Archive for the ‘MVEDA Reports’ Category

L&M Radiator photo courtesy of Fred Shepherd

Article courtesy of the Las Cruces Bulletin

By Samantha Roberts

The Mesilla Valley of Economic Development Alliance (MVEDA) has been busy this month with meetings, events and behind-the scenes work. The organization, which was incorporated in 1994, is “a public/private sector economic development partnership that serves Dona Ana County,” according to its mission. MVEDA partners with entities in southern New Mexico, such as the City of Las Cruces, Dona Ana County, New Mexico State University, Dona Ana Community College, the Las Cruces Public Schools, the Village of Hatch and the New Mexico Economic Development Department.

“We have begun a business connection series,” said Fred Shepherd, MVEDA business development manager. “We are trying to put together events that address what companies want to see and hear about.”

In addition to monthly business luncheons, MVEDA has other tools in its toolbox, such as business resource guides, assistance programs, business start-up help, educational opportunities and business consultations.

Newest to its resources, MVEDA offered a “commuter package” in collaboration with the City of Las Cruces to L&M Radiator, a worldwide manufacturer of MESABI flexible core heat exchangers that has decided to relocate its El Paso office to Las Cruces. The company purchased the old Coca-Cola bottling plant at 2100 S. Valley Drive.

“We have 60 current employees that will stay with us, and it will be up to them if they chose to move to Las Cruces or stay in El Paso, but we thought this was a nice way to at least show them what Las Cruces has to offer,” said Production Manager Tom Baumchen, in regards to the open house event.

L&M Radiator chartered two buses Saturday, June 4, filled with employees and their families to introduce them to the City of the Crosses. In addition to MVEDA, guests were allowed to peruse several vendors’ booths, including Dona Ana Community College (DACC), Las Cruces Public Schools, the City of Las Cruces, home loan companies, newspaper options and many others. Guests were also treated to a lunch and tour of Las Cruces before going back to Texas.

“We hope this event is the first of many of its kind,” Shepherd said. “We learned a lot from this first experience. For example, someone asked us about child care, and we didn’t have the information to provide them that day, but in the future we will know. And it is obvious, people moving to Las Cruces want to know the best place for their kids to go to school or where they can be safely kept.”

Other than booths, the participants also enjoyed guest speakers, including Margie Huerta, president of DACC, who was able to facilitate a brief question-and-answer session and recognize Las Cruces for its many wonderful opportunities.

“We are excited about the move, and it just came at the right time,” Baumchen said. “The reason for moving here was to continue a longtime partnership we have with TMS Machine Shop, and we found a building that could house both companies.”

Baumchen said the move has already started and anticipates three shifts per week to be operating by Friday, June 17. “We should be all moved over and settled in by the first or second week of August. Overall, we are very eager about being in Las Cruces and thrilled about the tremendous turnout today,” said Baumchen, hinting that an upcoming “phase two” is in the works for the company.

After L&M moves its final belongings to Las Cruces, Baumchen said he anticipates about 30 more hires. “We are bringing 60 people with us, and have already hired 30 more, but I anticipate that with the way work is coming in, we will add another 30 in the near future,” he said.

For Davin Lopez, MVEDA President and CEO, this event helped answer an important question. “For people moving here, where does quality of life fit in?” Lopez asked at the monthly Business on the Border luncheon Tuesday, June 7. “In addition to that, we at MVEDA want to help connect the fact that companies and their people are wanting to move here and are moving here, and how that will impact our local economy.”

L&M Radiator is not the only company making big changes in the area. Keith Beck, vice president and general manager of the Jacobs Technology’s NASA Test and Evaluation Contract (NTEC) at the NASA White Sands Test Facility (WSTF), also gave an update at the Business on the Border luncheon about what is going on at WTSF.

In regard to the number of people who will be out of work due to departments closing and contracts ending, Beck said a majority of the personnel will be maintained.

“We do a lot of stuff that has to do with testing. Anything that goes into space has to go through testing,” Beck said. “We have 420 employees now and as new jobs come, we look to hire internally first. The fiscal year is looking good, and we don’t anticipate another big hit coming anytime soon.”

