Citing a recent opinion of New Mexico Attorney General Gary King, five New Mexico State Representatives have asked State Auditor Hector Balderas to audit "any land-sale, land-swap and leasing contracts entered into by the commissioner of public lands."



According to the Albuquerque Journal, the State Land Office currently has approximately 18 leases in which it compensates private developers for "intangible" planning work they do on state land during short-term, no-bid leases. The Land Office pays the developer for actual project costs as well as a percentage of the change in land value during the course of the lease, which does not exceed five years.



The Attorney General’s opinion specifically found that state law did not allow the State Land Office to compensate developers for planning activities on leased state land, which it deemed "intangible." According to the Attorney General, state law only allows compensation for "tangible" improvements made by private entities who lease public land, such as roads or wells. The Attorney General also said that the practice of compensating a developer for a change in the value of state land due to intangible planning work "is vulnerable to challenge as an improper diversion of trust proceeds."

 

In an interview last week with the Independent, State Land Office General Counsel Robert Stranahan disputed that state law prohibited the financial arrangements in the business planning leases. He said planning activities are tangible because they make improvements such as zoning and municipal annexation to the land. He also said that state law doesn’t prohibit the Land Commissioner from passing a rule allowing the current practice of compensating developers for a change in land value.



In their letter to Balderas yesterday, state representatives Nate Cote, Ray Begaye, Mimi Stewart, Elias Barela, and Thomas Garcia said:



"Because these contracts may deprive New Mexico citizens of potential revenues for education, we believe the contracts merit special scrutiny, an investigation of potential mismanagement and a complete audit by your office. We request that an audit include a review of the State Land Office’s capacity to track and verify the complex costs of improvement value credits permitted under law, whether land trades are equitable and a determination that current contracts are written for the benefit of New Mexicans, not developers."



In an interview today with the Independent, Cote said the letter was spurred by many of his constituents who noted that the deals had the look of an appearance of impropriety. He said an audit would be the best course of action given the tension between the Attorney General’s office and the State Land Office, and that the outcome would "either validate the current practices and the State Land Office, or give us some idea on what direction we might need to head in regards to doing the best for our beneficiaries and protecting state lands."