Downtown Reno Remains “The Biggest Little City”
Since Myron Lake built the first permanent bridge over the Truckee River on South Virginia Street in the 1860s, the heart and soul of Reno has remained in its downtown area. From its humble beginnings as a rough and ready trading center, the core of the “Biggest Little City” has survived the shifts of growth and change that at times have weakened its gaming foundation and lured supportive retail to the outlying areas of the community. For the past several decades, however, downtown redevelopment has centered on the promotion of its burgeoning arts district along with projects that will encourage people to live, as well as work and play, in downtown. “The traditional gaming model that Reno depended on for decades is gone,” says Fernando Leal, managing partner of L3 Development LLC. Leal uprooted from Chicago three years ago to become a major player in the revitalization of downtown Reno. “I saw a community at a very important stage in its evolution,” he explains.
One of the cornerstones of current regeneration is providing appealing housing options in order to attract people to live downtown. Although a plethora of projects hit the drawing boards during a roaring economy just several years ago, fewer have survived the current crunch to actually open their doors to residents. Two of the standouts are The Palladio, owned by Palladio LLC, and the Montage, owned by Montage Marketing Corporation (MMC). Both are luxury high-rises several blocks apart on North Sierra Street. “People are desiring a simpler lifestyle,” explains Kathie Bartlett, leader of The Palladio sales team. “People who move in absolutely love being downtown.”
Another cornerstone to attracting people downtown is the opening of the Reno Aces Ballpark, constructed in exacting detail to house the area’s first minor league professional sports team. Although teams of less stature have come and gone with lukewarm support over the years, fans are betting that as a Triple-A team, the Aces will fulfill their long-awaited dream of having a truly viable hometown team. “This is a terrific market. There are no professional sports here,” says Stuart Katzoff, managing partner of SK Baseball LLC.
Equally important to the downtown reinvigoration is growing retail shopping along with restaurant and entertainment options. Tucked in several warehouse-style buildings between First and Second streets on West Street, the West Street Market is designed to meet all three of those criteria, according to City of Reno Redevelopment Agency Senior Management Analyst Shelli Fine and manager of the market. “This market has the ability to do a lot of programming,” Fine explains. “It’s not just a place to shop and eat.” Further north on West Street, the ReTrac Cover overlays two blocks of the ReTrac train trench, providing the future home for retail. “We want to bring retail back into downtown Reno,” says Jessica Jones an Economic Development Manager for Reno’s Redevelopment Agency.
Some locals fret that the overall development has taken too long, but others are more optimistic, pointing to the substantial changes that have taken place in just the past few years. “What has happened in Reno in the three years I’ve been here has been hugely significant,” Leal says. “In five years we will have a complete renaissance with more activities in a space where people will live, work and play,” Jones explains.
The Montage
With 22 stories of glass and concrete, The Montage offers a urban lifestyle in the former location of the Flamingo Hilton and the Golden Phoenix Hotel & Casino. As the largest vertical residence in downtown, the building contains 380 condominium units. Starting prices range from a low of around $130,000 for a studio to more than $800,000 for a penthouse. The development epitomizes Leal’s vision of downtown living. “Reno has grown up to its urban lifestyle,” he says.
Like almost every other construction project, however, The Montage has been affected by the economic recession. With the project coming online, MMC has been preoccupied with adjusting prices to reflect the downturn in the housing market, with existing buyers receiving reductions from 20 to 35 percent based upon the type of unit and how long they have owned it. As purchase agreements were modified, residents began to move in the end of March.
With around 140 units sold, MMC still has its work cut out for it in order to fill the building, however. Although Ruth’s Chris Steak House currently holds a lease for an 11,000-square-foot restaurant, the project appears to be on hold although it is hoped that the lease will be the catalyst to push it forward. Leal believes that patience is needed for the retail component of The Montage to be realized. “All retail is stagnant nationwide,” he says. “We can’t expect major growth in the next 24 months.” He’s betting on a turnaround then when retailers will show increased interest in a reinvigorated downtown area. “They believe the future of retail will be concentrated in downtown with The Montage as the epicenter,” he says.
The Palladio
Rising on the banks of the Truckee River, The Palladio delivers on its promise to provide upscale living in downtown Reno. “We have the best location in downtown. It’s right in the heart of everything,” Bartlett says. The development offers one-, two- and three-bedroom residences with a variety of river, city and mountain views.
