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Tuesday, July 08, 2014

On The Econ Beat: The Degradation Of Downtown ABQ, Plus: How To Get Out From Under A One Horse Economy, Also: State Tourism And The Austerity Hawks 

Come on Mayor Berry, city councilors and ABQ business leaders. Hasn't the disastrous decline of downtown ABQ gone far enough? Look at the pic of this sign we snapped during a recent walk through the city's central core. It's not a joke.

Sure, the homeless problem is a tough nut to crack, but giving up is not a strategy. This is the state's largest city and while downtown has struggled for decades, we've now been overtaken by docility and confusion. . .

The degradation of downtown is in part a symptom of the city and state's larger problem--the loss of billions of dollars in federal spending and nothing much to replace it. . .

Like ABQ, Reno, NV has been a one horse town when it comes the economy, For us it's that federal spending. For Reno it's gambling. ABQ is still searching for how to diversify the economy--or even if we really can. Reno has rolled the dice as the gambling decline forces its hand:

. . . Reno stirs images of worn-out casinos, strip clubs and quick divorces. But it is trying to change that reputation and reduce its reliance on gambling by taking advantage of its location and low taxes. . . Instead of poker payouts, Reno now boasts of e-commerce ventures, an Apple data center and a testing ground for drones. It also hopes to attract a large factory to build batteries for Tesla’s electric vehicles. “People believe in this town, and they’re tired of being presented as this joke,” said Abbi Whitaker, a local business owner who helped create a marketing campaign to reshape Reno’s image. “When you’re at rock bottom there’s a good chance to reinvent how you go up.”

On, forget it. Let's all just move down to Hobbs and party like it's 1999:

Although the Albuquerque metro jobs picture remains bleak, the oil patch in southeast New Mexico and in Hobbs is booming. Now economic development officials in the area are hoping to lure Albuquerque workers. The Hobbs Chamber of Commerce placed an ad in the Sunday Albuquerque Journal for its Hobbs Jobs website in the hope of luring Albuquerqueans and other New Mexicans to move to the oil patch.

All ready for your Hobbs advenutre? Here's the jobs site.

A SLOW LEAK 

Like a very slow leaking tire, the generations old housing bubble in Santa Fe has been gradually deflating. And that's actually good news for most City Different residents. A real estate agent says:

. . ."People were waiting for the market to get better and that it would magically spring back to 2007 levels. They have seen the writing on the wall — it’s not going to be overnight. It’s going to be years, perhaps a decade, before we see those levels, so they need to get motivated.”

More realistic pricing seems to be driving the volume, according to agents. And more low-cost homes under construction are bringing prices down, while higher inventory and a poor economy are keeping the lid on price appreciation. The median sales price in the second quarter of 2014 fell 10 percent in the city, to $270,000, and 8 percent in the county, to $409,500, according to the Association of Realtors.

Santa Fe will always be a manget for celebrity types, but the go-go days are gone and never to return. The capital city of the future will be more like the 70's with working classes srill coexisting with the big money and celebrity crowd, but not as dominated by it. . .

STIMULATION, PLEASE

For Santa Fe and so many small New Mexico towns and villages, tourism is vital. The fiscal austerity of the Martinez administration--embraced by the Martinez Democrats in the Legislature--has held the state back, but the two branches of government have loosened the reins somewhat on spending to attract tourists. The results--while not stellar--are heartening: 

New Mexico didn’t attract many more tourists in 2013 than it did in 2012, but it did attract bigger spenders. State visitation inched up just 0.63 percent last year, according to new tourism numbers. Data show that 32.2 million people visited the Land of Enchantment in 2013, up from 32 million in 2012. Though the bump was modest, Tourism Secretary Monique Jacobson said 32.2 million still represents a state record for visitation. But she suggests the better news is that travelers are opening their wallets wider. State- commissioned research from Longwoods International indicates overall spending by visitors grew 7 percent in 2013. That represents a gain of about $300 million.

Secretary Jacobson has a point about attracting tourists who spend more, but we still have much room for improvement in attracting raw numbers of visitors. Our northern neighbor of Colorado is getitng nearly double our number

Colorado hosted a record 60 million visitors who left almost $17 billion in the state in 2012. . . Last year, visitor research showed 57.9 million visitors spent $10.76 billion in 2011. This year's studies show the number of marketable vacationers — travelers who chose Colorado over other destinations — increased 2 percent in 2012, and spending climbed nearly 6 percent over 2011, which had ranked as the best year for the state's tourism efforts. 

SANTA FE THINK

The tourism news highlights the contradiction in Santa Fe's economic thinking. By increasing the budget for tourism and advertising, we attract more visitors and stimulate business. Similar investment in infrastructure etc. will have similar results.  Such a suggestion is greeted as apostasy by the ringleaders of austerity politics--Dr. Clifford at the Department of Finance and Senator John Arthur Smith at the Legislative Finance Committee.

Still, the state's current ranking as last or nearly last in the nation in job creation, the migration out of the state and ABQ's freshly announced double-dip recession would seem to vindicate our position. It's  really just a restatement of that old bromide: "You have to spend money to make money." 

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