April 6, 2015

Water, ‘systems thinking’ and Santolina’s tangled history

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Albuquerque’s iconic downtown skyline looks drastic different from certain Westside vantage points marked by new development. Photo by Margaret Wright

[box]© New Mexico Political Report, 2015. Contact editor@nmpoliticalreport.com for info on republishing.[/box]Deliberations are on hold until May over a proposal to transform a huge swath of desert southwest of Albuquerque into a booming planned community named Santolina.

Rio Rancho’s sprawling Loma Colorado master planned community by Pulte Homes is one of several referred by Santolina representatives as a recent success development story.   Photo by Margaret Wright

Rio Rancho’s sprawling Loma Colorado master planned community by Pulte Homes is one of several referred by Santolina representatives as a recent success development story.
Photo by Margaret Wright

As the process lumbers forward, it’s helpful to contemplate a concept raised by one of the representatives for the controversial development.

Jim Strozier, president of Consensus Planning, said last week during a special meeting of the Bernalillo County Commission that Santolina is the result of meticulous “systems thinking.” He was referring in part to his firm’s planning process, which he described as the merging of a range of considerations into a unified and ambitious vision: steady, multi-use development for the next 50 years on nearly 14,000 acres of what is today stark desert sloped against the Rio Grande Valley.

Strozier said he and his team, hired by Santolina landowners, have looked at how “to prepare for and respond positively” to inevitable changes in population growth in the Albuquerque metro area.

“Planned communities allow you to set the bar high,” he told county commissioners and a restive public gallery.

Perched precariously atop that high bar is a balance between new jobs and new housing, preservation of open spaces and the facilitation of healthy social, economic and environmental infrastructure.

Strozier made assurances that upcoming decisions about how to build critical new roads and utilities, remediate the desert soil for construction and plan for water use would also be centered on a careful “systems” approach, which would include stakeholder and public input.

Yet other dynamics have received scant or zero mention by players spearheading Santolina’s recent progression through the Bernalillo County planning process. These include the intricate web of history and policy underpinning the proposed project.

Water Systems

If there’s one thing the diverse cross-section of people who object to plans for Santolina have in common, it’s the concern that officials and planning experts touting the development’s “systems thinking” have yet to offer a comprehensive, long-term plan for water management.

That concern might be leveled at every expanding community in our drought-racked state, but it’s at the forefront of Santolina because the developers don’t have water rights secured for total usage estimated to top out at 4.7 billion gallons per year. Owners of senior water rights fear granting new ones to Santolina will contribute to over-allocation and depletion of stressed surface and ground supplies.

A post on the New Mexico Acequia Association website by Jorge Garcia, mayordomo of the Armijo Acequia Association, spells out some of the stakes for local farmers working to sustain traditional agriculture in the area.

“The South Valley Regional Association of Acequias are concerned that this development would seek to acquire and ‘retire’ existing water right from our parciantes,” said Garcia, “from irrigated lands in the Middle Rio Grande Administrative Area to satisfy a development of this magnitude.”

Another point worth highlighting: Despite members of the public pleading for careful consideration of water supply impacts, representatives from Santolina and the county have suggested it’s outside the purview of the Planning and Zoning Commission and the five elected commissioners to consider water use during deliberations to approve or deny the Santolina Master Plan.

That’s because back in 2003, the state Legislature passed a bill with far-reaching consequences for the Albuquerque metro area’s water planning authority. Sponsored by former Senate President Pro Tem Manny Aragon, Senate Bill 877 removed Albuquerque’s powers to regulate the metro area’s water utilities and placed them under the newly created Albuquerque Bernalillo County Water Utility Authority.

Some said the move, which decentralized water planning, constituted a boon to real estate interests looking to boost profits in new developments on the city’s fringes.

At the time of the bill’s passage, former Republican lawmaker Greg Payne wrote in the weekly Alibi:

if you’re someone who has speculated on a couple of hundred acres of land on the far Westside of town, having the city put its focus on infill development isn’t very appealing, because of the time it will take for the city’s growth (and water and sewer lines) to reach your property and make it worth anything.

Payne and Aragon, both controversial figures, have since fallen hard from grace. Payne has kept a low profile since a 2012 arrest for aggravated DWI. Aragon was released from prison in 2013 after serving time for his role in a multi-million-dollar construction fraud conspiracy.

Reports from 2004 and 2007 published by the government accountability group Common Cause New Mexico detailed political donations and lobbying efforts of real estate industry players in the state a decade ago. These campaigns had long-term consequences for land use and water planning.

For instance, the 2004 state legislative session saw the introduction of Senate Bill 89, which would have provided the Office of the State Engineer’s enforcement tools in line with recommendations from the 2003 State Water Plan. That plan centered in part on public feedback emphasizing the need to protect senior water users—New Mexicans like the Armijo Acequia Association’s members—from new domestic wells, especially in areas with critically limited resources. New Mexico Realtors’ PAC and the Homebuilder’s Association, both prominent campaign donors, directed lobbying to defeat SB 89, and it narrowly failed.

