SWOPblogger

In the least it shows "a pattern of financial irresponsibility." I'd say it's more like a pattern of ripping off tax payers and hurting state, city and local governments through deception and cluelessness.

URL: http://www.abqjournal.com/news/metro/294172metro03-17-08.htm

By Sean Olson
California-based SunCal, developer of Albuquerque's massive Westland project, has had a rough year with some of its California and Nevada ventures— but insists that will have no bearing on its plans here.

SunCal Companies defaulted on $184 million in loans— losing five properties in foreclosure. At least nine lawsuits are pending in those states.

Moody's last month removed a bond rating on one SunCal company responsible for four developments in Southern California.

About $17.5 million in liens have been filed in two of its California projects.

But SunCal, which bought 57,000 acres from the heirs of the Atrisco Land Grant on the West Side last year for $250 million, insists none of its struggles to the west will affect the Westland project here.

"The issues involving some of our other developments have no bearing on Westland, as each is a legal entity that is separate from the other," SunCal senior public affairs vice president David Soyka said in an e-mail last week. SunCal, along with investor D.E. Shaw, financed the Westland purchase, Soyka said. The companies used more than $100 million in equity and some third party debt, Soyka said.

Barclays Capital loaned money for the transaction and holds a deed of trust for the land, he said. That means, if SunCal defaults on its payments, Barclays would gain control of the land.

Bernalillo County, which has been negotiating with SunCal to provide tax incentives for the first 4,000 acres of the development, is not at risk if the company runs into money trouble in New Mexico, County Manager Thaddeus Lucero said Thursday.
The county was not aware of financial difficulties for SunCal in other markets until a Journal inquiry, Lucero said.

Money problems
SunCal divides its projects among a number of separate companies with differing financial backers and partners.
Among the problems in the past five months:
- A 1,300-acre development in Sparks, Nev., was returned to lender D.B. Zwirn after SunCal defaulted on a loan worth $35 million.

- Three apartment complexes in Orange County, Calif., were returned to D.B. Zwirn after SunCal defaulted on a separate loan. This one was worth $75 million.

- A roughly 500-acre development in Shafter, Calif., was returned to lender Lennar Corp. after SunCal defaulted on a $74 million loan, SunCal confirmed.

-Moody's lowered one SunCal company's bond rating from "substantial risk" to "in poor standing" on Dec. 20. Moody's removed the bond rating altogether Feb. 21 for "business reasons." It was the only SunCal company with a bond rating, Soyka said.

-About $2.5 million in liens have been filed against the company in a San Clemente, Calif., project, according to a lawsuit. Another $15 million in liens were filed against a 2,000-acre project in Bakersfield, Calif., The Bakersfield Californian reported.

-California contractor McCoy and Sons Inc. sued SunCal in November for $940,000, claiming SunCal never paid it for services. SunCal has counter-sued for $25,000, calling the McCoy and Sons' work faulty.

- Genesis Golf Course Builders of Nevada filed a lawsuit in December claiming SunCal still owes it $830,000 for a Greg Norman-designed golf course Genesis built in Bakersfield. SunCal had no comment on the lawsuit.

- Young and Associates filed a lawsuit last month claiming SunCal owes it $275,000 for utilities installed in a Los Angeles County development. SunCal had no comment on the lawsuit.

"Like every other home-building and development company, we are facing market challenges," Soyka said.

The housing market, which has been especially harsh in California, has much to do with SunCal's lost projects, Soyka said.

Soyka said SunCal decided not to continue development of the five properties foreclosed upon and is cooperating with its lenders.

The liens and lawsuits, filed mostly by SunCal subcontractors, are also a product of the housing market, he said.

"We're in the process of asking our subcontractors to work with us and help absorb some of the effects of the nationwide building downturn," Soyka said. "Some of these subcontractors have been cooperating and some have, regrettably, filed suit."

