November 12, 2025- American Campus Communities, Inc. v. Regents of the University of New Mexico, No. A-1-CA-42053

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IN THE COURT OF APPEALS OF THE STATE OF NEW MEXICO
Opinion Number:
Court of Appeals of New Mexico Filed 11/12/2025 8:45 AM
Filing Date: November 12, 2025
Mark Reynolds
No. A-1-CA-42053
IN THE MATTER OF THE PROTEST OF VALUATION AND ASSESSMENT OF IMPROVEMENTS FOR TAXATION AS REAL PROPERTY OF NON-EXEMPT ENTITY,
9 10 11 12 and 13 14 NEW MEXICO,
AMERICAN CAMPUS COMMUNITIES, INC.,
Appellant-Petitioner,
REGENTS OF THE UNIVERSITY OF
Interested Party-Petitioner,
V.
BERNALILLO COUNTY ASSESSOR,
Appellee-Respondent.
APPEAL FROM THE DISTRICT COURT OF BERNALILLO COUNTY Elaine P. Lujan, District Court Judge
1
2 3 4 5 6 7 8
15 16 17 18 19 20

Rodey, Dickason, Sloan, Akin & Robb, P.A.	1
John P. Salazar	2
Edward Ricco	3
Kara B. Murphy	4
Albuquerque, NM	5
for Petitioners	6
N.M. Local Government Law, LLC	7
Charles Rennick	8
Patrick F. Trujillo	9
Lea Corinne Strife	10
Albuquerque, NM	11
for Respondent	12

OPINION	1
HANISEE, Judge.	2
{1} 	American Campus Communities (ACC) and the University of New Mexico	3
(UNM) protested the assessment of property tax by the Bernalillo County Assessor	4
(the Assessor), claiming an exemption for certain shared properties under Article	5
VIII, Section 3 of the New Mexico Constitution. The County Valuation Protests	6
Board (the Board) denied the protests and upheld the assessment on the grounds that	7
there was never an application for the tax exemption, nor are the Properties eligible	8
for the exemption, as the primary use of the Properties is residential, not educational	9
use. The district court agreed, from which order ACC and UNM appeal. We affirm.	10
BACKGROUND	11
{2} 	In 2008, UNM partnered with ACC to remodel and build on-campus housing	12
facilities for UNM students. ACC is a for-profit, real estate investment trust that	13
contracts with universities around the United States to fund student housing. ACC	14
and UNM entered into an agreement that stated ACC was to “design, develop,	15
manage, and operate large scale and complex student housing projects[,]” which	16
would later be established as “Casas del Rio” on UNM’s main campus and “Lobo	17
Village” 	on 	UNM’s 	south 	campus 	(collectively, 	the 	Properties). 	Separate	18
agreements were entered into for each property and provided that UNM would have	19

2
the fee simple interest in the land and improvements and that ACC would hold a	1
leasehold interest.	2
{3} 	Both agreements required that the Properties be used “only for UNM [s]tudent	3
residential housing, parking[,] and ancillary supporting uses, such as (without	4
limitation) a management office, a leasing office, common areas and amenities,	5
recreational rooms, meeting rooms, workout rooms, utility rooms, lobbies, and	6
parking areas, swimming pools[,] and other outdoor amenities.”	7
{4} 	In 2010, a representative from the Assessor’s office contacted UNM’s	8
Director of Real Estate, Kim Murphy, inquiring about the tax status of the Properties.	9
Mr. Murphy relayed to the Assessor that under the terms of the lease for the	10
Properties, the improvements were owned by UNM. In 2020, after the completion	11
of the Properties, the Assessor sent a letter to ACC stating that although the	12
Properties had been considered tax-exempt due to partial ownership by UNM, after	13
further review and an investigation the Properties were taxable to ACC. During those	14
eight years, neither UNM nor ACC applied for property tax exemptions. A letter was	15
written from the Assessor alerting ACC that not only were the Properties not tax	16
exempt but also it would be receiving amended tax bills for the years 2012-2020,	17
amounting to more than $6,000,000.	18
{5} 	ACC filed a protest with the Board, challenging the denial by the Assessor for	19
the educational use exemption, and UNM intervened as an interested party. The	20

