DALLAS — Albuquerque, N.M., will seek proposals from developers interested in building a downtown multipurpose arena near the convention center that could involve some level of public financing.
Fred Mondragon, director of the city’s economic development department, said a request for proposals for a new downtown arena will be issued within the next 30 to 45 days. Developers will then have 60 days to submit their responses.
“We’re telling the private sector to come in with your best shot,” he said. “We’d love to have a developer say it can be done with only private financing, but this type of project doesn’t seem feasible right now without some sort of credit enhancement from the public sector.”
The request will include a pledge of city-owned land for the arena development as part of Albuquerque’s contribution to the project, he said.
Mondragon said he expects to make a recommendation to the City Council, based on the development department’s review of the arena proposals, no later than March 2006.
Based on the arena proposal that was withdrawn earlier this year after the city rejected a request for public financing, Mondragon estimated that a 10,000- to 12,000-seat multipurpose arena would cost between $75 million to $100 million.
“That’s my best estimate, based on the increases in construction costs we’ve seen since the last proposal for a downtown arena,” he said. “We don’t know the size of the public contribution to an arena yet, but the project probably won’t be financially viable without it.”
Arena Management and Construction LLC led a group of companies in a year-long futile effort to build a $70 million arena on a site the city would provide near the convention center. The arena was first proposed as a private project, but developers later asked the city, state, and county to help with the financing before withdrawing.
Mayor Martin Chavez, who was re-elected in October to a second four-year term, said at a Greater Albuquerque Chamber of Commerce luncheon on Tuesday that the project’s public-private partnership will be similar to the one that built the city’s minor league baseball stadium, with Albuquerque providing land and financial backing to private developers.
Mondragon said the land that the city acquired for the failed arena project would be sufficient for the new project unless it is much larger than the first proposal.
“We have enough land either in hand or optioned for the arena project, unless it really balloons in size from the earlier plan,” he said. “Developers will be including retail and restaurant spaces, maybe even some upscale lofts, to enhance their projects, so it might require some additional land.”
The proposals may include a hotel, Mondragon said, but a new study prepared for the city by HVS Convention, Sports & Entertainment Facilities Consulting determined that a 500-room hotel associated with the convention center would not be economical without a public subsidy of $22 million to $58 million.
The city will not pursue a stand-alone convention center hotel deal, Mondragon said, even though the downtown area could use another 500 to 700 hotel rooms.
“We have a lot of federal government-related conventions here, and the General Services Administration won’t allow federal employees or subcontractors to pay more than $68 a night for a hotel room in Albuquerque,” he said. “You can’t pay for a 500-room headquarters hotel, which costs $200,000 a room to build, if you have to charge government rates.”
