Experts say industry will move away from Reno/Sparks

Industrial companies will develop in the rural western counties, rather than the already crowded Reno/Stead area, an executive with real estate giant Colliers International said Wednesday.

Dave Simonsen, senior vice president of industrial properties with Colliers International's Reno office, said at the Northern Nevada Development Authority's breakfast meeting, land in Reno's South Meadows has become too expensive for industrial, so it will likely move to smaller cities.

Nine manufacturing companies relocated to Northern Nevada in 2004, mostly in Reno or Sparks, according to the Nevada Commission on Economic Development. Carson City only saw one manufacturing addition.

Simonsen said the regional industrial market "took about three years off, from the latter half of 2000 until the middle of last year."

Although the presentation focused on Reno and Sparks, some rural spots received attention.

Colliers executives pinpointed the Tahoe Reno Industrial Center, Minden and Fernley as desirable locations for commercial and industrial development.

But these predictions have been known to err. In January 2004, developers predicted that 1.7 million square feet of industrial space would be built in the Reno area. Simonsen said less than half of that projection was met.

"Increasing construction costs were the primary reason," he said to about 140 development authority members in the Piñon Plaza. "The dramatic increase in the price of steel, lumber and concrete translated into an overall increase in construction costs of about 20 percent."

The largest land sale announced in 2004 was Wal-Mart's acquisition of a 140-acre site for a 890,000 square-foot food distribution center in the Tahoe Reno Industrial Center.

Wal-Mart plans to use this center as its main Northern Nevada distribution center for its new Wal-Mart Neighborhood Markets. None of these grocery stores, which are smaller than Wal-Mart Supercenters, are planned for Carson City, a company spokesman said. A Colliers' associate said there are four possible locations for the neighborhood markets in Reno.

Lance Gilman, co-owner of the Tahoe Reno Industrial Center, said Wednesday that several contracts are pending, including one Fortune 100 company.

Barrick Gold began construction on the fourth power plant at the center. Ledcor has graded a 30- to 50- acre site for the power plant.

TRI land prices increased 18 percent over last year, from $1.65 a square foot to $1.95, according to Colliers. It's the largest fee-owned parcel of property in the state. It's 104,000 acres, which is about 60 percent of Storey County.

Colliers' senior vice president of industrial properties said 1.7 million square feet of industrial space is projected to be constructed in the Reno/Sparks area and in industrial property along Interstate 80 including Fernley. Simonsen the I-80 corridor will continue to attract industry.

"One of the reasons for that is the lack of available land in the immediate Reno/Sparks area," he said.

Panattoni Development Co. and DP Partners of Las Vegas are expected to have the largest projects, together totaling 635,000 square feet.

Colliers International Associate Joel Grace said that Carson City's Wal-Mart, which is now under construction on East College Parkway, will include multi-tenant pads. He declined to disclose any businesses considering the location.

Contact reporter Becky Bosshart at bbosshart@ nevadaappeal.com or 881-1212.