Developer Wins Lawsuit Over RR's Impact-fee Moratorium

RIO RANCHO – The city of Rio Rancho is waiting to hear how much it will have to pay after it lost a lawsuit over RR’s impact-fee moratorium in which Curb North was seeking $5.6 million in damages.
In a District Court non-jury trial earlier this month, Judge James Lawrence Sanchez of Valencia County found in favor of the plaintiff, Cabezon developer Curb North, city spokesman Peter Wells said.
The judge will decide the amount of damages in coming weeks.
“Legal fees and damages are not covered by the city’s insurance,” Wells said in an email. “These costs will have to come from the city’s general fund.”
Curb North sued the city in October 2012 after a majority of the governing body approved a two-year moratorium on 50 percent of residential impact fees and all of commercial impact fees. Impact fees are payments developers make to the city to offset system-level infrastructure improvements or expansions the city has to make to accommodate new development.
Curb North had put in more infrastructure than required for Cabezon, so the city issued it impact-fee credits. The developer could use those credits to avoid paying impact fees on future developments or sell to them other developers, which could, in turn, use the credits to avoid impact fees.
Curb North argued that the city was causing financial harm to the company by severely decreasing its opportunity to sell its impact-fee credits.
In an interview, outgoing Mayor Tom Swisstack said he and Curb North warned of lawsuits if the moratorium went forward, devaluing Curb North’s credits. Swisstack opposed the moratorium, but the city charter doesn’t allow him to vote at governing body meetings except in the case of a tie, which didn’t happen with the moratorium.
“I think this is a clear indication that what might be perceived as good economic development, if it has a negative impact on one of the larger developers in the area, that has to be taken into consideration before we consider extending this impact-fee moratorium again,” Swisstack said.
The city will be held accountable for any continuing devaluation of Curb North’s impact-fee credits, he added.
The moratorium expires this fall. After the judge’s final order on damages is issued, the city will decide whether to appeal.
By: Argen Duncan (Albuquerque Journal)
Click here to view source article.