The owner of the former St. Catherine Indian School is willing to negotiate a sale of the campus, City Attorney Geno Zamora said Monday.

Whether the city of Santa Fe and New Mexico Consolidated Construction reach an agreement about the price of the historic campus will be based on a new appraisal the city plans to order in the coming weeks.

The attorney's report to the City Council Finance Committee was a shift from previous discussions, where city officials talked about acquiring the property through eminent domain -- or condemnation -- because the landowner didn't want to voluntarily sell.

The city is eyeing the campus with the intention of leasing it to the New Mexico School for the Arts, a charter high school that is currently using the former St. Francis Cathedral School. Any lease between the city and the school would include an escrow clause whereby the school would set aside money it promises to use for building upgrades, Zamora said.

The current value of the land and its buildings has been a moving target.

Zamora said Monday that in December, the land owner offered to sell the property for $7.4 million. Around the same time, an appraisal ordered by the New Mexico School for the Arts put its value at $1.9 million. The school has been criticized for that report, however, because the appraiser did not visit the campus. Next, Zamora said, the landowner provided documents to the city that put the value at about $3.8 million.

Mayor David Coss, who sponsored a resolution calling for city staff to negotiate a deal, said Monday that the city still can't find that much cash, but he has hope in the new promise of negotiations.

"If we went the route of eminent domain, we would have to have an appraisal anyway," said Coss. "If we have another appraisal that shows the $3.8 million level, we can't afford it. If we have another one at the $1.9 million level, I think it's possible ... to find that funding. Somewhere between $1.9 million and $3.8 million, it becomes unaffordable for us and unaffordable for the school."

Another changing factor in the discussion, he noted, is news about federal criminal fraud charges against Max Tafoya, principal in the company that owns the campus.

"We have to find out what, if any, effect those [charges] have on the whole transaction," Coss said.

The Finance Committee directed city Manager Robert Romero to contract an appraiser. Romero said he expects it will cost about $5,000 and that the report should be completed within a month to six weeks.

Finance Director Mel Morgan wrote a memo last month about three ways the city could choose to fund the purchase. The city could issue industrial revenue bonds for the project, but can expect to pay up to 7 percent interest for that mechanism. Officials could also tap reserves or use bonds that are issued every other year against gross-receipts tax revenue.

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