New Mexico has an economic development incentive called a tax increment development district. It’s been in use in downtown Las Cruces for some time, but recently a single developer proposed using it for the property where the former Las Cruces Country Club was located.
After strong criticism of that plan, developer Zachary Wiegert withdrew his tax increment development district request, or TIDD. It would have allowed a large portion of tax revenue to be reinvested in the district’s public infrastructure rather than going to the city, and would have covered Wiegert’s proposed retail, home and office development.
New Mexico Public Regulation District 5 Commissioner Steve Fischmann says the project would have diverted a projected $262 million in future tax dollars toward the project.
“I think there are very constructive ways that the city and county can work with these developers, and I think these developers can get it done and do a good job,” Fischmann said. “We just have to put together a more fair deal that’s more focused on public benefits.”
Wiegert pulled the application after a series of emails between his team and Mayor Ken Miyagishima. During a public hearing, Mayor Miyagishima read Wiegert’s email.
“Mayor, we withdraw our TIDD application at this time,” Wiegert wrote in his email. “As a leader of our company I feel we have spent an inordinate amount of time and capital trying to build support for what could have been a transformational project for Las Cruces. At this time, I feel our real estate investments are better focused in other markets where we are welcomed and respected. I apologize to the city staff that have worked very hard to try and navigate this TIDD process with us. You all were a pleasure to work with.”
The move comes after the mayor suggested the TIDD request be tabled for six months as many specifics, such as the use of bonds, still felt unclear.
“I know I specifically asked about bonds being used, because I mentioned a quote, pay as you go method meaning, as the projects are being constructed, I would support, paying back the infrastructure costs with corresponding percentages,” Miyagishima said. “I believe both Zach and our city staff representative said that no bonds were to be used. I'm sorry but these responses, coupled with Zach’s terse email to me, is questioning my ability to fully understand this project. Therefore, I am recommending that this proposal, be tabled until six months from now as to fully study the mechanics of this TIDD.”
Some on the Las Cruces City Council had previously been encouraged by the economic growth this development could spur. Council member Gabe Vasquez spoke to KRWG about the need for action in a recent phone call.
“I was disappointed that the developer pulled back from this project and disappointed that the full council didn't get a chance to review this project again and further negotiate with the developer,” Vasquez said. “This is an older part of the city that I feel has been neglected for too long, that has already been master planned, and so I think opportunities like this come few and far between. I wish we could have come to an agreement that was mutually beneficial for the city and the developer, but I'm disappointed that we don't get the chance to do that anymore.”
Though Steve Fischmann does not discourage the government from helping developments, he is against private TIDD requests.
“I’ve got to be honest with you. I think private TIDDS are a terrible, terrible idea. I think they’re based on some highly flawed assumptions that many economists would point out to you, and I think there is a long history that shows that TIDDs do not stimulate economic development,” Fischmann said. “So I just think we should pursue other methods. That doesn’t mean the government can’t help with the development, but we should know exactly what features we’re paying for and have a partnership in developing what those are.”
The mayor is of a different mindset and hopes this experience has helped the city to prepare for future situations of a similar nature.
“We’re sorry it wasn’t able to move forward. This is something new to Las Cruces,” Miyagishima said. “I think if the timeline had been a little bit longer, we may have been able to gather some information better…Of course, he still has a large investment here right now, this 50 or 60 million dollar hospital. So we thank him for that, and we look forward to working with him on any other projects he may have.”
