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Opinion editorials Handling of Pit Appeal Calls for a Time-Out |
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opinion editorialsThis editorial first appeared in the Albuquerque Journal. It was written by editorial page staff and is unsigned as it represents the opinion of the newspaper rather than the writers
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Wednesday, June 24, 2009
Pipeline Bailout Bodes Ill for Future TIDDs
Once again taxpayers have ridden over the hill to save an economic development deal.
While in this case it's understandable Bernalillo County is ponying up $4.5 million to buy land for a proposed solar panel manufacturing plant on the far West Side, it does raise questions about the need for future safeguards so the public isn't left on the hook.
The county wants to make sure nothing threatens a $200 million incentive package to help Solar Array Ventures, or SAVe, which plans to relocate from Texas and initially employ up to 200 workers and eventually 1,000.
SunCal Cos., a California-based developer, was supposed to buy and donate land for the plant in exchange for the county taking over building a water pipeline that eventually could be extended to land where SunCal hopes to attract other companies. But SunCal really wasn't on the hook for $4.5 million when you consider it owns a minority share of the land and would have been paid back with county bonds.
SunCal couldn't complete the deal by SAVe's timeline, so the county stepped in. Now, building the pipeline and buying the land will cost the county up to $8.5 million. In turn, the Richardson administration has pledged to reimburse the county. Either way, it's taxpayer money.
With the possibility of a special legislative session on the horizon that may include state approval of SunCal's Tax Increment Development District, the company's failure to pull off this relatively small deal raises even more questions about its financial viability and whether it can keep its promises. SunCal already has failed twice in getting the state to sign off on its TIDDs, which would set aside a percentage of the tax revenues a development generates to reimburse the developer for putting in roads, sewer and water lines.
The state has signed off on TIDDs for Mesa del Sol and a project at the ailing Winrock Mall, but in the wake of the housing and credit meltdown, Mesa del Sol is in a holding pattern on building houses and the Winrock project is still seeking financing.
Future TIDDs and associated projects need reasonable timelines for developers to move forward and clawback measures to protect the governments that give up part of their tax revenues to help developers' dreams come true.
Governments need to protect themselves from building pipelines that could go nowhere.
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