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Mariposa sales office

Entrance to Mariposa Sales Office

Mariposa pool

Mariposa pool—one of the many amenities available to its community members

Mariposa commercial center

The commercial center at Mariposa Communities houses “Timbuktu”—a new upscale restaurant and bar that plans to stay open even if the other community services shut down.

Housing market collapse threatens Mariposa

Ty Belknap

The good life at Mariposa Communities—Rio Rancho’s flagship subdivision—could get a whole lot more expensive when High Desert Investment Corporation (HDIC) pulls the plug on funding. One hundred homeowners, paying a mere $55 per month dues, will have to come up with another $400,000, currently paid by HDIC, to keep the doors open at the 10,000-square-foot community center with both indoor and outdoor pools, fully-equipped fitness room, dance studio, and café.

Even before HDIC closed the door to their sales office, half of the 16,000-square-foot commercial space lay empty. Visitors can still experience the grandeur of the place and view Sandia Mountain while enjoying a meal and microbrew on the patio of the aptly-named Timbuktu restaurant. Mariposa was a good idea that came at the worst possible time.

Although residents might be forced to learn to live without the amenities for a while, they worry more about a possible tenfold jump in annual property taxes—from $550 to $5500 on a house valued at $250,000. Most are valued at a whole lot more than that—at least for now. The tax pays toward the $16 million debt of the Mariposa Public Improvement District (PID). Property taxes come up $1.1 million short annually, a cost that has been covered by HDIC. The PID was arranged by HDIC to sell bonds to cover the cost of water, sewage treatment, and other infrastructure. These taxes are in addition to Rio Rancho’s high property taxes that pay for schools, public services, and hospitals.

How could this happen? HDIC blames the great recession and the collapse of the housing industry. On June 14, HDIC announced that it was pulling out with this letter from board member Gary Gordon to homeowners:

“HDIC plans to close its sales and information office at Mariposa and has listed the land and lots it owns in the master planned community with Land Advisors Organization of Scottsdale, Arizona, a company that specializes in large tracts of land. Consistent with all companies that are involved in the residential home building industry, the last five years have been unprecedented for High Desert Investment Corporation. While the company enjoyed substantial revenues years ago, the great recession has proved to be most difficult in the home building sector of the economy. The company has not ruled out filing for bankruptcy relief due to the lack of land sales revenues to sustain the company in light of its existing obligations.

It has been abundantly apparent to the Mariposa Community that HDIC has been suffering from a lack of any sales whatsoever. We have met all of our promises, but the upcoming end of the fiscal year and the need for a new Community Association budget on July 1 has made it necessary that the company not promise to fund those operations for another year when there is no cash to do so.”

The next day, Rio Rancho City Manager James Jimenez broke the bad news about the possible tax hike to residents and city councilors saying, “We know it is outlandish.”

Jimenez told the Signpost that Rio Rancho is not on the hook for the bond debt. The action of HDIC will still impact a city already reeling from the housing collapse. He said the city is “aligned with the homeowners’ association and hopes for the success of Mariposa and will try to keep HDIC from walking out on their responsibilities. The city is looking at all options to try to compel HDIC and Albuquerque Academy (AA)—a well-endowed private school and owner of HDIC—to continue paying toward the bond obligation. It would be ideal if AA and HDIC reconsider their position and continue to subsidize debt payment for at least one more year while they try to find a buyer and negotiate with the bondholders.”

At the same time, the Board is responsible to the bondholders for setting the tax rate for operational costs and debt service. “It’s a strange situation,“ Jimenez said, “Of the five representatives on the PID board of directors, the two from the development have resigned, and the three remaining are high level city employees, appointed by city council. I am the chairman. Enough funds have been collected to fund fall 2012 and spring 2013 payments, but we will have to start collecting increased taxes this fall to pay fall 2013. I explained to the homeowners that I don’t like it any better than they do.”

Jimenez said that he is trying contact the mysterious bondholders to restructure the payment schedule because, “the high taxes would be disastrous and further contribute to a downward spiral” for everyone involved.

