How can NM attract developers? Business leaders say site readiness is the answer.

New Mexico can do it.

The state can incentivize and create policies that allow for development-ready sites and majorly support economic development in New Mexico.

These are the sentiments of Danielle Casey, president and CEO of the Albuquerque Regional Economic Alliance, or AREA. For months, she’s voiced concern over the lack of development-ready sites in New Mexico, which is leading companies to choose other states to develop in.

She’s confident that can change.

“The beautiful thing is, New Mexico can do this if we want to,” Casey said. “We can figure out a way to do this responsibly and quickly.”

The issue

What do companies consider when choosing a state to develop in?

Site readiness.

It's what determines if a physical site is ready for development and hinges on roads, power and internet infrastructure.

The Site Selectors Guild, a global association of professional site selection consultants, released a report in April: the State of Site Selection 2024. Casey, referencing the report, said at an AREA luncheon in September that 82% of Guild members strongly agree that development-ready sites are the top location driver.

The issue is that New Mexico struggles to provide development-ready sites.

“When we tell a client, ‘We'd love to have you here, but it's going to be a really long time before we can make that happen,’ that generally can throw us out of the running,” Casey said.

Utilities play a major role in site readiness.

Don Tarry is the president and chief operating officer of the Public Service Company of New Mexico. He’s been with the company for 28 years.

Tarry said companies typically want to be up and running within two years. It generally takes three to four years in New Mexico, he said, with yearslong wait times for electricity materials and infrastructure.

“Speed to market is so important because if it's going to take me four years to be in place, and I can go next door to one of the states and I can be in in two years, that's two years of profit that I can make by being up and running faster,” Tarry said.

PNM Economic Development Manager Elisha Saavedra-Torres said development is more successful at sites like Mesa del Sol, a community in southeast Albuquerque with booming commercial and residential growth. She said that’s been in the works for years, with communication between PNM and developers.

“That's the culmination of many years of pre-planning and pre-work collaboration that has happened,” she said.

She said the key to better development is collaboration and coordination.

She added that projects are also often on a much larger scale now than they used to be. For example, she said, five years ago, PNM considered a large project to be about 5 megawatts; today, a large project is around 285 megawatts.

“Not only are these projects bigger, but they want to move faster,” she said.

Other utilities like gas, broadband and water come into play, too, though perhaps on a different scale than the competitive demand for energy.

Gerald Weseen is the vice president of regulatory, strategy and external affairs at New Mexico Gas Co. He said the collective belief is “that there might be some opportunity for New Mexico if we could do (site readiness) a little better.”

“That might help us give us a little bit more of an edge or make us more competitive when companies are trying to make a decision of where to be," he said.

He said communication between the business industry and New Mexico Gas Co. is better now than it has been recently but can still improve.

And the utilities are regulated by the New Mexico Public Regulation Commission. Casey said there are "constraints that actually prevent them from being able to move forward proactively the way they want," and a lot of people are looking for solutions to that, like getting money from a separate entity that doesn't cost ratepayers more.

David Morrison is the communications director for the Albuquerque Bernalillo County Water Utility Authority. He said he knows site readiness has been a buzzword in the development community for several months and the water authority is aware of it.

“But as far as I know, there hasn't been a groundswell of discontent with respect to water service,” he said.

All the utilities have struggled with COVID-era supply chain delays that continue to slow things down.

The fix

Tarry said everyone is working to make developments on sites go faster. It benefits PNM, he said, because adding a new customer spreads costs across the entire base, making rates cheaper for everyone.

“And as we continue to transition the grid, as we continue to do grid modernization, economic development is a key point of that because it helps us share those costs,” he said.

Economic development also creates a job base and keeps workers in New Mexico, he said.

And with Rob Black, who led the New Mexico Chamber of Commerce for six years, as the state’s new Economic Development Department secretary-designate, New Mexico could be positioned well to bring everyone to the table. Tarry said Black “provides the perspective of all the different elements that require that partnership to come together.”’

Black told the Journal he often heard about site readiness issues when he was at the Chamber. He said there are a lot of companies interested in New Mexico because of its assets, like the prime oil and gas tracts in the state or its growing aerospace industry, but there’s nowhere physically to go.

“And we don't have — from an economic development perspective — product to sell because we don't have a lot of site-ready locations that are available,” Black said.

He said the need for more site-ready locations has grown more acute as New Mexico’s economy has grown in recent years.

Thirty-six other states have site readiness strategies, Black said. He said New Mexico needs to do a statewide assessment of properties.

He listed out many elements that come into consideration: access to power, water, sewer and broadband and interstates; if there’s already infrastructure at the site; zoning and best use of the site.

That information will help the state go to lawmakers — the officials approving capital outlay requests — and share what investments would be helpful, Black said.

“If we can give our policymakers and our utilities that vision of ‘Here's where we envision opportunities for growth in these particular sectors,’” he said, further elaborating that it would allow the state to be proactive rather than reactive in terms of development.

Black said the EDD is still trying to figure out exactly how much money it would need.

EDD received $500,000 as part of the state’s fiscal year 2025 budget to use for site readiness studies. Black said that money is committed to public lands for a high-level dashboard analysis, looking at things like zoning, then creating an asset map.

“So when a developer calls and says, ‘We're interested and we have this X company we represent, and they need these three things,’ we can look into our database and say, ‘Here's the land that meets that criteria,’” he said.

Black said EDD is talking with the governor’s office about the best way to move forward and get funding discussed during the upcoming legislative session. He added that the agency is a little late in the budget cycle due to the timing of when he joined EDD. Gov. Michelle Lujan Grisham appointed him in early September.

“For the long-term competitiveness of our state, we do have to figure out how to create this site readiness strategy, like 36 other states have already done,” Black said.

Casey at the AREA luncheon proposed $100 million in state funding is needed for site characterization and pre-development work, then, down the line, $500 million to $1 billion to fund public infrastructure.

“I don't have the exact answer on what that looks like but figuring out the tools on how to fund public infrastructure in a significant way … — we think this is absolutely critical,” she said.

AREA doesn’t lobby but has draft legislation available on its website for site readiness policies and funding.