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Council Considers Land Donation For Hotel Aug. 27

on August 15, 2019 - 10:34am
Los Alamos County Council will consider donating 3 acres of land located on 20th Street to TNJ during its regular meeting Aug. 27. TNJ has plans to build a 86-room hotel and conference center. Photo by Kirsten Laskey/
Los Alamos Daily Post

Council Considers Land Donation For Hotel Aug. 27

If Los Alamos County Council approves an ordinance to donate approximately 2.5 acres of County-owned land parcels on 20th Street to TNJ, an Albuquerque-based business, the hope is the County would further progress on achieving its goals for economic development. 

According to County documents, TNJ plans to develop an extended stay hotel and conference center. It also is reported in the documents that this would generate 17 full time jobs.

The ordinance will go before Council Aug. 27 for consideration. 

The six parcels included in the donation contain the “smart house”. According to County documents, TNJ plans to develop an 86-room extended stay hotel. Additionally, the business plans to construct a conference center to accommodate 250-300 people.

Los Alamos County Council Chair Sara Scott dropped by the Los Alamos Daily Post on Wednesday to discuss the proposed development.

“Thank you for the opportunity to be here today and provide an overview of the hotel and conference center project that Council is now considering,” Scott said. “The reason that we wanted to take a serious look at this proposal is that a hotel and conference room have been stated strategic goals for the community for more than 10 years.”

Scott explained that the 2010 and 2019 Economic Vitality Strategic Plans, the 2016 Comprehensive Plan, and the 2019 Tourism Strategic Plan, which were all developed with significant community engagement and input, cite this need.

“Additionally, as I spoke with folks around the community last year many noted that such a facility would be helpful in terms of keeping meetings, workshops and other gatherings on the hill and contributing to our local economy,” she said. “However, during the previous 10 years there have only been a few developers interested in building a hotel here, and none were interested in constructing and operating a conference center. None of these possible projects went forward.”

She added that the County now has a proposal from a well-established hotel developer and operator located in Albuquerque – and willing to invest in a $9 million project to build an 86-room extended stay hotel and a 250-300 person conference center in Los Alamos County. 

“Initially, the developer was proposing to purchase the land and build a hotel,” Scott said. “When the County relayed the long-standing interest in a conference center as well, the developer worked with the franchiser to obtain a waiver to allow the construction of a collocated conference center, developed a Local Economic Development Act (LEDA) proposal to help support the inclusion of a conference center in the project, and submitted it for review, evaluation and discussion – which is what we are doing now.”

The LEDA proposal requests that the County contribute land (worth about $1.4 million) and the Smart House (worth $425, 000) to the project for a total contribution of $1.825. What the County would get in return is about $3.5  million in taxes (this is the local portion of taxes only and estimated using comparison to similar businesses in the County), a conference center in the downtown area, and the operation and maintenance of the conference center for a minimum of 10 years, she said. The estimated value of the operation and maintenance contribution, based on experience at Fuller Lodge, is about $200,000 per year for a total of about $2 million over 10 years.

“This estimated return on the LEDA investment does not include any economic or community benefits that would be realized from keeping more events in town or potentially drawing new events into the community,” Scott said.

The project would include a “prep kitchen” for the conference center; service for events would open to any potential caterer. Additionally, the parcel closest to Trinity Drive is intended to be used for a coffee shop or restaurant. The County had previously generated a rough estimate of about $2 million for building a conference center.

“For completeness, I would like to note that by selling the Smart House we would lose from $100,000 to 400,000 on the current lease over 10 years (the County’s understanding is that the current lessee is willing terminate their lease should this property be sold),” Scott said. “We would also move forward with installing a traffic signal which, depending on grant and other cost sharing opportunities, would cost about $200,000 – 400,000; this signal has already been requested to address current pedestrian traffic from the Public Schools offices, the adult day care, and the bus stop on Trinity.”

Scott said that she has heard there have been some questions regarding the use of the 20th Street property for this project and whether this is the best use of the land.

“I had questions about that myself,” Scott said. “Clearly, if the six 20th Street parcels were sold and used for other businesses, they would also be generating taxes for the County as well (except for the estimated $1.3 million in lodger’s tax, which would only be generated by operation of a hotel). So, the trade-off I’m considering is whether it is best to wait for offers on these properties or to take advantage of the proposed investment in the hotel and conference center through the LEDA deal.”

Over the five years this land has been available and two years since the utility and road infrastructure was added, there has been minimal interest in one or two of the six parcels and there are no offers on the table for any parcels at this time, she said.