In contrast to the belief that downtown condos would be purchased primarily by investors, Bartlett says that the vast majority of Palladio owners are primary residents, of which two-thirds are empty nesters and about 20 percent are young professionals. “It’s a very nice mix of people,” she says. It seems to meet some developers’ goals of having permanent downtown residents who will help revitalize the city core.
Although the building is 85 percent occupied (only 14 units remain unsold out of 92), the road to residency has been somewhat rocky. With the real estate market in decline beginning in 2005, however, Dave Clark, who manages the project, says prices have had to be adjusted to reflect that. “Our target is to be sold out in 18 months,” he explains. “We’ve adapted prices to meet the market. There’s a lot of competition, but I sense a bottoming out of the market and enthusiasm coming back in.” In the meantime, he continues to pursue lease transactions for the retail space available in and around the building, saying he has about 45 percent of it committed so far. Although he says the market is ready for hard goods, such as retail clothing stores, there is renewed interest in restaurants, especially with Palladio’s river location. “People are recognizing the opportunity to create a market presence,” he explains. “We’ve offered significant incentives.”
L3 Revitalizes Fitzgerald’s Hotel & Casino
In addition to its interest in The Montage, L3 Development Co. has acquired the former Fitzgerald’s Hotel & Casino which it intends on developing as a boutique hotel. The 351 rooms will be remodeled and reconfigured into 200 suites as phase one of the project. Reflecting Reno’s connection to bowling, the development will include a Lucky Strike Lanes & Lounge that offers trendy dining and clubbing along with bowling. “It’s embracing what Reno is,” Leal says. “It casts a wide net demographically.”
In spite of setbacks, Leal continues to bubble over with enthusiasm as he talks about his newly adopted hometown. He believes the future lies in providing the urban amenities that are considered commonplace in most major cities, along with expanding beyond Reno’s dependence on gaming and capitalizing on the uniqueness of its geography. “I moved here because I fell in love with Reno. I drink my own Kool-Aid,” he says.
Reno Aces
When the Tucson Sidewinders came up for grabs in 2007, SK Baseball nailed the deal and made plans to move the team to Reno. “My first interest was to own a sports team,” says Katzoff, whose family has a history of successful ventures in real estate and restaurants on the East Coast. Viewing Reno as a growing virgin market for high level professional sports, SK seized the opportunity by building a state-of-the-art stadium several blocks from the casino district on Virginia Street. Borrowing all the best ideas from other stadiums around the country, Stuart Katzoff says he tried to incorporate them into the Reno Aces Ballpark. “I’ve built a mini major league ballpark,” he says. The only difference is the size. The amenities are the same.” To vary the overall experience, the park offers 15 different viewing areas such as dugout, drink rail and picnic area seating. “Each one is seeing it differently,” Katzoff explains. To broaden the appeal, action at the park has been designed as an overall entertainment experience rather than just a baseball game, with a kid’s corner, fireworks and special events along with a scoreboard that is a show in itself. “There will be people who come who won’t even look at the game,” he says. “It’s a family experience.” To make it family-affordable, especially in these economic times, ticket prices have been kept low, ranging from $7 to $29.
For die hard sports fans, the Reno Aces represent a long-awaited event after having seen the demise of a variety of lower level sports teams over the years. “This is the best brand of baseball in the world. You can’t tell the difference in the play (from the majors), but you get the intimacy of the minor leagues,” explains T. J. Lasita, director of media relations for the team.
Timing has played a positive part in this project with SK being able to purchase the Sidewinders in time to take advantage of around $27 million in rental-car tax revenues provided by Washoe County for stadium construction. With a $60-million price tag for the facility, the county contribution is welcome indeed. The timing of the project could have been better though, with the national economic recession slowing growth in the area. “The economy has made everything tougher,” Katzoff says. “Getting corporate sponsors has been difficult, especially banks, car dealers and car manufacturers.” Even so, the ballpark was finished on time for the first ball to be thrown out on April 17. Katzoff also says they expect to be in the black the first season. “We have an opportunity to have a very profitable venture and we’re on track,” he says.
