N.M. Admin. Code § 19.2.22.11

Current through Register Vol. 35, No. 23, December 10, 2024

Section 19.2.22.11 - PUBLIC AUCTION

The commissioner may, under the following procedures, offer a planning and development lease to the highest and best bidder after public notice and a public auction. In order to qualify to bid at a public auction, each prospective bidder must satisfy both a qualification deposit and the bidder qualifications prescribed by the commissioner in accordance with the following.

A. Qualification deposit. Each prospective bidder must deposit with the commissioner the following amounts which are to be specifically described in the public notice:

(1) the costs of the auction, whether incurred by the state land office or the applicant; such costs and expenses may include, but are not limited to, the costs of appraisals, surveys, advertising, land use planning, and brokerage or other real estate fees;

(2) the first rental payment under the planning and development lease; and

(3) if the trust land offered for lease has IV or improvements from a previous lease, all prospective bidders must deposit:

(a) a sum equal to the value of the IV, the improvements, or both, or a bond or letter of credit sufficient to cover the value of these (the holder of IVC or the owner of improvements need not make this deposit); or

(b) if the commissioner has agreed that its portion of the IV will be rolled over into the subsequent lease all bidders except for the holder of IVC must deposit:

(i) a sum equal to the IVC or a bond or letter of credit sufficient to cover the IVC;

(ii) a bill of sale for the IVC executed by the holder of the IVC; or

(iii) a waiver of payment signed by the holder of the IVC.

B. Bidder qualifications. In order to ensure the greatest return for the trust, the commissioner will establish the minimum objective criteria that must be satisfied by each prospective bidder in order to qualify to bid based on the nature of the lease and the proposed uses of the trust land. Such requirements may include but are not limited to:

(1) a preliminary, non-binding pro-forma or similar documentation that identifies a minimum anticipated return rate to the trust and demonstrates that a bid proposal is realistic and achievable;

(2) a financial statement that demonstrates solvency and resources sufficient to accomplish the proposed development project; and

(3) some minimum level of experience in land use planning and development.

C. Refunds. Upon completion of the lease auction, the commissioner shall return any deposits to the unsuccessful bidders.

D. Due diligence. All bidders must undertake their own due diligence, including but not limited to, inspecting the offered trust land and reviewing pertinent records and files of the state land office and other public agencies. A prospective bidder must obtain the approval of the commissioner before entering upon trust land.

E. Auction. The auction may be conducted by the acceptance of oral or sealed bids. If awarded at all, the planning and development lease will be awarded to the qualified bidder offering the highest bid as determined by the following: For each auction, the commissioner shall set a specific non-negotiable base rent. The commissioner may accept bids based on the lessee percentage, or set a specific non-negotiable lessee percentage and allow bidding in the form of a cash bonus pursuant to the following:

(1) if the commissioner sets only a specific non-negotiable base rent, the highest bid will be the bid offering the lowest lessee percentage; or

(2) if the commissioner sets both a specific non-negotiable base rent and lessee percentage, the highest bid will be the bid offering the highest cash bonus.

F. Bidding IVC. A lessee may bid its accrued IVC attributable to the portion of the leased premises subject to disposition at any public bid for the same disposition parcel.

N.M. Admin. Code § 19.2.22.11

19.2.22.11 NMAC - Rp, 19.2.22.11 NMAC, 11/30/12