City weighs $40 million hotel incentive near Old Town landmarks

A vacant office building in the Sawmill area could be cleared for two chain hotels, but the plan has become the latest fight over how much tourism growth Old Town can absorb without losing its neighborhood character. Sun Capital Hotels wants city backing for a dual-branded Hampton Inn and Home2 Suites near some of Albuquerque’s best-known tourist anchors, a project it says would bring 135 guest rooms, more than 40 full- and part-time jobs and more foot traffic for nearby businesses.

The Albuquerque Development Commission advanced the request to City Council on May 21 by a 4-1 vote, sending the decision to elected officials after recommending the Dreamcatcher Sawmill Hotel industrial revenue bond case. City records put the bond request at $40,520,267, while council legislation introduced June 1 identified the project as a dual-branded Hampton Inn and Home2 Suites. The city’s Metropolitan Redevelopment Agency describes the commission as advisory on project plans and inducement resolutions for private-purpose bonds, which means City Council now holds the final say.

Supporters argue the area needs more midscale lodging and that more rooms would mean more visitors, more spending and stronger business for nearby attractions. Opponents see the proposal as another step toward turning a historic district into a generic hotel zone. Heritage Hotels owner Adrian Perez, who developed Hotel Chaco and helped shape the modern Sawmill area, urged the commission to reject the incentive. Nearby residents said the project threatened the “heart and soul” of Old Town and the Sawmill District.

The hotel proposal lands in a part of Albuquerque that has been managed as a redevelopment balancing act for more than two decades. The Sawmill/Wells Park Metropolitan Redevelopment Area Plan was jointly developed in 2005 by the city and the Sawmill Community Land Trust, with help from groups including the Sawmill Advisory Council, Wells Park Neighborhood Association, Arbolera de Vida Property Owners’ Association, Sawmill Area Neighborhood Association, Harwood Art Center and the Old Town Sheraton Hotel. That history helps explain why small details such as traffic, parking and building design still carry political weight.

The current clash also follows other growth decisions nearby. In September 2023, Albuquerque approved a zoning change in the Sawmill District that raised future height limits to 75 feet from 65 feet near Mountain and 20th Street. In June 2025, the city approved a $227.5 million bond package for the Sawmill Bellamah Properties Project, which included a 115-room Sawmill Hotel, a 107-room Chaco Residences project and 140 apartments. Sun Capital Hotels also has a separate $25,008,118 industrial revenue bond request pending for a Dreamcatcher Journal Center project, underscoring how much of the company’s expansion now runs through city incentives and public review.