Downtown Reno is about to get a powerful new tool for redevelopment low-hassle money.
The Reno Redevelopment Agency, working with banks and groups ranging from the Downtown Improvement Association to the Economic Development Authority of Western Nevada, is putting the final touches on a new nonprofit to help finance redevelopment projects.
The program, which is likely to roll out in early 2006, holds the promise of lower-cost financing and reduced red tape for developers working in the downtown area.
It also will be available in the proposed second redevelopment area in Reno, a district that stretches in a patchwork fashion from near the Reno-Sparks Convention Center to a piece of land near Boomtown.
But organizers are unwilling to put too many boundaries around the program they're calling "The Catalyst." "This is a strategy, a strategy that says we don't have a cookie-cutter formula for development.
Whatever it takes,we can do," says James Graham, economic development manager with the Reno Redevelopment Agency.
He said The Catalyst would target three areas creation of affordable and marketpriced housing, assistance to small businesses in the redeveloping areas and incentives to woo major employers into the downtown.
The lion's share of the funding for the new nonprofit is expected to come from commercial banks.
The benefit for them: Their participation allows them to score points under the federal Community Reinvestment Act.
A 13-member board, mostly from the private sector, will oversee the nonprofit's operations.
The amount of capital the nonprofit will have available for lending won't be known until the banks make their commitments.
But Graham said he wouldn't be surprised if The Catalyst was involved in $80 million in deals in its first year.
"You have no idea of what this thing can do," he said.
In many instances, The Catalyst would act as a loan syndicator pulling together smaller pieces of money from several institutions and making a single loan to a developer.
While the loan may carry a below-market rate, a more important factor for some developers will be the ability to get a loan from a single source rather than assembling a complicated financial package from numerous institutions.
Jeff Hollingsworth, a vice president for commercial real estate lending at Nevada State Bank who has helped develop The Catalyst program from his seat on the Downtown Improvement Association board, said the new program also would provide more financing options for businesses in the redeveloping areas.
That's particularly important, he said, for small businesses.
"For them to obtain financing can be a real challenge,"Hollingsworth said.
Graham estimates the downtown area lost $147 million in investment the past year because no financing program was available.
Even though downtown Reno clearly is on the upswing with numerous condominium projects and the start of a resurgence in retail, organizers of The Catalyst caution that the recovery remains fragile.
"We have a handful of vibrant businesses," said Roberta Ross, president of the downtown improvement group."But we need more than a handful."
And Graham said sharp increases in the cost of land and water both threaten the downtown recovery.
The housing projects on the books in the downtown area will create homes for about 2,000 people, and Graham said redevelopment officials see the creation of office jobs in the center of the city as a priority.
That's where EDAWN, the jobs-creation agency, comes in.
Ken Pierson, director of business development for EDAWN, said The Catalyst will provide another tool for economic recruiters seeking to woo corporate offices into the central city.
"It's going to be a real nice project," Pierson said.
