A local developer says he'll build homes in the Bosque. City officials want the land for open space. But where will they get the money to buy it?
By Tim McGivern
It's hard to imagine a subdivision built into the Rio Grande Bosque for the simple reason that from any bridge in Albuquerque, as far as the eye can see, not a single home exists there.
The reason one of the nation's largest standing cottonwood groves has survived unscathed by development, up until now, is simple to explain: Of the approximatly 5,000 acres of river and woods that stretch from Sandia Pueblo to Isleta Pueblo, more than 4,700 acres are designated a state park, entrusted to the management of City Open Space by the New Mexico Legislature. Besides, the Bosque resides in an environmentally sensitive floodplain that, as we learned last summer, is also susceptible to severe fire damage. So aside from the obvious desire to protect the environment, common sense, one would think, has kept homeowners out of there.
Still, there are two privately owned tracts of land left in Bernalillo County that sit between the Corrales drainage ditch and the banks of the Rio Grande—both on the west side and easily visible from the Montaño bridge.
To the south, about 120 acres are owned by Ray Graham, a philanthropist who is not of a mind to alter the natural landscape, according to city officials.
Immediately to the north of the bridge, a 110-acre stretch has been renamed the Bosque Wilderness Subdivision and therein lies a controversy that is heating up at City Hall.
The man who claims ownership to this parcel and an adjacent 15-acre plot is Mr. D. McCall, who says he's going to bulldoze the area and make it, in real estate parlance, residential.
With this news, City Councilor Michael Cadigan and Mayor Martin Chavez want the city to purchase the land from Mr. McCall and forever preserve it as open space. And if negotiations for a fair price fail, the City Council, with the mayor's approval, can opt to condemn the land and award McCall an amount of money based on the city's own appraisal. If that occurrs, Mr. McCall, as is his right, will likely sue for a larger sum and take his case to a jury.
McCall is well known to the folks at Civic Plaza for purchasing environmentally sensitive land and selling it to the public for a profit, and he says he's ready to negotiate. But, like a seasoned poker player with his cards held tight to his chest and a confident grin on his face, Mr. McCall also says he's ready to cut down the cottonwoods and start building homes smack-dab in the Bosque floodplain if that brings the greatest profit.
A Brief History
On April 16, 2002, the Joel and Nina Mae Taylor Foundation submitted an application to Bernalillo County requesting that a subdivision be approved for the property.
On that day, the Taylor Foundation's president, Mike Jones, granted D. McCall permission to act as the agent on behalf of the Taylor Trust in all matters regarding their proposed Bosque Wilderness Subdivision. McCall then granted Ron Bohannan, an engineer with Tierra West of Albuquerque, permission to act as his agent in the permitting process, according to Bernalillo County records.
The proposed development, or sketch plat, submitted on that same day by Mr. Bohannan stated that the site would contain “approximately 97 one-acre lots for single-family (homes).”
One week later the county denied the application request for myriad reasons, chief among them the property existed in a “special flood hazard area,” as designated by the Federal Emergency Management Agency (FEMA). The county's report also noted that “the request conflicts with County Plans regarding the need to preserve the Bosque in its natural form so as to minimize erosion and protect natural species.”
Also mentioned in the county's refusal statement was the absence of a water and sewer availability statement that needed to be acquired from the city.
According to city records, a request for water and sewer service on the land had been submitted by Tierra West on March 14, 2002, and denied on March 21, 2002, because the property “is mapped as a Flood Zone referred to as a Floodway” and therefore would need approval by both the City-County Water Utility Authority and the City Council.
By calling the land a “floodway,” the distinction implies the property sits where the floodwaters flow, unlike a “floodplain,” which implies the area where the floodwaters settle.
Nonetheless, once the application for a subdivision was submitted public officials became aware of the proposed development, setting in motion a plan to determine what the land is worth and where public funds would come from to buy it.
Twenty months later, on Nov. 11, 2003, Tierra West submitted a second water service request on behalf of D. McCall, this time to the newly convened City-County Water Utility Authority. However, the sketch plat had been revised to serve 138 single-family units.
According to a deed of trust filed with the Bernalillo County Clerk on Dec. 2, 2003, McCall purchased the property from the Taylor Foundation on Oct. 1, 2003, financing $3.3 million of the undisclosed price in an owner-financed transaction.
