Land Ho! The Lyons-Philippou Deal

O.K. folks, bear with me for a bit on the history review because I think we have to look more closely at the actions of the State Land Office.

The conditions under which New Mexico became the 47th state on January 6, 1912 are rather interesting. Land was the currency of the day and New Mexico had plenty of it.

The 1899 Ferguson Act and subsequent 1910 Enabling Act created the state land office and the position of Land Commissioner (first territorial land commissioner then state land commissioner). Due to the strict and highly specified provisions of the Enabling Act, the mission of the State Land Office could be distilled down to a simple matter of generating revenue for the state (mostly for education) from trust lands.

Over time, raising revenues for the state took the form of business leases (used to collect money in the form or rent or sale of land). It became common practice for the state to reimburse business if they made tangible improvements like developing new wells or building stock tanks.

Still with me? Get your favorite beverage because it’s about to get interesting.

What has not at all been common practice is for private businesses to receive reimbursements for intangible improvements like planning, or convincing a local subdivision of the state to annex land. What is even further outside the norm for land office deals is giving the private business a percentage of the revenue – revenue ostensibly intended for kids’ education in New Mexico – once the land is sold.

Yet State Land Commissioner Patrick Lyons is trying to do just this with not one, but perhaps as many as eight different deals throughout the state.

What is most troubling about this recent phenomenon in State Land Office dealing is that the private developer who stands to gain the most from the questionable deals is none other that Lyons campaign contributor and Las Cruces land developer Philip Philippou.

If just one of the proposed deals goes through, Philippou stands to reap millions from the sale of the land. This investment is so lucrative for Philippou that he will reportedly give about 30% of his earnings to charity.

Upon the request of two Dona Ana-area legislators, Attorney General Gary King recently issued an opinion (link) about the State Land Office deal with Philippou. In a nutshell, the Attorney General does not believe such deals are permissible under state law. Local media in Las Cruces urged a thorough state legal review before the deal is cemented.

From Las Cruces Sun News editorial (March 2, 2008)

Suspend the land deal

A land deal that looked shady from the very start has now been ruled illegal by the state Attorney General’s Office… The State Land Office, a partner in the deal, seems unfazed by the attorney general’s opinion, and vows to keep plowing ahead with plans to continue selling off land for development around Las Cruces using this same arrangement that the state’s top law office has deemed to be illegal.

It seems to me three problems arise from this rather complex scenario:

1. The Phillippou deal is not permitted under state law.

2. If by some stretch of the imagination the Phillippou deal is legal, then the power of the State Land Commissioner to issue no-bid contracts should be thoroughly reviewed. A Land Commissioner with the power to issue a no-bid contract to a private firm that stands to reap millions from the sale of public land is bound to invite at least the appearance of corruption.

3. The State Land and Trust Board (an advisory board to the Land Commissioner) must have real oversight duties over the actions of the State Land Office.

Discussions about the official actions of the State Land Office can be overly wonky. But, with that office’s Constitutional responsibilities to raise revenue for schools in New Mexico, it’s a topic we all must pay attention to.

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