Here’s a copy of the bankruptcy filing.
“What we all said was going to happen and what we knew was going to happen finally happened,” said Rep. Ben Rodefer, a Democrat from Corrales. “They were not viable financially and not of the caliber we should want to be in a relationship with.”
One year ago, Rodefer was one of the strongest voices against California-based Westland DevCo/SunCal’s quest for legislative approval of a plan to tap future state tax receipts to develop a 55,000-acre parcel of land into a master-planned community on Albuquerque’s West Side.
The funding scheme, called a tax increment development district, or TIDD, is supposed to be used to spur revitalization of historic districts or other infill development within cities – not to aid companies who want to build up previously undeveloped tracts of land.
Westland DevCo/SunCal announced this week that it has filed for bankruptcy on its New Mexico properties after defaulting on $188 million in loans. A number of the company’s developments in other states have also gone bankrupt.
Incredibly, last year the New Mexico House of Representatives came within one vote of approving a plan that would have allowed the troubled corporation to issue $408 million in public bonds to reimburse themselves for building roads, sewer and water lines needed for their development.
Ultimately, the legislature was able to resist the well-funded lobbying, advertising and public relations onslaught launched by SunCal and voted the project down, said Rodefer. It saved the state of New Mexico an enormous headache, he said.
“Happy is not the attitude you take …you don’t want any business to have to close,” said Rodefer. “But from the beginning we knew they clearly had problems – 85 percent of their projects were going bankrupt.“
“I think it was a great victory for the people of New Mexico that we stopped it from going through. We would have been in a big financial mess right now if we had locked ourselves into a relationship with them.”
Supporters had claimed granting SunCal the TIDD would bring jobs and improvement to a previously undeveloped area. But it was hotly contested by TIDD opponents, who said the deal wouldn’t benefit New Mexicans and would in divert state resources away from existing needs.
“They bought the land real cheap and they were going to take taxpayer money to fix it up and sell it. We weren’t getting anything back. They were telling us that we’d be getting back jobs…but they didn’t have one employer lined up.”
It is always wise to be circumspect about any deal that sounds too good to be true, Rodefer said.
“Economic development for the state of New Mexico is very important – jobs are very important. But we cannot merely jump blindly at every opportunity that presents itself.”
One other side note: In 2009, SunCal filed a report with the Secretary of State’s office claiming it spent a whopping $232,000 on lobbyist and advertising costs associated with the TIDD campaign. It was the most amount of money ever spent at the legislature by any one company during a single session.
But the lobbyists and public relations people who were reportedly paid top dollar to tell legislators that the SunCal project was the best thing since sliced bread may be among the many creditors standing in line to get paid.
From the Albuquerque Journal story on the bankruptcy:
The bankruptcy filing lists creditors with unsecured claims including law firms Jones Day in New York and Modrall Sperling Roehl in Albuquerque, accountant firm Deloitte & Touche, and architectural, landscaping, lobbying and public relations firms.
I guess money doesn’t always talk.
Tags: corporate lobbying, Rep. Ben Rodefer, SunCal, TIDD, Westland DevCo/SunCal Bankruptcy