The deed serves as a public notice, but does not necessarily represent the full term of the transaction. New Mexico is a non-disclosure state, legally speaking, and if there was some additional agreement between the parties, it is not public record.
With that in mind, when asked what he paid for the property, McCall said, “I'm not gonna tell you.”
McCall did say that he also owns a 15-acre parcel of Bosque that borders his 110-acre proposed subdivision to the south, purchased from the Albuquerque Christian Children's Home “about three months ago,” adding that he might like to develop that as well.
Interestingly, Ivy Harper, the home's director, in an interview with the Alibi last week, said his organization still owns those 15 acres.
“We'd sell it to the city if they come up with the right price,” Mr. Harper said, adding the price the city has been willing to pay was “lower than what we want out of it.” Asked if the children's home would develop the Bosque land, Harper said: “We're exploring all sorts of possibilities.” (To obfuscate the matter further, according to the County Assessor's office the land is still owned by the Taylor Foundation, on behalf of the children's home.)
A Longer History
City open space acquisitions are routinely based on an imminent threat of developing environmentally sensitive areas, but in modern times it is unheard of for a proposal to involve a development up to the river's edge. That's what makes the case unique and worrisome to city officials.
“We expected the Taylor trust to hold onto the land,” said one official who deals with open space acquisitions, speaking on the condition of anonymity. “It's perfectly great Bosque, and we didn't expect McCall (to purchase it). It's like, now we have to deal with him again.”
McCall, according to city and county records, has owned or brokered land deals on three prior occasions when local government has ended up buying it to convert to open space.
The popular corn maze known as Los Poblanos Fields, near Montaño Road just east of the river, is the most high profile example, especially since it involved condemnation and litigation.
Beginning back in 1995, McCall and his business partners obtained all of the necessary utility commitments and permits to build residential housing in the area. Once public officials discovered a subdivision was imminent, the city condemned two separate plots of land owned by McCall on May 12, 1997—noting it's ecological value as wetlands and nesting area.
The city appraised one 48-acre plot at $3.75 million, then another 90 acres at $7.9 million.
By law, once the land was condemned, the city had to pay the owners its appraised amount. McCall and associates sued for a higher amount based on their own appraisals, which were $7 million and $9.65 million respectively.
On Nov. 25, 1998, a jury ruled that the 90-acre plot was worth $9,537,000 and the court ordered the city to ante-up the difference. Likewise, on July 6, 2000, a jury adjusted the property value for the 48 acres to $5,376,000.
In the end, McCall and his associates seem to have made a nice profit on the outcome. According to court documents in the case, in December 1995, McCall paid approximately $41,000 per acre for the land. The city condemned it 18 months later and the cumulative jury award equaled
$14,913,000—or $108,000 per acre. Had McCall accepted the city's offer, it would have equaled just over $84,000 an acre.
Although, he received nearly triple (legal fees notwithstanding) what he paid for the land in less than five years, McCall contends the city “jerked me around” by condemning the property, because he could have made significantly more had he transformed the land into a subdivision.
It's also important to note that back in January 1997, the city passed a two-year, quarter cent tax increase for the purposes of acquiring open space, specifically listing Poblanos Fields (then known as Anderson fields) acquisition on the ballot. The tax raised approximately $30 million, about half of which went to the McCall settlement. The tax increase expired in 1999, and no such money exists today.
That's a reality McCall is well aware of. With regard to his Bosque Wilderness Subdivision, McCall said last week: “I think the economic times tells me the city doesn't have the ability to pay for it, and the only alternative I have is to develop it.
City Councilor Michael Cadigan is one of three councilors on the new seven-member city-county water utility board (three county commissioners and the mayor round out the rest).
Needless to say, McCall's most recent request to run residential lines within spitting distance of the Rio Grande gave Cadigan pause. As a result, Cadigan said he wants the city to act swiftly to negotiate a purchase price for the land, or if that fails, condemn it.
“If this land were to be developed, it would be a huge scar in the Bosque that would never heal,” said Cadigan. “Once those trees are cut down, the whole ecosystem is changed forever.”
Cadigan said the newly formed water authority has not yet developed a procedure to deal with water line extensions and therefore the request has been deferred until the board meets again later this month.
“If the request is consistent with city land use regulations, we might have no other choice but to grant it,” Cadigan said.
