The developer behind the Reno Neon Line District unveiled several new projects around the West Fourth Street corridor, including the first new ground-up condominium development in downtown Reno in 15 years.
The Jacobs Entertainment projects include a new condominium on West Second Street that will have 130 units. The company also announced that two new apartment sites will be listed for sale to regional and national apartment developers.
In addition to the condo and apartment project, Jacobs is looking into the feasibility of building an amphitheater that can seat 5,000 to 6,000 people as well as a zip line attraction from the Sand Regency hotel-casino.
Neon Line District:Reno agrees to sell 2 downtown parcels to Jacobs Entertainment
Jacobs Entertainment CEO Jeff Jacobs shared his latest plans for the downtown district during an exclusive sit-down interview with the Reno Gazette Journal. While Jacobs will be partnering with other developers for the apartments, his company will be overseeing the development of the new condominium, with a groundbreaking planned by spring next year. The developer is also in the midst of the first phase of redevelopment for the Sands Regency hotel-casino, which just wrapped up major work on its Aspen Tower.
“We’re going into heavy construction mode in January,” Jacob said. “We have a good three to five years of construction ahead of us between our residential and commercial projects.”
Big plans for the Reno Neon Line
High up the Sands Regency from his 17th-floor office, Jacobs peered through a glass window and pointed to a spot just south of the hotel-casino.
The area, which was marked by parking lots and bare land, will be the site of the new condominium, according to Jacobs.
In September of last year, Jacobs acquired several parcels just north of West Second Street between North Arlington Avenue and Ralston Street. The purchase included the University of Nevada, Reno’s Nelson Building, which has been the subject of acquisition and trade talks in recent years.
Jacobs envisions the parcels as a key part of plans to bring in more people to the Reno Neon Line. Anchoring the developer’s strategy is the creation of residential units that should guarantee traffic even during the slower winter months. Jacobs believes his project won’t be the last condominium to be built along the Neon Line corridor.
“I can easily envision a demand for 500 to 1,000 new condominium units along West Second Street,” Jacobs said.
Development will start with the construction of a 63-unit property as part of the condo project’s first phase. The building will include a common area enclosed in glass as well as a dedicated urban garden.
Jacobs then walked over to one of the large suites of the renovated Aspen Tower. From there, Jacobs pointed to one of the upper sections of Sands Regency hotel-casino and then looked at the Burning Man art installations on the street below.
“We want to add fun and entertainment onsite so we’re looking at the possibility of a zip line,” Jacobs said. “It’ll go from the top floor of the building all the way down to Vine Street so people can see all the art from a different perspective.”
Jacobs added that he is working with regional promoters as part of plans for a showroom at the Sands with 500 to 600 seats. To bring in bigger shows, Jacobs is looking into a potential outdoor amphitheater with 5,000 to 6,000 seats. The developer pointed to his company’s 10-year deal with global promoter AEG for its Cleveland property, which it could leverage into attracting larger acts to Reno as well.
Such a move would put Jacobs in competition with the 8,958-seat Nugget Events Center in Sparks as well as Caesar Entertainment’s tri-properties — the Eldorado, Circus Circus and Silver Legacy casino-hotels, which have been re-christened as The Row in downtown Reno. Jacobs, however, believes there’s room for everyone given Reno-Sparks’ growth trajectory.
“I’m hoping that The Row will help me make Virginia Street strong and attractive again,” Jacobs said. “(Caesars) is the biggest gaming company in the world.”
One of Jacobs’ new apartment sites, an 86,000-square-foot property located just south of West Fifth Street between Washington and Ralston streets, is already generating strong interest from various apartment developers, according to Jacobs. The property is listed by Avison & Young and is located near Renova Flats, which Jacobs remodeled from the former Crest Inn.
The other apartment site is a 118,000-square-foot site listed by Colliers International and surrounded by West Fourth Street, Vine Street, West Third Street and Keystone Avenue. The site includes the 0 Second Street parcel that the city of Reno agreed to sell to Jacobs as part of a public-private agreement.
The deal sparked controversy after Jacobs offered to buy the properties at a significant discount. Jacobs then amended the proposal by raising his offer closer to the parcels’ appraised value while also offering to share 25% of the net profit raised from the property’s sale to a third-party developer.
“I used to be an elected official so I sometimes see things from a perspective that developers don’t see,” said Jacobs, who served as a state representative in Ohio in his 30s. “We built Jacobs Field in Cleveland through a public-private partnership and I usually find those to be the most successful for downtown sites.”
