At the river’s bend: water and the future of urban New Mexico

By Walker Boyd

What are the politics of water? It is an element that fundamentally defines New Mexican notions of ‘the common good’. How does the law, political debate, the economy, and the historical elements of New Mexico’s diverse population influence the debate and its outcomes? This is the first part of an ongoing investigation into politics of water in New Mexico.

I lived on a farm for 6 months in Jaipur, a city in Rajasthan, just off India’s famous Thar desert. The family that owned the farm had built a clothing mill on their property in the 1960’s. Their mill used water drawn from wells beneath the farm to wash dye off the clothing during the manufacturing process. When I arrived, Only two of the farm’s nine wells were drawing water, and with the summer yet to come, the choice was clear: either the mill stops running, or the plants are no longer watered.

Across the road, a government official had an estate. If you walked to the northern edge of the farm, you could peer into his yard. There was a fountain, and some of the peacocks from the farm had already made their way on to the man’s estate. Sprinklers watered an expansive lawn and polo ground.

In 1919, the San Mateo Land Company purchased most of the old Alameda land grant for 19 cents an acre after a court ordered its sale to pay for taxes the community owed the state. In 1948, SMLC sold the 55,000 acres (fully half the size of modern-day Albuquerque) to the land-speculation company Brownfield & Koontz. The same acreage was sold again in 1959 for $10 million to AMREP, otherwise known as Rio Rancho Estates. AMREP sold half- and one-acre tracts of land to retirees and small-time investors, ultimately collecting about $200 million dollars from the sale of nearly 77,000 lots while retaining ownership of 25% of the land for future development.

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Westland DevCo/SunCal Bankruptcy Was No Surprise To TIDD Opponents

Opponents of a state-backed tax scheme to help develop a parcel of land on Albuquerque’s West Mesa say they aren’t surprised by news that the company behind the plan has filed for bankruptcy.

Here’s a copy of the bankruptcy filing.

“What we all said was going to happen and what we knew was going to happen finally happened,” said Rep. Ben Rodefer, a Democrat from Corrales. “They were not viable financially and not of the caliber we should want to be in a relationship with.”

One year ago, Rodefer was one of the strongest voices against California-based Westland DevCo/SunCal’s quest for legislative approval of a plan to tap future state tax receipts to develop a 55,000-acre parcel of land into a master-planned community on Albuquerque’s West Side.

The funding scheme, called a tax increment development district, or TIDD, is supposed to be used to spur revitalization of historic districts or other infill development within cities – not to aid companies who want to build up previously undeveloped tracts of land.

Westland DevCo/SunCal announced this week that it has filed for bankruptcy on its New Mexico properties after defaulting on $188 million in loans. A number of the company’s developments in other states have also gone bankrupt.

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Bye Bye SunCal TIDD?

Looks like you dodged a bullet, New Mexico – this time.

The Albuquerque Journal reported Friday that the beleaguered California development company SunCal won’t seek the legislature’s approval for a tax increment development district, or TIDD, in the session that starts Jan. 19.

According to the paper, the company is currently involved in a lawsuit filed by three capital companies, who are seeking SunCal’s immediate payment of $182 million in loans it wanted to use to develop 55,000 acres of Westland property on the city’s West Side. If SunCal defaults on the loan, it will lose the land.

Creating a TIDD for SunCal would have required taxpayers to provide money upfront for providing SunCal land with roads, water and sewer lines. SunCal would have been allowed to reimburse taxpayers for the development costs later with property and gross receipts tax revenue garnered from the development.

Critics of the proposal protested the thought of more development on the West Side. After all, TIDD were originally developed to aid revitalization of inner city historic districts, not new development.

They also wondered how anyone could be sure that the SunCal would even be successful enough to reimburse taxpayers.

They noted that divisions of SunCal oversaw several failed developments in other states.

For it’s part, SunCal said its New Mexico holdings were solvent and had nothing to do with its operations in other states. I guess we know better now.

Good thing the legislature didn’t approve those TIDDS when SunCal asked for them back in 2008 or 2009, isn’t it?

From the Journal story:

The company has been denied approval for the incentives in the Legislature in the last two years.

In 2009, two tie votes in the House of Representatives stopped approval, despite a huge SunCal media campaign promoting the incentives and the company’s estimate of nearly 13,000 jobs it would help create. A year earlier, a Senate filibuster by Sen. Cisco McSorley, D-Albuquerque, stifled SunCal efforts.

SunCal president Will Steadman told the paper that the company will likely return to ask the New Mexico Legislature to reconsider the TIDD proposal “when the economy has improved.”

Let’s hope that, in fact, they’re gone for good.

TIDD Panel Draws Fire from Legislators

Senator Bernadette Sanchez

Senator Bernadette Sanchez

State Senator Bernadette Sanchez’s attempt to present a “balanced” panel to address the state legislature’s Economic and Rural Development Committee on the issue of TIDDs today backfired as several legislators questioned why no one “from the other side” was on the panel.

Legislators including Rep. Ben Rodefer, Sen. Tim Keller, Rep. Nate Cote, Sen. Steve Fischmann and Rep. Debbie Rodella all questioned the make-up of the expert panel Sanchez had assembled to answer legislators’ questions about TIDDs, or Tax Increment Development Districts.

TIDDs were a hot topic during the last Legislative session, when, in the wee hours, legislators narrowly rejected a proposal that would have seen the state give SunCal nearly $500 million in future tax revenue so the company could develop a parcel of land it owns on Albuquerque’s West Side.

Despite the defeat, SunCal has said it will push the TIDD proposal again during the next legislative session.

At today’s hearing, Rodella and others objected to the presence of SunCal lobbyist and former state Tax and Revenue Secretary Dick Minzner, who announced at the beginning of the panel that he was there to answer general questions about TIDDS and not just to talk about the SunCal proposal.

However, the hearing threatened to turn into the SunCal show as legislators fired most of their questions at Minzner.

Fischmann said he can’t understand how taxpayers could benefit from a deal that would see them paying hundreds of millions of dollars and ending up not even owning the development. “Would any reasonable person enter into this agreement?” he asked.

Minzner replied that the government and taxpayers get a portion of any gross receipts generated by the project.

Rodefer drilled into allegations of bad fiscal management by SunCal, noting that top Lehman Brothers executives publicly blamed SunCal for a number of failed development projects the two companies collaborated on in California.

“Do we really want to hand $500 million to a failed California developer?” he asked in a brief interview outside the hearing.

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