Westside land deal smacks of insider politics and failed policies of the past
When public officials announced that the Tempur-Pedic Swedish Mattress factory will start construction along Paseo del Volcan in the far outskirts of town this spring, the big news was that the company will bring 300 new manufacturing jobs to Albuquerque in the next few years.
There is, of course, other news to report as well that, for some, isn't as uplifting. The starting wage will be $3 an hour lower than the present median wage for manufacturing jobs in the metro area, for example. And over the next 20 years, the company likely won't have to pay property taxes and gross receipts taxes that the majority of local employers and businesses pay.
But don't forget those 300 jobs. That's what critics say the land developers speculating on the property will dazzle the public with while the factory is used as a pawn to try and pull municipal water lines out to the now vacant lands north of I-40 near the crest of nine-mile hill.
With water out there, nothing more would be needed to jump-start the massive subdivisions and other sprawling activities that would make some local land speculators a lot of money. One of those speculators is County Commissioner Tim Cummins who donated the land the factory will be built on and also has an option to buy the lands around it.
Welcome back to the way economic development still works in Albuquerque.
While the majority of city councilors, on a 7-2 vote, won the difficult fight for an ordinance to emphasize non-sprawl, water conscious economic growth in October 2002, the state Legislature in the January 2003 session reacted by taking away the city's water authority—and with it the ability of the city council to plan future growth.
Specifically, Senate Bill 887 forced partial unification of the city and county governments by creating a third governmental entity called the Bernalillo County-Albuquerque Water Utility Authority. The result so far has been mostly confusion, now that the seven-member board—comprised of three city councilors, three county commissioners and the mayor—try to figure out the new water authority's operating procedures. Meanwhile, water conservation measures and newly designed city water policy has been stalled, if not derailed.
The intent of creating this third government, based on some of the board's immediate decisions, appears to be clear: Get some more sprawl friendly folks back in charge of water. Senate Bill 887 was sponsored by Senate majority leader Manny Aragon, who has long-standing ties with Westland Development Corporation, who in turn owns vacant land around the area where the new mattress factory is to be built. And Gov. Richardson, in signing the bill, echoed the rhetoric of the political action group Citizens for Greater Albuquerque, which led the backlash against the Planned Growth Strategy last year.
“The city council is trying to position Albuquerque to enjoy the most environmentally friendly, quality of life-enhancing development possible. But I think it may be pushing too hard,” Richardson wrote in an essay published in the Albuquerque Journal in April 2003, to explain why he signed the bill.
And now, those councilors who were pushing too hard to enhance our quality of life are outnumbered on the new Water Authority, with Mayor Martin Chavez having voted on the side of the county commission to support extended water access to unincorporated parts of the city. Although the board is in its embryonic stage, it appears fringe developers are back in the driver's seat when it comes to local economic development. Growth—without that pesky “What kind of growth?” question getting in the way—can once again be the full-steam-ahead goal. And the road is wide open until at least November, when voters will get a shot at deciding three of the six seats up for grabs on the Bernalillo County Commission. Voters should now know the commissioners suddenly have so much power in determining how Albuquerque's water is allocated.
“After Phillips Semiconductor announced it was leaving, I told Mike (Albers), ’Mike, you're not doing so good here,'” Mayor Chavez said in a joking tone while looking over to Albers, whom Chavez had hired to head up the city's Economic Development office. But Chavez was speaking at a press conference held last October to announce a new mattress company coming to town, and he breathed a sigh of relief before continuing, “But with this announcement, we're back in the black, back in the plus.”
Phillips Semiconductor once employed 600 people in Albuquerque, but then left town. The new mattress factory will employ 300, so it doesn't literally add up to “back in the black,” but we know what the mayor meant.
The Tempur-Pedic plant is scheduled to open on Sept.1, 2005, offering a starting wage of around $12 per hour, just under the existing manufacturing median wage of $14.54 per hour, according to city statistics.
Gov. Richardson and Mayor Chavez each met twice with Tempur-Pedic executives and government officials invested a good deal of time recruiting the company. As a result, all the tax breaks possible were presented to help lure the company here.
“Albuquerque has an outstanding business climate and all we want to do is lunch off that,” announced Tempur-Pedic executive Paul Key, after citing tax breaks as one of the major factors in the company's decision to come to Albuquerque.