Pattern noted
City Councilor Michael Cadigan, who has been an outspoken critic of SunCal, said Thursday the problems in other states show "a pattern of financial irresponsibility."
He said a half-finished development, regardless of whether the county is on the hook to pay for completion, could force governments to step in and take care of residents already living there.

"If (SunCal) defaults on (its) responsibility, the taxpayers may have to pick up the pieces," Cadigan said.

But Lucero said there is no possibility for the county to be stuck with a bill.
He said no houses can go up in the development until all roads, utilities and other requirements are built.

If SunCal does default on any bonds to build that infrastructure, the county can still use those bonds to finish without SunCal— and still not have to take control of the debt, Lucero said.

Commissioner Teresa Córdova said the county's preliminary agreements with SunCal regarding incentives place the county in no danger regardless of any company's financial outlook.

"This is the reason we were so careful (with agreements)," she said.
Soyka said SunCal can easily afford to build infrastructure within its developments.

And he maintains the outlook for the housing market in New Mexico looks good to the company.

"This is a cyclical market correction that is currently taking place. We are very bullish on the future of New Mexico," he said.

SunCal is pushing forward with two developments inside city limits— a 500-acre housing development west of the Stormcloud and Crossing neighborhoods, and a 20-acre commercial site on the corner of Unser and Ladera. Those developments— which are separate from the 4,000-acre county plans, but still part of the 57,000-acre purchase— will go before the Environmental Planning Commission later this month.

SunCal had a setback at the state Legislature last month as lawmakers failed to pass a bill that would have ensured incentives for the company's county developments. However, SunCal officials said they would ask for a similar measure next year.

Labels: SunCal, TIDD, TIF

Big thanks to the many folks who stopped the TIDD's, 1000 Friends, New Mexico Voices for Children, Conservation Voters New Mexico, Environment New Mexico and SWOP.

A particular thank you to Sen. Cisco McSorley, Sen. Dede Feldman, Sen. Cynthia Nava and Sen. John Grubesic for standing up against the TIDD's and this nasty tax payer giveaway.

In case you missed it here's Senator Cisco McSorley's take on how it all ended. Also check out Cocoposts perspective and the comments.

Here's an excerpt from the Tribune on Feb 15:
Sen. James Taylor, a South Valley Democrat, said the session was all about stalling.

He had been pushing to get a floor vote on a bill regarding a tax incentive for SunCal Cos., which wants to build thousands of homes on Albuquerque's West Side.

His problem was with some last-minute strategy employed by Sen. Cisco McSorley, an Albuquerque Democrat, who, saying he was part of a minority that opposed the tax bill, embarked upon a filibuster.

"I'm going to talk for a long time," McSorley declared.

A long time turned out to be 30 minutes of pacing in the corner of the Senate floor and waxing poetic about solar photovoltaic technology at Mesa del Sol, sprawl development and why the Bernalillo County Commission "gave away the farm" to SunCal.

It ended when the bill was tabled, but McSorley later said that using the Legislature's noon deadline to adjourn had worked for others in the past.

"It was my turn to be the minority to stop the work on a bill," he said.

Labels: 2008 Legislature, TIDD, TIF

Good Jobs First yesterday released a new in-depth article about the nation’s most controversial kind of economic development subsidy – “TIF, Greenfields, and Sprawl” – just published in Planning and Environmental Law, a journal of the American Planning Association.

See it on their website at: http://www.goodjobsfirst.org/pdf/apa.pdf.

The article includes a segment on the most notorious current TIF dispute in the nation: in New Mexico, where radical TIF deregulation threatens to undermine funding for state and locally funded public services.

Related links:

TIF and sprawl in the Twin Cities Metro Area

Job subsidies and sprawl: Chapter 6 of The Great American Jobs Scam

Sprawling subsidies for Cabela’s and Bass Pro

ARTICLE SUMMARY: Tax Increment Financing (TIF) is an economic development incentive tool funded by diverting the incremental increase in property and/or sales tax created by redevelopment or new development within a geographically defined TIF district.

