Even before Topgolf opened its doors in Albuquerque last winter, its presence and its plans had an outsized influence over our fair city.
The Texas-based entertainment company announced plans to build its first indoor entertainment center in New Mexico near the beginning of 2018, and it didn’t take long for controversy to follow.
The project obtained a substantial infusion of state and county support – the former was vetoed by Mayor Tim Keller before being overridden by the City Council – and delays related to the COVID-19 pandemic left the project behind schedule. Less than a year after Topgolf opened its doors in Northeast Albuquerque in February, the parcel housing the facility was put on the market.
The company maintains it has no plans to shut the facility down or leave Albuquerque, but that hasn’t stopped readers from asking questions about the future of the facility or the incentives that helped support it. To help answer those questions, the Journal tracked down publicly available data on the process, including the project participation agreement signed back in 2018 via the Inspection of Public Records Act.
Who’s involved with this project?: The original project participation agreement with the city of Albuquerque names three stakeholders: the city itself; Topgolf, doing business through a specialized limited liability company; and Albuquerque Investors LLC, a holding company responsible for developing the site and leasing the finished parcel to Topgolf.
Topgolf is headquartered in Dallas, and operates climate-controlled sports entertainment complexes where customers play a variety of games using microchipped golf balls. The company has about 70 facilities across the United States, along with locations in the United Kingdom, Australia, Germany, Mexico and the United Arab Emirates, according to its website.
Albuquerque Investors is based in Kansas and Drew Snyder is listed as the principal at the company, according to previous Journal reporting. Snyder is also listed as the president of Woodsonia Real Estate, a real estate development company with offices in Nebraska and Kansas. Woodsonia’s website notes that the company owns and manages more than 40 properties, largely concentrated in the Midwest.
Who owns the actual Topgolf property in Albuquerque?: The agreement with the city specifies that Topgolf always planned to lease – rather than own – the nearly 24 acres it occupies in Albuquerque. The agreement mandates that the developer (Albuquerque Investors LLC) will retain the property, with Topgolf entering into a 20-year lease on the property.
What were the terms of the incentives? What programs did the funds come from?: The agreement requires the city to invest up to $2.57 million under New Mexico’s Local Economic Development Act to support the project. Additionally, the Bernalillo County Commission voted to contribute another $1.75 million, including a $250,000 LEDA grant and gross receipts tax revenue reimbursements.
Under the agreement, Topgolf pledged that it would meet a number of performance metrics, including requirements about the number of jobs and the wages and benefits associated with those jobs. For example, Topgolf must maintain an annual average of at least 132 jobs through the first 10 years after opening. If the company doesn’t meet those requirements, it triggers an intricate slate of clawbacks for some or all of the incentive money.
What did Topgolf do with the public funds it received?: The majority of the city funding, up to $2.16 million, went to the developer – Albuquerque Investors LLC – to cover land and infrastructure costs, including extending Culture Drive NE to Desert Surf Circle NE. The city was required to pay Topgolf $400,000 within 60 days of the project’s opening date to cover remaining land and infrastructure costs. As of July, Topgolf was meeting the terms of the agreement, employing 284 people at the facility, including 100 full-time workers, according to a report from the city.
What went into the project’s $39 million price tag?: Since 2018, the project has been described by the company and business leaders as a “$39 million” project. The figure was referenced in the project agreement, which estimates the price of the project as being just under $39 million, at $38.87 million. Of that total, $11.38 million is associated with land acquisition and site development, and the remainder was slated to cover the cost of the building itself, according to an application for LEDA funding filed by Snyder. Funding not covered by incentives would be covered by loan proceeds or cash on hand from Topgolf, according to the application.
After the property was placed on the market last year, what was included in the sale?: In September, Albuquerque Investors LLC put the property housing Topgolf’s Albuquerque location, including the land and buildings on it, on the market for $16 million. Several weeks later, the property sold to TG Albuquerque LLC, registered in Nevada, for $15.3 million. A Topgolf spokeswoman told the Journal in October that it has no plans to close its Albuquerque facility.
Who negotiated this deal?: The Phoenix office of real estate investment firm Marcus & Millichap represented the buyer in the transaction. Albuquerque Business First reported that California-based Hanley Investment Group represented the seller, Albuquerque Investors LLC.
What do we know about the new landlords?: Not a whole lot! TG Albuquerque LLC is listed as being based in Nevada, with an address of 9811 W. Charleston Blvd. in Las Vegas, according to the Nevada Secretary of State’s website. A quick Google search reveals the address is at a strip mall about 11 miles northwest of the Las Vegas Strip. The Secretary of State’s Office lists Michael Wang-Lu as the principal of the business. Michael and Frank Wang-Lu are each listed as managers of the company.
What do we know about their other business interests?: Michael Wang-Lu is listed as the manager of seven other LLCs incorporated in Nevada, six of which are listed as active. All but two of the businesses list the same Las Vegas strip mall as their address. Beyond that, there’s not much available information about Wang-Lu.
What’s behind the difference between the construction cost and the sale price?: The listing on the real estate website Loopnet.com notes that Albuquerque’s Topgolf property had around $16 million invested in it, which explains the valuation. The listing notes that those improvement costs revert to the landlord at the end of the lease. The discrepancy between the list price and the approximately $27 million initially estimated as the cost of construction is unclear.
Are city or county leaders concerned that the sale could endanger the incentives?: Not at this point. Sarah Wheeler, a spokeswoman for the city’s economic development department, said in an email on Wednesday that the sale does not trigger clawbacks from the city, or affect Topgolf as a qualifying entity in the incentive program. Tom Thorpe, spokesman for Bernalillo County, told the Journal in November that he doesn’t believe the county’s incentive package is in jeopardy following the sale, and didn’t believe the facility is in danger of closing.
Stephen Hamway covers economic development, health care and tourism for the Journal. He can be reached at firstname.lastname@example.org.