County to consider downtown purchase*

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By Jennifer Garcia

It's no secret that Los Alamos County has an ambitious load of projects that they are working on in an effort to improve the quality of life on the hill. Some of those projects are nearing completion, like the first phase of the Diamond Drive project and the skate park, while others are more long-term works in progress, like the Entrada project and the new judicial/police/jail complex. County Council has set its sights on creating affordable housing, in addition to revitalizing the downtown area, which would bring in desirable retailers in an effort to keep shoppers from going elsewhere.

As part of the downtown revitalization project, council has directed staff to evaluate the feasibility of purchasing the Los Alamos Apartments property for $1,168,200, which is a non-negotiable price. The federal Department of Housing and Urban Development, which currently holds the property's mortgage, has provided a purchase contract to the county. HUD has asked the county to execute a purchase offer on or before October 3, 2008. As a result, staff is requesting a decision from council on whether or not to accept the purchase contract and write a $75,000 non-refundable check in earnest money to HUD. Chief Financial Officer Steve Lynne said that although there is money in the Capital Improvement Projects fund and budget for downtown improvements that could be a funding source, his thought is that the county would probably use general funds for the purchase and for performing the site work/demolition. He said this is something he'll be prepared to further discuss with council at Tuesday night's meeting.

The time for consideration is short, so County Council is expected to discuss the issue at the Sept. 30 meeting, for which the public is encouraged to attend. If council delays the consideration, they could hold the discussion during a special session that is tentatively planned for Oct. 2. Should the county miss the Oct. 3 deadline, HUD will then offer the property to the next entity in line, so to speak, which would be the Santa Fe County Civic Housing Authority.

"The property sits on nearly four acres and is an attractive parcel of land for retail development," said Julie Habiger, the county's public information officer. "There is a desire to retain ownership and have input because it's in the heart of downtown," she added.

In September, Hippauf and Associates, Inc. did a complete appraisal on the property upon which the Los Alamos Apartments were built. According to county documents, the appraisers were instructed to appraise the land as if it was vacant and the structures had been demolished. The appraised value was set at $2,400,000 or $14.73 per square foot. The complex has 132 units, of which 43 are currently occupied.

According to county documents, as of Nov. 1, 2008, 31 of the 43 residents will be on month-to-month leases, and can have their tenancy terminated by the landlord, or may choose to terminate their tenancy themselves, with 30 days notice. There are currently six households that would be classified as "very low income." Per the contractual conditions of HUD, all very low-income tenants would have their rent capped for a two-year period. If the county did proceed with the purchase, it would have to freeze these individuals' rents for a two-year period after closing. In addition, HUD requires that 10 percent of the total units on site be set aside for occupancy by chronically homeless persons. These 13 people would need to be charged rent in an amount no more than 30 percent of their monthly income. Utilities need to be included in the price of rent. In reality, because the homeless individuals are likely to have little to no income, the full rent would be borne by the county.

The units are currently in need of repairs. 20 of the units are not in rentable condition and would require the flooring to be replaced and would need to be repainted. The estimated cost of this would be approximately $3,000 to $4,000 per unit. The roofs of all the buildings need to be repaired at a cost of approximately $180,000, according to the owner. In addition, the electrical system would need to be revamped because the current system is outdated, only allowing tenants minimal electrical usage in each unit. If anything more than a hair dryer, microwave or refrigerator is plugged in, the risks for tripping the breaker increase.

According to county documents, apart from the physical condition of the units, the fact that these are very small (397 sq. ft.) efficiencies with minimal amenities accessed from a double-loaded internal corridor and in a three story walk-up building with no elevator, makes it difficult to justify the expense of renovating these units. Demolition and reuse of the property is the recommended strategy for the long term.