This article is a deep dive review of the Albuquerque “Railyards Master Development Plan and Site Development Plan”.
In 2007, the city bought the Albuquerque Rail Yards site for $8.5 million. The historic and vacant Albuquerque Rail Yards are within one mile of the Downtown area located south of Downtown between the Barelas and South Broadway neighborhoods. The historical significance of the Rail Yards to Albuquerque in many ways is equal to that of Route 66 Central. Both reflect real milestones in the city’s history, growth, development, commerce, industry and transportation. Both need to be respected and preserved to some extent because of the historical significance to the city.
Albuquerque Rail Yards has 18 buildings still standing erected between 1915 and 1925 and include four major maintenance facilities built by the Atchison, Topeka and Santa Fe Railway. The Rail Yards have sat vacant and vandalized with broken windows and graffiti for decades. Currently, the area is the location of the seasonal Rail Yards Vegetable and Crafts Market and the Wheels Museum. The Albuquerque Rail yards has been used to film major movie productions and TV shows. Scenes for “Marvels Avengers,” the “Transformers”, “Terminator: Salvation,” Better Call Saul” and the TV hit show “Breaking Bad” have all been filmed at the abandoned and vacant facilities of the rail yards.
RAIL-YARDS MASTER DEVELOPMENT PLAN
On June 16, 2014, the Albuquerque City Council by a unanimous vote of 9 to 0 approved and adopted R-14-23 entitled “Railyards Master Development Plan and Site Development Plan For Subdivsion To Provide The Appropriate Policy Framework And Regulations To Guide The Redevelopment Of The Railyard Site”. The Master Development Plan is 73 pages long but with tables, designs and photos it is 224 pages. The Development plan was prepared by Samitaur Constructs. The “Railyards Master Development Plan and Site Development Plan” is highly detailed and takes great care to identify the historical nature of the Railyards, what affect it will have on the community and identifies what types of development should be considered. You can review the entire Railyards Master Development at this link:
https://www.cabq.gov/council/documents/rail-yard/RYMDP_Section1.pdf
The City Council adopted Rail Yards Master Plan prepared by Samitaur Constructs contains 6 guiding principles intended to serve as a framework to guide the redevelopment of the Rail Yards but over “many decades.” You can read all 6 of those principles in the postscript below to this article.
On September 16, 2018 Mayor Tim Keller during a press conference at the Rail Yards tore apart the contract between the city and Samitaur Constructs. With great bravado, Keller told reporters and a small crowd of market shoppers:
“We have decided to take back control over the Rail Yards. That’s right, the city’s taking it back. … And so it’s gonna be a long road ahead, but it’s gonna be our road. It’s gonna be a path we take together! … We’re also going to look at how it might be a workspace for the creative economy during the day and not on the weekends, and then at night and on the weekends we’ll use it for event and community space.”
The Keller Administration severing the city’s relationship with Samitaur Constructs was based on a finding by the Albuquerque Development Commission that Samitaur had not employed reasonable diligence for a second consecutive year, which meant the city could terminate its contract with the company.
ANOTHER MAYOR, ANOTHER DOWNTOWN REVITALIZATION PROJECT
Last year on September 4, 2018 Mayor Tim Keller announced his downtown revitalization plan. Keller proclaimed development of the Albuquerque Rail Yards as his top priority for downtown revitalization. Keller proclaimed it a “potential” economic development engine. Keller said he wanted to reinvent the historic Albuquerque Rail Yards by finding a development partner to transform the area into “an amenity where thousands can gather year-round”. The city has yet to find a private enterprise developer.
The city will begin remediation efforts and activate a second building at the Albuquerque Rail Yards after the city severed the master development contract with California-based Samitaur Constructs. The city has upgraded one building, the blacksmith shop, where the Rail Yards Market Place takes place on weekends. Activating a second building will accommodate additional vendors and potentially be a big tourist draw.
Further remediation will take time and money. Over $53 million in bonds will be on the November, 2019 ballot for spending on city facilities and it includes $13 million toward the historic Rail Yards property through 2029. The 2019 New Mexico Legislature also appropriated $7.5 million for development of the rail yards.
LELAND CONSULTING GROUP REPORT
Leland Consulting Group is a Portland-based development consulting firm that was contracted to study the financial feasibility of redeveloping the Albuquerque Rail Yards. On July 9, 2019, it was reported that the Leland Consulting Group’s draft report to the city of Albuquerque said the ideal Rail Yards redevelopment strategy should include a mix of uses.