Beck also said WSTF is constantly looking at new partnerships to create jobs, such as working with Spaceport America.  “We are currently working on scenarios that Spaceport America could be interested in,” he said. “For example, we are working with nitrous- oxide testing with the (Federal Aviation Administration). We will also have the ability to train people at Spaceport America or provided services as simple as rebuilding a valve on their car so they can get it fixed locally instead of shipping it away.”

At WSTF, Beck is responsible for all rocket propulsion testing, materials and component testing and the processing of flight hardware for the Space Shuttle and International Space Station as well as commercial and military systems. He holds a bachelor’s degree in mechanical engineering from Christian Brothers University and a master’s degree in engineering management from the University of Tennessee and is a registered Professional Engineer.

The next Business on the Border luncheon will be held from 11:30 a.m. to 1 p.m. Tuesday, July 5, at Hotel Encanto de Las Cruces, 705 S. Telshor Blvd. The meeting will begin with a hot entrée buffet followed by a brief update by MVEDA staff. Luncheon cost is $20 per person and open to the public.  For more information, call MVEDA at 525-2852.

As many of you are already aware, MVEDA has a core, focused approach to economic development that concentrates on growing the economic base of Dona Ana County.  Economic based approaches focus on industries that export a product or service outside the region thereby bringing new dollar flow into the local economy.   It is one of the fundamental means by which a region can build and create new wealth and demand.  New dollar flow into an economy then leads to greater disposable spending that can be used to purchase the local goods and services that we rely on each day.    We have had success in this approach to economic development and as move closer to entering the fourth quarter of our fiscal year the impact from economic based industry development becomes evident; not only in job creation but in the new tax base that it creates.

For example, currently this fiscal year MVEDA has been involved in efforts that have assisted in the creation of 216 new jobs as well as the retention of 42 jobs within the City of Las Cruces with the total capital investment estimated in new construction and equipment estimated at $40mm.  Utilizing IMPLAN economic impact analysis, a 3^rd party statistical software that measures direct, indirect, and induced economic impacts, new tax revenue to the City of Las Cruces would exceed $700,000 during the construction phase and over $226,000 per year in subsequent years should employment levels be maintained.  Likewise, the increased tax revenue to the State of New Mexico as a result of these projects is estimated at over $2.3mm during the construction phase and over $347,000 in subsequent years.  Our educational institutions also benefit as a result of these economic based projects.  Las Cruces Public Schools property tax revenues could grow by as much as $200,000 per year.

Also, MVEDA is working closely with a handful of projects that have considerable impact to Dona Ana County; primarily with Union Pacific’s $400mm refueling station and intermodal ramp which would create over 3,000 construction jobs and eventually over 500 permanent, high wage jobs in Santa Teresa.  The impact of this project would create $19.9mm to the State of New Mexico and $3.5mm to Dona Ana County in new gross receipts and compensating tax paid on construction services alone.   As the State of New Mexico is currently faced with large budget deficits, the identification and creation of a new tax base becomes even that much more critical.  As evident from the above discussion, the attraction of economic based industry to the State and County is the solution.

Economic development practitioners and leaders around the United States value economic based industry growth and it is for this reason that competition continues to grow.  And even during these challenging economic times, and even with budget deficits, we see that States and regions across the country are investing more in their economic development efforts.  For example, just to the south of Dona Ana County in Horizon City (a suburb of El Paso), the city has adopted a new tax to build an economic development fund.  This is in addition to the State of Texas’ Enterprise Fund which provides the State with deal-closing dollars to attract industry.  Recently, Arizona legislators began a special legislative session to begin consideration of business tax cuts and the creation of a $25mm closing fund to attract new business to their State.   On a recent trip to Atlanta, MVEDA met with several national site selectors and two messages became clear.  First, that there would be an exodus of companies from California, and second, that Arizona and Texas had firmly placed their flag in the ground as the business friendly destination.   With less than a month left in New Mexico’s 60-day legislative session, we are hopeful that the State of New Mexico remains aggressive in the pursuit of economic development.  For this reason the Dona Ana County Legislative Coalition has been supporting the following economic development issues:

