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Las Cruces Public Schools Files Lawsuit Over "Lease To Own" Dispute

Aug 12, 2019

Las Cruces Public Schools (LCPS) filed a lawsuit today against Trinity Properties, LLC under the Fraud Against Taxpayers Act.  Here is a statement from LCPS:

The lawsuit was prompted by an overpayment of rent to Trinity of at least $772,042.80 over a period of 10 years. Upon discovery of this information, the District notified the Office of the New Mexico Attorney General, which gave District officials the authority to investigate and file this lawsuit against Trinity Properties. The lawsuit names Trinity Properties, LLC, Trinity president William H. Cupit, Jr., and the owners of Trinity Properties (“Does 1-10”) as defendants.

The LCPS investigation revealed that, in the summer of 2008, the then-administration negotiated with Trinity president Bill Cupit a 10-year lease at $13,500 per month for a building and land. That lease was never executed. Instead, in November 2008, Mr. Cupit sent a letter to the LCPS Board proposing a “lease with the option to purchase” for a monthly payment of $19,983.69. In return, Trinity would give the District credit toward the purchase price, and at the end of the 10-year lease, the District would own the property. In December 2008, then-Superintendent Stan Rounds recommended that the LCPS Board approve a “lease purchase agreement” with Trinity, and the LCPS Board voted to approve the agreement. In January 2009 Bonnie Votaw, who was Board President at the time, signed an agreement entitled “lease with option to purchase” with Trinity for $19,983.69 per month.

In December 2018, after the District paid $772,042.80 more than originally negotiated, Trinity refused to give the District any credit toward the purchase price. Instead, Trinity told the District that, if it wanted to own the property, its only option was to have it appraised and pay the full market value. For that reason, the District vacated the property and is paying no more money to Trinity. All personnel and warehousing have been moved to other available property within the District.

The Fraud Against Taxpayers Act is designed to protect the taxpayers from actions like these. LCPS Superintendent Greg Ewing states “this is a most serious issue and the District and current administration are committed to holding those responsible to the highest ethical and legal standards.”

Pertinent documents have been posted to the LCPS website for public review, including: the lawsuit, the 2008 draft lease agreement, the Trinity Properties 2008 letter, the 2009 executed lease agreement, the December 2008 Board agendas and minutes, video recordings of the December 2008 Board meetings, and the letter from the Attorney General authorizing the Board to file this lawsuit.

The District will respond to inquiries regarding this matter to the extent possible, without compromising the pending legal proceedings.