Carson City to consider expanding tax incentives

About a month after the Board of Supervisors approved a sales tax reduction for the owners of the Southgate Shopping Center to help attract new tenants, city officials are now proposing to expand that policy to owners of other large vacant buildings.

The decision made at the Oct. 21 supervisors meeting resulted in the Southgate Shopping Center getting a 50 percent sales tax break on its two newest tenants: Big Lots and Big 5 Sporting Goods. Southgate's owners said that deal cemented the Olive Garden's decision to build a new restaurant in Carson City.

Consequently, the owners of other large vacant commercial centers, such as the Carrington Group that owns the Carson Mall, complained to city officials that the city was playing favorites.

City Manager Larry Werner said city officials were expecting the reaction.

"You can't treat one differently than everybody else," Werner said on Friday. "And then we were immediately contacted by the Carrington Corporation, by the Ribeiro (Companies)," the firm that developed the 46,000-square-foot Carson Tahoe Quail Park in south Carson City three years ago and has several vacant office and retail units along Carson Street.

The proposal is expected to be presented to the Redevelopment Authority Citizens Committee on Monday, which meets at 5:30 p.m. inside the Sierra Room of the Community Center, 851 East William St.

According to a draft of the proposal, applications for the tax reimbursement would be available through March 21 next spring.

Other rules include:

• The property owner must have a minimum of 15,000 square feet of vacant commercial space located in a redevelopment area, which includes a swath of land that follows U.S. 395 from the Douglas County border to slightly north of William Street as well as the former Kmart.

• Restaurants will not qualify.

• Vacant buildings must be occupied by April 1, 2012, in order to get the tax reimbursement.

An example of a building that could qualify would be the former 170,000-square-foot Kmart building, which was bought in June by Reno firm Jiangson Duke LLC for $1.7 million. It has been vacant since 2003.

Werner said the idea is to help fill large vacancies throughout the city, which could help spur more traffic for smaller units.

"We want to keep it to a minimum size so that we don't have a gazillion little offices that are empty," Werner said. "It has to be something that would be worth this process."

Kevin Ray, the property manager of the Carson Mall, said he and representatives of the Carrington Group will attend Monday's meeting.

"What it does is levels the playing field, it allows us to negotiate the same type of deals that Southgate was able to negotiate and the city was able to offer," Ray said. "If the city wants to make it fair to all the business owners in town, they need to level the playing field."

Ray said that tax break could help the mall fill the former Gottschalks, which closed last year after the company declared bankruptcy.

"It certainly increases the potential of us bringing in a company such as Joe Levy's Gottschalk or other ones that we're still working with," he said. "We get questioned by large companies and they ask us if they can get the same large incentives that were given down the road."

The supervisors voted earlier this year to suspend its redevelopment grant program to fledgling businesses. The redevelopment fund also has been strained by falling property values, which will post a 12.5 percent city-wide decline for the next fiscal year.

"There's no appetite at all to expand the redevelopment anymore," Werner said. "With all the controversy that's occurred, this is probably it."