Challenging Albuquerque's Penchant for Corporate Welfare

There's a huge debate raging just under the radar in Albuquerque at the moment, about what amounts to massive corporate tax subsidy schemes called TIDDs. You can read about TIDDs here, here, and here...some of which was written by me.

In a nutshell, TIDDs use something called "Tax Increment Financing" to subsidize the payday of big corporations to the tune of not millions upon millions, but billions of tax revenue for decades. We're talking State Revenue, City Revenue, and County Revenue.

It's really amazing and, as ever, New Mexico is setting the bar for this particular form of corporate welfare higher than any other state has managed to do so far. We're pretty good at that here in the Land of Enchantment.

Want to see the scope of what we're talking about for Albuquerque/Bernalillo County? Here is a map provided by Councilor Michael Cadigan's office:



Yep, that's the Atrisco Land Grant in red. And Suncal Corporation wants you and me to give them 75% of future Gross Receipts and Property tax generated in that big red area for decades to come. Not just City revenues, but State revenues and County revenues too. Why?

Big Developer: Well, so we can conduct our development business, duh.

Me: Huh? (Scratching head, perplexed look on face)

Question: Do we really need to pay big developers to develop prime empty land on the fringes?

Answer: uh...NO. They are going to do it anyway.

What are the ramifications for the rest of us if they get our tax money? Well, I can write a book, so I urge you to read some of the other posts I've linked. But in a nutshell...the rest of us non-Tidd residents are facing increased taxes over many decades to meet the collective needs of our community, which are many.

Councilor Cadigan is introducing a bill next Monday, December 3, at the City Council to roll back the legislation allowing this to happen. If you agree that these TIDDs in the greenfield areas are bad, please call your Councilor and urge him or her to support the bill. Also, go to the meeting on Monday and speak during public comment. See you there!

Want to know more but can't wrap your head around all the jargon in the written pieces?
Watch a debate on KNME's "In Focus/The Line" (Channel 5): tonight at 7pm, and again on Sunday, at 6:30am.


This blog is cross-posted on m-pyre.

Views: 11

Comment by Johnny_Mango on November 30, 2007 at 4:21pm
Great post. Important. I'll call.
Comment by thorstad on November 30, 2007 at 5:04pm
I believe that NM was the 48th state to approve TiDD/TIF. Hardly setting any kind of bar. More like catching up on approving a vehicle that promotes responsible development at, contrary to what you're describing here, no net expense. These evil developers wouldn't be here without this kind of financing available. Neither would the jobs they're creating. Period.
Comment by Marjorie on November 30, 2007 at 5:32pm
The Suncal project will be 50,000 acres huge when it's all said and done. That is the largest proposed TIDD project in the nation (here in NM we like to break those kinds of records...check out how big the industrial revenue bond packages are that we give out). You know, no one said these developers are "evil." Rather, the issue is whether or not their projects should benefit from massive public subsidies. These tax revenues are going to pay off a huge chunk of the costs that are a normal part of doing business in the development world. What you call a "vehicle" is 75% of State gross receipts taxes, and up to 75% of City and County GRT & property taxes...for over two decades. Look at that map and tell me that isn't a problem. As to your point about them being here without billions of public money to lure them, you have nothing that can show that SunCal wouldn't have purchased the old Atrisco Land Grant without the TIDD option. And regardless, why should a billion dollar corporation like SunCal benefit from this type of public subsidy scheme instead of local developers doing infill? As to the old refrain (blackmail) that "blah, blah, blah...wouldn't be here without this type of financing (subsidy) available"...this is about growth, which IS going to happen. And as a city/county we can mandate what it looks like without giving away our tax base. Period.
Comment by Kevin Murray on November 30, 2007 at 10:59pm
Marjorie,

I am not saying if you are right or wrong on this, and I know that this must be something that you care about based on your writing. But, also your tone of voice that is in your writing can be a real put off. Right now, based on your tone I almost want to call up anyone who will listen and tell them to give SunCal the money.

Now I am not saying that TIDD's are bad, but I think you might be right in this case. I think TIDD's can be good when used right, take for the Tempur-Pedic mattress firm. They built North America's largest mattress factory here and employ lots of people, which then infuses money into our economy.

Now the question of should we give SunCal "all that money" for the next 20 years is a whole other question. I somehow think that "roll back the legislation" might be a knee-jerk reaction to this. Growth is something that we are going have to deal with one way or another.

So minus infill, which I will hit on a little later, there are two ways this could play out, since growth is going to happen one way or another. One is the way things have been done in ABQ for a long time now. Building with no master plan. Developers just suck up small chunks of land, and build with no cause of what is around them, or even how they are going to get the infrastructure to these developments.

Just look at the west mesa now, it is riddled with development and no infrastructure. Now this really is just as much the cities fault as it is the developers since the city lets (ok makes) the owner of the land build the infrastructure.

So now consider this, a company comes in, will build the entire infrastructure out to 100% for the whole area that is their (in this case a large area). Build out will take at least 20 years, if not longer. Also, the company will build everything according to a well thought out master plan that consists of everything needed to be a great community (something that Albuquerque really lacks).

To me and this is just my view, the second option sounds much better then the first one really.

