City holding special meeting on Hotel Clovis issues

The Clovis city commission is holding a special meeting Tuesday, with three agenda items regarding the city-owned Hotel Clovis.

City officials said the items regarded changes in agreements made necessary by the Aug. 3 city election, when voters rejected an affordable housing ordinance.

On the agenda for the 5:15 p.m. meeting at the north annex of the Clovis-Carver Public Library are:

• A development agreement with Tierra Realty Trust for the hotel. The developer proposes turning the hotel into a piece of a 60-unit rental complex. There would be 29 lofts in the hotel and 31 built in adjacent buildings.

The trust is required to make good faith efforts to construct the project within reasonable time to use tax credits from the Mortgage Finance Authority in 2010 or 2012, and do nothing to “impair, threaten or risk” the hotel’s listing on the National Register.

City Attorney David Richards said the agreement was always required, but had not been finalized because an affordable housing plan, or a lack thereof, would have determined some of the agreement’s language.

The city commission in May passed an affordable housing plan — an amendment to the state’s anti-donation clause for the purpose of affordable housing — but it was overturned via the Aug. 3 referendum election.

• An amendment of the current lease agreement between the city and Tierra Realty Trust.

Bank of America, the commercial lender financing the project, has requested many changes to the lease agreement.

“Most of the amendments to the lease are really to accommodate the lender,” Richards said. “This was originally intended to be under the affordable housing act.”

Under an affordable housing act, the city would have deeded the property to the trust, and the lender would have operated an agreement as a mortgage agreement.

“Now that it’s continuing to be a lease,” Richards said, “the lender will be getting a secured interest in a leased property instead of an owned property.”

Mayor Gayla Brumfield said the forward motion of the Hotel Clovis project doesn’t mean an affordable housing plan was unnecessary. She said the plan was a way to remediate blighted areas, and the hotel was one aspect of the plan.

“What it states is this developer is committed to the project,” Brumfield said. “The developer had $800,000 committed to this project, and he didn’t want to walk away from it.”

• An ordinance is up for introduction to vacate the alley extending a half block north of Second Street adjacent to the hotel, and the half-block alley way south of Second Street.

The vacations would terminate public traffic through the half block. Richards said the alley wouldn’t be a dead end at the Chamber of Commerce, since drivers could still exit onto the alley going to Pile Street, behind the Wells Fargo Bank drive-thru area.

The city would retain ownership of the alleyways and grant easements for utility services.

In the requisition, Richards said it is necessary to approve and adopt the ordinance before Aug. 31, the developer’s deadline to close financing.