by Caleb Fort
Daily Lobo
The Board of Regents' Finance and Facilities Committee approved a rent-to-buy plan for the old Social Security Building at the UNM Science and Technology Park on Thursday.
The board will act on the plan at its December meeting.
Under the proposal, UNM would rent the building for 12 or 18 months before buying it for $7.7 million.
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Once UNM bought and renovated the building, it would be leased to organizations such as the charter school High Tech High and UNM Hospital.
The high school, a partner of UNM, would be able to move in while UNM is renting the building, said David Harris, president of the University.
"What we're trying to do is locate a site for them in time for the next school year," he said.
The high school is at 2500 Yale Blvd. S.E.
Renovating the building would cost about $10 million, said Kim Murphy, director of real estate.
The money would come from a $29 million endowment that was created with money UNM received from selling land at Winrock Mall.
Regent Mel Eaves, chairman of the committee, said he is hesitant about the deal.
"It's not a project we're dying to do," he said. "The bottom line is do we want to invest $16 (million) to $19 million, cash money, out of the regents endowment?"
After the building is renovated and filled with tenants, UNM would refinance it and pay back the endowment.
Investments made with the endowment earn about 10 percent per year, Murphy said.
Eaves said the money is important for UNM.
"That money from the endowment is being used for other purposes," he said. "We're looking at a new UNM west campus. The only ready cash the regents have is in that endowment, and we've got a full plate right now."
The endowment is used for minor construction and renovation and general operating costs.
Murphy said the proposal
is solid.
"The prospective purchase is an ability to get some square-footage at the (research) park that we can put University programs in or lease out," he said. "We can make this an economic proposition."
If UNM does not buy the property, it will be charged about $1 million, Harris said.
The biggest risk of the deal is not being able to find enough tenants for the building, Murphy said.
"What you don't want to do is spend $10 million renovating a big building and then not be able to fill it," he said.
To prevent that from happening, UNM will renovate the building in phases, he said.
"I think the risk is manageable," he said. "I wouldn't propose it if I didn't think we could handle it."
The 140,000-square-foot building, which has been vacant for four years, is on UNM-owned land.
The building is owned by WRD Ventures and NWD Ventures.
Renting the building before buying it makes sense, Murphy said.
"It would be like buying a car, and you get to drive around in it for a year without paying for it," he said. "It's a pretty good deal."
