Pacheco Street Lofts

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1 Click images to view full size Pacheco Street Lofts Santa Fe, New Mexico Project Type: Multifamily For-Sale Housing Volume 39 Number 05 January March 2009 Case Number: C PROJECT TYPE The first project expressly constructed as transit-oriented housing in Santa Fe, New Mexico, Pacheco Street Lofts comprises 15 two- and three-story live/work condominiums situated beside a new commuter rail corridor. The multifamily property s three buildings are arranged around an internal street and courtyard, and the development lies within a few minutes walk to the nearest rail station. It is also within walking distance to popular natural foods markets, the new Rail Yards Park, Farmers Market, and Rail Yards shopping and entertainment development, as well as SITE Santa Fe a contemporary arts museum and the Guadalupe Street arts corridor. LOCATION Central City SITE SIZE 0.86 acre/0.35 hectare LAND USES Condominiums KEYWORDS/SPECIAL FEATURES Infill Development Transit-Oriented Development

2 For-Sale Housing PROJECT ADDRESS 1346 Pacheco Street Santa Fe, New Mexico WEB SITE DEVELOPER Infill Solutions Albuquerque, New Mexico ARCHITECT, PLANNER, AND LANDSCAPE ARCHITECT Calott + Gifford Architecture/Urban Design Albuquerque, New Mexico

3 GENERAL DESCRIPTION Pacheco Street Lofts demonstrates a new model of neighborhood-scale housing for Santa Fe, New Mexico. Fifteen two- and three-story live/work lofts are configured around a central courtyard, which is oriented toward a rail corridor. The corridor will serve the Rail Runner Express, a new commuter rail line linking Santa Fe to Albuquerque a regional crossroads with an international airport. In anticipating the arrival of the commuter train, the project fulfills regional expectations for higher density along the transit corridor. The project s three buildings reinforce the existing street edge while creating a new paseo, or mews system, on the site. Most of the open-plan units average just over 1,000 square feet (93 sq m) in size, but range from 667 square feet (62 sq m) for two-story units to 1,014 square feet (94 sq m) for three-story dwellings. The residences are designed to be flexible live/work spaces, suitable for artists studios and galleries, primary residences, or weekend retreats. Nine-foot-by-ten-foot (2.7-m-by-3-m) cantilevered steel balconies on the third level lend an industrial feel to Pacheco Street Lofts at an intimate urban scale. The developer, Albuquerque-based Infill Solutions, specializes in urban redevelopment, multifamily, and mixed-use projects. The full-service group incorporates design, development, construction management, and sales functions for innovative small- and medium-scale construction. The locally based firm is a partnership among Jay Rembe, Chris Calott, and Tom Gifford. Rembe s background is in commercial real estate, as a broker and an owner. Infill Solutions partners Calott and Gifford both architects are also owners of Calott + Gifford Architecture/Urban Design. Gifford also serves as construction manager for the group. A special focus of Infill Solutions practice is to reintroduce traditional urban typologies backstreets, courtyards, gardens, and plazas to surplus land in Albuquerque and Santa Fe. The firm emphasizes community revitalization, and since 2001, Infill Solutions has been recognized with 30 awards for urban design and architecture. Near downtown Albuquerque, the firm is working on the third phase of a three-block project that includes the completed 47-unit live/work Silver Lofts I & II. Other projects include the Veranda Compound residences and the live/work Richmond Street Studios, both in Albuquerque. THE SITE AND BACKGROUND Situated 7,000 feet (2,134 m) above sea level in northern New Mexico, Santa Fe is prized for its clean, dry air and mild desert climate. The government is the largest employer in the city, which is both a state capital and a county seat, with tourism as a major economic driver. Santa Fe is the second-largest art market in the country after New

