Lyons disputes AG opinion on Cruces land deal
Posted 2/29/2008 04:09:00 PM
State Land Commissioner Pat Lyons is disputing a legal opinion the attorney general released this week that found fault with a Las Cruces land deal between the State Land Office and developer Philip Philippou.
“While I appreciate the attorney general’s input, this opinion attempts to constrain my authority and ability to perform my constitutional duties,”
Attorney General Gary King’s office has said he has no plans to try to enforce the opinion in court, but has said another party with legal standing could sue. The Las Cruces City Council is expected to discuss the possibility, but whether it would have legal standing isn’t clear.
King’s long-awaited opinion states that the lease agreement’s method of compensating Philippou’s Solo Investments for developing The Vistas at Presidio 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.
While King said portions of the compensation provision in the lease agreement are not authorized by state law, he didn’t use the word illegal to describe the agreement, saying the issue of whether it is enforceable should be determined by the courts.
The AG opinion, authored by Assistant Attorney General Andrea Buzzard, argues that the New Mexico Constitution gives the land commissioner authority over public lands “under the provisions of the acts of congress relating thereto and such regulations as may be provided by law.” The opinion states that
The opinion also states that state law only allows compensation to lessees for the appraised value of improvements to the land, not the other compensation
The AG opinion does cite the state statute that says a purchaser of state land shall pay the lessee for the improvements, which the AG says are defined to include water rights and tangible improvements but not intangible improvements or other costs.
The bottom line: The AG says the provisions in the lease agreement are not authorized by and in conflict with state law but has not called the lease illegal or unenforceable.
In the case of The Vistas at Presidio, that means Philippou gets 40 percent of the change in value of the land because of the improvements he makes to the land. After the lessee finishes improvements, the land is put up for sale, and the lessee has to compete with other developers to buy it.
Such is currently the case with another development Philippou is creating in
I’ve requested, but not yet received, a copy of the lease agreement between the land office and Philippou for that development. I don’t know if it contains similar provisions to those which King has called into question in the other lease.