The long-awaited development of 204 acres of vacant Westside land, where investors imagine broad boulevards and European-style plazas flanked by mid-rise buildings, shops, residences and offices, is set to move forward early next year.
Executives with Albuquerque-based Geltmore LLC, the master developer of the $500-million community called Aldea El Paso, made the announcement last week at a private meeting of El Paso commercial real estate brokers and developers.
Geltmore has been working to get the project, located less than four miles northwest of Downtown El Paso, off the ground for nearly 14 years.
“I knew it would take a long time and a lot of patience. I didn’t think it would take this long or this much patience,” Geltmore CEO Paul Silverman told members of the Greater El Paso CCIM chapter on Wednesday.
At the meeting, Silverman revealed details for the Aldea “urban village.” If all goes according to plan, it will be the biggest development in El Paso in years and one of the city’s first New Urbanism experiments.
Plans call for 1,400 residences, two hotels, student housing and 1.5-million-square feet of commercial retail space. By comparison, the new Fountains at Farah shopping center, which stretches for half a mile along Interstate 10 on the Eastside, has about 600,000-square feet of retail space.
The Aldea property is bounded by North Mesa Street to the east, Executive Center Boulevard to the south and Interstate 10 to the west. Mesa Park Drive, which now ends at Mesa, will be extended west through the Aldea development to I-10.
Aldea is next to Montecillo, another New Urbanism experiment, that’s seen its first residents move in. Both communities are expected to take a decade to be fully developed.
The design of the boulevard, according to Silverman, was inspired by the Champs Elysées, one of the most famous avenues in Paris, France. Traffic will be separated from pedestrians by landscaped medians.
It will flow through a large roundabout surrounded by buildings that vary in height from two to five stories.
“That will create an ambiance unlike anything else in El Paso,” Silverman said.
Another road segment was designed after La Rambla, a famous street in Barcelona, Spain.
Both the Montecillo and Aldea developments, 550 acres of land total, were master planned by Stefanos Polyzoides, according to Silverman. The Greek land planner is a founder of the New Urbanism movement.
The New Urbanism movement began in the 1980s as a reaction to suburban sprawl. The idea was to return to a type of development that predated the explosion of the suburbs – main streets lined with multi-story shops, public gathering spaces and pedestrian-friendly neighborhoods.
Garages are pushed to the rear of homes and replaced by front porches. Buildings are shared by shops, offices and apartments.
Critics of the idea say it creates communities that tend to have a faux, over-produced feel, something like Main Street, U.S.A. at Walt Disney World. And when El Paso city government began championing New Urbanism a few years ago, local developers largely opposed the idea, saying it was too expensive and, while popular elsewhere, was out of touch with the type of development El Pasoans demanded.
But at the time, City Council’s “progressive” members said New Urbanism was the type of development that would help reverse the flight of young professionals from the city. It would make the city more attractive, improve quality of life, reduce suburban sprawl, shorten commutes and take cars off the road. It would also save the city money, they said, by slowing demand for roads, sewers and water lines in the farthest reaches of the city.
At the time, former city manager Joyce Wilson approached Silverman, as well as the owners of Montecillo, about developing their land according to New Urbanism principles – to build something that had never been built before in El Paso and was unproven.
“I said, ‘I’ll do it, but you’ve got to help,’” Silverman said.
City Council agreed to provide the development a $22-million rebate of property taxes over 20 years; the Texas Department of Transportation agreed to build a frontage road along I-10 and a new interchange.
Silverman said on Wednesday that they are finalizing the agreement with TxDOT and expect to receive the final permit from the city soon. Geltmore is in the process of raising the $30 million needed to complete the “horizontal development.” That includes everything under the ground, dirt work, streets and other infrastructure.
The Aldea development has its origins in a chance encounter 14 years ago at an International Council of Shopping Centers event.
“In 2002, the senior vice president of real estate for Wal-Mart almost tackled me at ICSC and said, ‘I need your help,’” Silverman said.
As Silverman tells it, the VP proceeded to explain to him that Wal-Mart had purchased 204 acres in El Paso and couldn’t find a local developer willing to do a joint venture with them.
The big problem: The land had no access to I-10.
There’s an old story in El Paso, possibly apocryphal, that when TxDOT district director Joe Battle was overseeing the construction of I-10 in the 1960s, he told landowners that if they would dedicate the right-of-way, the state would build the highway and frontage roads and provide full access from I-10 to their land.
But the owners of five miles of land stretching from Downtown to the current Mesa Street exit said they would dedicate the right-of-way – but only if the state would pay for it.
“Joe Battle said they would be happy to pay for it but, if that was the case, they would never get access to I-10,” Silverman said.
Since then, that stretch of I-10 has not had frontage roads, but a major I-10 widening project that began recently on the Westside will add those frontage roads. That’s the primary reason the development can move forward now, Silverman said.
In the end, Silverman told the Wal-Mart VP that Geltmore was willing to serve as the master developer on the project.
“That was 19 contract amendments, 12 years, and I don’t know how many mayors and city councilors ago,” Silverman said Wednesday.
Since then, Geltmore has been spurred on by last year’s opening of the Downtown ballpark and the $473-million quality of life bonds passed by voters in 2012.
“To the rest of the world, you put those two things together, and it was like cannons going off, ‘Hey, look at us. We are going for it,’” Silverman said.
Silverman has been in real estate for four decades. His ventures include everything from a successful self-storage business in Singapore to shopping centers in Santa Fe. His company has more than 45 projects worth a total of $410 million in New Mexico, according to its website.
Silverman admits Aldea is the largest development Geltmore has attempted. But as ambitious as the plans are, he said he has no intention of scaling back.
“This is what it takes to make it work. If you don’t do this, if you water it down, it just becomes like everything else in El Paso and that will not make this successful,” he said.
But is their enough demand to support such a development? Shoppers who cross from Mexico to shop in El Paso are key to the answer, Silverman said.
Mexican nationals spend an average of $1,600 per El Paso shopping trip, Silverman said, citing Federal Reserve data.
“They typically will go first to Cielo Vista Mall and then they will drive up I-10 to the outlet mall and back down I-10 to go back across the border… so they are driving past our site twice,” Silverman said.
In addition, 8.8 million people live within a 300-mile radius of El Paso, he said. If the borderplex weren’t divided by a border and state line, it would be the third largest city in Texas.
The Aldea development has been designed to appeal to everybody but targets the millennial generation – those born between the 1980s and early 2000s, Silverman said. Increasingly, millennials are reaching working age and filling the ranks of the middle class.
“The good news is there are 76 million boomers, but there are more than 80 million millennials in this country,” he said. “So that trend is not going away.”
According to Geltmore’s market research, there are roughly 15,000 fast food-style restaurants in El Paso. At the same time, the number of restaurants at the top of the food chain with white tablecloths “was in the double digits. So we think there is a huge opportunity for expansion of that market,” Silverman said
Amazingly, he said, a title search found that the land where Aldea El Paso will be located has had just two owners since the United States acquired it in 1850 after the Mexican-American War: the Asarco copper smelting company, which bought the property in 1865, and Wal-Mart, in 2001.
Wal-Mart still owns the entire 204-acre property and the development will be anchored by a Wal-Mart Supercenter.
The irony of a “smart growth” community being anchored by a Wal-Mart, a company known for sprawling suburban stores, is not missed by Silverman.
“This will be a mixed-income, mixed-use project,” Silverman said. “The clerks that work at Wal-Mart – there will be a place for them to live in the development.”
The Wal-Mart is scheduled to open early in 2018.