Lawmakers propose land office reforms

By Heath Haussamen 2/5/09 7:11 AM

In response to a controversy involving the State Land Office and a Las Cruces developer, three Doña Ana County lawmakers are proposing reforms that would increase transparency and accountability in the land commissioner’s dealings.

The proposals follow Attorney General Gary King’s finding fault last year with Land Commissioner Pat Lyons’ leasing of land on Las Cruces’ East Mesa to Philip Philippou so it could be developed. The AG’s formal opinion on The Vistas at Presidio land deal states that the lease agreement’s (pdf) method of compensating Philippou’s company is “not comprehended by and in conflict with” a statute that allows developers who improve land for the state to be compensated only for the appraised value of the improvements.

In the lease, the land office also agrees to compensate Philippou for other project costs and 40 percent of the change in value of the land as a result of the improvements.

The first bill in the package proposed by Reps. Nate Cote and Jeff Steinborn, and Sen. Steve Fischmann, all Las Cruces Democrats, directly deals with the issue identified in the AG opinion. Cote’s House Bill 607 and Fischmann’s Senate Bill 474 would make clear that developers can be compensated for tangible improvements to the land but nothing else.

The other bills in the package are:

• Steinborn’s House Bill 606, which would require the land office to issue development leases only following public notice and a competitive bidding process.

• Cote’s House Bill 610, which would require the land office to develop uniform systems for classifying accounts, budgeting and reporting.

• Steinborn’s House Bill 605, which would require local government review before the land office’s development leases take effect.

• Fischmann’s Senate Bill 475, which would require that the AG review development leases before they take effect.

Steinborn’s bill that requires the land office to follow a competitive bidding process is significant because, in the Las Cruces situation, Lyons bypassed his own bidding process — which he’s not currently required by law to use — and leased the thousands of acres of land in question to Philippou in December 2006. Months earlier, while the Republican Lyons was running for re-election, Philippou gave $20,500 to a political action committee run by lobbyists he employs. The PAC gave most of it to Lyons’ campaign, and the lobbyists gave another $3,600. After Lyons leased the land to Philippou, the developer gave another $6,000 to Lyons.

On a conference call about the bills on Wednesday, Steinborn called the Las Cruces situation “ground zero” for “problems” in the land office that affect the entire state because Lyons entered into similar agreements for land in Albuquerque, Rio Rancho, Santa Fe and elsewhere. The AG has refused to back up his opinion with a lawsuit, and Lyons has effectively ignored it.

Cote said the legislation is an important response to the concerns of his constituents and others in the Las Cruces area, and it shouldn’t be viewed as an attempt to impede the work of the land office.

“The public, the people of my district and New Mexicans, want government accountability,” Cote said.

Fischmann said it’s now clear that the land office “was somehow operating out of sync with what the public needs were,” but Steinborn said he hopes that, in spite of that, Lyons will support the reform proposals.

A spokeswoman for Lyons did not immediately respond to a request for comment.