photo Todd Clarke
NEWS
$2 Billion Housing Development Comes to the Border
The first housing development in the Santa Teresa industrial area awaits the final green light before breaking ground in mid-2025.
The 1,180-acre development plans to build over 3,500 homes and 1,200 multifamily units in the Santa Teresa Industrial Park. The 10-phase development — to be called Alta Mesa Estates — is expected to take eight years to build and cost around $2 billion by the time it’s complete, say Dallas-based developers Terry and Devon McLachlan.
The project will address a sore need for housing in the area. Manufacturers looking to relocate operations to Santa Teresa face slim housing options for employees: Las Cruces neighborhoods demand a 40-minute commute, and El Paso traffic can be severe at rush hour. This development will allow factory employees to work, play, see the doctor and send their kids to school in the same place.
“it’s huge for us,” says Border Industrial Association President Jerry Pacheco. “It helps us show potential prospects that the employees can live right near where they work, and they can shop and exist in their community. Often times companies are asking us, ‘Where will the workers live?’ Now, with this new development, they’ll see with their own eyes that the industrial base is going to have that component.”
Project scores $124 million in county infrastructure financing
The development proposal, which is slated to cost over $200 million in infrastructure improvements, spurred Doña Ana County to designate the area as a “Public Improvement District” (PID). A PID is a small political subdivision created by a city or county that allows for the levy of a special assessment of properties within the PID to pay for infrastructure improvements within the district. Winning the PID designation secured $124 million in funding for Alta Mesa Estates’ infrastructure projects including roads, parks, and school sites. A PID funds infrastructure improvements by issuing tax exempt bonds that are repaid by those who move into the district.
PID’s are the cheapest source of funding available for new development, with an interest rate about 1 1/2% less than a private loan, says developer Devon McLachlan. The bond structure drives up the property tax rate, about .65% for the first 30 years. This tax rate is offset by the downward pressure exerted on home prices by the PID funds, according to McLachlan. The county is not responsible for debt in the event of a default — the PID levies represent liens against the properties in the PID, to be paid by property owners.
Expected payouts
The project is expected to contribute $7 million annually in property taxes, $16 million annually in gross receipts taxes, and $353 million in taxes over 20 years—and these figures are in addition to PID payments that will go to bondholders. The development is expected to add nearly $1.5 billion in tax revenues for the state over 20 years—about $64 million each year.
Developers Devon and Terry McLachlan also expect the development to attract 4,500 households and add 1.8 million square feet of commercial space to the county. Eighty percent of residents are expected to resettle from out of state.
It is unclear how many jobs, temporary construction and sustained employees of retail spaces, the project is expected to yield.
Facts and features
Most lots will occupy 5,750 square feet, with some 1/3- to1/2-acre lots.
A 32-acre central plaza will occupy the center of Alta Mesa Estates, and will include mixed-use retail, dining, and medical offices, surrounding a two-acre park.
Four acres will be donated for county emergency services.
The project will also feature 11 parks and 25 acres of open spaces, more than 10 miles of walking trails, five sports fields, three clubhouses with meeting spaces, gyms, and community pools, according to the developer.
Project timeline
To date, $40 million of assets have been committed, including $31 million for the 1,180-acre plot of land, $7.5 million in water rights, and over $1 million in wastewater connections.
Construction for phase one is expected to begin in the spring of 2025, yielding 232 lots over 12 to 15 months. Devon Mclachlan expects phase one to take the longest. Builders have already committed to the lots with pre-signed letters of intent.
Las Cruces-based Martin Pillar is the phase one engineer. No contractor has yet been named.
The project will go up for a final review before the Board of County Commissioners at their first January meeting, which will be the thumbs-up to start moving dirt on phase one.
The developers are also working on developing an 272-acre industrial park across the street. The land is still in early stages of securing county approvals and designing infrastructure. Depending on the end user, the land could add up to 4 million square feet of manufacturing space to Santa Teresa. The developers hope to begin installing infrastructure by mid 2025, and have already received “a lot of demand” in the lots, according to Devon McLachlan.
“We are really optimistic for this area because of nearshoring, and a lot of other factors that are working in their favor, so it seems like the right time and the right place,” says developer Devon McLachlan.
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