Jim Young sits down with Trevor Lewis of Los Alamos National Bank, winner of the first annual Trophy Deal of the Year Award at BankOnPurpose 2017.
Trevor worked with the developers and their legal council for close to six months to get a structure that would work for the developer, the bank, and the various government entities. He balanced the needs of all parties involved and allowed his passion to be directed by the amount of economic development the deal would create for his community.
- BankOnPurpose Conference 2017 Recap - Blog (5 minute read)
- More on the Project - Albuquerque Journal (5 minute read)
Jim Young: Hi and welcome to The Purposeful Banker. The podcast brought to you by PrecisionLender, where we discuss the big topics on the minds of today's best bankers. I'm your host, Jim Young, Director of Communications at PrecisionLender. And with me today, in our, I guess, our Austin studio is a very special guest, Trevor Lewis, of Los Alamos Bank. And we have Trevor in today to talk about his big award he just won at the Purposeful Banker Awards.
So, first off, Trevor, just tell us a little bit about what you do at Los Alamos and a little bit about your bank.
Trevor Lewis: Well, with Los Alamos National Bank, I'm a commercial lender in the Albuquerque market. We're about a 1.5 billion dollar bank in three markets in New Mexico: Los Alamos, Santa Fe, and Albuquerque. And we take a very big community approach to the credits we look at and to the deals that we do.
Jim Young: All right, well, in a minute I want to talk you a little bit about your markets and what else, you know, with competitors and that sort of thing, but first you won the trophy deal of the year. Tell us a little bit about that deal. I guess, let's just start with, what's the story behind this deal?
Trevor Lewis: Well, the trophy deal was a public/private partnership between our development team, the One Central Operating Associates, the city of Albuquerque, and Bernalillo County. And it was a multipurpose facility that's gonna be ground up construction, a parking garage, 66 two bedroom/two bath apartments units, and about 50,000 square feet of mixed retail space, and Los Alamos National Bank was lucky enough to be the financier for the construction loan. And we broke ground in the beginning of January and it'll be about a 24-month construction period.
Jim Young: So, it's a pretty massive deal. When it first came, I guess, how did it first come about and did you honestly think that you guys had a chance for this deal, or did you think it might be a bit too big for you guys?
Trevor Lewis: Well, when we first started looking at it, the overall project cost is about 37, 38 million dollars, which is a little too large for our institution. We were a little bit unsure if we were gonna be able to have the appetite to handle it all, without bringing in a participant bank. Lucky enough to get a look at the deal through some relationships that our Chief Lending Officer had with the development team.
After taking a closer look at the credit, and penciling out some different potential structures, I thought that we might be able to come to an arrangement where we could handle the whole credit in a two phase construction project. Two phases of funding, and after we looked at it, and talked with the developers, and the city of Albuquerque, we all kind of came to an agreement and a structure that would work for the financing.
Jim Young: So, obviously there were other people that wanted this deal, a deal that size. A lot of banks would want that deal. We call it a trophy deal for a reason. How are you guys able to differentiate and win the deal?
Trevor Lewis: Well, I think our main differentiating factor was that we are a community bank. And our banking team was all locals. Our Chief Lending Officer's local, I'm local, my manager's a local. So, we really had the local card that separated us from some of the big national banks, and even some of the mid major banks. Being that this was a local development team, that involved the city of Albuquerque, and the county of Bernalillo, the locality of our team really played into a benefit for us. And then, you know, we were able to get our pricing in line with what the development team wanted. And that's kind of how we were able to win the business.
Jim Young: Now, I gotta imagine this type of a big construction project like that is not the most simple straightforward thing. Were there some obstacles, maybe some turns in the road that maybe you didn't expect at some points?
Trevor Lewis: Well, absolutely. The county of Bernalillo had originally approved an IRB structure that was pretty significant. And later into the road, they changed the amount that was going to be eligible for the industrial revenue bond, which changed the future cash flows of the project which created some drama, for lack of a better word. And then also when you're dealing with public and private partnership like this deal was, there's always going to be some differing opinions between the city, the developer and the bank. So I was very fortunate that the bank has very good counsel and we were able to work with the attorneys from the city and the county, and the development team to kind of bridge some of the hurdles that we came across.
Jim Young: So you mentioned you're working with lawyers from your own bank, in this situation?
Trevor Lewis: We actually hired counsel from a local firm who knows the market very well and was familiar working with the city and the county, so.
Jim Young: So, what about with within Los Alamos, anyone else playing big roles in this deal?
Trevor Lewis: Well, our Chief Lending Officer and Chief Credit Officer both played a big role in the credit and the structure of the credit. We have a strong credit analyst team who also helped to underwrite the credit. Without those folks, I couldn't have done the deal. I also have a strong support team that also helped enable to get all our perfection of collateral documentation and everything in order, to help actually close the loan. We were under some time constraints because of the IRB structure so we had to work pretty diligently in order to close it in a calendar year. So, there was some pressures around the whole bank team but really our Chief Lending and Chief Credit Officer both helped.