3
Board denied ACC’s protest, stating that ACC never applied for an exemption and	1
therefore was never entitled to the exemption for the tax years of 2012-2020. ACC	2
filed another protest for the tax years of 2021-2022, presenting additional evidence	3
on the use of the Properties and arguing for the educational use exemption. The	4
Board again denied ACC’s protest, stating that ACC failed to show that the	5
Properties’ use qualified as tax exempt. ACC filed a third protest with the Board for	6
the tax year of 2023, again arguing for an exemption based on educational use, which	7
the Board denied. ACC then appealed the three decisions to the district court.	8
{6} 	The district court consolidated the three appeals into a single opinion and	9
affirmed the decision of the Board. It concluded that the Board’s decision was	10
supported by substantial evidence that the Properties were not used for educational	11
purposes and therefore not exempt from taxation. ACC now petitions for our review	12
of the district court’s decision. We granted the petition for writ of certiorari because	13
this case involves a significant question of constitutional law and an issue of	14
substantial public interest. 	See 	Rule 12-505(D)(2)(d) NMRA (listing the four	15
grounds upon which this Court has discretion to grant a writ of certiorari).	16
DISCUSSION	17
{7} 	ACC first argues that the ruling by the Board and the district court is contrary	18
to law as stated in Albuquerque Alumnae Ass’n of Kappa Kappa Gamma Fraternity	19
v. Tierney, 1933-NMSC-011, 37 N.M. 156, 20 P.2d 267, as well as Article VIII,	20

4
Section 3 of the New Mexico Constitution. ACC also contends that the Assessor is	1
equitably estopped from taxing the Properties for 2012-2020. Finally, ACC argues	2
that the Board and the district court erred by concluding that the Properties are not	3
used for educational purposes, arguing that the use of the Properties for student	4
housing serves an educational purpose, therefore qualifying them for the tax	5
exemption for the tax years 2022 and 2023. We disagree.	6
I. 	Standard of Review	7
{8} 	“We review a district court’s decision in an administrative appeal under an	8
administrative standard of review.” CAVU Co. v. Martinez, 2013-NMCA-050, ¶ 11,	9
302 P.3d 126 (internal quotation marks and citation omitted). “[W]e conduct the	10
same review of an administrative order as the district court sitting in its appellate	11
capacity, while at the same time determining whether the district court erred in the	12
first appeal.” Id. (internal quotation marks and citation omitted). “The district court	13
may reverse the [p]rotest [b]oard if it acted outside the scope of authority of the	14
agency, or if the district court determines that the administrative entity acted	15
fraudulently, arbitrarily, or capriciously; if the decision was not supported by	16
substantial evidence in the whole record; or if the [p]rotest [b]oard did not act in	17
accordance with the law.” Id. (alterations, omission, internal quotation marks, and	18
citations omitted). “Interpretation of a statute is a question of law which an appellate	19
court reviews de novo.” Id.	20

5
{9} 	“Property is presumed to be subject to taxation.” Georgia O’Keeffe Museum	1
v. Cnty. of Santa Fe, 2003-NMCA-003, ¶ 32, 133 N.M. 297, 62 P.3d 754. Article	2
VIII, Section 3 of the New Mexico Constitution provides that “all property used for	3
educational or charitable purposes . . . shall be exempt from taxation.” See CAVU	4
Co., 2013-NMCA-050, ¶ 9. This exemption deals with real property and therefore it	5
is “the use of the property, not the ownership, that is the determinative factor in	6
property taxation.” Georgia O’Keeffe Museum, 2003-NMCA-003, ¶ 40; see also	7
Albuquerque Lodge, No. 461, B. P. O. E. v. Tierney, 1935-NMSC-022, ¶ 29, 39 N.M.	8
135, 42 P.2d 206 (holding that “[i]t is the use of the property, not the declared objects	9
and purposes of its owner, which determines the right to exemption”). This Court	10
has held that the phrase “used for educational purposes” means “the direct,	11
immediate, primary and substantial use of property that embraces systematic	12
instruction in any and all branches of learning from which a substantial public benefit	13
is derived.” NRA Special Contribution Fund v. Bd. of Cnty. Comm’rs, 1978-NMCA-	14
096, ¶ 35, 92 N.M. 541, 591 P.2d 672 (internal quotation marks omitted). “It is the	15
taxpayer’s burden to claim, apply for, and prove an exemption based on an	16
educational or charitable use.” Georgia O’Keeffe Museum, 2003-NMCA-003, ¶ 32.	17
II. 	Determination of Educational Use Exemption	18
{10} 	The issue presented in this case is whether the Properties are used for	19
educational purposes and therefore fall under the tax exemption. “[T]he phrase ‘used	20

