ALBUQUERQUE, N.M. — The lease between the University of New Mexico and the Ohio-based company picked to develop the south campus area could potentially net the university up to $2 million annually, officials said Monday.
Regents on Monday approved a ground lease form, the second in a series of steps to bring restaurants and retail to the land around the Pit, which UNM has selected Fairmount Properties to do. The lease is for 74 years.
Although Fairmount and the university have yet to work out the price of the lease, university officials Monday said they expect to profit about $1.5 million to $2 million annually based on a preliminary estimate. The actual price that Fairmount and UNM will eventually agree on will be based on market value of the land and other factors.
The lease is for three parcels of land off Avenida César Chávez and University SE. The largest plot of land, south of the Pit and bordered by University and Interstate 25 on the east and west and by Gibson Boulevard on the south, will likely be developed first. That parcel is 39 acres.
According to the agreement, Fairmount also will have exclusivity rights over the two other parcels, which are off Avenida César Chávez between the Pit and Lobo Village and west of Lobo Village. That means that although Fairmount does not have to develop the land yet, it holds rights over it. It will pay $1,000 a month on each of those plots, an amount that initially did not sit well with Regent Gene Gallegos.
Gallegos at a regents finance committee meeting on March 1 said the $1,000 monthly was too low a price.
“It’s a very valuable piece of land. It’s a finite resource to this university,” Gallegos said.
University officials said it’s uncommon for developers to pay lease on a land they are not yet developing, and that Fairmount was essentially being generous with their agreement to compensate the university for holding the land.
By Monday, Gallegos had been convinced, and the board unanimously approved the ground lease. Regents still need to several phases of development, including plans, budgets and schedules for the project, followed by an agreement over the price of the lease. — This article appeared on page D1 of the Albuquerque Journal