the amount of the current fair market value of the property, less any portion of the value attributable to expenditures of non-CDBG funds for acquisition of, and improvements to the property per 24 CFR 570.505 & 24 CFR 570.503(b)(7). Since Workforce Housing provided at 60 to 80% AMI is eligible, the CDBG funds could stay with the project under Option B.
In an effort to facilitate the revitalization of downtown Reno and to follow through on the strategic priorities and goals of the City to increase infill development, manage debt, and explore opportunities to address affordable and workforce housing, staff recommends the City dispose of the Record Street properties either through a direct sale to a qualified developer that meets the economic development and redevelopment purposes defined by Nevada Revised Statute (NRS) 268.063, entertain proposals via the Request for Interest (RFI)/Request for Proposal (RFP) process, or through a public auction.