SANTA FE – The City Council’s Finance Committee on Monday approved a supportive resolution but postponed a decision on an ordinance to issue $80 million in industrial revenue bonds to help El Castillo retirement community purchase land at the former Ghost Ranch II site at Paseo de Peralta and Old Taos Highway and build a 68-unit facility.
According to city documents, as a non-profit that provides health care services, El Castillo is eligible to benefit from the IRBs with the city serving as fiscal agent.
“The IRBs would allow El Castillo to fund expansion with low-interest capital and abate state, city and county taxes for 30 years,” according to a staff fiscal impact report. It adds that El Castillo will be required to submit payment in lieu of property taxes due to Santa Fe Public Schools and Santa Fe Community College over 10 years, totalling $3.6 million.
This isn’t the first time El Castillo has asked the city to help with financing an expansion. In 2012, the City Council approved $30 million in industrial revenue bonds for renovation and expansion of its existing facility at 250 East Alameda.
Previous IRBs the city has issued include $45 million worth for the Thornburg campus on Ridgetop Road in 2007 and three IRBs in 1992, 1998 and 2011 totaling nearly $20 million as financing for St. John’s College.
City councilors on the Finance Committee questioned whether there were any limits or “best practices” that would dictate how many IRBs or a limit as to the total amount of bonds that could be financed in such a way. City staff reported there was no policy governing IRBs.
Councilors also questioned figures that aimed to measure the local economic impact the project would have, given that most of the construction workers would come from out of town, and potential “clawback” provisions.
When El Castillo received approval to build a three-story facility in “recent Santa Fe style” from the Historic Districts Review Board a year ago, the selling price for the 2.5-acres was listed at $4.2 million. Estimates to construct the facility is now between $40 million and $50 million, up from the $39 million El Castillo officials provided last year.
After erroneously approving an ordinance authorizing the issuance and sale of the IRBs, the committee eventually postponed action until city staff and El Castillo can provide more information. The ordinance will be considered again by the Finance Committee at its Aug. 19 meeting. It remains on track for a final decision by the City Council on Sept. 11.