The businessman behind Sawmill Market and Hotel Chaco is rolling out plans for three new projects in the same area – two more hotels and an apartment building – and seeking big public incentives to make them a reality.
Jim Long told the Bernalillo County Commission on Tuesday that the second phase of his Sawmill District vision represents over $200 million in investment. Given the current economic climate, he said they are possible only with some public support, but that they could be transformational.
“We think these projects will make a huge difference for our city to attract employment here, to attract the type of investment the community will want to see and hopefully raise the bar for the rest of the state,” Long said.
According to county documents, the plan includes a 101-room extended-stay hotel, a 115-room contemporary boutique hotel with amenities “appealing to a Gen X and Millennial audience,” and a six-story, 138-unit apartment complex with street-level commercial space. Long told the commission that exact capacities are not set in stone.
Long – working under the Sawmill Bellamah Properties LLC entity – is pursuing about $38.6 million in grants through the Local Economic Development Act, according to county documents. County Economic Development Director Marcos Gonzales said in an interview the money would come from future gross receipts taxes created by the three newly proposed buildings, but also from taxes generated by a series of existing properties in the area, including Hotel Chaco, Hotel Albuquerque and Sawmill Market.
If approved, the county would give up half the GRT it would get from construction of the new buildings and on business activity at all of the associated developments for what is likely the next 30 years.
But Gonzales said the total incentive amount is still being negotiated and that the city of Albuquerque may also contribute to the LEDA tax increment. A city spokeswoman said the city has “had discussions” with the developer about the proposed projects, but made no decisions about incentives.
It’s a LEDA deal unlike any the county has ever done before, Gonzales said, in that the county has not previously offered a developer a share of the taxes on projects already built and operational.
In addition to the LEDA agreement, Long’s company is seeking a total of $146.4 million in county industrial revenue bonds, or IRBs for the second-phase projects. Those are bonds that the developer, not the county, must repay, though they do come with tax breaks. Gonzales said the county is still working through the terms of the IRBs, specifically the rate of exemption and, thus, the dollar value of the tax breaks. The deal will also include a payment in lieu of taxes that the developer would make.
Gonzales said he is aiming to solidify the incentive terms and have the package ready for a December commission vote.
Bernalillo County previously approved $50 million in IRBs to support the Hotel Chaco and Sawmill Market developments, and commissioners on Tuesday took turns celebrating Long’s work to date.
“I’m so pleased how much you have contributed to our local community,” Commissioner Walt Benson told Long.
Commissioner Charlene Pyskoty said walking to get food and drinks at Long’s properties after visiting a nearby museum is one of her “favorite things.”
“It’s a destination where you can spend a whole day, and walk around and do all this great stuff,” she said.
Commissioner Debbie O’Malley, however, raised concerns about housing affordability – Long did not say what the proposed apartments would cost to rent, only that they would be at “market” rates – and traffic. She said she also needed to see the final terms of the incentive package before making an ultimate decision as she wants to know it is equally beneficial to both parties.
“I just think we need to do a deeper dive here and make very clear what the deal is,” O’Malley said.
In an interview, Long said the new projects would create over 300 permanent jobs and more tax revenue for the county, even with incentives.
“You’re creating new gross receipts tax for the county, for the schools, for many of our other public services that are so vital to our community, and you’re sharing only a portion of that” with the development, he said.
Last year, the city of Albuquerque filed a lien against some of Long’s properties – including Hotel Chaco and Hotel Albuquerque – for unpaid lodgers tax, though both Long and the city said the hotels now are up to date on those taxes.