Lease and Management Agreement
SFRCC’s Lease & Management Agreement with the City of Santa Fe was originally entered into in 2002 for a term of 10 years. The agreement was extended in 2011 through 2030, at which time all the city debt for Railyard development-related costs will be retired.
Through its rent paid to the City, SFRCC will pay for 30% of the land acquisition ($7 million) and 100% of the infrastructure cost ($18.9 million)
- The fixed rental schedule is through 2029.
- Annual rent paid to the City is $500K to $1.2 million.
- After the infrastructure debt is paid in FY 2026-2027, SFRCC will pay a minimum of 50% of its net revenue to the City. The other 50% will be utilized for Railyard operations and enhancements.
- The $23 million land acquisition bond was paid off by the City in 2010.
- SFRCC’s rent to the city is repaying $18.9 million for City infrastructure debt.
- SFRCC has paid $12.0 million to the City of Santa Fe through 2023.
- SFRCC will pay the balance of $7 million by 2029, and thereby retire all of the remaining bond debt.
Development – SFRCC was responsible for the entitlement, design and construction of the infrastructure totaling $14.7 million. SFRCC continues to be responsible for approving all each new projects to be constructed on the lease parcels in compliance with the Master Plan.
Leasing – SFRCC prepared and negotiated all the long-term ground leases on the commercial lease parcels. These complex documents usually have initial terms of 50 years and may include another 40 years of lease extension options.
Administration and Accounting – SFRCC maintains all the original documents, files and accounting books for the Railyard project. An independent CPA firm keeps the formal books and another firm prepares annual financial audits which are provided to the City of Santa Fe.
Property Management – Maintenance of certain portions of the Railyard common areas is performed by service firms under contract to SFRCC. SFRCC primarily provides waste removal and maintains the sidewalks and some landscaped areas, while the City of Santa Fe maintains the Railyard Park, Conservation Easement areas and all the streets and parking facilities.
Subleasing – Throughout the life of the ground lease, SFRCC has the right to approve each sublease tenant occupying any building in the Railyard. This right is intended to ensure the uses and tenancy in the Railyard are consistent with the Master Plan, which favors local businesses over national chain stores. However, SFRCC does not approve any residential tenants or residential condo owners.
Public Use Management – Through its agreement with the City of Santa Fe, SFRCC manages all events and vending on the public spaces in the Railyard. Permitting, fee collection, insurance and liability releases are required for all public events not held inside one of the buildings. In 2018, SFRCC managed approximately 70 public events in addition to licensing the weekly Farmers and Artists Markets in the public spaces.