4 York. Los Alamos Laboratories, one of the largest employers in the state of New Mexico, is within 30 minutes driving distance from Santa Fe. The Pacheco Street Lofts site lies less than a block from the South Capitol Station for the New Mexico Rail Runner Express. Completed in late 2008, the Rail Runner Express train connects Santa Fe with Albuquerque and its international airport. Feautring four stops in Santa Fe, the new line makes use of an existing Burlington Northern Santa Fe (BNSF) corridor. Pacheco Street Lofts is located in a transitional zone south of Santa Fe s redeveloping Rail Yards district, a swath of unevenly developed land left over from the days of heavy rail in Santa Fe. The area zoned for three-story, multifamily, and mixed-use development includes a mix of light-industrial uses as well as single-family and multifamily residential structures. The site is bounded on the west side by the rail corridor, on the east by a small city street, on the north by a onestory adobe structure, and on the south by a three-story apartment building. Pacheco Street Lofts is situated within a five-minute walk to the new 12-acre (4.9-ha) Rail Yards Park, Farmers Market, and Rail Yards shopping and entertainment development, an art gallery, and the Guadalupe Street arts corridor. Across the tracks to the west of the project, a 30-acre (12.1-ha) parcel containing scattered warehouse structures is owned and occupied by the New Mexico Department of Transportation, and is scheduled for redevelopment. FINANCING The project was financed through an 85 percent variable-rate land acquisition and construction loan ($3.6 million) from First National Bank of Los Alamos. The source of equity in the project approximately $508,000 is Infill Solutions New Mexico, LLC (a partnership of Infill Solution partners Jay Rembe, Chris Calott, and Tom Gifford). PLANNING, DESIGN, AND DEVELOPMENT Pacheco Street Lofts lays claim as the first specifically transit-oriented development in Santa Fe. The timing of construction and sales hinged strategically on the arrival of commuter rail between Albuquerque and Santa Fe. The New Mexico Rail Runner Express, a project of the Middle Rio Grande Council of Governments, will provide easy connections for residents with the rest of Santa Fe and with the Albuquerque metropolitan area. The three-building footprint of Pacheco Street Lofts was configured to form two interior streets and a parking court, with a walled garden. The wood-frame structures feature stucco finish, conforming to prevailing building practices in Santa Fe and New Mexico. But the ultra-simple lines, saturated colors, and raw steel elements of Pacheco Street Lofts set the buildings apart as an assertive, modernist design that is compatible with the industrial context of the rail corridor. In a departure from traditional garden apartment construction, the open plan, ten-foot-high (3-m-high) ceilings, and tall aluminum windows and side lights define the loft typology of the development. The most distinctive feature of the design is the row of nine-foot-by-ten-foot (2.7-m-by-3-m) cantilevered steel balconies, which visually dominate the courtyard and rail corridor sides of two of the buildings. Bolstered by X-bracing and hung against the wall structure of the building, the balconies are designed to be reminiscent of a metal boxcar. Smaller balconies on the second levels are fabricated with raw steel plates. Typical three-story units accommodate living or working areas and a half bathroom on the ground floor, with an open staircase leading up to the family level with the kitchen, and ultimately to a single master bedroom and bathroom on the third level. The bathrooms are finished with stone tiles and countertops, with oversized glassenclosed tubs and luxury fixtures. Custom-fabricated stair railings provide an important interior detail and reflect

5 the metal features outside. In the two-story units, kitchens are on the ground floor. Each of the condominiums is accessed from the ground level. Exterior colors including a deep chili red and shadowy violet inspired by the mountain ridges on the horizon were selected to reflect New Mexico s natural and cultural heritage. Windows frame views to historic downtown Santa Fe, the Jemez and Sangre de Cristo mountain ranges, and Atalya Mountain. Pacheco Street Lofts was built by Enterprise Builders Corporation, a New Mexico company affiliated with the U.S. Green Building Council. MARKETING The marketing and sales for Pacheco Street Lofts have been handled entirely by Infill Solutions. Marketing began in the fall of 2006, with three units presold before the project was substantially complete in June Slowed by doubts about the opening date for the commuter rail line, sales did not pick up again until the winter of 2007, when confidence in the rail schedule returned. As of January 2009, 11 of the 15 units had sold. One more has been acquired in a lease-to-buy contract, part of a strategy for adapting to the economic uncertainties and jittery market that commenced that month. Interest continues to be very high, with the rail line fully operational as of mid-december Buyers who seem to be evenly divided between in-state and out-of-state residents include artists, public employees, retirees, and professionals in the medical field, among others. Some of the residents are part-time or vacation owners, but half of the units are occupied by local artists as full-time live/work residences. Publicity about the project partly attributable to its architectural quality, novelty, and appeal as a transit-oriented development has generated a large number of calls and visits. In 2007, the project won an Honor Award from the Santa Fe chapter of the American Institute of Architects. Infill Solutions did not launch a traditional advertising campaign, relying instead on project information on the company s Web site and on the local 2008 Parade of Homes, where Pacheco Street Lofts competed against more traditional, suburban-style housing products. EXPERIENCE GAINED Street-oriented urban loft units can be adapted to mixed and transitioning neighborhoods. With their transparency from the street, their simple open plans, and their orientation to a newly introduced internal streetscape, Pacheco Street Lofts bring a human scale, semi-public open space, and added density to the neighborhood. Adjacency of modern rail is a strong selling point for busy professionals and environmentally aware buyers. Without exception, buyers at Pacheco Street Lofts cited the adjacency of the Rail Runner and the proximity to a stop as very important incentives for them. However, delays in the projected completion of the rail line caused some prospective buyers to back out. Interest and the pace of sales picked up again with assurances that the Rail Runner was back on schedule and arriving within months. The development team has concluded that pricing must take into account the timing of transit arrival and the risk of delays. In predevelopment pro forma analysis, units should be priced as if rail is not there, since it may be difficult to capture the value if the completion date of the project is not certain. Early absorption is critical for the realization of urbanist goals. The immediate success of three sales and a great deal of early activity at Pacheco Street Lofts were partially offset by the fact that most of the earliest buyers were investors and second-home buyers who did not move in immediately or permanently. Despite the early sales, the project initially showed little human activity or vibrancy from the street. In retrospect, it is important to outline a pricing strategy that will encourage an early wave of sales and occupancy that represents 25 to 40 percent of the

