A rendering of the Sierra Flats affordable housing development off Butti Way, courtesy of Oikos Development Corp.
What some view as an unnecessary gift from taxpayers, others view as a smart partnership addressing a critical need in Carson City: affordable housing.
Thursday, the Carson City Board of Supervisors approved an agreement between the city, developers, and a lender that would subordinate interest of city-owned property off Butti Way in order to secure a $2.2 million loan for development of 80 affordable housing units. A separate development agreement, passed in 2021, stipulates the land will be conveyed to Oikos Development Corp., at no cost, but the land must be used for affordable housing for at least 51 years.
The project is being developed by a limited partnership between Oikos — a nonprofit — and PalaSeek LLP. Known collectively as Sierra Flats, the partners have secured tax credits and funds from the Nevada Housing Division, according to Carson City Deputy Public Works Director Dan Stucky. Now the partners are seeking the additional $2.2 million loan from Western Alliance Business Trust, and that’s where the subordination agreement comes in.
Supervisor Maurice White, the lone vote against the agreement, said he objects to any “gifting” of taxpayers’ property.
Carson City resident Deni French worried there’s not enough protection for the city and didn’t want to see the local government become a “landlord.”
Mayor Lori Bagwell disagreed and said the city worked hard to protect itself. For instance, per the development agreement, a set of restrictive covenants mandate the property be used for affordable housing, even in the event of foreclosure or a new owner.
Bagwell said it takes a particular parcel and project to get affordable housing off the ground.
“I think it’s a true need in our community,” she said.
Michael Snodgrass of Oikos Development said higher interest rates have caused delays in the project but that final permitting is now underway. He said he hopes they break ground by September.
According to RentCafe.com, the average rent for an apartment in Carson City is currently $1,416, and that’s for an average size of 767 square feet. According to the U.S. Census Bureau, the median household income in Carson City was $58,305 in 2020, with 10 percent of the population in poverty.
Other board actions:
• After a closed session, the Board of Supervisors voted unanimously to reject a $400,000 settlement offer with Tahoe Hemp LLC, which sued the city in 2020 after being denied authorization to grow hemp on Buzzy’s Ranch.
The city purchased the land from the Jarrad family in 2010 with a $2.8 million grant from the state lands division. As part of the purchase and sale agreement, the Jarrad family has the right to continue to use it or lease it for ranching and agricultural purposes. But when Tahoe Hemp applied for a permit to grow hemp on the property from the Nevada Department of Agriculture, the city was concerned the crop would jeopardize its state grant and did not provide authorization.
The case is now on appeal before the Nevada Supreme Court. The settlement offer came from a mediation stage, but District Attorney Jason Woodbury recommended Thursday the board reject the settlement offer.
Rick Campbell, representing Tahoe Hemp, said initial damages were estimated at $28 million.
“$400,000 is a major concession,” he said.
In 2021, however, before the appeal, First Judicial District Judge James Wilson ruled in favor of Carson City, in part, and awarded the city more than $46,000 in attorney fees and costs.
• The Board of Supervisors voted unanimously to give notice to the Carson City Debt Management Commission of the city’s intent to issue infrastructure sales tax bonds in an amount not to exceed $5.55 million for infrastructure projects, namely the William Street corridor project.
William Street is a former state highway that now serves as a primary commercial gateway from the Interstate 580 into Carson’s downtown core but also includes residential uses and is frequented by Carson High School students, according to Carson City Chief Financial Officer Sheri Russell.
The project, which totals about $22.2 million with federal funds, will include street replacement, stormwater improvements, as well as underground water and wastewater pipe replacement.