Of the 21 projects the New Mexico Partnership tried to bring to the state in the last two years, it lost almost 40 percent of them because of real estate.
Those are the statistics found in a new spreadsheet from the New Mexico Partnership, the state’s economic development marketing group. Eight projects with the potential to hire 1,900 people didn’t come to the Land of Enchantment simply because there aren’t enough buildings, or the right kind of buildings, said Steve Vierck, president and CEO of the Partnership.
New Mexico Partnership markets the state at trade shows and meets with site selectors in the hopes of luring companies here. Lately, the organization has seen increased interest in companies wanting to move or expand here due to the state’s improved tax climate and the new closing fund that will go into effect this summer. But there’s a problem: There are few suitable office buildings, warehouses or spec spaces for them.
“Normally it’s labor, but (in this case) it’s existing buildings,” Vierck said. “Seventy percent of our prospects need an existing building. You have to have a hook, and a major challenge now is finding good buildings. There’s extreme scarcity.”
There are many vacant or under-leased buildings in the state, Vierck said, but most don’t fit the class-A requirements of companies, or they’re not large enough. He gave an example of one of the projects, code named “Symmetry,” which needed a plug-and-play building large enough to house up to 1,000 call center workers, with parking. None were available.
Santa Teresa, which has one of the few booming economies in the state, is particularly hurting — despite recent efforts to build a new business park there.
“We’re down to one building in Santa Teresa, one 8,000-square-foot building without a bathroom, and it’s that bad. I kid you not,” Vierck said. “But where there is an existing building, there’s keen interest. Multiple interest. Any large functional building, there’s interest.”
From Roswell to Farmington, many buildings still don’t meet requirements for industries the state is trying to attract, like manufacturing, Vierck said.
“Many are 20-foot clear (ceiling) heights. But our guys want 30 feet or more,” he said. Those buildings are scarce in New Mexico and developers have seemed reluctant to build large speculative buildings.
“Labor is a driver, but these guys want an existing building,” he said. “And then look at Phoenix. There’s a lot of good buildings there, and the price is going down, and we compete with them. Is price important? Yes.”
Of the projects that declined to come to New Mexico for reasons other than real estate, Vierck said, several were wooed by other states’ incentives, others could not find capital to finance their projects here and, for a couple, New Mexico didn’t have the right type of labor.
Vierck polled the companies about their reasons for not choosing New Mexico. Here’s what they said:
• Project Milan, a warehouse distribution site looking to hire 40:
“Lack of existing, suitable building/real estate.”
• Project Symmetry, a call center that was planning to hire 1,0000:
“Lack of large plug-play office buildings.”
• Project Distant, a call center that was planning to hire up to 500:
“Lack of building options for a training center.”
By: Dan Mayfield (Albuquerque Business First)
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