Subsidizing Wealth at Taos Ski Valley: Hopefully Santolina Isn’t Next

Commentary By KAY MATTHEWS

To no one’s surprise, the Bernalillo County Commission approved the Santolina Master Plan yesterday, June 16, in a 3-2 vote. Why no surprise? Because despite the strength of the opposition, from South Valley residents who are worried about water and climate change, to young folks who don’t want to live in another sprawling subdivision, to planners who see the proposed development as archaic, money talks. And I’m not just talking Barclays Bank, which is subsidizing the development by Western Albuquerque Land Holdings (WALH), but the public money that has already, and will no doubt continue, to trickle into the hands of the wealthy, private investors who claim to be contributing to the common good but in actuality are feeding at the public trough. Included in this category is Louis Bacon, the owner of the Taos Ski Valley, who I discussed in the context of the proposed new Taos airport in the June 12 La Jicarita.

The two county commissioners who voted against Santolina, Maggie Hart-Stebbins and Debbie O’Malley, were able to strengthen some of the conditions to the plan, one being that approval doesn’t commit the county to provide public financing or subsidies for the development. That doesn’t mean that the state isn’t going to step in and provide that financing, probably in the form of a Tax Interest Development District (and there’s no guarantee the county won’t capitulate and go along as well). The New Mexico State Legislature passed a bill in 2006 allowing these TIDDs, and the former owner of what is now being proposed as Santolina, SunCal (which bought the land from the heirs of the Atrisco Land Grant), tried to get a TIDD in 2009 from the state legislature but the request was denied. SunCal threatened to come back to the legislature in 2010 but fortunately for New Mexicans the company was sued for non-payment of loans. Another development, Mesa del Sol, a master-planned community south of the Albuquerque airport, which was “planned” to include 18 million square feet of office, industrial and retail space, 37,500 new homes, and 3,200 acres of parks and open space currently has five TIDDs. The development has never reached anywhere near capacity. Will Santolina developers be next in line?

A TIDD essentially allows the developer to divert a portion of property and sales taxes from within a district to reimburse the upfront costs of new infrastructure — such as roads and utilities — in the district. The incorporated village of Taos Ski Valley got $44 million in tax-exempt bonds from the state legislature this year as a TIDD to reimburse Bacon for his investment. The state and Taos County pledged a portion of their new tax revenues as well (see the Taos News article in March of 2015 for a very detailed explanation of how this is supposed to work).

Which brings us to the questions raised in my article on the proposed Taos airport expansion. How much is the town of Taos really going to benefit from the Taos Ski Valley investment, essentially underwritten by taxpayers? The airport expansion seems likely to primarily benefit the ski valley, as wealthy skiers fly in to spend their money there. Will the expansion provide significant job growth? This is always the bottom line rationale of developers and has certainly been trotted out by both Bacon and Santolina. The Taos News article quotes Laird Graeser, a contract analyst who wrote the analysis of the Taos Ski Valley TIDD for the Legislative Finance Committee: “The whole idea of TIDDs is that, does the state need to take some risk in order to provide good, high-paying jobs for my grandchildren? That’s where I was coming from.”

These are the projected job and economic activity figures for Taos County as presented in Laird’s analysis, compiled by the Board of Finance staff, the Department of Finance and Administration, Economic Analysis Unit (EAU), and the Legislative Finance Committee economists:

“The economic impact analysis assumes an investment of $352.8 million will be made during the construction phase of the project, which includes the $307.8 million in public infrastructure, real estate developments, and on-mountain improvements made by the developer and an additional $45 million in private real estate improvements that will be induced by other parties as a result of the project. Further, the analysis assumes a cumulative $19.9 million in retail sales, rental and lodging revenue, and operations revenue will be added to the regional economy over the lifetime of the State GRT [gross receipt tax] revenue dedication through increased economic activity. This increase represents approximately 64 percent of FY14 taxable gross receipts for the Village.”

“The project is expected to generate 3,726 full-time equivalent (FTE) direct and indirect jobs with average labor income of $54,381 during the construction phase of 2015 through 2024. By 2025, the project is estimated to create 295 direct and indirect permanent FTE as a result of expanded resort activity, consisting of 167 full-time positions and 294 part-time positions, with average labor income of $32,042. The analysis also projects the in-migration to New Mexico of as many as 486 persons during the construction phase with a long-term increase in population of 68 persons.”

Again, it’s hard to discern how much of this job creation and income will “trickle down” to the town of Taos and how much benefit is accrued from temporary jobs and in-migration. Some of these questions were raised at Tuesday’s Santolina hearing before the Bernalillo County Commission as well. Commissioners Hart-Stebbins and O’Malley grilled the developers on their promises that the development will create 75,000 jobs. They wanted to know whether these jobs were fulltime jobs or temporary construction jobs, and whether they were all within the boundaries of Santolina. The New Mexico Political Report quoted Southwest Organizing Project (SWOP) organizer Juan Reynosa’s response: “Some of these job claims they make they’re backing out on right now, because they know they’ll never meet their 2:1 jobs ratio,” which refers to the promise of one job for every two Santolina residents.

Supporters of the Taos Ski Valley’s TIDD, especially Taos County’s representatives in the state legislature, Rep. Bobby Gonzales and Sen. Carlos Cisneros, minimize any comparison of the ski valley’s TIDD, where a resort already exists and a billionaire’s fortune backs it up, to the undeveloped projects like SunCal or Mesa del Sol. But it’s still speculation: in Taos, will the snow come as we continue down the path of global warming and drought; in Albuquerque, will the 95,000 people come to Santolina? In the meantime, wealthy developers like Barclays and Bacon’s Moore Capital Management, each of which has been investigated and fined for various financial infractions, depend upon tax breaks and TIDDs to support their developments. The Self-Made Myth: The Truth About How Government Helps Individuals and Businesses Succeed, by Brian Miller and Mike Lapham, lays out government’s central role in creating the conditions for economic prosperity and personal opportunity. Private fortunes are always supported by public investments: beneficial regulations, including tax breaks such as capital gains exemptions; public infrastructure; educational opportunities; the issuance of pubic stock; etc. While the Santolina fight is far from over—a lawsuit is already pending, and more are probably on the way—the last thing we need to provide WALH and Barclays is a TIDD. An early draft development plan requested subsidies; they’re now saying they don’t plan on using any public funding. Let’s see how long that pledge lasts as they travel down the development road.

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