CNJ staff photo: Kevin Wilson An artist’s rendering of the planned Hotel Clovis Lofts, a $13 million conversion project by Tierra Realty of Clovis.
City officials feel tax dollars will be better spent helping a private company renovate the Hotel Clovis than tearing down the city-owned building.
The Clovis City Commission met Friday to approve a multi-party agreement that would allow the city to loan up to $1.4 million to Tierra Realty of Taos to turn the 79-year-old building — vacant since 1983 — into low-income housing.
The building has been owned by the city since 2004. It’s been part of the National Register of Historic Places since 1984, a year after it closed its doors. The city has long held a 2012 deadline to either fix the building or demolish it.
Mayor Gayla Brumfield said the economic downturn has created a budget gap for Tierra, which has done other low-income housing projects throughout the state, including one near Greene Acres Park along Mitchell Street. Brumfield said part of the project’s funding comes from the sale of tax credits — companies buy them to lower their tax burdens.
But developer Steve Crozier, Brumfield said, only got about 78 cents on the dollar, and five years ago such credits could garner 85 to 90 cents on the dollar.
Also, she said, Crozier had a tough time getting loans because the project doesn’t convert the entire building into housing units.
“The bottom floor of the hotel has restaurant space and retailer space,” Brumfield said. “His lender won’t give him any credit for that because of the way commercial loans are right now.”
Also, the second floor cannot be converted, because of a ballroom floor that is still in very good condition, Brumfield said.
“That will probably be an art gallery or maybe a place for receptions. On that same floor will be administrative offices. From the third floor up is where the housing begins.”
The Hotel Clovis would provide 31 one- or two-bedroom apartments, with space anywhere from 600 to 1,000 square feet, Brumfield said. Also, two additional buildings will provide another 28 apartments.
Construction would take a minimum of 18 months, with the earliest possible start in May.
Brumfield doesn’t believe the price tag will be so high, because an affordable housing plan will allow Tierra and the city to take in more grants for the hotel, which is zoned in a metropolitan redevelopment area (MRA) district. The housing plan is probably about 90 days away, Brumfield said.
“Ultimately, we do not think the $1.4 million will be the city’s part,” Brumfield said. “I think our part will be somewhere between $500,000 and $700,000.”
The vote for the agreement, between the New Mexico Mortgage Finance Authority, the New Mexico State Historic Preservation Officer, the City of Clovis and Hotel Clovis Housing was approved in an 8-0 vote at Friday’s special meeting.
Commissioner Bobby Sandoval said he can understand opposition to the possibility of the city lending money to a private company, but it’s worth the investment.
“It’s something we have worked so hard to do for so many years,” Sandoval said. “If we have to use a little bit of money, I think the public’s money is safe. I have no concerns.”
Brumfield said it’s the cheaper move, since demolition quotes came in starting at $2 million. She said Crozier has to meet about 40 separate contingencies to take the money, which she said he’s reluctant to take.
Tierra Realty has a policy against commenting to the media.
Also, Brumfield said, the Hotel Clovis renovation is such a limited circumstance she doesn’t feel the city is setting much of a precedent by making a financial commitment.
“If (people working on a project) come in and want to buy an 80-year-old building that’s been sitting there for 30 years, that the city owns, and they want to do an affordable housing project, and it’s in an MRA district, we will look at it,” Brumfield said.