Editor’s note: This is the second installment in a series titled Downtown Albuquerque Reboot, about Downtown Albuquerque, its challenges and the plans to address them. Read the first installment about why the area matters here, peruse a photo essay about lowriders here, read about crime here and end with what the area has to offer here.
Downtown Albuquerque features some big name property owners: the City of Albuquerque and Bernalillo County are two, as both host the majority of their operations there. Jim Long, founder and CEO of Heritage Hotels & Resorts, owns the two tallest Downtown buildings — the Albuquerque Plaza office tower and the Clyde Hotel. There is Albuquerque’s Garcia family — of the Garcia Honda car dealership enterprise — who own many Downtown properties and have projects either completed or in the works. Douglas Peterson, president of Peterson Properties and owner of the historic Simms Building, is highly invested in the corridor.
But if you take a stroll through the heart of Downtown you’re likely to come across properties owned by those less familiar — ones that represent some of the more attractive and less attractive the corridor currently has on offer.
Some of the more attractive serve as bookends to the key stretch along Central Avenue from the railroad tracks to Eighth Street — known as the center of the heart. At the east end, there’s InnovateABQ owned by the University of New Mexico, and the One Central ABQ development owned by three partners. At the west end is an under construction boutique hotel, owned by Paligroup Management, and a highly anticipated second location of the locally-owned Ex Novo Brewery. Your stroll in-between the bookends feature more of the best, too, like the 505 Central Food Hall owned by architect Mark Baker, the city-owned KiMo Theatre, and the oft-praised, locally-owned restaurant Oni.
Along the way, though, you’ll also pass an alarming number of shuttered businesses and vacant buildings — some that have been closed and empty for many years. Such sites are known to attract unseemly behavior and crime, from vandalism and loitering to urination and defecation.
“The greatest problem Downtown has is the vacant buildings,” said Leba Freed, who owns two Downtown properties. “It thwarts business. People don’t want to pass by vacant buildings. When a building is vacant, it blights the whole Downtown.”
Freed is president of the Wheels Museum at the historic Albuquerque Rail Yards located just south of Downtown, which she is credited with helping to preserve. Her family has had a presence in the Downtown core for decades as the owners of 415 Central Ave. NW — known as the Freed Building — located next to the KiMo Theatre. Freed & Co. businesses operated there from the early 1970s to the early 1990s. It’s currently leased by the Jam Spot – an all ages event space. Two of Downtown’s long vacant buildings are its neighbors to the east — the former Weekly Alibi building, which included a one-time restaurant.
‘Do something with them’
When discussing Downtown’s vacant buildings, Freed and others often mention two that are prominent and particularly frustrating — 410 Central Ave. SW (known as the “Gizmo Building”) and its neighbor, the historic Kress Building at 414 through 416 Central Ave. SW.
The Gizmo Building is owned by the Church of Scientology, while former Albuquerque business woman and Downtown fixture Anna Muller, owned the Kress Building. Muller died in late 2020 at 77 and the Kress building was subsequently left to her sister.
The Gizmo Building was the home of JC Penney department store from 1915 to 1986 — a popular Downtown amenity that residents still reminisce about. While no one expects such a store to return, the building has the potential for a mixed-use project. The aforementioned Baker completed such a project at 505 Central Ave. NW in the building once occupied by Sears: his food hall is on the bottom floor with residential lofts on the two top floors.
Colliers International commercial broker Terrie Hertweck, an Albuquerque real estate veteran representing the owners, said the Gizmo Building is a “great property that has attracted interest,” but wouldn’t disclose if any deals were in the process of being inked.
Meanwhile, mixed-use ideas for the Kress Building have been bandied about over the years: a roller skating rink, a speakeasy, lofts, a pop-up performance space and a recording studio are a few. Nevertheless, patience has worn thin among those focused on putting Downtown on more solid footing after navigating rough pandemic seas.
“Unoccupied buildings are a blight on our success,” Freed said. “Any incidents where there is a vacancy for a long time, the government should try and get it leased and open to the public.”
Freed said she’s leased her buildings at low rates to keep businesses open and avoid prolonged vacancies. She also owns the building Juno Brewery occupies at 1501 1st Street NW in the Wells Park neighborhood just north of the Downtown core.
“Maybe there are opportunities to do art or photography shows and not have them be vacant,” Freed said. “Open these buildings up. Do something with them.”
