Motels

Reno seeks to buy motels as affordable housing instead of having developers tear them down – ProPublica

For more than five years, the mayor of Reno, Nevada, has supported the demolition of dozens of dilapidated motels that housed thousands of residents squeezed by the city’s housing crisis, rather than rehabilitating the buildings to provide affordable housing. Now she is changing course.

Mayor Hillary Schieve is proposing to spend hundreds of millions of dollars to acquire and rehabilitate downtown motels through the Reno Housing Authority. In fact, the agency has already moved quietly to buy two closed buildings. Last week, the agency submitted an offer to purchase the Bonanza Inn, a gated 58-unit motel with a history of code violations that is now part of an estate sale. He also submitted a letter of intent to bid on a much larger property – the 19-story former Sundowner Hotel and Casino.

Details of the offers — prices, contingencies and financing — are not public. The RHA Board of Commissioners discussed the offers last month during a series of closed meetings permitted under an exemption from the state’s open meeting law. An RHA spokesperson said the agency had sufficient funds to purchase the Bonanza Inn, but would need to obtain financing to purchase the Sundowner. An early estimate by the RHA indicated that it would cost $22 million to purchase the two properties and up to $50 million to rehabilitate the buildings.

The purchases would be the start of a larger effort to increase the supply of affordable housing in the area, Schieve said. She supports the use of a portion of the city’s share of federal stimulus money from the American Rescue Plan Act and would like to see the state, county and neighboring city of Sparks raise money, as they do for other regional projects such as the Reno Homeless Shelter. . Schieve also wants to see if the housing authority can use its existing housing stock as collateral for bonds to help fund more affordable housing. She would like to borrow at least $200 million. She did not provide details on her plans for the additional funding.

“We have a real opportunity when it comes to labor and affordable housing,” Schieve said.

The city’s about-face follows a ProPublica investigation that found Reno did little to deter the demolition of similar motels that housed some of the city’s most vulnerable residents. The city also failed to provide incentives for landowners to replace these dwellings. One developer, casino owner Jeff Jacobs, has been responsible for most of the motel demolitions, razing nearly 600 units since 2017. Schieve and other council members posed for photos during some of those demolitions, celebrating eliminating what they said had been messed up. properties to make way for a proposed entertainment district.

After much criticism over the demolitions, Jacobs recently announced that he would be willing to donate up to $15 million of land for an affordable housing and public parking lot project. The donation would be conditional on the housing authority funding the project and the city acquiring additional land, he said.

Jacobs has assembled more than 100 plots in downtown Reno for what he describes as a $1.8 billion entertainment district that would include hotels, restaurants and an amphitheater. He said the motels he demolished were slums that could not be renovated and said he provided resettlement assistance to most of the people who lived there.

The property sought by the Reno Housing Authority is in Jacobs’ proposed neighborhood, directly across from his signature casino, the Sands Regency. In fact, the agency’s letter of intent on the Sundowner includes a vacant parcel on a block primarily owned by Jacobs.

The Sundowner has been vacant since 2003. The Bonanza Inn, however, only recently came up for sale following the death of its owner. His son told the Reno Gazette Journal that the estate was forced to sell the motel, which had been vacant for more than a year, following aggressive code enforcement efforts by the city. His family could not afford the necessary repairs, he told the newspaper. The property had been cited multiple times for code violations since 2012, according to public records.

In an interview with ProPublica, Schieve reiterated that she doesn’t think “sleep landlords should be landlords,” but also said she doesn’t support mass hotel demolitions.

“If you can rehabilitate something, then that’s great, obviously, and if that makes sense,” Schieve said. “I sincerely believe in saving everything you can.”

She added: “I’m not like, ‘Let’s tear it all down.’ It’s not who I am. On the contrary, she says, she doesn’t believe that people should be forced to live in terrible conditions.

This is, however, the city’s first attempt to preserve such buildings. In addition to supporting Jacobs’ razing of mostly squalid motels, the city used its scourge fund in 2016 to fund the demolition of two vacant motels despite calls from the community to preserve them as housing.

Schieve said the city lacks the financial resources to purchase and rehabilitate motels for housing. Federal stimulus money has now made it possible to pursue such acquisitions, she said.

“It’s hard to build it. It’s expensive,” she said. “With the ARPA funds, it really gives us a foot in the door.”