Architect’s perspective of the proposed Tres Alamos townhomes Investment Group Inc. wants to build on Los Alamos Public Schools property at Central Avenue and Canyon Road. Courtesy Image

Architect’s drawing homes proposed for the Tres Alamos project. Courtesy Image

BY MAIRE O’NEILL
maire@losalamosreporter.com

The Los Alamos Public Schools Board has voted 4-1 to endorse the Canyon Complex Townhouse Project as presented to them at their December 14 meeting by Phil Gursky on behalf of himself and Jeffrey Henry of Investment Group LLC and Twilight Homes of NM. Board member Christine Bernstein voted against the endorsement.

Gursky introduced the project which proposes to place a 32-unit townhouse or duplex at what’s known as the Canyon Complex, potentially in the area immediately to the north of the new roundabout on an area that was once open ground for the Canyon School and is now adjacent to the LANL Canyon Complex location. He called it “a fairly exciting project potential for the school district to create long-term revenue” as well as help to address some of the local issues with housing.

The townhouse proposal comes at a time when LAPS is preparing to conduct an inventory of its property and address future potential uses for vacant property. No decisions have been made by the board as to the demise of that property or any other LAPS vacant parcels and no requests for proposals have been issued for interested developers.

Gursky said he and Jeffrey Henry are looking develop a project that’s helpful in a number of ways.

“One is that I was born and raised in this town and the continuing lack of availability of what we consider to be reasonable and affordable housing is a significant problem for a wide range of people. The proposals that we’re putting together look at a number of things that we think the school board has well-outlined in the past and that is they look to do something that helps with community needs and community requirements and that’s one of the uses for the project – taking vacant land that the school district has and making use of it.”

He said Investment Group, LLC is looking to create a long-term revenue stream for the schools for their property. He said this has been a particularly difficult problem with vacant land because it’s very difficult to come up with a consistent long-term revenue project for them and the company is also in this particular instance looking to provide an opportunity for the school district to create more affordable and subsidized or incentivized programs to retain and to look to attract new teachers as well as other employees of the school district.

“The project we are looking at doing is small to medium sized houses on fairly small lots with the idea that the way for us as a group to make things affordable for residents and for potential buyers is to have a higher density as well as smaller units that still contain all the things that people need. That’s been a significant problem. We obviously can’t tell you what final prices might be for a project because we’re way far out of that there, but we’re looking to be firmly on the low end of what was referred to in the housing study done before the North Mesa one as the missing middle market.”

The company’s goal is to produce a cost for the buyer of less than they would be paying for renting a quad, Gursky told the board.

“So the idea is certainly to come in and do something that is functional and affordable, stylish and really useful for people. And keeping in mind the requirements of the school district that it’s really not feasible to sell vacant land and retain the proceeds, this would be based on a 99-year lease for the buyers which would have a renewal provision coming towards the end of that term if they had financing,” he said. “Fanny Mae and the financing authorities require that we have a renewal provision so that there’s never a time that somebody’s mortgage might expire, that their lease might expire before their mortgage does. If somebody were to acquire one of these, they’ll be six or seven generations down the line before the issue – we like to think we build effective and nice houses but in 120 years there may be other uses. So the idea will be that we are partnering with Twilight Homes.”

Gursky said the company’s partners Twilight Homes are really an outstanding choice.

“They are affordable and reasonably priced builder. They are all New Mexicans like my partner Jeffrey Henry and myself. They are routinely and heavily concerned about producing a product that’s appropriate and people are getting the best value they can so we consider them by far the best choice in New Mexico that we have to do this project,” he said.

Gursky said he thought the company had brought a pretty nice presentation in terms of what a subdivision might look like and that all that was presented is preliminary.

“It’s really to give the board a really good look at what something might look at. We think that we can produce a really attractive product and we also want to take into consideration what neighbors and the community is in need of and what they would like to see happen. I think as the district goes forward looking at its assets, it’s not going to be feasible to leave a lot of these vacant assets vacant forever so I think it’s incumbent on us to look at and to work on providing things that are both useful as well as attractive and then provide really a helpful long-term range of investment value,” he said.

