State Auditor: Mesa del Sol community is ‘adrift’

Keller advises board to take active role

State Auditor Tim Keller is advising the Mesa del Sol Tax Increment Development District, or TIDD, to take an active role in overseeing the district’s activities, particularly given that Mesa del Sol property is in receivership.

“This master-planned community appears to be adrift without a clear future,” Keller said in a statement accompanying the recent release of the district’s annual financial audit. “The district board should be diligent and directive going forward during this time of uncertainty.”

But the chairman of the TIDD’s board says there’s not much more the district can do at this point.

“It’s really in the hands of the court,” said board Chairman Pat Davis, who is also a city councilor. “We have a pot of money ready to go to reimburse a developer.”

Mesa del Sol is a 12,900-acre planned community south of the Sunport.

The Mesa Del Sol TIDD is a political subdivision formed in 2007 to provide financing for Mesa del Sol infrastructure improvements, like roads. Essentially, the developer covers the up-front cost of the infrastructure, and a portion of property and gross receipts taxes generated from the development is diverted to reimburse the developer for those infrastructure costs.

But Davis, one of several city councilors on the Mesa del Sol TIDD board, said the whole development has been on hold because a lot of the property is in receivership. He said that until there’s a new owner, there’s not much that can be done with the TIDD.

A default judgment was entered against Mesa del Sol LLC on Sept. 27, 2015, on about 2,792 acres of land, according to the recently released audit report. Roughly 160 acres of that land is inside the TIDD. In its foreclosure petition, the lender claimed that the development corporation had defaulted on a $25 million loan secured by the land.

Davis said there had been a potential buyer for the property currently in receivership, but the deal fell through.

“From the TIDD perspective, we’re ready to go,” he said, noting that the district has about $2.5 million available to fund infrastructure projects.

Davis said the TIDD board now includes a representative from the receiver group in an effort to improve communication. And he said the board has been vocal about the type of developer it would like to see take over the project.

“We can’t force the hand of the private market,” he said.

As for the financial audit, it covered the fiscal year ending June 30, 2016. The only finding is that the audit was six months late.

Davis said that despite Mesa del Sol’s troubles, it is generating revenue and active business is happening there. But he said the next phase is mostly residential.

“Mesa del Sol is not going to grow until that piece is out of receivership,” he said.