The affordable housing question
The announcements come at a time when Jacobs has been pressed to deliver on his plans following an acquisition spree of several properties on downtown Reno’s West Fourth Street corridor.
In addition to purchasing the Sands Regency for $30 million in 2017, the developer acquired blocks of properties between the hotel-casino and another Jacobs property, the Gold Dust West near Keystone Avenue. The purchases include a slew of blighted motels that served as de facto affordable housing for Reno’s lower-income population.
The demolition of the motels by Jacobs as well as the Regional Transportation Commission of Washoe County for its RTC RAPID bus project has taken out hundreds of rental units from downtown’s housing stock. While Reno-Sparks has also seen the construction of several new apartment complexes, the bulk are offering rents at either market rate or the upper end of the spectrum.
Rent in Reno-Sparks posted record highs for five quarters in a row, with average rent reaching $1,600 during the second quarter this year, according to real estate appraisal and consulting firm Johnson Perkins Griffin. The median sales price of an existing single-family home in Reno-Sparks has also hovered above half a million dollars, according to the Reno/Sparks Association of Realtors.
Jacobs continues to push back against criticism that his acquisitions have reduced options for lower-income residents in the area.
“I’ve always said that those motels were inappropriate places to house people,” Jacobs said. “Some of them were 50 years old and had bed bugs.”
Jacobs also pointed to his pledge to set aside 10% of the units for either senior or workforce housing with any apartment project that his company builds, such as Renova Flats, for example. The pledge, however, does not apply to apartment projects built on the Neon Line District by third-party developers, which Jacobs says he can’t interfere with.
Workforce housing also will not be implemented in Jacobs’ condominium project, he added. Affordable housing requires a different kind of development, which includes government funding and a host of other procedures, and can’t just be shoe-horned into a typical condo development, according to Jacobs.
“I feel that government should be the housing provider of last resort, which is why I supported the Nevada Cares Campus and also donated to the Reno Housing Authority.”
Switching the center of downtown
The latest announcements for the Reno Neon Line likely won’t quell the criticism that the project has received from its opponents.
Jacobs’ acquisitions have especially earned the ire of Reno Councilwoman Jenny Brekhus, who has frequently slammed the developer during city council meetings. Brekhus sided against the majority and voted against selling two downtown parcels to Jacobs earlier this year in July.
“Whose economic development are we doing it under?” Brekhus said at the time.
“The only economic development going on here is for Mr. Jacobs’ bottom line. I’ve seen Mr. Jacobs continue to tear down property and build nothing.”
Jacobs Entertainment and Brekhus are set to face each other once more this month as the developer goes in front of city council with a proposed development agreement. Jacobs expects the proposal to pass and declined to comment on Brekhus’ criticism.
“I don’t really respond to it because I’m too busy redeveloping this property,” Jacobs said.
“There are no demagogues in the majority of the council,” Jacobs added. “The mayor and the majority of the council are in favor of sitting down quietly and working through issues.”
Jacobs, however, agreed that public parking — an issue brought up by critics such as Brekhus following his purchase of the two city parcels — is critical for downtown. Jacobs plans to approach the city council with proposals for parking, particularly how the developer’s properties could figure into a solution to the problem. Jacobs is also open to providing parking as an incentive for further development in the district, including more housing.
“If we’re going to grow the (Reno Neon Line) district for tourism and festivals and an amphitheater and restaurants, you’re going to need parking,” Jacobs said. “The land is there so I have some ideas for additional parking for the district and also how to make that available to affordable or workforce housing developers and basically give them the land for free.”
For Jacobs, the move is as much a strategic play as he aims to move the traditional bustle of downtown from the Virginia Street core to the Neon Line district.
This year’s Street Vibrations event, which approached Jacobs while searching for a venue, is a perfect example of the developers’ plans to push more events into the west corridor of downtown. Jacobs plans to open up even more of the district next year for the motorcycle event.
Even as Jacobs projects the tourism and gaming industry to be slightly down in 2022 compared to this year’s COVID fatigue-driven rush, he also expects to see 100,000 people walking within the Neon Line district next summer.
The shift is all part of downtown Reno’s ongoing evolution, according to Jacobs. The developer pointed to properties such as Harrah’s converting into residential and commercial space as a sign of downtown’s future. Jacobs added that he would not be surprised if properties such as the former Sundowner end up as student housing.
“If we hadn’t bought (the Sands), the property would have probably turned into apartments,” Jacobs said. “Real estate has a way of recycling itself.”
Jason Hidalgo covers business and technology for the Reno Gazette Journal, and also reviews the latest video games. Follow him on Twitter @jasonhidalgo.
