Dear County Council:
Editor’s note: Dr. Shin’s letter has not been fact-checked by the Los Alamos Reporter.
Here are 5 brief points responding to Councilor Suzie Havemannś loud and angry rant at the last Council meeting on November 19, 2024:
1. Affordable housing: On May 15, 2024, Bernalillo County ¨commissioners voted to acquire two plots of land in the International District, which the county will put in an affordable housing community land trust and are slated for the construction of affordable housing projects to be planned at a later date. The acquisitions are funded by a $2.5 million New Mexico Department of Finance grant that the County Commission also voted to accept at last night’s commission meeting.” I find this a much more reasonable proposal involving state grants.
2. Public input: If she is unwilling to reject this purchase, based on the strong public outcry against it, what makes us think that public input will matter for what can go there? Will she listen to public comments to “amend and massage” plans?
3. Mari-Mac redevelopment: Recall that Columbus Capital finalized the $8 million purchase of the former Smithś building and the $5.5 million purchase of 800 and 820 Trinity Drive/911-991 Central Avenue properties. Columbus has been meeting regularly with County Manager Anne Laurent to discuss their redevelopment plans, as well as a $31.5 million public funding request.
4. 1031 like-kind exchange: Councilor Havemann lectured citizens about a 1031 exchange as a possible reason for the urgency of the sale by the proposed closing date. This means that the owner has 45 days after this sale to purchase another property to avoid capital gains tax. Here, it appears that she is more concerned about protecting the owner’s financial interests than she is about being fiscally prudent with our tax dollars. It is NOT our responsibility to ensure that the owner avoids massive taxes with this sale.
5. Philip Gursky’s comments. Councilor Havemann remarked that they were helpful and stuck with her. They stuck with me, too and prompted me to ask my attorney, Tim Bullock, to write a letter. It has been delivered to each of your mailboxes at the Municipal Building and is attached to this email.
Editor’s note: The following is attorney Tim Bullock’s letter to Council on behalf of Lisa Shin. It has not been fact-checked by the Los Alamos Reporter.
“I represent Lisa Shin who asked me to summarize her arguments against the proposal now before the County Commission to purchase three adjoining parcels on Diamond Drive: the old Metzgers lot, the Anderson’s Pharmacy/Morning Glory lot, and the land and building formerly known as Ed’s Market.
The Role of County Government
Local governments are tasked with basic community functions. They meet needs and solve problems which traditionally include water, sanitation, streets, fire, police, criminal justice, elections, recording of documents and citizen protection. Property development is not a government function. The County’s entry into the real estate market as a competitor negatively impacts the value of other commercial property, as well as the ability to lease and sell competing commercial property.
The Government’s Insensitivity to Price
Government officials are less sensitive to price when spending ‘other peoples money’. The three
parcels were assessed earlier this year at $5.6 million. This value was confirmed by professional appraisal. The appraiser considered the typical factors: price, location, the availability of alternative buyers, unique features, the market and other miscellaneous considerations. Citizens are now informed that the ‘negotiated’ purchase price between the seller and county staff is $9.85 million – almost double the appraised amount.
Purchase of Real Property by a Government Entity Above Fair Market Value is Prohibited
Commissioners will be breaking the law if real property is purchased above fair market value.
Acquisition of Real Property
C. Acquisition of real property for more than fair market value, as determined by the requirements of Paragraph (2) of Subsection B of 1.5.23.8 NMAC, is not permitted.
N.M. Admin. Code § 1.5.23.8
Relative Value of Land to Project Cost
Land value as a percentage of commercial project cost is typically 25% to 33% of overall value.
In these circumstances, a $9.86 million purchase price for the land would equate to an overall future project cost of between $29.58 million to $39.44 million. Monthly mortgage payments on $30 million at 5% over 30 years is $216,721.
A Rush to Decide
The private owner of the three parcels is in a rush for the Commissioners to decide. By itself, the ‘rush’ should be a red flag given the amount of money involved and particularly when no project, public or private, has been identified. If the numbers worked, the land would be in demand and developers would take full advantage.
Unidentified Use Prior to Purchase Is Prohibited
New Mexico Administrative Code prohibits the acquisition of land without a description of proposed use. This is meant to forestall land speculation by public officials.
Acquisition of Real Property
B. In order to attain approval for acquisition of real property, the board [of the public body] requires that the following information be provided at the time of submission to the board:
(4) a description of the proposed use; N.M. Admin. Code § 1.5.23.8
Anti Donation Clause in the New Mexico Constitution
Paying over the fair market value for a piece of real property violates the Anti-Donation Clause in the New Mexico Constitution even if the project or recipient of the largess is deserving. Los Alamos County Commissioners forget that they do not have the authority to dispose of public funds or assets in any way they choose. The key phrase from the New Mexico Constitution states: “Neither the state nor any county, school district or municipality . . . . shall directly or indirectly lend or pledge its credit or make any donation to or in aid of any person, association or public or private corporation . . . .” This Constitutional restriction applies even if Los Alamos County Commissioners have well-meaning intentions. Proponents of the purchase will likely argue that there are a number of exceptions to the prohibitions on governmental donations, the most relevant of which allow government to:
- provide land, buildings or infrastructure for facilities to support new or expanding businesses in order to create new jobs, but only when authorized by specific legislation;
and; - make donations to assist in the creation of affordable housing, but only when authorized by specific legislation|
|
The community has experienced how Los Alamos County Commissioners have ‘helped’ promote new businesses in commercially vacant White Rock. More recently we’ve witnessed the County Commissioners rebuff SALA’s modest request for expansion assistance. At a recent Council meeting the City Manager claimed that “The County has a very good track record of using land and trying to put it back out into the private sector as well”. Is she the force driving this proposed boondoggle? The County is not a developer and should stay within the traditional role of county government. There are far better ways to support our small business community. Affordable housing is a sympathetic and noble goal but the numbers still have to work. They don’t.
Respectfully, my client urges withdrawal of any consideration of the purchase of the propertieson Diamond Drive.
On behalf of my client Lisa Shin O.D.,
BULLOCK LAW L.L.C.
s/: Tim Bullock