The city of Las Cruces was considering an enormous economic incentive to an out-of-state developer who owns the former Las Cruces County Club property.
But when the deal faced scrutiny, the developer withdrew his proposal.
The incentive would have created the Royal Crossing Tax Increment Development District. An analysis of the proposal was recently presented to the Las Cruces City Council.
The proposed Royal Crossing project would have diverted a projected $262 million in future tax dollars toward developing the former Las Cruces Country Club site. While the TIDD request was withdrawn by developer Zach Wiegert in August, some city officials are eager to see a new deal move forward. Councilor Gabe Vasquez says the development would be a much-needed economic boost.
“We're looking at an infill area of the city, something that we've all decided we want to prioritize for redevelopment. We've created a blueprint, we have an investor who's interested and that doesn't happen very often, let's be honest,” Vasquez said. “If we can't do it here, then it's going to be near impossible to do it anywhere else.”
President of Strategic Economics Dena Belzer presented the analysis of the TIDD request, in order to prepare the council for any future TIDD projects. One of the concerns highlighted was that revenue projections for the Royal Crossing TIDD were not provided on an annual basis, making it hard to understand future economic estimates for the project.
“The revenue projections were not provided on an annual basis, and this is actually required by state statute,” Belzer said. “I don't think this is like the big deal killer, but it did make it really hard to understand the revenue projections, in addition to the fact that the revenue projections that we used in the feasibility analysis didn't accurately match the final build out scenario.”
Belzer advised the city to obtain outside assistance when evaluating future TIDD proposals in order to negotiate more effectively. One suggestion for a future Royal Crossing project—negotiate a reduction in total project cost.
“If you start to think more critically about removing some of these costs, you can start to pretty quickly reduce the amount of money that would go into the tax increment district.” Belzer said. “And the reason why I suggest really working to narrow down the list of costs here is because the lower the amount of costs that you have, the less amount of tax increment the project is going to need to generate in order to cover these costs.”
Mayor Ken Miyagishima says he’s hopeful the city will be able to get a deal done to develop the area without the need for a TIDD.
“Now, I'm not saying just do the deal. I'm interested to hear what the parameters are and bring it back to council, and let’s weigh it,” Miyagishima said. “I don't think I want the TIDD. I don't want to reimburse a developer for infrastructure that they put in because then what do we do with the other developers that have done it as well? But I do want to see jobs, new jobs, not transferred jobs, not people moving from one hospital to another, you know, I want to see new people come in.”
Councilor Yvonne Flores stood in strong opposition to working further with Wiegert’s team on a new deal.
“I think that there were a lot of problems, and there is no way I would ever want to do business again, or even think of having to do anything with regard to Wiegert and his cronies, his cohorts. I thought that they were very deceptive,” Flores said.
Others on the council say a deal could still be made. Councilor Johana Bencomo says she recognizes the city should not enter into a deal lightly but is open to development.
“I'm personally open to that negotiation. I think that after today, though, during this presentation, I'm a lot more clear about, frankly, how scary this TIDD is,” Bencomo said. “And I think that it's a very big deal. And that's why as the conversation went on, I kept thinking, well, is that even the right place to negotiate? And so I'm okay if we start elsewhere.”
City Manager Ifo Pili says he feels confident that a deal can still be made. His team was tasked at the council meeting to explore a future development deal that will spur economic development and minimize city risk.
“I've been in negotiations where things may or may not have been thrown across the table. But then we duke it out, and we come back and we work a deal,” Pili said. “I mean that's just economic development, right? You just duke it out…but from what I see, from an outsider coming in, I think we can get a deal done.”