6
for educational purposes’ [means] ‘the direct, immediate, primary and substantial	1
use of property that embraces systematic instruction in any and all branches of	2
learning 	from 	which 	a 	substantial 	public 	benefit 	is 	derived.’” 	NRA 	Special	3
Contribution Fund, 1978-NMCA-096, ¶ 35. Our Supreme Court used this definition	4
provided by NRA Special Contribution Fund to establish a three-part eligibility test	5
for what counts as educational use: “(1) use that is direct, immediate, primary, and	6
substantial, (2) use that embraces systematic instruction in any and all branches of	7
learning, and (3) use that imparts a substantial public benefit.” CAVU Co. v.	8
Martinez, 2014-NMSC-029, ¶ 13, 332 P.3d 287; see also NRA Special Contribution	9
Fund, 1978-NMCA-096, ¶ 35 (“[W]e hold the phrase ‘used for educational	10
purposes’ to mean ‘the direct, immediate, primary and substantial use of property	11
that embraces systematic instruction in any and all branches of learning from which	12
a substantial public benefit is derived.’”). The Board determined that the Properties	13
failed the first two of the three parts of the test articulated in 	NRA Special	14
Contribution Fund, because the Properties do impart a substantial public benefit.	15
Upon review of the whole record, the district court affirmed the Board’s findings.	16
We address each part of the NRA Special Contribution Fund test below.	17
A. 	Direct, Immediate, Primary, and Substantial Use of the Properties	18
{11} 	Article VIII, Section 3 of the New Mexico Constitution does not provide that	19
to be exempt, properties need be “exclusively” used for educational purposes. NRA	20

7
Special Contribution Fund, 1978-NMCA-096, ¶ 34. However, when the facts of a	1
case demonstrate that “the educational function is merely incidental to its activities	2
in pursuance of educational purposes,” then an exemption may be denied. Id. “It is	3
the use of property, not the declared objects and purposes of its owner, which	4
determines the right to exemption.” Albuquerque Lodge, No. 461, 1935-NMSC-022,	5
¶ 29.	6
{12} 	ACC attests to this Court that when an institutional property, like the	7
Properties that are the subject of this case, is used under similar circumstances to	8
that in Albuquerque Alumnae Association, the use meets an institutional need	9
consistent with that institution’s purposes. In Albuquerque Alumnae Association, our	10
Supreme Court found that a sorority house on the UNM campus, primarily used as	11
a dormitory for university students, did not constitute as serving an “educational	12
purpose” and therefore was not exempt from taxation under Article VIII, Section 3	13
of the New Mexico Constitution. 1933-NMSC-011, ¶ 18. While ACC heavily relies	14
on this holding, distinguishing the instant properties from a sorority house, we find	15
the facts before us nearly indistinguishable from those of Albuquerque Alumnae	16
Association and consequently ACC’s argument is misplaced.	17
{13} 	The property in Albuquerque Alumnae Association was used “as a fraternal	18
home where the active members of the society board, room, study, hold social	19
functions . . . while in attendance at the [u]niversity.” Id. ¶ 2. In the lease agreements	20