At this time, Gursky said the company would only be looking at this time to request that the board look favorably on returning the project to the superintendent and the schools to look at putting together all of the details and all of the considerations that would be in there.

“Upon doing that we will be pleased to put together a town hall meeting or meetings to allow people throughout the community to have comments on both design and all those things being personal, but the appropriateness, the location, all the factors that are going in so that when the school board would come and look at potentially a finished project or a finished set of agreements for approval, they would have a significant community involvement and a significant community input that we typically don’t have when the school board just goes for approval. We are happy to that part of the project,” he said.

Board president Melanie Colgan said she felt the presentation had given the board a lot of food for thought.

“We hope in the new year to start looking at our assets, our properties, as a school board and see how they can best be utilized and this has given us yet another idea of what we can do to support the school district,” she said.

Board vice president Ellen Specter asked if the homes were ready to sell today what the price point range would be. Gursky said that without tying down their Twilight Homes partners too hard, they were hoping to bring the homes in at $300,000 to $350,000 depending on how large they are.

“They seem extremely expensive but when you look at the mortgage and the potential lease payment that’s made – we’re very concerned about the affordability of the monthly payments and the price – so that we’re looking at something that’s in the neighborhood of $1,300 or $1,400 a month for the combined payments,” he said.

Gursky said at this point, buyers would be paying less than they would be paying on a two-bedroom apartment or a townhouse. 

“Square footage would be approximately 1,500 square feet. They would all be based on a three-bedroom, two-bathroom, with a garage and maybe they are on smaller lots, there’ll be one common wall, which would have complete privacy between them and it would then be approximately 30 feet between your window walls on your townhouse and the next one over which is three times what they’re doing in Mirador,” he said. “We try to produce something that would have useful backyards, functional kinds of things as well as being downtown. Certainly one of the factors that we tried to incorporate is these will be less expensive per square foot than comparable other houses and maybe even comparable duplexes and quads for sale because we will be able to reduce the purchase price by an amount that reflects that we did not have to pay for the land but we have to accommodate the cost because each of these people will be paying a 99-year lease payment.”

Gursky said the initial cost will be lower in order to make it more affordable and one of the options the school district would have would be to waive the lease payment for employees the district is intending to incentivize.

“So you’re basically able to provide as long as you want to provide an incentive an approximately $2,500 a year incentive to employees for retention or recruiting. We think that’s a reasonably significant amount of money and it’s also a way that you can continue to contain affordability for the houses as you go through the process,” he said,

Specter said she appreciated that half the units are one story only which she said is a huge factor for senior population and that there is a lack of that kind of a product even nationwide for people to be able to age in place and stay in the community that way.

The design is intentionally – some trees outlined on the corner will be maintained – three  cottonwoods and provide small park there – county park along with the space across the street, similar to the co-op park that was just created across from the Municipal Building – we would be open to the kind of improvements that would make that a nice park area and maintain that as something that could be used for actually  gathering events for groups of up to 50 or 100 people.

In response to questions from board Secretary Chris Bernstein, Gursky confirmed that the 99-year lease would be for the land.

“The lease payments would be a determination of the value of the overall property against a return that’s going to be guaranteed to the school district on an annual basis based on the valuation. It’s a process that the Public Education Department uses and it’s a process that we typically do in leases. It’s something that would be negotiated between the school district and ourselves although we are firmly in favor of as much revenue as can be generated without impairing the affordability of the houses. It’s not like we’re against maximum revenue to the schools, we just have to take a look at what are the sizes of the houses we can build, what’s the per square foot cost and what’s the return to the school district” he said.

Bernstein said when Gursky noted that the homes would cost $300,000 to $350,000 her heart dropped,

“I’ve been a teacher and the there’s no way that I would ever be able to afford that. It’s just not going to happen – not when my mortgage is more than my paycheck. I think when we talk about affordability, we have to keep it realistic about what that really means. I’m looking at these houses going, ‘Man I wish I could live in that’,” she said.

Gursky said this is only one piece of property that the school district owns.

