Traffic, water, schools: What you need to know about proposed Stonegate development

After nearly two years of wrangling, the Reno City Council is poised to make a final decision Wednesday on whether to allow developers to build 5,000 housing units-- more than exist in the entire town of Fallon-- on the northern outskirts of the city.

The Stonegate development would be a masterplanned community of townhouses and single family homes sprawling over 1,700 acres of what used to be the Heinz Ranch in Cold Springs, 15 miles north of Reno. It would include parks, a swimming pool, sites for two elementary schools, a town center of local shops and an extensive trail network connecting it all.

The proposal comes at time the region is experiencing a severe housing crunch, which has made affordable housing almost non-existent, dropped the apartment vacancy rate to 2 percent and sent the median home price soaring.

But the location of the development, 15 miles north of downtown Reno, has raised concerns about promoting sprawl, the city's ability to pay for police and fire services there, the traffic the new homes would add to the already over-stressed U.S. 395 corridor and whether the development would overtax the region's water supply.

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The developers of the project-- the Heinz Ranch Land Co.-- say they've addressed each of those concerns in the 18 months it has taken to work through the city of Reno's approval process, reacting to the concerns of city staff as well as people living in the North Valleys.

"The simple answer to your question is: We believe we offer a lot more to the city than being a burden to them," said Don Pattalock, a principal in the Heinz Ranch Land Co. "They take on no debt. The general fund gains from us. The street fund gains from us."

Here's a look at how the development will affect everything from water supply to road infrastructure:

Will the development result in a "net positive" for the city of Reno's tax revenue?

The Stonegate developers and city staff continue to disagree over this important point. The developers believe their project will generate enough tax and fee revenue to add $6.4 million to the city's general fund and $19.6 million to the fund the city uses to repair streets over 20 years.

The city took issue with the developers' methodology, which assumed 95 percent of Stonegate residents would be new to the area. The city believes between 50 percent and 75 percent will be new residents and thus less revenue will be generated.

The city anticipates a deficit after 10 years, meaning the development would cost more to service than it would generate in revenue.

The developers "strongly disagree" with the city's analysis, arguing the new residents will generate more revenue than the city expects.

Pattalock also points out that owners of new homes pay higher property taxes than those who have older homes which have depreciated.

Will this development burden the school district?

The Heinz Ranch Land Co. will donate the land for two elementary schools to the Washoe County School District to handle the influx of students expected to arrive with the development.

The developers also will set aside land for a high school, but will not be donating that land to the school district. They argue the high school will be used by the region, not just their development.

It will be up to the school district to fund the construction of the schools and to staff and operate the schools once built.

How bad will this be for U.S. 395 and the Spaghetti Bowl?

Anyone who drives between Cold Springs and the Spaghetti Bowl on U.S. 395 during rush hour knows it can be a miserable commute.

The traffic issue has been one of the more difficult ones for the city and developer to deal with. Under city code, the council can't require the developer to build improvements on a state-owned highway.

While the developers plan to build a new interchange at the Cold Springs exit, they have no plans to help fund projects to increase the capacity on U.S. 395.

Instead, they are taking the largely unprecedented step of tying their construction dates to improvement projects planned by the Nevada Department of Transportation.

Heinz Ranch Land Co. hired a former NDOT deputy director as a consultant to work with the state in an effort to obtain a solid commitment for the U.S. 395 improvement projects.

Under the agreement with the city, the developers won't begin building houses until construction begins on two projects designed to ease traffic flow on U.S. 395 from the state line to the Spaghetti Bowl. The developers won't be able to begin construction on the third phase of their project until the state is underway on its projects to add another lane to the freeway between Lemmon Drive and McCarran Boulevard and to widen the Spaghetti Bowl.

"That's the scary part for us," Pattalock said. "We realize the risk and it's why we were resistant to tie ourselves to an (NDOT) project we don't control."

NDOT spokeswoman Meg Ragonese said the state did not make any promises on timing to the developers, noting that the U.S. 395 projects were prioritized in a public process. She also noted that factors out of NDOT's control could delay those projects.

If a delay occurs, the developers would have to go back to the city to win approval for an alternative for alleviating traffic.

Ragonese also noted that NDOT has offered to relinquish ownership of a section of North Virginia Street to the city of Reno, which could be rebuilt to serve as an alternative roadway to the Stonegate project.

Where will this development get its water?

The Stonegate community would rely on water from the Fish Springs Ranch water importation project, the first time water would actually be imported into the Truckee Meadows.