8
between UNM and ACC, each agreed that the Properties were to be used “only for	1
UNM [s]tudent residential housing, parking[,] and ancillary supporting uses, such as	2
(without limitation) a management office, a leasing office, common areas and	3
amenities, recreational rooms, meeting rooms, workout rooms, utility rooms,	4
lobbies, and parking areas, swimming pools[,] and other outdoor amenities.” The	5
Lobo Village property provides eighteen residential buildings, a game/video lounge,	6
a sand volleyball court, theater, a fitness center, as well as an academic support and	7
social gathering space located inside the clubhouse. The Casas del Rio property	8
provides four residential buildings, a fitness center, study group space, communal	9
student lounge areas, and academic support space. Most notably, the Properties	10
combined provide 1,890 beds to be used by UNM students.	11
{14} 	While we do not disagree that the construction and use of the Properties	12
enabled UNM to provide needed additional dormitories as well as overdue upgrades	13
to campus facilities, we cannot agree that the record demonstrates that the use of the	14
Properties directly advances the University’s educational mission. See id. ¶ 13 (“But	15
we cannot . . . hold that the sorority is an educational institution, or that its occupancy	16
of the premises as a home of refinement and culture and select social activity is an	17
educational use. Its claim must stand or fall upon the part it plays in [u]niversity	18
education.”). Moreover, our review of the whole record proves that the direct,	19
immediate, primary, and substantial use of the properties is residential. The evidence	20

9
demonstrates that while academic activity organically occurs on the Properties, such	1
activity merely is incidental and secondary to its primary function as dormitories for	2
UNM students. See NRA Special Contribution Fund, 1978-NMCA-096, ¶ 34 (“But	3
when the facts of the case show that the educational function is merely incidental to	4
its activities in pursuance of educational purposes, exemption may be denied.”).	5
Finally, while this Court acknowledges the evidence presented by ACC that students	6
who live on campus “fare better academically” than those who do not, that is a	7
remote and consequential benefit of the Properties’ use, rather than its sole use. See	8
CAVU Co., 2014-NMSC-029, ¶ 17 (stating that an exemption may not be based upon	9
“the remote and consequential benefit derived from the property’s use” (alteration,	10
internal quotation marks, and citation omitted).	11
B. 	Properties Must Embrace Systematic Instruction	12
{15} 	The use of the property must “embrace systematic instruction in any and all	13
branches of learning.” Id. ¶ 27 (alteration, internal quotation marks, and citation	14
omitted). Systematic instruction “requires an ordered, methodical, structured, and	15
regular learning opportunity.” Georgia O’Keeffe Museum, 2003-NMCA-003, ¶ 57.	16
This Court has stated that “matters of education are not restricted to academic	17
curricula or to ivy covered halls.” NRA Special Contribution Fund, 1978-NMCA-	18
096, ¶ 26 (internal quotation marks and citation omitted).	19

10
{16} 	The question presented before us in the second part of the NRA Special	1
Contribution Fund analysis is whether the Properties embrace education through	2
their use and if such use ultimately furthers an educational purpose for UNM	3
students. See CAVU Co., 2014-NMSC-029, ¶ 29. From our review of the record, the	4
only evidence presented by ACC to satisfy the second part of the NRA Special	5
Contribution Fund test rests on an affidavit from Dr. Chris Heasley, a professor in	6
the Department of Educational Leadership and Counseling at Saint Joseph’s	7
University. But in his affidavit, Dr. Heasley provided no evidence to support his	8
contentions that the Properties embrace systematic instruction. Nor did his affidavit	9
support that the Properties further an educational purpose for UNM students. Just as	10
the district court noted in its memorandum and order, Dr. Heasley’s affidavit did not	11
“identify ordered, methodical, structured[,] and regular learning opportunities on the	12
Properties or otherwise detail how systematic instruction takes place.” We agree.	13
{17} 	Dr. Heasley stated that “the diverse offerings and facilities at [the Properties]	14
promotes 	mental, 	moral, 	and 	physical 	education” 	and 	“[u]nlike 	off-campus,	15
unaffiliated and non[]academic use properties[,] which house some [UNM] students,	16
[the Properties] require affiliation/enrollment with the university. Maintaining all	17
units filled by enrolled college students, provides an academic homogeneous	18
community in which students can and will interact with peers both socially and	19
academically.” This Court has emphasized the importance of reading the language	20