1.    Support of a State economic development recruitment budget by expanding the New Mexico Partnership beyond present funding levels, with the purpose of creating new private sector employment opportunities, creating new jobs for New Mexicans and expanding business in the State.  Currently, past year funding has been at $1.1mm.  This is a significant decrease in funding from when the program began in 2003. It is also a small budget in comparison to neighboring cities, much less other State recruitment budgets.  The Partnership also provides lead generation flow to smaller communities that do not have their own marketing budget to work with.  Rural communities that have benefited from the Partnership’s involvement have included Clovis, Roswell, Gallup, and Dona Ana County to name just a few.   To compare this funding level against some of our neighbors;

o    El Paso, TX has a recruitment program funded at about $1.5mm, and

o    The Greater Phoenix Economic Development Council has a recruitment program funded at about $4mm.

2.    Support of retaining existing economic development incentives to include:

o    Funding the State’s Job Training Incentive Program,

o    Maintaining the Technology Jobs Tax Credit, the Manufacturing Investment Tax Credit, and Rural Jobs Tax Credits.

3.    Support of regional border issues which comprise New Mexico’s second largest existing industrial base:

o    Reinstatement of the Locomotive Diesel Refuel Tax Exemption to make southern New Mexico more competitive against Texas as a bi-modal, transportation and logistics hub.

o    Creation of an Commercial Overweight Zone which will assist in attracting new logistics and distribution companies to New Mexico, &

o    Creation of a border infrastructure fund to plan, design and construct border infrastructure to allow for pro-active economic development planning.

Regardless of the outcome at the State level, we still have tremendous economic growth opportunities here in Dona Ana County.  This stems from a direct industry focused marketing approach that leverages the unique assets of the region.  They include our border logistics and port of entry with Mexico, our proximity to White Sands Missile Range, our natural assets in solar, a strong agricultural region, and the continued development of an aerospace industry with Spaceport America as its anchor.  As illustrated in the Lead Generation chart, MVEDA continues to receive diversified industry interest lead first by manufacturing and logistics, followed by renewable energy, and increased growth in the aerospace and food processing sectors.  We have also recently seen a renewed interest in high tech companies looking at the area.

In terms of performance output versus past years, MVEDA has assisted in the creation of 237 new jobs in Dona Ana County as of March 1 of this fiscal year which places us well ahead of job creation numbers in each of the past previous two years, only overshadowed by the positive economic climate of 2007-’08.  However, there remains a strong potential that we will see a handful of projects close before the end of the current fiscal year which would then create a record year for MVEDA.

As also illustrated in the Completed Projects chart, as of March 1^st we have already surpassed past years’ results in the industrial square footage taken off the marketplace and in the total capital investment that these projects have brought to Dona Ana County.

In addition to economic based industry attraction, MVEDA is working on solutions to connect local businesses to the opportunities that economic based industry brings to the region.   Therefore we were pleased to announce our first “Business Connection Series” on Monday, March 7, 2011 where SunEdison provided local vendors, suppliers, and sub-contractors with a pre-bid briefing on their 12 MW solar project at the West Mesa Industrial Park.  We are hopeful that this will be the first in a series of localized economic-based business building opportunities.

Additionally, in conjunction with the Border Industrial Association (BIA), MVEDA hosted a Business Incentives Workshop for the southern New Mexico industrial base and the CPA firms that service them.   The workshop which also counted towards CEP credit was provided by Moss Adams, a MVEDA Partner and covered, not only the details of applying for state incentives, but federal incentives as well.

As evident, even with the budget challenges at the State level, we are optimistic about the future of economic development in Dona Ana County and appreciate the continued support of all of our partners and stakeholders.

MVEDA just completed another successful Business on the Border Luncheon and we are thankful to everyone who had the opportunity to attend.

Our guest speaker on Tuesday was Fred Mondragon, the Cabinet Secretary of Economic Development, who shared some economic data on the status of New Mexico and Southern New Mexico’s economies, and also provided some words of advice as to how we might keep the momentum moving forward in Dona Ana County.  The Secretary outlined and highlighted several success stories for Dona Ana County that included (click on graphic to view presentation):

• A September 2010 unemployment rate in Las Cruces 2% below the national average and more than ½ percent below the State’s average,
• Site Selection Magazine and Business Facilities ranked New Mexico in their Top 10 nationally for:

o    #2 in Solar Energy Manufacturing Leaders,

o    #3 in Workforce Training Leaders,

o    #5 in Alternative Energy Industry Leaders,

o    #6 in Cost of Labor, and

o    #8 in Economic Growth Potential.

