CNJ staff photo: Kevin Wilson Stephen Crozier, founder and CEO of Tierra Realty of Taos, speaks about his planned renovation of Hotel Clovis during the Thursday Clovis City Commission meeting.
The Clovis City Commission met for more than two hours Thursday, and spent much of it debating the merits of an affordable housing plan it eventually passed on a pair of 6-1 votes.
The resolution and ordinance for the plan, which allows an exception to the state’s anti-donation clause for the purpose of affordable housing projects, were both approved with Commission Randy Crowder as the dissenting vote.
The clause states that municipalities cannot “directly or indirectly lend or pledge its credit, or make any donation to or in aid of any person, association or public or private corporation.”
The plan, Legislative and Community Development Director Claire Burroughes said, had numerous goals, and was requested by the commission more than a year ago. Goals, based on an average median income of $46,400 per year, included rentals at 30-120 percent of AMI and remediation/renovation of homes at the level of 30-80 percent of AMI.
By Cannon officials’ estimates, about 75 percent of incoming personnel at Cannon Air Force Base will be of rank E-5 or below, with CAFB as their first mission. That translates to annual salary of $25,092, or 54 percent of AMI, for personnel who want affordable rentals.
“It’s a very tight market for rentals,” Burroughes said.
Much of the focus for the project went to the renovation of Hotel Clovis, which Tierra Realty of Taos is looking to modify into 28 units to go with 31 at an adjacent building it will also modify. The plan is $12.8 million, with about $9 million in private monies, $1 million in grants and a loan of up to $1.4 million from the city.
Commissioner Randy Crowder voiced specific opposition on the plan, regarding a commitment letter the city made on the $1.4 million loan it offered to Stephen Crozier, owner of Tierra Realty, to keep the deal going.
Crowder said the letter, which the city adopted in a resolution, would allow the loan to convert — upon implementation of an affordable housing plan — into a half grant, half non-recourse loan which Crowder said could include indefinite deferment of payments. To him, that meant Crozier never had to repay the loan and the city would basically give him $1.4 million.
Other commissioners said Crozier still has to get approval for his overall plan, and it would require approval from the state Mortgage Finance Authority.
Crozier said the request for the loan was one he was forced to make when the recession hit.
“I don’t like to ask municipalities for money,” Crozier said. “This is the first project where I’ve asked for money.”
He said he has numerous other projects across the state, he’s never missed a payment or defaulted on a loan and his projects have occupancy rates between 95 and 100 percent.
“We have a long-term interest in the communities where we develop,” Crozier said.
Zala Smith of Clovis said she liked the plan because “having 60 new families is going to bring an awful lot of business in the downtown area.”
She and Crowder debated over the merits of giving tax breaks to private industries for economic development. Crowder said those tax breaks are based on formulas that consider long-term job creation, while affordable housing does not. Smith responded that number-crunching would reveal that many municipalities never recover the financial incentives they offer in the name of economic development.
Joseph Montoya, MFA deputy director of programs, said Albuquerque’s affordable housing plan has resulted in more than $300 million in private investment over six years and two mayoral administrations.
Commissioner Bobby Sandoval said estimates are that tearing down Hotel Clovis would cost the city $2 million.
He said he’d rather pay $1.4 million in a worst-case scenario for a project that revitalizes the downtown area — and, as Mayor Gayla Brumfield said, returns $200,000 of that in gross receipts taxes — than spend $2 million to have a hole in downtown Clovis.
“That’s a one-time cost, Bobby,” Crowder said to the $2 million question. Crowder added that more costs would come, as other builders would line up to extract benefits through the affordable housing plan they couldn’t get in the free market.
Crowder said that housing, and many other things, would be less expensive if government would get out of the way.
“I’m a conservative guy,” Crowder said. “Commissioner (Ron) Edwards used to tell me I’m to the right of Atilla the Hun.”
Crowder later said that while Crozier had a project that was “awesome” and “fantastic,” the cost of the project broke down to $217,000 per 900 square foot unit, and he knows local builders who can make a house twice that size for $211,000.
Crozier said many of those costs deal with staying within landmark protection guidelines of the hotel.
