Northern Nevada Development Authority panel: Carson City needs commercial development to meet demand
Carson City needs more commercial development to meet demand and keep the economic recovery going, said a panel of industry insiders Wednesday, July 27.
“Building capacity to look to our future is probably the most important thing we’ve got going,” said Rob Hooper, executive director, Northern Nevada Development Authority, at the group’s monthly breakfast held at the Carson Nugget.
Hooper said businesses are interested in locating to the area.
“But, unfortunately, we don’t always have the capacity to meet their needs,” he said.
There are vacant industrial buildings in the city, but many of them are “functionally obsolete,” said Aaron West, CEO, Nevada Builders Alliance.
That means they don’t meet current market needs, not that the structures are unusable.
“We don’t mean the building is in bad condition. We mean that in today’s market manufacturers are looking for 24 to 36 foot clear heights. The buildings we have, it’s rare to find over 16,” said Brad Bonkowski, principal, NAI Alliance, and a Carson City supervisor.
The other problem is financing, which is still tight after the economic downturn, especially for speculative building.
That’s why NNDA and others are focusing on recruiting companies willing to build to suit and working on a certified site program.
The program requires a land owner to do much of the due diligence normally done by a buyer, then for the local municipality to verify it, all prior to making the property available for sale.
That expedites the process so a company or developer can purchase and build in much less time.
So far, one certified site is available, a 46-acre parcel on Arrowhead Drive near the Carson City airport, and the program has a second property in the pipeline.
“We are finally starting to see commercial construction here,” said Bonkowski, who said in 2015 commercial building permits increased fivefold while the total project values doubled.
The residential side is picking up, too, said Mark Turner, principal, Silver Oak Development Co.
Turner listed more than half a dozen current residential projects in one phase or another of development, from 31 lots to be built out in Silver Oak at the north end of town, to Schulz Ranch, the Lennar project which Turner said recently pulled nine permits to build, at the south end.
“We’re poised to start creating inventory that hasn’t been seen here in 10 years,” he said.
The residential market started to take off when home prices in the area began to rise, hitting a point that made construction make financial sense to developers and builders.
But that doesn’t mean we’re headed for another bubble that caused the recession, said the panelists.
“The last one was driven by easy financing, and lending standards are tighter than ever,” said West. “This is being driven by job demand.”
Much of that demand is coming from commercial development in Storey County, at the Tahoe Reno Industrial Center, which will help insulate the area from an inevitable downturn for at least the next three to five years, said Bonkowski.
“Even if all fail, they are investing so much money it would take three to five years for them to fail,” he said.
Reno’s median home price jumped to $413,405 in November, a 4 percent increase from the same month a year ago. Meanwhile, across greater Reno-Sparks, November’s median price of $400,000 remained unchanged from October.