Horizon lots sit undeveloped; owners unable to sell

by Alex Hinojosa \ El Paso Times
Posted: 02/28/2011 12:00:00 AM MST

HORIZON CITY -- Investors who were promised financial gain have been left with nothing but dirt.

Early investments in shady land deals have residents paying the price today. More than 27,000 people worldwide invested in undeveloped desert lots outside of Horizon City's city limits between 1962 and 1975. More than 40 years later, buyers from across the country and as far away as Germany and Italy have yet to see a return on their investments.

Edward Relder of Garland, Texas, is one of the thousands of people who purchased desert land between 1962 to 1975 from Horizon Corp. The corporation was one of the largest sellers of undeveloped land in the Southwest, pocketing more than $40 million in profits.

Salesmen used high pressure sales tactics to sell undeveloped tracks of land in Arizona, New Mexico and Texas at thousands of dollars apiece, promising customers a quick return on their investment.

"At the time, I thought that it could be a good investment for my kids," Relder said. "We weren't looking to make any money and the payments were only $10 a month -- and if that's all it took for the salesman to leave our home then I didn't see any harm."

After several class action lawsuits, the Federal Trade Commission shut the company's operation down in 1981 and cited them for disreputable practices, including overaggressive salesmen, mass misrepresentation to land buyers, misleading ads and the failure to supply water. As a result of the fraudulent land deal, Relder's land, once valued at $1,000, is now appraised at a mere $2. According to the El Paso County Central Appraisal District, most of these lots are valued at $10 per acre. This is the value for undeveloped lots with no infrastructure.

Relder said if he could, he'd sell the land. But the Texas Colonias Law act of 1994 prohibits the sale of any properties under 10 acres. Those who own 10 acres or more must guarantee the availability of water, utilities and sewage before putting the land up for sale.

"Now I have a piece of land that is worthless," Relder said. "And my worry is that I am going to pass this onto my kids."

Toby Alvarado, general manager of the Horizon Regional Municipal Utility District, estimated that lands purchased more than 200 feet outside Horizon City limits would not be provided with a water line in the next 20 to 50 years.

"In order to have development, you have to have water," Alvarado said. "We get calls from all over the country all the time asking if there is a water line near their land. The problem with these lots is that a lot of them are fractionalized, so it makes it difficult to provide water if they are 200 feet outside the city limits."

In documents obtained by the El Paso Times from the El Paso County Appraisal District, 7,000 pieces of land from the Mountain Shadow Estates, located northeast of Horizon City, were purchased by thousands of investors.

The Mountain Shadow Estates is one of 15 land subdivisions in the area. Each subdivision can have up to 100 lots and each lot can contain up to 200 owners.

A majority of the lots for each subdivision can be reached only with an all-terrain vehicle.

To add insult to injury, land owners are expected to pay assessment fees to the Horizon Communities Improvement Association, which took ownership of the lots after the Federal Trade Commission shut down Horizon Corp. In 1981, the association was charged with improving the lots and collecting the dues cited in landowner deeds.

But many customers, who discuss their frustrations on online forums, refuse to pay their dues. Assessment fees are $14 per year for single-family homes, $24 a year for multi-family purchases and $40 for commercial buyers.

Horizon City resident Erika Orozco owns a parcel of land on the Horizon View Estates subdivision. Although the area there is more developed, Orozco said she stopped paying her dues several years ago.

"They don't want to do anything for us out there," Orozco said. "There's been no improvement in the area for more than 50 years. We're like the last child that nobody wants."

Orozco said the last thing the association ever did for her subdivision was give them a few palm trees.

"We don't have light posts outside and we don't have a sewage system," she said. "We have a main road, but it floods when the rains come so I don't see the point of paying."

The frustration has led to several complaints lodged against Horizon Communities Improvement Association.

In the past 36 months, six complaints were filed against the association with the Better Business Bureau. Last year, El Paso County Attorney Jo Anne Bernal assigned an attorney to investigate the nonprofit organization.

"We received a call from city Rep. Rachel Quintana's office who said they had received complaints from several lot owners who wanted to figure out some kind of relief from paying the association fees," Bernal said. "Unfortunately we could not determine if there was a crime."

Association manager Roxanne Jurado said she understands the frustration, but said slow improvements have been made.

"The palm trees we gave to residents were for a vision that didn't work," Jurado said "We thought if we could put palm trees on a lot then it might make the area more attractive."

Jurado said the association has a lot assembly program that is meant to combine small parcels of unsellable land together so that it can be sold to developers.

"Right now we have a lot of land that is not serviced by any utilities," she said. "And lot owners can't sell these lots because of the Colonia Act. So in order to make the area attractive to developers, we are asking our members in certain lots if they are interested in participating."

The association recently assembled one of the lots. The lot will be the future site of the Horizon View Estates.

Jurado said the association would attempt to develop three more lots in the next few years.

The challenge with this program, Jurado said, is that it is time consuming and customers can get frustrated.

"Each lot may contain up to 200 owners that we have to contact," Jurado said. "And this is the most time-consuming process."

But Jurado said the potential for development now is better than it was 50 years ago because of the population boom Horizon City has seen in the past ten years.

According to the U.S. Census Bureau, Horizon City had 5,233 people in 2000. In the past decade that number has tripled, with Horizon at 16,735 residents for 2010. Further signs of development include the addition of new schools, including El Dorado 9th Grade Academy and Eastlake High School, and the expansion of several other schools.

Developments are on the way with Horizon City's Vision 2020 Master Plan. The plan includes the improvement of streets and landscaping to attract businesses to the area, Horizon City Planner Robert Coleman said.

With this in mind, Jurado estimated it would take no more than 20 years to see a difference in the development.

As for those lot owners who no longer want their lots, Jurado offered a solution.

"If members do not want their lots, then they can deed it back to us," she said. "The association will take a loss, but if we can attain these lots and put them toward our lot assembly program then we have a greater chance at attracting commercial developers."

Alex Hinojosa may be reached at ahinojosa@elpasotimes.com; 546-6137.

Caution
For future land buyers, El Paso County Attorney Jo Anne Bernal urged caution. She said potential buyers should read the fine print in each deed and check if there is a covenant requiring association fees, which are allowed by the Texas property tax code.

For more information on the Lot Assembly Program or other questions, contact the Horizon Communities Improvement Association at 852-1811.

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