HDIC’s Gary Gordon agreed with this assessment, questioning the wisdom of even discussing the tax hike. He wrote Jimenez:

“While HDIC has exhausted its cash and regrets its inability to meet the replenishment obligation, we still continue to believe that advertising that the PID will raise the tax rate as much as ten times to “cover” the payment obligation is a mistaken notion. Regardless of what the PID does, there will be insufficient revenue to cover the bond payment obligation. Regardless of what steps are taken, the bondholders will not be paid in full, or anything near full payment. Raising the taxes in the district will cause less gross tax revenue to be collected, creating an impossible situation for taxpayers, residents, lot owners, mortgage lenders and builders. It will make our ongoing effort to recruit new investment dollars much more difficult. Raising taxes to impossible levels will result in disputes between the local parties and the PID that are unnecessary. The financial fix is with the bondholder negotiation, not the taxpayers.”

Gordon told the Signpost, “The replenishment agreement was designed as a smoothing mechanism for revenue, not as a means of causing the developer to somehow pay for the entirety of the infrastructure that is now titled in the city of Rio Rancho. None of the parties in 2006, neither HDIC, the bondholders, nor the PID, would have agreed to the bond issuance under such a belief.” Gordon said that it’s nobody’s fault that the appraised value of Mariposa is one sixth of what it was six years ago.

“We’re not selling land, we burned through our funds, and we just can’t continue with no end in sight. We can’t justify further investment at the expense of our other investments and the Academy.”

During better times, HDIC developed the High Desert area, which includes twenty-three high-end subdivisions in the foothills of Albuquerque. Gordon stressed that HDIC was not “the financial arm of Albuquerque Academy” as reported in the Albuquerque Journal, but rather a free-standing corporation with its own board of directors, employees, and bank accounts.

This distinction might become important if the Mariposa Homeowners Association or the PID sues HDIC for failing to meet its obligations. It is quite possible that AA is not liable for the failure of HDIC and Mariposa. Corporations are, after all, set up to protect and limit the liability of investors. Homeowners are not immediately discussing a plan, while looking for legal council and waiting for a response from the PID. The city is consulting with attorneys. No doubt the bondholders are doing the same.

Gordon said, “We need to make a deal that would help the entire situation.” He said that a lawsuit could force HDIC to declare bankruptcy, which would cause them to “loose the control that we need to make something happen as soon as possible.”

The PID announced an emergency meeting on June 22 at the City Council chambers “in hopes that the developers can throw some light on their plans for the project.” Attending the meeting was not part of the HDIC’s plan. Gordon emailed Jimenez that he was not given adequate notice and that he did not want to jeopardize ongoing efforts to resolve the situation by selling large tracts of land.  Anxious Mariposa residents crowded into the chambers only to find out that nobody has a clear-cut solution. The PID board explained that they want to resolve this problem as quickly as possible without raising taxes or decreasing property values and marketability. They want HDIC to sell Mariposa lands to pay down the bond debt. Unfortunately, they don’t know much about HDIC assets and they don’t know who the bondholders are.

Several homeowners expressed anger and frustration with HDIC and AA. One speaker suggested that the city might have set up the PID illegally. A homeowner from New York blamed AA for his failing real estate speculation. He asked, “Is AA a steward of the land as they portray themselves, or are they diabolical corporate real estate hucksters?”

The PID board ended the meeting with a closed-door executive session to discuss possible litigation with their attorney. Jimenez said that while the PID board is an advocate for the homeowners, they need to move cautiously because they had no funding for the litigation that promises to be complex and expensive. This expense will also be paid by the homeowners—and if they don’t come up with a plan for funding the community center, the pool will be closed by the Fourth of July.


SCFD, USFS, BLM, NM Forestry ban opening burning and fireworks

Signpost staff

As of June 21, the Sandoval County Fire Department has issued a burn ban effective in all parts of unincorporated Sandoval County. Effective immediately and until further notice, open burning is prohibited—including within established fire rings or pits. Liquid-fueled or gas-fueled stoves, fireplaces within buildings, and charcoal grills at private residences are all allowed under the ban.

“Recent sightings of unattended campfires, along with the severe drought conditions, prompted us to issue this ban,” says Sandoval County Fire Marshal James Maxon. “It’s necessary to ensure the safety and well-being of all county residents.”

The Sandoval County Commission passed a resolution on June 7, restricting the use of fireworks in Sandoval County.

