By Cooper Metts | Albuquerque Business First
The New Mexico State Land Office signed an agreement last year that could lead to one of the largest land exchanges in New Mexican history.
The land office signed an agreement to initiate an exchange with the Bureau of Land Management on Aug. 16, 2024, according to Stephanie Garcia Richard, New Mexico’s commissioner of public lands.
The exchange could see the land office trading all its land within the Organ Mountains Desert Peaks National Monument for land mostly and ideally in Doña Ana County, specifically the Santa Teresa area.
The land office’s goal in the exchange is to get “lands that have high commercial redevelopment potential,” according to Michael Sage, the land office’s assistant commissioner of commercial resources.
“The State Land Office needs to make money,” Garcia Richard said. “We can’t just have protected land. It’s a good thing, and we support it, but that doesn’t serve the purpose of the land office. So, we’re looking for land that has high commercial value.”
The land office has 85,000 acres within the national monument, and it hopes to get approximately 17,000 acres in the Santa Teresa area through the exchange. This exchange with the BLM has the potential to be the largest in state history, dependent upon the appraisal and public engagement process, according to Joey Keefe, assistant commissioner of communications for the State Land Office. Regardless, it will be one of the state’s largest exchanges ever, he said.
“We really have our eyes set on trading out of these approximately 85,000 acres and picking up 17,000 approximate acres of much higher value BLM lands in Doña Ana County,” Greg Bloom, assistant commissioner of mineral resources, said. “This is so that we can get land with higher commercial potential, but it’ll be worth multiple times the grazing land that we give up.”
The exact amount the land office can get in return will be determined through an appraisal process. The exchange will likely be a straight land-for-land trade, but the land office has a running ledger with the BLM in the event there’s difficulty getting an exact match of land-for-and value, Bloom said.
Timeline of the exchange
The exchange process began over six years ago in the administration before Garcia Richard’s.
Originally, the previous administration’s deal included lands outside of Doña Ana County. Now, she said the plan is to acquire land almost exclusively in Doña Ana County, for tax and commercial purposes.
In Garcia Richard’s administration, the process started with Sage driving around the state looking at lands to potentially acquire in the exchange. Sage was limited to lands on the BLM’s disposal list, which are lands cleared for off take by the BLM.
“He did this incredible ranking system where he put up all the acreage and said, ‘These have the biggest bang for our buck, these have medium and these have less,’” Garcia Richard said. “We’re trying to get as much of that top range as we can.”
After identifying desirable land through Sage’s ranking process, the land office again approached the BLM and negotiated before signing the ATI in August.
After signing the ATI, the BLM began the exchange process by publishing a notice of exchange proposal in November and legal notices of the NOEP in the Las Cruces Bulletin and the Hidalgo Herald on Nov. 14, 2024, Keefe said.
At the same time, the land office and BLM sent letters Nov. 12, 2024, to its grazing lessees, Tribes and Pueblos in New Mexico or the nearby area that could be impacted by the exchange, Keefe said. The letters informed recipients about the exchange and of a public meeting where they can learn more about the exchange and give feedback. A date for that meeting has not been schedule yet, and likely will not be scheduled until after this year’s legislative session so the commissioner and staff have better availability to attend the meetings, Keefe said.
The BLM also started a federal environmental evaluation process, known as the National Environmental Policy Act process, and an Appraisal and Valuation Services Office process, which will help determine how much it must give in return for the lands in the national monument at the same time. This process is expected to end in 2025, Keefe said.
And, in light of the election results, the State Land Office provided this statement as to how the new administration could impact the deal.
While it’s difficult to say what will happen, we’re hopeful that the new administration will allow the BLM to complete this exchange. The process has been underway for several years and there would be numerous benefits on both sides of the exchange, including the economic potential on the new state lands we would acquire.
The next step is for the BLM to publish an environmental assessment that expresses support for or opposition to the exchange, Bloom said. If it is in opposition, the transaction would not proceed.
Once the appraisal is completed, which Bloom estimated would take about two years, there will be time for the two sides to negotiate details before the exchange can be finalized.