Now I know you said that we should give infill the same TIDD's, but with infill you have a lot less cost associated. All of the infrastructure needs are already there for the most part. But I do agree that infill should get tax breaks too, maybe just not the same ones. But infill also has its issues too. For a city with the largest balloon rally in the world, we need our open space, even in the heart of the city core. But really, this is not a debate about infill, which my guess is for another day.

So who is right and who is wrong? No one. That is the great thing about this country we live in. We both are allowed to have different views and no one is wrong. As for me, I have yet to figure out where I really stand on this issue, cus I have been way too busy at work to even do any research on this issue. Anyway, here is hoping that the right choice is made, what ever that is.
Comment by Marjorie on November 30, 2007 at 11:45pm
Kevin,
Tempur Pedic got an IRB, a tax subsidy which exempts a corporation from paying property taxes or taxes on the equipment they buy for their plant. The city website has a pretty straightforward explanation of how that works. An IRB is similar to a TIDD only in that it subsidizes the corporation. A TIDD goes well beyond an IRB, really. Whereas an IRB exempts a corporation from taxes, a TIDD provides an outright transfer of tax revenue to the corporation's development project. The argument for IRB's is often that the company wouldn't have come here otherwise. I consider that up for debate, but it's a hard debate. I don't see how anyone can argue that growth won't happen without TIDDs in the greenfields.

As to quality development, sometimes referred to as "smart growth"...when I first started thinking about this issue, I found the quality infrastructure argument compelling also. But in many ways I think it obscures the majorly huge subsidy that is happening here. First, SunCal (and they aren't the only ones in the state) argues that they will just piecemeal the 50,000 acres to other developers and not worry about building "smart" if we don't pay for their infrastructure. This is a real argument they make...I've heard it directly from them myself. But in reality, we can choose to mandate that certain development criteria are followed. As a community we have that right. Getting to what makes this a really huge subsidy rather than simply the community deciding to build public infrastructure...this mechanism is designed to pay off private development costs. Nowhere is there any provision stating that the company has to show they aren't including the cost of that infrastructure into the price of the homes they put on the market. If that were the case, it seems to me not only would we have higher quality infrastructure, but we'd also have a lot of affordable housing. It would be an entirely different situation, although still quite problematic.

As to my tone...not sure what to say about that. It is what it is.
Comment by Kevin Murray on December 1, 2007 at 1:13am
Marjorie,

Thank you! That was a much better explantion of the whole thing. I always get those damn IRB's and TIDD's confused with each other. :)

I think if this does get approved, that there should be some major oversite in regards to the costs, just like you talked about.

With regard to the "mandate that certain development criteria are followed", I know that in theory we already have this in Albuquerque, but there are days that I really wonder. The normal MO for the city has been let the developer and/or land owner build/figure it out. The problem with this is that we get what is the west side. A bunch of roads that go from 2-lanes to 4-lanes, then back to 2-lanes and the cycle continues.

I for one would love to see the city step up and fix a lot of these issues and not wait for the developer to do it. I know that was the point a few years back when they changed the way the impact fees (or what ever ABQ calls them) were changed, but I kinda think we (being the city) should build the roads and charge the developers for them when they build.

Does this mean the city might have to pay more? YES. But we would have a much better built out infrastructure in the city as a whole, which until we get a new transit depeartment (cus the current one is a joke), then our roads are what we need. (thats a whole other argument that I dont want to start on right now).

My whole thing about all of this, in theory, any tax that is gathered out in the new SunCal area should goto helping support that area (not only roads, but what ever else a new area like that needs), TIDD or not. I do not think that the tax from that area should go to support anything else in the city (short of public saftey, and river crossings to support more population).

As much as I think our current mayor is doing a decent job (better then some of our past mayors), I really think the way the city deals with things is a complete joke. This city would not know real planning if it held a big sign in bold print! (again another topic for another day).

As much as I hate to say this, I think that if SunCal does not get the TIDD from the city (I just read on ABQJournal.com 's website that they have also applied for 9 TIDD's in the county) that what we will see is much of the same that we already see. I hate to say that, cus it means another developer will get what it wants, but this is a very large chunk of land and a very large part of what Albuquerque will become in the future and we (being everyone) really should not want to see this get screwed up.

So after reading that artical ( http://www.abqjournal.com/west/265970west_news11-30-07.htm ) I have a question that you might or might not be able to answer. What would happen if say SunCal got their 9 TIDD's from the county but not from the city? Would the areas in the county be very nice and the parts in the city crap?

Heck, I already see some of this in the area of my office. My office is in the Edith, Griegos / Comanche, I-25 area which is a patch work of city and county land. We are luck in that the street my office is located off of, is private land that all the land owners own (bascily we own our street), so its nice and uniform all the way. But, Rankin RD which is a few streets away is right in the middle of this patch work, so you get parts of the street which are very nice with curb and gutter and then there are other parts of the street which are total crap. So, I would really like to know if we are going to see something like that again or not.

Anyway, I think that is all I've got for now. Thanks again for explaing it deeper to me :)
Comment by bleve on December 2, 2007 at 1:36am
"your tone of voice that is in your writing can be a real put off. Right now, based on your tone I almost want to call up anyone who will listen and tell them to give SunCal the money."

Her tone and your reaction to it has just prompted me to get the word out to everyone I know to stop this crap from happening. Amazing the blind allegiance corporations and governments can get due to an individuals befuddled philosophy. Tone is often incurred by an informed voice.

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