Commissioner Fred Van Soelen said he wouldn’t vote for “every project that came down the pike,” and he said the Hotel Clovis Project is a good plan — especially in light of the fact that nobody was lining up to rebuild the Hotel Clovis for the last quarter-century, before and after the city bought it in 2004.
“This is the only person to come forward with a plan,” Van Soelen said. “He’s sunk $9 million in private funding into it. If this project goes bad, he’s on the hook for $9 million.
“Where are the private developers? We put this out, we got one proposal.”
Brumfield said she disagreed with the notion that the Hotel Clovis plan creates an uneven playing field, because Crozier has to go through a multi-year process to get benefits.
Tim Ashley, treasurer of the High Plains Patriots citizen group, asked if the housing plan ordinance was subject to a negative referendum election through a petition. City Attorney David Richards said it would be.
The citizens group successfully gathered more than a required 456 signatures to recently put a .25 percent gross receipts tax increase on the ballot after the commission approved it on a 7-1 vote. Clovis voters passed the ordinance with a 57 percent margin on Tuesday.
The Clovis City Commission met Thursday at the north annex of the Clovis-Carver Public Library:
Commissioner Fidel Madrid was absent. All agenda action items passed on 7-0 votes.
• The commission approved an ordinance to extend parks and recreation grants to pay for the city’s recent purchase of Colonial Park Golf Course and its parks master plan.
The city currently has bonds that expire in 2013 for the Potter Park Pool and other various park improvements.
Kevin Powers of RBC Capital said based on the city’s current $470,000 annual payment to the bonds, the city could acquire around $6.195 million by extending the bond to 2031.
“You’re really doing this at an opportune time,” Powers said.
Of the money, $2.81 million would pay for the golf course, $2.368 million would be dedicated to other projects and the remainder would pay the outstanding bond balance.
Powers said if the ordinance passes next month, the city could have the money by the first week of July.
• The city gave quarterly awards for outstanding supervisor and line employee.
Street Superintendent Larry Hall was given the supervisor award. Public Works Director Clint Bunch said he and Hall were hired on the same day 14 years ago. He’s promoted Hall to a pair of different positions and, “He’s never let me down,” Bunch said.
Martin Martinez, who has been an animal control officer for 13 years, was the employee selection. Clovis Police Chief Steve Sanders said Martinez has been an “outstanding professional” who shows great care for the animals.
• The commission approved membership in the Eastern Plains Council of Governments for the upcoming fiscal year, with dues a little more than $7,500. The commission also kept Madrid as their representative, with Commissioner Bobby Sandoval chosen as an alternate. City Manager Joe Thomas said he had spoken with Madrid, who indicated he was fine with serving again.
• The commission approved a request to hire two seasonal employees for the Colonial Park Golf Course, which the city began operations of on Sunday. Parks and Recreation Director Bill Bizzell said the employees, at a total cost is $11,400, would help make some needed touchups. The commission also approved a $5,000 contract for leases on golf carts with Golf Professional Services through Sept. 30.
• The commission approved a budget change for $28,584 with the Clovis Municipal Airport, mainly for work on an elevated water tank.
• A solid waste disposal agreement between the cities of Clovis and Portales was approved. Landfill fees of $30 per ton, $11 a ton for demolition debris and $18 a ton for green waste will apply to Portales.
• A fund-raising cookout was approved for Greene Acres Park, done by the Cannon Air Force Base 56IS A Flight Team. The monies from the cookout, tentatively scheduled for 11 a.m. May 14, would go towards improvements at the park.
• Budget changes of $5,000 for unforeseen electrical expenses at the airport’s fire station, and $35,000 for equipment repairs at the Public Works Department, were approved.
• In conjunction with the great American Cleanup, scheduled for 8 a.m. to noon May 14, a waiver of dumping fees at the landfill from noon May 13 to noon May 16 was approved. Tire disposals are limited to nine passenger vehicle tires per household. The tire number was reduced from 10 to simplify the process for landfill employees.
Street closures were approved for the following: Noon to 1 a.m. May 22 on the 300 block of Merriwether (with a noise variance) and 1 p.m.-7 p.m. on Fourth Street between Oak and Maple streets for two separate graduation parties, and 9 a.m.-11 a.m. Friday on the 1300 block of Merriwether at James Bickley Elementary for its annual Maypole dance.