Overview Of Industrial Revenue Bonds On Agenda For County Council Work Session

Bio Lab1.jpgNew Mexico Consortium Biolab at Entrada Park. Photo Courtesy NMC


Los Alamos County Councilors are slated for an overview of Industrial Revenue Bonds (IRB) this evening, May 14 at their work session at the Fire Station 3 in White Rock.

According to Deputy County Manager Steve Lynne, IRBs are an economic development tool available to counties and municipalities in New Mexico and have been used by Los Alamos in the past. They incentivize development of projects within a county, providing job growth, capital investment and increased economic activity as well as providing tax abatements to companies for eligible projects.

At the May 7 Council meeting County Manager Harry Burgess said the Council had approved a request for an amendment to the Local Economic Development Act (LEDA) agreement with the New Mexico Consortium. He said the purpose of that change was to facilitate the Consortium’s potential to sell that property and move to an alternate property. He said the potential buyer of the Consortium property is known as Pebble Labs and that there is  a request from Pebble Labs for LEDA consideration which largely entails the donation of property adjacent to the current Entrada Business Park location.

“They’re also requesting consideration for industrial revenue bonds which is a financing mechanism and because we have not used those commonly in the past, at next week’s work session there will be a presentation on that subject so the Council has the time to consider it before the ordinance comes before you. We have also learned they are pursuing state LEDA funds as we experienced with the UbiQD project,” Burgess said, adding that state LEDA funds typically involve a tri-party agreement that requires the County to be fiscal agents for those funds as well.

“So we’re anticipating as many as three ordinances coming before Council as early as May 28. That’s highly dependent on our ability to review those LEDA applications and other documents. We’re still proceeding with the IRB discussions so nothing will be lost there. Council will be ready if the May 28 date is still viable. Even if we’re not there’s potential to postpone it to a subsequent meeting,” he said.

The  Consortium has made it known that there is a deal in the works for them to sell their Biolab building located in Entrada Business Park to Pebble Labs while the Consortium plans to build an entirely new biological research lab building to be located next to the Los Alamos Research Park located across from the Omega Bridge. The new 76,000 square-foot facility will have a similar sized biological laboratory and will also have a research greenhouse attached. The Los Alamos County Development Corporation currently leases the 44-acre property  from the Department of Energy.

Burgess said the reason he was bringing all this up at this point is that as part of the IRB process, the County is required to notify all taxing agencies within their jurisdiction of the potential for an IRB because the IRB’s effect is to reduce property taxes for the properties that they are financing which would potentially negatively affect the County, Los Alamos Public Schools and UNM-LA would be the ones that would potentially be negatively affected. An IRB actually puts those properties into the public domain during the timing of the IRB.

“This is something that would be discussed and in doing so allows those properties to enjoy municipal financing but when you have them under local government control, they’re non-taxable and so potentially local governments, local taxing entities, could lose that revenue,” he said.

Burgess said conversations to date have indicated that Pebble Labs agreed that they would enter into some sort of contract that would continue their payment of those equivalent amounts to both LAPS and UNM-LA.

“For us to consider the IRBs we would be providing that incentive to them as part of your consideration but we didn’t feel it would be something Council would want to consider for those other two entities,” he said.

Thirty days prior to Council’s consideration of an IRB the Council must inform LAPS and UNM-LA of the potential for IRB and because the proposed project is potentially considering developing a large triangle of land with an additional building similar to the one that’s currently owned by the Consortium.

“The total project could amount at $60 million in investments and that would be the amount of money that would be on the letter that is distributed to those other taxing agencies for the potential of issuance of IRBs. We will be hand-delivering those letters and discussing it with the principals of both of those entities however, before it comes back through the grapevine that we’ve sent a letter with the potential for $60 million to be considered I wanted Council to be aware of that,” Burgess said.

He said obviously none of that occurs until Council actually votes on it but that the notice has to be sent out 30 days prior to Council’s consideration.

“They may not draw down the full $60 million initially or ever however they had asked that we consider the full amount at this time so that they knew what their potential was and would not have to come back or multiple bites of the apple,” Burgess said.