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NMBW - City Awards Contract for Downtown Housing

Reprint from New Mexico Business Weekly- December 1, 1998

A deadlocked vote on apartment proposals for a site in Downtown was broken last week on the Albuquerque Economic Development Commission when member Alex Romero switched sides. The winner was Tesh Development's more than $6 million proposal for 140 units, the lowest density of three rival plans for the 3.3 acres on Coal Avenue. Rejected was the staff-endorsed Armstrong Brothers' proposal for 190-units and 5,000-square feet of commercial space. Also rejected was a 202-unit proposal by Canadian developer John Hampson. While representatives of the three rival teams watched in silence, the commission spent 14 minutes dueling over which proposal would be the first new apartment project in Downtown in 15 years. Two motions failed and a recess was called before Romero's decisive swing vote. "I wasn't about to let it slip away from us tonight without action," Romero told NMBW after the 3-1 vote to approve the Tesh proposal. "I go back to the process itself - how long it takes to get things developed. We owe it to our community to demonstrate forward thinking and the fact we are interested in Downtown as a place to work, live and shop." Concerning his switch from the Armstrong Brothers' recommended proposal, Romero said, "If I had not thought the other proposals were not strong proposals, I would not have changed my position." The Tesh proposal calls for 140 apartments, including 56 for low-income tenants, in three-story, walk-up buildings with interior corridors. The buildings are designed with patios and balconies, and will use a variety of colors. Amenities will include a laundry, pool fitness center and site management. There will be 187 surface-parking spaces. Tesh submitted three alternatives to finance the project. Two require the use of revenue bonds issued by the city: $6,635,477 over 30 years or $6,900,732 over 40 years. Doug Chaplin, housing development coordinator for Albuquerque Development Services, said the city has never issued revenue bonds for a multi-family housing project. Tesh's third financing alternative requires tax credits and bonds issued through the New Mexico Mortgage Finance Authority. The cost was $6,757,744. The Tesh proposal was supported by the only citizen to speak at the Oct. 20 commission meeting, Margie Hernandez of the Barelas Merchants Association. Referring to the Armstrong and Hampson proposals, she said, "The higher density really scares us." Hernandez targeted the Armstrong proposal and said, "With this particular proposal, we weren't part of the process, both the planning process and the RFP process. We don't support the staff recommendation. The main reason is we weren't part of the process." When chastised by commission chair Vickie Perea for not including public input in the planning process, Chaplin replied that a city staffer was involved in the Barelas Neighborhood Association. He said the association was familiar with the project and had been given recent presentations on the Tesh and Armstrong proposals. He acknowledge, however, the association had no formal role in the planning process. When it came time for action, Romero made a motion to approve the staff recommendation of the Armstrong proposal. Silence followed and the motion died for lack of a second. Commissioner Vangie Gabaldon then made a motion to approve the Tesh proposal without comment. Perea joined her in voting to approve the Tesh motion, while Romero and Loretta Armenta voted against it. "I support the Armstrong proposal," Armenta said, "but I would very much like the Barelas neighborhood brought into the partnership." Perea, faced with the deadlock, said action could be postponed to a later meeting when the commission's absent fifth member, Marian Matthews, was present. Romero protested, "We have developers willing to move forward on this. I'm really reluctant and a little embarrassed to send a message out to the community that we can't reach a decision." Gabaldon said all three rival proposals were realistic, but added, "I am concerned there is not a market for all of these units. The [staff-commissioned] market study is a year old. That doesn't prove to me that 202 units can be sold." After 10 minutes of wrangling, Perea called a five-minute recess. Two minutes later, she reopened the meeting. After a brief discussion, Gabaldon repeated her motion to approve the Tesh proposal. It passed. A participant and observer of the proceedings, Todd Clarke of Grubb & Ellis/Lewinger Hamilton, said he saw the issue decided on density. "It's both ends of the envelope. The Tesh proposal was conservative; it met the minimum [density]. Armstrong pushed the edge of the envelope. Both could be done." The winning team is headed by Albuquerque developer Amar Tesh and includes Dekker/Perich/Sabatini as the architect, Bradbury & Stamm Construction as the general contractor and Charles Williams Co. as agent and property manager. The Armstrong Brothers team were headed by Dan and Gary Armstrong, who were both the developer and general contractor. The architect was RMKM Architecture. The Hampson team included Garrett Smith Ltd. as architect and Zeta Construction as the general contractor. Grubb & Ellis was the marketing agent and property manager for both the Armstrong and Hampson proposals

Additional Info:Call Todd Clarke CCIM
(505) 883-7676 Fax: (505) 837-1944
Address: 2340 Menaul NE Suite 200 Albuquerque NM 87107
Information compiled from the Database of Todd Clarke CCIM and is © of Todd Clarke CCIM and NM Apartment Report
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