As originally enacted in most states, TIF was intended to reverse private-sector disinvestment in older, urban areas with physical “blight” or contamination, so its use was not widespread. However, over the past three decades, some states have loosened their TIF-targeting criteria; in other states, courts have granted localities wide latitude in defining “blight.” In the same decades, federal aid to cities declined, and some states enacted legislation or ballot initiatives causing “fiscalization of land use,” or a tax base-driven distortion of local governments’ development priorities.

For all these reasons, TIF is now increasingly associated with “greenfield” or sprawling projects, including big-box retail. A few retail chains have become especially aggressive seeking TIF, such as Cabela’s, the outdoor sporting goods company. And a mixed-use new urbanist project by the partnership Forest City Covington on the edge of Albuquerque will benefit from a very large TIF tax diversion.

Because such applications are so far astray from TIF’s original pro-urban mission, and because TIF often diverts large amounts of revenue for many years from other bodies of governments—especially counties and school boards—it has become the United States’ most controversial economic development subsidy.

Labels: Campaign for a Better New Mexico, TIDD, TIF

Front Page Sunday Journal. Makes this, this and this all the more poignant.

Some of City's 'Green' Claims Full of Hot Air
By John Fleck

It is a claim every Albuquerque resident who cares about global warming could be proud of: Since 1990, city residents have cut their greenhouse gas emissions by 6 percent.

It is also untrue.

The claim was contained in a report that was until recently featured prominently on the city's AlbuquerqueGreen Web site. As the nation's emissions of global warming-causing pollutants is on the rise, ours are going down, the report claimed.

But the report vastly overstated the city's greenhouse gas reductions. City officials acknowledged the problem and removed the report from a city Web site after the Journal requested supporting data.

It is not an isolated case. A Journal review shows the claims of greenhouse gas reductions and other "sustainability" successes made by the city are often exaggerated, misleading or wrong.

In response to the Journal's inquiries, city officials acknowledged problems in the data they were presenting to the public. The Web site containing the questionable claims was taken down completely last week. It was replaced with an old Web page produced by city staff more than a year ago. Officials said the change had already been in the works and was unrelated to the Journal's inquiries.

Most of the erroneous figures presented to the public came from a study done in late 2005. The report contained warnings that the information was "preliminary," and could change as more accurate information became available. Those caveats were generally not included when the information was presented to the public.

Site not updated
When more up-to-date analysis showed the city's successes were more modest than originally thought, city officials continued to use the old data.

Mary Lou Leonard of the city's Environmental Health Department blamed the problem on a failure to update the numbers on the public Web site.

"We haven't been keeping them as up-to-date as we should have," Leonard said in an interview.
Albuquerque Mayor Martin Chávez, who has made "green" issues a centerpiece of his current term, said inaccurate information undermines the city's efforts.

"There ought to be no exaggeration," Chávez said in an interview.

Chávez's name was featured prominently on the AlbuquerqueGreen Web site, and his picture appeared on the Web site's home page in three places. The city has spent $30,000 on a citywide advertising campaign that includes billboards and refers people to the Web site.

The AlbuquerqueGreen.com Web site was created in fall 2006 to create a separate place for Albuquerque residents to go for information about the city's sustainability efforts, said Alfredo Santistevan, head of the city's Environmental Health Department.

Chávez has repeatedly sounded the alarm about global warming, which scientists say is caused by greenhouse gas emissions from burning fossil fuels in our cars, factories and power plants. In an interview, Chávez pointed to the problems that Albuquerque could face as a result, including reduced water supplies.

Accomplishments
In June, Chávez accepted an award from the U.S. Conference of Mayors, which declared Albuquerque "the greenest city in the nation." The award application, written by city staff, was based in part on the erroneous preliminary data.

However, the underlying data, from the city and independent sources, show significant accomplishments:

- Water usage has decreased substantially since citywide water conservation efforts were launched during Chavéz's first administration in 1995.

