BY MAIRE O’NEILL
maire@losalamosreporter.com

It’s been a year since Columbus Capital co-owners Jeff Branch and Greg Gonzales finalized their $8 million acquisition of the former Smith’s building in the Mari Mac Shopping Center and $5.5 million acquisition of 800 and 820 Trinity Drive along with 911-991 Central Avenue in Los Alamos.  The Smith’s store was upgraded and the exterior façade of the building was redesigned and updated. Los Alamos National Laboratory had taken occupancy of the former Smith’s for storage and Columbus Capital was looking to work with Los Alamos County on financial tools that could be used to help get their projects rolling.

The Los Alamos Reporter sat down with Jeff Branch to discuss what has been happening with the Mari Mac project. Branch also found it hard to believe how much time has gone by since the community meetings he and Gonzales held in Los Alamos.

“At the time that we started, interest rates were very low and we have learned that the delay has not been easy in terms of the cost on the project. So, we have been kind of working backwards – value engineering, working with our architects and talking to the County to see what public assistance there might be to help us to close the gap in the financing. We’re not fully clear yet, but really it’s been more of an investigation with the County and the state Department of Economic Development of all the different public-private tools for financing that are out there. So we’re still learning as we go,” Branch said.

He said he and Columbus Capital managing director Rachel Oostman met recently with the state Economic Development Department to discuss some of the tools they have available.

“The County has been educating us on some of the things they’ve done in terms of LEDA and then also on some property tax increment financing tools that are out there, that again, are all public information that anybody can access. We have not put a specific ask yet on all the tools, but we’re learning and kind of creating a sort of salad bowl between our private financing and the equity that we’re going to bring to the table on being financially being able to make this project go,” Branch said.

Branch said his team was excited that the feds dropped interest rates a little bit a couple of weeks ago, but then what happened immediately is that the 10-year T-bill bounced back up to 4 percent.

“It hasn’t closed the gap. I think the election will maybe settle some things down next month but really what we’ve been doing is a lot of due diligence on how to get this thing to financially work is what it amounts to. We’re dedicated to making things work. Buying and owning the property was a huge step,” Branch said. We’re also investigating some construction tools, maybe doing a modular type construction that could help because one thing we’ve learned is that contractors of the size we need are either going to be from Albuquerque or out of state. The premiums that contractors are putting on projects in Los Alamos are much higher than I think we would have understood when we started this project.”

Branch said the initial pricing Columbus Capital, which is without construction drawings, for the project came in at $140 million for what had been approved, which consisted of a parking garage and 322 apartments.

“That’s obviously the number we were using that unfortunately has the gap in it, so what we’re trying to do is break that down considerably. Just for that piece with the parking garage. So we would build a street from Central Avenue across the property to Trinity Drive with the retail shops in the front. We’re still doing that,” he said.

Instead of building all 322 proposed apartments, Branch said Columbus is investigating maybe reducing that number to 220 or 230 and adding a 130-140 room hotel within the same layout that has been discussed.

“The pricing would still be the same. “We’re just investigating the different pieces to try to really value engineer, close the gap on the financing and also close the gap on the construction. We’re looking at those two components right now, looking at modular construction so that those could be built somewhere else and then trucked in and then we just put it together using the same design, he said. “We’ve been working diligently, in spite of our being quiet, looking at different tools and ways we can get this going, so we’re eager and the County has been very supportive in terms of how we can get this done.”

What’s next at Mari Mac? Branch said the intention is to is to tear down the area that used to house China Palace as well as the 911-991 Central building where the Department of Motor Vehicles is currently.

“Those two buildings will come down as part of our construction. There will be a party – we will have grills out there. When it’s time to break ground it will be a community affair!” Branch said.

Asked about 800 and 820 Trinity Drive, Branch said Columbus also owns those builings and they will be part of a future development phase.

“We’re not going to do anyting with them yet, however in the interim with the Metropolitan Redevelopment Area (MRA) designation, we have the opportunity to get some money for stucco and landscaping while keeping it as part of our construction and upgrading those buildings until such time, some day that it is part of a future phase,” he said.

The lease for 820 Trinity has been renewed by LANL and the building is currently occupied by the LANL Engineering Groupis still in 820. LANL also occupies most of the space in the 800 Trinity building. Four condos remain in that building that do not belong to Columbus.

“We recently purchased the former Daniel’s Cafe location are are currently seeking a tenant for that space that would start a coffee shop, a taco shop or an ice ice cream parlor – a business that we can grow and incubate and eventually move into our building. The location just closed a couple of weeks ago and it’s in pretty decent shape I think there’s a higher use for both that and 820 Trinity,” Branch said.

Asked about the proposed Arbolada housing development on North Mesa, Branch said the contract was not renewed by the family.

“We ran into the same issue there with the rising construction costs. We got our plans approved and construction costs were higher than we wanted and of course the financing was higher. We had a bank actually, but they did not want to give us the extension of time for our contract that we needed if we were to buy the land. I don’t know what they’re doing with it,” Branch said.

The County’s Projects website indicates that 86 homes were expected to be built on the Arbolada property.

New Mexico is currently seeing unprecedented investments in public and private construction at the same time as construction costs are skyrocketing. A report by the legislature cites workforce shortages, high construction volumes, and high material prices as contributing to these cost increases.