Cocoposts

County Economic Development Movida

Your tax dollars at work on a new intersection to benefit speculative real estate development on an alfalfa field in the South Valley.  The Albuquerque Journal story smells so bad I need a face mask.

County administrators asked commissioners to tap $1 million in economic-development funds for the Coors and Las Estancias intersection for traffic signals, road improvements, turn lanes, curbs and gutters.    ... It's not clear whether that would cover the full cost of the intersection or if landowners would be asked to chip in.

Chip in? The developers should pay for these improvements as part of a Subdivision Improvement Agreement (SIA) required when the plat was approved. 

(T)he South Valley is home to enough residents to comprise one of New Mexico's largest cities, yet it still lacks bookstores, coffee shops and other businesses.

But it is a regular valhalla for tire shops.

"I'd like to see some significant development in the valley," De La Cruz said.

Hey, what do you call that enormous Wal-Mart next door?   In the City.  

The wisdom of constructing more commercial space in an overbuilt market next to a super Wal-Mart is highly questionable.  Calling it economic development and subsidizing it with tax dollars is outrageous.  

Does Bernalillo County use economic development as a kind of slush fund for favorite projects of Commissioners?  Inquiring minds already know.

 

       

Nuevo Rancho Viejo

The Rancho Viejo development, totalling about 12,500 acres south of Santa Fe, has been sold.  (Santa Fe New Mexican) Like other big real estate deals, ownership is thoroughly obscured by corporate identity, in this case,  Univest-Rancho Viejo LLC - whoever the hell that is.*  They purchased the "community" from Ariz.-based SunCor Development Co for an undisclosed amount.  The book value was placed at $400 million at one time.  

Referring to a "community" as being bought and sold has a company town ring to it and this gets clarified in the article.

The development has some 1,200 homes as well as parks, playing fields and a central plaza. There are three separate homeowner associations that own all of development's open spaces, recreational areas and six-plus miles of trails. These areas are not included in the transaction.

"We hope some of the past plans as presented to us now will be completed by the new owner," said Bruno Keller, president of the North Homeowners Association.

And no worries there, right?  Right?

 

*This could be anyone for all hapless homeowners know.  (Could it be SAAAtan?) The New Mexican story states the company includes a group of original owners - whoever the hell that is.

Behind Growth - Dead Regulations

Housing regulations, more than those that bind standard businesses, explain the Sunbelt’s population growth.

 That's the conclusion of economist Edward L. Glaeser in the NYTimes Economix.  He uses census information to frame his idea that land use regulations impact housing supply and a cheap housing supply is the measure of a triumphant city - the title of his book.  The construction industry must adore this guy.   Here's the money paragraph:

A rich body of research shows that regulation, which is intense in the Northeast and California but lax in the Sunbelt, explains why housing is supplied so readily down South. The future shape of America is being driven not by quality of life or economic success but by the obscure rules regulating local land use.

 

The rules are so obscure he can't name them.  Except for passing reference to the absence of zoning in Houston, the specific regulations constraining urban triumphalism remain consistently mysterious straight through his links. 

I'm no Paul Krugman, but this jumps the shark for urban theory.  It doesn't make sense even if you completely ignore the role of finance, speculative money, public bonds and subsidies for utility and water system expansions and road projects.

If New York and Massachusetts want to stop losing congressional seats, then they must revisit the rules that make it so difficult to build. High prices show that the demand would be there if the supply is unleashed.

Unleash the hounds on the planner!

Up Slots at Downs

Predatory addiction machines in a high density urban population - what could possibly go wrong?  Anti-gambler Guy Clark points to Governor Richardson's latest movida sin verguenza on behalf of his buddy Paul Blanchard.  (Albuquerque Journal)  Dr. Clark doesn't think it's a good idea to plop lots-o-slots into a low income hood.  But he's not holding any cards.

How did we ever get to this point?  Why is horse racing - the sport of Kings - intimately connected and dependent on despicable slot machines?  It's like taking a GameBoy trail riding.  Hell, at this scale it's like strapping Xbox to the saddle.  Sick and sad.

Second point, unrelated;  the redevelopment potential of the State Fair land between San Pedro and Louisiana Boulevards in Albuquerque's northeast heights is consistently over-estimated.  Both proponents and opponents of moving the Expo out of town have the misguided notion that a fabulous scheme for reuse will materialize.*  Yet there is no historical precedent to give cause for optimism. On the contrary, experience indicates that sale or lease of this public land will be decades long and fraught with complexities, not to mention politics. 

*It will involve unicorn sales and rentals.  They don't shit and can use the race track as a landing strip.