- Bus ridership has risen 54 percent the past five years.

- Emissions of methane— a powerful greenhouse gas— from city landfills have been substantially reduced.

But even in those cases where the city has made progress, the city has frequently overstated the accomplishments, the data show.

For example, a frequent claim that city government has dramatically reduced its greenhouse gas emissions is based entirely on a project to burn off methane at the city's landfills.

In other areas, including fuel used to heat city buildings and miles driven by city vehicles, the latest numbers show that city government's greenhouse gas emissions have risen substantially since 2000.

City officials did not dispute the Journal's analysis of the problems with their data.

Not enough effort
Critics say exaggerating success with easy steps makes it harder to make the serious development and lifestyle changes that are necessary to deal with climate change.

"There is a risk that people will be placated or feel like that the community is contributing to its fullest, when we haven't really even begun what is necessary or what is required," said Gabriel Nims, executive director of 1000 Friends, a group fighting suburban sprawl.

Nims' concern is that while city officials focus on narrower greenhouse gas reduction concerns, new construction under Chávez's leadership continues on the city's fringes, [Link added by SWOPblogger] forcing residents to spend more time in their cars. Nims called what the city has done "greenwashing"— a pejorative term used by environmentalists to describe efforts to make an organization look "green" when it is not.

Critics of sprawl's effect on greenhouse gas emissions point out that as Albuquerque has spread over the last two decades, the average driver has spent more time behind the wheel. According to the Mid-Region Council of Governments, average per capita miles driven in the greater Albuquerque area have risen 10 percent since 1990.

Chávez bristled at the criticism. "If they say 'greenwash,' I would say 'hogwash,' '' he said.
He pointed to developments like the Mesa del Sol community planned for a large empty tract of land south of Albuquerque's airport, which he said will be an environmentally sensible project.

The claim that Albuquerque had reduced its citywide greenhouse gas emissions by 6 percent came from a report by city staff that attempted to account for all the emissions in our homes, vehicles and workplaces.

When the report was completed, it was posted at the top of the city's AlbuquerqueGreen.com Web site.

The heart of the claim was a dramatic reduction in Albuquerque residential and business use of natural gas, a major greenhouse gas emitter. The report claimed, for example, that residential natural gas usage in Albuquerque had dropped 87 percent from 2000 to 2005.

When the Journal and others questioned how that was possible, city officials reviewing the data concluded that they had made a mistake and withdrew the report for revision.
Creating a greenhouse gas inventory for the community is an ambitious task that is critical to understanding what needs to be done, and the city deserves praise for undertaking it, said Eva Thaddeus of the Sierra Club.

"Only if we know what our carbon footprint was in the past, and what it is now, can we know how to focus our reduction efforts," Thaddeus said. Thaddeus was one of those who raised questions about the data, and she praised city officials for withdrawing the report to fix it.

CLAIM
The city's latest "Greenhouse Gas Emissions Inventory" said emissions were reduced by about 6 percent from 1990 to 2005.
REALITY
Figures were based on the claim that natural gas usage dropped 87 percent from 1990 to 2005. PNM data show no such drop. City officials acknowledged a calculation error and withdrew the report.

CLAIM
Albuquerque city government rated fourth best among U.S. cities for use of alternative fuel vehicles.
REALITY
Many of the city vehicles are capable of running on ethanol but don't because the ethanol fueling infrastructure is not complete.

CLAIM
From the AlbuquerqueGreen.com Web site: "Mayor Chávez and the citizens of Albuquerque have reduced greenhouse gas emissions by 64 percent since 2000."
REALITY
The claim applies only to city government, not to the community as a whole.

CLAIM
City government reduced natural gas usage by 42 percent.
REALITY
New data show a 10 percent reduction since 1990 in natural gas usage, but the city continued citing the old data.

