Could Be Bigger Than Spaceport

Motorplex Is "The Biggie" That Will Fuel Growth In T-or-C, Manager Says

By J. Hopkins
SENTINEL ŠSierra County Sentinel 2007

     When the T-or-C City Commission agreed at a special meeting held on August 17 to sign three deals with the Hot Springs Motorplex organization, it was the culmination of months of talks involving the developers and the city, including both the city manager and the commissioners.
     "The city commissioners have been involved from day one and they all know about the project," city manager Jaime Aguilera explained Thursday afternoon, August 23. "This was a complicated set of agreements that they (the commission) read quickly and turned around quickly. Instead of letting it wait, they held a special meeting. The BLM announced that their 45-day period starts this week...once the land swap takes place, the investors get another shot in the arm--things are moving along."
     The motorplex, which started as a concept for a racetrack thought up by T-or-C hotelier Steve Rouke, has grown into a development plan that could double the population of the city while making Sierra County a bigger, richer place.
     "This is the biggie, not the spaceport," Aguilera said. "From the point of view of T-or-C, this will surpass the impact of the spaceport 20 times."

WHAT IS IT?

     The Hot Springs Motorplex (HSM) started out as Rouke's racetrack concept, then grew fast. The whole complex includes dirt and hard surface racetracks, buildings and industries related to racing, and other industrial uses not related to racing. Then, on then other side of I-25, it's a resort development with hotels and golf course and so forth. The total area is over 8,900 acres, surrounding the T-or-C airport.
     "That's what it's grown into. Part of their vision is that they need the airport--it's a vital link to the outside world," Aguilera explained.
     Some of the land for the complex is part of a land swap involving the federal bureau of land management and the state of New Mexico as well as the Santo Domingo Pueblo near Santa Fe. The swap is currently in a 45-day comment period that began last week--the same day as the special city commission meeting--when the Sentinel published the legal notice on the land deal.
     The city commission gave their approval to three deals on August 17: leasing the airport, sewer capacity and water capacity reservations.

AIRPORT DEAL

     The city has agreed to have the motorplex organization take over as manager of the airport. "The agreement says that in the short term we will continue to operate the airport as we always have, "Aguilera explained. "We continue operating the airport and they assist with grants or whatever. At some point a request for proposals will go out to hire a Fixed Base Operator (FBO). They will hire someone to operate the airport...once the FBO is hired the city no longer operates the airport. This is 8-12 months away," the city manager estimated.
     "The city will continue to get the hanger rental money, about $31,000 a year, in airport rentals. The city also will not have to subsidize the airport, which costs $75,000 per year. At some point the airport will become profitable under the new management. When that happens, the city stands to get 15 percent of the profits. The deal is good for 20 years, with another 20 years of possible extension," he outlined.
     Aguilera said that the HSM people have been talking to smaller commercial airlines to begin commercial flights to T-or-C; a paved crosswind airport will have to be built to accommodate their needs, which is why the city has made that runway a priority.
     The Sierra County landfill is a big hurdle to the development of the airport--it has to be moved because it is in the way; it could be a $3 million project to get that done.

SEWER CONNECTIONS

     The HSM organization also is paying the city impact fees for their future wastewater needs. "We have a sewer plant that can process a million gallons a day; at peak we use 750 thousand gallons a day," the city manager explained. "So we have 250 thousand gallons a day that we could process but we don't have the need. They are reserving 80 percent or 200,000 gallons a day. They are paying cash for the reservation, and their first payment, a $20,000 check, was received August 23.
     "In January HSM will pay $180,000, which is non-refundable," Aguilera continued. "Then they have three years to pay $2.3 million. The 200,000 gallons is worth $2.5 million--they are buying sewer capacity up front before they use it. They made a reservation by putting money down. In two and a half years they will pay for the sewer connections or the city just keeps the money.
     "It's no different than a contractor coming in and saying they want to buy a sewer connection for the house they are about to build, except they are buying over 900 connections," said Aguilera.
     The HSM will keep 50,000 gallons a day for other users who might want to come in and build, including Wal-Mart and a potential new Sierra Vista Hospital.
     "The city retains the capacity for 230 connections. In recent years the city has been adding 16 connections per year, so even if that doubles we will have 2-3 years remaining," Aguilera said. This deal is good for three years, at which point HSM either walks away and releases the capacity, or they are hooked up and using the capacity and the city is billing monthly for sewer services.
     "If they fail to perform, we just get to keep their money," he said. "We are not at risk in any way. It's $2.75 million deal--$200,000 in the next six months, and the $2.5 million in Jan. 2011.