The Leland report suggests 3 different levels of development of varying levels of density. The report notes redevelopment will occur over many years, making it impossible to predict the exact mix that would work. All the levels of redevelopment call for “adaptive reuse” of buildings on the property’s north side, which the report calls the Rail Yards’ “front door.” Proposed uses include Central New Mexico Community College’s film center, the existing Rail Yards Market, and new retail, restaurants and commercial tenants.
The Leland draft report recommended 10,000 to 20,000 square feet of retail space in the Rail Yards over the next decade. According to the report, the focus should be on food and beverage tenants, vendors related to film or rail travel, existing area businesses looking to expand or “small, local vendors that build on the Rail Yards’ unique, historic and gritty character.”
The Leland development report suggests using large existing buildings near the Rail Yards’ center. The Boiler Shop and the Machine Shop alone has nearly 4 acres of enclosed floor space. There are facilities that would require renovation for concerts, festivals, special events, film productions and even team sporting events. Two scenarios suggest renovating and remodeling existing buildings to create110,000 to 200,000 square feet of employment space. The Leland report suggests that is more space than likely needed over the next decade.
Housing is also recommended in the report. The report’s various scenarios include 65 to 160 mixed-income housing units near the Rail Yards’ southern end.
PROPOSED COMMUNITY COLLEGE FILM CENTER
On January 11, 2019, the City of Albuquerque and Central New Mexico Community College (CNM) signed a one-year Memorandum of Understanding (MOU) to locate in the Rail Yards CNM’s new facility for its “Film Production Center of Excellence.” Over 15 years ago, CNM began a film production program and it has grown each year and now requires a separate facility of its own.
CNM President Kathie Winograd wants to help train a sufficient workforce for the city’s emerging film production industry and said:
“CNM is committed to building a new CNM Film Production Center of Excellence to support the workforce needs of the fast-growing film industry in Albuquerque and New Mexico. … The excitement of having Netflix here has made us dream even bigger and think about all the things we can do not only in the programs we have now [but others]. … We see this as an opportunity to be nationally recognized and be the place not only for films … but we see this as the place to come for education. CNM is committed to building a new CNM Film Production Center of Excellence to support the workforce needs of the fast-growing film industry in Albuquerque and New Mexico.”
After over 6 months since signing the MOU, no lease has been signed by CNM with the City. CNM is saying it is still examining the potential project. CNM has been given $300,000 in state funds by the legislature and has another a $300,000 grant from the U.S. Conference of Mayors and Wells Fargo to plan the project. CNM is also seeking $3.5 million for the project’s first phase as part of an $84 million bond issue going to voters for approval on the November, 2019.
MARKET ANALYSIS LACKING
Leland Consulting Group was contracted to study the financial feasibility of redeveloping the proposed CNM Community College Film Center on the Railroad Yard site. Dated May 7, 2019, Leland Consulting Group released a draft “Summary of Market Analysis and Development Scenarios”. The report was late and was promised to the city by the end of May. It should have included action plans for up to three proposed development proposals. The report is a mere 28-pages and was paid for under a $54,944 contract with the city.
Not only just being a late draft report, it is also severely lacking in a number of critical areas. Leland Consulting has yet to provide a financial analysis for renovating existing buildings and erecting new ones on vacant parts of the site. It has not produced an estimated cost for remediation of the site which could be very prohibited given the decades of train engine repair work and toxic oil and chemical discharge and disposal. Leland was also supposed to have analyzed options for Rail Yards governance and evaluated infrastructure upgrades needed to ready the site for construction. The final report is expected by the end of July.
Notwithstanding Leland’s failure to provide a remediation cost estimate, the city has completed an environmental study of the site and has submitted a voluntary remediation plan to the state. The city is moving forward with demolition of small non-historic structures for site improvements. The city has also submitted a state capital request for $15 million to support rail yard environmental remediation and site improvements.
The Leland report labeled the proposed CNM Film Center for Excellence at the railyards as a “game changer” and “an exciting and potentially transformative use” of the property. The report added the project would “define the economic purpose of the site” as opposed to waiting years to find another investor or another anchor enterprise for the site. The Leland analysis report said the city should “do everything in their power” to make sure the CNM project happens.
According to the market analysis, the film center would be “a game changer” for the following reasons:
1. CNM can be the one catalyst that pulls other innovative tenants and employers with it and demonstrate redevelopment momentum.
