City of Reno
Nevada

Staff Report
11870

Staff Report (For Possible Action): Discussion and potential approval of proposed Parks and Open Space Agreement for purchase of land in the Caramella Ranch Estates Planned Unit Development in the maximum amount of $935,000. (Residential Construction Tax District 4 Fund)

Information

Department:Parks and RecreationSponsors:
Category:AgreementProjects:Ensure Financial Stability
Wards:Ward 2

Recommendation and Proposed Motion

Recommendation:  Staff recommends Council provide direction on the possible purchase of land within the Caramella Ranch Estates PUD.

 

Proposed Motion:  Potential motions include:

1.              I move to approve the Parks and Open Space Agreement.

2.              I move to deny approval of the Parks and Open Space Agreement.

3.              Other motion as determined by Council.

Staff Report Formal Body

Summary: Staff requests direction and/or approval of the proposed agreement with the Master Developer of the Caramella Ranch Estates, a 935 unit Planned Unit Development (PUD).  The agreement calls for the City to purchase a 16.72 acre site for open space at a cost equal to the total of all Residential Construction Taxes (RCT) to be collected within the development, currently estimated to be $935,000.

 

Background:  Council originally approved the PUD Handbook in 2010 with a maximum of 1,316 units.  The Handbook requires a 15+/- acre park, which will be built and maintained by the City.  There are no provisions governing use of the applicable RCT funds in the Handbook. 

 

In 2017, Council approved a tentative map which allowed for construction of a maximum of 935 housing units and which also established the location of the park site.   As a condition of approval, City and Developer were to obtain appraisals of the park site, of which ±5.5 acres of the total area would be graded by Developer for future park development by City.  There are also provisions for access, revegetation and temporary irrigation to be performed by Developer prior to transfer to the City, which the developer has completed.

 

Discussion:  In accordance with Council conditions, Developer and City obtained independent appraisals of the ±5.5 acres of buildable park land within the 16+ acre site.  These are based on the hypothetical market value of the property with adjacent city streets, utilities and paved roadway access.  The appraised values are:

 

              Developer ordered appraisal                            $1,650,000

              City ordered appraisal                                          $1,615,000

 

The development is located in the South Meadows area, south of Damonte Ranch, and is bisected by Western Skies Drive.  The park is located at the eastern end of the development with access from a roundabout on Western Skies Drive.  The park parcel contains ±5.5 acres of level, buildable land.  The remaining acreage slopes upwards at grades in excess of 15 percent.  To the east are three parcels, owned separately by RiLite Aggregate Company, NV Energy, and a residential owner on a 39 acre lot.  The north and west/south boundaries of the site include rockery drainage swales to be maintained by the homeowner’s association.

 

Staff and Developer began initial discussions of a potential park site and terms for a development agreement in 2016.   The proposed agreement is Developer’s last, best offer. 

 

The key terms of the proposed agreement include:

 

1.              Developer shall grade the site, install an access road, revegetate the entire site, provide temporary irrigation, and maintain the site for a period of three years after first revegetated by Developer.  The developer has completed these items.

2.              Developer shall transfer the property to City three years after approval of the agreement, unless requested earlier by City.

3.              City shall preserve the site as open space in perpetuity.  City shall be responsible for maintenance of the site after the three year period described above.

4.              City may elect, in its sole discretion, to construct a traditional neighborhood park in the future.  If so constructed, the park shall be named Caramella Ranch Park.  City shall be responsible for maintenance of the developed park.

5.              City shall reimburse Developer from all RCT funds collected within the Caramella Ranch Estates PUD up to a maximum of $935,000.  Reimbursement shall begin after conveyance of the park site to City and then quarterly until the final housing unit is sold.

6.              City has no obligation to pay any funds other than RCT collected within the Caramella Ranch Estates PUD.

In prior development agreements with planned unit developments, City has sometimes paid to acquire park land while at other times the developers have provided the land at no cost.  However, in no prior case has City obligated the total amount of RCT collected within a PUD for the purchase of land.  Approving the agreement as proposed would therefore set a precedent which may impact City’s ability to acquire and build neighborhood parks in future planned unit developments.

 

Reno’s closest park is the heavily used Damonte Ranch Park, approximately a two mile walk from the proposed park site.  The closest park is Washoe County’s Virginia Foothills Park, a 12 acre neighborhood park just outside city limits but a three-quarter mile walk from the proposed site.

 

Potential options for Council include:

 

1.              Approve the agreement as proposed by the developer.  In this case, City will leave the site as open space unless or until such time as future RCT from other developments may become available to build a neighborhood park.  Developer will be responsible for educating homebuyers prior to sale of each unit that the site will remain as undeveloped open space for the foreseeable future.  This will restrict the RCT funds collected within the PUD solely for purchase of the land.

2.              Not approve the agreement.  Without a park development agreement to restrict the RCT, the RCT funds from this development may be used for any other park projects in RCT District 4.  This may include completion of Double Diamond Park or additional enhancements at other parks in South Meadows (Cyan, Center Creek, Comstock, Horizon View Parks).

3.              Other direction which may include renegotiation of the terms with Developer.

 

The Recreation and Parks Commission, at their meeting on September 17, 2019, unanimously voted to recommend that Council not approve the agreement because of the precedent this may establish for future developments.

 

Financial Implications:  Approval of the agreement will restrict all RCT funds collected within the Caramella Ranch Estates PUD, plus any interest, for purchase of the property.  No additional funds are identified to complete construction of new park improvements, equipment, grass, or trees.  The land would remain in the current undeveloped condition until available funds are identified.

 

Legal Implications: Legal review completed for compliance with City procedures and Nevada Law.