Santa Fe officials press developer on annexation, water and drainage before Megatel project can break ground

City Manager Raven told the Santa Fe City Council on May 8 that the large Megatel development is still waiting on several external approvals before construction can begin. “They have to get everything in order before they can even break ground,” Raven said, summarizing a recent meeting with the developer and the city’s engineering consultants.

Raven said consultants from LJA and a firm identified as “p3” reviewed the project and recommended completing annexation before starting infrastructure work so permits and utilities would be governed by a single jurisdiction rather than the county. Raven said the developer’s timeline in the pit assessment shows a planned groundbreaking in August 2026, “but they’ve got to get everything in order before they will ever be issued a permit.”

Why it matters: Council members pressed staff on timing and local impacts because the project would add hundreds of housing units, new commercial acreage and municipal service demand. Raven said the developer has reduced some counts in the conceptual plan: “the multifamily tracts has gone down from 1,200 to approximately 950 units,” and residential lots “have gone from 2,844 down to 2,823,” figures Raven presented as the current plan.

Key dependencies and outstanding items

- Annexation: LJA recommended annexation occur before infrastructure work so the city — not the county — would handle permitting and long-term maintenance for roads and utilities.

- Water district agreements: Raven told council the developer cannot complete the land sale or proceed with major infrastructure until contracts with local water providers are finalized. “They can’t complete the sale on the land until everything with the water district is complete,” Raven said.

- Drainage district and retention sizing: Raven and other staff said the drainage district has required more on-site retention than the developer had modeled. Staff described the district’s position as requiring roughly double the originally proposed retention in some areas because consultants could not assume an empty downstream channel. Raven summarized the district discussion: the district “said, well, no. You can't assume that Dickinson Bough is gonna be empty… so you've gotta count into that,” and that requirement has reduced the number of housing units that fit on some parcels.

- Pit assessment and amendments: The consultant p3 is finalizing a pit assessment; Raven said the city requested amendments and clarifications, particularly about responsibilities for parks and a bridge if the municipal utility district (MUD) dissolves. Council asked staff to circulate the most recent conceptual use diagram Raven said the developer provided the council earlier that day.

Other considerations discussed

- A 300-acre parcel across Highway 517 that earlier materials had shown as a possible recreational/entertainment area remains in limbo: Raven said the Megatel representative told staff she “did not know” whether the 300 acres had been purchased and that the city’s information indicates it has not been purchased.

- Phasing: Raven said Phase 1 focuses on the lagoon area, multifamily tracts and the wastewater/water treatment plants; Arcadia Station and an unrelated modular-home development will proceed on separate timeframes and infrastructure tie-ins.

Council directions and next steps

Council asked staff to prepare a checklist of the remaining steps that must be completed before the developer can break ground, with current status for each step (city staff agreed to do that). Raven said she will send council the conceptual document that had been emailed to staff that afternoon, with the caveat that it is a living document and still subject to clarified responsibilities and amendments.

No formal vote was taken. The council’s discussion centered on clarifying what approvals and agreements are still required and on documenting a clear, trackable list of remaining steps before construction can begin.

Ending

City staff framed the development as still several phases away from construction: annexation, water-district contracts and drainage-district acceptance of retention plans topped the list of conditions Raven said must be satisfied before permits can be issued and any land sale can be completed.