Because a city water line that services the Westside runs near the Corrales drain, McCall said hooking into it would be inexpensive and stand as a good example of the city's commitment to infill development. If the request is denied, again, McCall said he's going to construct a private water and sewer system.
“It's a big enough development to do that, and I have the private water rights,” he said.
As a seasoned developer, McCall might have guessed that getting permits to build homes in a flood zone wouldn't be easy. But he contends building a levee will fix the problem, and he says the U.S. Army Corps of Engineers will give him permission to do it.
The levee would have to protect the property against a flow of water that could reach 40,000 cubic feet per second, or what is also known as twice the size of the worst flood that could happen in a 100-year span, according to McCall.
“The Corps told me exactly what I had to do,” he said, “and it would cost $500,000. We're probably going to submit that proposal to them by the end of this month, hopefully.”
Ron Bohannan said he is in the process of designing a plan that would be similar to the dykes installed in the Corrales Bosque several years ago. Bohannan also said the U.S. Corps of Engineers provided him with the “design criteria” for the Bosque Wilderness Subdivision plan. Interestingly, there is one development in New Mexico, just north of Corrales, known as Bosque Encantado where homes are built right along the river in the floodway. Mr. Bohannan knows it well—he was a consulting engineer on that project.
If McCall's project is to ever gain county approval, it is imperative that the corps of engineers concurs with the plan and then FEMA would also need to issue a letter of approval.
“It's their land, they can do what they want as long as they don't effect anyone else,” said Fritz Blake, a project manager with the U.S. Army Corps of Engineers that has met with McCall and Bohannan on several occasions to discuss the matter.
Blake said in order to get clearance, McCall would need to produce evidence, such as a technically written analysis, that shows the result of building a levee would not induce damages on surrounding property. Blake said, by his own estimation, such a levee would likely increase water flows on the east side of the river if a 100-year flood occurred.
“They have quite a few hoops to jump through before they reach the point where they can [start building],” said Blake. “From our view, it's not developable at the present time.”
Blake said that McCall and Bohannan also approached his agency, among other federal agencies, looking to sell the land for upwards of $30 million.
“We said no,” Blake said. “We don't make those kind of purchases.”
The Price of Doing Business
When city officials met with McCall in August 2003, it became clear to both sides that the value of the land would be highly subjective. The city appraised it at $3.7 million. McCall, in an interview with the Alibi last week, said he has decided the property is worth $31.5 million—the full value once his subdivision is complete. Somebody, it would seem, is suggesting an unrealistic number.
Either way, whether you talk to a bureaucrat or McCall, the property value is more than what local government has in its coffers for open space acquisitions. And with McCall and his engineer Mr. Bohannan putting the time in, ostensibly, to acquire all the obligatory permits, the city would seem to have no other recourse but to enter negotiations in earnest.
“If the city wanted to buy it I would try and negotiate,” McCall said last week. “They said it's un-developable. That's their theory. Mine says because you don't want it developed doesn't make it un-developable.”
McCall insists that there is no negotiation in the works presently with the city, and he hopes to be “turning dirt by the end of the summer.”
There are plenty of government officials that wonder if McCall isn't bluffing based on past experience and the difficulty of getting approval to build in a floodway. They speculate that he is trying to drive up the property values by submitting development plans and requests for utilities in order to help his case if a market price is left in the hands of a jury. They say, this would be in line with McCall's track record and business acumen.
Michael Cadigan, however, isn't comfortable with the idea of gambling away the Bosque's future. He said the city should work to find money to purchase the land before it's too late.
“It's a matter of priorities,” said Cadigan. “This seems to be the most emergent open space need in the entire city and other purchases might have to wait. Once those trees are cut down, it'll be like a knife through the heart of the open space program. I think people will be beside themselves.”
Cadigan said there is always hope that additional money can be procured at the state legislature or from the federal government.
Mayor Chavez said the city has been working for more than a year to make sure, “at the very least,” the land isn't developed. He preferred not to go into much detail while negotiations are imminent, especially if litigation could be involved.
“I'm not against people making money, but he's got quite a system,” said Chavez. “I think Mr. McCall represents much of what people dislike about the development community.”
The mayor's perception might be accurate, but what does that mean for the Bosque?
“People want to walk around there, but I'm sorry you don't own it,” said McCall. “It's my land and I ought to be able to develop it, as long as I follow the rules and regulations. I'm passionate about this piece of land too.”
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