The vote, 6-1 with Regent Gene Gallegos dissenting, means UNM will move forward with Fairmount Properties to determine the value of a lease on three parcels totaling nearly 50 acres off Avenida César Chávez and University SE, near the Pit.
Regents also approved unanimously a commitment to spend up to $10 million on infrastructure, such as streets, curbs and lighting. The UNM Foundation, the university’s private fundraising arm, will loan the money to the university and set an interest rate as well, Regent Jamie Koch said.
The vacant land is surrounded by Lobo Village, the apartment-style housing for about 900 students, and the Pit, which has 1.3 million visitors a year. UNM also has offices on the south campus.
Despite the number of people who frequent the area, there is a dearth of food establishments and retail stores, with no restaurants in walking distance. Under the development deal, Fairmount Properties would lease the land from UNM and pay for construction. The company would enter leases with businesses that want to set up shop there.
Early plans call for a 6,500 square-foot restaurant, a coffee shop, and 22,000 square feet of shops just west of Lobo Village, according to a copy of the contract. The parcel east of Lobo Village is slated for another restaurant. The project is expected to take about five years.
Gallegos expressed concern about contract provisions that would restrict UNM from suing for certain damages if Fairmount went into default and failed to complete the project.
“I strongly doubt that fiduciaries of a public institution dealing with the public’s land, public’s resources, can give up that,” Gallegos said.
“This would be a very significant commercial transaction. … I am concerned about waiving legal remedies,” he said.
However, attorney John P. Salazar, who works for Rodey Law firm and represents UNM, said the university does reserve the right to sue for actual damages. And he said the agreement protects UNM from being sued by Fairmount if the university fails to approve the company’s development plans.
The effort to develop the growing area started in 2007, when UNM put out a formal request for proposals and picked a company to do the work. But that developer pulled out when the economy crashed in early 2008. The university again tried in 2010, but received no proposals.
UNM’s Lobo Development Corp, a nonprofit organization that handles the school’s real estate transactions, started working with Forest City Real Estate Services, an Ohio-based consultant that helped assess the value of the land. The company also helped develop a strategy to attract developers.
Forest City Real Estate Services pre-approved four firms early this year. After a second review process, the Lobo Development Corp. picked Fairmount Properties, based in Cleveland.
The deal went before the regents’ finance and facilities committee last week, but members passed on approving the deal and instead sent it straight to the full board of regents.
Regent Don Chalmers, who serves on the Lobo Development Corp. board, said the project needed to be approved to move on to the next phase, which is for the value of the lease to be determined. Regents also will have to approve that, and could back out of the deal with Fairmount if the two cannot agree on the value.
— This article appeared on page A1 of the Albuquerque Journal