16 March 2010

UTEP to Develop Mesa Property

El Paso Inc.

What happened to the Whole Foods deal?

For years, the city has been hoping for a developer to build a transit-friendly, high-density mixed-use neighborhood, but it has yet to happen.

The University of Texas at El Paso might be first to make that a hope a reality.

The university has a number of proposals from developers for the former Rudolph auto dealership. The almost eight-acre site is next to the Don Haskins Center and has frontage on both North Mesa Street and Sun Bowl Drive.

According to the university’s request for proposals, the development should include “large and small retail uses complementary to the University, multi-family housing as a part of the retail complex, and structured parking to serve the retail and residential uses.”

UTEP would maintain ownership of the land through a ground lease, similar to the deal it made with the developers of the Hilton Garden Inn, located a few blocks away at University and Oregon.

It won’t happen immediately. UTEP has requested proposals previously, and about three years ago almost had a deal with food retailer Whole Foods.

The deal fell through when the recession squeezed the life out of negotiations, said Cindy Villa, UTEP vice president for business affairs.

“We certainly were disappointed. It would have been a very good tenant for that area and would have fit with our vision of how to develop that area,” she said.

UTEP officials are hoping this turn of the wheel brings such a deal to conclusion, but the university can afford to wait.

“We’ll take the time to try to do this right and ensure we have the best possible options available to the university,” she said. “What the RFP does is give you the opportunity to view the proposals from various developers and then negotiate from there, so it can be a fairly lengthy process.”

The university was scheduling presentations from the bidders. Villa declined to say how many bidders made proposals or who they were, citing the need for confidentiality during the bidding and negotiating periods.

Negotiating points include the length, cost and other terms of the ground lease, and the possibilities for development are fairly wide open, Villa said.

“We may not get into whether Texas apartments have granite countertops but we want to have control or say over the nature of businesses on the site,” she said. “The other thing we definitely want control over is design. We would envision having it in the style of the university architecture.”

UTEP’s trademark building style is based on the ancient architecture of Bhutan.

The Rudolph site makes sense for mixed-use development for several reasons: Its location next to the Don Haskins Center draws crowds for evening and weekend events, and during the day, UTEP is a major employment center with the population of a small city.

The site is within walking distance of the medical cluster that includes Sierra Providence and Las Palmas hospitals, also major employment centers, and the Cincinnati Street nightclub and restaurant district.

The lot is flat, clear land along a major arterial, Mesa Street, which means it has plenty of traffic. According to the request for proposal, which uses 2002 figures, 32,646 cars per day pass the location.

Also, the city is working with UTEP on the Glory Road Transit Terminal, which will connect a high-speed bus line from Downtown to the university district.

Taking an even broader view, the site is less than two miles from Downtown to the south and the large-scale Montecillo proposed high-density mixed-use developments to the north.

“If there was a site for mixed use development, this is it,” said Mathew McElroy, the city’s deputy director for planning. “There’s ridiculous density in that area because of the hospitals and UTEP. You could have nurses walk or take the bus. People who work Downtown probably wouldn’t even need to own a car because they can walk to the Glory Road station.”

But despite all the promise, the fact is that such a development model doesn’t exist in El Paso.

“It’s hard to do those types of developments when you don’t have an area that can support it. This is the one area of El Paso that can,” said Bob Ayoub, president of Mimco, a real estate development company that made a proposal previously.

“We’d be interested in pursuing it again. It’s a great site. UTEP needs more housing and I think it’s great they’re finally getting going on it,” Ayoub said. “That piece of dirt needs to be developed.”

City Rep. Beto O’Rourke, who represents the area and has been a leading proponent for this kind of development, said the RFP had potential.

“I hope that UTEP and the developer they choose do something truly innovative here because the past history of development along Mesa is really uninspired. I think our community deserves a lot better,” he said. “I’m optimistic UTEP will be able to do that.”

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