Border, outdoors and more: A look at NM's economy

He describes the industrial park in Santa Teresa like the movie “Field of Dreams.”

“If you build it, they will come,” said Jerry Pacheco, the executive director of the International Business Accelerator, a nonprofit trade counseling program of the New Mexico Small Business Development Centers Network.

There is a complex at the border between Santa Teresa and Mexico that has become a major factor in New Mexico’s unique business environment.

It was built in the desert scrub outside of El Paso, Texas, 30 years ago. Today the complex supports more than 7,000 jobs and has $2 billion of local economic impact annually, including $47 million in state and local taxes, according to a study by New Mexico State University.

There are also spec buildings under construction that will be used to recruit more business to the complex.

“U.S.-Mexico trade is thriving,” Pacheco said.

There’s currently 1.5 million square feet of space under construction on both sides of the border near Santa Teresa, Pacheco said. There are 78 companies in the industrial park. Electronic products and parts for the automotive industry are some of New Mexico’s main exports. New Mexico exported $4.9 billion in goods in 2023, which marked an 81% increase from 2013.

The Bureau of Economic Analysis calculated New Mexico’s gross domestic product at $130.3 billion in 2023.

“A lot of people don’t realize that New Mexico has an automotive base in Santa Teresa,” Pacheco said.

The Santa Teresa Port of Entry opened in 1993 and Pacheco has been involved with the port since its start. He said it is the most likely way for New Mexico to diversify its economy away from relying on oil and gas production.

The diversity of the industrial complex that has spawned from the port of entry speaks for itself.

When the port opened, the Mexico side didn’t have paved roads and the New Mexico side had administration working out of mobile buildings that were previously used by the state prison system for conjugal visits, Pacheco said.

It took time to build up an industrial base. Today, Union Pacific has a large rail system in the complex. There are cable and copper wire companies. A Louisiana company trades pepper mash. It’s the largest livestock crossing on the U.S.-Mexico border.

“I always tell people, especially legislators, the state has been hooked on petroleum, we’re hooked on tourism, we’re hooked on government spending,” Pacheco said. “The best way to diversify our economy is through the Santa Teresa industrial base.”

It took legal maneuvering to turn Santa Teresa into a major import/export hub. For example, Pacheco said that in Mexico trucks and their cargo can weigh up to 96,000 pounds. But cargo coming into the U.S. had to weigh 80,000 pounds or less. Pacheco worked with New Mexico State Police, the New Mexico Department of Transportation and state lawmakers to create a 12-m ile overweight zone so larger trucks could pass through Santa Teresa. That has significantly increase trade.

On top of a mesa overlooking El Paso, Texas, Santa Teresa is in a different media market than central and northern New Mexico. It can be overlooked for its role in New Mexico’s economy.

What could the state do to keep Santa Teresa’s momentum going forward?

“One word: Infrastructure. We need to invest in a wastewater system,” Pecheco said. “The day you can’t flush your toilets is the day we stop recruiting businesses.”

Recruiting companies

Back in Albuquerque, the Albuquerque Regional Economic Alliance works to recruit and retain companies to Bernalillo and surrounding counties.

Danielle Casey, the president and CEO of AREA, said she is focused on three industries: aerospace and defense, biolife sciences and renewable technology.

“I’m hyper-focused on the three that have the highest potential for investment and job and career opportunities that can truly change the market and outcomes for people,” she said. “What I want to see over time is that we drive that forward and we start seeing higher average household incomes.”

When it comes to recruiting businesses, she said Albuquerque competes with other mid-size markets in the Mountain West, such as Colorado Springs, Salt Lake City, Phoenix and Tucson Arizona and El Paso.

AREA will reach out to companies in specific industries and try to get them interested in the Albuquerque community. Among other selling points, the organization explains the different tax benefits that are available.

“We’re seeing so many demands across the board for high-power requirements,” she said. “We need that public dollar investment in infrastructure because otherwise the company isn’t going to come. If the company does come, you’re getting ten-fold back on your investment.”

What could make the Albuquerque area more attractive to a business looking to expand? Casey said water, power and infrastructure are in need of investment.

“These renewable energy projects are awesome,” she said. “Well, a solar chip manufacturer or panel manufacturer has significant water and power requirements.”

A solution, she said, would be to invest in infrastructure or calculate the economic impact of a project and refund companies for investments if they meet certain metrics in terms of job growth and economic development.

“We’re right now using (Local Economic Development Act) funds, which is a deal-closing fund, to solve for infrastructure on the back end when we have a company commitment,” Casey said. “I would like to get us in the practice of proactively planning out sites and then marketing them the way we want.”

The great outdoors

Gov. Michelle Lujan Grisham’s administration has identified nine target industries to enhance and diversify the state’s economy.

One of those industries, which separates New Mexico from other states, is outdoor recreation. For example, the state is home to mountain ranges, high desert landscapes and world-class fly fishing.

In 2022, outdoor recreation accounted for nearly 2% of the state’s gross domestic product, or $2.4 billion and supported 28,000 jobs, according to ORR.

In 2019, New Mexico created an Outdoor Recreation Division to support the industry, making it one of the first states to do so. From the Organ Mountains outside of Las Cruces to the Bisti/De-Na-Zin Wilderness outside of Farmington, the state has lots of unique getaways.

“It’s one of our biggest assets in New Mexico,” said Karina Armijo, the director the state’s Outdoor Recreation Division. “In the surrounding and rural areas, especially, our biggest asset is the outdoors.”

The division has multiple missions. The division aims to increase equitable access to the outdoors and environmental stewardship, as well as economic prosperity.

Since its inception, the division has supported 72,000 New Mexico children to learn outdoor activities.

The division has a Outdoor Recreation Trails+ grant. Last month, the division partnered with Central New Mexico Community College Ingenuity’s ActivateNM to create ActivatOR Outdoor Recreation Growth Accelerator, a free business accelerator tailored to outdoor recreation businesses and startups in the state.

“Many of these locally owned businesses that have been in business for 10, 20 30, even 40 years, they don’t have a succession plan,” Armijo said.. So when we heard that, we wanted to definitely implement that into the growth accelerator program, to make sure that we’re investing in them and helping them to try to figure out how to move the business on.”

The division recently worked to make Lordsburg an official stop on the Continental Divide Trail. It made the town of a little more than 2,000 the first, or last, stop on the entire trail. Armijo said it will likely have a robust economic impact on the town in the coming years.

She said a key factor to supporting the outdoor recreation industry is protecting certain places from other types of development.

“When you have these places that are protected. And you’re able to access them through outfitters, like running the chama or hiking or fly fishing and things like, she said, “That that really supports the outdoor (industry.)”