Council Supports Hotel/Conference Center Project In 5-2 Vote

IMG_5119.jpgTNJLA, LLC representatives sit in the front row at Tuesday evening’s Los Alamos County Council meeting which was also attended by a large group of community members both in support of and against the proposed Marriott extended stay hotel and conference center. Photo by Maire O’Neill/


All that remains  is for Los Alamos County Council to vote on amendments to Ordinance No. 695, adopting an economic development for public support of TNJLA, LLC and the associated project participation agreement at their Oct. 15 meeting and a controversial hotel/conference project on the 20th Street Extension will be able to move forward.

The development will include an 86-room extended stay Marriott hotel and a 250-300 person banquet style conference center as well as a stand-alone food and beverage space.

Prior to a 5 to 2 vote in favor of the project at Tuesday’s County Council meeting, Chair Sara Scott said the Council had an opportunity to support what she has heard many community members want. Councilors Antonio Maggiore and Randy Ryti were the dissenting votes.

“And we have a deal that I feel makes sense financially, has a good return on investment. It makes use of land that has had minimal development or interest over the last few years. It’s in the right location. I’m not sure in fact, other than the Smith’s property where we would fit such a facility in the downtown area, and it’s being proposed by a reputable developer. That’s why I support this opportunity and investment,” she said.

Scott said she had found it very helpful to hear results of strategic planning in the last 20 years that resulted in the recommendation of an investment in a conference years and why a conference center was a key factor in an economic diversification growth.

“There has been discussion of the benefits to the County in terms of taxes that would be generated by this type of project but that’s not the main reason that I’m supporting it. As I walked around and met with folks last year, knocked on doors, had meet and greets, and talked to folks in a lot of other venues, one of the top five, if not one of the top three things I heard from the community was a strong desire for more restaurants, shops and a bit more economic diversity,” she said.

Scott said people in the community have wanted these things for a long while and that it’s a hard challenge.

“Therefore that’s why I would suggest that if we want to achieve this, we need to do things in a strategic way and take a multi-pronged approach. There are a few ways you can go after this type of growth and diversification and we need to be working hard on multiple fronts. We need to create more housing, more people, provide more customers for our businesses,” she said. “Housing is important because it’s needed for the workforce that works in these businesses and other enterprises that are growing in our community. Pebble Labs and the New Mexico Consortium were mentioned – these are important investments that have been made and have made important contributions to our community.”

She noted that there are some 450-500 housings currently being developed and that there’s support and planning for more.

“We will aggressively continue to focus on housing and our investment in an ongoing housing study is going to help guide these efforts. We need to look at our business environment that’s been mentioned tonight. There are things we can do and are doing to support the business environment. For example the County has created mixed use zoning code to help take advantage of developer interests and opportunities for infill and redevelopment of both commercial space and housing,” Scott said.

She said the County has also had improvement in the approval process – both commercial and residential – which has resulted in decreasing the average time it takes to get a permit from six weeks to four days.

“We’ve also used (Local Economic Development Act) to create incentives for tech type businesses which further diversify our economy and provide more customers for the shops, restaurants and other businesses that folks in our community would like to see. We’ve invested in way-finding which will help guide visitors to our community and see what we’ve got to offer. There’s more to do and again, we’ll keep focusing on these efforts as a part of another prong of attacking this challenge,” Scott said.

She said she feels another way of helping existing businesses while encouraging new ones, is to get more folks to stay in the County or visit and spend their money in the community as well as prevent significant leakage of events, meetings and conferences outside of our community.

“If you could estimate at a rate of $50 per person per day, which is well below the figure of $150 to $200 per day asserted on the New Mexico Tourism website, if we could retain just 10 days per month of 200 people at meetings, that would translate into $1.2 million into our economy every year. This combined with additional hotel space in town and the benefits that would be provided in terms of diversification and local spending is why three separate strategic planning efforts utilizing broad community perspectives and engagement have recommended a hotel and conference center. Through these efforts it was recognized that attracting a conference center to the County would likely require the use of incentives as in the case of many other communities,” she said.

Council Vice Chair Pete Sheehy said asking for an additional commitment of five more years, a 15 year commitment is an improvement to the original project participation agreement.

“In addition to the language, asking for local consultation on what to do with the property fronting on Trinity is an improvement. I asked Mr. Patel to please go to some of our local restaurants just across the street. There’s some very good ones. …As you know it tough to get started even if you have something good to offer and have a track record of successful developments” he said.

