ALTO ELDORADO PARTNERS v. City of Santa Fe

644 F. Supp. 2d 1313, 2009 U.S. Dist. LEXIS 120056, 2009 WL 1232091
CourtDistrict Court, D. New Mexico
DecidedMarch 11, 2009
DocketCIV 08-0175 JB/ACT
StatusPublished
Cited by2 cases

This text of 644 F. Supp. 2d 1313 (ALTO ELDORADO PARTNERS v. City of Santa Fe) is published on Counsel Stack Legal Research, covering District Court, D. New Mexico primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
ALTO ELDORADO PARTNERS v. City of Santa Fe, 644 F. Supp. 2d 1313, 2009 U.S. Dist. LEXIS 120056, 2009 WL 1232091 (D.N.M. 2009).

Opinion

MEMORANDUM OPINION AND ORDER

JAMES O. BROWNING, District Judge.

THIS MATTER comes before the Court on Defendant County of Santa Fe’s Motion to Dismiss Plaintiffs’ Complaint and Memorandum in Support, filed May 19, 2008 (Doc. 31). The Court held a hearing on January 8, 2009. The primary issues are: (i) whether the Plaintiffs’ takings claim is ripe for adjudication; (ii) whether their other federal claims are subsumed under then’ takings claim and must be premature if the takings claim is premature; and (iii) whether the Court should dismiss the pendent state law claims. Because the Court concludes that the Plaintiffs’ takings claim is premature and that the Plaintiffs’ other constitutional claims are subsumed under the claim, the Court will dismiss the Plaintiffs’ federal claims on jurisdictional grounds. Because the Court thus lacks a basis on which to exercise supplemental jurisdiction, the Court will also dismiss the remaining state claims for lack of subject-matter jurisdiction.

FACTUAL BACKGROUND

This case concerns challenges under both the United States and New Mexico Constitutions, as well as New Mexico state law, to the County Ordinance and to the City of Santa Fe’s similar affordable housing ordinance (the “City Ordinance”), the latter of which the Court has dismissed because the Plaintiffs lack standing to challenge the City Ordinance under the United States Constitution. See Memorandum Opinion and Order at 44, entered March 11, 2009 (Doc. 79). The Plaintiffs are developers active in the City and County of Santa Fe. They contend that the City and County Ordinances are legally invalid on a variety of theories. In essence, however, their claims are that the Ordinances deprive developers of their property by forcing them to set aside significant portions of their developments for affordable housing, at a loss to the developers.

The Court will focus here on the facts relevant to the County Ordinance. Because this is a motion to dismiss, the Court will assume that the Plaintiffs’ factual allegations are true, although the Court notes that a number of the allegations in the Complaint are essentially assertions of law or mixed questions of law and fact that the Court does not assume are true.

Three of the Plaintiffs, Alto Eldorado Partners, Ranch Verano, LLC, and Cimarron Village, LLC, (collectively, “County Plaintiffs”), “own parcels of land in Santa Fe County which have master plan approval and these Plaintiffs intended to proceed with the development of their properties but are being impacted by the” County Ordinance. Complaint for Injunctive Relief for Violation of Civil Rights and New Mexico State Law ¶ 7, at 2, filed February 15, 2008 (Doc. l)(“Complaint”). The bulk of the Complaint discusses the City Ordinance, and then notes that the County Ordinance is similar and describes what the Plaintiffs view as the key differences between the two Ordinances. The Court will therefore lay out most of the allega *1316 tions involving the City Ordinance, but refer to the County and to the County Ordinance.

The County Ordinance requires that upwards of thirty percent of the lots in a subdivided development be affordable housing lots to be sold to qualified buyers. These set-aside lots must be sold at below market value. See Complaint ¶ 12, at 2-3. This scheme effectively requires property owners not only to dedicate some of their property to others, but requires property owners to become home builders. See Complaint ¶ 23, at 3. 1

In lieu of providing affordable housing, owners may, at the County of Santa Fe’s discretion, pay money to the County. See id. ¶ 13, at 3. The Plaintiffs acknowledge that the County Ordinance allows for density bonuses — which permit an owner to add more lots or units — -and fee waivers, but state that the waivers defray only some of the losses owners suffer. See Complaint ¶ 15, at 3. The density bonuses are a more complicated story. While allowing for more lots, decreased lot sizes may depreciate the overall value of a subdivision, push the subdivision into a category requiring more extensive infrastructure, or even not be given at all because of neighborhood opposition or other legal restrictions. See id.

When affordable housing units are resold, the difference between the resale price and the original affordable housing price is split between the County of Santa Fe and the qualified buyer. See id. ¶ 16, at 4. This provision effectively denies the original developer any profit after the developer builds the home at a personal loss. See id. ¶ 17, at 4. All funds the County receives under the Ordinance go into a trust fund that is to be used exclusively for affordable housing purposes. See Complaint ¶ 2 1, at 4.

To make projects viable, developers are forced to increase prices on the non-affordable housing lots — or market lots — to recover losses the County Ordinance forces on them, helping drive housing prices out of the reach of the middle class. See Complaint ¶¶ 19-20, at 4. Additionally, the County Ordinance limits the amount of rent certain owners may charge for rental units. See Complaint ¶ 22, at 5.

One difference between the City and County Ordinances is that, for small projects, the County Ordinance requires that sixteen rather than thirty percent of the development be set aside for affordable housing, although the requirement is raised to thirty percent if a density bonus is sought for a smaller project. See Complaint ¶ 23, at 5. The County Ordinance also defines qualified buyers as a larger set of the population: “those who have incomes up to one hundred twenty-one percent (121%) of the ordinance-defined average median income and who may have up to $125,000 in assets.” Complaint ¶ 24, at 5. The Plaintiffs state the County Ordinance is more burdensome than the City Ordinance, because minimum lot sizes in the County are larger — ranging from two- and-a-half acres to twelve-and-a-half acres depending on the hydrologic properties of the zone in which the lot lies and whether a County-approved water system services the lot — see Complaint ¶ 25, at 5, and also because road and infrastructure costs are greater for these larger lots, see id. ¶ 26, at 5. If a development remains economically viable under the County Ordinance, the property owner will usually make payments in lieu of providing affordable housing. See Complaint ¶ 27, at 5-6. For a *1317 one-hundred lot subdivision, the fee is $4,960,000.00. See id.

The Plaintiffs maintain that the County Ordinance amounts to an unconstitutional taking because the Ordinance lacks any reasonable nexus between the activity of developing property and the problem of providing affordable housing, because it places disproportionate burdens on owners, because it requires property owners to sell property at below-market rates, because it transfers resale profits to buyers or to the County, and because it may in some cases requires direct payment to the County. See Complaint ¶¶ 30, 32-40, at 7-8. Property owners are not compensated for these effects. See id.

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644 F. Supp. 2d 1313, 2009 U.S. Dist. LEXIS 120056, 2009 WL 1232091, Counsel Stack Legal Research, https://law.counselstack.com/opinion/alto-eldorado-partners-v-city-of-santa-fe-nmd-2009.