November 7, 2006

Is City Bending Rules For REI?

By Kiera Hay and Russell Max Simon
Journal Staff Writers
   

REI, the outdoor clothing and equipment retailer, is in negotiations to lease space in the Santa Fe Railyard.
   
The Washington-state company's request to developers to build higher ceilings inside the proposed 120,000-square-foot Market Station Complex, however, has local business advocates accusing city government of avoiding the public input process to cater to an outside company.
   
Several local business owners expressed concern Monday that REI's presence in the Railyard is contrary to the spirit of the project's Master Plan, which states that preference be given to local companies. Subleasing policy and a proposed height variance for Market Station have caused particular consternation.
   
A request from REI to developers to increase the maximum allowable height of the Market Station Complex from 36 feet to 43 feet was postponed at Monday's Public Works Committee meeting. Councilors decided to postpone the issue until their Nov. 27 meeting and re-notice it as an administrative issue, rather than an amendment to the Railyard's master plan.
   
City Attorney Frank Katz said Monday that an amendment to the master plan would require a lengthy community process, including resurrecting the Metropolitan Redevelopment Commission, an appointed committee that has not met in four years.
   
Public Works Committee chair Patti Bushee said the city attorney's opinion was contrary to that of past city attorneys, who have allowed the City Council to change the master plan simply by holding neighborhood notification meetings and public hearings.
   
The committee's decision to re-notice the height issue as an administrative matter will likely give City Manager Asenath Kepler authority to allow the height increase without the public hearings.
   
Old Santa Fe Association board member Marilyn Bane said the city was "bending over backwards to accommodate a retailing formula for a retailer, rather than asking a retailer to conform with our master plan."
   
"The issue here is that we're bending the rules. We're doing favors where we didn't do favors before," said Sangre de Cristo Mountain Works owner Kent Little, whose Montezuma Street store would face stiff competition from the outdoor giant.
   
Kepler, meanwhile, said REI could serve as a solid economic anchor for the new center. She also said an increase in height would not negatively impact the skyline.
   
REI has yet to sign a lease with Market Station developers Railyard Company LLC, and the earliest a store would open is 2008, company spokesman Mike Foley said. REI, whose headquarters is near Seattle, has more than 90 stores in 25 states and the District of Columbia. There is one store in Albuquerque.
   
Santa Fe, with its multiple of recreation opportunities, was a natural choice for expansion, Foley said. The company already has a number of Santa Fe fans who purchase items from the Albuquerque store or shop online, he added.
   
Little, whose Montezuma Avenue shop is within walking distance of the proposed REI, said he didn't object to the potential competition.
   
"Are we threatened by it? Sure. Are we intimidated? No," he said.
   
Rather, the proposed height variance, which would allow Railyard Company to extend the Market Station structure from 36 feet to 43 feet, is unfair to Railyard groups that have had to abide by the restrictions, he said.
   
"I don't think they (REI) deserve special treatment," Little said.
   
Another point of contention among the independent business community is a Railyard policy that allows local companies to lease space and then sublease it to whomever they want. Vicki Pozzebon, executive director of the independent business advocacy group the Santa Fe Business Alliance, said the policy allows national stores like REI to "sneak in through the back door" at the Railyard.
   
"Let's at least close the loophole so we don't get another Starbucks or Barnes & Noble," Pozzebon said.
   
Although Railyard tenants can sublease property, approval must be granted by the nonprofit Santa Fe Railyard Community Corporation, which manages the Railyard, said SFRCC executive director Richard Czoski. Currently, 77 percent of the Railyard's available space has been leased— all of it to local companies, he said.
   
REI is a "responsible corporate citizen," he said, noting that in 2005 the company was ranked ninth on Fortune magazine's list of "great companies to work for."
   
Market Station co-developer Allen Branch said there was nothing illegal about renting Railyard space to a national chain store, and that "there are very few 28,000-square-foot local users" who might take REI's place if the deal falls through. That could happen, Branch said, if a height variance isn't granted.
   
"I think it would be preferable for the entire community of Santa Fe if REI came to the Railyard. It's a perfect fit," said Branch, who called REI "a bright star in the Railyard."  

If the site doesn't pan out, REI will put roots down somewhere else in Santa Fe, Czoski said.

"REI is coming to Santa Fe regardless of whether they are in Santa Fe Railyard or another location," he said.

© 2006 Albuquerque Journal

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