Rick Holliday is a man who in our region is synonymous with the Railyard Project. Now, though, he wants that to change.
The organic extension of downtown Truckee has been long in the making, with vertical building finally showing this summer. The development, despite an inspired visioning process, was beleaguered by a recession, state funding disappearing, lawsuits, layers of agency oversight, and more, all of which created an overall complexity that would befuddle even the most tenacious of developers.
Through it all, Rick and his wife Nancy kept going because, as Rick says, “we just didn’t really know quite how to quit.”
It’s more than that. His career trajectory shows that once Rick gets fascinated by an idea, a kernel of curiosity motivates him to chase down his dreams, and along the way he unwittingly pioneers a new way of doing things.
He started his career in local government as a community development director, moving to a nonprofit that built affordable housing, then decided he wanted to be a hands-on developer, founding Holliday Development in 1988. His main interest was rejuvenating industrial areas. It’s a concept that is seen quite frequently now, but back in the mid to late ‘80s, it was “really unusual,” Rick says.
Here’s a prime example of Rick’s penchant for innovation: In the area south of Market Street in San Francisco, which at that time was a “real wasteland,” his company developed a vanguard project in 1990. Despite the country being in a deep recession, all 85 units sold in an hour. This was Field of Dreams material, he says; “if you build it, they will come.”
“I’ve been fascinated with changing neighborhoods,” Rick said, “where it changes from an industrial economy to a knowledge economy, which is what really has happened in my development career in the last 25 years.”
He and Nancy were harkened to Truckee in 2003 by the Union Pacific Railroad, which had decided to sell its land east of downtown. It was a prime location, but not quite prime condition.
The Hollidays bought the property, then with active support from the community, they embarked on the extensive and visionary redevelopment project. Nearly two decades later, now that the “bones are there,” Rick and Nancy are ready to officially hand over the reins to Jason Hansford, general manager of Truckee Development Associates, the subsidiary company that orchestrated the railyard project.
Family and other ventures call — especially yet another big idea, in the form of a housing factory they launched just three years ago. Once again, the Hollidays are breaking ground.
Also, Nancy decided she wants Rick to lighten his load. When I asked why, Nancy said, “Because I fucking missed him!” Who can argue that?
Rick sat down with me for a conversation to reflect on the Railyard Project, its lessons, and what next big ideas have captivated his imagination.
Listen to the interview, as broadcast on Moonshine Minutes on July 2, 2020, below.
This has been a long journey, from 2004, when Union Pacific first sold you the property to today when building is finally going vertical. Tell us a little bit about the early days. What were some of the challenges?
The early days were fairly exciting from Nancy’s and my perspective. We met a lot of people that are household names — Tony Lashbrook being the most significant, and Kathleen Eagan and Maia Schneider, both of who had been mayors, in [the town’s] formation and Tony, who was just becoming the town manager. And the three of them really gave us the enthusiasm to want to take this development on.
The challenges to the railyard were very clear and obvious on day one. First and foremost, it’s what is called a brownfield, which means it needed to be characterized and cleaned up. For five years after we owned the land, we did clean-up of the soil, with some state funds and some of our own money.
Then the second thing that was obvious is that it needed what all of us understand as infrastructure. The boring stuff. Water, sewer, power was not anywhere near the site.
Then it needed roads, and right-of-ways, and then we needed to work with the railroad to tear their old buildings down and build them a whole new facility out of the way.
What was the visioning process like?
That was fun! Some people may remember Darin Dinsmore, who hasn’t been in Truckee as of late, but he’s a very very important person for Truckee. He was involved in getting a grant through the Sierra Business Council. And the city and the business council got some funding to start visioning the site even before I found it. We pooled our resources, from their grant and some of our predevelopment money, and we went about a very active planning process for the site that actually ended up taking about four years, from 2004 to 2008.
