County agrees to apply for grant for Nevada Pacific Parkway project

Robert Perea, The Fernley Reporter

After negotiations between the Fernley City Council and representatives of Mark IV Capital on the terms of a grant application for the Nevada Pacific Parkway project hit a snag during the council’s June 17 meeting, Lyon County has agreed to be the applying agency.

The City Council and Mark IV were unable to settle on terms of Memorandum of Understanding between the company and the city for the purpose of a grant application for the completion of Nevada Pacific Parkway.

After a sometimes contentious back-and-forth between council members and Mark IV representatives, a motion to approve the Memorandum of Understanding failed, with only two of the five council members voting in favor. Then, later in the meeting, after Mark IV representatives implored the council to reconsider the item, no council member offered a motion that would allow them to reopen the discussion.

With the deadline to apply for the grant looming Friday, Mark IV representatives turned to Lyon County, which agreed to be the entity to apply for the grant.

The Memorandum of Understanding was first brought to the council for consideration on June 3, but at that meeting, the council asked for several questions to be answered before considering the agreement. But at the June 17 meeting, council members weren’t satisfied with the answers, and were leery that without documented assurances, the city could ultimately wind up being responsible for a project it can’t afford.

In June 2019, Mark IV Capital announced it had purchased the approximately 4,100 acres of what was then called the Crossroads Commerce Center, and additional land west of Fernley, and promptly renamed it the Victory Logistics District.

But to fully capitalize on the potential of the property, additional rail lines, and the completion of Nevada Pacific Parkway, connecting Interstate 80, from Exit 50 east of Fernley, to U.S. 50, would be required. Mark IV has also proposed building a rail spur and transloading facility as part of the grant application.

“They purchased the property knowing this project needed to be done,” City Manager Daphne Hooper said.

At the June 3 meeting, the council asked Mark IV to produce a letter from the Nevada Department of Transportation to guarantee that NDOT is committed to the project.

At the June 17 meeting, Ross Pfautz, Mark IV Northern Nevada Vice President for Development & Asset Management, told the council that NDOT has $2 million committed to the project, but the council wanted that in writing, saying it’s been told otherwise by NDOT.

“When we’ve spoken to NDOT, it’s not only no, it’s hell no,” Mayor Roy Edgington said.

The project, which includes an overpass over the railroad, is estimated at $54 million.

The grant funding would be reimbursable, but with an annual general fund operating budget of about $8 million, the city would be unable to pay for the project. The agreement between Mark IV and the city would call for Mark IV to front the money for the project, including matching funds required by the grant. The city would then administer the project and use the grant funds to repay Mark IV.

“The grant is contingent on us making that commitment,” Pfautz said. “It’s the basis for the partnership we have with the city.”

However, the council wasn’t satisfied that the commitment wasn’t in writing.

“The Council was concerned because if the developer walked away – which has happened before – or if we find ourselves in another pandemic or crisis, the financial liability of this project would fall onto the City of Fernley and our citizens,” Edgington said.

Councilman Albert Torres expressed concern that the design of the project, as presented to the council, showed the railroad spur being built close to a city well and a lift station. The discussion became adversarial when Torres asked Pfautz what the proposed solution is, and Pfautz didn’t give an explanation.

“There were many simple requests and questions that needed to be answered, but were not,” Torres said.

Councilman Stan Lau proposed a motion to approve the Memorandum of Understanding, but only he and Ray Lacy voted in favor, with Torres, Shellie Severa and Fran McKay opposed.

Because the grant, from the U.S. Department of Transportation, requires a political subdivision, such as a city or county, to be the applicant, Mark IV is ineligible to apply for the grant itself. Instead, the company turned to Lyon County.

County Manager Jeff Page said applying for the grant doesn’t put the county in any position of liability.

“All we’ve done is applied for the grant,” he said. “The county has not taken any action.”

Page said the county allows department heads and elected officials to apply for grants without commission approval, because grant deadlines and application timelines often don’t allow enough time.

Instead, the commission must act to accept a grant if an application is approved.

In this case, Page said, the county will negotiate its own Memorandum of Understanding with Mark IV, which will be presented to the commission for consideration of approval during its second meeting in July.

“We’ll clear up some of the language so we’re all clear on our roles,” Page said.

If the grant is approved and the county accepts it, the county would be responsible for administering the grant and ensuring its requirements are followed, but much of that would still fall on the city.

“This is a very good outcome, as the County is in a position with more resources to use for such a substantial project versus the City of Fernley,” Edgington said.

If the grant is awarded, the City will still be involved throughout the entire project.

“The plans and development would still go through the city for review,” Hooper said

Page said he was willing for the county to get involved because of the necessity of connecting I-80 with U.S. 50.

“This is our one shot to do it without spending local tax money,” he said.