Also according to Common Cause New Mexico, unmitigated new well permitting not only has negative impacts on senior water rights, it inhibits the state’s ability to honor interstate stream compacts. Failing to deliver on downstream water obligations to Texas costs New Mexico taxpayers millions of dollars in fines and litigation costs.

Spanish Land Grant Systems

Jerome Padilla, president of the board of trustees for the Town of Atrisco Grant-Merced, alluded to the long legacy of contention underlying today’s debate over the Santolina Master Plan when he stood to testify before the Bernalillo County Commission on March 26.

The Town of Atrisco Land Grant achieved designation as a political subdivision in 2011 from the state Legislature. Padilla said its members may file legal claims to require Santolina’s ownership company, Western Albuquerque Land Holdings LLC (WALH), to issue a warning to real estate customers “that they’re buying within the boundaries of a contested land grant, and that title has been held by the Atrisco heirs.”

Padilla’s assertion is a sustained echo of a dispute that reached a climax in 2006 when a powerful faction in the management corporation formed by Atrisco Land Grant heirs nearly 40 years earlier announced plans to sell the land and its cultural significance to the highest bidder.

“The deal could decide the future of Albuquerque,” wrote then-editor of the New Mexico Business Weekly (which is now Albuquerque Business First). The view of Los Angeles-based journalist Peter C. Beller regarding the shady legal wranglings was more pointed. He described it in Forbes as “one long tale of stupidity, cupidity and mismanagement in roughly equal measure.”

As it turned out, the bidder to emerge victorious was master-planning behemoth SunCal, which swept in from California promising deep-pocketed financial backing from hedge fund D.E. Shaw.

Real estate and finance systems

Meanwhile, local power brokers, some with SunCal associations, have wielded influence during the continuing series of Santolina Master Plan hearings.

WALH has retained Rodey Law Firm’s John Salazar, whose resume includes memberships and leadership positions with some of the area’s most powerful business associations, as well as a couple of regional banks. Tom Garrity tweeted from last week’s county proceedings as part of his public relations campaign on behalf of Santolina developers. A registered lobbyist for WALH, attorney Dick Minzner, works at Rodey with Salazar and is a former state representative with previous ties to SunCal.

Vanessa Alarid, a lobbyist who runs her own consulting firm, gained experience in government affairs working for the Homebuilders Association of Central New Mexico and SunCal. Now married to state Rep. Antonio “Moe” Maestas, D-Albuquerque, Alarid testified in favor of Santolina before the Bernalillo County Planning and Zoning Commission as well as the Board of Commissioners.

“As a Westsider, I can say that the Westside is completely underserviced with jobs and services for our community,” said Alarid during last week’s public testimony. “I view the Santolina plan as hope for us. We can see job creation and development on our West Side.”

She did not, however, disclose her contractual relationship with WALH until Commissioner Debbie O’Malley asked about it.

Alarid and Minzner were also part of two heavily funded SunCal efforts in 2008 and 2009 aimed at securing hundreds of millions in special tax incentive dollars by forming a Tax Increment for Development District or TIDD. At that time, SunCal offered assurances that its mixed-use development plans would bring 11,500 permanent new jobs to Albuquerque.

Less than a year later, the company was up against a lawsuit for more than $220 million in unpaid loans. And the end of 2010, SunCal’s lenders, led by the U.K.-based Barclays bank took over the company’s New Mexico assets in what was perhaps the largest foreclosure in state history.

The demise of SunCal in New Mexico was the direct result of systemic failures in the global finance world. As the housing bubble bulged to dangerous proportions, SunCal made a series of risky deals throughout California with the overly risk-friendly Lehman Brothers financial firm.

In a September 2013 article, the International Business Times described Lehman Brothers’ “real value [as] a complicated array of broken promises with values that were difficult to figure out, mostly because they are not tangible assets. Wrapped in more than 2,000 subsidiaries are tens of thousands of toxic deals that have to be untangled, straightened out and sold.”

Amidst the tangled messes sat SunCal. In addition to its floundering California ventures, the developer had borrowed almost all the money for that initial Atrisco Land Grant purchase from three lenders, primarily Barclays. After the British bank was finished devouring the last choice cuts from the Lehman Brothers carcass, it turned to SunCal in New Mexico. And when its demands for repayment weren’t met, it simply took ownership of the Westside land holdings under the newly formed corporate umbrella of WALH.

Santolina representatives project the development could bring up to 75,000 jobs to the metro area along 38,000 new rooftops, though other analysts have more modest estimates.

Barclays, like Santolina’s other players, has expressed at least short-term optimism that the economy’s on the upswing. Whether locals grappling with poverty and consistently opaque political dealings will reap the benefits any time soon is a hard bet.

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