The Carson City Board of Supervisors intends to provide the new owner of the old Wal-Mart building $2 million to offset costs to improve the structure.
The owner, Robert Rothe, is pursuing a Burlington Coat Factory store to occupy 70,000 square feet of the 120,000-square-foot space.
Last month, Rothe received a letter of intent from Burlington stating that it wants to occupy part of the building. Rothe and Burlington are involved in lease negotiations. Burlington wants upgrades completed in time for a store to open by March 1.
"I want to open a hot dog stand. I'm asking the board of supervisors for $50,000," said resident Bob Crowder. "Why can't they go to the bank?"
The retailer "will not come unless the owner makes the contract, rent aggressive enough to entice them to locate in a redeveloped property as opposed to a new shopping center in North Douglas County," said Joe McCarthy, manager of the city's office of business development.
The city anticipates that increased revenue will make up for its investment. Burlington is expected to add $15 million in taxable sales to the city's annual total. A store that sells that much merchandise should bring the city at least $300,000 in additional tax revenue based on the taxable sales estimate, McCarthy said.
It should also generate more customer foot traffic, improve conditions for surrounding retailers, possibly lure more businesses to the area - all of which would further boost city revenues, he said.
A city "buying down the cost of property," asked Supervisor Pete Livermore. "Is that unusual?"
"It never would have happened without our help," McCarthy replied.
The building where the store would be located was Carson City's Wal-Mart until 2002. Max Baer Jr. purchased it for about $4.5 million in 2003 to use as a site for a Beverly Hillbillies casino. He sold it in May to Rothe for $8.5 million, and intends to set up the casino in North Douglas County. The building has been vacant for five years, except for occasional short-term occupants.
The building, however, is worth $6.5 million to $7.5 million. Baer leveraged "the higher sales price is based on it being a targeted redevelopment project," McCarthy told the supervisors.
The city began wooing Rothe as a possible buyer for the property two years ago and Rothe, in turn, made an offer more than a year before Baer finally agreed to sell. And by the time the building is ready, Rothe will have spent another $7.5 million in improvements, he said.
Money for this and other economic development projects will come from the Carson City Sanitary Landfill. This funding policy still is being created but should be completed soon, City Manager Linda Ritter said.
The landfill is also being targeted as a source of cash to help the city buy equipment.
"This is a hell of a stretch," said Mayor Marv Teixeira of the incentive. "We're out of up-front money - Campagni with $4 million and we're working with Hohl. ... We live and die on sales tax revenues. We must do what we must do."
Supervisors will decide whether to finalize the agreement, still being discussed between the city and Rothe, possibly as soon as their next meeting scheduled Sept. 6. The money wouldn't change hands until the retailer is operating.
Burlington sells an assortment of designer and name-brand apparel, and home products, at discounts of up to 60 percent compared to other well-known department stores. The Burlington Coat Factory Warehouse Corp. operates 379 stores in 44 states. Among them is a store in Reno on South Virginia Street in a space also owned by Rothe.
• Contact reporter Terri Harber at tharber @nevadaappeal.com or 882-2111, ext. 215.
In other business, the supervisors:
• Approved a cooperative agreement for the city to take control of several local streets, most of which are in west Carson.
• OK'd placement of a billboard on Old Clear Creek Road promoting downtown shopping and tourism.
• Allowed a 90-day moratorium on approving adult entertainment facilities while city staff reviews current local rules.
• Gave the Regional Transportation Commission sole ability to purchase or acquire property for street rights-of-way.