There were a lot of public meetings. A lot of interest. And when we finally were before the council and planning commission, I think it was in late ‘08, early ‘09, they did receive 5-0 votes in both cases, with very very strong public support. All the past mayors of Truckee testified for it — it was a wonderful night for Nancy and me.
We thought that in ‘09 that we would be starting fairly soon thereafter, but the recession was pretty deep, and we were held up by that.
In a previous interview, you told me that the field of infill redevelopment as a whole is not for the “faint of heart,” but that the Railyard is by far the “most complex development” that you’ve ever dealt with.
That’s definitely true. I’ve developed many, many properties. The railyard in its totality is the most complicated because it involves creek restoration, soil remediation, infrastructure, redevelopment financing, very complex environmental rules, important local regulations that are important to the people of Truckee to follow, and it keeps going. Dealing with the railroad is a very, very complex entity to try to satisfy. And we had state, federal, and local agencies that we had to coordinate with, so that adds all kinds of layers. And then of course you got to deal with banks, money, and investors, and all that. So, very complicated.
On top of that, you had a major funding source — the redevelopment agencies — go belly up during this time period.
Yeah, that was probably the most, um, frustrating obstacle that hit. I was a big proponent of Jerry Brown running for governor a second time. I dealt with him in Oakland quite a bit. He was frustrated with the redevelopment agencies’ ability to reform when the state needed more capital, which I understand. They essentially wiped out redevelopment, which was the main source of us doing the infrastructure, so that really set us back in 2012.
You had the Great Recession and you had the redevelopment agencies go bye-bye …
And in between the recession and the redevelopment agencies, we had a CEQA litigation lawsuit that ate up 18 months, but those aren’t terribly uncommon. They are difficult and they slow things down. Those three things: the ‘08/’09 recession, the CEQA litigation, and then redevelopment [funding] were three pretty significant obstacles.
What kept you going?
I think it’s the people of Truckee. As Nancy and I got to know more and more people, we realized that there was a lot of interest in this development happening and happening for locals, most importantly. And we just didn’t really know quite how to quit. So we just kept plowing ahead.
The new streets, sidewalks, and stop signs are in, plus the beginnings of the Artist Lofts affordable housing. What else is going in this summer?
This summer, right at the present time, is the artist housing, which is probably the one that’s nearest and dearest to Nancy’s and my interest. It’s 77 units of affordable artist housing.
There’s a very exciting proposal for a hotel that the city just started proposing just before COVID, which I still think is very viable. Everybody’s heard about the grocery potential that we had with Nugget a few years ago. Weren’t able to hold onto them, which was a frustrating and difficult experience, but we think we are going to get a grocery store in the next year, from what my commercial partners tell me.
What about the movie theater? Is that still in the plans and moving forward?
It’s in the plans for me because Nancy and I love movies; we’re selfish. I’m half-joking. If I had a dollar for everybody who’s asked me about the theaters, it would have been financed four times over. Now, I think the challenge for someone trying to run a theater now is it’s a very different industry … Netflix and digital distribution and now COVID have thrown many, many challenges to people trying to do theaters. I’m fully supportive of our theater partner’s efforts and I think they are going to get there, but they are struggling with some of the same things that Nancy and I did. But they don’t look like the kind of people who would quit.
The main reason we’re sitting down today is that you want to announce an official stepping back from heading the development. What does this mean? Why step back now?
I would say that I stepped back about a year or so ago. And I just don’t think it was terribly obvious. Jason Hansford, who most people know, is really the person in charge of the railyard. Part of me wanting to do this conversation with you was to reinforce Jason’s authority and let people know, he’s the voice of the railyard.
In 2012 you and Nancy built the building downtown to serve as a model as to what was going to be coming in the railyard development. Are you guys going to be moving down into that building now?
No, actually not. At one point, we thought we might. We’ve actually settled in a house that is closer to (our daughter) Maiya and grandson so we can walk back and forth to each other’s place. So we’ll probably be selling that unit, rather than moving in, probably as early as this summer. And it did all the things that we wanted, which was give people a snapshot of what we meant when we started taking a look at what downtown housing could be like. But the artist housing and some of the other buildings that will come up will be the buildings that will define the railyard.
