Given all those interested in the De Anza Motel here on DCF (especially in light of the Aztec Motel's recent demolition), I thought this might be of interest - the New Mexico Business Weekly posted a story today explaining two proposals for turning the De Anza Motel into an apartment complex. I'll spare you the ads and just repost the story here:

Rethinking De Anza as apartments

Premium content from New Mexico Business Weekly - by Steve Ginsberg, Special to NMBW

Date: Friday, July 8, 2011, 4:00am MDT

After nearly a decade of trying to resurrect the De Anza Motor Lodge as an historic hotel, it’s looking more like the 1.5-acre property on Central Avenue could become an apartment complex.

Hotel preservationist Allan Affeldt withdrew his proposal with the Albuquerque Development Commission in late June. Now the commission has two proposals before it.

The Lofts at Albuquerque High developer Rob Dickson is proposing to convert the 1939 building to a 50-unit market- rate apartment project that would cost $5 million. New Life Homes, a nonprofit, is proposing to convert the property to a $7.5 million affordable housing project that would have 40 units. Both proposals include a museum and a café. New Life’s design proposes to keep six motel units for use by Zuni traders who visit the Duke City to sell jewelry and ceramics. The De Anza is east of Nob Hill at 4301 Central NE near Washington in a neighborhood still trying to emerge from Route 66’s decline since the 1960s.

The commission will meet in late July to consider the proposals. Many had hoped to see a new hotel on the site. The city’s redevelopment agency staff has been trying to keep Affeldt in the project. The city wanted to keep the De Anza a hotel and preserve its historic Zuni murals while promoting its Rt. 66 roots. It acquired the property for $891,000 in July 2003. This is its fourth request for proposal evaluation.

Affeldt is a Winslow, Ariz. preservationist who operates La Posada in Winslow, a former Santa Fe Railroad Victorian- style historic hotel. He had proposed a 45-room upscale boutique hotel that would cost $4.5 million, but after studying the project in depth, he pulled out.

“The rooms are very small, the ceilings are very low and the motel’s interior is a parking lot. It would need a complete remodel, and today, the land is worth half the price compared to when the city bought it. It’s a very complicated project that a traditional developer won’t do because of the risk and expense,” Affeldt said. “It’s a lot riskier as a hotel than an apartment building. If they can’t do it as a hotel, maybe they should go with someone who has a track record like Dickson.”

The De Anza’s timing to be resuscitated into a hotel couldn’t be worse. Average hotel occupancy in April was 60.4 percent, according to Smith Travel Research and the Albuquerque Convention & Visitors Bureau, and from January through April, it was 55.7 percent.

However, that is the city’s lowest demand period, said Dale Lockett, CEO of the ACVB.

Meanwhile, the rental apartment market is red hot, with the city’s average occupancy rate at 95 percent as of Q1 2011, according to Grubb & Ellis N.M.

Dickson is aware of the trends and eager to proceed. He says he’s lined up an equity partner in New Orleans and construction financing from CBRE Capital Management. He’s hired Pavilion Construction to do work for his Paradigm & Co. He envisions rents from $495 to $995, with 70 percent of the units at less than $700.

“This project is centrally located on a major transit line and has O’Niell’s pub and the Desert Fish [restaurant] across the street,” Dickson said.

His plan includes a museum and a café. He estimates construction would cost $3.5 million. When the for-sale condo market improves, Dickson would consider converting the project to a for-sale project. His lofts project at the original Albuquerque High School site on Central was built as a for-sale development, but during the recession, units were converted to rentals, and the project is now a hybrid. Dickson’s success there might give him clout with the city, which has been frustrated for years in its attempts to find the right hotel developer.

John Bloomfield, director of New Life, also has been successful partnering with the city. He’s built 200 units in seven projects throughout the Duke City. His financial plan for the De Anza encompasses tax credits and grants. He said the project could be done mostly with equity and no permanent debt. His team includes contractor Gerald Martin Latest from The Business Journals SFCC’s .7M Health and Sciences Center opensState’s first green affordable housing project opensState’s aerospace industry upward bound despite recession Follow this companyGerald Martin and architect Garrett Smith. Preliminary designs call for landscaping much of the interior parking lot to make it a more sustainable project. An informal business incubator would be included among the 40 residential units.

“Our project would employ 20, but the longer the De Anza sits vacant, the more gross receipts taxes are lost,” said Bloomfield. “[We] believe we have a strong design and would be able to provide work force housing as well as a place for people with disabilities.”