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Downtown Albuquerque has had some big wins this year. More breweries are opening in the urban core, new apartments and a grocery store are being built, and Molina Healthcare of New Mexico transitioned 800 employees to its new headquarters near City Hall.

Now, Rural Sourcing Inc., which announced yesterday it would open a development center in Albuquerque, has its eyes set on Downtown.

Ingrid Miller, the COO of Rural Sourcing Inc., said the company has looked at several Downtown office spaces.

“We need something in the next few weeks,” said RSI chief operating officer Ingrid Miller.

She said the company is looking for a temporary location between 5,000 and 7,000 square feet. It’ll use that space to hire its first tech employees.

During the set up, the company is shopping for a larger, permanent place, either for lease or for sale that could house about 125 employees in all. Miller said RSI has hired Scott Throckmorton with ARGUS Investment Realty to find a space.

Gov. Susana Martinez said yesterday that the company will use $250,000 in Local Economic Development Act (LEDA) funds for building improvements. Additionally, Albuquerque Mayor Richard Berry said the city will contribute $250,000 if the company moves Downtown.

The $500,000 that’s potentially available in building improvements has property owners interested.

RSI CEO Monty Hamilton told Business First’s sister paper Atlanta Business Chronicle that the company seeks out older historic buildings in downtown areas for its software development centers and then renovates them into workplaces with a “hip, cool vibe.”

“Being a part of that revitalization…is a central part of our business model,” Hamilton said.

RSI’s Atlanta-based headquarters are in the historic Biltmore Hotel. Its Augusta offices are located in a renovated mill. And the company is a year into the process of renovating a historic 1930s Buick dealership for its offices in Mobile, Alabama.

The pressure for Downtown Albuquerque stakeholders is whether it could deliver a renovated space by January, which is when the company is aiming to be in its new center.

“It’s definitely aggressive,” Miller said. “We’re hoping to find something that’s kind of 90 days to move in. We’ve toured a bunch already and there are some options that would definitely require a year of renovation.”

RSI’s requirements are pretty specific. The company needs to start with about 7,000 square feet of space, with the possibility of later expanding to 15,000 square feet. It also needs a kitchen and a room for entertainment. Much like other tech companies, Miller said RSI employees can take a break to play video games or use a foosball table.

Miller said the company wants to find the right space, and aren’t trying to rush into buying something.

“We’ve seen some things we think we could turn around somewhat quickly, but if our hearts are won over by a building, [renovation] is something we’re not afraid to do,” Miller said.

By: Stephanie Guzman (Albuquerque Business First)

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At the LIN September 2015 Meeting on September 23, 2015, 16 excellent properties were presented. Thank you for presenting properties and attending the meeting! Thank you to our host, 4001 Jefferson Plaza NE.
View September LIN properties here.
View September LIN PowerPoint presentation here.
 

When it comes to “fair taxes,” a new report has ranked New Mexico 38th in the country — meaning that consumers and businesses alike are hit harder here than many other states.
According to WalletHub’s 2015 Most & Least Fair Tax Systems report, New Mexico has the 12th “least fair” tax system in the U.S. — a conclusion gleaned from both consumer surveys, as well as data from the Institute on Taxation and Economic Policy (ITEP) and the U.S. Census Bureau. Data showed that while New Mexico relies significantly less on personal income tax and property taxes, the state relies heavily on sales, excise and other taxes.
One of New Mexico’s more well-known excise taxes is the gross receipts tax, which taxes the total gross revenues of a company. In New Mexico, the gross receipts tax rate varies from 5.125 percent to 8.6875 percent depending on business location. Gross receipts taxes have been a hot topic in New Mexico of late, with many business leaders speaking out against it.

Jill Gonzalez, an analyst for WalletHub, says the report is a mixed bag for New Mexico.

“For businesses in New Mexico, [the data shows] that [the rankings] are actually a good thing. New Mexico just reduced the corporate tax rate, so that’s better news. From a consumer point of view, it could trickle down and consumers will feel the effects of that soon,” she said.

