The New Mexico State Land Office is formally soliciting development proposals for a parcel of land on Old Santa Fe Trail, directly across from the agency’s downtown Santa Fe offices, that is now home to Garrett’s Desert Inn and the Santa Fe Bite restaurant.

The state-owned parcel has generated some interest, according to spokeswoman Kristin Haase, with 10 businesses and individuals requesting a bid package so far.

Earlier this year, as Dunn was assessing the market for a land lease at the site, he collected four proposals, ranging from a motor court hotel with Airstreams and a rooftop pool to a mixed-use retail and housing development.

Local legislators and preservation advocates remain concerned, however, about whether a new development on the commercial property, at 311 Old Santa Fe Trail, will fit in with the distinct style of a historic street that is home to some of the city’s oldest buildings — including a 17th-century mission church. A bill that would have required such a project to comply with the city of Santa Fe’s strict design rules for buildings in historic districts passed both chambers of the Legislature this year but was vetoed by Gov. Susana Martinez.

While State Land Commissioner Aubrey Dunn has made clear that he will have final say on the lease award, the State Land Office is putting together an advisory committee of city and neighborhood representatives to help evaluate proposals and provide input.

The state acquired the 2.7-acre motel property in September in a trade with Cochiti Pueblo, which had purchased it from the Catron Family Trust in an effort to reclaim thousands of acres of ancestral land owned by the state.

That state trust land, donated a dozen years ago to benefit The University of New Mexico, lies along the Rio Grande in a valley adjacent to the pueblo. It was leased for years to a family who operated Dixon’s Apple Orchard, but the business was devastated by a flood following the Las Conchas Fire in 2011.

A land lease for Garrett’s Desert Inn is set to end in August.

Now, the state is moving ahead with finding a new long-term tenant for the commercial parcel, which sits about 1,000 feet from the historic Santa Fe Plaza.

The land will continue to benefit UNM, though the state is hoping for a tenfold increase over the $20,000 brought in each year by the motel operator. Lease proceeds will go into a trust for UNM, which provides annual distributions to the school based on a percentage of earnings.

Under a timeline established by State Land Commissioner Aubrey Dunn, a new tenant for the property will be chosen in October.

A provision in the solicitation says a bidder that secures a contract for the property must comply with all federal and state laws, including the handling of hazardous waste and regarding endangered or threatened species, health and safety, and archaeological preservation.

The State Land Office does not address, however, whether a leaseholder will be required to follow the city’s zoning rules for historic districts.

The city’s initial historic design ordinance was adopted after Gene Garrett built his motel at the site in 1956. The midcentury design stood out at a time when preservationists and community boosters were promoting Spanish-Pueblo Revival and Territorial architectural styles. An outcry over the project helped lead to the adoption a year later of city-enforced standards in designated historic areas.

The ordinance was largely written by the Old Santa Fe Association, a decades old preservation group. Members of the association have attended informational meetings about the current state project at the Garrett’s site and have been vocal about what they see as a need to protect the downtown area’s architectural integrity.

Senate Majority Leader Peter Wirth and state House Speaker Brian Egolf, both Santa Fe Democrats, sponsored a bill in this year’s legislative session that would have required any project on the parcel to comply with the city’s historic code. Martinez, in vetoing Senate Bill 422, said it might be a detriment to economic development in some communities.

“It’s a critical site in downtown Santa Fe,” Wirth said of the Garrett’s site, “and it’s important that whatever one puts there fits into the fabric of our historic district.”

Randall Bell, a Santa Fe attorney who has worked on historic preservation issues, said the situation is confusing because the Land Office is not the developer, but that any lease holder who proceeds would have to follow the ordinance.

Dunn has said he wants a project at the site to comply with all ordinances, but he will move forward with approval if those become unreasonable.

Haase reiterated that this week, saying, “The commissioner has always encouraged stakeholders to comply with rules and ordinances.”

The seminal legal case involving whether the state has to follow the local zoning restrictions arose when neighborhood associations and preservation groups convinced the city to seek to force a former state land commissioner to remove an oil-field pumping rig that he had placed in front of his state office building.

The State Land Office prevailed in a 1981 decision by the New Mexico Supreme Court, which ruled that the city has no authority over state land that isn’t delegated by the state.

The state has since passed a law that requires all projects funded with state capital outlay money to comply with local zoning laws, but it does not cover privately financed projects, even those on land leased from the state.

Contact Bruce Krasnow at brucek@sfnewmexican.com.