11
of the tax exemption that “neither favors nor prejudices the taxpayer or the state,”	1
but rather we should “apply a common sense construction.” Georgia O’Keeffe	2
Museum, 2003-NMCA-003, ¶¶ 43-44.	3
{18} 	Dr. Heasley’s logic regarding systematic instruction suggested a scenario that	4
defeats 	the 	purpose 	of 	the 	tax 	exemption 	and 	opens 	a 	door 	for 	seemingly	5
“standardless property tax exemption determinations.” See id. ¶ 45 (“Too broad a	6
standard means no standard. Without a relatively narrow standard governing the	7
educational purposes exemption, subjective ad hoc decision-making can become the	8
rule, making an objective principled process the exception.”). This Court’s adoption	9
of the very broad standard suggested by Dr. Heasley’s rationale would undermine	10
the efficacy of taxation to our local governments. See id. ¶ 39.	11
{19} 	This Court has stated that the “scope of tax exemption has broadened so that	12
exempt organizations tend to grow wealthier . . . [s]uch increased exemptions may	13
create a serious problem because a diminished tax base lessens the amount available	14
to meet governmental costs.” Id. (internal quotation marks and citation omitted).	15
Further, Dr. Heasley’s reasoning implied that a privately owned residential building	16
on campus that requires all tenants to be UNM students, provides spaces for physical	17
activity, and offers spaces that promote social gathering and student-led activities	18
should be tax exempt because such would embrace systematic instruction. This logic	19
implies that fraternity and sorority houses on the UNM campus should too be tax	20

12
exempt, which would be contrary to the ruling in Albuquerque Alumnae Association.	1
See 1933-NMSC-011, ¶¶ 2, 26 (Concluding that a sorority chapter house at UNM,	2
where active members “board, room, study, hold social functions, and practice the	3
principles of the society while in attendance at the [u]niversity” was not property tax	4
exempt.). To that end, a scenario with identical facts to the ones presented before us	5
would not warrant an opposite outcome.	6
{20} 	Based upon Dr. Heasley’s affidavit, we remain unconvinced by the evidence	7
presented to support the satisfaction of the second part of the 	NRA Special	8
Contribution Fund analysis. Because it is the only source of evidence used by ACC	9
to support the second part of the NRA Special Contribution Fund analysis, we find	10
that there was substantial evidence for the Board to find that the Properties do not	11
embrace systematic instruction.	12
C. 	Properties Must Create a Substantial Public Benefit	13
{21} 	Although we need not do so given our conclusion thus far as to the character	14
of the Properties under the applicable educational use exemption analysis, we briefly	15
address the third part of the NRA Special Contribution Fund analysis. See 1978-	16
NMCA-096, ¶ 36. “[A]ll property should bear its share of the cost of government.	17
Property which is exempt from taxation does not share in the burden. Therefore, in	18
exchange for its exempt status, such property must confer a substitute substantial	19
benefit on the public.” Id. ¶ 38. A “substantial public benefit” must be “derived”	20

13
from the use of a property. Id. ¶¶ 35-36. “[S]ubstantial public benefit” means “a	1
benefit of real worth and importance to an indefinite class of persons who are a part	2
of the public, which benefit comes to these persons from the use of property.” CAVU	3
Co., 2014-NMSC-029, ¶ 31 (alteration, internal quotation marks, and citation	4
omitted). Here, we consider whether the derived use of the Properties confers a	5
substantial public benefit.	6
{22} 	Just as the Board and the district court concluded that the use of the Properties	7
imparted a substantial public benefit, we conclude the same. It is undisputed by both	8
parties that prior to the construction of the Properties; UNM needed improved	9
housing for students. Therefore, the use of the Properties imparts a substantial public	10
benefit because UNM students are now provided with improved and high-quality	11
housing.	12
{23} 	Nonetheless, based on our review of the record, we determine the district court	13
was correct that the Properties fail the former two parts of the three-part test	14
established in NRA Special Contribution Fund, consequently deeming the Properties	15
not exempt under Article VIII, Section 3 of the New Mexico Constitution. See 1978-	16
NMCA-096, ¶¶ 20-45.	17
III. 	Property Tax Years 2012-2020	18
{24} 	Although we have addressed the sole issue in this case and concluded that the	19
Properties are not exempt from taxation under Article VIII, Section 3 of the New	20