6 project. If demand for multifamily projects is low, it is especially important to push through modeling and pricing ground-floor or street-side units that contribute a visible presence. Even code-conforming architecture can bring legal challenges. In times of change and transition such as the arrival of a new rail line new construction that anticipates changes can draw opposition. This is especially true in areas where traditional single-family neighborhoods border on other uses, such as multifamily or a mix of uses. Even transit-oriented infill development, which supports regional planning goals and conforms to existing zoning codes, can be vulnerable. This is especially true in modern Santa Fe, where the permit process tends to uphold a strictly historicist design vocabulary based on stylized interpretations of the traditional adobe. The single-family neighbor nearest to Pacheco Street Lofts objected to the three-story height and sued the developers under the state s Solar Rights Act and the 1983 Solar Recordation Act, which protects solar arrays that collect at least 25,000 British thermal units (BTUs) on the winter solstice. The delays and other costs associated with the lawsuit raised the total development cost by approximately 2 percent. At a smaller scale, an in-house marketing effort can be a smart business strategy. When conducted by a member of the development team, marketing can provide key feedback about buyer motives and preferences, as well as pricing sensitivity. PROJECT DATA LAND USE INFORMATION Site area (acres/hectares): 0.86/0.35 Percentage complete: 100 Gross density (units per acre/hectare): 17.4/42.9 Number of off-street parking spaces: 25 LAND USE PLAN Use Area (Square Feet/Square Meters) Buildings 0.12/ Streets/surface parking Landscaping/open space 0.23/ / Total 0.86/ Percentage of Site RESIDENTIAL INFORMATION Unit Type Number Area (Square Feet/Square Meters) Percentage Sold Sales Price Two-story townhome 2 667/ $200,000 Three-story townhome 13 1,016/94 70 $364,000 $415,000 DEVELOPMENT COST INFORMATION Site Acquisition Cost: $650,000 Site Improvement Costs: $336,400 Excavation/grading: $60,500 Sewer/water/drainage: $45,000 Paving/curbs/sidewalks: $39,300 Landscaping/irrigation: $36,200 Fees/general conditions: $155,400

7 Construction Costs: $2,418,100 Soft Costs: $704,165 Architecture and engineering: $105,600 Project management: $60,000 Marketing: $67,000 Legal/accounting: $38,000 Taxes/insurance: $10,200 Title fees: $1,300 Construction interest and fees: $411,315 Other: $10,750 Total Development Cost:$4,108,665 DEVELOPMENT SCHEDULE Planning started: March 2005 Site purchased: May 2005 Construction started: May 2006 Sales/leasing started: September 2006 Project completed: August 2007 DRIVING DIRECTIONS From Albuquerque International Airport: Travel north on Interstate 25 toward Santa Fe for 59 miles (95 km). Take exit 282B for St. Francis Drive; travel on South St. Francis Drive for 2.2 miles (3.5 km). Turn left onto Alta Vista Street; make an immediate left onto Pacheco Street. Project will be a half-block up on the right. Driving time: One hour in nonpeak traffic. Clair Enlow, report author Jason Scully, editor, Development Case Studies David James Rose, copy editor Jamie McAfee, online production Ted Thoerig, editorial associate This Development Case Study is intended to serve as a resource for subscribers in improving the quality of future projects. Data contained herein were made available by the project s development team and constitute a report on, not an endorsement of, the project by ULI the Urban Land Institute. Copyright 2009 by ULI the Urban Land Institute 1025 Thomas Jefferson Street, N.W., Suite 500 West, Washington, D.C

8 The first project in Santa Fe, New Mexico, expressly designed to be transit-oriented housing, Pacheco Street Lofts features 15 two- and three-story townhouses next to a new commuter rail line that links the state capital with Albuquerque.

9 Ranging in size from 667 square feet (62 sq m) to 1,014 square feet (94 sq m), all units are live/work spaces intended for use as artists studios, galleries, primary residences, or weekend retreats. Located near a transitional zone comprising unevenly developed land that was originally used as rail yards, Pacheco Street Lofts is within a five-minute walk of a park, a farmers market, and a shopping and entertainment district.

10 Evenly divided between in-state and out-of-state residents, buyers include artists, public employees, retirees, and professionals in the medical field, among others. Typical floor plan for Pacheco Street Lofts.

11 Pacheco Street Lofts section

12 Pacheco Street Lofts site plan.