The Agency and the City are continuing implementation of the Victorian Square Development Plan (the “Redevelopment Plan”), a part of the Town Center 2000 Amended Redevelopment Plan as most recently amended by the Second Amendment adopted on February 9, 2015.

The Redevelopment Plan calls for reconfiguration of parcels in the area formerly between 12^th and 13^th Streets and between Victorian Avenue (formerly B Street) and Avenue of the Oaks (formerly C Street).  The parcels within this area are located north and south of the alley alignment between Victorian Avenue and Avenue of the Oaks (the “B/C Alley Alignment”). Implementation of the Redevelopment Plan required the acquisition of property to provide the public right-of-way needed for the street couplet bordering the Victorian Square Plaza (the “Plaza”) to place into the ownership of the City the land needed to modify the Plaza and for property to be exchanged with the former (Sparks Nugget, Inc.) and current (Wolfhound Holdings, LLC) owners of the Sparks Nugget to reconfigure parcel boundaries as called for in the Redevelopment Plan.

In 2008, the Agency acquired the parcel identified as Washoe County Assessor’s Parcel Number 032-136-11 from Pacific Pawnbrokers and, in 2010, acquired APN 032-136-06 from Victorian Partners LLC for these purposes.  The parcels north of the B/C Alley Alignment and south of Avenue of the Oaks in the area formerly between 12^th and 13^th Streets were consequently reconfigured in 2010 by Parcel Map No. 5024.

In December of 2014, in furtherance of the Redevelopment Plan, the City and Agency entered into an Exclusive Negotiating Agreement (ENA) with Silverwing Development that provides for Silverwing to acquire up to nine parcels from the Agency for residential and mixed-use development.  As part of the ENA, the Agency agreed to seek to acquire, through an exchange, a parcel owned by Wolfhound with APN 032-135-14 (the “Wolfhound Parcel”).  Agency acquisition of the Wolfhound Parcel, and subsequent sale to Silverwing Development, would allow for Silverwing to incorporate the parcel into its proposed Fountainhouse project.

The City and Redevelopment Agency now propose to enter into the Victorian Square Property Exchange Agreement (the “Agreement”) with Wolfhound Holdings, LLC..

The exchange involves the Agency’s acquisition of the Wolfhound Parcel to complete land assembly for the Silverwing Development’s proposed Fountainhouse project.  Under NRS 279.486, the Agency must obtain the consent of the City Council and before the City Council may give its consent, it must find (1) that the property being acquired is of benefit to the redevelopment area and (2) no other reasonable means of financing the land are available.

The exchange also involves the disposition of a parcel at the southwest corner of Victorian Avenue and Victorian Square Plaza to be created in part from a parcel owned by the Redevelopment Agency with APN 032-136-11.  Because APN 032-136-11 was acquired in part with funds from the Redevelopment Revolving Account, under NRS 279.630(3) the Agency must obtain the consent of the City Council to sell it.  The consent must be by resolution, following a public hearing upon notice that must be published at least once a week for two weeks.  Such notice has been published.

The actions necessary to implement the agreement include the reconfiguration of parcel boundaries, which requires a future City Council approval and recordation of a parcel map (see Exhibit 1 of the Agreement) in the area along and including the Plaza between Victorian Avenue and Avenue of the Oaks.  To do so, the City will first need to vacate public right-of-way – also to be considered by the City Council at a future meeting – that would be incorporated into the new parcels, identified as parcels I and J on the merger and resubdivision parcel map (the “Parcel Map”, attached as Exhibit 1 to the Agreement).  Parcel J, which is to be created largely from the Wolfhound Holdings parcel with APN 032-136-19, and will be the same size (11,204+ square feet) as the existing parcel, will be owned by Wolfhound Holdings.  Parcel I (11,250+ square feet), which will be created from a portion of the Redevelopment Agency owned parcel with APN 032-136-11 and vacated public right-of-way, will be conveyed to Wolfhound Holdings in exchange for the Wolfhound Parcel (APN 032-135-14, which is 10,110+ square feet in size).