WHEN ARE THEY DOING IT?

"They believe that they are going to move very quickly and they don't want to spend millions putting the racetrack together and then find the city doesn't have the capacity," Aguilera explained. "They know we have the golf course and the guy who wants to sell to the hospital and the Hot Springs Retail Center development."

WHY IS THE CITY INTERESTED?

     Aguilera says that the deal, and the HSM development, will help the city grow. And grow it will--"T-or-C has been discovered," he said.
     "What we have now is we have nothing to offer," the city manager said. "We are constantly bombarded by prospective industrial users. The state sends inquiries in to SCEDO (the Sierra County Economic Development Organization). They want things like a 50,000-foot building ready to move into, or a local labor force experienced in welding, but we don't have that.
     "They (HSM) will be building an infrastructure that will act as a magnet for other industries. We cannot delve into their financials, but it appears they have the money--we know they have brought out the grazing lease, according to their numbers they have spent a million already in moving this project along. They have shown the ability to spend the money, they are willing to put up $200,000 for the sewer capacity."
     In the first part of 2008 building will begin, starting with a desert racecourse that will bring in 10-18,000 people.
     "My estimate is that it will be two to three years before we actually see some hard surface and buildings and infrastructure," Aguilera predicted. "Some of that has to do with the airport; it takes three years just to process a landfill permit, according to city managers I've talked to."
     The city of T-or-C will be annexing everything the motorplex acquires. About 20 percent of their project is in the county and the city will be annexing that.

WATER RIGHTS

     HSM has also agreed with the city to have access to water for their development.
     "They are not buying water rights, they are buying the ability to hook up and use our water," Aguilera said. "We're not selling water rights. It's the same idea as the sewer--they are reserving the ability to hook up to a city water system and use our water."
     The city of T-or-C has 2741 acre feet of water rights and now uses 1400 acre feet, so it has 1341 acre feet in reserve. Each house takes 1/2 acre foot of water per year. The city code requires that water rights that are used be replaced. The fee is $6000 per acre foot. HSM is taking 1,072 acre feet of water at a cost of $6.4 million. At the end of three years they have to pay $6.4 million, the city manager explained.
     "We have several wells located in the southern part of town that supply the 1400 acre feet we pull out every year," he said. "We are not seeing a lowering of the water table, or other signs that we are depleting the aquifer there. However, we need to explore the availability of water on the northern side of town. Three wells have been drilled out in the motorplex area, and we (the city) have another well in the Cuchillo Creek area. If none of them pans out, we will continue to explore."
     No one seems to know how much water is out there, Aguilera said. "I can't base a decision on not knowing what is down there. For all we know the aquifer is huge and will continue to recharge itself. Even the geologists and hydrologists don't know," he said. "When I was in college they were predicting that El Paso would run out of water in the 1990s, but that didn't happen."
     Aguilera said that it is Spaceport America that has attracted the eyes of developers to the T-or-C area.
     "There is a symbiotic relationship with the spaceport," he said. "The spaceport depends upon the T-or-C airport, we are designated as the airport to service the spaceport. Our airport needs to increase in size and capability to service the spaceport, so there's a give and take. The clients of the spaceport will need better facilities, as well as resort facilities. And that's what these guys are banking on."
     Assuming that the land swaps go as planned this fall, the next thing local residents will see is a desert race course. After that, the city manager said, the growth will come fast.