CLAIM
"Every new building in Albuquerque will be carbon neutral by 2030," meaning no greenhouse gases would be emitted in energy use.
REALITY
A recently passed ordinance will reduce carbon emissions 30 percent, according to City Councilor Isaac Benton. Benton said reaching that goal by 2030 is "conceivable" and the ordinance is "a modest first step."

CLAIM
City government has reduced greenhouse gas emissions by 64 percent or 67 percent since 2000.
REALITY
A new city study showed a more accurate number, 53 percent, but the old claim continued to be used— on the same Web site. Most of the reduction was in methane emissions in landfills, where the city has a program to burn methane.
In other areas, city government greenhouse emissions rose 19 percent between 2000 and 2005.

Labels: Campaign for a Better New Mexico, Marty The Duck, TIDD, TIF

Megan Kamerick NMBW Staff
Original article

Opponents of how tax increment development districts (TIDDs) are structured in New Mexico plan to take their concerns to the state this January during the legislative session in the hopes of changing how the economic development tools can be used.

New Mexico Voices for Children, which has been among the groups opposing the use of TIDDs by SunCal Cos. in its large, mixed used development on Albuquerque's westside, wants to change the enabling legislation that passed in 2006 to allow the creation of TIDDs.

The nonprofit sides with 1,000 Friends of New Mexico and the Southwest Organizing Project in their opposition to the use of these tools to develop projects on the city's fringe. So it will seek to limit the use of TIDDs in greenfield development. But its primary concern is the potential impact of TIDDs on the state's general fund if more such projects begin popping up across the state, said Gerry Bradley, research director of Voices for Children.

"We want to go back and say that the state share of gross receipts tax should not be taken out of the state general fund and given to the TIDD," Bradley said. "So we would delete that portion of the statute."

mkamerick@bizjournals.com | 348-8323

Labels: Albuquerque City Council, Campaign for a Better New Mexico, county commissioner, State Legislature, TIDD, TIF

To explain why he didn't recuse himself from the vote to create 9 TIDDs for SunCal Corporation, Bernalillo County Commissioner Tim Cummins told the Journal that "There is absolutely nothing of benefit that the TIDD brings to us."

We think this is highly debatable given the amount of land SunCal proposes to develop very near Cummins' own property. And we're not the only ones who think so. In her blog, Coco points us to this from the 2004 Alibi expose of west side development shenanigans:

"Cummins has said he will not vote on any plans that would directly affect the value of his property. But, bureaucratically speaking, to get any closer to the deal, he'd have to be the county commission's staff proctologist. (...)"

On other fronts, the Journal reports on a case this morning that NM State District Judge Jerald Valentine won't reconsider his decision to set aside an Extraterritorial Zoning Authority approval of a development project just south of Las Cruces.

Valentine made his decision because of the participation of Las Cruces City Councilor Jose Frietze in the hearing. Apparently Frietze has an extensive history of working with the developer, of which the Judge noted "...an objective observer would entertain reasonable questions about Authority Commissioner Frietze's impartiality."

During the hearing to ask him to reconsider his decision, the judge said that further study after his initial ruling about the relationship between Frietze and the developer "reinforced his belief that a "reasonable person could entertain reasonable suspicions" about Frietze's impartiality."

Moving this logic to the wheeling and dealing on Albuquerque's west side...we think any reasonable person can see that Tim Cummins stands to benefit financially a great deal from SunCal's development project. After all, it will essentially bring the City of Albuquerque right out to meet his land.

In 2004, Cummins told the Alibi he would not vote on any plans that would directly affect the value of his property. He might not be getting direct cash from SunCal, but it’s pretty obvious that the SunCal project will most certainly directly affect the value of his property.

Labels: Albuquerque County Commission, TIDD, TIF

Not much to say but Quaaack!

Check out the
Campaign for a Better New Mexico site to read about the TIDD's and how bad they are for our city, county & state.

You gotta hear this!
Marty_the_duck.mp3

Labels: Albuquerque Mayor, Marty Chavez, Marty The Duck, SunCal, TIDD, TIF

Read the great commentary over at M-pyre.
Read the editorial on the Journal site.

