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Pink Elephant project proposed

Posted: Thursday, Oct 4th, 2012

Courier editor

ALAMOSA — Plans are in motion to replace one of Alamosa’s downtown “white elephants,” long known as the Pink Elephant property, with parking and retail space to complement the Colorado Welcome Center on Sixth Street.

Alamosa County Economic Development Corporation/Chamber of Commerce Executive Director Randy Wright last night outlined plans during a work session with the city council to revamp the property across the street from the railroad depot/welcome center.

The idea, Wright explained, is to draw the thousands of people who stop at the welcome center and train depot down to Main Street, or as Councilman Josef Lucero said, “from train to Main.”

Currently, 40,000 people visit the Colorado Welcome Center-Alamosa each year, and 3.5 million cars drive down Sixth Street/Highway 160, but the condition of the Pink Elephant and its adjoining properties deters folks from going any farther into the city than Sixth and State, Wright said.

He presented the estimated price tags for buying up the properties, abating them from items such as asbestos and leveling them. He also requested the city’s financial assistance with the project, a decision that would have to be made when the council has a formal request during a subsequent council meeting.

The city council was receptive to the proposal, however.

Wright said negotiations have been going on with the property owners, who are willing to sell for the most part. One business owner is still hesitant, but even if that property owner did not sell, the project could go forward in a modified fashion, Wright said.

Alamosa County Economic Development Corporation has been working with Preston Porter and the owners have been working with Terry Smith to work out the real estate transactions, according to Wright.

Businesses in the project area include: the former Trujillo’s On Tap, now in the bank’s possession; the property formerly housing the Pink Elephant and more recently a church; Tienda Latina Guatemex; Sicc & Twisted; and Oscar’s Restaurant, which owns part of the parking lot next to these businesses.

Wright said from his first day on the job a year ago on Wednesday one of his primary tasks was to develop a proposal to revitalize that area of Sixth Street.

“At times it’s been frustrating, but the further we go, the more exciting it gets,” he said.

The finished product would be a combination retail space totaling about 16,500 square feet estimated at just under $2 million in value, Wright said.

The estimates for buying the properties across from the welcome center are: about $110,000 for the former Pink Elephant; about $55,000 for Guatemex; about $90,000 for the former Trujillo’s on Tap; about $85,000 for Sicc & Twisted; and about $25,000 for the portion of the parking lot owned by Oscar’s Restaurant.

In addition to the approximate $365,000 in acquisition costs, abatement expenses are estimated at about $233,000 (asbestos and lead paint), and demolition and disposal costs are estimated at $173,000.

After investing those costs, a developer would have a cleared lot worth about $150,000, Wright said, or essentially $450,000 upside down before the development even started. That is why it has not been feasible for a private developer to take on this project.

A government group, however, would be eligible for brownfields grants, money used to clean up urban blight areas. Wright said he has no promise but some assurance the city could obtain about $150,000 in brownfields grant funding. The next grant cycle comes up in November, so if the funding were to be approved this year, and everything fell into place, “we could be tearing down by this time next year,” Wright said.

He asked the city council to consider $100,000 towards this project and is asking Alamosa County officials for approximately $173,000, which would largely be provided in-kind in the form of demolition and disposal.

If those funds came through, the project would only be about $20,000-21,000 short, and Wright saw no problem coming up with that money, once the other groups committed funds.

He is working with entities such as local banks and the marketing district to fill that gap.

Wright said with projected sales taxes from the retail space that would be developed, the city should be able to get its $100,000 investment back in about three years.

He estimated the property would generate about $1.5 million in sales annually, but some of that would be taking sales away from other existing businesses, so the net effect of new sales would be just over $1 million each year. Figuring the city’s sales tax, the sales tax it shares with the county and the sales tax generated by the current businesses that the city would no longer be receiving from that location, the estimated new sales tax the city would receive from this project would be about $32,000 a year, Wright said.

Using that figure, the city would recoup its $100,000 investment in the project in about three years. He said if someone offered him that kind of deal for an investment, he would jump on it.

City Manager Nathan Cherpeski said he believed the city could afford this project, particularly since it would get its investment back over time.

Councilors asked Wright several questions about the project, such as what type of businesses might be going in. Wright said he and Cherpeski were utilizing Buxton, a company that analyzes the best matches of businesses with markets, to determine what might be good fits for this space.

Wright said a restaurant might anchor the space, with retail shops filling in. These might be the type of shops that would draw tourists who had stopped at the depot or welcome center across the street. Alamosa County Economic Development Corporation will retain authority over some of those decisions, Wright said.

He added that although one developer is very interested in taking up this project once the site is cleared, the development corporation will take the project to bid.

When asked about whether a hotel might be a good idea for some of this space, Wright said that was one of the considerations initially but the railroad is now planning to erect a hotel on their property between State and Ross Avenues.

Wright said he saw the Pink Elephant project as a catalyst towards greater development in the downtown area.

Mayor Kathy Rogers said, “I can’t think of a project more important to the city of Alamosa and downtown.”

Councilman Lucero added, “That’s the cornerstone of tourism right in that area … Anything that’s going to go from train to Main is going to benefit everybody in the city. I am excited about this project.”

He added that he saw this as a good investment for the city, especially considering how much money the city council has invested in economic development over the years.

Councilor Rusty Johnson said he would like the revitalization efforts to extend all the way down Sixth Street.

“We need to fix Main Street and Sixth Street to be appealing to guests,” he said.

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