Albuquerque delays decision on Sawmill District hotel incentive package

Albuquerque has hit pause on a more than $40 million incentive package for two hotels planned near Old Town, giving Sun Capital two more months to refine the proposal and hold more community meetings. The project would replace a vacant 25,000-square-foot office building on 18th Street with a Hampton Inn and a Home2 Suites, totaling 135 guest rooms.

The Albuquerque Development Commission voted 4-1 to send the request to City Council for final approval, but councilors decided they wanted more time before committing to the industrial revenue bond. Councilor Joaquín Baca said he was leaning yes, but wanted to see the final version after the public meetings and design work are finished. The delay keeps the proposal alive while preserving space for residents to press concerns about traffic, pedestrian safety, and how the buildings would fit into the district.

Supporters say the hotels would add a more affordable lodging option for visitors near Explora, the New Mexico Museum of Natural History and Science, and within walking distance of Old Town. They also say the project would bring more foot traffic to nearby businesses and create more than 40 full- and part-time jobs. Opponents fear the project could worsen congestion on streets already busy with pedestrians and tourists, while changing the historic character of the neighborhood.

That tension runs through the Sawmill District, which grew out of the old lumber site and now sits inside the city’s Sawmill/Wells Park Metropolitan Redevelopment Area. The city’s redevelopment plan calls for a walkable, livable, mixed-income community and community-scale economic activity, goals that supporters of the hotel proposal say the project could help advance. Critics argue that adding more chain hotels near Old Town risks making the district feel more standardized just as redevelopment has drawn new attention to its identity.

The debate also lands in the shadow of the city’s last major Sawmill financing decision. On June 16, 2025, the council unanimously approved $227.5 million in industrial revenue bonds for the Bellamah/Sawmill development, a package that included a 115-room hotel, a 107-room extended-stay project and 140 apartments. New Mexico’s 2025 prevailing-wage law for IRB-funded projects now requires municipalities and counties to pay prevailing wages and fringe benefits, adding another layer of scrutiny to public incentives tied to hospitality development.

Sun Capital also has a separate $25 million IRB request for a hotel in the Journal Center, suggesting the company is building a wider Albuquerque pipeline while city leaders decide how far to go with tax-backed projects in the Sawmill area. For now, the delay leaves the Old Town proposal in the balance, with the next round of council review likely to test how much growth the city wants to encourage around one of its most visible historic districts.