Dunn said the partnership of GreenTree Hospitality of Scottsdale, Ariz., and Peak Hospitality of Albuquerque failed to come up with a required $250,000 bond in time to take on the project by the end of 2017.
As a result, Dunn has leased the site to the current Garrett’s manager’s for another eight months, as of Jan. 1, while he starts a second request-for-proposals process for redevelopment of the site.
The State Land Office acquired the 2.7-acre hotel property, at Alameda and Old Santa Fe Trail, in 2016 in a three-way deal involving Cochiti Pueblo and the former owners of Garrett’s.
The GreenTree-Peak group planned a remodel of the 1950s-era hotel, including improvements to the lobby, its main building, guest rooms, furniture and tech capabilities. Exterior renovations were to include replacing the portico, the roofing at the hotel’s entrance.
GreenTree’s Kevin Brooks said Monday the developers were disappointed by their disqualification and that the group had been confident about meeting the terms of the contract but were busy with other matters toward year’s end.
Brooks said the partners were surprised that Dunn’s office “didn’t work with us a little bit more,” considering plans to invest $2.5 million in the property, though he acknowledged the failure to have the bond formally in place was the bidders’ responsibility. He said there is “no ill will” over the disqualification.
GreenTree-Peaks offered a $300,000 annual base rent, a $100,000 bid bonus and 5 percent of annual gross revenues, more than $10 million over the 20-year term of a lease. The companies would have had two optional 20-year renewal periods. Any Land Office proceeds from the property go to the state land trust and are designated to support the University of New Mexico.
Dunn said it would be difficult for a developer to make a profit by tearing Garrett’s down and building something new while still paying $300,000 rent. “I think probably the only type of bid that’s going to work is a refurbishing of the existing structure,” he said.
Dunn also said it would be difficult to meet downtown Santa Fe’s historic-district zoning code, something he said he wants a developer to do although city requirements apparently don’t apply to state property.
Dunn said the existing hotel is already netting more than $500,000 a year, and he believes there will be plenty of interest as the Land Office takes another round of bids. “It’s a neat property,” Dunn said.