Too many of New Mexico's top politicians are too comfortable in the company of lobbyists whose client lists are built on the cozy relationships.

The politicians even turn for help with their campaigns to the lobbyists— a testimonial to their ability to influence— yet assert they are immune to the lobbyists' persuasive powers.

Mayor Martin Chávez, for example, could not be swayed by his former Senate campaign manager Mark Fleisher, according to Fleisher. Perhaps political advice would be an exception, otherwise why hire him?

So, where is the line between the fine art of influencing and advising? Are there city issues that are devoid of politics? Perhaps. But the use of tax increment development districts— something that affects plans to build out the Atrisco Land Grant on the West Side— isn't one of them.

Chávez vetoed a City Council constraint on use of the TIDD financing mechanism for developments like that proposed by SunCal, the California company that bought out Westland. Campaign manager Fleisher's day job is with a powerhouse lobbying firm, Butch Maki & Associates, that represents SunCal.

It looks bad. Even though most observers could have predicted the Chávez veto if he had never met Fleisher. His views and past actions were consistent with his veto pen.

Similar relations between Gov. Bill Richardson and the firm's principal, Butch Maki, look bad. The Maki firm launched with the inauguration of Richardson, for whom Maki worked during his tenure in the U.S. House. Maki quickly built an impressive list of clients. Maki also has been active in Richardson's presidential campaign.

But any question that those clients hired Maki to influence state government action that affects their interests elicits the same response: Richardson makes up his own mind. Lobbyists, even those with long, close relationships with Richardson, have no influence.

Now the familiar refrain comes from the Chávez camp. It's believable— if you can believe that a roster of successful companies are being suckered by lobbyists, instead of the suckers being voters with little access.

Labels: TIDD, TIF

Call your County Commissioner today. We can still stop this.

505-768-4000

SunCal wish list.

Groups back override of TIDD's

Labels: Albuquerque City Council, Albuquerque County Commission, Albuquerque Mayor, SWOP News Rant, TIDD, TIF

FOR IMMEDIATE RELEASE
12/09/07

Contact:
Gabriel Nims, 1000 Friends of NM / 505.228-5777
Marjorie Childress, SouthWest Organizing Project /505.410.8487

Organizations Support Council Override of Chavez Veto on TIDD


What: Press Conference RE: TIDDs in greenfields

When: Monday 12/10/2007, 12:00 noon

Where: Corner of 5th and Marquette, City Hall

Who: 1000 Friends of New Mexico and SouthWest Organizing Project

Tomorrow, Albuquerque organizations will announce their support for a City Council override of Mayor Chavez’s recent veto on the Tax Increment Development District bill sponsored by Councilor Michael Cadigan.

Gabe Nims, Executive Director of 1000 Friends of New Mexico, stated, “Last week, the City Council saved Albuquerque taxpayers from a $100 million gamble. With his veto, Mayor Chavez is throwing taxpayers under the bus in order to help private developer interests. We support the Council’s attempt to override Chavez’s veto and protect Albuquerque’s taxpayers.”

On Monday, December 3, the Albuquerque City Council closed a loophole that allows massive tax subsidies to developers building in empty land on the fringes of our city.

Robby Rodriguez, Executive Director of SouthWest Organizing Project, added, “TIDD”s are complex tax proposals with far-reaching implications. This particular TIDD proposal by SunCal would result in literally hundreds of millions of dollars in tax subsidies by Albuquerque and Bernalillo County taxpayers. Now is the time for the City and County to go slow and complete the necessary financial analysis. To do otherwise, as the Mayor is suggesting, is a disservice to taxpayers.”

The Bernalillo County Commission will also address SunCal’s application to create nine TIDDs at their meeting on Tuesday, December 11.

Labels: Albuquerque City Council, Albuquerque Mayor, Marty Chavez, Mayor Veto, SunCal, TIDD, TIF