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.”

A new bridge in the Los Lunas area could actually mean a new interchange for the City of Belen.

As the Mid-Region Council of Government continues its Los Lunas corridor study, two primary routes for a new interchange and bridge are being evaluated. Those routes are near Miller Road just north of Los Chavez and Morris Road just south of Los Lunas.

Despite all of the proposed routes being so far north, the interchange options under consideration near Miller Road are actually within Belen city limits.

Los Lunas is in red and Belen is in green.

The study has a long way to go, and it’s unclear which interchange option will ultimately be recommended for the construction of a new interchange.

A new interchange in Belen, however, could have the benefit of providing opportunities for economic development, boosting gross receipts tax revenue.

Up until this week, it had been unclear exactly how far north Belen’s city limits go, after the city annexed the area west of Interstate 25 in 2006, because the study hadn’t clearly shown the various county and municipal jurisdictional boundaries.

Councilor Jerah R. Cordova requested the information to get a better understanding of the effect the issue could have on Belen.

Work on the reconstruction of the North Belen interchange halted Wednesday, less than four months after it became clear the project would run out of money.

The interchange was being reconstructed to provide access to Rancho Cielo, a master-planned residential, commercial and industrial development west of Los Chavez.

While the state funded $4 million of the design and reconstruction work, Rancho Cielo’s developer, Coast Range Investments, never provided the remaining millions needed to complete the project, as had been promised in a three-party agreement among the developer, the State of New Mexico and the City of Belen.

According to officials with the New Mexico Department of Transportation (NMDOT), a letter has been sent to Coast Range Investments telling the company it’s too late to contribute its portion to complete the project.

NMDOT is terminating the project’s construction contract.

Demobilization of the construction crew and the delay in completing the project will substantially increase the cost of completing it in the future, should Coast Range Investments seek to restart construction. The project will also need to be rebid.

The interchange project was embroiled in controversy in February when city officials and others found out the developer was refusing to contribute the funding needed to complete it.

The construction crew and NMDOT are expected to address a couple of minor issues related to paving and lighting in the coming weeks.

Coast Range Investments yesterday pushed back on the claim by Belen City Councilor Jerah R. Cordova that its subsidiary’s corporate license has been revoked.

Last week, Cordova posted information on this website claiming that New Mexico Development Partners license with the New Mexico Public Regulation Commission (PRC) had been revoked.

In a letter delivered to Cordova today, Jim Wood, the vice president of Coast Range Investments, wrote that Cordova’s assertions were “inaccurate” and “egregious.”

Part of the documentation Wood has provided to the city to prove there was no revocation included Coast Range Investments PRC filing, which lists that company’s status as “exempt.”

Wood has requested that a correction be issued.

According to the PRC’s website, the corporate license for New Mexico Development SPE Corp., the general partner of New Mexico Development Partners, is listed as “revoked.”

A PRC official in Santa Fe said the license was revoked on April 21, 2009, for “failure to file reports.”

Technically, New Mexico Development Partners doesn’t have a corporate license with the PRC and is listed as “active” with the New Mexico Secretary of State’s office. New Mexico Development SPE Corp. held the license. Both are partners and both were registered with the State of New Mexico on November 19, 2004.

Cordova called the Secretary of State’s office, as well as the PRC, to ask what happens when a partnership no longer has a partner, and if a corporation with a revoked license can continue to transact business within the state.

Officials in both offices refused to answer any “legal questions.”

The revocation could be a concern because the City of Belen signed agreements with the partnership in the latter half of 2009.

New Mexico Development Partners, a subsidiary of Coast Range Investments, the company attempting to develop Rancho Cielo, has had its license revoked by the New Mexico Public Regulation Commission (PRC).

The corporate status on the PRC’s online corporate database shows the company’s “license was revoked.” The company qualified as a foreign profit corporation on November 19, 2004.

The PRC’s database doesn’t indicate when the revocation occurred.

According to the PRC, New Mexico Development Partner’s listed purpose is “real estate management.”

