As Mayor Alan Webber said when a national development company recently pulled out of trying to remake the city-owned Midtown Campus site, Santa Fe now faces making some “really hard decisions” about what to do with the 64-acre property.
For the past couple of years, there’s been excitement about what the campus could become after its former tenant, the for-profit Santa Fe University of Art and Design, closed two years ago. Much public comment was collected and conceptual designs, most of them innovative and futuristic, were submitted for what was described as an unprecedented opportunity to create a new neighborhood in the city’s geographical center.
But things have taken a hard turn since Texas-based KDC Real Estate and Development pulled out of the project just last month.
At a City Council meeting Wednesday, a consultant described the site and its decades-old buildings as “a distressed asset.” Ouch.
KDC’s own report on the campus property, obtained by Journal North reporter Kyle Land, recommended demolishing 17 buildings on the site and preserving only eight.
“The remaining buildings that will not be preserved will need to be demolished to reduce the City’s holding costs and liabilities, and clear a path for new development and users on the campus,” the report stated.
Now, there’s discussion of just selling the property outright. The debt service on the campus, purchased by the city in 2009 when the old College of Santa Fe collapsed, is $1.7 million a year.
“It’s a tremendous drain on the city’s resources,” said former City Councilor Mike Harris, a vocal advocate for redevelopment of the St. Michael’s Drive corridor that includes the campus. “The city of Santa Fe is going to have to probably do more than what they have in the past. If we can’t make that happen, then I think there needs to be a serious discussion about selling the property.”
On the table is whether the city should undertake the additional expense of demolishing or rehabilitating campus buildings, or even adding infrastructure improvements to enhance the site’s value or attraction to development partners.
The basic question, really, is whether the city should just bail on having a part in redevelopment other than standard zoning and other city code requirements that a new owner would have to follow.
The city borrowed $30 million to buy and improve the campus in 2009, but the cost has, of course, actually become much more than that with the continuing interest on financing added in.
One idea would be to devise a master plan for the campus that interested developers would have to follow as a way to put the public interest first. That’s what happened when the city purchased the Railyard in the 1990s in the face of public concerns that overdevelopment would be undertaken by private owners.
The city still owns the Railyard land. The businesses that have moved in under the master plan, while owning their buildings, are in fact lessees.
Of course, it’s taken a quarter of a century for the Railyard to get to where it is now and there were years, particularly during the Great Recession, when the project stalled. And going this route at this point for the Midtown Campus would essentially mean starting all over again.
The city also could impose its own zoning plan on the campus before selling it off – designating parcels for apartments or single-family homes, office space, health care facilities, educational institutions and retail or entertainment options that have been mentioned in the best-laid plans discussed over the past couple of years.
Of course, there’s still a chance a major development partner may emerge. There were several other groups, including one that included dozens of locals that envisioned an attractive, multi-faceted $400 million build-out, that filed formal “expressions of interest” before KDC was chosen for the project.
Will the poor condition of most of the campus buildings, other drawbacks such as asbestos in the structures or a reduced market for office space post-COVID scare them off now?
The cost of the campus to city taxpayers mounts with every debt service payment. So, while it’s time for a collective deep breath while City Hall tries to figure out where to go next with the campus, the delay can’t be indefinite.
It will be a tough call. Should Santa Fe spend more money to fix up or clear the campus in hopes of attracting a willing and enthusiastic master developer attuned to the city’s needs and wants? Negotiate with one of the parties rejected before KDC was chosen?
Or sell the campus, eliminating the cost of debt service, and hope for the best?
After all, given the public build-up over the positive things the campus could be used for – including affordable housing, a public amphitheater, George Martin taking over the Greer Garson Theatre, etc. – just selling the property for an unspecified purpose, even if that’s the most practical solution, would be a real disappointment.