One definition of insanity is to do the same thing over and over again while expecting different results. One corporation, Phillips Semiconductor, lured to New Mexico by tax breaks, recently left town with little warning. Is the best solution, as Mayor Chavez suggested, really to bring in another multi-national company using the same promise of big tax breaks? Is the mayor or his staff investing this kind of time to help out the local businesses, which keep their profits in the New Mexico economy and have roots here?
After the October press conference, I asked Mayor Chavez if he had ever met with any of the four local mattress manufacturers already operating in Albuquerque. He hadn't, nor could he muster the name of one local mattress manufacturer when asked.
Albuquerque Mattress Company has been operating from the Barelas neighborhood of Albuquerque since 1955. It's a family-run company that pays full property and gross receipt taxes according to owner Lillian Martinez, who says her business could certainly use a small portion of the attention lavished on the Swedish company. But like other local mattress factories such as Sleep-N-Air, Supreme Bedding Manufacturer and Sofa Mattress Factory, Martinez' small business employs less than 20 people.
Still, City Councilors Michael Cadigan and Eric Griego have been publicly asking questions like why not build the manufacturing plant at an infill site where there are already water and sewer lines. But thus far, those questions seem to have been ignored.
If you think encouraging fringe development with tax subsidies is an outdated economic development model that too often comes with the taint of insider politics—just wait 'til you hear about the potential ramifications of the Paseo del Volcan land deal.
Tempur-Pedic is getting the land for free and has been promised property and gross receipts tax abatements for the next 20 years on conditions that will still have to be approved by the county commission. It remains to be seen whether the county commission will be aggressive enough to demand the sort of “clawbacks” that the city council required for Phillips Semiconductor's tax breaks—clawbacks that got the city $13 million in paybacks when Phillips Semiconductor suddenly left Albuquerque.
County Commissioner Tim Cummins owns 40 acres of the land that the new mattress factory is scheduled to be built on and Wesltand Development Corporation owns the other 10 acres.
According to Cummins, he and his business partner are donating the land in order to jumpstart other developments at the property. Cummins, also holds the option to buy land adjacent to where the mattress factory will be built.
The well on the property has adequate water rights attached to serve the Tempur-Pedic factory, but to serve additional developments, more water rights will be needed, according to Cummins.
This has many interpreting the land deal as a ploy to get municipal water lines extended out to the property, which would increase the value of the adjacent land approximately ten-fold. The water access would also make the massive subdivisions that Westland Corp. hopes to build on the surrounding lands a reality. Interestingly, when asked if Manny Aragon, an attorney by trade, had done any legal work for Westland, a company spokesperson, Barbara Page, declined to answer, saying, “I don't know if it's anybody's business,” adding: “Ask Manny, he's a very honest person.” (The Legislature is currently in session and phone calls to Manny Aragon's office at the Roundhouse were not returned.)
Cummins interprets water hookups out at the property as a potentially great deal for all of Albuquerque, because it will foster job creation. The aquifer there, Cummins says, has been shown to have good production potential.
“One of the things the water authority should look at is putting water lines out there for a source of water,” Cummins explained.
Of course, the water also would be an excellent source for developing all the vacant land that Cummins and Westland have hope to profit from.
Cummins worked out a purchasing deal with Westland where he and his partner Robin Dyche would purchase the land if they were able to change the zoning from A-1 (one house per acre and cows) to M-1 (manufacturing and industry). The deal was made in 2001, two years after Cummins had lost his seat on the city council and just before he started on the county commission, although the zoning change went through just after he started on the commission.
“The zoning change happened maybe right after I got on the commission,” Cummins said, “I'm not sure of the timing. All those things I'm real careful to stay out of.”
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.
Meanwhile, in addition to the potential tax-break subsidies for Tempur-Pedic, the county commission has already approved a multi-million dollar Industrial Revenue Bond for New Mexico Foods, Inc.—a company owned by a business partner of Cummins.
“If you want the county to issue IRBs for your business, it's beginning to look like the best thing you can do is enter into a business partnership with Tim Cummins,” said former city councilor Greg Payne, one of seven councilors who voted in favor of the Planned Growth Strategy. “That's not an effort to make government work for your constituents, that's making government work for a close group of insiders.”
Last year, there was quite a backlash against the city's Planned Growth Strategy. The backlashers, allied together as Citizens for Greater Albuquerque and led by real estate developer Chuck Gara and the Greater Albuquerque Chamber of Commerce, raised $140,000 in an attempt to stack the City Council with “business-friendly” candidates. The group's leadership, among other things, seemed troubled by the idea that land developers (rather than taxpayers) ought to pay increasing costs to extend public services out to once-vacant lands.
