Posts Tagged ‘food processing’

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 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.

During the month of October, MVEDA invested considerable time on its target marketing and prospecting efforts.   Early in the month MVEDA conducted a prospect visit to Washington, D.C. where we met with several site consultants and companies involved with federal contracting efforts.   During the month, MVEDA also attended two trade shows: the International Symposium for Personal and Commercial Spaceflight (ISPCS) in Las Cruces which focused on the commercial aerospace industry; and Solar Power International in Anaheim where over 2,000 companies exhibited.  At both shows, MVEDA sponsored invitation only events where we had the opportunity to engage and develop relationships with companies within each respective industry.  At ISPCS, MVEDA sponsored the conference’s opening reception which received significant attention, and at Solar Power International, MVEDA and Verde Corporate Realty Services co-sponsored an event hosted by the New Mexico Partnership where over 250 company representatives attended.  New Mexico Governor Bill Richardson also attended this event and spoke to the audience about the continued opportunities for solar energy development and manufacturing in New Mexico.

To date during the current fiscal year, MVEDA has created 36 new leads, representing over 3,190 jobs thereby indicating a very healthy pipeline of future projects.   Renewable energy and manufacturing & logistics projects represent the overwhelming greater percentage of our leads.

November marks a critical time period for MVEDA in our prospecting activities.  Economic development recruiting efforts normally have a minimum sales cycle of six months.  Given that we have only eight months left in our fiscal year, this means that we have only two months left to develop new leads that may have a chance of closing prior to July 2010 when our new fiscal year begins.  Therefore, MVEDA will be concentrating significant efforts on getting current leads and prospects to the finish line.

The open projects that MVEDA believes have the greatest likelihood of closing this fiscal year include;

• Project Windtower, an alternative energy manufacturer,
• Project Alimentos, a food processing company, and
• Project Roadrunner and Project X, both alternative energy developers.

If realized, these four projects represent over 200 jobs to Dona Ana County and over $300MM in capital investments.

Yesterday, we held our October Business on the Border Luncheon where Wayne Savage and Pat Hynes presented on the upcoming Leonard R. Sugerman Public Forum and International Symposium for Personal and Commercial Spaceflight (ISPCS) events which will be taking place October 20th to the 22nd at the New Mexico Farm and Ranch Heritage Museum in Las Cruces.  MVEDA will be sponsoring the opening reception for all registered attendees of ISPCS. As economic developers we work very hard and spend time and resources to get in front of industry decision makers and encourage business attraction to our region.  The fact that ISPCS is taking place in our own back yard with industry leaders attending creates a very powerful marketing tool for MVEDA and the region as a whole.

To recap lead generation activity over the past month, MVEDA generated fifteen new leads compared with ten the last month, thereby showing a very healthy pipeline of projects and interest.   Although alternative energy companies continue to make up over 1/3 of all our leads in the past two months, the overall percentage has dropped slightly and we have seen an increase in the percentage of lead generation within the aerospace and food processing sectors.  We currently have 25 new leads in the pipeline for this fiscal year totaling 2,512 potential jobs and over 1 million square feet of potential real estate needs.

As announced last week, Frontier Airlines stated that they would be closing their Las Cruces reservation center towards the end of this year.  MVEDA has already begun to market the facility as a plug-n-play call center to the site selector community and have currently received two inquiries.

In September, MVEDA attended the Industrial Asset Management Council (IAMC) conference in Minneapolis.  This is the premier event for site consultants.  MVEDA co-hosted a site consultant dinner put on by the New Mexico Partnership which received strong attendance.

For the month of October, MVEDA has a very busy marketing and travel schedule consisting of:

• Oct. 12-16: Prospect mission to Washington D.C. to meet primarily with defense related firms and site consultants
• Oct. 20-22: Leonard R. Sugerman Public Forum and ISPCS
• Oct. 26-29: Prospect mission in Los Angeles and attendance at the Solar Power International Show.

Finally, I am happy to say that on September 22, 2009, the County Commission voted unanimously on the passage of the Local Economic Development Act (LEDA) in Dona Ana County.