Since the exchange will likely take the rest of Garcia Richard’s term, which ends at the end of 2026, the current land office administration wouldn’t have anything to do with the development and commercialization of the land it would acquire in the exchange.
The land office is working to get the exchange finalized before the end of 2026 so that a foundation can be laid for the next commissioner and administration to build upon and generate revenue for New Mexico.
“I’m kind of trying to set the next commissioner up for success, or the next few commissioners,” Garcia Richard said. “This is a legacy issue. I want to leave land that is prime for revenue generation.”
Why Doña Ana County and Santa Teresa
Bloom said the dual drivers motivating the land office to seek Doña Ana County land is its economic potential and the office’s effort not to reduce federal acreage in a given county, thereby altering the county’s payment in lieu of taxes (PILT).
PILT payments are federal payments that help local governments offset losses in property taxes due to the existence of nontaxable federal lands within their boundaries, according to the U.S. Department of the Interior.
In the previous administration’s proposed exchange, counties would have lost PILT because they would lose some of their federal acreage.
“You start getting into some smaller, more rural counties, and that could be one or two persons’ jobs that depend on that (PILT),” Bloom said. “We’ve heard that before from county elected officials and county managers, so we wanted to be really careful and not pick up anymore land outside Doña Ana County than we have to.”
Doña Ana County would increase its PILT in this exchange, Bloom said.
From a revenue generation perspective, the land office views Doña Ana County and Santa Teresa as “an area that’s ripe for long-term development,” Sage said.
That belief partially comes from the Inflation Reduction Act. The act’s manufacturing incentives make onshoring enticing, driving demand for manufacturing and warehousing space.
This manufacturing and warehousing demand is often funneled to border states because of an industrial boom in northern Mexico, in places like Chihuahua and Ciudad Juárez.
Many investors and companies want to stay in the U.S. to take advantage of the Inflation Reduction Act’s manufacturing incentives but be close enough to northern Mexico to profit off its manufacturing boom through value-added production.
“You’ve got a company that maybe makes wire for automobiles or maybe makes harnesses for automobiles. … They want to be close to Mexico because a lot of car production is occurring in Mexico,” Sage said. “How close can I get to Mexico without being in Mexico, knowing that my suppliers are right on the other side (of the border)?”
Similarly, foreign companies and investors are looking to do foreign direct investment in the U.S. to take advantage of the Inflation Reduction Act’s manufacturing incentives and the northern Mexico manufacturing boom.
“Oftentimes what we do see a lot of in Santa Teresa is that FDI (foreign direct investment),” Sage said. “You do see those suppliers coming in that want to be stateside because they are actively supplying the manufacturing that goes on in Mexico.”
Santa Teresa is a prime location for companies and investors looking to take advantage of both the Inflation Reduction Act’s manufacturing incentives and the manufacturing boom in northern Mexico because of its proximity to the border, major transit routes and availability of developable land.
Santa Teresa is approximately 45 minutes away from I-10, which runs through Phoenix to Los Angeles, and about 30 minutes away from a port of entry. The burgeoning town also has an airport and is within 50 minutes of Las Cruces International Airport and El Paso International Airport.
It also has a Union Pacific railroad facility with rail access extending as far east as New Orleans and as far west as Los Angeles, with connections to other northern metros like Denver, Seattle and Chicago, among others.
“In the grand scheme of things, Santa Teresa is a big deal,” Sage said. “It is quickly becoming a national hub for logistics, manufacturing [and] transportation.”
The land office is primarily seeking land near the Union Pacific railroad station, the Doña Ana County International Jetport and the Las Cruces International Airport in the exchange.
As Santa Teresa grows into the logistics, manufacturing and transportation hub Sage alluded to, housing projects are following to accommodate the workforce these manufacturing and warehousing facilities will employ.
The land office hopes to capitalize on heightened demand for industrial facilities, housing, logistics and transportation infrastructure in Santa Teresa by acquiring land in the area to then lease to tenants, thereby generating revenue for the state.
“There is a demand and a need for infill of commercial and additional support services (near the border),” Sage said. “We look at that as an opportunity.”
This article originally appeared in Albuquerque Business First.