• Regionally, Las Cruces ranked in the following areas:

o    5^th in U.S. in projected 2009-2011 employment growth rates.

o    8^th in Milken’s 2010 Best-performing small cities,

o    #9^th in Business Week’s top recovering job markets for 2010, &

o    Dona Ana County ranked 14^th Best County in the nation for job growth over the last nine years by Money Magazine.

The Secretary also praised many of the strides Southern New Mexico has made with respect to:

• The aerospace industry, where he cited Spaceport America and the selection of NMSU as an FAA Center of Excellence for Commercial Space Transportation as the anchors that will spur this industry forward in New Mexico,
• The alternative/renewable energy industry with three new solar projects taking place in the County, the announcement of Johnson Plate and Tower this past January and with Sapphire Energy located at the West Mesa Industrial Park.
• And of course our Borderplex growth at Santa Teresa which has seen cross border goods increase by 256% over the past five years.

Finally, his words of advice to local leadership moving forward were to:

1.    Continue our economic diversification,

2.    Build on regional and local strengths,

3.    Think globally, and

4.    To support less unfortunate communities in the region.

Given that Tuesday was Election Day, it is only appropriate that we discuss both the success we have had in economic development and job creation, but more importantly to focus on the future building blocks we need as a region so that we may continue to grow our economy.   As I have mentioned many times in the past, Southern New Mexico is blessed with some very strong assets by which we can grow upon.  But we need to assure that the tools and legislative support is available to do so.  This includes maintaining a strong State economic development marketing effort, maintaining existing incentives, as well as expanding those incentives to support Southern New Mexico growth in the areas of aerospace, border logistical support, alternative energy, and food processing.   And although in Dona Ana County, we look towards the State to support us in many of these efforts, we must also realize that as a community we are equally responsible for taking steps to prepare ourselves to attract growth and that comes in the form of education, infrastructure, and capacity building.  In this respect, MVEDA continually provides assessment and analysis on the challenges facing economic development in our region.  Although MVEDA’s primary focus is on marketing and attracting economic-based jobs to the region, we nevertheless find it necessary to engage in capacity building activities that will assist us in our long-term goals.  Currently, MVEDA is implementing and working on several capacity building directives that include:

• Colonias/Rural Area Labor Assessment:   With the support of an intern from NMSU, MVEDA has designed a bilingual workforce survey which we will be distributing to residents in rural areas.  We are receiving support from PICO to assist us in survey response.  Our first effort will take place in November in Anthony, NM.  We hope to expand this to Sunland Park and Chaparral before the end of the fiscal year.
• Labor Identification Program for Santa Teresa based Employers:  Working in conjunction with DACC, we will be marketing employment services offered through DACC to Santa Teresa based employers.  MVEDA’s analysis through conversations with employers indicates that 60% to 70% of the existing workforce in Santa Teresa comes from El Paso.  We are hoping to offer employers a one stop solution and first point of contact through DACC when they have future labor needs.
• Investment Interest in Santa Teresa:  A second challenge with the workforce in Santa Teresa is the ability to convert them to New Mexico residents.  This is due to lack of housing that is within proximity to the employment base.  We have begun collaborating with the Border Industrial Association, the Building Industries Association, and the Las Cruces Association of Realtors to potentially identify new programs that could be offered to promote and encourage more development in the area.
• Spaceport America Economic Development Strategies:   Finally, MVEDA has been involved with Spaceport America and their consultants in trying to identify clear strategies that we can jointly implement that will assist our efforts in developing business opportunities revolving around the Spaceport and the aerospace industry.

We are hopeful that some of these efforts lay additional foundation for growth leading into the next administration and MVEDA will continue to work closely with the Economic Development Department and the New Mexico Partnership as partners in this endeavor.  Again, MVEDA thanks the Secretary for his time and for all the support he has provided to economic development in Dona Ana County.  We wish him well in his retirement from state government which was announced by Governor Bill Richardson earlier today.

