Land deal cuts prized-apple growers’ ties to New Mexico

May 20--The owners of the Dixon Apple Orchard in Peña Blanca have agreed to relinquish their lease on the orchard and another 8,600 acres of land managed by the State Land Office in exchange for $2 million.

The agreement brings to a close the family's ties to the land that date back to 1944, when Fred and Faye Dixon moved to a dude ranch on the Spanish land grant known as Rancho de la Cañada and began developing an apple orchard.

Dixon's was known for its champagne apples, a pale yellow variety prized by New Mexicans for being particularly crisp, juicy and sweet. People from all over the area made fall pilgrimages to the apple shed to buy bushels of champagnes, as well as another popular variety, sparkling burgundy.

In 2011, however, a devastating fire and subsequent flooding destroyed many of the trees in the orchard. The damage also broke the will of Fred Dixon's granddaughter, Becky Mullane, and her family to continue growing apples on the land near Cochiti Lake.

The Mullanes originally sought to reassign their lease on the 860-acre orchard and the adjacent 8,500 acres of land to San Felipe Pueblo for $2.8 million. But the State Land Office opposed the idea. For more than two years, the family has been trying to find a solution and finally restart their lives.

Reached in Wisconsin, where she and her family now live, Mullane said, "We're through. We have nothing to do with apples now."

The prolonged negotiations have "not been easy on our family at all," she added. And at this point, "We don't know what the future holds."

The Mullanes' lawyer, Tom Hnasko of Santa Fe, who has bitten into many luscious champagne apples himself, said that in addition to the loss of a multi-generational family business, "a landmark in New Mexico has now gone away."

Under the $2 million deal, the Mullanes will receive from Cochiti Pueblo and $200,000 from the State Land Office.

State Land Commissioner Ray Powell said Monday the office has signed a five-year lease with Cochiti Pueblo, which has historical and religious ties to the land.

Had the lease been for a longer period of time, Powell said, it would have needed to go out to bid.

The State Land Office also has signed an agreement for a land exchange with the pueblo.

Cochiti Pueblo will perform an appraisal of the Peña Blanca property first, and then the state will identify a piece of desirable land of equal value and ask the pueblo to purchase it. After that transaction, the State Land Office will trade with the pueblo.

In the end, Powell said, "we will get land we can earn a whole lot more money on for the schoolkids of New Mexico."

State trust lands, which are managed by the State Land Office, are each designated to one of 22 beneficiaries. Revenue from the Dixon lease goes to the state's public schools, while the revenue from the mineral estate goes to the Carrie Tingley Hospital in Albuquerque.

Powell said the $200,000 the state is paying will be fronted for insurance money for the loss of the trees, which were owned by the Mullanes and were considered to be the value of their improvements to the property.

"The important part here is that the public will be paying no money," Powell said.

When the land exchange occurs, the $200,000 will be added to the appraised value, he said.

When the Dixons moved to the dude ranch 70 years ago, it was owned by James W. Young. In addition to managing the ranch, they developed the orchard. In 1964, Young decided to give the land, totalling more than 9,000 acres, as a gift in trust to The University of New Mexico. The Dixons then leased the land from UNM and continued running the orchard.

After Faye Dixon died, Becky Dixon returned to to help her grandfather run the orchard. She and her husband, Jim, were married there in 1993. They expected their three children to continue the family business.

In 2006, the Mullanes learned that UNM was trading the land to the State Land Office. After signing the new lease, they began to plant additional trees and install a more efficient irrigation system. They also started offering hayrides and other special events.

Hnasko said that while the orchard was operating, the Mullanes paid the State Land Office about $30,000 to $35,000 in rent annually.

The came the July 2011 Las Conchas Fire.

"It sounded like a jet coming over the mountain," said Jim Mullane, who watched the flames burn a neighbor's cabin before they entered his canyon. The Mullanes fled with some personal documents and pictures just as the trees behind their house started burning.

The fire scorched more than 40,000 acres that night.

Although the Mullanes' house and other structures were damaged by the fire, the trees and the apple shed escaped. They went to work enlarging creek beds, putting up barriers and replacing the irrigation system. Then came the August floods. "Our family watched from the hill sides of the orchard as our livelihood was being destroyed," the Mullanes wrote on their website. "It was after this we decided that our time in the canyon was over."

Becky Mullane said Monday that most of the iconic trees are "pretty much dead."

The Mullanes are now living in Chippewa Falls, Wis., where the couple work for a dairy and Jim Mullane drives a milk truck.

They have mixed feelings about Monday's announcement, but Becky Mullane said, "We just needed finality, and that's what happened."

The family's lawyer said they are happy with the $2 million, under the circumstances.

"It was a long ordeal, emotionally and financially," Hnasko said.

According to Powell, the agreement is also "particularly good for taxpayers and our beneficiaries."

And the terms will be completely transparent, he vowed Monday.

Powell has accused his predecessor for mishandling state trust leases in the past, including the Mullanes' 75-year lease following the land swap between UNM and the State Land Office that involved Albuquerque's Mesa del Sol development.

State trust lands are critical to New Mexico's treasury. They earned $2 billion in the last three years and are on track to earn $800 million for the state in the fiscal year ending June 30, Powell said.

Almost all of the revenues -- some 97 percent, he said -- come from oil and gas leases. But the largest solar array in the state and the largest wind array in New Mexico are on state trust land, and the renewable energy portfolio is growing.

Meanwhile, the Mullanes are keeping their options open. Somewhere, in an out-of-state nursery, there are some champagne apple trees just in case they decide to start over.

"We still have some hopes that someday, somewhere, we're going to be able to orchard again," Becky Mullane said.

Contact Anne Constable at 986-3022 or [email protected].

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