|By Steve Ramirez, Las Cruces Sun-News,
N.M.McClatchy-Tribune Regional News
October 12, 2010 - --LAS CRUCES -- Caught between a rock and a hard place -- that's how Greg Eden, managing partner and chief executive officer of Intercap Institutional Investors describes it.
Ben Woods, senior vice president of External Relations and chief of staff at New Mexico State University, sees it much the same way.
Efforts to build and operate a hotel on NMSU land across the street from the soon-to-open Las Cruces Convention Center are at a standstill. Intercap had a contract with NMSU to develop a hotel on that 3.8-acre parcel, at the southeast corner of Union and University avenues, but it expired in May.
NMSU officials are now reconsidering their options.
The contract stipulated that Intercap would develop the hotel and find a corporation willing to build and operate the facility, with no financial investment from NMSU. It was also agreed that students in the university's Hotel, Restaurant and Tourism Management program would be able to work at the hotel to gain professional experience.<>The agreement initially called for a 110,000 square-foot, 180 room, full-service hotel to be built at the site. But the proposed project has since been scaled back to about a 77,000 square-foot, 127 room select service hotel. >
The hotel hasn't materialized, but the convention center it was supposed to companion with, has. How far off a hotel is from becoming a reality isn't exactly known.
"We're not about to give up, but sometimes you need a little help from your friend," said Eden, Intercap's managing partner and chief executive officer. "... We really need someone or some entity to demonstrate leadership."
Eden said it has become extremely difficult for Intercap to find investors willing to agree to the original contract terms and build a hotel entirely on their own. The effects of the recession have just about every investor reluctant to sink their money into a project without any other financial resources, he said.
Intercap has broached the possibility of a public-private partnership, where NMSU or possibly the City of Las Cruces would share the cost to develop the hotel.
But with budget deficits facing state government, and the trickle-down effects on NMSU, university officials have remained steadfast in keeping the contract's original terms in effect. So far, there haven't been any indications, either, from city officials that they would be willing to consider becoming an active parter in the proposed project.
"We are willing to be supportive of any efforts to keep the project moving forward, however that should not be construed that the city, itself, would be a willing investor in the project," City Manager Terrence Moore said. "City administration acknowledges that the presence of a neighboring lodging facility is necessary to ensure the long-term success of convention center operations, but this is an agreement strictly between the university and Intercap Institutional Investors, and the city will be supportive of whatever direction may come from any resolution."
Woods said there appears to be consensus among NMSU officials that "the time has come" to resolve the matter one way or another.
"This is important to us that this be resolved," Woods said. "It has reached a point where it needs to be made known that it needs to happen now. The university is not interested in continuing to keep this project in limbo.
"Everyone, including Intercap, has made a good-faith effort to make this work. But, through no fault on anyone's part, it just hasn't worked."
Woods said NMSU lawyers are reviewing the agreement with Intercap and will be developing options for university officials to consider.
"There should be quite a few options that could be considered," Woods said.
Eden said if it's possible for a public-private partnership to be worked out, the project could move forward soon.
"We've done everything that a development group can do in this economic environment. It's been a significant struggle," Eden said.
Steve Ramirez can be reached at (575) 541-5452
No inn at the room
-- A proposed hotel across the street from the Las Cruces Convention Center had been planned on 3.8 acres owned by New Mexico State University at the southeast corner of Union and University avenues .
-- A 12-month extension to a contract between NMSU and Intercap Institutional Investors to develop the proposed hotel was approved by the NMSU Board of Regents in May 2009.
-- Initially, a full-service, 180 room hotel was proposed, but the project was scaled back to a select service, 127 room hotel.
-- The estimated cost to build a hotel is $15.5 million.
-- Construction of the Las Cruces Convention Center is expected to be completed late this month, and a "soft" opening for the facility is anticipated in December.
-- The convention center will officially open to the public in mid-January.
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