The city of Santa Fe would need to spend about $2 million to buy a historic downtown campus that some hope will be the future home of the New Mexico School for the Arts.

A collection of historic buildings and 11 acres of land at the former St. Catherine Indian School are worth a total of $1.9 million, according to a real-estate appraisal conducted for the nonprofit charter high school and discussed in public for the first time Tuesday.

City councilors on the Finance Committee voted unanimously after the discussion to recommend approval of a proposal from Mayor David Coss that calls for city staff to study how the local government could buy the campus and lease it to the charter high school. State law ordinarily prevents the city from paying more than appraised value for property. (There are very limited exceptions.)

But buying the long-vacant campus would be only the first step. Some buildings there are dilapidated from sitting empty since the century-old institution closed in 1998. Most, if not all, will require extensive work before they can be used again.

School officials say they have $7 million in privately pledged funds that would be available for the first phase of work to make buildings there inhabitable for residential students and usable for classrooms and art, music and dance studios. The school in currently located at the St. Francis Cathedral School, but needs a permanent home, said Adelma Hnasko, executive director of the public art school and its nonprofit arm.

"We would be responsible for the restoration and we would lease the land from the city," Hnasko told the committee, explaining that the school estimates it will need to spend $20 million in a multiphase plan to completely fix up the campus, which has been named a city and state landmark.

"We know it's a land mine and a gold mine both in one," she said.

City councilors said they await more information about the details of how the deal could work.

"If we are successful, there would be a lease," said Councilor Rosemary Romero, "There are a lot of 'ifs' built into this."

City Manager Robert Romero, no relation, said staff will likely consider three ways the city could come up with the cash: issuing revenue bonds, accessing reserves or putting the project on a capital-improvements list that is paid for from other bonds.

The city's Public Works Committee voted in mid-December to recommend that the full City Council approve the resolution. It calls on city staff to conduct due diligence and determine the feasibility of the city buying the property. The governing body would have to vote later on whether to make the purchase.

In a similar deal, the city bought the former College of Santa Fe campus in 2009 and leased it to a newly formed school, which later changed its name to Santa Fe University of Art and Design.

If the city purchased nearly 11 acres at St. Catherine's, that would leave about 7 acres of mostly flat and empty land that was used as the school's baseball field. The federal government has studied using that land for expansion of the adjacent Santa Fe National Cemetery. Landowner Max Tafoya, who is a cemetery developer and a principal in New Mexico Consolidated Construction, has said he bought the land with the intent of it being used for the veterans graveyard.

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.