MVEDA would like thank everyone who was able to attend Friday’s Regional Economic Development Forum, titled “A Tale of Two Ports.”  Those who attended were able to hear directly from leading experts on both the opportunities and challenges we face in Southern New Mexico in growing our region’s two commercial ports of entry, both the Santa Teresa Port as well as Spaceport America.

The MVEDA Board of Directors and Staff want to give special thanks to our key note speakers:

• Francisco Urango, Corporate Vice President and Chief Business Operations Officer for Latin America,for Foxconn.   Foxconn is the largest contract manufacturing company in the world with a significant manufacturing presence in San Jeronimo, next to the Santa Teresa Port of Entry,

• Carissa Bryce Christensen, founder and Managing Partner of The Tauri Group, an analytic and engineering firm based in Alexandria, VA, which provides expertise on the economic, market, technology and policy issues associated with commercial spaceflight, and

• Dr. Lowell Catlett, Regent’s Professor/Dean and Chief Administrative Officer at NMSU’s College of Agricultural, Consumer and Environmental Sciences.  Dr. Catlett is also a national speaker and futurist on trends associated with technologies and their implications on the way we live and work.

Special thanks also go out to our expert panelists that included:

• Juan Massey, Director of Regulatory Affairs at Verde Realty,

• Jerry Pacheco, Executive Director of the International Business Accelerator,

• Andrew Moralez, Executive Director of the New Mexico Border Authority,

• Zoe Gisela Richmond, Director of Public Affairs for Union Pacific,

• Robert X. Martinez, VP of Construction Management for Gerald Martin,

• Keith Beck, VP and General Manager of the Jacob’s Technology Test and Evaluation Center,

• Wayne Savage, Program Manager of Progressive Construction Management, and

• Mark Lautman, Principal of Lautman Economic Architecture Partners, LLC.

For those of you who could not attend, we will be placing parts of the presentations on our website in the coming weeks.

Q1 2010-’11 Activity

MVEDA entered the 2010-’11 Fiscal Year with twelve, high-priority projects, consisting of approximately 1,200 jobs with a realistic chance of closing in the current fiscal year.   Approximately 1/3 of those jobs (as illustrated in the blue on the chart below), consisting of primarily manufacturing and renewable energy companies, show a very strong chance of closing.  What this means to MVEDA’s internal operations is that we have turned much of our attention this past quarter towards the project management needs of our clients.

Additionally, MVEDA continues its aggressive marketing campaign and year to date we have developed 22 new leads consisting of approximately 925 employees and 785,000sf of required space.   In comparison to last year, total new leads are slightly down and we see a shift in industry specific leads especially within food processing which currently represents 25% of all our new 2010-’11 leads as compared to only 3% of total leads for the same period last fiscal year.

Manufacturing/logistics and aerospace also showed some slight growth as a percentage of total leads while renewable energy leads dropped to 21% of total leads YTD 2010-’11 compared with 32% for the same period last fiscal year.  Additionally, whereas a large portion of our renewable energy leads last year were involved in manufacturing, we see a much larger portion of this year’s renewable energy leads involved in renewable energy generation.

With respect to employment trends in the region versus the rest of the United States, the Las Cruces market has fared very well.  In a September 2010 report by Garner Economics LLC, which measured job growth trends amongst 158 U.S. metros, Las Cruces was recognized along with 15 other metros as setting new record employment numbers.  Garner Economics’ report quoted:

“The July 2010 employment numbers also show that sixteen metros have set new records; surpassing July peak employment totals from the previous five years (see map and table).”

As illustrated in the map and table provided as part of the Garner Economics report, Las Cruces NM was ranked 8th amongst these 16 cities in terms of the percentage increase in jobs with over 1,900 new jobs added over July 2009.

In the upcoming months, MVEDA will continue to be active in several events.   Later in October, MVEDA is sponsor to ISPCS as well as to the VC Speed Dating Event put on by the Arrowhead Center.   We will also be attending the BizTech 2010 Expo in El Paso.