The company’s registered agent is listed in Santa Fe, which appears to be a law firm. The company also lists its mailing address as the office of RS Investments in San Francisco, California.

Construction work on the North Belen interchange will shut down by July if the developer of Rancho Cielo doesn’t come through with its portion to complete the project.

Using a $3-million state appropriation, the New Mexico Department of Transportation (NMDOT) has continued the reconstruction of the interchange despite not having Coast Range Investment’s contribution, which would be approximately $4 million.

As the state appropriation runs dry, NMDOT will demobilize the construction crew and halt the work.

Jim Wood, vice president with Coast Range Investments, said at last night’s Belen City Council meeting that his company won’t have the money to complete the interchange unless it has a “user” for land within Rancho Cielo.

Signet Solar was expected to be the first user in Rancho Cielo, but the solar company was unable to secure a federal loan guarantee to back funding for construction of its manufacturing facility.

The State of New Mexico, City of Belen and Coast Range Investments, with the latter operating under the subsidiary New Mexico Development Partners (NMDP), signed a three-party agreement explaining the various roles and financial obligations of each entity related to the interchange project.

According to that agreement, the State of New Mexico contributed $4 million to the project, which included approximately $1 million for design and planning and $3 million for construction.

Under that same agreement, New Mexico Development Partners committed to funding any remaining project costs.

“NMDP will provide funding for project costs that exceed this $4,000,000.00, based upon the project estimates, in escrow prior to letting of the construction project,” a section of the agreement reads.

Coast Range Investments never placed its contribution in escrow prior to construction, and now, through an attorney, it disputes that it has any legal obligation under the agreement to provide the funding.

Should NMDOT stop construction on the interchange because of a lack of funding, Tamara Haas, an NMDOT district engineer, told the city council it will need to rebid the remaining construction work.

Signet Solar has decided it won’t build its solar technology manufacturing facility in Belen, according to Jim Wood, the vice president of Coast Range Investments, the developer of Rancho Cielo.

During last night’s Belen City Council meeting, Wood made the announcement by saying Signet Solar won’t build anywhere in New Mexico, largely because the federal government denied a loan guarantee for the project.

Signet Solar was denied a loan guarantee from the United States Department of Energy (DOE) on January 11, which the company planned to use to back funding for the first phase of construction for what has termed “the SunKachina project,” a multimillion dollar silicon thin film manufacturing facility.

The DOE denial letter suggests that prior to the denial the federal agency gave Signet Solar an opportunity to clarify information in its loan guarantee application, but the company was unable to allay DOE’s concerns.

On January 27, Wood and a representative of Signet Solar provided letters to Governor Bill Richardson’s office and the City of Belen indicating the DOE denial was undergoing an appeal.

An appeal, however, wasn’t possible, because the DOE application process doesn’t allow appeals.

“DOE’s determination is final and unappealable but will not prejudice you from applying under a future solicitation if appropriate,” the DOE denial letter reads.

Signet Solar has expressed no interest in a second attempt at a loan guarantee, along with Coast Range Investments, having spent approximately $1 million on the DOE application.

Wood said Coast Range Investments is continuing to search for companies that are willing to build manufacturing facilities in Rancho Cielo.

Rep. Elias Barela said over the weekend that not supporting the development of a master-planned community in Rancho Cielo’s 6,000 acres west of Los Chavez could lead to unwanted development there.

“It’s a quality development. It’s private land. If we drive Rancho Cielo out, who’s going to take over it? What’s going to happen with it?” Barela asked. “Is a better company going to come in? Is it going to be developed in a better fashion or a worse fashion?”

Not helping the developer, Coast Range Investments, build Rancho Cielo there could mean the 6,000 acres turns into Valencia County’s next Meadow Lake, he said.

“If people don’t have good jobs here, the only people who are going to be buying that land are ones who basically will do what they’ve done to other parts of the county, literally a spew of mobile homes and lack of infrastructure,” he said.

