Huge Santa Teresa development aims to fill workforce housing shortage

Editor's note: This story was updated to correct the name of the Border Industrial Association in Santa Teresa.

Santa Teresa, a logistics center on El Paso's western edge, is finally set to get a long-needed, large housing development.

It will be built on land that years ago was to be part of prominent El Paso businessman William "Bill" Sanders' plans for a city-sized housing project in the New Mexico desert.

Sanders (the father-in-law of former U.S. Congressman Beto O'Rourke) and his former company, Verde Realty, dropped the ambitious, 20,000-acre, 25,000-home project about 15 years ago and sold its land holdings. No one has moved to build housing on the vacant land until now.

Alta Mesa Estates, a 1,180-acre, master-planned community, is to have about 3,400 single-family homes, 1,077 apartments, and about 130 acres of commercial development done over the next 12 years or more, according to information provided to Dona Ana County officials.

Terry McLachlan, 64, a longtime real estate investor and developer based in the Dallas area, is the person behind the project. He retains his New Zealand accent even though he's lived in the United States for over 30 years.

Three years ago, McLachlan and his partner began buying 1,117 acres of the Alta Mesa land from El Paso businessman Lane Gaddy, who operates his family's business, W. Silver Recycling . They also bought other acreage from another landowner for the project.

"We identified this area as sort of the center of the universe of logistics," McLachlan said recently during an interview on the desert land located near the intersection of Strauss Road and Pete Domenici Highway, which links to Artcraft Road in El Paso. The land is near Santa Teresa's four industrial parks and the Santa Teresa international port of entry to Mexico.

El Paso's Hunt looks at possible joint venture

El Paso-based Hunt Communities, a large developer of master-planned communities in El Paso and other areas of the country, has signed a letter of intent with McLachlan's company, operating as Alta Mesa Estates LLC, to explore creating a joint venture for the project.

Hunt's big housing developments in El Paso are Cimarron on the far West Side, and Mission Ridge, in far East El Paso County.

Hunt Communities is part of Hunt Companies , the national real estate development group headed by well-known El Paso businessman Woody Hunt.

"We went to them. We were looking to bring in a strong partner that had a lot of experience in this type of development to help accelerate this site," McLachlan said. "It's a big project."

His investment partner is Lola Young, a Florida-based real estate investor and home health care entrepreneur. His son, Devon McLachlan, 31, who recently joined his father's company, also is working on the project.

Horizon City land attracted developer

McLachlan came to this area in 2009 when he began buying desert land in the Horizon City area in far East El Paso County.

He and his partner, Young, own about 7,500 acres in the Horizon City area, with just over half of the land made up of about 15,000 small, noncontiguous desert lots, known as ghost lots, he said. Thousands of people worldwide purchased the lots decades ago from a now-defunct company that marketed Horizon City as a future, modernistic city and retirement community.

Since much of that Horizon City-area acreage is not yet developable, McLachlan looked for other land and discovered the Santa Teresa property.

"We buy and sell land. We've provided land for development to many other builders and developers. We call it land banking," McLachlan said.

"We're getting a little older and a bit more successful, and it's time to put some of that money into (our own) residential development."

More workforce housing needed, officials say

McLachlan and Young also own a 272-acre tract of land, across the highway from the Alta Mesa property, where they plan to build an industrial park.

"We prioritized this (housing) development over the more obvious industrial development" to help solve the area's housing problem, he said.

New housing is being built in Sunland Park, New Mexico, bordering the Santa Teresa area, and in El Paso, but having houses within view of Santa Teresa's four industrial parks will enhance recruitment of companies, said Jerry Pacheco and Davin Lopez, who head economic development organizations in New Mexico.

"The first question we get anymore is where is the workforce going to come from. And when you have a (housing) development you can point to, bricks and mortar, it makes it a lot easier to convince the company that the labor is going to come from right here," said Pacheco, the longtime president of the Border Industrial Association, focused on attracting companies to Santa Teresa's industrial parks.

Some large companies didn't locate in Santa Teresa because of concerns about the source of labor, Pacheco said.

Industrial parks employ over 4,400 people

Santa Teresa's four industrial parks have about 80 companies with more than 4,400 employees.

Union Pacific Railroad's huge intermodal hub, the Dona Ana County-operated jet airport and the Santa Teresa international port of entry are located near the industrial parks.

Lopez, CEO of the Mesilla Valley Economic Development Alliance in Las Cruces, said Santa Teresa has done well attracting manufacturing and distribution companies in the last 20 years. But the ever-increasing question is where do people live so they can access the jobs, he said.

If the Verde Realty development had happened years ago, it would have sped up economic development in the area, he said.

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Manufacturing nearshoring gives boost

El Paso businessman Bill Hagan, a partner in LBG Properties, which is developing the 580-acre, 2,384 homes Rancho Santa Teresa community along Sunland Park's McNutt Road, a few miles from the Alta Mesa site, said housing developments are going up in Dona Ana County because West El Paso land is scarce and expensive and the Santa Teresa industrial parks have lots of employees.

"We felt like the closer people could be to their work source, the better it was going to be for everyone."

Industrial development in Santa Teresa and across the border in Mexico are being boosted by the increase in manufacturing nearshoring, Hagan said, echoing views of McLachlan, the Santa Teresa economic developers and others.

So-called nearshoring has companies moving factories and other plants from Asia and elsewhere to Mexico and other North American locations to be closer to customers. It's also bringing a boom in warehousing and distribution in the entire El Paso area.

Special taxing district key to Alta Mesa

Pacheco and Lopez were among many area business leaders that urged the Dona Ana County Board of County Commissioners to approve formation of a Public Improvement District, or PID, for Alta Mesa Estates. By a 3-2 vote, the commissioners approved the PID at its April 23 meeting.

The privately run district will collect a special annual tax from homeowners in Alta Mesa to help pay for part of the estimated $160 million costs for building infrastructure, including streets, water lines, parks, and trails.

The entire project, with homes, will probably cost more than $1 billion, McLachlan said.

More: $300,000 homes sit vacant because of developer problems at El Paso Upper Valley subdivision

Alta Mesa would have been financially unfeasible without the PID, he said. The special tax revenue means home lots can be sold at prices to allow homebuilders to construct more-affordable homes, he said.

Homebuilders hope to sell homes starting at $275,000 to $300,000 in the first phase, he said.

Six companies have committed to building homes in the first two phases, which will have about 530 homes: Las Cruces homebuilders KT Homes and French Brothers and El Paso homebuilders Tropicana, CareFree, BIC, and Desert View, part of View Homes.

Alta Mesa will feature 32-acre plaza

Dirt work on Alta Mesa's 232-home first phase possibly could begin in July. The first homes possibly could begin being built in Spring 2026, McLachlan said. About 100 apartment units also are slated for the first phase.

About $35 million worth of amenities will be part of the development, including walking trails, parks, sports fields, three swimming pool centers, and about 25 acres of open space, McLachlan said.

The focal point of the development, a 32-acre plaza with restaurants, office spaces and other features, won't come until the seventh phase of the 10-phase development.

The entire development is expected to be completed by 2036.

Vic Kolenc may be reached at 915-546-6421; vkolenc@elpasotimes.com ; @vickolenc on Twitter , now known as X.

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This article originally appeared on El Paso Times: Huge Santa Teresa development aims to fill workforce housing shortage