The first in a set of biweekly midtown campus updates Wednesday outlined potential timeline options for the development — including the pros and cons of selling the campus in its current state, compared to investing public dollars into the aging site over time.
“What we’re hearing is that the midtown asset today is a distressed asset,” Dena Belzer of Strategic Economics, an urban economics consulting firm, said during a presentation to the City Council.
Belzer noted that to reduce risk to a developer, fiscal investments in the site could be considered, including demolishing undesirable buildings, exploring zoning for desired land uses and and investing in infrastructure and site assessments.
“The more the city puts in, the more risk is reduced,” Belzer said.
Dallas-based KDC Real Estate Development & Investments/Cienda Partners — which was brought on by Team Midtown, a consortium of 17 local businesses and organizations — was slated to develop the property. But the company and city mutually terminated their contract last month.
KDC/Cienda identified a number of concerns about the onetime college campus, including issues with buildings, infrastructure problems and ongoing fiscal uncertainty tied to the coronavirus pandemic.
In a letter, KDC/Cienda wrote the buildings had “no commercial value.”
Belzer said the city could consider selling the property “as-is,” comparing the option to a garage sale, while noting the downside of the city being left with the least attractive parcels of the campus, and thus, losing control over future value creation at the site.
Belzer also said the city could make larger improvements over a six- to 12-month period to prepare the site for market, which would include demolishing or rehabbing older buildings, rezoning and establishing a financial structure for public financing, such as a municipal redevelopment area.
The longest-term option floated to the council was a gradual five-year disposition of the site, which Belzer said gives the city the most control over its future to meet previously noted community plans for the midtown campus.
“This might require additional resources from the city, but this also has the most potential for the city to participate in the economic value down the road,” Belzer said
Belzer added that during that period, previous applicants to the city’s request for expression of interest could be brought back into the fold.
Assistant City Attorney Andrea Salazar said a decision needs to be made about whether the city wants to move forward with the request for expression of interest process, get rid of it entirely or partially, or move to the next highest-rated master developer.
The Central Park Santa Fe group, a team of 40 Santa Feans, was one of the three previous finalists for the exclusive negotiation agreement, alongside KDC/Cienda and Raffles Education Corp., a Singapore-based education group.
Councilor Michael Garcia advised the city not to consider the “garage sale” characterization.
“We’ve all heard the stories of where a garage attendee happens upon the sale and finds a $5 million Billy the Kid picture and they sell it for 75 cents,” he said.
More concrete recommendations will be presented as early as the Feb. 24 council meeting.