Water would be shipped into the community from the Honey Lake Basin just west of the stateline through a $100 million pipeline project built by Vidler Water Co. Pattalock is a former executive from Vidler Water Co.

The pipeline project was controversial when it was built a decade ago in part because other communities, particularly in Lassen County, Calif., also rely on the water from the Honey Lake Basin. Officials from Lassen County continue to voice their concern over water being exported out of the Honey Lake Basin.

The Stonegate developers would finance the construction of a six-mile pipe to connect to Truckee Meadows Water Authority system.

The city of Reno originally wanted to require Stonegate to obtain a backup water source from nearby Great Basin Water Co. The city has since backed away from that requirement. Instead, Stonegate will rely on on-site wells as a backup water source.

How will the city pay for police and fire protection?

The developers have agreed to build a temporary fire station and police substation for the city to use during the early phases of the Stonegate project. They also will donate an ambulance to the city for use at the temporary station.

The developers also will build a permanent fire station and will provide furnishing and equipment for the station as well as a brush truck and triple combination pumper truck.

But it will be up to the city to staff both the temporary and permanent stations. While Stonegate developers argue their project will generate enough revenue to cover the staffing costs, the city disagrees and has not yet presented plan for funding either the police or fire staff.

Isn't this project going to be in the floodplain?

The short answer is: Yes.

This development is being built on ranch land that used flood irrigation for decades. The site includes both floodways-- natural streams and channels that fill with runoff from Peavine Peak-- and floodplain areas on the White Lake playa.

More concerning is the project is planned for a closed hydrologic basin, which means all of the water that runs off Peavine Peak in the south and the Petersen Mountains in the north winds up in White Lake with nowhere else to go. Floods in closed basins are problematic because the flood water can remain for months, as is the case in neighboring Silver and Swan lakes.

To mitigate this risk, the developers plan to dig out a substantial portion of the southeast end of White Lake to prevent the lake from flooding other properties in high water years. They also plan to build wider culverts to prevent flooding on U.S. 395 as well as a series of drainage swales throughout the development to both channel stormwater and allow it to infiltrate back into the ground.

Do key city officials have conflicts of interest on this project?

The short answer to this also is yes. But don't expect a public disclosure of the conflicts.

The conflicts include:

-Reno City Manager Sabra Newby's husband works for the McDonald Carano law firm, which also represents the Stonegate developers. But because she is not in a position to make decisions regarding approval of the project, she doesn't have to disclose her relationship, according to a memo written by the Reno City Attorney that was obtained by the Reno Gazette Journal.

-Councilwoman Neoma Jardon also is a former employee of the McDonald Carano law firm.

-Finally, the Truckee Meadows Water Authority is a client of the firm. In fact the same lawyer working on the Stonegate project, Michael Pagni, is the lawyer for TMWA. The water agency will get around this conflict by hiring an outside law firm to handle any negotiations with the developers for water service, said TMWA general manager Mark Foree.

-In 2005, when the land for this project was annexed by the city, Assistant City Manager Bill Thomas worked as a private consultant for the people who owned the land at the time.

Thomas said some in the city believed that experience presented a conflict of interest so he has recused himself from working on the approval process. But the city attorney ruled Thomas has no obligation to disclose because he has no financial or legal interest in the current project.

-Reno's Community Development Director Aric Jensen also has recused himself from managing the approval process because of a personal relationship he has with one of the developers. The city attorney's memo describes the relationship as a "casual friendship," which does not trigger the need to disclose.

The tangle of relationships bothers critics of the project, who worry objective decision-making on the part of city staff reviewing the project has been compromised.

"It seems like good decision-making will be thwarted here in a rush to get it approved with all these incestuous relationships," said Bob Fulkerson, executive director of the Progressive Leadership Alliance of Nevada. "And what happens in the future? This is just one step. Are these folks recusing all the way along?"

What happens if the city council doesn't approve the project?

In 2005, the city of Reno annexed the Heinz Ranch from the county. A year later, the council approved a zoning change that would allow for industrial development of the land.

In order to build houses, the developer needs the council to approve both a master plan amendment and a zoning change. The master plan amendment also must be approved by the Truckee Meadows Regional Planning Commission.

If the council doesn't approve the housing development, the landowners are free to begin building industrial projects immediately under current zoning rules.

Industrial development generally costs less for cities to provide services to than residential developments and also provide employment centers for the community. But an industrial development would do nothing to alleviate the housing shortage.