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Monday, November 30, 2015

On The Econ Beat: KAFB Joins the Historic Shrinking ABQ Economy, Plus: Dem PRC Battle Shapes Up, Luminaria Tours Too Light? And Is The Convention Center A "Rat Hole?" 

New Mexicans joined the traditional post-Thanksgiving shopping frenzy but our subdued economy probably had many of them doing more window shopping than actual buying. Here's part of the reason. . .

In its latest report Kirtland Air Force Base--which includes Sandia Labs--reports that in 2014 the base had a $7.6 billion economic impact on the state. But looking at its 2012 report KAFB said it then had an impact of $7.8 billion. That's a whopping $200 million decline (not accounting for inflation) and much more when you account for the repeat effect of those dollars not being spent. And KAFB says since its last report the impact of base spending on the ABQ metro is down a stunning $500 million.

KAFB asserts that its economic impact on the ABQ area is $3.8 billion. We say asserts because we're always suspicious of these economic impact numbers as they are based on suppositions. But there's no denying that the decline in the amount of federal dollars here continues its long, slow grind. It has contributed to the downsizing of the economy which is symbolized by the multitude of payday loan stores, dollar stores and the flat housing market. Some reasonably argue that the fewer dollars in circulation has also contributed to the higher crime rate.

KAFB and our congressional delegation are quick to point out that the employment numbers at Sandia are actually up the past few years, but that obviously doesn't account for the bleeding we have had with contracts and other funding.

We ran into local advertising whiz and possible 2017 ABQ mayoral candidate Steve McKee the other day and he opined--as he often does--that ABQ must build a robust private sector economy to replace the federal dependency.

No doubt the conservative Republican is correct but we offered the opinion that there is no way on God's green earth that you are going to create private sector activity anywhere near the equivalent of the mammoth federal presence here. Has the private sector even replaced the $200 million in economic impact that the KAFB numbers says was lost here in the past two years? Not even close. It will take generations.

The current political leadership have been bystanders to the federal dollar decline, claiming that we must fight for the federal dollars but not showing us any specific plans or actions. The congressional delegation is aware but so far unable to land new federal installations or monies to offset the decline.

KAFB and the rest of the federal presence remains the backbone of the ABQ (and NM) economy but after 75 years it has fractures. What we do about it in the years ahead will largely determine the fate of the New Mexican economy.

PRC PRIMARY BATTLE

It looks as if we'll getting an interesting Dem primary in '16 for the Public Regulation Commission (PRC) seat that covers most of big Bernalillo County. Incumbent Democrat Karen Montoya, current chair of the commission which regulates utilities, among other businesses, will face off against attorney Cynthia Hall, a former staffer at the PRC and who ran against Montoya in the primary of 2012.

Back then Hall came in second and Al Park ran third. Both Montoya and Hall say they will take public financing which will give each of them about $32,000 for the run. So far Montoya and Hall are the only two announced contenders. No R's have surfaced yet in this fairly solid Dem district.

MORE SUPPLY?

City officials are gleeful over this news but we're wondering if we're not falling behind the curve in providing an even bigger and better Christmas Eve show for the many clamoring to participate:

Tickets for ABQ RIDE’s Annual Luminaria Tour on Christmas Eve have sold out.  All Tour tickets were sold by 12:30 p.m. November 27. That is the fastest-ever sellout of tickets. . . The tour. . . takes approximately 45 minutes and travels through Old Town and Country Club neighborhoods. . .Tour times are scheduled at 5:30 p.m.; 5:50 p.m.; 6:10 p.m.; 6:45 p.m.; 7:05 p.m. and 7:25 p.m.

How about adding a tour or two, going a little later and getting other neighborhoods to participate? This is a nice draw for ABQ now serving 3,600 participants, but if it's selling out in four hours the city could look at expanding and satisfying demand not just celebrating its current popularity.

A RAT HOLE?

That luminaria tour begins and ends at the downtown convention center which Mayor Berry is proposing to spend more money on in renovations. A reader disgruntled over that writes:

I can not figure out the fascination City Hall has with pouring money down a rat hole that is now some 40 years old and will never be able to compete on a national level. Why is it that this city always has to do things half assed and on the cheap? Mayor Berry just spent over $20 million to renovate the convention center and now wants to spend another $5 million to somehow convert it to an event center. A 10,000 seat arena he proposes is not what is needed, but rather a 16,000 to 20,000 multipurpose facility to attract national shows and events. It would have been far more practical just to level the damn building, start from scratch, and build a new facility for $45 or even $65 million that will be far more practical and will be used.

This corner has long advocated that Tingley Coliseum on the state fairgrounds be demolished and a 21st century events complex be built with a seating capacity north of 20,000 that would be a showcase for the entire state and also boost tourism. Unfortunately and with apologizes in advance to Vicki Harrison of Common Cause, our idea has about as much chance of winning legislative approval as an independent ethics commission.

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