Developer Throws in the Towel

Builder cites lack of interest from City Council among reasons for abandoning apartment proposal

Tierra Concepts will likely be cutting ties with the 16 acres of land on Agua Fría Street they had hoped to develop as a 399-unit affordable housing apartment complex. Since the proposed El Rio development was unanimously rejected for a rezoning by Santa Fe City Council during a June 24 meeting, the future of the land remains unknown.

The proposal was an assemblage of four lots, one of which the design firm had purchased, one it was under contract to purchase and two it had secured options on. The one lot they've purchased, about 2.5 acres, may now be divided into two lots.

"I doubt if we'll develop it, but at this point I think we'll probably give up the property in one way, shape or form," Keith Gorges, builder and designer with Tierra Concepts, tells SFR. "It's unfortunate because it'll break up and it'll be one less location where somebody can do a multifamily project."

Councilors Ronald Trujillo and Carmichael Dominguez, who were not in attendance at the meeting in which the vote was taken, tell SFR they likely would have joined their fellow councilors in voting against the proposal. The proposal seemed like a lot of density for the area, Dominguez says, adding, "I understand the concepts behind the development ... [but] the concepts don't always work out the way we envision them."

"In looking over everything that I've seen of El Rio I did think that it possibly was a little bit too big," Trujillo says. "I'm hoping that maybe they can reconsider and possibly put something there that has less of an impact on the surrounding neighbors."

Tierra Concepts spent three years on the project and will lose between $100,000 and $200,000 on the proposal, fees and cost of the land, Gorges says, "And that's if we can sell the land that we purchased for what we purchased it for and I'm not clear that we can do that."

Thirteen of the 16 acres are zoned to allow 21 units per acre, and Tierra Concepts had requested rezoning to allow 24 units per acre.

"We've run the numbers time and time again and with the affordability units, the water rights and everything, we just can't make the financial end of it work," Gorges says. "You have to have more units to be able to spread the cost out over is really what it comes down to. So I think we'll probably let the entire project go.

"I don't think anybody really understands how difficult it is to do a project like this in Santa Fe with all the burdens of expense, the development fees, the impact fees, so on and so forth and particularly the costs of the affordable housing program and what impact that's had on apartments."

Affordable homes for sale have a much easier road to the tax credits for those projects, he says, and the insistence on integrating affordable housing units—as some of the members of the public testifying at the June 24 meeting called for and city councilors reiterated—disallows access to the tax credit benefit.

"I think the city needs to rethink the affordability component when it comes to rental units because it has all but killed any new rentals being built since that whole ordinance was enacted," he says.

Would he consider another affordable housing development elsewhere in the future?

"I think I would have if the city council members or the city in general had showed really any interest," he says. "Nobody has jumped up and said, 'This is a great idea. We want to try to make this work. Where can we make this work? How can we help you?' There just has not been any of that reaching out, and there was none at the city council meeting the other night."

After the motion to deny the Tierra Concept's general plan amendment had been made during the June 24 meeting, Mayor Javier Gonzales expressed some regret that the proposal had not instead been sent back to the planning commission for review. But that wasn't the motion, he said, and so he voted no alongside the rest of the council.

"I think the mayor is doing a fantastic job, but he's doing it relatively in a vacuum," Gorges says. "There was not a lot of feeling that other council members or people in the city really wanted to work hard with us."

He expected someone would step forward wanting to work with a plan that was put on the table — the first of its kind in many years to take a crack at addressing Santa Fe's short supply of affordable rentals.

"But nobody has reached out to us. We haven't had one call from a councilor since the meeting that I'm aware of," he says.

He cites the loss of the city's workforce as residents of the city, down to 38 percent from about 51 percent 10 years ago, and the loss of people in age groups between 10 and 54, as alarming trends in need of a remedy to maintain Santa Fe's economic future and political diversity. He says, "Those of us that have teenage kids, which are my other two partners and myself, are just, I guess, stunned by this seeming lack of real motivation to solve these problems."

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