Lawsuit aims to block city turning hotel into housing
Shopping center owners say project would violate code as well as the property’s covenants
The New York-based nonprofit Community Solutions closed Monday on the purchase of Santa Fe Suites — a 122-room hotel on the south end of St. Francis Drive — which it intends to convert into housing for people who are homeless or at risk of becoming homeless, city Affordable Housing Director Alexandra Ladd said.
But controversy over the proposal apparently is heating up.
The project faces opposition from several commercial property owners who have filed a lawsuit claiming it doesn’t conform to the shopping center’s covenants and city codes, which they say define a hotel as a business that offers lodging to the general public.
In a lawsuit filed Dec. 15 in state District Court, attorneys for Plaza Entrada Co. LLC and San Miguel Shopping Center LLC say that if the project goes forward “it will irreparably and permanently alter the nature of the current use of the property ... and impact the value of the surrounding properties.”
The proposed project is a public-private partnership in which the city of
Santa Fe agreed to contribute $2 million of federal coronavirus relief funding to help Community Solutions purchase the hotel with the understanding it be used to provide low- or no-cost housing to community residents.
Community Solutions’ Real Estate Development Director Dave Foster declined to comment Monday.
But the nonprofit said in a Dec. 17 emergency motion for an expedited hearing on the complaint that the property owners’ lawsuit “reeks of improper gamesmanship” and their arguments are based on a “tortured interpretation” of the covenants and city definitions. It added the plaintiffs may be motivated by “selfish concerns” over the effect the project might have on their businesses despite the project’s widespread community and government support.
Plaintiffs attorney Mark Ish said Monday said it’s not his clients’ fault city officials never bothered to look at the covenants for the shopping center — which includes an Albertsons supermarket, fast food outlets, several medical offices and various other businesses — or reach out to area business owners or residents before approving the deal.
“These people were all in the dark,” Ish said Monday. “The first we heard of it was when
printed the story [about the project being approved] Dec. 19 . ... The people who were going to ram this project down our throats are the ones to blame.”
City Councilors Michael Garcia and Carol Romero-Wirth — who represent District 2 where the hotel is located — both said the city was not required to hold an early neighborhood notification meeting on the proposed new use because it does not require a zoning or ordinance change.
But Garcia said he was disappointed the community had not been included in the discussion earlier and felt the city should do better in the future.
Ladd called the project a “private transaction between two private entities,” adding the city merely acted a passthrough for the federal funding and had to expedite the process because of deadlines placed on the expenditure of federal coronavirus relief funds.
Ladd said Community Solutions — which contributed $6 million to the project, according to previous reports — will own the property initially and would be operated by St. Elizabeth Shelter.
“And down the line it will transfer wholly to a local entity,” she said.
City spokesman Dave Herndon wrote in an email Monday that under the proposed plan, 70 percent of the efficiency apartments in the hotel would become “affordable rentals for working men and women” and 30 percent would be “homes for those experiencing homelessness,” including veterans.
Mayor Alan Webber defended the project Monday.
“Affordable housing and family-friendly neighborhoods have been at the top of my agenda since I took office,” Webber wrote in an email sent by Herndon.
“The Santa Fe Suites project will provide homes for Santa Fe families and individuals who need a good place to live with rent they can afford. Everyone in Santa Fe should be proud of this positive step for affordable housing and the partnership that is making it possible.”
The property owners’ lawsuit seeks preliminary and permanent injunctions preventing Community Solutions — and its local affiliate, S.F. Holdings LLC — from moving forward with the project and compensation for the cost of bringing the lawsuit.
The case is pending before state District Judge Matthew Wilson.