ALBUQUERQUE, N.M. (AP) - There are plans to redevelop another dilapidated hotel along the longest urban stretch of historic Route 66, but this project on the edge downtown Albuquerque will be bankrolled in a unique way.
ARRIVE Hotels & Restaurants, the California-based hotel and entertainment company behind the effort, is partnering with investment platform NextSeed to raise $6 million through local crowdfunding to pay for part of the project.
At nearly $25 million, the work will involve updating rooms at The Hotel Blue, changing the property’s name and adding new food and drink offerings.
The approach to funding is common in the technology world but relatively unproven in the world of Albuquerque real estate. Still, NextSeed CEO Youngro Lee told the Albuquerque Journal that the funding gives local investors an opportunity to invest in developments that are closer to home than most tech startups.
“We found that a lot of people … would rather invest in something in their own backyard,” Lee said.
Lee said he sees ARRIVE’s renovation as a way to establish NextSeed’s presence in Albuquerque, and he could see the funding platform expanding to work with other small businesses in the city.
Jennifer Esquivel with the city of Albuquerque’s economic development department said the agency wasn’t familiar with the partnership between ARRIVE and NextSeed, but isn’t concerned about the project’s use of investment dollars. Esquivel said the arrangement doesn’t preclude the developers from seeking additional funding through city programs.
The development team is seeking industrial revenue bonds from the city and has applied for a tax credit for historic properties. The developers also are looking for other areas to make up the cost of the project.
The Hotel Blue was originally built in the mid-1960s as the Downtowner Motor Inn, part of a national chain of midcentury downtown hotels. Like many inns along Route 66, the property suffered when the highway was decommissioned in the 1980s. In 2018, the six-story hotel was put up for sale, at an asking price of $6.8 million.
ARRIVE announced plans to purchase and renovate the property in August. Work is scheduled to begin in the spring.
The ground floor of the hotel will be redeveloped with a more open floor plan, featuring space for a new bar and a coffee shop. Developers say the goal is to engage pedestrians along that stretch of Central and convert it into a destination that will attract locals as well as hotel guests.
The hotel also will add more high-end hotel rooms to an area where they’re scarce. Since 2013, the Albuquerque Convention Center has been eliminated from consideration from at least three dozen meetings due to shortage of hotel rooms in the area, according to Visit Albuquerque.
Under the crowdfunding model, Lee said the campaign is open only to investors who meet the Securities and Exchange Commission’s criteria for accreditation. Investors receive equity in the project, and can eventually expect a return on their investment. In the case of the hotel, distributions are made to investors first, before the fund manager receives disbursements.
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