14
Mexico Constitution, we next address ACC’s argument that the Assessor is equitably	1
estopped from requiring ACC to pay back taxes for the years it had not applied for	2
the exemption. ACC asserts that it was never informed by the Assessor that either	3
UNM or ACC would have to apply for this exemption, nor did the Assessor send a	4
notice of valuation for the properties.	5
{25} 	“Property is presumed to be subject to taxation. It is the taxpayer’s burden to	6
claim, apply for, and prove an exemption.” Georgia O’Keeffe Museum, 2003-	7
NMCA-003, ¶ 32 (citation omitted). All property with a taxable situs in New Mexico	8
is subject to valuation for property tax purposes. NMSA 1978, § 7-36-7(A) (2008).	9
The law does not require “any specific investigation by an assessor when considering	10
tax application for an exemption.” Georgia O’Keeffe Museum, 2003-NMCA-003,	11
¶ 32.	12
{26} 	ACC’s argument regarding the application for tax exemption, or lack thereof,	13
for the tax years of 2012-2020 is unsupported. ACC ignores the fact that it is the	14
burden of the taxpayer “to claim, apply for, and prove an exemption.” Id. Despite its	15
communications with the Assessor, as a nongovernmental entity ACC was required	16
to report the Properties to the Assessor’s office and apply for the exemption. See	17
NMSA 1978, § 7-38-17(B) (2025) (“Other exemptions of real property . . . for	18
nongovernmental entities shall be claimed in order to be allowed.”). Moreover,	19
ACC’s reliance on its brief communications with the Assessor before the completion	20

15
of the Properties does not negate the findings by the Assessor or the Board following	1
the valuation. See Georgia O’Keeffe Museum, 2003-NMCA-003, ¶ 34 (“While it	2
might be good practice for an assessor to perform a field investigation involving a	3
tour of the property and to visit with related personnel about education and charitable	4
programs conducted at the property, the failure of an assessor to do so does not	5
invalidate the decision of a valuation protests board after a protest hearing.”).	6
{27} 	Finally, even if ACC had applied for the educational use exemption for the	7
tax years of 2012-2020, it still would not have qualified for the reasons stated above.	8
Accordingly, we see no basis for reversal of the district court’s order.	9
IV. 	The Assessor’s Valuation	10
{28} 	ACC takes exception to the district court’s determination that its challenge to	11
the Assessor’s valuation before the Board was unpreserved, and if preserved argues	12
that the valuation was wrongly based on improvements to the Properties and not the	13
value of ACC’s leasehold interest. But before the Board, ACC offered no alternative	14
proposed leasehold valuation, failed to identify a statutory provision the Assessor	15
did not or wrongly applied, and fails now to overcome the presumption of	16
correctness of the Assessor’s valuation. See Hannahs v. Anderson, 1998-NMCA-	17
152, ¶ 22, 126 N.M. 1, 966 P.2d 168 (“Taxpayers challenging their assessments have	18
the burden of rebutting this presumption [of correctness] by showing that the	19
assessor did not follow the statutory provisions of [The Inspection of Public Records	20

16
Act (the Act)] or by presenting evidence tending to dispute the factual correctness	1
of the valuation.” (internal quotation marks and citation omitted)). Stated simply,	2
ACC did nothing to demonstrate to the Board that the Assessor’s improvement-	3
based valuation was statutorily or factually incorrect and that the valuation should	4
instead have been something altogether different. As authority for its proposition,	5
ACC now points to a separate opinion, partially concurring and partially dissenting,	6
in Cutter Flying Service, Inc. v. Property Tax Department, 1977-NMCA-105, 91	7
N.M. 215, 572 P.2d 943, along with another opinion of this Court, to argue that	8
which should have been fully pursued before the Board. Agreeing with the district	9
court, we decline to address ACC’s assertion that the Assessor’s valuation is	10
erroneous because it was not preserved below. See Princeton Place v. N.M. Hum.	11
Servs. Dep’t, 2022-NMSC-005, ¶¶ 21-22, 503 P.3d 319.	12
CONCLUSION	13
{29} 	For the reasons stated above, we affirm the district court.	14
{30} 	IT IS SO ORDERED.	15
_____________________________	16
J. MILES HANISEE, Judge	17

WE CONCUR:
Megan P Duffy
MEGAN P. DUFFY, Judge
Lavalo E Bara
GERALD E. BACA, Judge
17
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