City Council Discusses Land Sale To Address Workforce Housing

By VERNON ROBISON

The Progress

The Mesquite City Council passed a resolution last week that expressed an interest in selling 318 acres of city-owned property designated for economic development. The action, taken in a meeting held on Tuesday, June 28, found that selling the property for that purpose would be in the best interest of the city.

The parcel is located on a large swath of rugged terrain south of Hardy Way, east of Lower Flat Top Drive, and west of Falcon Ridge Parkway.

The resolution itself did not recognize any specific developer for the property, or whether it should be sold as one large parcel, or broken up into developable pieces.

However, in a separate item, earlier in the meeting agenda, the council had heard a presentation from a local development group called Mesquite Affordable Futures. During this presentation, the council had held a discussion on the possibility of entering into a development agreement with the group on this parcel of land.

Opening a dialog
To begin the discussion, Assistant City Manager Martine Green explained that the city staff had been approached by Affordable Futures about a phased acquisition of the 318 acres to build a mix of market rate and workforce housing. The conceptual planning also included a sports complex on 33 acres on the northeast corner of the property, she said.
“We have asked the developer to come here tonight to make a presentation and open up a dialogue on a potential joint development agreement between them and the city,” Green added.

Making the presentation was local real estate brokers Trent Graves and Doug Reeth of Premier Properties; and local developer/contractor Dillon Jensen of Nevada Residential Construction (NRC).
Graves explained that their concept had begun with the group noticing a need for housing priced for the city’s workforce. Graves said that their two companies employ about 100 people. He said that it is a challenge to keep staffed.
“Like other employers, we are discussing how to attract and keep employees,” Graves said. “And the concept of affordable housing just keeps coming up.”

Meeting a need
Graves said that the group is proposing to purchase around 272 acres from the city at appraised market value. But a 45-acre portion would be tagged for affordable workforce housing and acquired from the city at around $1,000 per acre. This would allow the housing product on that property to be lower in cost and aimed at an emerging workforce, Graves said.

Mesquite mayor Al Litman asked the group to clarify what was meant by “affordable housing.”
Jensen responded that the developers had no intention of staying within the bounds of federal affordable housing guidelines in this project. Instead, the developer wanted to work carefully with the city to keep costs of land and building low so that the product could be lower in cost for the ultimate buyers.

“We don’t want to be hamstrung by government red tape,” Jensen said. “So our proposal is basically to voluntarily put a profit margin cap on ourselves of 15 percent on any development or vertical construction.”

Jensen said that the group is open to multi-family apartment complexes, duplex housing or smaller single family dwellings.
“We are totally flexible and willing to go down that road and put together some numbers and proposals and layout and work with the city to figure out just the right product on that piece of property for the workforce,” Jensen said.

“But to keep things affordable, it is going to have to start with the land,” Jensen added. “Buying a portion of it at a discounted rate.”

Other benefit to the City
The project’s net result to the city was estimated at about $5.4 million in cash influx from the total sale of the parcel, according to Graves. Those funds would be placed in an escrow account for the city to use as it sees fit, Graves said.

Graves pointed out that the concept currently would set aside an adjacent 32.26 acres, not part of the proposed 318 acre take-down, as a future city park. He suggested that the development group could build all or a part of that recreationa facility as part of the project. But if the council decided that something else was needed more than a park in that area, there was flexibility for the city to use the money elsewhere, Graves said.

“This proposal, I think, is a win-win for everybody,” Graves concluded. “We are able to provide some much needed affordable workforce housing, as well as city amenities that are not in the budget that we can build for much cheaper than the city could. But again, we are very flexible on it. If you’d rather take the money and build your fire station with it, we can do that instead.”

Concern over land scarcity
City Public Works Director Travis Anderson had written a memo the previous week expressing his concerns about the proposal. In the memo, he pointed out that the proposed parcel represents most of the remaining land owned by the city and still available for development.
“With the sale of the entire 318 acres, we would be giving up approximately 64 percent of the land available,” Anderson said.

Anderson also felt that the 46 acres for workforce housing, out of a total of 318 acres, was too little for that purpose.
Anderson advised the council that including less of the land in the sales deal would be more in the city’s best interest. He also urged that a larger portion of the land be set aside to address the current workforce housing need.

Councilman George Gault asked Anderson about other city land that is still open to future growth. For example, he asked if there were plans to extend Pioneer Blvd further into the are west of Eagle’s Landing.
Anderson acknowledged that the city does own a good deal of property there. But to develop it would take significant infrastructure investment, he said.

Now is the time
Doug Reeth reminded the council that the proposed parcel is part of a federal land act of 2003 involving the takedown of 4,800 acres of BLM land.
“It is in the original act that the city was taking it down for growth purposes,” Reeth said. “That is the only reason that the BLM would give up that land. But we have been staring at it now for more than 20 years. That was not the intent.”

Reeth said that the community is now in a cycle of growth and the proposed parcel is next to existing infrastructure.
“I can’t understand when someone says, ‘Well, you’re taking all of the good land,’” Reeth said. “It is land right next to infrastructure that you build naturally as the next phase.”

Short and long term vision
Gault said that the council needs to be thinking both for the short term and the long term. As far as developable land, he felt that the city needs to be looking forward to create conditions for growth in the long term.
“I don’t know when people started developing the MTCC (Mesquite Technology and Commerce Center),” Gault said. “But somebody had some vision at some point. They stood out there and looked at that pile of dirt and mountains and said, ‘Yeah, I’ve got a scraper, let’s go to it!’ So if that is where the city has got to go, then let’s plan that now.”

In the meantime, Gault said he is deeply concerned about the short term issues that the city faces.
“We need to address the affordable housing issue right now,” Gault said. “We have about 150 new jobs coming, guys! I don’t know where the hell those people are going to live – unless these guys get going in a hurry.”

Councilman Brian Wursten felt good about the fact that the developer was flexible and willing to work with the city on what is needed.
“I asked about you helping us build apartments and you were open to that,” Wursten said to the developers. “I asked about taking the money (from this deal) and using it to put in infrasture into areas that haven’t been taken down yet for future growth, you were open to that. You are paying market rate for most of this land and it is a lot of property; and you are willing to do about anything we ask. I just don’t know that we are going to find a better builder out there for any of this.

On the action item before the council, Councilman Wes Boger made a motion to approve the resolution and instructed staff to enter into discussions with the developer on what is needed on that parcel. The motion was adopted with a unanimous vote of the council.