The City is involved as a party to the Agreement in order to vacate certain public easements and right-of-way and to approve the Parcel Map.  Accordingly, the City Council is also asked to approve entering into the Agreement itself.

The Agency’s rights and obligations under the Agreement include:

• To convey approximately 6,752 square feet of the parcel it owns identified as APN 032-136-11 for inclusion in Parcel I, which will be conveyed to Wolfhound Holdings.

• To convey to the City for public right-of-way the remainder of APN 032-136-11, which underlies a portion of the western half of the north-south street couplet between Avenue of the Oaks and Victorian Avenue adjacent to the Plaza.

• Acquisition of the Wolfhound Parcel (APN 032-135-14).

• The Agency agrees to include a contractual provision in any agreement transferring in whole or part any right, title or interest to APN 032-135-14 to a private party (e.g., Silverwing Development) that provides that: (i) such real property may not be used for a non-restricted gaming establishment; and, (ii) Wolfhound or its successors and assigns are specific third-party beneficiaries that may enforce by any legal or equitable remedy compliance this restriction.  City staff have reviewed this provision with Silverwing Development; Silverwing does not object.

Per the Agreement, the parties jointly stipulated that the land exchange will not involve an exchange of money; this was the only acceptable option to all of the parties.  While the appraised value ($200,000) of the property the Agency is receiving (i.e., the Wolfhound Parcel) is less than the appraised value ($235,000) of the property (Parcel I) Wolfhound is obtaining in the exchange, the values are comparable and the exchange can be deemed to have equal value for the parties.   However, NRS 279.630(1) stipulates that the Agency must find that the disposition of property for less than its fair market value is necessary to effectuate the purposes of the Redevelopment Plan.

HOW THE PROPERTY EXCHANGE AGREEMENT EFFECTUATES THE REDEVELOPMENT PLAN

In this case, the exchange is occurring at the behest of the Redevelopment Agency and, per NRS 279.630(1), the Redevelopment Agency may proceed with the exchange on the proposed terms if the Agency Board finds that it is necessary to effectuate the purposes of the Redevelopment Plan. The proposed Agreement is intended to allow the Redevelopment Agency and City to effectuate the purposes of the Redevelopment Plan by accomplishing two purposes.

First, full implementation of the Agreement will allow the Redevelopment Agency to complete the reconfiguration of parcels and public right-of-way in the area bordering and including Victorian Square Plaza (the “Plaza”) between Victorian Avenue and Avenue of the Oaks, as called for in the Victorian Square Development Plan amendments to the Town Center Redevelopment Plan.  There will be four parcels, two each on the east and west sides of the Plaza bordering the north-south street couplet between Avenue of the Oaks and Victorian Avenue.  These four parcels are designated for mixed use development featuring retail, dining and entertainment uses on the ground floor and residential and/or office uses on one or more upper floors.

Second, the Redevelopment Agency will acquire APN 032-135-14, which will complete the Agency’s assembly of the property along Victorian Avenue between what was formerly 13^th Street and Victorian Plaza Circle.  Doing so will enable the Redevelopment Agency to sell this parcel, along with other Redevelopment Agency parcels, to Silverwing Development for their proposed Fountainhouse multi-family residential and mixed-use project, as contemplated in the December 2014 ENA between the City, Redevelopment Agency and Silverwing.  In addition, Wolfhound which will own the four parcels lining the Plaza between Victorian Avenue and Avenue of the Oaks which should facilitate their future redevelopment.

Staff respectfully recommends that the Agency Board make the finding that the proposed property exchanges, as provided for in the Agreement, effectuate the Redevelopment Plan and that the Agency Board approve the Agreement.

The Council could decline to make the requested finding and reject the Agreement or modify the terms of the Agreement subject to the concurrence of the City and Wolfhound Holdings.

I move to approve the Victorian Square Property Exchange Agreement with the City and Wolfhound Holdings, LLC as presented to the Agency Board and to make a finding that disposition of the the Agency owned parcel identified as APN 032-136-11 as provided therein for less than fair market value is necessary to effectuate the Town Center Redevelopment Plan for the reasons set forth in the staff report, the staff presentation to the Agency Board and information provided during the public hearing.