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SOUTHERN NEW MEXICO

Judge tosses 828 Productions lawsuit, but it's not over

Movie company suing Las Cruces over termination of economic incentives

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A 2022 conceptual drawing of a proposed conversion of an abandoned seed barn in Las Cruces as a movie production facility for 828 Productions.
Published

LAS CRUCES — A district court judge dismissed 828 Productions’ lawsuit against the city Tuesday morning, but litigation is expected to continue.

The movie studio, which moved its headquarters from California to Las Cruces as part of a deal announced in 2022, is fighting the City Council’s vote in February to terminate an economic development agreement that supported the construction of facilities aiming to bring more productions and permanent film industry jobs to the community.

The council’s decision also authorized the city to seek a refund of $1.3 million already spent. Economic development staff recommended parting ways after saying the studio had failed to meet reporting requirements or fulfill commitments outlined in the agreement, stalled on developing blighted properties and even defaulted on one property after the city contributed nearly $1.14 million to its redevelopment.

State District Judge Casey Fitch granted a motion from the city to dismiss the studio’s lawsuit on jurisdictional grounds. The company had filed for a writ of certiorari, treating the council’s decision to terminate the contract as something akin to a judicial proceeding by an administrative tribunal.

As such, the company’s attorney, Joseph Dworak, argued 828 had been denied due process and should have been granted an opportunity to examine witnesses in a sworn proceeding. Instead, they were allowed several minutes to offer public input when the council considered the ordinance on Feb. 2.

Dworak argued the case was unique, saying the money that had passed through the agreement represented a vested property interest that activated certain rights and made a formal review of the administrative record mandatory.

The city’s attorney, Henry Becker, said such a precedent could make local government “unworkable.”

It could also complicate a tool frequently used in New Mexico to support business development without violating the state Constitution’s anti-donation clause.

An unused industrial building painted with the 828 Productions logo is seen behind fencing in Las Cruces on Jan. 21.

The project with 828 was authorized under New Mexico’s Local Economic Development Act (LEDA) and governed by a “project performance agreement” serving as a contract. LEDA agreements typically include clawback provisions seeking the return of public funds that have been spent if specific benchmarks are not met. The agreements are authorized and terminated by ordinances.

The city’s economic development staff said they had attempted to resolve concerns about the project as part of an annual review process, working with 828’s leadership over several months without success.

Becker said in court Tuesday the merits clearly show the city acted properly in ending the contract after attempts to work with the company failed. “I find it somewhat frustrating … to defend an ordinance after they had the opportunity,” he said.

Fitch asked Dworak a number of questions about the appropriate legal mechanism to challenge the city’s decision — such as a petition for declaratory judgment — before finding for the city and dismissing the suit without prejudice, anticipating the company would return with a new petition.

Algernon ’A is the Journal’s southern New Mexico correspondent. He can be reached at adammassa@abqjournal.com.