Under that resolution, fireworks are prohibited in grassy wildland areas. In addition, commercial display fireworks, fireworks that shoot more than ten feet in the air, outside a six-foot circle, or louder than a cap gun are all prohibited.

The following types of fireworks are banned from sale and use within the unincorporated areas of Sandoval County:

  • Stick-type rockets
  • Helicopters
  • Aerial spinners
  • Missile-type rockets
  • Ground audible devices
  • Firecrackers.

The fire ban and fireworks restrictions will be enforced by the Sandoval County Fire Marshal and the Sandoval County Sheriff’s Office. Anyone found to be conducting an open burn or using illegal fireworks will be subject to arrest and/or fine. County residents should report illegal burning or fireworks to 505-891-7226. For additional information, contact Sandoval County Fire Marshal James Maxon at 505-934- 8788.

Also in June, all land management agencies in the state, including the Santa Fe National Forest, Valles Caldera National Preserve, New Mexico State Game and Fish properties, Cibola National Forest’s Sandia and Mountainair Ranger Districts entered Stage II fire restrictions due to the potential for extreme fire danger.

“Prolonged high temperatures, low humidity, and current fire activity have really increased the potential for extreme fire danger on the forest,” said Bruce Hill, Santa Fe National Forest Public Affairs Officer. “We’ve also unfortunately seen a high number of abandoned campfires already this year, even while in Stage I fire restrictions. We need to take added precautions under these conditions to reduce risk to the public, and cultural and natural resources by going into Stage II.”

Stage II fire restrictions include:

  • Building, maintaining, attending or using a fire, campfire, charcoal, coal, or stove fire. Exception: the use of petroleum-fueled stoves, lanterns, or heating devices is allowed, provided such devices meet the fire underwriter’s specifications for safety
  • Smoking except within an enclosed vehicle or building
  • Using an explosive
  • Discharging a firearm, air rifle, or gas gun
  • Operating a chainsaw or other equipment powered by an internal combustion engine between 10:00 a.m. to 6:00 p.m
  • Operating or using any internal or external combustion engine without a spark-arresting device that is properly installed, maintained, and in effective working order. They must meet either USDA Forest Service or appropriate Society of Automotive Engineers (SAE) recommended practice
  • Welding or operating acetylene or other torch with an open flame
  • Possessing or using a motor vehicle off National Forest System roads, except when parking in an area devoid of vegetation within ten feet of the roadway; and except for overnight parking in Forest Service-developed campgrounds and trailheads.

Violations of these restrictions on Forest Service lands are punishable by a fine of not more than $5,000 for individuals and $10,000 for organizations and/or imprisonment for not more than six months. The restriction order will remain in effect until October 31 or until rescinded, whichever occurs first.

Restrictions in all BLM-managed public lands in New Mexico are essentially the same Level II. Violation of this prohibition is punishable by a fine of up to $1,000 and imprisonment for up to twelve months.

These restrictions have been coordinated with the other land management agencies, the New Mexico State Forestry Division, and affected counties. As summer continues, additional restrictions or closures may be necessary; check for updates at:    www.nmfireinfo.com.


Dixon Apples/State Land Office dispute continues

—Ty Belknap

There won’t be any Dixon apples for sale this year. A hearing on the Dixon Orchard lease has been scheduled to begin on December 10. The Mullane family of Dixon Apples filed an appeal with the New Mexico State Land Office (LO) regarding the decision by Land Commissioner Ray Powell to deny a lease transfer deal between the Mullane family and San Felipe Pueblo. The Mullanes contend that Powell unreasonably concluded that San Felipe lacks the experience in orchard management required by the lease. The appeal is also based on the contention that Powell was overly influenced in his decision by his objection to the terms of the lease that were negotiated by former Land Commissioner Patrick Lyons.

On June 21, Lyons wrote “the Dixon Apple Orchard would still be producing if I was still commissioner of public lands. However, Powell has done little to help the orchard recover from last year’s tragic fire. He failed to send the Land Office fire team I created to protect Dixon orchard and its buildings—a valuable trust asset—and has since dismantled it. He also failed to provide adequate flood support after the fire, adding to the devastation. The Dixon exchange was fair to everyone, including the University of New Mexico and the Land Office. Clearly, Powell’s administration doesn’t know how to manage agricultural land, or we would still be enjoying Dixon’s apples.”

