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City seeks leverage over delinquent downtown business district funds

ALBUQUERQUE, N.M. — The city of Albuquerque, reaffirming its support for Downtown’s business improvement district, is seeking to file a counterclaim against the owners of the Albuquerque Plaza office tower to force payment of delinquent fees owed to the district.

The City Attorney’s Office has filed a motion in District Court for permission to file a “complaint for foreclosure” against Albuquerque Plaza Office Investment LLC as a means to aid collection of previous tax liens. The city wants its proposed complaint heard as part of an ongoing court case challenging the legality of the district.

The building owner is fighting the city’s attempt to file said complaint, said B.J. Crow, Albuquerque Plaza’s lawyer.

Albuquerque Plaza had originally sued the city and the Downtown Action Team, which is the beneficiary of fees paid to the business improvement district, in U.S. District Court in November 2010. The lawsuit was dismissed in February 2011, basically on grounds the issues were better suited to state court.

The lawsuit said the business district’s fees violated the “just compensation” clause of the U.S. Constitution, Plaza’s right to due process and equal protection, and both state and federal laws by disproportionately assessing fees on different property owners in the district.

Albuquerque Plaza refiled its lawsuit in state District Court in March 2011.

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Downtown’s business improvement district is funded by fees based on the assessed tax value of eligible commercial properties. Properties with higher values pay more in fees than properties with lower values.

Albuquerque Plaza Office Investment, which actually owns four Downtown properties, has been described as the highest-paying property owner in the business district with a fee of $72,000 a year. The Albuquerque Plaza building, which sold for about $38 million in 2005, is Albuquerque’s tallest building at 22 stories.

Albuquerque Plaza stopped paying the fee in 2011 for two general reasons: its fee was disproportionately high and the owner felt it wasn’t getting anything for the money. The plaza owner also asserts that a simple majority of the 185 or so property owners in Downtown doesn’t support the business district.

The now-financially strapped Downtown Action Team uses revenue from business improvement district fees for street cleanup, graffiti removal and marketing. In February, the City Council voted to use $183,000 in taxpayer money to keep DAT going in the wake of a shortfall in fee payments.

The City Attorney’s Office previously filed tax liens against Albuquerque Plaza. The proposed foreclosure complaint, which seeks about $218,000, is a means by which the city could cash in on those liens.
— This article appeared on page B1 of the Albuquerque Journal

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