Let’s move to your new venture, Factory OS, want to tell us a little more about that?
Yes, I was driving home from Truckee in 2015 with my business partner, Kevin Brown, and I got an email that a factory in Sacramento on McClellan Air Force Base was just starting to produce apartments. So I stopped by. The company was named Zeta. I said, this is wonderful. I ordered 130 apartments for a development in San Francisco. They were well built, they were all the things I wanted. I thought I would be Zeta’s customer for Truckee; it turned out that Zeta wasn’t able to sustain itself.
I got a visit from a colleague who is in charge of real estate for Google. He and I were looking at this new methodology for building apartments. He said, you should start a factory. I thought he was joking. And he was serious. He said if you start a factory, we’ll be your first customer. So ironically in June of 2017, Google gave me a letter ordering 300 apartments from a company that I hadn’t even had a name for, I didn’t have a business card, or a location. Nancy took care of the name and helped with the location. Here we are three years later, we’re Factory OS in Vallejo.
Having visited the factory myself, it’s a marvel.
Thank you, thank you. One of the silver linings for Nancy and me is that one of the problems in this business is not enough labor. So we went out with the carpenters union and committed to a union factory, and they committed to helping us recruit workers. We’ve taken people, many of whom were in minimum wage shops, underemployed, and have more than doubled their income. They are on their road with a trade that will pay them well and create a real future for them.
About 20% of our workers were either formerly incarcerated or coming out of drug rehabilitation programs, which is another great source of workers because it gives someone a second chance if they’re ready for that. You don’t have any better employee than that. Not every one of our second-chance hires has been perfect or worked out, but we’ve committed pretty deeply to give people another chance and see if we can get them on a path to building affordable housing.
So putting workers that need affordable housing together with building affordable housing is a very, very powerful force and it’s led to some really big companies putting big investments in us in the last six months. We’re very excited and we’re going to become a very big company.
When should we expect to see some of these units in Truckee?
In July. You’ll see some of these units come up the hill with the big Factory OS logo on them, and they’ll get set in about two weeks’ time, so there will be very little disruption. The building will kind of jump right out of the ground and then we’ll get working on the exterior and roof through the rest of the summer, so people can move in by the end of the year, first of next year. It’ll get built very fast.
What will you do with all your free time?
Back to where we started … Nancy and I love Tahoe/Truckee. We sort of joke that our first meaningful experience together when we were 15 is we took a ski trip up here in 1968 and then we got married in ‘73. We had our honeymoon in Tahoe City at a condominium that a friend gave us for a week. Like many people, we just loved coming up and being with people that were active, interesting, and fun. It’s not changed. Now that we’re 50 years later, we’d like to spend more time with people up here. And be outdoors.
Circling back to the railyard, what do you think the legacy of this project will be for the Tahoe/Truckee community?
I think it’s still to be written yet because the buildings will define it. But I think that there are very few towns — going back to Tony, Kathleen, and Maia Schneider — that had people that had that kind of vision 15 years ago. That was long before people were talking about smart growth, before electric cars, before the internet was very significant. A whole bunch of things. Before social media was around. They saw that a really healthy town needed to have a healthy downtown. The downtown that is here is wonderful but it’s primarily serving tourism. To create a complementary downtown to build on the tourism and build on the community was something the town really needed.
It was really fun to try to work on the vision — how do you do that? How do you create something that complements but doesn’t hurt the downtown? How do you create something that reinforces what the local community needs for a downtown that also strengthens the whole town?
I think the bones are all there. It’s just one of those things that’s taken a lot longer than we’d like.
But here it comes …
Here it comes. We’re excited for the next 15 years. We’d like to be watching the development grow and supporting it, rather than being in the frontlines. That’s probably how I’d put it.