That’s why he and Rep. Andrew Barreras worked to get the North Belen interchange reconstruction and Signet Solar’s infrastructure funding out of bills at this year’s legislature that Barela said threatened to cut the funding. He said efforts to pull Rancho Cielo’s funding would have “ensured its utter destruction.”

Sen. Michael Sanchez placed the North Belen interchange money on a list of projects to be cut during the regular session. Sanchez said last week he did that to highlight how the developer of Rancho Cielo won’t pay its portion of the money needed to improve the interchange, which will provide access to Rancho Cielo.

“The thing that I think is really important is that we just be honest about what our policy decisions are and what our policy choices are,” Barela said.

Barela said Sanchez has been trying to cut funding for the North Belen interchange and Signet Solar since the special session last year.

The two legislators have a significant policy disagreement when it comes to how Valencia County and Belen should grow.

Sanchez is opposed to the growth of Rancho Cielo west of Los Chavez, instead wanting to focus on downtown redevelopment in Belen.

“I’d rather fix Belen and do what we can in the city of Belen. Why are we moving the city from one area to the next?” Sanchez said last week in Santa Fe.

Barela, on the other hand, believes Rancho Cielo will provide development that downtown Belen can’t, manufacturing jobs like those that could be created by Signet Solar, a solar technology manufacturer.

Barela said the best way to help small businesses is by providing jobs in major industry, which can in turn provide a stronger consumer base for small businesses. The failure of Signet Solar to build in Rancho Cielo is one way to harm small business, he said.

“It’s devastating to people. You’re hurting people who don’t have work and are having trouble putting food on the table, not only the ones who are going to work in Signet Solar, but the ones who buy dinners, the ones who buy gas, the ones who buy flowers, and the ones who buy building materials,” he said.

Last week, local business owners began meeting to save the funding for the North Belen interchange project, even traveling to Santa Fe to meet with Sanchez.

“It’ll really help all the small businesses. I’m not surprised businesses came out and said they’re for this,” Barela said.

In the meeting with Sanchez, however, and during a later meeting with Jim Wood, executive vice president of Coast Range Investments, the business owners found out the state’s $3 million in funding for the interchange reconstruction was never at risk of being cut. The project is instead being halted because Coast Range Investments said it wouldn’t yet put forward the $4 million it “pledged” for the project.

Signet Solar, which was expected to be the first to build in Rancho Cielo, was denied a loan guarantee from the United States Department of Energy (DOE) in January, which led Coast Range Investments to decide to hold back its funding for the North Belen interchange improvements. The denial is now in a DOE appeal process that could take nine months to a year.

“I am very disappointed that the debate suddenly became about when and where they’re supposed to pay this and that,” Barela said.

The debate about funding cuts and Rancho Cielo’s viability is “unnecessary” and a “cat fight,” he said, adding that both Valencia! and the Valencia County News-Bulletin got “sucked into” irrelevant concerns characteristic of “gotcha” politics.

“I’m not a mind reader. We don’t know if the project will fall apart. But I know that it hasn’t fallen apart. This action and this debate are making it more likely that it will,” he said.

Barela said the city, county, state and federal governments have put thousands of hours of work into Rancho Cielo and Signet Solar. Coast Range Investments has put $40 million into the master-planned community.

Barela said the worst thing local leaders can do to Signet Solar because of the denial of the loan guarantee is “kick them and throw them and use it as an opportunity to walk away” from the project. He said that would show Valencia County is “closed for economic development.”

“It’ll ensure nothing comes to this area anymore. It’ll create a stigma,” he said.

Barela said the project shouldn’t end this way. He wants locals to take a deep breath and show “some real leadership.”

He said he believes Coast Range Investments and Signet Solar are acting in good faith and have given him no reason for pause.

“The road’s not without bumps, and I think real leadership requires people to step up and say, ‘Look. Time out.’ I don’t think the way to do this is to pull the rug out from under them. If we’ve got some issues with delays, if we’ve got some issues with how the contracts are written, we’ll deal with that. And if the project’s completely unviable, we really need to look at it,” he said.