Although the Mullanes had found great success in operating their iconic seventy-year-old family business, they decided that continuing was neither safe nor economically feasible after the orchard was severely damaged by last summer’s Las Conchas Fire and ensuing floods destroyed much of the irrigation system and other infrastructure. They arranged to transfer the State Land Office lease to San Felipe Pueblo last spring for a reported $2.8 million, but Powell issued an emphatic public denial of the transfer, saying allowing the transfer would perpetuate a “sweetheart deal” and would waste taxpayer dollars. He said San Felipe lacked the orchard experience required by the lease and were motivated by an interest in cultural sites in eight thousand acres of LO land surrounding the orchard.

Last month, the LO issued a press release entitled, “State Land Commissioner takes action to save Dixon’s Apple trees.” Powell pledged that the State Land Office would do whatever reasonably can be done to save the remaining apple trees at Dixon Orchard,“acting on advice from an engineering firm and a fruit tree expert from New Mexico State University. “When I learned that about seventy percent of the remaining trees are still alive, I authorized water hauling measures to be taken. The most healthy are the newer trees in the lower orchard.  Hauling the water to these trees will cost about $100,000, which we are prepared to pay for this year’s irrigation season.”

“If we save the majority of the healthy trees, and if the Mullanes no longer want to be the lessee, perhaps a new lessee—with demonstrated experience and credentials—could take over the property and rebuild the business. Then the Mullanes could be fairly compensated for their trees that were lost due to the fire and floods last year,” said Assistant Commissioner of Commercial Resources Don Britt.

Becky Mullane described hauling water as an ineffective short-term solution, which wastes taxpayer dollars. “Spraying water from trucks is a good way to keep dust down on roads, but it only reaches the soil on the surface. The apple trees need microsprinklers to reach the root systems. The trees are very stressed,” she said.

“There is only so much that taxpayers can do financially.  But, I will continue to cobble together state resources from our limited agency operating funds to put a band-aid on the irrigation system,” said Powell. “Our best effort is to get these trees healthy and productive again, with the hope that one day future generations of New Mexicans can enjoy these special apples. However, there are no guarantees that more flooding this summer won’t wipe out our best efforts.”

Mullane said that the $100,000 wasted hauling water could have repaired the irrigation system, as she encouraged Powell to do throughout the winter. “A long-term solution would have been to allow the lease transfer to go through in February.” She described Powell’s actions and public declarations as “self-serving attempts to make himself look like the savior of the orchard after we ran away from it. He made a series of wrong decisions and refused to communicate or cooperate with our family. I don’t know what he’s got against us.”

Mullane has obviously given up on finding favor with Powell, even though it is he who will determine the outcome of the December hearing. “We hoped the hearing would be scheduled for the summer or fall so we could get on with our lives,” said Mullane. “We are using the insurance money that covered our personal property to pay our lawyer, the hearing officers, and the cost of the hearing.”

The appeal will be presented in an administrative hearing to two Land Commission hearing officers. Evidence will be presented by the Mullanes’ attorney much the same as is done in a court hearing. The hearing officers give a non-binding recommendation to Powell who will then make a final decision. Powell says that this will be a very open and transparent process. If the Mullanes are not satisfied with the decision, they can appeal to District Court.


Darryl Madalena

Sandoval County Commission Chairman Darryl Madelena

Just call him Mr. Chairman

—Ty Belknap

Sandoval County Commission meetings are often long and tedious. They are sparsely attended unless residents (usually from Placitas) turn out in mass to oppose a zoning issue. Somebody from the Signpost attends occasionally, when an agenda item promises a good news story. There is always one guy who seems vastly entertained by the proceedings—a thirty-year-old Native American with a buzz cut who sits between the two staunch Rio Rancho Republican commissioners and two old-guard Democrat Commissioners.

Commission Chairman Darryl Madelena, a Democrat often casts the tie-breaking vote, but he definitely cannot be counted upon to follow a party line.

“I’m the wild card,” Madelena jokingly told the Signpost in an interview. “I was always taught to vote with my heart, not my head.”