Boom Scars

"The furious rush to build — and profit — has forever altered Vegas environs"  A thoughtful restrained look at Las Vegas development in the Las Vegas Sun by architects - which may explain the restraint. But still, the big point is right there:

Those with land felt the need to build, and build now, and build with the highest possible density.  They built with the assumption that growth in the valley — of residents, tourists, consumers — would lead to profitability. But the building continued even after the growth stopped and everyone ran out of money...

State's Development Deal and Martinez

The incoming Martinez administration is looking askance at a $200 million land deal for new State offices out on the mesa south of Santa Fe. (Steve Terrell in the Santa Fe New Mexican)  It sounds like it could move forward, at least the $2 million land purchase part, with or without her approval.  I'll see that sideways glance and raise you an eyebrow. 

Also keeping an eye on the proposal are Santa Fe real estate interests, especially those who rent office space to state government.

They all have their fingers crossed so hard they can't text.

Crumpling SunCal Paper

The crumbling the SunCal-Atrisco development will live in history as the poster child for the greatest real estate bubble and subsequent collapse in the history of the city of Albuquerque. 

So old Joe Monahan says.  He links to this Wall Street Journal story. 

SunCal is a great example of the political influence associated with land speculation.  The lobbying and advertising for tax benefits during the legislature should go down in history as among the most intense on behalf of one developer.  We can hope. 

But it's mostly crumpling that I hear.  Like paper promises.  Not crumbling, like hard infrastructure.  SunCal's bubble-riding development investors lost their paper development.  Boo Hoo.  No one lost their home.  Sure, the Westland Board made off with a bundle and gave most Atrisco heirs the equivalent of souvenir t-shirts, but that'd been coming since incorporation of the land grant in the 1960s. 

Albuquerque's Biggest Collapse Ever? Let's strike a hopeful tone and say it is.  What is more sure, and far more hopeful, is that the land, soil, water, history, place and people of Atrisco and their multifaceted potential haven't been wholly diminished because of some misguided speculation. 

You can be darn certain that crumpled paper will get ironed out and this dealio will come roaring back if the stupid market does.  

Sparce Parse

UPDATE:  YES, I SPELLED IT WRONG! 

Trust that my dealings with events of late* are only slightly more engaging than witnessing  Albuquerque's impact fees, along with planning and civics, get flushed down the toilet like so much poop-rich wastewater into the Rio. 

Solar Charade

Something stinks about Rio Rancho's solar plant scheme.  The Albuquerque Journal sniffs around the deal itself - curious about the mysterious promise to buy the bonds and SEC troubles of the solar company's VP.  Then they describe the public investment - from which the biggest stench arises.

The city plans to use $6.9 million of the bond money to purchase the plant site* and transfer it to Green2V by the end of May.  It also has pledged to spend $7.2 million to put in a road and sewer line for the plant, which officials say they will consider installing regardless because it eventually will be needed. "If Green2V comes or not, we will still move forward with the road and the sewer. This is an economic corridor".

That burns my nose. 

Economic corridor for land flipping maybe.  The beneficiaries of this deal (though surely not all of them) will be those with skin in real estate alongside that corridor who would have otherwise had to pay for the road and sewer themselves.

Just as in the case of Bernalillo County's publicly funded construction to a non-existent flying electric car plant, the promise of jobs jobs jobs is a kind of lost leader.  It is the lucrative land deals - notoriously difficult to track - that propel such decisions. 

*Alternative locations are never proposed or publicly evaluated.  Economic development land schemes always involve predetermined undeveloped land - never a range of alternatives.

Fiery Finance Reform

Financial reform issues make my few remaining brain cells ache but they still bounce around fitting facts into fractals.  Falsehoods create anomalies that don't quite fit. Like I heard from someone recently who contends that banks were required to make risky loans to poor people so the government and poor people are to blame for the housing crisis.  Such talking points create a harmonic discordance in my little fractal head pattern - not unlike ringing fire alarms.  It is windy and the blaze was intentionally set. 

Invariably, it helps to step away for a better view.  Good perspective from The American Prospect:

The core failure of the past 30 years was not that Wall Street financial engineers thought of clever ways to make money; that is absolutely par for the course. The failure was that Wall Street was able to gain sufficient influence in Washington to win favorable policies from Congress, regulators, and both Democratic and Republican administrations. The banks earned their political power the old-fashioned way, through campaign contributions and lobbying expenditures; the financial sector was the primary source of campaign money for the past two decades, and its contributions grew disproportionately rapidly over the period. More important, the popularization and spread of the ideology of finance meant that politicians and government officials increasingly came to sincerely believe that what was good for Wall Street was good for America.