Fred Mondragon, the secretary of the New Mexico Economic Development Department, is a “huge supporter” of Signet Solar who says the project is “an extremely viable venture,” according to Barela.

“If we pull the rug from under this, it’ll be an extremely negative message that we may never recover from,” he said.

He said Sanchez’s efforts to pull funding from Rancho Cielo are “premature” and “punitive,” because there hasn’t been open debate in Valencia County about the viability of the project and the future growth of Valencia County.

When asked if he would debate Sanchez face-to-face on issues related to Belen’s growth, Barela said he welcomes it.

“I’ve been very upfront about my position on this issue. What is his position?” Barela asked, adding, “If he would want to talk about it and do it, I’d be more than happy to do it.”

He also plans to push his ideas for how Valencia County should grow with local officials in Belen, Los Lunas and at the county.

“When I talk to people who have lost their jobs and people who have lost their homes, when I talk to people who have lost family to drug use because there’s not any opportunity for them, when I see there are rampant Children, Youth and Families Department complaints in this county because of stresses on the family — when I see what the lack of a good job does, I have become one of those people who understands what Franklin Roosevelt meant when he said the best social program is a good job. There’s dignity in work far beyond the economic benefits of it,” Barela said.

A report concerning where to place a new interchange and bridge in the Los Lunas area that was provided to the Valencia County Commission last night shows broad public support for locating the new roadway near Morris Road.

The report, produced by the Mid-Region Council of Governments (MRCOG), includes a compilation of comments by citizens who attended last month’s informational open house concerning the issue.

MRCOG and D. Pennington & Associates have been conducting a study of where to place the new interchange and bridge.

The options under serious consideration have been whittled down to two: Morris Road at the southern end of Los Lunas and Miller Road at the northern end of Los Chavez.

The open house had high attendance, bringing in more then 250 people, including many from El Cerro and the Mid-Valley Air Park in Los Chavez. During the open house, MRCOG compiled public comments on flip charts and forms, later analyzing levels of support for potential routes. Study officials also received comments by mail and email, about 140 comments in all.

“We have tallied the comments by a particular position they may have taken. Maybe they’re supporting a particular alignment. Maybe they’re opposing a particular alignment. Maybe they’re suggesting we do nothing. Or maybe they’re suggesting we should do something but they’re just not sure what,” said Dave Pennington of D. Pennington & Associates.

According to the comments, the public is more strongly supporting an interchange at Morris Road than any other route. A Morris Road interchange would connect by a bridge across the Rio Grande to Highway 47 at El Cerro.

“It shows that the Morris route is by far and away the recommended route,” Commissioner Pedro Rael said.

Rael noted that public support for a route isn’t the only factor that will be taken into consideration when a final decision is made.

The open house comments also showed substantial concern for the protection of Valencia County’s agriculture.

“The preservation of farmlands was raised quite often. The preservation of the rural character of the communities was raised quite often,” Pennington said.

The study of the interchange is only one-third complete and has many months left before governments, like the Village of Los Lunas and Valencia County, start making decisions on where to build a new interchange and bridge.

“A lot of people are ready for decisions. We’re no where near being ready to make a decision in terms of what should be done, where it should be or what it should look like,” Pennington said.

Coast Range Investments, the company developing Rancho Cielo west of Los Chavez, said during a meeting with Belen business owners yesterday that the company won’t commit money to finishing improvements to the North Belen interchange that was expected to provide access to the west side of Interstate 25.

The project has been in question since last week when Sen. Michael Sanchez included it on a list of projects that could be cut by the state. On Tuesday, Sanchez said he took that action to show the developer isn’t living up to its promise to pay for a portion of the interchange reconstruction.

The interchange project is estimated to cost approximately $7 million. The governor, through the City of Belen and the New Mexico Department of Transportation (NMDOT), contributed $3 million in capital outlay funding, money that will be spent, according to Sanchez and NMDOT officials.

