Are weekly motels the next hot redevelopment opportunity in Reno?

Several Reno developers have started buying vacant weekly motels to convert them into apartments, while others hunt for the right price to do the same. And another still is demolishing them to build a new district instead.

Kelly Rae and partner Pam Haberman bought the Coach Inn from Northern Nevada Urban Development Co. on Fifth and Center streets for $610,000. They said they plan to convert the decade-vacant property from 21 motel units into 15 small and three medium apartment units. Small and medium in this case means 220 and 440 square feet.

They plan to rename the motel Uptown 18. They have redeveloped old buildings into apartments and built new ones throughout the Midtown and Wells Avenue District neighborhoods over the last decade.

“We’ve touched every part of urban Reno with the exception of downtown," said Rae, co-owner of HabeRae properties. "We always wanted to do a midcentury building and (Coach Inn) kind of showcases what can be done with a building of that era."

HabeRae said they plan to add kitchenettes, living and sleeping areas and washers and dryers in all units. Many of the 93 motels operating in Reno-Sparks don't include anything more than sleeping areas and a bathroom, though they still operate as semi-permanent housing for Reno's poorest residents.

“There is a market for small space living, we’ve learned," Rae said. "We get emails every single day asking for it."

Rae said that after years of building new and redeveloping old, they've learned it's more cost-effective to buy a sturdy, vacant building to gut and turn into something livable. They recently converted a Salvation Army Depot into Salvation 10 apartments and previously converted DeLuxe Laundry into apartments on Wells Avenue. 

They want Uptown 18's rent to cost under market rate, and if possible, under the current rate for weekly motels. Many of the weeklies now charge about $700 or $800 per month — far more than the low-income tenants can afford and close to the median rent price for a livable two-bedroom apartment. 

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"We choose projects that are interesting that nobody else wants to do," Rae said. "We ask if we love that building. How much do we love it? Can we change it? Can we make it a better color? Will someone love to live there? If the answer is yes, then we’re in."

Rae said they hope to start renting next summer and want to attract 18 people who need affordable living in downtown.

This is not the first time HabeRae tried to buy a motel and convert it. Last year, they offered to save two motels on Virginia Street from the wrecking ball. They wanted to convert those into apartment to show that it's possible.

But Northern Nevada Urban Development Co., which sold them the Coach Inn, refused a $1.2 million cash offer for the Golden West Motor Lodge and Heart o' Town motels across from Circus Circus. The two vacant scars of those motels are now filled with Burning Man art.

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Nick Pavich, a principal at NNUD, did not immediately return requests for comment on the sale.

Though the Uptown 18 project sits within the Tessera District, a redevelopment district meant to encourage retail development, HabeRae is not planning for retail tenants. Neither have other housing developers making other plans nearby.

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"I think it’s because there’s more demand for residential than retail right now," Rae said.

Rae said she is confident the redevelopment will be successful and wants to show other developers that the empty motels littering downtown and Fourth Street can be converted into habitable, affordable homes.

"You can take every one of those East Fourth motels and make them glorious living spaces. Seriously," she said. “We’re going to prove it. I want everyone to watch this project.”

Center and Pine

On the other side of the Truckee River on Center and Pine streets across from the Wells Fargo building, another motel was redeveloped into apartment living this summer. The motel was previously called the the most blighted property in Reno in an RGJ investigation two years ago.

But now it's an apartment with planned retail on the ground floor.

Urban Investments and Desert Wind Homes stripped the motel down to its concrete pillars and rebuilt it into Center and Pine apartments. What was originally a ground-floor parking lot is now a gated garage with space for retail and restaurants. The outdoor-facing motel rooms are now a mix of studio, one- and two-bedroom units with washers, dryers and kitchens facing an indoor hallway.

Fountain District

Meanwhile on West Fourth Street, Gold Dust West owner and Jacobs Entertainment developer Jeff Jacobs continues to buy up motels in order to take them down.

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In early September, Jacobs started demolition of the Carriage Inn on Washington and Fourth streets. Demolition and asbestos abatement also started on the Donner Inn across the street and Star Dust Lodge on Arlington Avenue. He also bought several other weekly motels across from the Sands Regency Casino (which he also purchased), including the El Ray and City Center motels.

Jacobs doesn't plan to save or redevelop the motels in this ever-expanding footprint. Instead, he told the RGJ he wants to turn the district into the Fountain District. He said it would start with commercial development, parking structures and event spaces, then evolve into multi-story mixed-use apartment living above that commercial district. 

The Fountain District could also include roundabouts at Fourth and Washington streets and on Fourth and Ralston streets to mitigate car-pedestrian accidents. 

The project, which seeks to revitalize the Sands too, is a long-term one that he said would take several years, though the overall plan has not materialized publicly.

Jacobs said he may also want to buy other weekly motels in the Fountain District footprint behind 3rd Street Flats to collect a contiguous area of land to redevelop.

For now, all these developments appear to move slowly, but they continue to chip away at both blighted and operating weekly motels.

Mike Higdon is the city life reporter at the RGJ and can be found on Instagram @MillennialMike, on Facebook at Mike Higdon, Reno Life and on Twitter @MikeHigdon.