Carson City development officials are looking to buy 13 acres on South Carson Street and then sell the land to a car dealer to bolster the city's sales and property tax.
The plan must first secure city and state approval, and to do that Carson City Economic/Redevelopment Manager Joe McCarthy would have to present a strong argument that a car dealership in that location would benefit the public.
"It's the strongest retail we have right now and we're allowing it to grow," he said "Not just because it makes more money - but it does."
If McCarthy manages to persuade the state that this transaction benefits the public, then the city can purchase the 13 acres - former home of the Nevada National Guard, 2361 S. Carson St. - for its appraised value from the State Division of Lands, rather than go to an auction.
McCarthy said the city would buy the land and then sell it to a car dealer at that same price. In 1999 the land was appraised at $6 million, but that could go up to $7.3 million if it's appraised at $13 per square foot, which is comparable to land sold on South Carson Street to auto dealer Dick Campagni. He was the first auto dealer to make an economic incentive deal with the city earlier this year to purchase six acres on South Carson Street for a new dealership.
Campagni's incentive is based on up to 20 percent of what the expanded Toyota dealership will generate in sales tax. The promissory note is similar to a term loan with a 5 percent interest rate payable over 10 years.
Campagni, owner of four Carson City dealerships, must also commit to stay in Carson City for up to 15 years and grow his business.
The 13 acres contain 14 buildings, totaling 84,000 square feet, that were mostly used by the military for storage.
"The primary needs for the state right now is office space, so that's why they're not occupied," said Cindy Edwards, administrator of the state Division of Buildings and Grounds.
Only two of the buildings are being used, by the Forestry Department and Emergency Management. Those buildings were constructed from 1960 to the early 1990s.
Since the National Guard moved out in 2002, state lands administrator Pam Wilcox has received periodic inquiries about its availability. She has received no formal offer, but Wilcox confirmed that Carson City's redevelopment agency has been the most recent to express interest.
"We only had two options: Find another state use for it or sell it," she said. "And at the present time there isn't another state use for it. But to sell it we would need the approval of both the State Board of Examiners and the Legislature's Interim Financial Committee."
To sell the land to a private party, it would have to be appraised twice before being offered at a public competitive sale, which would be similar to an auction. This process could greatly increase the price of the land. If sold to Carson City, it could buy the land at its appraised value, an option not open to a private buyer, such as an auto dealer. The statute requires that state property sold to local government be used for some sort of public purpose.
"We would have to make the case that it's a public purpose for (the 13 acres) to go back on the property tax roll," McCarthy said.
For the city redevelopment agency, the ideal public use for 2361 S. Carson St. would be as a car dealership. The dealer would have to sign an agreement with the city that it would stay in Carson City for 15 years and continue to grow its revenue.
The state would likely get more money for the land if it went to a competitive bid.
"If it went to auction a speculator could buy it and let it stay empty for years," McCarthy said. "And we've seen that happen here."
Car dealer Michael Hohl, who with a partner bought 144 acres in northern Douglas County and sparked Carson City's car-dealer incentive program, could not be reached for comment. His Honda and Subaru dealership is located at 4500 N. Carson St.
Mike Tiehm, co-owner of Valley Chevrolet Pontiac, said a proposal has not been presented to him. His dealership is at 2500 N. Carson St.
n Contact reporter Becky Bosshart at bbosshart@nevadaappeal.com or 881-1212.