With fans hopefully filling the stadium throughout the season, SK is free to concentrate on phase two of the project which is the development of an entertainment district surrounding the park. With development rights to about 17 acres, the immediate focus will be around 40,000 square feet for restaurants and retail options to be completed by April 2010. “The ballpark is just the anchor,” Lasita says. In an effort to make more efficient use of the stadium and to keep people coming to the neighborhood, Katzoff emphasizes that the ballpark will be used off season for other sporting events and concerts. “We want to make it a 365-day venue,” he says.
West Street Market
It took a bit of vision on the part of the City and its Redevelopment team to take three 1920s brick buildings on West Street and turn them into a thriving urban market that promises to be a new chic place “to see and be seen.” With around 8,500 square feet of indoor space and another 6,200 of outdoor courtyard to lease, the market offers a dozen retail/restaurant spaces and several kiosks with a funky urban ambiance. When the weather permits, the selling space will also flow out to the street. Like other urban markets, such as the expansive Ferry Building in San Francisco, West Street Market emphasizes food, but also offers an eclectic mix of retail. “It’s meant to be a place to get food and sit in the courtyard or to get it for takeout,” Fine says. Of course its location, just a stone’s throw from the Truckee River, puts it smack in the middle of all the outdoor-oriented events in downtown, such as Artown, the River Festival and Hot August Nights, when the market is expected to be hopping with people.
Opened in December 2008, West Street Market is already 83 percent occupied with tenants that include West Street Wine Bar, Reno Envy, Great Basin Basket and Earthly Delights. With an emphasis on small local businesses, the market is designed to showcase Nevada products and also give smaller operations a less costly way to jump into a business venture. “We’re trying to attract small business owners and facilitate them starting up,” Fine explains. Brick and mortar tenants are encouraged to sign five-year leases, but kiosks and temporary stalls are offered for less commitment.
Capitalizing on the popularity of farmers’ markets, West Street Market will inaugurate its own version of it with a weekly Sunday happening from June 14 to September 13 from 10 a.m. to 2 p.m. In addition to the expected local produce offered by the participating growers, the food purveyors will offer special brunch items to create a more festive atmosphere for the event. Fine says she is working with the Nevada Certified Farmers’ Market Association to have year-round participation. Although fresh produce wouldn’t be available at certain times, other Nevada products, such as jams and honey, could still be sold. “We really want to have a bigger farmers’ presence,” she explains. In addition to the food and retail, the market also has a permanent stage and sound system which facilitates a variety of programming, such as classes, musical events, children’s activities and charity fundraisers. Fine says the space is offered to local nonprofits at no cost.
As one more cog in the wheel of downtown redevelopment, West Street Market reaches out in its own unique way to attract and retain people in the downtown core. “The target market is two-fold,” Fine explains. “First are all the people who live and work in the downtown area and a second audience is all the people who’ve begun to discover coming downtown.”
ReTrac Cover
Since the 2006 completion of the Reno Transportation Rail Access Corridor (ReTrac) project, which included sinking the Union Pacific Railroad tracks 33 feet below street level, ReTrac remains Reno’s largest public works effort since the project’s completion to date. The ReTrac Cover overlays two blocks of the trench as it passes through downtown.
The change in downtown Reno is astounding, with far less accidents in the ReTrac area, traffic flow is greatly improved, emergency vehicle access is enhanced, property values of buildings adjacent to the trench have significantly increased and there are even various environmental benefits. There are now 120 acres of new real estate (valued at more than $11.5 million dollars) available for development or open space in downtown Reno.
Additionally, the ReTrac Cover adds usable space where only air existed before. “We need new space as well as reinvigorating the old,” Jones explains. Even with no development on the cover, it has the added advantage of making those two city blocks more pedestrian-friendly. With the addition of 30,000 square feet of prime real estate in the middle of downtown, however, developer juices begin to flow. The retail project will be the completion of 10-15 specialty retail shops that will add a pedestrian shopping environment to that area of downtown. “People don’t like to walk through empty space,” Jones says. “This will complement the existing core.” Also, the ReTrac Cover can be used for additional space during special events, thus enabling the city to close fewer of the streets during those times.
Although the cover is complete, the economic recession has caused about a one-year delay in the bidding process for the completion of the retail phase. Jones says they hope to begin the process in the fall with a scheduled completion within three years. Despite delays, she remains bullish about the overall future of downtown redevelopment. “The council has put themselves on the line for things that have turned out to be wildly successful,” she says.