However, she also said that the state’s tax on the lower and middle-classes is hampering economic growth. Data from ITEP shows that the bottom 20 percent of earners carry the highest tax burden in most states and New Mexico’s middle class is considered one of the most overtaxed in the country; both classes are taxed about 10 percent.
By comparison, the top 20 percent of earners are taxed the least — about 5 percent, according to Gonzalez. If those with the smallest incomes are taxed the most, it equates to less consumer spending and less revenue and profit for businesses in the state.
Still, tax fairness is debatable. Using other measurements, a recent report ranked the state as one of the lowest-taxed in the U.S.
By: Sal Christ (Albuquerque Business First)

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Money will pay for streets, economic development
Las Cruces >> Las Cruces city councilors approved the issuance of up to $28.5 million in debt, which will be repaid over 20 years using revenue from a 2014 tax hike. The bond proceeds will be combined with a year’s worth of unspent GRT money and directed to three types of projects: economic development, facilities improvements and city streets, city officials have said.
The item had been up for a vote in early September, but a “super majority” of the City Council — at least six people — wasn’t present for the vote on the proposed bond issuance, prompting the item to be postponed until Monday.
All six councilors and Mayor Ken Miyagishima attended Monday, and they unanimously voted to issue the bonds after a presentation by Eric Harrigan of RBC Capital Markets, the city’s bonds adviser.
Harrigan said the bond market is favorable to the city, so it should get a lower interest rate when selling the bonds, set to happen at city hall on Thursday. The city has an AA3 bond rating, which officials said works in the city’s favor.
Councilors posed questions to Harrigan, but there wasn’t debate about the decision.
Harrigan estimated the city could get about $27 million in the sale.
The exact amount of the bond package will boil down to the interest rate the city gets on the debt, said City Manager Robert Garza after the meeting. “On Thursday, investors compete for the sale by proposing various interest rates,” Garza said in an email. “Low rates could yield higher loan — bond — amounts. The market on that day at that moment will dictate exactly what we see in terms of attractive interest rates.” Miyagishima said it was a positive that the city’s bond rating is so strong because it means “better rates and lower cost for the public.”
A controversial 3/8 of 1 percent hold harmless gross receipts tax, which took effect in mid-2014, is the source of the money for bond repayment. Councilors earlier decided to use the approximately $36 million generated by the bond and GRT money in three areas — 45 percent (roughly $16.2 million) for street improvements; 20 percent ($7.2 million) for energy-efficiency improvements to city facilities; and 35 percent for economic development. Among the projects considered for economic development are an expansion to the convention center, a sound stage for TV and film productions, a “spec building” and incubator projects targeting small businesses.
Garza said about $1.9 million — out of an estimated $8 million per year collected from taxpayers — will be used each year to repay the bonds. Out of the remaining sales tax proceeds — roughly $6 million per year — a portion will be put into savings, while the rest will be used in the city’s general budget, Garza said.
The council is set to meet in a special meeting Thursday afternoon for a final approval after the bond sale.
Incentive awarded
Also, the council approved issuing $60,000 in economic development incentive funding for a drone company, ARCA Space Corp., to lease about 14,000 square feet of space in two hangars at Las Cruces International Airport.
The dollars will be provided to the company via the Local Economic Development Act, New Mexico’s version of a closing fund, city officials said. While LEDA projects locally have tended to combine both state and city funds, city economic development coordinator Gary Camarano said the ARCA incentive is stemming from the city only, at least for now. However, the state is considering an award as well, he said.
Camarano said a condition of the funding is that the company create at least 20 jobs within three years. And once it has created the 20 jobs, even if it’s before the three-year mark, ARCA Space Corp. must maintain them for at least two years. The company has hired 11 personnel, Camarano said. And it’s set to start light manufacturing work later this week from the airport. “It puts the project right up to speed,” he said of Monday’s approval. “We’re happy to have an aerospace company join us in Las Cruces.”
The company fits into the city’s goals for promoting economic development in that it’s both a light manufacturing operation and an aerospace business, Camarano noted. “We want to get above average paying jobs, and these jobs pay well above the median in the county,” he said. ARCA is slated to do testing at both the Las Cruces airport and Spaceport America in southeastern Sierra County, city officials said.
By: Diana Alba Soular (Las Cruces Sun-News)
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