SANTA FE, N.M. — Santa Fe city government’s effort to redevelop the city-owned Midtown Campus took a major, stunning blow late last week when the developers chosen for the massive project issued notice that they want out of the deal.
The developers cited the COVID-19 epidemic and other unforeseen issues, including contamination on the campus and that the old college buildings on the site are “obsolete” and have “no commercial value,” requiring “expensive demolition.”
The notice letter from Dallas-based national developer KDC Real Estate Development and its partners maintains they “had assumed all the financial risk of due diligence in the project, while the city had taken none.”
Mayor Alan Webber put some silver-lining spin on the developers’ pull-out, saying “It’s not a win-lose situation” and “What we learned from it was a great deal of valuable information.” But he added, “It does mean that we’re going to have really hard decisions to make.”
The 64-acre site was the long-term home of the defunct College of Santa Fe and then, after the city bought the property, was rented for nine years by the Santa Fe University of Art and Design before that for-profit institution collapsed in 2018.
As we’ve said before, the mostly empty campus is a financial albatross — city debt service on the property is $1.7 million a year — but it also represents an unprecedented opportunity to develop housing, cultural offerings, health care facilities, maybe a new educational institution and expanded use of one of the site’s big assets, a professional film studio.
The involvement of KDC, whose past projects include huge office facilities for the likes of Toyota, FedEx and J.P. Morgan Chase, as leader of redevelopment effort seemed like a major coup when the firm was chosen for the Midtown project last May. Big bucks are needed for the campus re-do and, from all appearances, KDC has that.
But going local can sometimes be better. There were local bidders to be the project’s master developer last year that were passed over. One group led by Allan Affeldt, who has worked magic rejuvenating historic hotels in Las Vegas, New Mexico, and Winslow, Arizona, called for adding in nearby state and city parcels to create a 100-acre site. Their plan would create a “second center for the city” to include parks, a 1,400-seat amphitheater, academic institutions, the construction of more than 1,000 housing units, a 200-room hotel and a “Silicon Santa Fe” tech campus.
Affeldt knew the redevelopment wouldn’t come cheap — he said it would take at least $400 million. Stay tuned to see whether his group or others are still interested in making that kind of investment in the campus now. Let’s hope all the grand visions for the site weren’t just pie in the sky.
Affeldt reportedly upset officials by releasing details of his plan to Journal North. City Hall otherwise kept the whole developer selection process secret, which many in the community criticized. And there had been little information released about progress (or lack thereof) on the project before the pull-out letter from KDC/Cienda was released Thursday.
A rare public update on campus development had been scheduled for a City Council committee meeting last Tuesday. But the discussion was moved to a planned closed-door executive session of the full council. Councilor Roman Abeyta, chair of the Finance Committee, said the move was made in consultation with city Finance Director Mary McCoy.
So, once again, as in the developer contract selection process, discussion of the campus project was to take place in secret.
New Mexico’s Open Meetings Act does provide a real estate exception, allowing discussion in closed session of “purchase, acquisition or disposal of real property” by a public body such as the City Council.
But Abeyta said he’d asked city finance staff for a presentation on the operational cost, debt service and outstanding money owed by the city on the Midtown property. That’s obviously public information that should not only be discussed by the council in public, but also be available to anyone who asks for it. Still, a city spokesman provided a comment saying, “it’s considered most efficient to bundle all (Midtown) discussions into executive session.”
Fortunately for the public, “efficiency” is not mentioned in the Open Records Act as grounds for an executive session. Not realizing that fact is just the latest example of City Hall’s transparency failures.
If the council wants to talk about “purchase, acquisition or disposal” of the Midtown property behind closed doors, it certainly can. But it shouldn’t try to just rake in any data point that has to do with the campus for secret talks.
Late last week, after a Journal North story on the planned executive session and an admonition about it from the Foundation for Open Government, Abeyta released the information about the city’s Midtown Campus financial obligations and said it no longer was to be discussed in the closed session.
The campus redevelopment is an issue of great public interest where secrecy has already been a sore point. Webber and his team need to commit to bringing the process into public view from now on.