The Reno City Council voted unanimously Wednesday to sell a vacant lot in downtown at a steeply discounted price after the buyer argued that the coronavirus pandemic is lowering land values.
Tolles Development Co. wants to build a mixed-use commercial building on the land at the corner of Virginia and Seventh streets.
One of the building’s tenants is expected to be Jimmy John’s, a chain sandwich restaurant that is being forced from its location on Ninth Street because of University of Nevada, Reno expansion plans.
Cory Hunt, vice president with Tolles Development Co., argued the company’s planned project wasn’t viable if it had to pay market value for the land.
He also said a recent appraisal was incorrect because it was based solely on comparable sales and because land values are likely now lower because of the coronavirus pandemic.
The appraisal conducted in December valued the lot at $67 a square foot, or $502,000. The council decided instead to sell the land to Tolles for $375,000.
The city bought the land — which was the site of an abandoned motel — in 2007 for $710,000.
“My understanding is this project is ready to go,” Councilwoman Neoma Jardon said. “There’s an anchor tenant. There is shovel-in-the-ground construction ready to commence. And it fills the need for downtown revitalization to … activate that space, create light and activity which has been absent for a very long time.”
As part of the deal, the council also agreed to sell a small parcel of land on West Street to CCR Newco, a subsidiary of Eldorado Resorts, for $120,000. The West Street land, which is used as a public parking lot, is owned by the Reno Redevelopment Agency.
Although no appraisal was done for the West Street land, a broker valued it between $93,650 and $131,110.
To develop the Seventh Street lot, Tolles Development must buy two adjoining parcels that are owned by CCR Newco. But Hunt did not explain exactly why the deal had to include the sale of the Redevelopment Agency’s West Street property to CCR Newco.
That made Councilwoman Naomi Duerr uncomfortable. However, she still supported both land sales.
Proceeds from the sale of the Seventh Street lot will help the city fund the construction of its new police headquarters.
Anjeanette Damon is the government watchdog reporter for the RGJ. You can reach her at firstname.lastname@example.org or follow her on Twitter @AnjeanetteDamon. If you care about shining a bright light on decisions made by your elected officials, please consider subscribing to the Reno Gazette Journal.
Read or Share this story: https://www.rgj.com/story/news/2020/05/13/reno-sell-downtown-lot-developer-below-market-value-price/5188682002/