Wednesday, June 5, 2013

SNAFU: SITUATION NORMAL, A FIASCO UNDERWAY, OR LAS CRUCES PLANS FOR A BOONDOGGLE



The future of the defunct Las Cruces Country Club depends on people motivated at least as much by private interests as by public service.  Mayor Ken Miyagishima wants a pro-business, pro-growth feather in his cap to run for higher office, and City Manager Robert Garza wants anything which aggrandizes his position, power, prestige, or profit.  Their ambitions probably explain the appeal of other self-promoters who give peeks and promises of Really Big Things for the city.

Not too long ago, Miyagishima and Garza tried to appeal to a hyper-ventilating self-promoter Robert H. Brumley, the Managing Director of Pegasus Global Holdings, to make the Las Cruces area the site for CITE.  (Where are he, his company, and his proposal now?)  Now city government is trying to accommodate Joseph P. Galichia, CEO of Galichia Hospital Group, an over-ambitious corporation, to develop the largest tract of underdeveloped land within city boundaries.  (Where will they be in a year?)  Once again, city government is so excited about a grandiose speculation that it is not taking basic city-planning steps to protect against a major land-use decision likely detrimental to the public interest.

Miyagishima appears relatively isolated from the planning process and will maintain that appearance until the Planning Commission acts.  But Garza is not.  He advises City Council and directs his staff’s analysis and evaluation of the developer’s proposal, and he advises the Board of Directors of Memorial Medical Center.  Although he has no vote on either the Council or the Board, he has great influence on their members.  Under the best of circumstances, a conflict between city and hospital interests is always a possibility.  In the case of the development of this site, the conflict of interests is a reality.  To address it, Garza should recuse himself from any discussions at hospital board meetings or with board members about the proposed site development.

But Garza will not.  So his conflict of interest creates an intriguing situation.  Which of his two roles will prevail?  Who—city councilors or hospital directors, not to mention the citizens of Las Cruces—can know what or whose interests he serves in taking any stance on any of the procedural or substantive issues related to this development?  Will transparency replace opacity? 

The bigger questions, however, are whether the city’s approach to planning will be sensible or honest.  The early readings are not encouraging.  Dazzled by the prospects of a buyer and builder with so-called plans for the site, the city is neither taking a sensible approach to the rezoning request nor asking the right questions about the developer.

First, the city is taking a piecemeal, not a comprehensive, approach to the LCCC site development.  It thus blinds itself to all of the relevant information about the developer and the fully developed site.  In particular, by focusing only on a 30-parcel for a cardiac-care center, the city denies itself an understanding of the economic, environmental, social, traffic, and other consequences of developing a 110-acre, high-density commercial and residential site next to a park, near major highways and highway intersections, and close to established neighborhoods and businesses.  Risks include declining housing values and business revenues, increasing traffic congestion, and incurred infrastructure and service costs not offset by site-derived tax receipts.

Second, although the submission of a request for a zoning change is only weeks away, Galichia has provided only sketches, frequently shifting, of the first 30-acre parcel for the center alone.  What the city and the developer call a “plan” is nothing of the sort; a plan includes and integrates activities, budgets, and schedules.  (The claim to have local doctors eager to invest in the project reveals not a strength, but a weakness: no present, assured financial resources to fund the project.)  Even what the city and the developer call a “conceptual plan” is a misnomer; it is a site design.  It hardly promotes trust—it prompts suspicions of duplicity—that Galichia has provided different sets of these designs to the city and to the citizens.

However, having a real plan—activities, budget, schedule—for developing the entire site—all 110, not just 30, acres—is only one, though an important, part of an approval process.  The city staff, then the Planning Commission, and finally City Council must have every confidence that the proposed hospital and other buildings or facilities will be viable economically.  Specifically, they must have every confidence that the development will generate the sustained revenues necessary to cover the cost of constructing and maintaining additional infrastructure and the costs of additional city services, all as required by the entire site.

To this end, city staff must have two sets of documents from Galichia.  One, it must have a full capabilities statement demonstrating that it has the management, technical, and financial capabilities and experience to develop and operate a site of this kind and size.  Two, it must have a comprehensive business plan including a market analysis of the demand for its services and the prospects for generating the revenues for sustained profitability and sufficient tax payments to cover the city’s costs for infrastructure and services.

I doubt that Galichia is qualified or competent to do what it proposes.  It appears not to have done its homework on the professional market, the demographics, or the socio-economics of Las Cruces.  As it is, the two hospitals in the city, Memorial Medical Center and Mountain View Medical Center, are currently operating at one-half and two-thirds of capacity, respectively.  As a result, one of the hospitals is laying off professionals.  The likelihood that a specialized cardiac-care center would attract enough business seems problematic.  The many cardiologists in the city would provide intense competition.  And relatively few Las Cruceans have supplemental health-insurance policies to accommodate more-than-Medicare-level payments.  The likelihood that Galichia could keep most of its 48, not to mention 60, beds filled with heart-disease patients seems more problematic.   Thus, the odds are that Galichia would operate at less than capacity and not generate adequate profits or tax revenues.

As in the case with CITE, so in the case of Galichia: caution is in order.  I have suggested some of the steps which the city can and should take between now and the various deadlines for planning commission and city council decisions.  In addition, it is imperative that the public has ready access to all requisite information in time to participate meaningfully in the decision-making process.

No comments:

Post a Comment