Finally, if you were not already aware, the MVEDA staff is now settled into our new offices in the First Community Bank Building in downtown Las Cruces.  Our formal address is: 1st Community Bank Tower, 277 E. Amador, Suite 304, Las Cruces, NM  88001.  We hope you can all stop by and visit us in the very near future.

Click on graphic to download

Thank you to all who attended Tuesday’s Business on the Border Luncheon where Dr. Chris Erickson from NMSU provided his economic outlook and forecast for Las Cruces and the region.  Dr. Erickson presented employment information illustrating that although Las Cruces has fared better than both the national average and New Mexico as a whole, in terms of employment growth, we are still behind our peak employment numbers experienced in the mid 2000’s.  Dr. Erickson stated that it will take approximately three years to catch back up to those previously experienced levels.   Dr. Ericson also commented that although it appears that the country as a whole is moving out of the current recession, which has lasted a staggering 20 months, we must nevertheless not rule out the possibility of a double dip recession.  If you are interested in a copy of Dr. Erickson’s presentation, it can be downloaded by clicking the graphic.

From an economic development perspective we enter the new fiscal year cautiously optimistic.  Over the past fiscal year, MVEDA has developed over 100 leads and over 45 initial site visits.  We also carry forward a strong pipeline of projects which we believe have a strong chance of closing in the coming fiscal year.   We are also experiencing much more diversification amongst the types of industries that have expressed interest in the region.  MVEDA’s top 10 active prospects include 3 manufacturing companies, 2 aerospace companies, 2 renewable energy companies, one food processing company as well as one high tech company.   Together these 10 prospects potentially could create the need for over 2,000,000sf of space and create as many as 600 to 700 jobs.

We are also beginning to see some recurring themes in terms of the anecdotal data we pull from prospects.  For example, whereas over the past fiscal year it appeared financing was the leading driving indicator of a business’ locate decision; we are now seeing more inquiries once again surrounding work force needs.   Additionally we are receiving more inquiries for build-to-suit opportunities as opposed to existing inventory.  Both questions lead us to believe that access to capital is slowly becoming more available which should bode well for economic development initiatives.

This past fiscal year, we also showed success in developing opportunities within the rural areas of the County.  MVEDA conducted site visits to Hatch, Rincon, Anthony, Chaparral, Santa Teresa and Sunland Park amongst other locations.  We are proud to say that one of these actually led to the “locate” of Universal Plastics in Anthony, NM.

Although optimistic, we cannot lose sight that there is still much to do to spark economic development within the state and region. The MVEDA Board of Directors and staff met last week to outline our strategic plans for the new fiscal year.  At the session, MVEDA updated its regional economic development SWOT analysis and recognized that although we have been successful in addressing many of our economic development weaknesses, there are several new arising threats and barriers that we must be aware of.   They include:

1. Uncertainty of a new administration:  A new administration always puts pause in private sector decision making.  Will the next administration be business friendly?
2. Uncertainty of business attraction incentives:  Recently the State has been experiencing budgetary challenges with its most “tried and true” incentive; Job Training Incentive Program (JTIP).  Recent changes have lowered the reimbursable amount on JTIP funding in urban areas (ie…Las Cruces) from 50% to 30%.  Incentives such as JTIP are the only tools most economic development programs across New Mexico have to be competitive in business attraction.  Will they be further reduced?
3. Regional and Local Incentives:  Serious consideration needs to be placed into the development of localized incentives for economic development.  Communities throughout the country, especially in Texas have economic development funds by which they can tap into for job creation.
4. Border competitiveness:  Recently El Paso announced the acquisition of 1,000 acres of land in Tornillo for the development of an industrial park with a port of entry which they will break ground on in 2012.  How will this affect our port of entry and future economic development opportunities in Santa Teresa?

These are challenges that MVEDA recognizes and, as an organization, must consistently retool our marketing efforts and plan strategically to deal with new challenges that arise.  And we can only hope that a “double dip” by the national economy is avoidable.

I look forward to seeing everyone at our next Business on the Border Luncheon where MVEDA will be providing a year end re-cap.  We will also have a guest speaker from the New Mexico Small Business Assistance Program which is a program that leverages technology and expertise at our National Laboratories and can provide up to $20,000 in technical support to companies in the region.