On the other hand, Planned Growth Strategy supporters have called for measures that would help the market redirect development to where city water and sewer already exist—a concept commonly known as infill.
The most obvious example of infillI is Albuquerque's downtown corridor. Soon the area east of Nob Hill, along Central between Carlisle and San Mateo could follow the downtown model and become another example of successful infill development.
If the prospect for truly successful, widespread Downtown redevelopment and revitalization of our existing neighborhoods has an enemy in this city, it's the competition of sprawl development sucking business and tax dollars out to the city fringes, a point that clearly seemed to resonate with voters in the recent council elections.
All three of the CGA-backed candidates who had pro-planned growth candidates running against them lost in October. And the road bond that would have expanded Paseo del Norte further west through the Petroglyphs was soundly defeated to boot.
While the Albuquerque Journal editorial board interpreted the election outcomes as a tactical mistake by CGA, and Mayor Martin Chavez tried to spin the road bond defeat as a selfish “no” from citizens east of the river—those who actually voted for progressive candidates and against the road bonds knew exactly what their votes meant. It was, more than anything else, electoral demand for water-conscious, taxpayer-friendly planned growth in Albuquerque.
The first week of this year, four city councilors who had been opposed or derided as “anti-business” by the planned growth backlash, presented a package of incentives to support local and homegrown businesses and entrepreneurs. It's a plan that the councilors say is what pro-business means to people that support planned growth.
“We're all in favor of economic development,” said City Councilor Eric Griego, who introduced the economic development package along with Michael Cadigan, Debbie O'Malley and Martin Heinrich, “The question is, ’What kind of economic development?' I believe we are not doing enough to retain existing businesses or to spur entrepreneurs, and this package of proposals addresses that.”
Things might be looking rosy for non-sprawl economic growth in Albuquerque—if the city council still had control of our water.
State legislators are now looking at an agreed-upon deal to make the water authority work. Mayor Chavez, who has made strong public statements condemning the water authority even while backing the county commissioners, has also said that he believes it cannot be killed.
So far councilors and commissioners have spent their meetings at the new water authority trying to figure out operating procedures. And not everything has been pretty.
City Councilor Michael Cadigan proposed an ethics code that would have required all seven members of the board to disclose the potential to personally profit from decisions the water authority made. By controlling the where and when of expanding Albuquerque's water and sewer lines, the water authority has the power to make or break millions for real estate developers. Most citizens might like to know if their politicians were acting even a little bit in their own self-interest. County commissioners opposed the ethics provisions, though. The result is that county commissioners and city representatives each will operate by a separate set of ethical standards—one for the county and one for the city—while serving on the same governmental body.
Since city residents are represented by a county commissioner and a city councilor, there's also the real possibility that some citizens could have double representation on the water authority, while other citizens have no representation.
And remember that water budget bill passed by the city council last year? It no longer applies to the water authority. So anyone who believes, like a majority of city councilors did, that the city ought to have a water budget just like it has a fiscal budget—forget about it for now. Full steam ahead on the sure hope we got enough water model of planning for growth.
Underneath the whole issue is not just a struggle for how the Water Authority should work, but who local government should work for. Extending water and sewer lines to undeveloped land can make certain land developers rich. Choosing not to extend water and sewer lines to vacant lands has the potential to boost housing prices in existing neighborhoods and spur revitalization. Every property owner in Albuquerque has a stake in these decisions, but some property owners have profit potentials going much, much higher than others.
So what are the prospects for getting planned growth, water budgets and the whole water-conscious, non-Phoenix economic growth model back in the driver's seat?
Partially as a result of the county commission's new power over growth, a host of pro-planned growth types are already gunning for the June 1st primary elections of the Bernalillo County County Commission. Three seats are up this year and Tim Cummins, the only incumbent who is not term-limited, will face a strong primary challenger in former Republican state Sen. Bill Davis, who announced his candidacy last week.
The county commission elections will be held along with the regular elections in November and this fall there will again be a city/county unification attempt on the ballot. And unification could make this whole, awkward water authority third government that now controls our water and growth a one-
Of course the state Legislature could also decide to kill the awkward third governmental entity it created, but don't count on that either.
Best bet? Get out and vote in the June primaries and again in November, since planned growth will again be the referendum on the ballot.