Jason Hidalgo

Reno Gazette-Journal

A key downtown Reno property is poised to see new life after languishing for years.

The former Sundowner south tower on North Arlington Avenue and Fourth Street sold on Thursday for $12 million to Pine Cone Circle Investment, paving the way for the property’s redevelopment. The company is an affiliate of Lake Tahoe-based Prim Ventures.

“The Sundowner has been empty far too long,” said Brian Ring, vice president of Prim Ventures. “We aim to change that pretty quickly.”

The sale involves the south tower of the former Sundowner property, which was split off from the Belvedere north tower during the recession, said Ted Stoever, senior vice president of land and investment for Colliers International in Reno. Stoever served as the sole broker for the transaction, which involved Bay Area-based seller Steven Scarpa and buyer Prim Ventures. The south tower encompasses nearly 200,000 square feet, 20 stories and more than 300 rooms, Stoever said.

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The building was in contract for eight months as the parties untangled a web of legal issues associated with the property, which has been subject to tax liens and other problems over the years. The property was originally sold in 2003 after the Sundowner Hotel Casino suffered financial losses from the advent of Indian gaming.

“It was a complicated transaction with lots of moving parts,” Stoever said. “Obviously, it’s had its challenges in the past but it’s a high-profile property in downtown Reno.”

The new owners are looking into mixed-use redevelopment of the property that would be in line with revitalization efforts aimed at attracting more people as well as a younger demographic to downtown Reno.

Potential ideas include housing units at the upper floors as well as a grocery store, restaurants and retail at the lower floors. Ring pointed to the success of the 3rd Street Flats, which rose from the ashes of a blighted property — the King’s Inn — as one of the properties that his company is looking at for ideas.

Although housing is eyed as part of the potential mix, the building’s new owners have not yet decided whether to turn some of its units into condominiums or apartments. Looking at the current demand for multifamily housing, however, the company is leaning toward apartments.

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Pine Cone Circle says it does not have an exact timeline for redevelopment or an estimate on how much it will cost as it has only owned the building for a few days. The company, however, would like to get going sooner rather than later and is already in the process of gathering consultants, architects, engineers and advisors for the project.

Stoever says that the $12 million asking price for the property initially looked aggressive for a market that was hit hard by the recession. Given the recovery in real estate values and the ongoing growth seen in the greater Reno-Sparks area, however, the price became more attractive as time went by.

“We showed the property more than 40 times,” Stoever said. “There are a lot of developers and investors looking for opportunities downtown.”

Stoever says he sees a lot of synergies for the property with other ongoing efforts downtown, including Jacobs Entertainment’s Fountain District projects. Asked about the rising cost of development downtown, Stoever says it is a natural effect of the growth and developer interest seen in the area, especially given how far real estate declined during the downturn.

Prim Ventures, meanwhile, says it is excited about the property’s potential. Although nothing is set in stone yet, the company is also receptive to potential partners who want to work with them on the property.

“(The Sundowner) is in an area that the city clearly likes to see improved and brought to a new standard,” Ring said. “It has the capability of having a variety of different uses and the totality of those circumstances brought us to believe that this was something worth pursuing.”