A project to build a new city on Albuquerque’s west mesa has been on life support since lawmakers rejected a controversial proposal to fund it using tax increment development district (TIDD) financing in 2009. The tenuous nature of the project was made clear Monday when the developer filed for bankruptcy.
The Albuquerque Journal has reported on Westland DevCo’s bankruptcy filing:
“The filing, in U.S. bankruptcy court in Delaware, was considered necessary to preserve the value of its business as an ongoing concern and its assets, as well as to explore alternatives for restructuring loans ‘in a challenging real-estate market,’ a company statement said.”
But that’s not the whole story. Westland, a partnership between D.E. Shaw and SunCal Companies, had sought legislation that would have provided $408 million for the development. It was controversial because the TIDD funding would have allowed the developer to use public money to build infrastructure in the 55,000-acre development, with a percentage of future tax money from the area devoted to repaying those costs.
Opponents said that would tie up too much future tax revenue for costs that should be paid for by the developer.
The TIDD proposal was narrowly killed during legislative sessions in 2008 and 2009. Westland didn’t seek the controversial funding during this year’s regular legislative session.
Despite the bankruptcy filing, the project isn’t dead, the Journal is reporting. The bankruptcy is designed to “allow the development to reorganize and thereby continue operations,” David Soyka, Westland spokesman, was quoted by the Journal as saying.
“We are working to keep this project moving forward,” he said.