Land deal, New Mexico style
Ancestral land turned corporation could be up for sale
ALBUQUERQUE, New Mexico — This booming desert city, with luxury homes stuck like ticks to the foothills and suburbs crawling west from the Rio Grande, is nearing capacity. To the north and south, Indian reservations block sprawl; the only open land lies beyond the western mesa. But those sandy rills and arroyos have been largely off-limits for the past 300 years: In 1692, the king of Spain granted that land to Spanish settlers and their heirs.
Today, the former Atrisco Land Grant covers 57,000 acres from the Rio Grande to the Rio Puerco. Developers and politicians alike are casting covetous eyes at that land, which became a private for-profit corporation in 1967 — the only such instance in New Mexico’s history. People who could prove they were heirs became "shareholders" of the Westland Development Corporation.
Last summer, however, the Westland board of directors shocked those heirs when it announced it was considering an offer that would liquidate all shares, dissolve the corporation and sell the land. If the land is developed, it will increase the Duke City’s area by half its size.
Many heirs don’t understand the implications of that, says shareholder James Aranda, whose connections to Atrisco stretch back at least nine generations. People think the sale will allow them to "buy a fridge or put a down payment on an SUV," he says. What they don’t realize is "this is a one-shot deal."
"We’re going to lose everything," he says. "And it’s going to transform the entire region."
Since incorporating, Westland has sold some land, including 2,000 acres that today make up part of Petroglyph National Monument (HCN, 10/25/99: Monumental Chaos). It’s also building a 6,400-acre planned community and is seeking approval to break ground on another 14,000 acres. But the outright sale of shares is a new twist — and it’s set off a bidding war. Last August, the initial offer was for $200 per share. The current offer, from Las Vegas-based Sedora Holdings, stands at $305 per share, or a total of $242 million.
Some heirs are eager to cash in on the deal: Shareholders currently receive annual dividend checks for about $1 per share. But others are skeptical of the board’s intentions, alleging that its members cut a "sweetheart" deal with an early buyer, participated in insider trading by purchasing shares at deflated prices prior to the sale announcement, and even withheld knowledge of oil resources. (Repeated calls to Westland were unreturned.)
If the deal goes through, the nine board members will profit most: Under Sedora’s offer, they would reap more than $15 million. In contrast, the other 6,120 shareholders would split just over $227 million. And the split would be uneven; some own just a few shares, while others own thousands.
On June 8, shareholders were supposed to vote on whether to allow non-heirs to purchase Westland shares, a necessary condition for any land sale. But the board abruptly called off the vote, because Sedora outbid an earlier offer. Bewildered shareholders were left milling around the Hotel Albuquerque on a Thursday morning, and Westland has yet to reschedule the vote.
Shareholder Jerome Padilla, who opposes the sale, says the board has no business signing land deals when shares can’t even be sold to non-heirs. Westland has already paid a $5 million termination fee to one early buyer. And if the deal with Sedora falls through, the company will shell out another $10 million termination fee.
"This group of people is not negotiating in our best interest," says Padilla. "How can we allow this board, who jeopardizes such large amounts of money, to be responsible (for) such prime property?"
Connecting a city with its future
Westland has its hands on prime real estate indeed: This winter ended a long-standing battle over the westward expansion of Paseo del Norte through Petroglyph National Monument (HCN, 6/27/05: Suburbia blasts through a national monument). The city won with significant legislative help from Republican Sen. Pete Domenici, who, more than 30 years ago, bought land along the west bank of the Rio Puerco. If Westland is developed, that land will be made accessible by the proposed Northwest Loop Road, which would blow through the Puerco Valley.
Even non-heirs in Albuquerque wonder about the future if Westland sells. The city might someday resemble Las Vegas, where Sedora owner James Rhodes is one of the city’s biggest developers. The area could even sprout nettles of oil derricks, pumping out an estimated 100 to 500 million barrels of oil.
But state Rep. Miguel Garcia, D, thinks that land could instead "re-instill hope and respect" for his poverty-stricken constituents, many of whom are Atrisco heirs. His district in the South Valley of Albuquerque has the state’s highest teen pregnancy rate; many residents don’t have health insurance, and the area lacks basic infrastructure such as storm drains.
Garcia — an heir, but not a shareholder — hopes shareholders will vote against the sale and someday elect a new generation of board members. If that happened, he says, Westland’s assets could be used for the good of the community, funding loans, education and recreational opportunities for teens and seniors — rather than simply enriching "a handful of people."
"Land grants are about tradition, belief, respect, ancestors, strength, democracy and values," says Garcia."They are not about money."
The author, Southwest correspondent for High Country News, lives in Albuquerque.
This story was funded by a grant from the McCune Charitable Foundation in Santa Fe.