By Jerry Snyder
On March 26, 2018, ThisisReno reported that the University of Nevada, Reno (UNR) issued a request for proposals seeking bids to purchase a 104-acre parcel of the University’s Main Station Farm, an experimental farm located on the east side of McCarran Boulevard, north of Mill Street.
UNR said that minimum bids of $20 million had to be submitted by April 5, 2018. It is not clear whether any conforming bids have been submitted.
UNR President Marc Johnson said that the proceeds from the sale are to be used “to provide funds to renovate critical research lab spaces to be more competitive for research grants.”
While the improvement of UNR research facilities is a laudable goal, the use of College of Agriculture, Biotechnology, and Natural Resources (CABNR) assets to fund this goal undermines CABNR’s proud tradition as part of a land grant institution and is contrary to well established and clearly articulated University policy.
In 1887, Congress passed the Hatch Act, which created a mechanism through which the federal government granted money to state land-grant colleges for the purpose of creating a number of agricultural experimental stations. States are required to at least match funds provided under the Hatch Act to set up and operate such experimental stations.
In 1917, in order to take advantage of Hatch Act funds, the Nevada Legislature enacted Chapter 145, authorizing the issuance of $43,000 in bonds. The money raised from the sale of these bonds was to be placed in the “university experiment farm fund.”
The Act further directed UNR to use the funds raised to purchase certain real property and water rights from D.C. Wheeler. In 1917, the University of Nevada Board of Regents voted to approve the purchase of the Wheeler Farm.
In 1944, Major Max Fleishmann supplemented UNR’s agricultural holdings by purchasing the Ladino Dairy farm, located about seven miles south of Reno, and donating it, along with the cattle, equipment, and water, to UNR.
In 1955, the Board of Regents concluded that the existing Wheeler Farm was not sufficient to serve the long term needs of the College of Agriculture, and accepted an offer by Le Vere Redfield to purchase the South Virginia Street Farm (the Wheeler Farm) for $700,000, with the proceeds to be used to purchase a larger property that would, as former UNR President Stout said, “enable the University to improve on what it is now doing in the way of agricultural research and in assisting the citizens of the state engaged in agricultural.”
In voting to approve this transaction, then Regent Roy Hardy wrote that his vote was conditioned on “a proviso that a suitable replacement outdoor farm laboratory is first obtained for the Agricultural College; also, with the understanding that any differences in the amount realized from the sale and the amount expended to purchase a new farm . . . would accrue to the Max C. Fleischmann College of Agriculture.”
On January 18, 1956, the Board of Regents approved the sale of the South Virginia Street Farm to Redfield and the purchase of the Gilbert Ranch, which forms the bulk of the current Main Station Farm.
In 1962, the Board of Regents approved the sale of the Ladino Dairy Farm. At the recommendation of then-President Armstrong, the Board resolved that “all remaining and future proceeds from the sale of the Ladino Dairy be devoted to the program in Agriculture.” The Board further voted that anticipated revenues from the sale of the Ladino Dairy go toward the Main Station Farm budget.
After that, UNR’s attitude toward the value of the experimental station began to evolve from viewing it as an educational and research asset that should be protected and developed to a financial asset that could be leveraged.
In 1979, UNR traded approximately 196 acres, known as the Jones Ranch, on the corner of Mill and McCarran, to Dermody Properties in exchange for 357 acres, located adjacent to the Main Station Farm, and $1.3 million in cash.
No mention is made in the minutes of the Board of Regents as to what this money was used for. However, as UNR looked at options to finance Lawlor Events Center, there were rumors, as reported in College of Agriculture Dean Dale Bohmont’s 1989 book The Golden Years of Agriculture in Nevada, that UNR intended using Main Station assets to assist funding the center’s construction.
As a result of these rumors, there was some movement toward enacting legislation that would ensure that funds generated from the sale of College of Agriculture assets would remain with the College.
In an effort to avoid the need for such legislation, the Board of Regents passed Resolution 81-8, which provided that the value of the College of Agriculture properties at Main Station, the Jones Ranch, and the Valley Road Experiment Station should “be protected and maintained for the benefit of the College of Agriculture and its programs.”
The Board decided that any income from these funds—though not the principal–were first to be used to supplement the operating budgets of the Agricultural Experiment Station, then the 4-H camp, and lastly UNR as a whole.
Since 1981, when UNR clearly articulated Main Station Farm assets should benefit the College of Agriculture, the Board of Regents has, on at least two occasions, reneged this policy.
In 2005, UNR sold 55 acres of Main Station to the Truckee Meadows Flood Control Planning Committee for $12.1 million.
In a September, 2005 meeting, regents approved this sale and determined that for purposes of this sale at least, the policy, as articulated in Resolution 81-8, should be temporarily rescinded.
