SANTA FE — An unusual public financing measure intended to accelerate development around the Pit and south campus in Albuquerque is moving forward at the Legislature amid questions over whether it’s the appropriate way to support the project.
The legislation, House Bill 353, would authorize the sale of $267 million in bonds that would be backed by a share of the growth in future tax revenue in the area — a financial mechanism known as a tax increment development district.
The money could pay for parks, plazas, trails and other public infrastructure.
But it would be the first TIDD connected to a college or university in New Mexico, generating new questions at the Roundhouse about whether public institutions — such as the University of New Mexico — should be allowed to pursue tax increment districts rather than seek funding through the normal budgeting process.
Supporters say the project is precisely the kind that’s appropriate for a tax increment development district. It would support infill development in a blighted area by tapping into some of the future tax revenue generated by new activity, a low-risk financing tool they say universities in other parts of the country have employed.
Rather than repaying the bonds with existing tax revenue, they would instead be paid off by diverting a share of the future growth in tax revenue within the district.
The bill won House approval 53-12 on Thursday, picking up bipartisan support. All dissenting votes came from Democrats.
Rep. Dayan Hochman-Vigil, an Albuquerque Democrat and one of five sponsors, said the tax district would make a critical difference in an area that includes a science and technology park, university sports fields, Isotopes Park and student residences — but also plenty of vacant land.
“There’s a lot of potential,” she said in an interview. “Some of the businesses that expressed interest in coming into this new area are going to be huge in New Mexico — the types of business we don’t normally see here.”
But Democratic Rep. Christine Chandler of Los Alamos said it would be more appropriate for UNM and the city of Albuquerque to seek funding from the Legislature, allowing elected lawmakers to scrutinize the project in public hearings. She called the TIDD a “workaround” that bypasses the normal budgeting process.
“We appropriate money to UNM for various activities,” Chandler said, “and then we have some oversight for how it’s proceeding. Once we develop a TIDD — where they have a separate governing board and the revenue stream is pledged for 25 years — pretty much the Legislature is out of it.
“It’s not transparent in how the projects are proceeding, how the monies are being used.”
The legislation now goes to the Senate.
The development plan covers 337 acres, mostly in the south campus area. A mix of residential, commercial and other development is planned.
University of New Mexico spokeswoman Cinnamon Blair said the proposal is a collaboration among UNM, the city of Albuquerque, Bernalillo County and state of New Mexico.
It will spur job creation and wage growth, she said, while revitalizing an important part of the city.
“Our vision is to address critical community challenges by building an educated, healthy and economically vigorous New Mexico,” Blair said.