One of Downtown’s most ambitious redevelopment projects, the Gold Avenue Lofts, is having a groundbreaking today thanks in part to a Florida investor.
American Ventures Corp., a Florida real estate company, has just launched a real estate investment fund in New Mexico that is meant to help finance inner-city projects.
The New Mexico Urban Initiatives Fund will contribute $1.5 million to the $9.8 million Gold Avenue Lofts residential-retail project, said Philip Blumberg, the fund’s president and CEO.
He said the fund has received several million dollars in initial investments from the McCune Charitable Foundation and American Ventures Realty Investors, as well as preliminary commitments from several banks. Eventually the fund wants to raise as much as $50 million to invest in community initiatives statewide over the next eight years.
The Gold Avenue Lofts “follows a pattern of redevelopment in Albuquerque that gave us confidence in its success,” Blumberg told the Journal in a phone interview from Florida. “Clearly there’s a beginning of a trend of not just retail activity but residential growth.”
Gold Avenue Lofts will be a six-story building at 100 Gold SW, with street-level retail space, second-floor offices and condominiums from $190,000 to $335,000 on the remaining floors. Construction should be completed by June.
Blumberg said progress on other Downtown projects such as the theater block and transit center encouraged him to invest in Albuquerque.
“The redevelopment being done by (the Historic District Improvement Co.) in Downtown Albuquerque suggests the city is in a very progressive mode right now,” he said.
The Historic District Improvement Co., headed by Pat Bryan and Chris Leinberger, is a private company working with the city to revitalize Downtown. Leinberger said he met Blumberg through Funders Network for Smart Growth, a consortium of 80 foundations, including the McCune Charitable Foundation, that has partnered with HDIC in other Downtown projects.
Representatives from the network, including Blumberg, visited Albuquerque nine months ago.
Bryan said Blumberg’s fund provided the Lofts with what is called gap financing needed to satisfy the requirements of lead lender Wells Fargo Bank. Wells Fargo is providing $7.2 million for the project.
Although the developers have met the bank’s preselling requirements, having sold 14 of 41 units, Bryan emphasized the project still faces challenges.
“The fact remains, for a lender and developer this is a risky project because buyers, by law, have the right to walk after you have build the building,” Bryan explained.
Redevelopment projects are complicated and require complicated financing arrangements, he said. “This is not like a Wal-Mart going up in the suburbs.”
Blumberg credited Albuquerque Mayor Martin Chavez and the city for helping with parking and land for HDIC projects. The public participation “shows a visionary perspective of what Downtown Albuquerque could be,” he said.
“This is the first time this type of fund has ever been attempted in New Mexico,” Chavez said. “This should lead to the investment of hundreds of millions of dollars in the Downtown area.”
Blumberg said he will evaluate other New Mexico projects between now and the end of the year and expects to make another investment decision early next year.Keywords: American Ventures, American Ventures Realty Investors, Chris Leinberger, Gold Avenue Lofts, HDIC, McCune Charitable Foundation, New Mexico Urban Initiatives Fund, Pat Bryan, Philip Blumberg