Freed, Albuquerque City Councilor Joaquín Baca, and others say they’d also like to see the facades of vacant properties more well maintained — whether with fresh paint or other exterior repairs and updates. Baca, whose District 2 encompasses Downtown, said he will soon host a series of meetings with Downtown residents, business owners, and other stakeholders to come up with ways to beautify and maintain the key area between First and Eighth streets.
No simple solution
The Bernalillo County assessor said he’s aware of the problem and has a strategy he thinks will help.
Bernalillo County Assessor Damian Lara, who took office in 2023, said one way to motivate owners of long vacant properties is to correctly assess them. While such a task for an assessor’s office might seem obvious, he said it’s one that hasn’t always been done properly.
The effort has been called a “vacancy tax,” a term Lara doesn’t use.
“We are ensuring that non-residential property — which includes vacant property, industrial property, commercial property, retail property, is equitably assessed so that everybody pays their fair share,” he said. “That includes buildings that are abandoned or that the city or county have identified as non-habitable or substandard.”
Lara said sometimes properties like the Gizmo Building aren’t on substandard lists, because owners know to do “just enough not to become a nuisance property.” He said owners of vacant properties have historically received a “very low” valuation because it’s boarded up or the roof is leaking.
“Is it possible to do something else with that property other than to have it vacant? We will value it at the highest and best use, which is what our industry standards require for an appraisal,” Lara said. “The fact that it hasn’t been done correctly before is a different story.”
Lara said his focus on vacant properties is an economic development tool and incentive.
“There is no magic bullet, but we are mandated by state law to value property at its current and correct valuation,” he said. “It has not been done with vacant properties, which is not fair or equitable to the business owners who are utilizing their property, who are generating income, who are investing in renovations and remodeling and upkeep and maintenance, to have another property owner across the street or next door who is not doing any of those things.”
Why sit on it?
Lara said there are different reasons an owner — including some who may live out of state and have sizable real estate portfolios — might let a vacant property stay empty. It could be a form of land banking (holding it for future use without specific plans), speculation (anticipating profits based on predicting changes in local market conditions rather than physical improvements or rents) or for a tax write off, he said.
“If I make a lot of money in real estate in California and in New York, I want to offset those profits with some losses somewhere,” Lara said. “They say: ‘We’re better off in a state that has me under-assessed and has a low property tax so I can write off all of these losses and still pay almost nothing in taxes.’”
New Mexico has one of the lowest property tax rates in the country.
“We’re going to value vacant properties at its highest and best use, which is going to be a much higher valuation,” Lara said. “It’s what the industry standard requires, not to just simply say that the property is valued as it stands currently — vacant, boarded up, dilapidated, a nuisance property.”
While the assessor’s office doesn’t set property tax rates — called the mill rate — Lara said if a vacant property’s value is doubled, its taxes would likely double, too.
Assistance for owners
Lara added that his office is also open to working with owners who are maintaining and updating their vacant property in good faith.
“But they need to come in and say, ‘Here’s my estimate; here’s my quotes from my general contractor or my subcontractor,’ and we’ll take a look at that,” he said. “We will revalue that property for the year and see what repairs, remodeling, restorations are being done to ensure that it is being put to the highest and best use. But we’re not going to let that go on year after year. We’ve got to see some progress.”
Other options officials use to help address vacant properties are city industrial revenue bonds and metropolitan redevelopment bonds.
Revitalization specialist Rhea Serna wrote a vacant building ordinance white paper in 2019 on behalf of New Mexico MainStreet, a division of the New Mexico Economic Development Department. She thinks one of the most effective tools available to property owners and the city are incentives through the Metropolitan Redevelopment Agency (MRA).
“I really like what we can do in New Mexico through the MRAs — it’s one of the best opportunities for private property owners to get some kind of assistance,” Serna said. “Especially for the property owners who are low income.”
Serna said sometimes low income property owners don’t have access to the funds needed to maintain a vacant building to standards. She said programs like Albuquerque’s Downtown Storefront Activation Grant can help, too.
“An owner of a vacant property could use it for critical repairs and expenses — to repair and rehabilitate a building under existing building codes,” she said.
*City Desk ABQ contacted Douglas Peterson and the Garcia family for comment on this story but did not hear back as of press time.