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Powell reiterates apple orchard lease rejection

ALBUQUERQUE, N.M. — Dixon’s operators proposed turnover to San Felipe Pueblo

SANTA FE – State Land Commissioner Ray Powell has again rejected the assignment of the lease for the famous Dixon’s Apple Orchard to San Felipe Pueblo.

In April, an administrative hearing officer acting on an appeal found that Powell’s decision-making process in turning down the lease proposal was “not rational and is arbitrary and capricious as a matter of law.”

But Powell still gets the final say, unless the case ends up in court. And in a written decision earlier this month, he reiterated his rejection of the lease assignment and said his refusal “was consistent with the terms of the lease and (State Land Office) rules.”

Jim and Becky Mullane, longtime operators of Dixon’s, wanted to sell the lease on the apple farm’s 625 acres of state trust land and an adjacent 8,600 acres, also trust land, to San Felipe for $2.8 million.

New Mexico Land Commissioner Ray Powell, listens to concerns from Jim Mullane, and his wife Becky Mullane, who both run Dixon Apple Orchard. (Journal File)

New Mexico Land Commissioner Ray Powell, listens to concerns from Jim Mullane, and his wife Becky Mullane, who both run Dixon Apple Orchard. (Journal File)

Becky Mullane said that the Mullanes and their attorney are reviewing Powell’s latest decision against the lease assignment and have no comment for now. The Mullanes have the option of pursuing the issue further in state District Court.

But as has been noted in previous rulings in the case, the outcome of the dispute may be moot because San Felipe Pueblo has informed Powell that it was no longer interested in taking over the farm and was seeking the return of $280,000 it gave the Mullanes as earnest money.

Another proposal for Dixon’s surfaced earlier this year. Adelante Development Center Inc., an Albuquerque nonprofit that assists people with physical and mental disabilities, expressed an interest in running the orchard and making it more of a tourist attraction, if some state funding can be provided.

The apple farm was largely ruined in 2011 by the Las Conchas wildfire and subsequent flooding in the canyon near Cochiti where Dixon’s is located.

Powell said a temporary irrigation system has been installed to help save the apple trees and that his office is trying to find out if the Mullanes – who have moved to Wisconsin to run an apple farm there – are interested in returning to Dixon’s before the Land Office invests more than $600,000 in a permanent watering operation. The old irrigation system was destroyed in 2011.

“The place is still going to be at risk from potential flooding,” Powell said.

He added: “They (the Mullanes) remain our lessee and it’s really up to them if they can find another assignee or be able to meet what they need to do make it a successful apple farm.”

Powell has maintained that the pueblo did not have the 20 years of orchard experience required of the lessor under the state lease. The Mullanes argued that the requirements would have been met if the pueblo hired an experienced manager.

Powell also says that he doesn’t want to continue the 75-year lease under its present terms for the 8,600 acres attached to the apple farm. The Mullanes pay only $100 a year to lease that land, as would San Felipe if it took over. The Mullanes’ rent for the orchard parcel itself, based on profits, ranged from $27,000 to $36,000 in the years before the 2011 damage.

Trust land dollars go for several purposes, including schools and hospitals. Powell has maintained the Mullanes’ lease, negotiated under former Land Commissioner Patrick Lyons, is a bad deal for the state and shouldn’t be extended for decades by assigning it to San Felipe.

Becky and Jim Mullane have moved to Wisconsin to operate an apple farm there. (Journal File)

Becky and Jim Mullane have moved to Wisconsin to operate an apple farm there. (Journal File)

Powell’s order was in the Mullanes’ administrative appeal of Powell’s original 2012 decision to reject the lease assignment. Former state District Court Judge James A. Hall served as hearing officer and held hearings in the case in December.

Hall found in his written decision that the reason Powell gave for rejecting the lease transfer – that San Felipe Pueblo didn’t meet the lease’s requirement for an operator with 20 years of experience operating an apple orchard – was just a rationalization for turning down the lease assignment.

Powell, Hall wrote, had already decided he wanted to reject the lease assignment and separate the orchard’s 627 acres from the 8,600 adjacent acres of state trust land.

In his final order, Powell says he agrees with Hall that the Mullanes should have the opportunity to negotiate a “mutually agreeable” lease assignment, but rejects the idea that the Mullanes can sell off the lease without the Land Office removing the 8,600 acres that produce just $100 a year for the land trust.

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