City explores cancelling Rancho Cielo agreements
July 20, 2010
The Belen City Council last night began discussing the possibility of terminating two agreements and two ordinances related to Rancho Cielo, the proposed development west of Los Chavez.
In June, the New Mexico Department of Transportation (NMDOT) ran out of money for the project after the developer, Coast Range Investments, also known as New Mexico Development Partners, refused to fund the remaining cost of the project.
The agreements under consideration for termination are related to the North Belen interchange improvements.
The first is a two-party agreement between the City of Belen and NMDOT. Should the council take no action on that agreement it’ll expire under its own terms in 2012.
The second agreement is between the City of Belen, NMDOT and New Mexico Development Partners.
That agreement was an issue of contention in February when it was revealed that the agreement required New Mexico Development Partners to place its portion of the interchange project’s funding in escrow prior to construction, which the developer never did. NMDOT moved forward with the project.
Under that agreement, NMDOT was responsible for putting $4 million into the project, and New Mexico Development Partners was responsible for $4 million to complete the project.
The project ceased construction in June, without the $4 million from the developer. NMDOT has said it was terminating its construction contract with AS Horner.
Should the council terminate the second agreement, it wouldn’t keep the developer from signing a new agreement with the City of Belen and NMDOT.
The council is also considering repealing two ordinances related to a $3-million state appropriation for economic development. The ordinances bind the use of the money directly to Signet Solar, a solar technology manufacturer.
Signet Solar, which intended to build in Rancho Cielo, pulled out of the development earlier this year after it was unable to secure a loan guarantee from the United States Department of Energy.
The $3-million appropriation is earmarked for “a solar project” in Belen, and the city has been actively pursuing solar companies with the help of the state in an attempt to use the money to benefit economic development in Belen.
Repealing the ordinances frees up the $3 million for use by a company other than Signet Solar.
If New Mexico Development Partners found another solar company willing to build, the city could recommit the money to the developer through the same process used for Signet Solar.
The issue was discussed at last night’s council meeting at the request of Councilor Jerah R. Cordova.
Because there wasn’t a representative of New Mexico Development Partners present at the meeting, all action was tabled for a later meeting.
Mayor Pro Tem Wayne Gallegos, who ran the meeting in the absence of the mayor, allowed the public to speak about the issue.
Former City Councilor David Lopez said the city should avoid terminating any agreements or repealing the ordinances because it would “kill the project.”
Cordova explained that all other plans, studies and agreements related to Rancho Cielo would remain in place for the development, including the annexation agreement for the entire 6,000-acre development.
Nino Trujillo, who has worked closely with the developer on the project, also said the project would be harmed by any termination or repeal. He said Cordova was “trying to kill everything.”
Posted in: Contracts Rancho Cielo