No affordable housing plans for midtown’s 1st apartments

Developer opts to pay fee to keep rents at market rates despite city’s emphasis on offering cheaper housing on campus

A four-story apartment building that could be the first housing project to break ground at the midtown campus will move forward with no plans for affordable units.

Jennifer Jenkins, the principal of development manager JenkinsGavin Land Use, said construction could start in the spring on a 2.1-acre lot at the city-owned property off St. Michael’s Drive, adjacent to a film studio primarily owned by the same out-of-state developer.

Monthly rents for the 129 units in the proposed complex are projected to average between $1,200 and $2,200, according to city documents, with no units offered at “affordable rates” — or those below market value — as the city requires for new developments.

The city had made affordable housing a priority for the long-planned redevelopment of the 64-acre former college campus.

Instead, the developer will pay fees into the city’s Affordable Housing Trust Fund, a popular alternative for builders.

Jenkins estimated the fees will amount to $350,000 to $450,000.

“It’s not an insignificant number,” she said. Affordable housing at the midtown campus became a topic of debate earlier this year after Councilors Michael Garcia and Renee Villarreal introduced a resolution to ban the so-called “fee-in-lieu” option for developers, requiring them to offer 15% of their new housing units at below-market rates. The measure failed on a 5-4 council vote in May.

Garcia said Monday he was “a bit disappointed” the developer opted to go the fee-in-lieu route because the city “direly needs” more affordable housing units.

“My hopes are that we as a city do everything we can to encourage developers to develop affordable units instead of the fee,” he said.

While he failed to ban the fee option at midtown, Garcia said in the next few months one of his priorities will be to introduce legislation calling for an increase in the fees, which he said is the only way to get more developers to build affordable housing.

An early neighborhood notification meeting was held virtually last week on the proposed apartment project, dubbed “Shellaberger: Multi-Family” in city documents.

New York developer Phillip Gesue is the signatory for Midtown Santa Fe Residential QOZB LLC, listed as the property owner. He also is the principal of PE Real Estate Holdings, the leading company overhauling the film studio.

The City Council in July approved a proposal to merge

Garson Studios with the Midtown Santa Fe Production Studio next door to create the largest film studio in Northern New Mexico. Midtown Santa Fe Production Studio has been operating out of the former Shellaberger Tennis Center, which Gesue purchased last year.

The housing development will be in the Midtown Local Innovation Corridor Overlay, created to incentivize residential development at the midtown site. Because it falls within the overlay, its developers aren’t required to undergo a public hearing before the Planning Commission.

Jenkins said the complex will have studios and one-, two- and three-bedroom units in one four-story, 49-foot-tall building. The architecture is intended to blend in with the midcentury modern style of other midtown properties, she said.

There will be about 8,300 square feet of open space, Jenkins said, noting that’s 1,300 square feet more than required. The open space will include a corner plaza, roof deck and “landscaped parking island,” according to city documents.

The complex will share 53 parking spaces with the film studio in an attempt to cut down on parking requirements, Jenkins said, and will also have bicycle parking and access to the Santa Fe Trails bus stop on Siringo Road.

“It’s a great opportunity to minimize and be strategic about parking facilities,” Jenkins said.

She added the development team hopes to receive a building permit from the city by the end of the year and break ground “as soon as possible” in the spring.

The city’s plans so far have focused on the business side of redeveloping the midtown campus. Along with the film studio, it has entered into an agreement with the Santa Fe Art Institute to develop and operate a visual arts center.

The City Council also will be asked at its Dec. 13 meeting to approve an agreement with LiveArts Santa Fe for the development of a performing arts studio as the third of three major midtown projects under consideration this year.