Developer calls airport purchase a ‘raw deal’
When Tom Ragan picked up the Sierra Sun on Nov. 12 he realized that he had lost more than $200,000.
The news story on how Truckee Tahoe Airport had bought a 19-acre parcel off of Estates Drive was Ragan’s first indication that his almost three-year effort to build a subdivision of workforce housing on the land had finally failed.
“We just think that we got a raw deal,” said Tom Ragan, president of Pacific Built in Tahoe City, the Ragan family business that planned to build the subdivision. “We’ve got a whole lot of paperwork, and that’s all we’ve got for our $200,000.”
The saga began in late 2000, when Ragan decided to diversify his marine construction company. Ragan feared that Tahoe Regional Planning Agency regulations would make it too hard to rely solely on construction of docks, piers and other lake projects, and decided to launch a workforce housing project in the area.
After a six-month study of land, Ragan found a 19-acre piece he thought was suitable. It had several drawbacks – a wetland ran through the property, and there were noise and safety issues from the neighboring airport – but these factors also worked in his favor, making the land very affordable.
With an inexpensive piece of land (the property was offered by the Winters Family Trust at $630,000) Ragan designed the type of project he thought the area needed. It started as 45 workforce homes, and gradually shrunk through the more than two years of design and redesign. The project was to be named Ponderosa Pines.
The idea was to provide renting families the ability to buy an inexpensive home in a town where home prices have skyrocketed. Homes in the development were to range from $178,951.50 for a two-bedroom home, to $224, 217 for a four-bedroom home. The deeds on the houses would be restricted to be only occupied by owners (no rentals) and would only increase in value by the cost of living plus improvements done to the property.
“If you don’t put restrictions on them, then they are no longer affordable,” Ragan said.
Ragan had some vested interest in the idea of an inexpensive subdivision. Pacific Built had 28 employees more than three years ago; now they have two. It is impossible for working families to buy a home in the area, so they move to Reno and other outlying areas, Ragan said.
“Half of our employees are leaving us because they have nowhere to live,” said Ragan. Melinda Ragan, Tom Ragan’s daughter and part owner of the business along with her brothers, said, “All of us live in Reno. Nobody can buy anything around here anywhere.”
Pacific Built went into escrow on the property in February 2001. For the next two and a half years, the company redesigned the project numerous times to respect seasonal wetland areas and the noise contour of the airport. In the process they consolidated the project to 38 homes and spent more than $200,000 of their own money.
During the planning process the company remained in escrow, asking for extensions while the planning department pointed out where the plan needed to be redesigned.
Community Development Director Tony Lashbrook said the wetland and airport noise issues made it a very “complicated” project.
“Trying to address those issues was very difficult,” he said. “On day one, when they showed up, we told them, ‘you have to go talk to the airport.'”
“Frankly we could use that housing he was proposing, it just didn’t happen,” Lashbrook said. Issues that kept the project in the planning stage were addressed with Pacific Built early on, and were not fully dealt with in the proposal. Communication deteriorated between the planning department and Pacific Built before the airport bought the property, said Lashbrook.
The property was 2,500 ft. from the edge of the primary runway, with houses being proposed within 3,500 ft. and directly under the flight path of the airport. Although a revised development put the development outside of direct safety and noise restrictions, the concern over increasing density so near to the primary runway may have been a primary reason the proposal eventually failed.
However, Ragan feels that the resistance the project received was unusual. He said that his final proposal was outside of the noise contour of the airport and that Lahontan Regional Water Quality Board had signed off on the wetland issue of the property.
“They just kept leading us, asking us for information,” said Luke Ragan.
A representative for the Winters family, owners of the land, contacted Pacific Built and asked for a larger, non-refundable deposit for an escrow extension. Ragan asked how much they wanted, and the representative for the family said he would get back to them, according to Tom Ragan.
Then, on Nov. 12, Ragan was called by a friend and told to read the Sierra Sun story on the airport’s purchase of the land. That was the first Ragan knew of the failure of his development.
“They have not ever notified us that the deal was off,” said Ragan of the seller. “They just let the ball drop.”
“Three years later is too late to tell you ‘no,'” said Luke Ragan.
Melinda Ragan added, “If they had told us from the start, ‘no way’ that would be $200,000 not down the hole.”
Ragan assumed that he was still in escrow on the property. The Ragans said that they would have at least liked to have had an opportunity to buy the land, and recover some of their lost money by reselling it. However, they said they were never notified or given the opportunity to match an offer.
Dave Gotschall, airport manager, said that the property dropped out of escrow, and the airport bought it up since it would, “most likely be designated unusable when the Airport Land Compatibility Plan comes out.” He noted the land would be designated “airport influence zone” by the new plan.
“We did the right thing in my opinion,” Gotschall said. “If that project had gone through I don’t think that it would have made anyone happy.”
Gotschall said that the land was so close to runway 28, that building homes there would have amounted to “environmental injustice.”
Ragan said that he planned for the possibility of noise, doing a week-long noise study, and designing for heavy insulation on the homes. Plus, the proposal was planned for a space in between two housing developments, and would not have been even the nearest houses to the airport, he noted.
“It’s an infill project. We’re in between everything else,” said Melinda Ragan.
John Ragan said, “If somebody doesn’t want to hear any airport noise, don’t buy a house there.”
Ragan doesn’t understand why the airport would buy the land, or increase the noise contour so dramatically for 2020, an updated guideline that Ragan’s proposal had to meet.
“We don’t need a huge airport there. It’s a small-town airport and that’s all it needs to be,” said Ragan.
Gotschall has emphasized that the airport did not buy the land for expansion, and will hold the land as open space.
“You don’t want to adversely affect anyone, so we took it off the plate,” Gotschall said of the property.
The Ragans said they had planned to build more affordable housing in the area if this project had gone well. Now they plan to get back to the marine construction part of their company.
“Our money is out on the lake. We make better money out there,” Ragan said.
The Ragans are convinced that the community lost out along with them when the proposal failed. The housing project would have attracted working families that now rent, freeing up rental property for lower income households, they say. In a town with an affordable housing shortage, they can’t understand why their project was not encouraged.
“The community is going to want to know why a project like this failed,” said Melinda Ragan.
Support Local Journalism
Support Local Journalism
Readers around Lake Tahoe, Truckee, and beyond make the Sierra Sun's work possible. Your financial contribution supports our efforts to deliver quality, locally relevant journalism.
Now more than ever, your support is critical to help us keep our community informed about the evolving coronavirus pandemic and the impact it is having locally. Every contribution, however large or small, will make a difference.
Your donation will help us continue to cover COVID-19 and our other vital local news.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.
User Legend: Moderator Trusted User
Local coronavirus cases reached 3,292 on Friday, a rise of 35 from the day before.