TIDDs these days

Like bad allergies, they're everywhere. If you've been in Albuquerque the last few weeks, you've seen smiling families on television, soothing voices on the radio and polished print and internet ads all assuring the local populace that tax-payer financing of private real estate ventures will bring untold prosperity to our land. This PR campaign has been accompanied by an infusion of cash into legislative candidate campaigns as well as money to both political parties.

The heavy-duty campaign for tax breaks from the state is covered by the Albuquerque Journal on Sunday, although with no mention of the untold thousands the Journal has taken in by running those ads online and in print.

According to Jeff Jone's piece, SunCal Companies' Westland Development and El Paso-headquartered Hunt Development, "gave a combined $62,000-plus to legislative candidates, state political committees and the state Democratic Party in 2008."

Sen. Cisco McSorley, D-Albuquerque, who has been opposed to the districts, is cited in the article:

"They are the 500-pound gorilla in the room... When you have this many lobbyists, which has historically never been seen before, when you have this much media, when you have this much ability to produce materials and information, I don't know how much influence it has. It's unprecedented."

No mention is given to McSorley's bill that would "impose a 2-year moratorium on new greenfield TIDDs and create a taskforce to study how TIDDs are being implemented in NM", according to Anne Stauffer of New Mexico Voices for Children. The bill was to be heard by the Senate Corporations and Transportation committee this past Saturday. No word yet on how the hearing went.

The Journal gives us a look at the TIDD lobbying effort finances:

SunCal during the 2008 legislative session pushed a $629 million TIDD bill. It passed the House but died in the Senate, where McSorley filibustered it.

A Journal analysis of campaign finance reports shows that Westland since the 2008 defeat has contributed a total of at least $32,500 to more than three dozen state legislative candidates and one PAC in increments ranging from $500 to $2,000.

Westland also gave $14,000 to the state Democratic Party in March 2008. More recently, it was a "platinum sponsor" of the state party's Jan. 29 legislative fundraising dinner, pledging at least $7,500 for the event.

Westland and SunCal have a total of 11 state-registered lobbyists — including former Reps. Dick Minzner and Joe Thompson. Minzner is also a former state tax secretary.

Its important to note that this full-court press formula has already been utilized with success by Forest City Covington, LLC in 2006 for the Mesa del Sol project. According to a study compiled by Common Cause in early 2007 that "examines the hefty political campaign contributions developers make to New Mexico politicians", the circumstances are extremely similar. The report gives this account of the situation in 2006:

By the time the 2006 legislative session got underway, the players in the TIDD game had changed. This time around, an enormous $8.5 billion real estate conglomerate, Forest City Covington LLC (a joint venture between Ohio-based Forest City Enterprises and Covington Capital Corp.) had come to the table. Before the session began, the company contributed heavily to the candidates in the races for Governor ($65,000) and State Land Commissioner. In addition, the company had committed millions of dollars to a massive development project, Mesa del Sol, on Albuquerque’s south side.

Forest City Covington assembled a dream team of lobbyists, including former House Speaker Raymond Sanchez, the venerable lobbyist Tom Horan, Albuquerque bond attorney David Buchholtz, and former Assistant State Land Commissioner Harry Relkin, among others. With Forest City’s large campaign contributions to candidates for governor and land commissioner in mind, and the developer’s huge investments in the Mesa del Sol project on the line, the lobbying team set out to secure Tax Increment for Development legislation that would work for Forest City.

No expense was spared: Experts in real estate law, finance, tax and legislative maneuvering were brought in to push the TIDD legislation. According to one government insider, the team “bowled over everyone” and won passage of the TIDD legislation at 11:59 a.m. on the very last day of the short, one- month legislative session—it was the last bill to pass.

Another issue covered in the Common Cause report, which is never brought up in the TIDD debate, is the Development Fees Act of 1993. According to the report:

...the New Mexico Homebuilders Association (HBA) pushed to pass the Development Fees Act of 1993. The Act, modeled on and Texas’ first-in-the-nation impact fee legislation, provides uniform rules under which local governments across the state may impose impact fees on developers.

Seeking predictability in their expenses and in an effort to minimize the impact these fees would have on overall project costs, the HBA successfully lobbied to exclude libraries, community centers, schools, projects for economic development and employment growth, and affordable housing from the list of items payable by impact fees. This means that a city may elect to charge a developer its fair share of the costs of new roads, sewage systems and the like, but the city may not charge the developer for the schools, libraries or community centers that new homes will require.

The exclusion of schools from the impact fee statute has had real impacts on Albuquerque’s West Side. There, booming growth during the past decade has left the Albuquerque Public Schools (APS) struggling to keep pace with the need for new school construction. School overcrowding in the newly developed areas west of Albuquerque has reached crisis proportions. In the absence of impact fee contributions, APS has struggled to find new sources of school construction capital-- including a $351 million general obligation bond issuance, the sale of APS properties, and a loan from the state. The crisis has become so severe that new developments are becoming less attractive to prospective investors and home buyers.

You can bet SunCal and Hunt will utilize this piece of legislation to maximize their profits. So while listening to the smiling family on TV explaining the virtues of collectively getting into the real-estate market at this most opportune time, remember that they will not be required to pay - nor use your tax-dollar funding for - library, school, and community center infrastructure.

And then there's the Journal's recent article which says, "SunCal Companies defaulted on $184 million in loans— losing five properties in foreclosure. At least nine lawsuits are pending in those states(California and Nevada)."

When Mayor Marty was doing his darndest to fast-track the Albuquerque TIDD bill, City Councilor Michael Cadigan said it best, "What happened to capitalism? What happened to asking a developer to get the money from a bank instead of taxpayers?"