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The State Land Office confirmed Wednesday that D.R. Horton Inc. -- which had planned to build 2,780 homes and nearly 2 million square feet of commercial space on 1,813 acres of state land along N.M. 14 -- pulled out last week.
State Land Commissioner Patrick Lyons said Wednesday that D.R. Horton representatives told him they were withdrawing from the project for three reasons.
The main one, Lyons said, was an opinion on State Land Office leases by Attorney General Gary King. The opinion, issued in February, states developers should not be allowed to get financial credits for "intangible" improvements such as zoning changes made to state lands. "They were concerned that they would not be getting their money back," said Land Office spokeswoman Kristin Haas.
Lyons has publicly criticized King's opinion, saying it will hurt the Land Office's ability to develop public lands for the benefit of New Mexico public schools.
He said a state audit of Land Office development agreements and difficulty dealing with Santa Fe County were the other two reasons Horton gave for pulling out of the deal.
Lyons said he didn't know what problems the company has had with the county or about the audit related to the deal. But he said the attorney general's opinion is a case of "too many attorneys messing things up."
Haas said the collapse of the San Cristobal Village project would cost the Land Office a total of about $6 million in potential revenue that would have been generated by the sale or lease of the homes and business that were to have been built.
Assistant State Land Commissioner Jerry King, who was in charge of the San Cristobal Village project, said he didn't want to comment on the role the attorney general's opinion played in the disintegration of the deal because Gary King is his cousin.
Attorney General's Office spokesman Phil Sisneros said his office did not discuss the lease on the San Cristobal Village property with the Land Office or D.R. Horton. "The Land Office knows a heck of a lot more about why they pulled out than we do at this point," Sisneros said. "All I know is that they blamed us for it. ... If they cite our opinion, our only response is: Our opinion hasn't changed."
Jerry King said D.R. Horton hasn't given written notice it intends to drop out of the deal, but the company is about 90 days behind in paying its annual $91,000 lease on the property. Under the terms of Horton's lease with the Land Office, he said, the first phase of the project -- about 250 homes -- should have been completed by April. The project was to be built in 11 phases over 30 years.
Jerry King said other factors such as the housing market, the economy and difficulty finding water rights for the project could have been factors in Horton's decision to drop out. "We only had 22 acre-feet of water," he said. "That meant D.R. Horton still needed another 300 acre-feet of water."
Jerry King said Santa Fe County has a "very sophisticated planning division," which may have slowed the process. "There are a lot of approvals you have to go through at Santa Fe County that you don't have to do other places at all," he said.
County spokesman Stephen Ulibarri, in a written statement Wednesday, said: "County staff was unaware of issues relating to this project." Ulibarri didn't respond to an e-mailed question asking how long the project had been in the permit process.
D.R. Horton, one of the country's largest home builders, also could be facing its own financial difficulties. Moody's Investors Service this month downgraded the company's stock into junk territory.
The Land Office had been working on the San Cristobal Village project since 1995, Jerry King said. He said local developer John McCarthy guided the project through master plan approval but sold his interest to Horton in 2004.
Jerry King said the Land Office will continue trying to find a developer to work with on the project. He said the deal's collapse could be a blessing because it will let Lyons' office rewrite the lease on the project, which was created by the previous administration.
Contact Phaedra Haywood at 986-3068 or phaywood@sfnewmexican.com.
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