A rendering of the Guest House being proposed at 400 Trinity Drive. Courtesy/LAC

A rendering of a guest room at the proposed Guest House. Courtesy/LAC

By KIRSTEN LASKEY
Los Alamos Daily Post
kirsten@ladailypost.com

Mesa Grand Partners development company has a vision to turn the weed-choked patch of concrete at the entrance to Los Alamos into an attractive hotel. To do that, however, the company is hoping for the public’s financial assistance.

Tucker Sharp, a representative of Mesa Grand Partners, presented the plans for the hotel, dubbed the Guest House at 400 Trinity Drive, during the July 28 Los Alamos County Council meeting. These plans include requesting Local Economic Development Act (LEDA) and Metropolitan Redevelopment Area (MRA) funds totaling $3.8 million.

While the council took no action July 28, an ordinance for the requested LEDA and MRA funds is anticipated to be introduced by council this month and return for approval either at the end of August or in September, according to the staff report.
Los Alamos County Economic Development Administrator Maksim Khudiakov offered a general overview of the project.

He explained it would be a 60-room hotel catering mainly to business and leisure tourists. Some of the rooms would offer extended stay options for Los Alamos National Laboratory summer interns, post-docs and visiting researchers.

Khudiakov reported the project would cost more than $30 million. He also broke down the requested $3.8 million in LEDA and MRA funds.

“Essentially the LEDA request is $3 million (which is) $2 million in grant funds and $1 million as a 0 percent, one year loan,” Khudiakov said. “And the MRA grant funding request is $875,000.”

He added that the developers are providing more than $7.2 million in cash equity financing with the rest of the financing coming from conventional bank loans.

It would be a good use of public money, Khudiakov said, because “The economic impact of the project is job creation, GRT revenue for the County during the construction phase, GRT (Gross Receipts Tax) revenue through the operations phase and the lodger’s tax.”

Plus, he said, the MRA will help remediate the blight at the entrance of town and increase commercial activity.

Sharp elaborated further. He said the Guest House would occupy one of the most visible locations to Los Alamos.

“(It) serves as one of the first impressions visitors receive when entering the community,” Sharp said.

The Guest House would sit on the same site as former Hilltop House Hotel. Sharp mentioned that hotel’s tragic ending – it was abandoned, then deteriorated before being demolished. Even with the old hotel gone, Sharp said Grand Mesa still had to invest several million dollars to address issues such as fuel tank removal, environmental remediation and coordination with state agencies.

“And today instead of representing a liability, the property is finally prepared for redevelopment,” Sharp said.

The vision moving forward, he said, is “… to serve people already coming to Los Alamos. That includes LANL employees, management, laboratory contractors, consultants, visiting researchers and interns and business travelers as well as tourists exploring Northern New Mexico.”
“Our goal is to better accommodate demand that already exists today in an effort to help alleviate stress on the existing housing stock in Los Alamos,” Sharp added.

Once opened it will provide GRT, employment, and will drive people to local businesses, he said, adding that “this is exactly the type of multiplier effect that successful economic redevelopment seeks to create.”

Councilor David Reagor wondered about plans for the hotel’s interior. He asked if there would be any restaurants.

Sharp said no restaurants are in the plans but there will be a common kitchen for guests as well as outdoor amenities and a small conference room.

Council Vice Chair Ryn Herrmann asked how many full-time jobs the hotel would offer. Sharp said there would be four, full-time positions as well as a variety of contract labor and services. Herrmann also asked how many years it would be until the County saw a return on its investment through property taxes and GRT; Sharp estimated it would be five to 10 years.

Council Chair Randall Ryti wondered if more rooms could be added to the hotel. Sharp said no, due to constraints on parking and the desire to make a really aesthetically pleasing hotel. Plus, the project is already expensive.

Ryti wondered what the economic benefit would be of an attractive looking building. Sharp said it would lure more people downtown.

County Manager Anne Laurent added that “the value of construction and the gross receipts tax the County will get on that construction is significant … the lodger’s tax and the jobs and the tourism the hotel might play on … the MRA piece of it very much talks about helping to do things like relocate the site utilities, landscaping the public right of ways, the widened sidewalks in the right of ways and the façade improvements … those are elements that make up the $800,000 MRA estimate right now.”

Speaking during public comment, Los Alamos County Council Candidate Jason Chappel urged the Council to investigate how this project benefits the public and what protections are in place for the taxpayers.

Los Alamos business owner Lisa Shin expressed skepticism about the project.

There was already one failed hotel in that location, she said, what’s stopping the new hotel from experiencing the exact same fate. Plus, only offering four, full-time positions doesn’t seem like a great return on investment. Shin said she felt the new hotel would be in competition with other local businesses and could put them at risk. Finally, she asked how the public is liable for any of the developer’s failures to follow through on the MRA and LEDA commitments.

Laurent elaborated more on details of the MRA and LEDA. She explained the budget for MRA and LEDA is in the County’s economic development fund. Historically, the County puts $1 to $3 million in the fund, which has built it up to $10-$12 million.

As far as claw backs and security, “The project will be built and once there’s equity in the improved project, the security will be in the improved project,” Laurent said. “The funds are not provided until after the certificate of occupancy and the construction is completed. Then there is the participation agreement that does outline the obligations of the County and the business entity and in what circumstances the money would be clawed back or required to be paid or we would call on their security.”