Significant. Highly unusual. Dangerous.

Those were some of the words thrown around during a civil yet highly charged meeting last week that saw the Reno City Council vote 4-3 to give the stalled Daybreak project a second look after its developer hit the city with a lawsuit.

The legal gambit by developer Newport Pacific Land paid off by garnering it the second chance it wanted after the same city council denied its application in November for a 4,700-unit master-planned community.

But it also came with a price.

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Some council members who were willing to give the project another look if the developer re-applied through the normal process now view it with increased skepticism as they find themselves dealing with a court-ordered remand to get both parties together before their Sept. 27 hearing date. Councilwoman Jenny Brekhus scoffed after the developer highlighted modifications to its plan that were designed to make it more palatable to city council members at the packed public meeting on Wednesday.

“In addition to the very poor precedent it sets of the do-over, I don’t even know if I want to sit on the table to hear all the goodies they throw at us,” a clearly frustrated Brekhus said.

Newport Pacific Land, meanwhile, said it had no choice but to sue after its application was rejected.

The Newport, Calif.-based developer claims it could lose $100 million if the project does not move forward as planned, essentially turning the dispute into a takings case where a property owner feels the government is restricting its rights to develop its own land.

Although the developer has the option to reapply, the delay would mean ballooning costs for the project, including higher pricing for any homes that eventually get built, according to Newport Pacific Land. Just sitting on land comes with holding or carrying costs for developers such as property taxes, not to mention the cost of equity or investment that was raised to fund the project.

“Holding costs are enormously great, especially for residential real estate development,” Christopher Bley, executive vice president for Newport Pacific Land, told the Reno Gazette Journal prior to the public meeting. “When people think of holding costs, it’s actually greater than what they think it is.”

The struggle between the city of Reno and Newport Pacific Land reflects the complicated dichotomy behind the Biggest Little City’s challenging real estate landscape.

On one hand, people clamor for increased housing supply as a significant housing shortage sent rents and home prices rocketing to record levels in the last year alone. On the other hand, a dwindling supply of readily available land has more developers looking at places farther away with non-existent infrastructure or less than perfect locations such as floodplains. This, in turn, is inviting pushback from concerned residents.

Reno Mayor Hillary Schieve echoed the sentiment during the city council meeting.

“Everyone always says to me, ‘Mayor Schieve, we want affordable housing, just not here,’” Schieve said. “I hear that all the time.”

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