Jacobs proposing 1,000 downtown Reno workforce housing units. He wants the city to help

Developer and hotel-casino owner Jeff Jacobs is proposing 1,000 new affordable workforce housing units in downtown Reno to help address the city’s housing affordability crisis, provided the city also contributes to the deal.

Jacobs — whose company owns the Sands Regency and is in the midst of an ambitious redevelopment of the West Fourth Street downtown corridor into the Reno Neon Line district — offered up some of his own land as part of a potential public-private partnership to build more housing as well as public parking downtown.

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The Jacobs Entertainment CEO, however, also added that he would like to see the city of Reno “have some skin in the game.” Jacobs cited securing additional real estate as well as infrastructure funding for the workforce housing project, including federal dollars, as examples of what the city could do. 

“If the public bodies want to engage in conversation with me regarding that goal of 1,000-plus affordable housing units and 3,300 parking spaces then I’m willing to include in that conversation about $15 million worth of my land which could help us get a long way toward that goal,” Jacobs told the Reno Gazette Journal on Thursday.

Jacobs made the proposal prior to a Monday public forum over his Reno Neon Line project. The proposed entertainment district has fueled much debate in the community, ranging from the terms of its proposed development agreement to the razing of several old motels to make way for the project. Prior to being demolished, the motels served as de facto low-income housing for people unable to afford Reno-Sparks’ skyrocketing rents. 

Reno City Manager Doug Thornley also got embroiled in the controversy over the project during a heated city council meeting where Councilwoman Jenny Brekhus questioned whether Thornley was in the pocket of the developer.

The 1,000 housing units proposed by Jacobs, which are planned to be a mix of workforce and affordable housing, would help alleviate the loss of the hundreds of units taken out of the market after the motel demolitions. Workforce housing is typically targeted toward middle-income households that make between 60% to 120% of an area’s median income, according to the Urban Land Institute. Affordable housing, on the other hand, applies to those making 60% or less of their area median income.

The move would address one of the common criticisms about the Reno Neon Line project and the city council. A ProPublica investigation co-published in the Reno Gazette Journal found that “city leaders have not used Jacobs’ project as leverage to increase and improve affordable housing options.”

To help push the proposal forward, Jacobs is offering vacant land located between Washington and Ralston Streets just south of the train tracks. Jacobs was originally planning to turn the empty lot into surface parking.

Jacobs shared a rendering as an example of the type of property that could be built on the site. The mockup showed two buildings that combined housing and parking spaces into each structure. Combined, both buildings will feature 850 units and 2,650 parking spaces, including 1,800 for the public.

In order to reach 1,000 units, the city will have to provide extra land, according to Jacobs. The CEO also proposed having two other agencies involved — the Reno Housing Authority and the Regional Transportation Commission of Washoe County. The city and the RTC have experience working together on garages while the RHA is versed in affordable housing development.

“Perhaps the city, housing authority and transportation commission can talk among themselves and, if they’re inclined to work with me toward this goal, they can go out and get additional land or property in the district where another 150 or 250 affordable housing units can be built,” Jacobs said.

“There are several parcels in the district that lend themselves to that.”

Jacobs added that his company won’t be developing the project and that he prefers for the Reno Housing Authority to take the reins for building it. While it’s possible for the city to contract with a private developer, Jacobs believes it would be better for the project to be a public one.

“They could invite a private sector developer to come in, I suppose,” Jacobs said. “But I’m hoping the housing authority can do the development because if you bring in a private sector … developer, millions of dollars will go to profit for the private sector.”

Potential public funding sources floated by Jacobs and other backers of the proposal include community development block grants as well as the recently passed infrastructure bill.

If Jacobs won’t be developing the project, the question is what he wants in return for the land that he is offering for use. In response, Jacobs said that the project’s economics and the terms of the land deal would be subject to further discussions with the city.

Jacobs is even open to donating the land “under the right scenario.” As to what that scenario would be, discussions must take place with the city and its partners, he said.

“I don’t even know yet if (this project) is something that folks want to do,” Jacobs said. 

“The first conversation is, can we first catch the chicken before we figure out what the ingredients are in the chicken soup?”

Reno Mayor Hillary Schieve, who Jacobs consulted with while crafting his proposal, confirmed that she is definitely interested in such a partnership for affordable housing. Schieve likened it to the city’s 1,000 Homes initiative, except this time it’s for “1,000 doors in downtown for workforce and affordable housing.”

Schieve stressed that a public-private affordable housing project was always part of the bigger picture for the city. The arrival of the pandemic in 2020, however, threw cold water on such plans, particularly as it related to downtown’s West Fourth Street corridor, she said.

The mayor also pushed back against accusations that the city was simply rubber-stamping the Reno Neon Line District and other development projects across Reno and not pushing hard enough for more affordable housing.

“That’s what’s so hard about the narrative that the city did nothing,” Schieve said. 

“This was always part of the plan. I’m just glad we could pick up where we left off before COVID happened.”

Getting affordable and workforce housing constructed, however, is easier said than done, particularly for a city that is already stretched thin as far as resources. Making an affordable housing project pencil out is already tough in a normal market. Add today’s rising costs for materials as well as a labor shortage and the proposition becomes even tougher.

Even Schieve acknowledged the challenges of getting a 1,000-unit project done should the city accept the proposal. By having various stakeholders come together, however, Schieve hopes the project will come to fruition.

“This is where it becomes important to bring private and public partnerships together in order to create the affordable housing we desperately need,” Schieve said. “This will probably be the largest housing initiative this region has ever seen coming out of the Reno Housing Authority.”

Jason Hidalgo covers business and technology for the Reno Gazette Journal, and also reviews the latest video games. Follow him on Twitter @jasonhidalgo. Like this content? Support local journalism with an RGJ digital subscription.