Can anything be done about vacant and abandoned commercial buildings?

They lower property values, encourage crime, and generally ruin the vibe.

The Downtown core has more than its share. We have a pictorial guide. 

Why do they seem exempt from the laws of supply and demand?

Part one of a two-part series
The rap sheet for vacant and/or abandoned buildings is a mile long.

They often function as magnets for crime. They lower the value of nearby properties. They are associated with more fires. They seem to generally degrade the social fabric of the communities around them and even impact people's mental health.

But on a more basic level, they amount to a bad look, one that is particularly unhelpful to the cause of breathing new life into urban commercial areas like the Downtown core.

"If there's vacant spaces or boarded up spaces it sends the message quite clearly that it's not doing well," said Mark Baker, the owner of the 505 Central Food Hall. "The city needs to use their code enforcement and the other tools that they have to pressure these landlords to maintain these properties, get them occupied, or sell them."

The problem is about as close to universal as they come. Plenty of residential neighborhoods - even the affluent ones - have an empty house or two that people fret over. Sometimes the concerns are purely aesthetic as houses go without the normal TLC year after year. Other times, as with the recent case of 1112 Iron SW in the Barelas neighborhood, neighbors lose count of how many times they end up calling emergency services to report vandalism, property destruction, and fires.

Commercial vacancies add a new dimension to the problem because they can impact other people's ability to make a living. Old Town, for example, has three prominent restaurant vacancies, two of which - the former Hacienda del Rio and La Placita Dining Room - are adjacent to the plaza and have been closed, respectively, since just before the pandemic and late 2020. A third, the Backstreet Grill, closed last fall following a fight with the city over COVID regulations.

Just how much more spending and buzz Old Town would attract if those vacancies were filled is something area merchants can only wonder about.

But as far as the broader city center area is concerned, the Downtown core has the biggest problem with vacant and/or abandoned buildings. DAN has regularly surveyed storefront vacancies on Central between First and Eighth since 2019, and back then, the number tended to hover around 11. It now stands at 19. They are most concentrated between Fourth and Fifth, where there are eight.

Here's the map, with the green dots representing properties vacant since before March of 2020:
To be sure, the news is not all bad: There are tentative or concrete plans to reopen at least six of those storefronts. Others were occupied in recent memory, meaning they're more likely to make for a smooth move-in process once the right tenant comes along.

Still, it's a big mountain to climb just to get back to a pre-pandemic level of vacancy that also drew plenty of complaints.

What exactly is the story with all those long-term vacancies? Below is a catalog of buildings between First and Eighth that have been empty for at least three years (plus one prominent building on Tenth) and everything we know about their futures:
The former Skip Maisel's Indian Jewelry and Crafts (510 Central SW) is now owned by the family behind Garcia Automotive Group. Ed Garcia told DAN last year that a thorough renovation was set to begin in a matter of months.
Most of the Rosenwald Building (320 Central) is also now owned by the Garcias, and Carlos Garcia told DAN last year that a major renovation - likely to include a ground floor commercial space and residences above - was a high priority.
The former headquarters of the Alibi newspaper (left, 413 Central NW) and the former Fire Kitchen (411 Central NW) are owned by an LLC called Odd Manner. We couldn't find a working phone number for the group, and a letter sent to the owner's address on file with Bernalillo County came back as undeliverable.
The Kress Building (414 Central) is owned by Frankie Veronda. See article below.
The Gizmo Buiding (410 Central SW) is owned by the Church of Scientology of New Mexico, which says it is for sale (DAN, 1/26/22).
The future home of Flamenco Works (506 Central SW) should begin a renovation within months.
The former Duel Brewery (610 Central SW) is own by an LLC. Its registered agent, Steve Coe, didn't return messages seeking comment.
The Hotel Blue (717 Central) is under renovation and slated to reopen in 2023.
The former Café Oaxaca (1001 Central NW) has been closed for many years. Its owner, Hil Davidson, didn't return messages seeking comment.
One owner's view: Vacant building not a high priority
Though they all one big obvious thing in common, the property management strategies employed by the owners of prominent buildings along Central are nonetheless all over the map.