2. It would bring hundreds of students and educator or teachers to the area site who in turn would spend discretionary money in the area.
3. It would potentially spread the Rail Yards’ capital and operating costs among various partners, and
4. CNM’s existing connections within the film industry could serve to attract other film industry users such as NETFLEX and Albuquerque Studios.
https://www.abqjournal.com/1267274/city-cnm-partner-for-film-production-center-in-rail-yards.html
NO “SILVER BULLET” TO DOWNTOWN REVITALIZATION
The Leland’s report identified what it referred to as “economic warning signs” making the proposed CNM film center especially valuable for development of the rail yards. The report noted that the City is recovering from the great recession. The city is now seeing measurable population and economic growth when before there was none and even a decline.
The Leland report questioned the viability of adding much mixed employment space at the Rail Yards citing the cities stagnant commercial property lease rates existing in the Downtown area office and industrial properties. Albuquerque has had a chronic commercial vacancy rate city wide of upwards of 23% based on information from CBRE, the largest real estate investment manager in the United States. The downtown commercial office space vacancy rate hovers around 35% according to local commercial real estate experts. A real estate analysis found Downtown locations are not commanding high enough rents to justify new construction of any kind.
The Leland report warned against the “silver bullet strategy” of seeking “one big tenant” or development at the expense of incremental momentum. The Leland report stated that emphasis should be placed on achieving incremental successes and leveraging key anchor institutions such as the CNM film center and the Rail Yards market.
https://www.cabq.gov/council/projects/completed-projects/2014/albuquerque-rail-yards-redevelopment
COMMENTARY AND ANALYSIS
For the last 50 years, City Hall and virtually all Albuquerque Mayors have been fascinated and enamored with trying to revitalize the Downtown Central area. All the Mayors wanted to bring back Downtown Central of its heyday of the 1950’s and 1960’s where it was the center of commercial, business and retail and entertainment activity.
First there was “urban renewal” of the 1970’s with the new convention center built, followed by the Festival Market Place, followed by the Convention Center expansion with building the Hyatte Regency and the adjoining office building, then the rejected “Performing Arts Center”, then the 4th Street Mall concept, then the attempt to build the new Isotopes’ Baseball stadium downtown, then the convention center and civic plaza remodeling, then the ART Bus project. Each time it was a Mayor involved trying to leave his lasting mark on the city with his own legacy project. You can review Central Downtown revitalization over the years at this link”
https://www.petedinelli.com/2018/09/04/downtown-revitalization-deja-vu-all-over-again/
It was downright cringe worthy when former Albuquerque Mayor Richard Berry called the ART Bus project “a world class project” and a “game changer” and crammed it down the throats of citizens without a public vote. The ART bus project was nothing more than a $130 million-dollar construction project to build a cheesy 9 miles of bus service that has resulted in the destruction and character of historic Rout 66. A truly “world class project” and game changer is the construction and development of facilities or infrastructure that costs billions of dollars of investment in a community.
“Downtown Albuquerque” has become the government and financial district for the city with the location of city hall, the City/County Government Center, the Metro Court, State District Court, the Federal Courts, the Social Security Administration, the main bank branches of Wells Fargo, Bank of America, Bank of the West Compass Bank and other banks and government agencies. The fact that “Downtown Albuquerque” has become the government and financial district for the city where no one wants to go after 5:00 because there is nothing to do there makes it hard to redevelop the area for tourism, entertainment and night life activities other than going to the bars.
The center of Albuquerque and the new “downtown” is the uptown area of the city consisting of Coronado Shopping Center, the many shops at the Commons at Uptown, the Winrock development. The WINROCK development is now local and will include even more retail shops and even luxury housing when it’s done. Numerous restaurants have also popped up in the area with even more planned not to mention the commercial office space in the area.
SUCCESSFUL CITIES AT REVITALIZATION
Successful cities that have transformed blighted and struggling older areas of their cities have been Tulsa, Oklahoma, Oklahoma City, Oklahoma, Denver, Colorado, Phoenix and Scottsdale, Arizona. El Paso, Texas has dramatically transformed its downtown area. The way each one of these cities did it was with a massive infusion of capital and building large capital projects costing billions of dollars.
