Duke City dimensions - Albuquerque, New Mexico economic development

New Mexico Business Journal, Sept, 1991 by Arlene Cinelli Odenwald, Bill Diven

Albuquerque: Moving on in hard times

DUKE CITY DIMENSIONS

In the '80s, "Megatrends" author John Naisbitt said Albuquerque was one of 10 cities of great opportunity; later he also picked the Duke City as one of the booming cities of the '90s.

Albuquerque is the only city in the country that made both lists.

In the same decade, Inc. magazine ranked Albuquerque high in company start-ups, job growth and fast-growing companies.

In 1990, Ryder Truck Rental reported that Albuquerque ranked sixth nationally on a list of 120 cities with more people moving in than moving out.

This year Albuquerque was pegged one of the nation's 10 Cinderella cities for the future.

All of that portends well for Albuquerque's future, but does not reflect the hard statistics as Albuquerque tries to muscle itself to stability before the turn of the century.

Albuquerque is getting off to a slow start.

In terms of new jobs, Albuquerque grew by 1.7 percent last year, compared to 5 and 6 percent in the early '80s.

Albuquerque's slump began in 1987 and the city has been growing an average of about 2 percent a year since then.

So far this year, growth has dipped even more. It was a mere 0.6 percent the first quarter of the year, and recent statistics indicate that Albuquerque's growth last April was zilch.

Brian MacDonald, director of the Bureau of Business and Economic Research at the University of New Mexico, attributes the slow growth to more than one factor.

The construction industry is in a severe depression; Albuquerque lost 30 percent of its construction jobs in the last three to four years.

The bankruptcy of Bellamah Corporation and ABQ Bank -- both with major raw land holdings on Albuquerque's West Side -- reduced the supply of development land and hindered single family home construction in the city.

The city is also paying the price for having overbuilt in the apartment, hotel and shopping center sectors.

Another major factor is the city's heavy dependence on the defense industry. Although Albuquerque did not suffer any major cuts, defense is such a large part of the Duke City's economy that no real growth in that sector will affect the city's growth curve.

For the last several months, Albuquerque's unemployment rate has been hovering between 5.5 and 5.8 percent. July statistics from New Mexico's Department of Labor reported that the jobless rate had risen two-tenths of 1 percent to 6 percent.

The higher unemployment does not mean Albuquerque is losing jobs, says Jim Covell, executive vice president of Albuquerque Economic Development. It does mean Albuquerque is not growing fast enough to satisfy the demand for new jobs. MacDonald sees hope in Albuquerque's future because of the number of new jobs that moved to Albuquerque over the last year.

One of Albuquerque's major strengths is its competitiveness with other cities in locating business.

"I feel that we have a lot of small successes that point to Albuquerque's competitiveness," says Covell, rattling off company names like Baxter Health Care, Martin Marietta, Metropolitan Life, Intel and Motorola.

He believes Albuquerque's growth will be in manufacturing and services.

According to the 1991 Albuquerque Business Outlook, strength will concentrate in local and state government as school teachers will increase because of rising student enrollment.

Health services will also provide new jobs this year, the report states, because the state expanded its eligibility pool for Medicaid.

On the other hand, real strong growth is hard to predict, MacDonald says.

That kind of growth would take something like the Space Systems Division moving to Albuquerque from California.

MacDonald, too, sees hope for the city's future.

He believes the city is beginning to bottom out from its woes of recent years.

Construction of single family homes are picking up, he says.

MacDonald also sees apartment building picking up soon, but he doesn't expect office or retail construction to improve for a few more years.

Developers watching

Not all of Albuquerque's major developers have disappeared.

Some are keeping a low profile; others like Albuquerque developer Steve Johnson are busy in other cities. Johnson, for example is involved in developing projects in El Paso and Portales.

When asked who Albuquerque's major developers were, Covell hesitated -- then said he could think of only one at the moment: Amrep Southwest Inc.

If Covell had been asked that question five years ago, however, names like Jack Clifford, Paul Silverman, Rick Leon, ABQ Bank's Albuquerque Community Development and Steve Johnson would have gushed out.

Albuquerque has been waiting to find out whether California's Space Systems Division and its 10,000 plus jobs would move to the Duke City.

Not this year or maybe even the next or the next, it seems.

The Space Systems Division wasn't on the list when the Air Force's April 1991 base closure list came out. That was a breather for the California workers at SSD, but a disappointment in Albuquerque.

Closures will not be reconsidered until 1993, says Covell. What will happen will depend on a whole different set of factors.