Council Forgoes Purchase Of CB FOX And Reel Deal

Los Alamos Daily Post

In a 5-2 vote, Los Alamos County Council passed on the opportunity to purchase the CB Fox and Reel Deal Theater properties during its Tuesday night work session.

Councilors Sara Scott and David Izraelevitz cast the two opposing votes. They proposed extending the due diligence period on the purchase agreement for 30 days to continue investigating the potential purchases, but that motion failed to pass in the 2-5 vote.

While the majority on council disagreed with the County purchasing the properties, there was a consensus that the downtown is facing problems, and something needs to be done.
Councilor David Reagor addressed that issue.

“We definitely want to do something, but we want to do something that makes sense,” he said.

The proposed purchase agreement did not make sense and would not be the right approach for development, he added. Referring to the County staff’s presentation, Reagor said it seems the County would either lose a lot of money or a little money in the venture and it would appear the current owner concluded the same thing.

He further added that the County’s role in development projects should be helping or supporting the developer – whether that is providing infrastructure or changing zoning codes.

While Reagor said he saw a lot of problems with the CB Fox building – small lot, odd shape and parking issues – he felt the Reel Deal building is a “treasure” and should be maintained as a movie theater. Reagor brainstormed perhaps turning it into a co-op that could be utilized for library functions or a cinema club.

Councilor Sean Williams said he too supports a vibrant downtown but he is not in favor of this purchasing option because the numbers do not work out. He pointed out that in all the different scenarios of what could be done to the CB Fox building, it would cost businesses more than $300 per square foot. In comparison, Williams said he looked into the cost for businesses to get spaces near the plaza in Santa Fe and it ranged from $120-$360 a square foot.

With these numbers, Williams predicted that the proposed purchase agreement would be “an inevitable failure.”

Still, “there are two things I hope will come out of this,” he said. “First, that my fellow councilors will better understand the business community’s prespective … second, that council remembers these analysis when the metropolitan redevelopment area comes up next month. This project has proven that a fusion of public funds in the commercial real estate market will not improve the business climate and will likely make things worse …”

Williams also voiced support for solely purchasing the Reel Deal Theater.

Looking at the results of the recent survey regarding the purchase of the two buildings, it was clear the public did not support it, Vice Chair James Robinson said, adding that it is not something that can be brushed off. Furthermore, Robinson said if the County puts money into this project it may lose out on other strategic investments.

Councilor Denise Derkacs agreed. She pointed out the survey showed that the purchase was not supported roughly two to one.

“I found this a very difficult decision,” Derkacs said. “In the almost 39 years I’ve lived here I’ve watched business after business disappear. I think I can count on one hand the businesses that are still here after 39 years. So, we have a definite problem.”

However, Derkacs said she doesn’t feel the County purchasing the buildings was the right approach because the numbers “don’t pencil out”. Other options need to be investigated, she said.

Council Chair Randall Ryti also said he did not support the purchase and added that he has heard comments that businesses find the County difficult to work with. If this is true, he said it needs to be addressed because there is a problem with empty businesses and empty storefronts.

Councilors Scott and Izraelevitz said they felt extending the due diligence period might help resolve the problem with vacant properties.

Scott said this could be an opportunity to invest in the type of downtown the community wants.

Based on the numbers, the type of investment the community desires is not attractive to developers, she said.

“I propose that we take the option of giving the purchase of these properties continued consideration – of whether we want to take this opportunity to invest in the kind of downtown that our community wants,” Scott said. “Whether we want to take measures to make the property more attractive for the kind of development that provides benefits to our local businesses, housing and the liveliness of our downtown.”

If it was ultimately decided to purchase the property, Scott said an example of how the County could proceed would be to identify key goals – including bringing vitality to our downtown, nicer spaces for businesses, opportunities for businesses to own their own space, and housing, solicit ideas on how to accomplish these goals, and then work with local and/or new businesses that might be interested in some of the store front spaces and developers interested building housing. The specific project would be guided by using input from interested partners and the resulting space would be appraised and sold at market value. The cost to the end user would be based on that value, not what it cost to get to that point.

Izraelevitz agreed. He pointed out the County has many tools at its disposal to make this project a success – including the money.

With its healthy capital funds and reserves, Izraelevitz said Los Alamos is in a better position than other communities.

Additionally, it has the time to continue the conversation on whether to purchase the properties, he said.

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