Sheehey said to get a conference center as well as a hotel benefits not just the developer but also the community.

“That’s more people here going to more meetings, needing more meals. When we did the LEDA development at Entrada Park, that’s a huge amount more people and investment in that area. That’s going to benefit the Holiday Inn Express,” he said.

“I’m supporting the project because it will help everybody. The cost of building the conference center ourselves and running it is much greater than the cost that we’re asking the Patels in this deal to accept. It is all about the conference center. If a convention center downtown with a hotel maximizes the benefit for everybody. That’s why I support this,” Sheehey said.

Councilor David Izraelevitz said Council’s primary responsibility is policy setting and budgeting.

“Those are really strategic responsibilities for the individual operational responsibilities which means that we have to take a long look, five, 10, 15, 20 years ahead for the County. That is really our responsibility and I see this satisfying those. We should not insert ourselves into the business community lightly and I don’t accept that responsibility lightly, but I see this as a unique opportunity to change the strategic business environment of our town regarding tourism, regarding other impacts to amenities the County will provide and I don’t see that occurring without this project,” he said. “And for the amount of dollars that we are contributing to this project, I think it’s a good trade-off in terms of risk – allowing the private market to take on the risk of getting use of those conference spaces.”

He said Marriott is going to require that the facility be updated and he thinks it is much more appropriate for the private market to take that than for something to be done with explicit tax dollars as an ongoing expense.

Councilor Randy Ryti said the project has a lot of pros and a lot of cons to it and that the thing that most concerns him is the unquantified detriment to the local businesses. He said at this point, there is only a 2017 report on hotels to refer to and that the document predicts a substantial decrease in occupancy levels over three years.

“Looking roughly here, it (the project) does return the money so roughly it looks like we can get roughly $2 million from just the conference center part. It’s attractive in lots of ways but I don’t feel like I can support going forward without having some information and more definitive information on whether or not there will be negative impacts on the local hotels and the other conference facilities, including ones the County owns because obviously if it’s a County-owned facility we actually get that revenue directly as opposed to just giving them the 10 percent,” he said.

Councilor Katrina Martin said when the hotel/conference center first came up to Council she had many of the same concerns as some of the community members expressed under public comment.

“To me it seemed unfair that we were giving land away to a company that probably could afford to buy it and I did also question whether or not we truly needed a conference center. However, in discussions with many different people, I think ultimately going forward we have to trust that the multiple studies in the past said that we will benefit from a conference center that is bigger than the facilities that we already have,” she said. “No one made these things up. Mr. Patel didn’t just say, ‘I want to build a conference center’. He’s doing this based on information that we put out there and that numerous staff hours have gone into and I trust that those reports are accurate. We could continue to study this to look at a variety of impacts indefinitely. At this point I feel like this is a better deal and I appreciate that TNJLA was willing to work with us towards making some improvements and at this time I feel that I could support this.”

Councilor Antonio Maggiore, who did not vote in support of the project, did not chose to offer comments during the hearing. Several community members voiced concern about County property which appraised at $1.8 million being turned over to TNJLA, LLC for the project, stating that the company should have to purchase it. Others were concerned about how the project would affect other businesses in town. Also of concern was how the incentives offered by the County under LEDA where property is given to a new business, affect the ability of developers to sell their land.

Brian Martin, president of HIL Holding LLC, the new owner of the Holiday Inn Express on Entrada Drive, said his company plans to invest some $2.4 million into the hotel without a subsidy.

“As such we have certain concerns about the proposed project and its impact on the non-subsidized lodging facilities in this marketplace,” he said. “These concerns include negative impacts on employment and diminution of both real estate and business value.”

Brian Martin said supported the County investing in ways to improve the economic environment in Los Alamos, however, he said those investments are better targeted toward improvements that increase/enhance the economic vitality of the area, creating sources of actual demand, not hypothetical “induced demand” and allowing for private development that is viable without subsidy.

“This type of investment maintains an equal playing field for all stakeholders,” he said.

Brian Martin asked the Council to approve the commission of an updated study that would address the impact the new hotel would have on existing lodging facilities in Los Alamos. He asked that if the new study concluded that damage is possible to the marketplace and Council decides to move forward regardless, that it also approve a financial package to mitigate damage to existing lodging owners who are current tapayers.