“Because of its proximity and because of the nature of the neighborhood and the other ones, we didn’t think it was appropriate to produce the kind of density and the kind of units that would produce a lower price. I think we’d have a very difficult time having the property selling for that if it looked more like an operated more like an apartment complex, it would be very difficult to have it approved. This is not set in stone in terms of density but this was a calculated view of how dense we could both produce revenue for and generate both good will and livability in the neighborhood. These figures represent a parcel that is not the same as for example North Mesa,” he said. 

Gursky said there’s a wide range of housing needs that are appropriate to potential school vacant land.

“This one, given the single-family neighborhood area across the street, the townhouses to the south, the houses and apartments to the west, this is probably the kind of density that is something that a Planning & Zoning Commission and the Council are likely to look favorably on and approve. But at the same time we can develop this process, close with mortgage companies on long-term leases. It gives us a tremendous amount more flexibility in much less expensive saleable units in both North Mesa as well as other projects. I would suggest that there’s going to be other vacant property as you go through your inventories that are much more appropriate to a higher density kind of housing because of approvals and realistically we have to look at what we realistically can produce,” Gursky said.

He said he agrees that the questions of affordability are all relative.

“But if you look at average sales prices as you look at what quads and duplexes and other buildings such a Denver Steels are selling for – they’re selling now for more than $300 a square foot for some that are 60 and 70 years old. I find that astonishing having grown up here and that we’re attempting to put as reasonable a type property – brand new with as much functionality as we can and livability – that is less expensive than those products and hopefully will bring down the prices on those as well,” Gursky said.

Bernstein said this is a puzzle to be solved, that the district has the land and they have a problem.

“We have a means somehow to figure this puzzle out to make it work for our community. This definitely is something that is worth our while to continue looking at,” she said.

Outgoing board member Steve Boerigter said with the development of new housing on what is currently not housing land, on what is not an effectively used asset of the schools, the key to doing that right is to develop housing that produces units that are similar in mortgage payment similar in size to its neighbors.

“This is the neighborhood we have – houses of about this size – and while one can choke a little if you will at the perspective cost of the units, the fact of the matter is that one of the nicer, newer, updated homes in this general neighborhood if it went on the market today is going to go on the market for about that amount and we can’t change that. I wish that were not the case. We might say that’s not right. It doesn’t really matter. It is what the facts are and it is very important for us to make decisions based upon facts and so I think you’ve given this potential development that is very interesting and can, I think, fit into the neighborhood effectively and that’s very important. If we were moving to the development of a different property we might have a different development concept because the neighborhood would be different,” Boerigter said.

He said the development is a great idea and that he greatly appreciates that the idea was brought to the board by “local people – a Los Alamos native, a Northern New Mexico native and a team that has come together with locals.”

Board member Erin Green told Gursky that the proposed development should not be called affordable housing because that’s not appropriate.

“People my age are not buying homes. People my age are not moving to this community because it’s not affordable. Let’s just call this the schools housing plan, let’s not try to dress it up as affordable housing because at $1,300 a month when you make $15 an hour, you will be house poor. I am ashamed that my partner works at LANL and we live paycheck to paycheck and that’s the reality of people in their 30s, because the older generation will not let go, will not concede their properties to make room for people to expand,” Green said. “What about retired folks – how will they afford to live here?  I’m really tired of making other people comfortable because they like their view, or they don’t want to look at apartments across from their home. Other folks don’t have a right to safe and secure housing because you don’t want to see an apartment complex across the way from you? Go to any large city in this nation and you will see mixed neighborhoods with apartment complexes and houses.”

Green went on to say that affordable housing is not the schools’ problem to solve.

“This is a serious crisis. People don’t have places to live. People don’t want to work here because there is no place to live. There’s no incentive. If you make $15 an hour, you cannot pay $1,400 a month in rent. That needs to be acknowledged and upheld. I hear the other land the schools have is more appropriate so let’s call that affordable housing, not this because it’s not,” she said.

At that point, Boerigter moved that the Los Alamos Public School Board endorse the Canyon Complex Townhouse project as presented.

Bernstein asked what he meant by “endorse”.  Boerigter responded, “Well we could look it up if you wanted to,”.  Bernstein asked him how he was defining it in this context. Boerigter responded, “ That we have the record as a school board that we would like to see this project proceed”.