“Given the challenges we’ve seen in attracting investors for either a hotel or conference center and that the 20th Street property has not attracted many potential investors, I feel that this actual offer and opportunity to invest in a downtown conference center is worth serious discussion and consideration,” Scott said.

In discussing the project with Los Alamos County Economic Development Administrator Joan Ahlers, she said that the conference center could serve numerous purposes and it would encourage people who would be in town for various events hosted at the conference center to explore the local restaurants and shops.

“Not to mention locals could utilize the facility to host fundraisers, high school proms or weddings,” Ahlers said.

During public comment at the Aug. 6 council meeting, Los Alamos Commerce and Development Corporation Executive Director Patrick Sullivan offered his organization’s support for the project.

“A conference center is something that has been identified in almost every strategic planning document this County has produced over the past 20 years as a vital need for our community,” Sullivan said. “A hotel has also been identified in the economic vitality strategic plan, the comprehensive plan, the tourism strategic plan … so it has been shown across the board that the need for both of these facilities is here … Almost every conference facility that I am aware of, from a small rural area to a large urban city, has some form of participation by the municipality in which it lives. That is the way those things are sustainable; they don’t work well on their own. The developer in this project is bringing in over $9 million of his own money that he is risking on this. He will be running and operating the conference center, not Los Alamos County. We are very supportive of this. One of the main reasons we got behind this from the beginning was because of the economic spinoff for the small businesses in our community. The ability to retain conferences in our community … and the spinoff benefit to our restaurants, our retail shops, the catering opportunities that go along with a conference center.”

Speaking as a private citizen, Linda Deck also expressed support for the project. She said she has been a part of working groups that have noted the dire need for a hotel and conference room to accommodate the events the County would like to host.

“In order to bring anything of any more size, we have to bring in that kind of center to be able to serve those worthy groups that want to highlight being here in Los Alamos and what this County is … so we are missing out by not having that kind of a center,” Deck said. “The other thing I have personally observed is that the hotels here are routinely taken up almost entirely by laboratory renters, workers who come in and need to have rooms in order to be here and it doesn’t leave room for those other people who are just visitors to our beautiful area and want to see it as a vacation type of place … I am thoroughly behind the effort to make this happen.”

Not everyone is fully in favor of the deal. A few people expressed skepticism during the Aug. 6 meeting. One person called gifting the land to TNJ “repugnant”. He said he didn’t feel it was fair to donate land to an outside business when there are local businesses with a proven track record that are trying to improve but get stymied at every point. He encouraged council to help local businesses rather than out-of-town enterprises.

Pet Pangaea owner Cyndi Wells said, “I don’t argue at all that we do need a facility. I believe that would be in the best interest of the community … I also believe if there is such as strong need, I don’t understand why we have to make it less risky for the developer to put in this convention center. If there is such a strong need why are they risk adverse? Why do we need to give it to them? … I am not against the County helping move things forward with money when it is necessary and would be beneficial.

“For example, I see areas of blight within the County where there are properties that private enterprise just would not touch because it is going just cost too much for it ever to make financial sense,” Wells said. “So, we have empty, decaying buildings, which I think would be an appropriate use of County funds to purchase and demolish and perhaps make available for economic development rather than taking land that is very sellable and appealing and giving it to an outside entity that has pockets deep enough to pay for it and as they said there’s a huge need so there’s not much risk.”

Local developer and business owner Shannon C de Baca commented that she felt more transparency and communication was needed.

“One of the problems the County has with this donation is transparency,” C de Baca said. “Very few of us got the memo on this meeting ... when the County is considering a $3 million donation to a competing developer when you have developers present that might have had opportunity to bid on the process such as that … to not have a voice in the process is a little disconcerting to me … I think the County moves so fast and there so many players and so many silos that transparency is lost in the system. It is a systematic problem in the County that communication could solve and I think there is a problem in the County as well with the 12,000 plus residents we have … you have tendency to judge us … we are advocates for the County … but we do argue with the transparency the land and lease deals in County proceed.”

Regarding transparency, Ahlers explained that Council approved a process for the disposition of land, which the County followed. She added that before Council decides on the ordinance, two public meeting would be held, one of which was Aug. 6 and the second is scheduled for Aug. 27.

Additionally, Ahlers said the community still has two weeks to weigh in on the land donation, request documents and ask questions. In fact, she said that she encourages the public to contact her at 505.662.8296.