Board of Regents’ Finance and Facilities Committee approves agreement with Fairmount Properties for development near Lobo Village, south campus area
Agreements to develop commercial locations near Lobo Village are underway.
At a Board of Regent’s Finance and Facilities Committee meeting on Monday, board members unanimously approved the South Campus Master Development Agreement without recommendation. The agreement will go before the full Board of Regents at its next meeting.
UNM Director of Real Estate Kim Murphy said the agreement explains that the University, the Board of Regents, the Lobo Development Corporation and the developer, Fairmount Properties, will develop proposals for specific sites near Lobo Village. He said the sites include a 4.3-acre lot west of Lobo Village, a 1.8-acre lot east of Lobo Village on Avenida Cesar Chavez, and a 45-acre space south of the UNM baseball field.
Murphy said the individual proposals will have to be approved.
Murphy said the agreement does not yet include ground leases, which are agreements that allow for the development of a piece of property during the lease period, after which the property owner takes over the property. He said the 1.8-acre lot will probably become a restaurant location.
“The agreement itself is really a process document,” he said.
He said specifications for development costs have not yet been determined but that an original estimate totaled about $6 million.
Murphy said an estimate from Fairmount Properties was much higher than the original estimate because it included other costs, such as parking lot construction costs.
“Those costs are considerably higher than ours and we have not reconciled that yet, but intend to do that,” he said.
Murphy said the agreement will allow Fairmount Properties to seek tenants and property users and provide them with information about the plans.
But Regent Jamie Koch said the full board’s next step before approving the agreement is to understand the potential costs of the project as that may affect whether the regents decide to fund the cost of infrastructure. He said the regents also need to ensure that funding will be available from the UNM Foundation, money that would later be paid back to the foundation with interest.
“I think we need to know if it’s going to be six million dollars 18 months ago, or is it going to be nine million (dollars), and what the value of that land is going to be once the infrastructure is put in, what’s that value going to be? All of that stuff,” he said. “And the regents need to make a decision.”
Fairmount Properties Principal Adam Fishman said the company wants to move forward with the agreement whether or not the University will be a partner, and that the agreement is a two-phase agreement. He said the first phase includes the development agreement and the second phase includes the ground lease agreement, which will be negotiated within 60 days of the first agreement.
“We are prepared to move forward with this transaction with the University as partner or not,” he said. “It was my preference to do all of this at once in an effort to expedite the process that we would do this in two pieces.”
Fishman said the first agreement will allow for the developers to attract potential users of the space. He said the agreement will allow the developers to show that the company intends to do business with the University.
“It’s really important for us, for our leasing efforts, for our commitments, that we’re trying to both articulate and, in one case at least, document with potential users of the site that we do get through this process … executed,” he said.
UNM President Robert Frank said the committee should move the agreement to the Board of Regents and that discussions for the plan have gone on for too long.
“Prior to my arriving, you spent an enormous amount of time looking for a partner, you’ve discovered a partner, they’re prepared to move with or without our investment,” he said. “I support us being an investment partner; I believe they’ve provided us with adequate information about their worthiness as an investment partner.”
Frank said the administration will be more prepared with information to answer the committee’s questions at the next Board of Regents meeting.
“We’ll do our due diligence and we’ll get to work,” he said. “If you move it out of committee we’ll do our homework and we’ll come back to you … addressing the issues.”