“That is to say it has to go forward in some manner or other otherwise it will never happen and there’s a whole lot that has to happen that is way outside of our control in order for this project to come to fruition including Planning & Zoning efforts and what not. There’s lots that has to happen but none of it is ever going to happen if the school board doesn’t want to move forward – none of it will ever happen if we don’t want to move forward. And so I’m going to say that I think it’s important for us to put on record that we would like to see the project move forward. That’s what I mean by endorse,” Boerigter said.

Chair Colgan said she just worries about being careful that the board doesn’t endorse Gursky and his group because she believes that “breaks some laws”.

“We could say we would like to look into the possible development of the property,” Colgan said, and Boerigter responded, “We had a presentation”.

“Right, but we can’t say as an endorsement that this is something we definitely want to give to Mr. Gursky. We have to put out the (requests for proposals) and things like that. I think it’s good to say we are in favor of a possible development of this property and others but I don’t want it on the record that we decided to go with this exact project,”

Board member Green said she thinks it’s two issues because there has been an issue with one consensus from the board reflected in the minutes of a meeting past.

“Some folks have said, ‘Oh we had consensus,’ and other folks have said, ‘I don’t recall it that way’. So at this juncture we could choose to voice what our feelings are, either pro moving forward with an RFP, moving forward with definitely seeing housing in this lot versus leaving it a park, building offices, more offices, building another school, building a circus – does that make sense? We could either say, ‘Yes, we need this to be housing, indefinitely, regardless of who builds those houses or we could say, “No, I want to see a water slide attraction on the property. That’s how I’m interpreting your request, so I second, because there should be no confusion when we look at the minutes what the feeling, the consensus or not that this board had,” Green said. “We’re not accepting a bid at this moment; we’re just saying, ‘Yeah, we think it should be housing’ and Steve can go, ‘No, I don’t think it should be housing’. If what we’re saying is we would like to move forward with a similar concept to the one presented, that I would agree with.

Bernstein responded that this is the first time the board has been presented with putting housing in the Canyon Complex part of the community and that she feels like it is something that definitely deserves more exploration, research on viability for the community and would require input from all LAPS stakeholders.  

“What we’re saying right now is what Mr. Gursky requested was to have the go ahead to continue on next steps with staff, with the superintendent and staff, and it would be an operational issue to figure out what those next steps, what the legalities are, which hoops need to be jumped through next. We are just saying, ‘We endorse this’, we’re saying, ‘Please staff, work with Mr. Gursky and his group and if there are others who need to be included, please go forth’.” Specter said.

Chair Colgan said she would like to say, go forward exploring the ideas for development of the land, not necessarily making it a housing choice – there might be other things that could go on that property depending on what stakeholders would like to see in our community. Specter said she feels like that kills the whole idea of housing.

Green said housing is definitely needed and that Gursky’s project  would be beneficial to the community regardless of who purchases the homes.

“Don’t call it affordable housing because it’s not. There’s no doubt in my mind that all of these lots would be claimed before ground was broken if they became available to the public to purchase because it’s desperately needed. And if there’s even a two percent chance it could stop this disgustingly inflated housing market, then I’m behind it,” she said.

The board approved the endorsement of the project by a 4-1 vote, with Bernstein voting against.

The Los Alamos Reporter reached out to LAPS Supt. Jennifer Guy with some questions about the board’s vote, including why the item was not listed on the agenda as an action item and why the board had not indicated that it had identified the property as being available for proposals.  Supt. Guy responded that the board’s intention is to gain a full understanding of all the property LAPS owns.

“The board is open to any ideas for the use of LAPS land. They endorsed Mr. Gursky’s proposal to direct staff to further explore developing that piece of property. There are many steps involved. If the board decides to move forward with any development of the property, the district would follow all the state laws and would provide many opportunities for public comment and input,” Supt. Guy said.

With regard to the action item question, she said it is her understanding that the board can take action on anything on the agenda.

 Supt. Guy said the next steps will be for LAPS staff to give full reports in all properties LAPS owns as well as how it is currently used, how it is zones and how all property holdings are next used for the long-term benefit of the district and the community.

“We will have several reports over the next several months,” she said.