Some of the best examples of billion-dollar investments are the building of the BOK Center in downtown Tulsa, the Chesapeake Arena in Oklahoma City, the municipal railway running from the outskirts of Denver and through downtown Denver, Colorado or the River Area in downtown Scottsdale, Arizona. In Tulsa the BOK Center sparked hundreds of millions of dollars of redevelopment in adjoining neighborhoods.
In Oklahoma City, the Chesapeake Arena and adjoining Bricktown continue to expand. Previously blighted areas are being filled in with business developments, new housing, recreational facilities, and even cultural amenities. A key component has also been law enforcement to make people feel safe enough to move into those areas as they were being redeveloped. A key involvement to most if not all was seeking voter approval of the projects. Tulsa and Oklahoma City have been so successful that voters continue to approve new ones.
KELLER PROPOSAL NOTHING NEW
Mayor Keller’s emphasis on Downtown revitalization and tourism should come as absolutely no surprise to anyone. The problem is Mayor Tim Keller is not proposing anything dramatic and nothing visionary to revitalize Downtown Albuquerque. Keller is pinning his hopes on getting Downtown revitalization by relying on higher education institutions such as CNM and UNM and the emerging film industry.
If this sounds very familiar, it is. Former Mayor Richard Berry relied on UNM funding to build the 6 story Innovate Albuquerque Complex of which 5 stories is a UNM Dormitory. The complex is across the street from luxury condos of the old Albuquerque High School. Building of a dormitory on valuable commercial property is not the highest and best use of property. The biggest problem with relying on state funded institutions of higher education is that they tend to change their mission statement to conform with changing times and education fields. State funded institutions of higher learning also have a way of absorbing and taking over areas to expand.
The emerging film industry is developing facilities they will own and operate. Waiting for the Railyard Development is not in the cards. NBC Universal plans are to redevelop a warehouse into a state-of-the-art television and film studio with two sound stages, offices and a film production mill. The turnaround time for the renovations is very short and it’s expected to be complete in the fall of 2019.
The Netflex purchase of Albuquerque Studios is complete. Albuquerque Studios is an enormous complex that includes 9 sound stages, a backlot and management offices and the rail yards are small in comparison. In 2006, Albuquerque studios was a $74 million, 50-acre project featuring eight sound stages, production officers and support space.
The Leland market analysis report noted a recent report by the Urban Land Institute “that indicates other western metro areas are more likely to attract outside development and investment dollars than Albuquerque.” The big problem is the report failed to even note that the City and the State are sorely lacking in local major investors, wealthy entrepreneurs and wealthy individuals and corporations having the financial ability and commitment to make major capital investments.
It is very disappointing that Mayor Tim Keller is not proposing anything dramatic nor visionary to revitalize Downtown Albuquerque given the platform of change and economic development he ran on. In fact, Keller’s Downtown revitalization plan is akin to “political plagiarism” of his predecessor.
It is apparent that the Railroad Yard Development is Mayor Tim Keller’s own “legacy project” as was the ART Bus project for his predecessor. It should not be given the adoption of the 2014 “Railyards Master Development Plan and Site Development Plan”. No one knows for certain how the enactment of the new City Planning Comprehensive plan will have on the Railyard Development and it may just be another “gentrification” project that ultimately has a dramatic and negative affect on historical Barelas Neighborhood, the way the ART Project had on historical Central and Route 66.
What is ill advised is Mayor Tim Keller apparently thinks the Rail Yard redevelopment can all be done with local talent and local and state investment tax dollars. Such massive amounts of capital, usually in the billions of dollars, is needed to build large capital projects. The city also faces the prospect that voters in November will say NO to the $13 million in capital improvements bonds for the Rail Yards development. Given the voters mistrust of elected officials because of the ART Bus project, the defeat of the APS tax levy in February and Mayor Tim Keller last year signing a tax increase breaking a campaign promise to put tax increases on the ballot, no one will be surprised if the City capital improvement bonds are rejected by the voters.
To be blunt, the truth is that the City Hall and the State do not have the financial ability to undertake a cleanup and a massive investment and make capital improvements in the billions of dollars to revitalize Downtown Albuquerque. Keller for that matter, like all other Mayor’s the city has had, is enamored with Downtown revitalization and the Railyards is in the Barelas neighborhood area. The problem is Mayor Keller does not have an understanding nor the business and investment experience background and savvy in the private sector of what it’s going take to get it done.
CONCLUSION
When Mayor Keller dramatically tore up the contract with California-based developers Samitaur Constructs he said:
“We have decided to take back control over the Rail Yards. That’s right, the city’s taking it back. … And so it’s gonna be a long road ahead, but it’s gonna be our road. It’s gonna be a path we take together.”