Some people, like the 505 Food Hall's Mark Baker, plow serious money into their properties and speak of the cause of Downtown revitalization with a near-missionary zeal. The team behind Flamenco Works raised hundreds of thousands of dollars for their own renovation effort and are very much looking forward to their move to the core. Others, like the family behind Lindy's Diner, are notable for their staying power: Their multi-generational business will celebrate its 100th anniversary in 2029.

When it comes to vacant buildings, some owners have big plans, as with the Garcia family. Others, like the Church of Scientology, are apparently content to keep their buildings on sale for years on end.

But in at least one case, the reasoning basically amounts to a pessimistic view of the Downtown core scene combined with an otherwise full plate. That's the situation with California-based Frankie Veronda, who inherited the Kress Building from her sister, Anna Muller - herself a Downtown stalwart (DAN, 11/2/20).

The Kress is in pretty bad shape at the moment. It has no working bathrooms and the elevator is broken, Veronda said, plus the floorboards on the second story are all buckling.

"You can't rent that out in the state it's in now," she said.

For the time being, Veronda is instead working on three other properties that Muller left her.

"Right now I'm putting my energies into these other buildings," she said. "I'm just trying to revitalize them one by one. I can't do them all at the same time."

But while she does have a rough plan to eventually find some money to spruce up the Kress, it's clear that her general impression of the Downtown core is less than positive.

"As far back as a couple of years ago it was fine," Veronda said, adding that "Downtown as far as I'm concerned is just geared for nightlife ... I don't know how [it] is ever going to be revitalized."

"It's just scary being down there," Veronda concluded. "If they don't like to see vacant buildings why don't they make the area safer?"
Why do vacant commercial buildings even exist in the first place?
At first blush, the idea of a vacant commercial building would seem to be a problem that the free market could make short work of in anything less than a depression-era economy. People who own the properties, after all, are typically hoping to make money by charging tenants rent, and they lose money every day that doesn't happen. If a particular property isn't attracting tenants, economics 101 would recommend lowering the rent until the situation sorts itself out. Ditto for someone trying to sell a property.

So why isn't that happening in Downtown and Old Town? Chalk it up to a host of factors, both human and financial.

"Every owner is different," said Clay Azar, a broker with Metro Commercial Realty. "Every owner has different goals and different thresholds of loss and vacancy."

Some owners, for example, may be better-positioned than others to keep paying bills for maintenance and property taxes year after year, and that can give them an advantage. To whatever extent it's possible, "You'd rather wait it out and get a good tenant than just lease to the first prospect," Azar said.

For others, the reasons for hanging on to a vacant parcel might not make much economic sense at all, particularly for long-time owners who may still be clinging to unrealistic dreams they once had for the place.

"It's their baby," Veronica Salcido, a broker at KLNB, told the Washington Post in 2017. "They want to hold firm and get the rent they envisioned when they bought the property."

The list of factors goes on: Extremely local situations, like a given property's parking or zoning, could play a role. Some might be looking to let property values appreciate for a few more years - rises that could potentially dwarf the maintenance costs - before eventually selling.  The property might well be tied up in court as siblings fight over an inheritance. Some landlords might be open to short-term leases until a long-term prospect comes along, but tenants might be less enthusiastic.

Complicating matters further is the sheer amount of money commercial tenants need to set up in a new spot. Move a family into a house and you might not need much more than a deposit and the first month's rent, but move a business into a storefront and you could easily spend tens of thousands of dollars setting up. That creates incentives for both parties to exercise extreme caution.

But whatever the case, Azar reckons that owners don't like vacant and abandoned buildings any mroe than the neighbors who grumble about them.

"If you have a potentially income-producing asset your goal is to get that asset producing income," Azar said. "I don't think property owners do this on purpose."
Next week: Part Two
Now that we've wrapped our minds around the scope of our local vacant building problem, we'll investigate what Albuquerque has done in the past to deal with similar issues, what other cities are doing, and what we might learn from them. Barring breaking news, we'll be back with that on Tuesday.
Downtown Albuquerque News covers Greater Downtown, which we generally define as the area surrounded by I-40, the Rio Grande, Av. César Chávez, and I-25. We publish weekdays except for federal holidays. If someone forwarded DAN to you, please consider subscribing. To subscribe, contact us, submit a letter to the editor, or learn more about what we do, click here. If you ever run into technical trouble receiving DAN, click here.
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