Land Commissioner Pat Lyons
More than a year and a half after the attorney general took issue with certain types of State Land Office development leases, the land commissioner is attempting to erase questions about the legality of such agreements with an administrative rule change.
According to the Albuquerque Journal, the rule change would allow the office of Land Commissioner Patrick Lyons to pay developers who make improvements to state trust land and give them a percentage of the increase in the land’s value when it sells. You can read the proposed new rule by clicking here.
The land office held a public hearing on the proposed rule change today in Santa Fe. Written public comments will be accepted through Tuesday.
In response to questions about a controversial land deal in Las Cruces, Attorney General Gary King’s office took issue with such lease agreements in early 2008. In the Las Cruces case, the AG’s formal opinion 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.
The agreement with Philippou stated that, when the land was sold, he would be compensated for the value of “reasonable project costs” plus 40 percent of the “change in value” as a result of his developing the land. The land office entered into several leases around the state similar to the deal with Philippou.
The AG’s opinion isn’t legally binding and Lyons has disputed it. And the AG isn’t currently commenting on Lyons’ attempt to enact the rule change.
“Since nothing has been made official yet, it would be pure speculation and premature on our part to make any judgments concerning the rules,” spokesman Phil Sisneros was quoted by the Journal as saying.
Codifying ‘inappropriate practices’ or providing an incentive?
The development controversy has been at the center of local elections in Las Cruces and debates over reforms of the land office that have been proposed by some Las Cruces-area lawmakers. Those legislators take issue with the new rule proposal.
“These rules seem to be an attempt to codify what we consider some of the inappropriate practices of the State Land Office,” said Rep. Jeff Steinborn, D-Las Cruces, was quoted by the Journal as saying.
But the land office, according to the Journal, “says the lease provisions provide an incentive to developers to enhance the value of state trust land before sale and deny criticisms they haven’t worked closely with local governments to ensure the developments fit in with surrounding areas.”
“We have a number of legislators who don’t really understand how these leases work — they just don’t want them,” land office general counsel Robert Stranahan was quoted by the Journal as saying.
According to the land office’s Web site, written comments on the proposed new rule can be e-mailed to Ley Schimoler at lschimoler@slo.state.nm.us or mailed to Shimoler at Office of the General Counsel, New Mexico State Land Office, P.O. Box 1148, Santa Fe, NM 87504.
Update, 4:10 p.m.
Rep. Nate Cote, D-Las Cruces, provided a copy of written comments he submitted today to the land office. You can read his letter by clicking here.