He continued, “I was only 26 when I was first elected. After a year, I was elected vice-chairman, now I am serving my second year as Chairman. Obviously, the other commissioners don’t think I’m just some kid. They must think I can make the right call, and they know they have to be on top of their game. Nobody comes to a meeting thinking we can run through the agenda in twenty minutes and get out.”

Everyone at the administration building calls Madelena “Chairman” or “Mr. Chairman.” He is in a position to wield a lot of power and is treated with respect.  He meets with County Manager Phil Rios twice a month to decide priorities and draw up the Commission meeting agenda—maybe one reason he seems to find the all agenda items so interesting. Madelena formerly worked for the Sandoval County Assessor as an appraiser. Now he lives off a meager salary as a full-time chairman.

The Chairman was born to be in public service. He took over the seat held by his cousin Jemez Pueblo Governor Joshua Madelena for two terms. He is the son of former two-term commissioner, Governor, and fourteen-term State Representative Roger Madelena. All are residents of Jemez Pueblo. Darryl Madelena will run unopposed for his second term in November after winning the June primary. “I grew up in Santa Fe,” he said. “I started going to the Round House with my dad when I was about five, met Governors Caruthers, King, Johnson, and Richardson; saw the flashbulbs, and assumed early on that I would be in politics.”

Madelena represents the vast District Five which includes 3,100 of Sandoval County’s 3,700 square miles—from Mariposa Communities in Rio Rancho northwest to Zia Pueblo, San Ysidro, San Luis, Torreon, Cuba, Regina, La Jara, Counselors, Ponderosa, Jemez Pueblo, Cañon, Jemez Springs, La Cueva, Peña Blanca, Santo Domingo Pueblo, Cochiti Lake, and Cochiti Pueblo. He drives an average of 1,400 miles a month to meet with his constituency. He says that Sandoval County is the local government for the mostly unincorporated areas and is a vital part of the governments of incorporated villages and pueblos. Residents are most commonly concerned about roads, public safety, and law enforcement.

The threat of wildfire is never far off in the summertime. “The Bear Springs Fire last month was only eight miles from Jemez Pueblo. If it hadn’t been for areas burned by the Las Conchas Fire, we would have been in real trouble. It might still be burning,” said Madelena, who advocates thinning forests to provide land-based employment and slow wildfires. “One spark and Cuba could be gone.”

Madelena is proud to be the only Native American County Commission Chairman in New Mexico. He said, “In a way, I represent all the twenty-two tribes in the state.” He has been involved in the Native American Voting Rights Act, which provides translators to native-speaking voters, and speaks Towa “pretty good.” He supports casinos for job creation and cooperative economic development efforts between the tribes and the county.

Madelena’s support of his rural constituency occasionally clashes with the more urban concerns of the other commissioners.  “I was the only one to vote against the desalination plant [to process deep-well brackish water for the expansion of Rio Rancho] on the Rio Puerco. Nobody bothered to discuss the issue with people who live up there.”

He cast the deciding vote in the controversial firing of County Manager Juan Vigil last year. The media storm that followed essentially blamed this action on the Commission’s nervousness over Vigil’s less than subservient approach to collecting property taxes from Intel, a major player in the County economy. “It wasn’t just that,” said Madelena. “Vigil refused to communicate with the Commission and kept us out of what was going on with Intel. He didn’t consult with the commissioners about the agenda and sometimes we wouldn’t get it until the day of the meeting. Of course, nobody wanted to be on the Commission that lost Intel, especially me. My dad was on the commission that negotiated the first IRB with Intel back in 1980. I have seen what a big part Intel plays in the economy all over the county.”

Madelena cast the deciding vote when the Commission elected Democrat Lisa Curtis to replace Republican State Senator Kent Cravens who resigned in the middle of his term.

The Chairman says that he takes a non-partisan approach to County government because the issues require non-partisan solutions—especially in his district. Although he sees the Commission as a cohesive group, for the most part, he still bumps up against what he calls the “old school” approach. For example, Madelena is a big advocate of social media to communicate with his constituency. He thinks commissioners should be able to be present at meetings via web cast. He is working with Public Information Officer Sidney Hill to broadcast Commission meetings in real time online.

Madelena likes being Chairman. There are no term limits to the position within the two-terms allowed to commissioners, and says that if re-elected, he will be glad to sit in the middle chair for the next four years.

 
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