Jim Young: So, what is this project, when it's done and it's completed and I think they broke ground on it in January, is that correct?
Trevor Lewis: They did, they broke ground on it in January and it's going to be a 480 space parking garage, it's going to have 66 two bedroom/two bath apartment units that are roughly 1000 square feet. Those are going to be market rent. This is, the project's located in kind of the center of downtown Albuquerque or the entryway into downtown Albuquerque, on what is historic Route 66 in Central Avenue and 1st Street. There will also be about 50,000 square feet on the lower two levels that will be mainly retail and entertainment kind of district. It's also located on the intersection of the Rail Runner, which is a commuter train that connects Albuquerque and Santa Fe. And Albuquerque Rapid Transit, which is a project that's going on through Route 66 and Albuquerque, that's connecting old town, downtown, the university area and Nob Hill, so it's a pretty attractive location being that there's a lot of mass transit very close proximity to the project.
Jim Young: So it seems like this is pretty big. I guess, I don't want to use maybe the word, kind of "urban renewal" is the right word. But it sounds like this is pretty significant to Albuquerque's downtown future.
Trevor Lewis: It's very significant to Albuquerque as a whole and more specifically the revitalization of downtown Albuquerque. And this was part of the mayor's grander plan of kind of making downtown Albuquerque more of a destination to live and work. There's been a lot of offices down there for a long time but not as many amenities for living as such as a grocery store, which was put into a project just a couple blocks away, about a year or so ago. So this really brings, gives it more of an ability for people to live downtown and not only work downtown.
Jim Young: But you guys are not Albuquerque National Bank, you're Los Alamos National Bank, so what does this do for your bank's profile? In the city of Albuquerque now?
Trevor Lewis: Well, this definitely helps to put us on the map in Albuquerque as a lender to look to for future projects. We are Los Alamos National Bank but one of our large growth markets and areas of opportunity is Albuquerque. That's the largest metro in New Mexico and a lot of business banking there. So this has helped us to kind of put our name more on the map in Albuquerque and not just Santa Fe and Los Alamos.
Jim Young: So, we'll go to some of the softer, mushier, feeling stuff here now. What was it like for you, you got to participate, I guess, in the groundbreaking, is that right?
Trevor Lewis: I did participate in the groundbreaking along with our CEO of the bank and the mayor and the development team and the city team. And it was kind of neat to see, you know, the gold shovels come out and we're going to transform this old parking lot into something that's going to be special for decades to come in downtown Albuquerque and for hopefully future generations to enjoy this project and bring traffic downtown.
Jim Young: And yeah, what's that feeling like for you to know, I mean, sometimes I'm sure you do stuff and it's important but you don't necessarily get to see it and you know and actually see exactly what you've done, a physical manifestation of it. What's that like?
Trevor Lewis: Well, it's pretty special, yeah. You know, I've done quite a few operating lines of credit and when you convert inventory into receivables and then back and pay down a line of credit, it's not very sexy. But when you see a large multipurpose structure going up in downtown and it's got a great design. The architect team did just phenomenal job on it. So we're going to get a really pretty building downtown. For me, being in my hometown, it's pretty special to know that I'm going to contribute and help contribute to a pretty skyline for downtown Albuquerque.
Jim Young: And finally, you know, we got listeners to this podcast who are commercial relationship managers and lenders like you. Any sort of takeaways or advice you would give for somebody if they were kind of walking in your shoes in a similar situation, trying to tackle a big deal like this?
Trevor Lewis: Well, I think perseverance comes into play. There's going to be hurdles, it's not going to be easy. There's going to have, especially when there's multiple vested interests, people are going to have different ideas of what they think the outcome should look like. And you're going to have to work through quite a bit of hurdles in order to appease the different parties, but also come to a structure that's going to work for the bank, make sure that the profitability and the pricing's there, to help the bank, which was very nice to have PrecisionLender. So, you know, you got to just put your head down and keep working through it and then don't let the little things cause anything to derail.
Jim Young: That's pretty good advice for a lot of things in life, actually, not just a trophy deal on that one. All right, Trevor, thanks so much for coming on. That'll do it for us today. Thanks for listening. If you like to learn more, visit our resource page at explore.precisionlender.com. If you like what you've been hearing from our podcast, make sure to subscribe to the feed in iTunes, SoundCloud, Google Play or Stitcher. We love to get ratings and feedback on any of those platforms. Thanks for listening. Until next time, this has been Jim Young and Trevor Lewis and you've been listening to The Purposeful Banker.