Auditor will consider request to scrutinize land deals

State Auditor Hector Balderas says he’ll consider a request to investigate the land commissioner’s dealings with developers and determine whether he should get involved in a controversy over a provision in a lease agreement the attorney general says is illegal.

Five state representatives sent a letter on Tuesday to Balderas requesting that he audit all land-sale, land-swap and leasing contracts entered into by the commissioner of public lands. Their request comes in light of a recent opinion issued by Attorney General Gary King’s office that says a lease agreement for land in Las Cruces includes a compensatory provision not authorized by state law.

“We suspect other State Land Office contracts throughout the state may reflect similarly illegal financial arrangements,” the lawmakers stated in their letter, which you can read by clicking here.

The lawmakers want Balderas to consider “whether contracts are written for the benefit of New Mexicans, not developers,” and wrote that the contracts “merit special scrutiny, an investigation of potential mismanagement and a complete audit by your office.” The letter is signed by Democratic Reps. Nate Cote of Organ, Ray Begaye of Shiprock, Mimi Stewart of Albuquerque, Elias Barela of Belen and Thomas Garcia of Ocate.

Though the letter is dated Tuesday, Balderas said in an interview that he didn’t receive it until Thursday.

“We’ll begin an immediate evaluation of the request, and that also may include meeting with the legislators that signed this letter,” Balderas said.

The AG’s formal opinion related to The Vistas at Presidio land deal on Las Cruces’ East Mesa states that the lease agreement’s method of compensating Philip Philippou’s company for developing the land is “not comprehended by and in conflict with” a statute that allows developers who improve land for the state to be compensated only for the appraised value of the improvements. In the lease, the land office also agrees to compensate Philippou for other project costs and 40 percent of the change in value of the land as a result of the improvements.

There are a number of other leases for land in Las Cruces, Albuquerque, Rio Rancho and Santa Fe that contain similar provisions. After initially saying he didn’t plan to take Land Commissioner Pat Lyons to court to try to void The Vistas at Presidio agreement, King has since said Lyons “does so at his own risk” if he chooses to proceed with the agreement. Lyons briefly put all land deals on hold while he met with King about the situation, but has since decided to proceed and said he suggests that “the attorney general work with us, not against us.”

Land office accuses lawmakers of partisan politics

Kristin Haase, assistant land commissioner, said Lyons has an open-door policy and, as a former lawmaker, has an excellent relationship with most legislators.

“He would have welcomed the opportunity to meet with these five representatives to address their concerns personally and explain how planning and development leases do in fact benefit the trust,” she said. “Clearly they are less interested in matters of state than they are about playing partisan politics.”

She said if the lawmakers had “done their homework” they would know that Lyons’ predecessor, Democrat Ray Powell, was the first land commissioner to enter into agreements containing provisions similar to the one the AG says is illegal. She said Powell’s development leases “were less lucrative for the trust,” but Lyons “has improved them significantly.”

In an interview, Cote said he signed the letter because there is “apparent tension” between the AG and land commissioner, so an audit may be the best course of action. He said many constituents have urged him to take action.

“The results of this audit may also answer some questions the public has voiced regarding the appearance of impropriety on actions by the SLO,” he said. “The outcome may either validate those practices and the SLO or give us some idea on what direction we might need to head in regards to doing the best for our beneficiaries and protecting state lands.”