From the proceeds of this sale, the College of Agriculture budget was increased by $100,000 per year. For the sake of comparison, the prime lending rate in Nevada as of July 2005 was 6.25 percent, which on principal of $12.1 million, would have yielded $756,200 per year.
In 2008 Bob Dickens, UNR’s then director of government relations, authored a “Public Benefits Initiative,” the stated purpose of which was to “modernize, conserve, and secure the Main Station Field Lab.”
This proposal suggested that the Main Station Farm would best be protected by selling a 104-acre strip of property along East McCarran, the value of which was estimated to be $40 million, with the proceeds of such a sale to be “used for other University purposes, such as decommissioning and debt liquidation of the Fire Science Academy and/or acquisition of CABNR facilities.”
In addition, this proposal noted that the construction of the Southeast Connector transportation project would require the sale of right-of-way through Main Station valued at approximately $9 million.
In spite of the fact that Resolution 81-8 continued to be in place, Dickens’ recommendation was that a portion of Main Station be sold and that the proceeds be used first to retire Fire Science Academy debt, and second for the benefit of CABNR.
The 2008 “Public Benefits Initiative” proposal is explicitly contrary to the policy the University articulated in Resolution 81-8.
Nonetheless, the Board of Regent’s actions since 2008 demonstrate that UNR’s de facto policy resembles the 2008 proposal more than Resolution 81-8.
In 2010, as part of budget cuts invoked in the wake of the subprime mortgage meltdown, UNR determined that it would eliminate the College of Agriculture entirely.
Notably, this was in direct contravention of a State Constitutional provision requiring that the University, as a land grant institution under the Morrill Act of 1862, maintain a college of agriculture. (Nevada Constitution, Art. 11, Sec, 8).
In the face of public outcry, the Board of Regents abandoned this plan.
In retrospect, it is hard not to wonder whether part of the impetus for the plan to eliminate the College of Agriculture was a desire to liquidate Main Station assets for other UNR purposes.
In 2012, the Washoe County Regional Transportation Commission purchased 165 acres of Main Station for a right-of-way for the Southeast Connector. The purchase price: $7,402,600.
In November, 2012, the Board of Regents approved the RTC sale, as well as the sale of 962-acre feet annually in water rights, worth approximately $5.2 million, to Great Basin Land & Water.
At the time of this sale, the regents again voted to “waive” the requirements of Resolution 81-8.
Funds generated by this sale were used to retire debt incurred when UNR moved the self-sustaining Fire Science Academy from Stead to Elko – at which time it ceased to be self-sustaining.
Perhaps recognizing that the proceeds of this sale ought to have gone to CABNR, UNR increased the College’s budget by approximately $300,000 annually. However, rather than being part of funds held in trust for the College, as required by Resolution 81-8, this budget increase is entirely discretionary and can be reversed at any time.
Since the regents firmly articulated their policy in favor of using Main Station assets for the benefit of the College of Agriculture, UNR has sold nearly $25 million worth of land and water from the property.
The funds generated from these sales have not been prioritized for the benefit of the College of Agriculture – indeed, any benefits the College has seen have been almost incidental.
It seems there is an implicit exception to Resolution 81-8 – Main Station Farm assets will be used to benefit the College of Agriculture – except when the UNR president really wants to use them elsewhere.
Since passing Resolution 81-8, UNR has come to regard the Main Station Farm as its Mill Street ATM.
The Board of Regents are now being again asked to go to the Mill Street ATM. This time, rather than sell property for a public purpose, UNR is seeking to sell the 104-acre strip along McCarran to a private developer who will transform the scenic and bucolic agriculture area into strip malls and warehouses.
President Marc Johnson has made no bones about the fact that UNR does not intend to use the proceeds of this sale to benefit CABNR.
As such, it appears that Johnson is again suggesting that either Resolution 81-8 should be “waived” or simply abandoned entirely.
It is apparent that UNR leadership does not take seriously the Board of Regents’ historical commitment to use Main Station assets for the benefit of the College of Agriculture.
It is time for the Board of Regents to show that when it states a policy, it expects UNR to abide by that policy. If the Board of Regents does not intend to enforce Resolution 81-8, the Nevada Legislature should revisit the question.
Policy makers should also analyze the extent to which Hatch Act federal matching funds – which by law must used for the agricultural experiment stations – have gone to the purchase, development, and maintenance of the Main Station Field Lab.
If the people of Nevada want to protect this asset – and there are many good reasons to do so – the obligation cannot be left to a Board of Regents that will suspend its stated policy at the whim of UNR’s president.
Jerry Snyder has been practicing law for nearly two decades in California and Northern Nevada, both in private and government practice. Jerry has represented individuals and businesses of all sizes, from small entrepreneurs to large public companies. Jerry has worked with individuals, companies and communities, and excels at delivering sensible solutions, regardless the size of the client or the scope of the situation. He has extensive experience litigating cases in areas of construction law, water law, corporate governance, real property law, business torts, and intellectual property.