- Special Sections
- Public Notices
What is going on? This week the New Mexico Senate gave the go-ahead for a new development on the west side of Albuquerque and the redevelopment of a mall within the city. And they approved a much smaller redevelopment project in downtown Las Cruces.
While this may sound good, we wonder.
The Legislature’s approval of the issuance of $408 million in bonds for SunCal’s industrial development on Albuquerque’s west mesa, and $164 million in bonds to redevelop the Winrock Mall into retail, residential and office space.
The projects are being done under a 2006 law that allows the formation of tax increment development districts — TIDDs — that can issue bonds to pay for roads, water and sewer systems and other on-site infrastructure.
But does this development fit under that umbrella?
Under a TIDD, up to 75 percent of future tax revenue generated at the site is set aside to pay off the bonds.
Sounds great, but will this really create jobs? And what kind of jobs? Do we really need to invest millions of taxpayer money into minimum wage jobs?
But even worse is the company that this money is going to.
In May 2008 the Albuquerque Journal reported that California-based SunCal defaulted on $184 million in loans – losing five properties in foreclosure. At least nine lawsuits are pending in those states.
And Moody’s removed a bond rating on one SunCal company responsible for four developments in Southern California.
Then in November 2008, the Los Angeles Times reported that Cal Cos. would seek federal bankruptcy protection for two of its premier planned residential developments in Southern California – including a 45-story luxury Westside tower on one of the region’s most valuable pieces of land.
Faced with the loss of a major investor and a collapse in the demand for new homes, they filed for Chapter 11 protection for its proposed skyscraper at 10000 Santa Monica Blvd.
SunCal also filed for protection for Marblehead, a 313-home planned community on a coastal plateau in San Clemente that has been the subject of controversy for decades.
The bankruptcies come against a backdrop of trouble for the privately held SunCal, which along with other builders is facing crushing financial difficulties, the Times reported.
This is the company the Legislature is entrusting millions of public money to?
That seems to have been brushed aside by the Legislature, saying TIDDs benefits the state in the long run because the projects create jobs and generate taxes that otherwise wouldn’t exist.
Again, minimum wage jobs don’t do a lot for us in the long run, something that these arguments ignore.
All that – in the end – is going to happen is that jobs will shift around, creating nothing.
Even with a good company, this program is very questionable, if not outright bad business. We find ourselves agreeing with Sen. Eric Griego, D-Albuquerque.
“It’s terrible policy,” he said. “Why are we giving this money away?”