The Rancho Cielo developer “pledged” it would pay the remainder, approximately $4 million, according to Jim Wood, executive vice president for Coast Range Investments. He said his company is taking a position that it has no contractual obligation to provide that $4 million to the project.

“We entered into a third-party agreement with the city and NMDOT for the development of the North Belen interchange. This three-party agreement was from our end, as documented by our attorneys, dependent on Signet Solar being approved by the DOE.”

Signet Solar, a solar technology manufacturer, has been expected to locate in Belen but was denied a United States Department of Energy (DOE) loan guarantee to help with financing the construction of a plant. Wood said his company won’t contribute the money to the North Belen interchange reconstruction unless he has a “user” in place, something like Signet Solar.

The denial of the federal loan guarantee is now undergoing a DOE appeal process some say could take nine months to a year to complete.

Andrew DiCamillo, the City of Belen Planning and Zoning Department director, said the city interprets the contract differently, with Coast Range Investments being contractually obligated to put forward its $4 million to finish the interchange regardless of whether or not there’s a “user.”

Wood said the interchange project was postponed last year because it took so long to get an answer on Signet Solar’s loan guarantee. He said his company is again delaying the interchange project, this time because of the denial of the loan guarantee.

“The city feels a little cheated, in certain respects, that the project has been carried this far and now we’re going to have a postponement,” DiCamillo said.

Wood suggested Coast Range Investments has the $4 million but can’t contribute it.

“Paying the last $4 million would have seriously depleted our funds – we’ve already invested over $40 million – and limited our viability to work with other people. We are pledged to complete the interchange,” Wood said, calling the postponement a “corporate decision.”

Mary Aragon, a candidate running for a seat on the Belen City Council, questioned why the attorneys with NMDOT and the City of Belen didn’t find it odd that construction would start on the interchange without Coast Range Investments contractually committing its money to the project.

“It seems like they’re not acting in good faith at all. You have to have your money there,” she said.

NMDOT said it’s terminating the construction contract for the interchange project to avoid financial or legal problems.

“We’re in the process right now of terminating the contract with A.S. Horner pending a funding source, whoever it may be, whether it comes from a private developer or not,” Plese said, noting it’s the first time he’s ever had to terminate a construction contract.

If the contract isn’t canceled now, the state could get stuck with paying into the project more than it has available for it.

“We can’t continue this job because we don’t have the money to complete it as designed,” Plese said.

Because construction of the interchange is already underway, utilizing the state’s contribution of $3 million, Plese said a postponement could increase the total cost of the project by a million or more dollars, partly because the construction crew and its equipment will vacate the construction site.

Wood said despite the delay Coast Range Investments isn’t going away. It’s invested $40 million in Rancho Cielo already, buying land, securing water rights and engineering the master-planned development. He called Rancho Cielo a 25-year project.

“We are not walking away from our phase of the interchange,” Wood said, adding, “Never in our history since 1991 have we walked away from a project. We’ve completed them all.”

Belen business owners at the meeting we’re unhappy about the situation.

“What I’m hearing today, and I’m not happy about it, is we’re not going to get our interchange because of the private funding and attorneys,” said Neil Hise, who owns CEMCO Inc. near the North Belen interchange.

As a businessman, Hise said he understands why a company might not want to spend more money on a project that’s not yet profitable. He was also “pissed off” with NMDOT for sounding like it doesn’t want to continue the project.

Another business owner near the North Belen interchange was also disappointed by the direction of the project.

“You are dead in the water without that interchange,” Bruce Prater, who owns the Graphic Arts Station, told Wood, adding, “Without the interchange, you can’t get into your property. I feel like we’re being held hostage right now as the negotiations go on, because without the interchange we’re dead.”

Meanwhile, with the legislative session ending today, the fight over capital outlay and other state funding for Rancho Cielo continues. As of yesterday, it appeared all attempts to cut funding for the development had been stopped by reps. Andrew Barreras and Elias Barela.