Tiny county and giant developer talk big bucks
VIRGINIA CITY – The nation’s largest industrial park and Nevada’s smallest county will spend the next two weeks hammering out details that could lead to more than $800 million in tax revenue for Storey County over the next 25 years.
“Potentially, Storey County could be the wealthiest county in the state in the next five or 10 years and we want to make sure we protect the county’s interests,” Storey County Commission Chairman Chuck Haynes said.
Nearly every county department head and commissioner left a Monday workshop regarding the massive Tahoe Reno Industrial Center with questions about a development agreement to benefit both the developer and the county.
“I have about six hours worth of questions,” said Storey County Planning Administrator Dean Haymore, who was worked the past decade to zone the bare northern half of the county for industrial development.
Partners Lance Gilman, Roger Norman and Don Norman – owners of the South Meadows Business Park in Reno – bought 104,000 acres in Storey and partly Lyon counties in August 1998 with intentions to develop about 14,000 acres as an industrial park.
The former Asamera Ranch land fills the northern half of Storey County with the industrial land near Interstate 80.
Haynes encouraged department heads and industrial representatives to sit down during the coming weeks to settle as many concerns as they can before the Dec. 7 commission meeting.
Commissioners at that point want to finalize a development agreement that will spell out how the private-public partnership to build the industrial park’s infrastructure will work.
“We don’t want to be stuck with infrastructure we can’t afford,” Commissioner Greg Hess said.
Hess has spoken several times with the Tahoe Reno team and is confident the developer will follow through on paying for necessary fire stations, sewer, water, roads and other utilities.
The draft agreement calls for infrastructure ultimately to be transfered pass to the county. Storey County would “pay” the developer’s cost with a portion of tax revenue generated by the park.
Some county officials wondered why the county even wants the infrastructure.
“The buy-back is part of our incentive program,” Haynes said.
Haynes said Storey County does not offer tax incentives nor give land to developers like other city, states and counties. But it needs to offer something.
“It’s a very competitive market out there luring industry,” Haynes said. “So we have to say what kind of carrot can we dangle out there. What reason can we give them to locate here rather than somewhere else. We don’t want to give a tax incentive because the idea is to generate taxes.”
A fiscal impact analysis submitted by the partners details predictions for only 4,378 acres, but they anticipate those acres having 63 million square feet of industrial space in the next 25 years.
The analysis, prepared by Fox Consultants in Reno, predicts the appraised value of that land will reach $13 billion with an assessed value of $4.5 billion.
In the 25 years that the partners believe it will take to build out the park, they expect Storey County to receive $863 million in incremental tax revenue while incurring costs of $285 million.
The county brought in financial consultant Katherine Ong and attorney Dee Wisor from Las Vegas to evaluate the analysis. They saw no glaring problems, but Ong suggested the county get a third opinion.
Haynes is fairly comfortable with the numbers after talking with several financial experts.
“Personally, I think we will exceed those numbers,” Haynes said. “They are conservative. Everything done in that document is conservative.”
County leaders see the Tahoe Reno Industrial Center as Storey County’s ticket to become a self-sustaining county. Currently, Storey is among 10 Nevada counties that get a guaranteed share of the state’s sales tax revenue subsidized by bigger counties because the county’s expenses exceed its revenue.
Haynes anticipates the 2001 Legislature will remove Storey County from the fair share program and the county would gain revenue from its sales tax receipts.
“The way fair share works, it limits our income,” Haynes said. “It’s about time we get off that.”
Even though the county and Tahoe Reno are just now hashing out a development agreement, the industrial park has already been under construction since August 1998.
“We have already contracted and sold 1,000 acres and 2 million square feet of industrial space is up or under construction,” said Gilman, who also owns the Harley-Davidson motorcycle dealership in Carson City.
By the end of next year, the park should have about a dozen tenants, Gilman said.
Hydroline, a hydraulic cylinder manufacturer, started operations about two months ago in a 40,000-square-foot plant and Royal Sierra Plastics is in the design phase for a 1.4 million-square-foot plant on 60 acres.
Dermody Properties bought 420,000 square feet that the firm is leasing to manufacturers.
Gilman is not flustered by the barrage of questions from Storey County officials.
“These folks have not had to deal with something like this,” Gilman said. “Now they have to sit down and look at this tremendous document and decide they’re comfortable with that. We now stand by to answer questions and concerns. They’re asking legitimate questions.”