The University of New Mexico is seeking to expand its Science and Technology Park and create a bustling entertainment district, in part through public financing for a quarter century.
The city and UNM, through its private, nonprofit Lobo Development Corporation, are in the process of creating a Tax Increment Development District, or TIDD, which would allow for future taxes to help fund the massive development project. The State Board of Finance is scheduled to take action on the request Dec. 20.
The districts allow for developers to collect a percentage of future gross receipts and property taxes to offset the cost of building public infrastructure, such as improvements to streets or sewers, for example.
The district in UNM’s south campus will also allow the developers to collect taxpayer money to cover the cost of a projected $136 million for building improvements planned at UNM’s Science and Technology Park.
Total taxes diverted to the TIDD are expected to be $336 million over 25 years, said Kelly Ward, the executive director of Lobo Development. The TIDD board, which is comprised of city and state officials and representatives from Lobo Development, would be tasked with taking that money and reimbursing the developer.
University officials envision bars, shopping, restaurants, a hotel and movie theater as well as a beefed up business park. Much of the district’s land is near University Arena and the other stadiums in south Albuquerque.
The district is comprised of mostly university and some city land that straddles University Boulevard from Basehart to Gibson. It’s about 337 acres, according to summary documents.
The improvements for the Science and Technology Park would also bring high-paying jobs to the area, UNM officials said. The city is projecting the revamped south campus will create about 4,000 new jobs and $4.2 billion in salaries over the 25-year life of the district.
“Our vision at UNM is to address critical community challenges. We do that … by building an educated, healthy and economically vigorous New Mexico,” UNM President Garnett Stokes said during a state Board of Finance meeting last month.
Justin Snyder, who works in commercial real estate, spoke against the TIDD during a recent County Commission meeting. The county board approved the district.
He said such development would give the university an unfair advantage over other commercial landlords, who pay property taxes while UNM doesn’t. That would allow the school to lease office space at cheaper than market rates.
“In the end, they’ll be leasing space that the taxpayers have paid for, and they’re taking the profit without ever paying taxes,” Snyder said. “UNM is pretty much selling their tax-exempt status.”
Ward said that the redirecting tax revenue is a wise investment for taxpayers, because the money will come from all-new taxes that don’t currently exist.
Iowa State, Oklahoma and Purdue universities are some of the other public colleges that have used public financing to develop their land into research parks.
“I think that the thing to emphasize is this is not raising taxes,” Ward said. “This is a slice of the new revenue that will come from the additional economic activity.”
Ward said some of the development would be taxable. For example, if a developer builds a restaurant or theater on UNM land, Ward said the building would be privately owned and subject to property tax. The university land, however, wouldn’t be taxable.
Members of the State Board of Finance last month questioned whether UNM would be giving away leases on the proposed site for less than other commercial property owners.
Teresa Costantinidis, the university’s executive vice president of Finance and Administration, said such a practice would violate an anti-donation clause.
“We are not permitted to provide discounts to private entities,” she said. “We will make sure that type of experience doesn’t happen here.”