Airport Authority board rejects its only development bid
May 25, 2005
Reno-based Ribeiro Companies will have to sweeten the deal on its offer to lease 250,000 square feet in front of the Carson City Airport if it wants to develop a retail/light industrial center there.
In an Airport Authority board meeting that was marked more by its deviations from Robert’s Rules of Order than its discussion, the board voted 4-2 to reject Ribeiro’s bid to lease the seven acres. Chairman Neil Weaver and board member Bob Brogan cast the dissenting votes. Board member Collie Hutter was absent.
Weaver said after the meeting that he dissented because he wanted to accept Ribeiro’s offer of 8 cents per square foot, which equals a monthly rent of $1,247. He said Carson City residents can use the retail buildings, gas station and restaurant that Ribeiro proposes.
“I felt that it’s in the community’s better interest,” Weaver said. “We serve the community, not just the airport.”
Other board members rejected Ribeiro’s offer because it was lower than the 30 cents per square foot per year that they had requested. The lease would be for 50 years.
Board member Gary Handelin, making the motion to reject the bid before any discussion, said he would be uncomfortable awarding the lease to a company that bid so low. The motion was seconded by board member Harlow Norvell.
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Board member Ted Barben said he “covets this kind of entrance” to the airport that Ribeiro could build, even so much that he could consider taking less than 30 cents per square foot, but not as low as 8 cents. He then asked if Ribeiro would “sweeten their offer.”
Board member Richard Staub said the board should only vote to reject or award the bid.
“I don’t think it’s fair to make Ribeiro ante up,” he said.
Steve Tackes, legal counsel for the airport authority, said the airport authority would expect to collect $4.8 million over 50 years from a lease rate of 30 cents per square foot per year, compared to about $3 million that they would receive from Ribeiro’s offer. The board is requesting a net present value, which is the value today of what the Airport Authority would collect over 50 years, or about $675,000. Ribeiro’s offer would net about $334,000.
Ribeiro’s offer also included giving the Airport Authority 1,500 square feet in one of the new buildings and a share in the profit of the gas station.
Since the offer was rejected, the Airport Authority will re-open the invitation to bid, accept offers, and award the lease at a future board meeting. Other developers who have seen Ribeiro’s offer and its development plan will have the chance to bid again. Carson City-based Sterling Air also submitted a bid proposal letter last week, but the board rejected the proposal because it did not meet state requirements.
Dean Rallis, a retired real estate attorney, said at the meeting that 30 cents per square foot is a fair price to lease the land.
“Ribeiro has good people, and it’s a good developer,” he said. “They also know the value of things, and I think they’ll come along to what (the board members) are requiring.”
Ed Yuill, a Ribeiro Companies representative, declined to comment on the board’s response until after he could evaluate it.
Yuill wrote in his proposal that Ribeiro would build 187,136 square feet of multi-tenant retail and light-industrial buildings, restaurant/office buildings on 24,215 square feet and a convenience store on 38,925 square feet off Graves Lane.
n Contact reporter Becky Bosshart at email@example.com or 881-1212.