By County Manager Anne Laurent:
I would like to thank Allan Saenz for his hard work and dedication to making the SALA Event Center a success now and into the future. I also respect his decision to pursue other funding avenues rather than continuing to seek a grant under the Local Economic Development Act (LEDA).
From the County’s perspective, the bureaucracy Allan speaks of surrounds one issue – the legal requirement of the private entity receiving the public funding to provide security, or collateral, for the loan or grant amount until the terms of the agreement have been satisfied. (Specifically, this is item 1, under “SALA” in the Proposed Terms included at the end of this letter.)
See the Local Economic Development Act, N.M. Stat. Ann. § 5-10-10(c),
“The qualifying entity shall provide security to each local or regional government or any other New Mexico governmental entity providing public support for an economic development project. The security shall secure the qualifying entity’s obligations based on terms stated in the project participation agreement with the local or regional government and shall reflect the amount of public support provided to the qualifying entity [emphasis added] and the substantive contribution expected from the qualifying entity.”
The full text of the statute can be viewed here: https://nmonesource.com/nmos/nmsa/en/item/4376/index.do#5-10-10
This foundational legal requirement is imposed by the State of New Mexico to ensure a community’s public funds are protected when public money is used for a private purpose. The County is in no position to disregard this legal requirement imposed by state law. This is a law of general applicability throughout the State of New Mexico. As such, this law cannot be altered or amended at the local level using the County’s Home Rule powers. Without security in an amount equal to the public support being provided it is illegal for the County to provide LEDA funding to any private enterprise.
To offer some background, on Dec. 12, 2023, the Council authorized staff to move forward with developing a LEDA agreement between SALA and the County. For the next six months County staff worked with Allan and his team to come up with a mutually aggregable LEDA project. There were lengthy discussions about the need for security and what type of security would be adequate and was the only point holding up the completion of this LEDA agreement.
Staff have worked hard and made it a priority to move the agreement forward to completion. To be more specific, in March I believed we were at the finish line of completing the LEDA agreement using a letter of credit as collateral. The agreement was ready to be placed on Council’s agenda for consideration. The terms of the proposed agreement are included at the end of this letter.
The County was looking forward to launching this LEDA project and providing SALA the requested funding. However, last month Allan requested the County change the source of collateral and the County amended the agreement once again to add the terms Allan requested. The County was awaiting a final okay on the draft agreement when Allan changed his mind and withdrew.
The County remains supportive of local businesses and SALA’s success. We will always be looking for new tools and opportunities to expand the ways government can assist.
If residents or businesses are interested in learning more about LEDA, information can be found on the New Mexico Economic Development Department webpage or read the full Local Economic Development Act here: https://nmonesource.com/nmos/nmsa/en/item/4376/index.do#a10
Terms of Proposed Agreement:
