City supervisors shy away from endorsement of auto mall incentive deal

Carson City supervisors backed away Thursday from endorsing a $27.5 million incentive package for development of an auto mall in North Carson City, instead handing the developer a general policy statement of support.

Feeling pressures, not unlike a customer sweating it out in a car salesman's office, some supervisors said they wanted more time to ensure they were getting the best deal.

"This package should have been before us 90 days ago," said Supervisor Richard Staub. "Business deals made in crisis are bad business deals. From a business standpoint, I wouldn't touch this deal with a 10-foot pole."

The board was asked to adopt a detailed resolution, which was non-binding but would act as an official stamp of approval, for Princeton Development Corp. to proceed with purchasing land at the site and continuing with the development.

Steve Taber, chairman of the board for Princeton, a developer out of Sausalito, Calif., said he needed time before commenting on the board's action.

Before the decision, Taber told the board the three auto dealers who had signed letters of intent for the deal could not develop the auto mall without the $27.5 million incentive package.

Taber told supervisors he also needed to make a payment today to buy a 42-acre property owned by Don and Toni Langson off Hot Springs Road.

Supervisors voted unanimously to make a general policy statement endorsing the auto mall project and directed staff to take "good faith" actions to assist the implementation of an auto mall, which may include an incentive package.

The $50 million, 100-acre mall, planned for easy access off the future Carson freeway bypass, would be located off Hot Springs Road and bordered by Arrowhead Drive to the north and Troy Way to the east. In the works for the past two years, dealings for the auto mall became serious after Gov. Kenny Guinn's public statement in January committing the state to finishing the freeway bypass, officials said.

The city has also been under pressure of losing auto dealers to Douglas County. Dealers are looking to update their facilities and move when the freeway is built.

Developers plan for the mall to open in 2006 when a portion of the freeway is expected to be complete.

While supervisors and Mayor Ray Masayko said they support the development of an auto mall, some were reluctant to commit to details in the resolution. Others felt the pressure of endorsing the deal without more notice, comparisons and bargaining.

Masayko said he wanted to see the process move forward but did not want to be bound by specifics in the resolution.

"When I go out to buy a car, I like to haggle a little bit too," Masayko said.

The incentive package offered by city staff and city consultant Charlie Long to Princeton was what Taber said the dealers need to keep the cost of selling cars on an even level with dealers in Fallon and Reno. Without the incentives, it would cost auto dealers $800 per car, compared to $400 per car for surrounding areas, to move and set up shop at the new center, he said.

In the proposed incentive package, the city would contribute $11.2 million toward public improvements -- about $1 million per year -- and $4.2 million to relocate auto dealers to the site.

The city would cap its sales tax revenue from auto sales at the level that exists a year prior to the mall opening. Beyond that, the city would collect only enough to cover inflation and the cost to finance public improvements on the site.

Sales tax revenues above that would go to the auto dealers until they collect $12.1 million.

Staub estimated the city would be obligated to pay more than $700,000 a year to pay for borrowing $15.4 million for improvements and relocation costs for dealers.

The proposed deal was substantially less than a comparably sized auto mall developed in Roseville, Calif., a development that a partner with Princeton helped build. Roseville paid $9 million in sales tax revenues to auto dealers after their relocation to a 95-acre site, Taber said.

Masayko said the board would be in conflict of interest accepting the incentives before a public process. The resolution called for designating the area a redevelopment district and would require changes in land use and zoning, all of which the board would feel committed to follow through if the resolution was signed, he said.

Supervisors also heard from residents Thursday who oppose the location of the mall and the city's financial contribution. Citing concerns with airport safety, noise, lighting and traffic, many said they were in favor of developing an auto mall somewhere in the city.

Existing auto dealers generate about $3.7 million in sales tax revenue for the city per year and make up nearly 20 percent of the city's total sales-tax income. Last month, the city raised property taxes and cut department spending to make up for a $2 million deficit in the 2003-2004 budget.

If the city loses one dealer or three dealers, "things are going to be a lot uglier than they were this year," Supervisor Robin Williamson said. "The basic idea is we need to keep the auto dealers we have ... and we need to energize them."