The problem appears to be that Keller really has no idea where the road and path leads us nor what is at the end of the journey. Mayor Keller needs to set aside his ego and apparent desire for a “legacy project” and secure a major out of state investor that knows what they are doing and who are willing to make the investment and partner with the city to get the job done. Such an approach has happened before in Albuquerque when Winthrop Rockefeller developed Winrock Shopping Center in the 1960s, and it can and should be done again.
Mayor Keller and the city need to seek out experience in the private sector who have done such projects like those in El Paso, Denver, Phoenix and Oklahoma and even Dallas, Texas and who have a proven record of success. Otherwise the Rail Yard Development will wind up being just another failed legacy project to feed the ego of a Mayor very much like the ART Bus project that destroyed the character of Route 66.
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POSTSCRIPT
The 2014 adopted “City Council Rail Yards Master Plan” contains 6 guiding principles intended to serve as a framework to guide the redevelopment of the Rail Yards over many decades. Following are the 6 guiding principles quoted verbatim without editing:
GUIDING PRINCIPLE #1: JOB GENERATION, ECONOMIC DEVELOPMENT & ECONOMIC VIABILITY
The Rail Yards, once an economic pillar for the community, is envisioned to become a hub of economic activity again. The Master Plan provides a framework for renewed economic and business success for the Project Area and is sufficiently flexible to accommodate a variety of potential future economic uses and opportunities. The Plan also provides opportunities to generate quality, living-wage and high-wage jobs and programs that will link those jobs with community residents. The Master Plan recognizes that the success of the Project Area is directly related to the financial feasibility of the overall mix of uses that is ultimately developed. Implementation of the Master Plan should prioritize uses that are financially self-sustaining and, preferably, revenue-generating and minimize the City’s exposure to and obligation for direct costs and subsidies.
GUIDING PRINCIPLE #2: HOUSING INTEGRATING HOUSING :
Housing Integrating housing into the Rail Yards redevelopment of the site is important for three reasons: 1. To ensure the availability of affordable housing in the community; 2. To minimize possible displacement of people as a result of redevelopment; and 3. To create a true mixed-use environment and a constant presence on the site, which will increase the overall vibrancy and safety of the site. The Master Plan supports construction of the required Workforce Housing and includes opportunities for additional affordable and market rate housing. The development of housing at the Rail Yards will be coordinated with the City’s ongoing efforts to rehabilitate existing housing in the surrounding neighborhoods.
GUIDING PRINCIPLE #3: COMMUNITY CONNECTIVITY
The Master Plan complements all adopted plans for surrounding areas, including the Barelas, South Broadway and San Jose neighborhoods. The Plan supports current and planned economic activity in the Downtown area and encourages connections with existing attractions in the area—such as the Albuquerque Zoo and BioPark, Tingley Beach, Rio Grande State Park, the National Hispanic Cultural Center, the South Broadway Cultural Center, Old Town and its museums, Downtown Albuquerque and its amenities, the Alvarado Transportation Center, the Historic 4th Street Corridor, local sports venues, the Albuquerque Sunport, and others. The Plan reinforces the City’s transit goals and objectives, and supports pedestrian, bicycle, auto and public transportation to and from the site.
GUIDING PRINCIPLE #4: LAND USES
The Master Plan encourages new development on the Rail Yards site that balances new economic and design approaches with protection of the integrity and history of the Rail Yards and the surrounding residential communities. The Plan complements the goals in other adopted plans that cover or affect the Rail Yards site.
GUIDING PRINCIPLE #5: ARCHITECTURE AND HISTORIC REHABILITATION
The Master Plan recognizes the significant value of the existing Rail Yards historic resources, i.e. buildings and structures, to a local, state and national audience. The fundamental approach to site development will be to maintain the “integrity” of the site as a whole, with individual structures being rehabilitated and adaptively re-used for modern and functional purposes, in consultation with the New Mexico SHPO.
GUIDING PRINCIPLE #6: ART AND CULTURE
The Master Plan encourages opportunities for promoting the art, history and culture of the site, the community and the region. The Plan sets aside space for a museum that celebrates the history of transportation, particularly rail transportation. Commercial and residential tenants, local community members, and visitors from near and far will be attracted by heightened aesthetics, comfortable, quality amenities, and a unique cultural vibrancy.