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As Kmart leaves, DHF brings in 50 jobs

RIO RANCHO, N.M. — Rio Rancho both welcomed new jobs and lost one of its oldest retailers this week, after the Monday ribbon-cutting ceremony for DHF Technical Products, which brings up to 50 jobs with it, and Kmart’s Tuesday announcement that it is shutting its Rio Rancho store and leaving nearly 60 people unemployed.

Mayor Gregg Hull and other city and regional economic development officials spoke about the latest developments at several venues this week, including over breakfast at a commercial real estate organization gathering, over lunch to the Rio Rancho Regional Chamber of Commerce and at Wednesday evening’s meeting of the city’s Governing Body.

There, they outlined the city’s strategies for attracting new business while still heeding other priorities, like infrastructure improvement and nurturing existing businesses.

Hull also said the city needs to be “strategic” about the infrastructure investment it chooses, adding that the city is increasingly successful at attracting businesses.

“We just see opportunity after opportunity after opportunity in Rio Rancho right now,” the mayor said Thursday at “Keeping Up With Rio Rancho,” an event organized by the commercial real estate development association NAIOP.

The new DHF Technical Products facility on Vortex Road was packed with spectators Monday afternoon, with state and local leaders, in addition to law enforcement and community members, at the ribbon-cutting ceremony. Gov. Susana Martinez and Economic Development Secretary Jon Barela both spoke to attendees.

The company, which refines precious metals and offers other services, relocated to the former Xynatech building in Rio Rancho after being founded in California about 40 years ago. Owners intend to hire 50 people within two years, they said.

The state Economic Development Department gave the company $200,000 to offset the building costs, in addition to about $175,000 to pay for on-the-job training. Company president Dan Castilleja said those incentives, plus Rio Rancho’s tax structure, real estate prices and overall quality of life are what convinced the company to uproot itself from California.

On the economic downside, Kmart on Tuesday said it would close its Rio Rancho store by early December and leave its 59 employees, most of whom are part-time or hourly, without work. They’ll be eligible to receive severance and can apply for open positions at area Sears or Kmart stores.

The store opened in April 1990, the city’s first big discount retailer.

Kmart closed a store on the 4200 block of Central SW in Albuquerque earlier this year.

With the Rio Rancho store’s closure, only one Kmart remains in the metro area.

“Store closures are part of a series of actions we’re taking to reduce on-going expenses, adjust our asset base, and accelerate the transformation of our business model,” Kmart spokesman Howard Riefs said in an email.

Local officials were optimistic, however, about what could come of the 90,000-square-foot retail space off N.M. 528 between Sara Road and Southern Boulevard that Kmart will leave behind, saying that the vacancy frees up space for other retail opportunities. The city has a retail vacancy rate of under 8 percent, city manager Keith Riesburg said in a phone interview.

“While it’s disappointing to see the Kmart close, it’s not unexpected,” he said.

The Kmart sits about three miles north of Cottonwood Mall, an area that analysts said sucks gross receipts tax revenue out of Rio Rancho by drawing Rio Rancho residents into Albuquerque’s borders. Riesburg said he’s not concerned about more so-called “retail leakage” in the short term because of Kmart’s closure.

Glenda Cunningham has lived just inside Albuquerque city limits for six years, but considers herself a “Rio Ranchoan,” she said Wednesday while perusing Kmart’s outdoor clearance items. She said she will likely go shopping in Albuquerque now in search for clothes that fit her at a good price, qualities she said she liked in the Kmart close to her home.

“I had thought Rio Rancho was trying to build up, but this might show we’re going the wrong way,” she said.

At the NAIOP meeting, city business relations manager Matt Geisel said the city has brought in nearly 1,200 jobs in the past 18 months, more than a third of which came from the S&P data center, which announced earlier this month that it will begin hiring the first wave of 425 employees in October.

Also, Sandoval Economic Alliance interim CEO Jami Grindatto outlined the types of jobs, and how many of each, the alliance would like to bring into the region over the next 10 years.

He said he hopes the city will attract 3,500 new back office or teleservice jobs like the ones promised by S&P, in addition to 2,500 health and social services jobs, and 2,500 manufacturing jobs, along with smaller numbers of jobs in other sectors.

During the DHF ribbon-cutting ceremony, Hull pointed out that he had been at two jobs-welcoming functions in two weeks, a trend the first-term mayor hopes to continue.

“With statistics like this, we’ll have the city filled up in no time,” he said.