Carson City officials are working on a deal that could turn a vacant piece of city-owned property near Fuji Park into a giant Costco discount store.
City Manager John Berkich confirmed Tuesday he met with Costco representatives interested in a 15-acre parcel near the intersection of highways 50 and 395 on the south end of Carson City.
The city is not in a position to deal with and sell the property to a single developer, as the land is a piece of the park system and is subject to public bidding laws, Assessor Kit Weaver said.
But city supervisors tentatively are set to decide Dec. 16 whether to make the parcel part of the city's redevelopment district - a special designation, currently involving only downtown property, intended to attract businesses.
Such a designation for the 15.3 acres north of Clear Creek Road and south of Highway 50 could be controversial, however.
Putting the property into the redevelopment district would allow the city to sell the land without going through the public bid process, Deputy District Attorney Neil Rombardo said.
The redevelopment district takes in much of downtown Carson City. Nevada redevelopment law allows for the addition of "blighted" properties, or properties with economic potential that are underdeveloped or underused, Rombardo said.
The land near Fuji Park would be a "satellite" site of the district, the first such property not located within the downtown area.
Mayor Ray Masayko said he is uncomfortable with the process, although he understands how important Costco or another retailer at the site could be to Carson City.
"I have concerns over using the redevelopment statutes for this reason," Masayko said. "It's an interesting use of the redevelopment law. I understand what we're trying to accomplish. Costco would be a heck of an attraction. But I want to hear sentiment from the public, city staff and Costco about the use of redevelopment law and the use of property next to Fuji Park. I want it to be a public process."
Supervisor Robin Williamson, who also chairs the city's Redevelopment Authority, said redesign of the freeway's southern interchange and the addition of a stoplight at Clear Creak Road have made the area a prime target for developers
She and Berkich said putting the land into the redevelopment district would probably be the best use for it and would allow the city to negotiate directly with potential buyers.
"We can be sure through the negotiation process to get the highest and best use for the property to the benefit and welfare of the community," Berkich said.
Williamson said the addition would give a welcome boost to the struggling redevelopment district.
Money from the property's sale and all property taxes would go to the district, according to Weaver. Parcels in south Carson City generally sell for $5 a square foot, he said, but a recent court decision against the Nevada Department of Transportation set land prices at $22 a square foot.
Using those figures, Weaver said the land could be worth as much as $13 million, but had a more likely value around $3.3 million.
The addition of Costco to the site would generate "a tremendous amount of sales tax revenue" as well as property tax revenue to the city, Berkich said.
The property is slated for use in Fuji Park's master plan as a parking lot, Parks and Recreation Director Steve Kastens said. The Parks and Recreation Commission is scheduled to consider the property's future on Dec. 15.
"I think it's prudent to get the highest and best use out of any property," Kastens said. "If this affords the ability for economic development, we need to be open minded."
Berkich said several companies have expressed interest in the site, although he declined to identify the other retailers.
Costco officials did not return phone calls seeking comment.