Mayor Keller’s Lackluster Economic Development Department

In a unanimous 9-0 bi-partisan vote, the Albuquerque City Council approved a resolution supporting a proposed economic development project that would include $2.7 million in financial incentives for a sports and entertainment complex to be built at the former Beach Waterpark site.

For the past 14 years, the property at Montano and I-25 has been a dirt lot.

As part of a resolution, the City Council supported funding of $500,000 from the city’s general fund to provide economic development assistance for land, building and infrastructure at the proposed site.

The $2.7 million in incentives will include gross receipts tax revenues of $2.3 million and capital improvements funding of $326,000.

Originally, $500,000 was going to come from the city’s Local Economic Development Act funds, but the Keller Administration objected to the funding.

https://www.abqjournal.com/1180698/city-council-agrees-to-back-proposed-topgolf-complex-ex-resolution-includes-500000-from-the-citys-2018-general-fund.html

Topgolf, a Dallas based corporation, will be the recipient of the incentives.

Topgolf promises to build a three-story tall netted driving range, with a bar and kitchen.

City councilors are working on what Topgolf will have to give to the city in return, before the council gives final approval of the project.

Topgolf has yet to commit in writing what it will do for the city in exchange for the incentives.

The city council believes the golf complex will create 300 construction jobs and another 350 service jobs.

Efforts are being made to reach a final agreement on the terms of the proposed project participation agreement before the development commission meets to approve the project and before the city council gives the project final approval.

KELLER ADMINISTRATION OBJECTIONS

The Keller Administration wants the entertainment company to play by the rules before it can receive $2.7 million from the city.

Economic Development Director Synthia Jaramillo said Topgolf was “breaking the rules” when it comes to the city incentives being offered.

Jaramillo claimed that Albuquerque won’t win by promising millions to the entertainment complex without demanding much in return.

One of Jaramillo’s major concerns is Topgolf will primarily provide low-wage, part-time jobs.

According to Economic Development Director Synthia Jaramillo:

“Topgolf is an entertainment venue, therefore it does not qualify as economic-based company. … So, when we’re talking about economic-based jobs, those are jobs or employers that provide higher wage jobs.”

https://www.kob.com/albuquerque-news/topgolfs-future-in-albuquerque-up-in-the-air/4935953/?cat=500

Given the lack luster performance of Keller’s Economic Development Department and given Albuquerque’s extremely high unemployment rate, the projected 600 jobs that the Topgolf project will likely produce is nothing to sneeze at, even if not the high paying jobs the Keller Administration wants.

In this case, an eye soar vacant lot will be developed after 14 years.

One approach would be is to have Topgolf agree to having a satellite corporate office in Albuquerque with additional high paid professional staff in an effort to have it be an Albuquerque based company.

KELLER’S ECONOMIC DEVELOPMENT DEPARMENT

The mission statement of the City of Albuquerque Economic Development Department states its purpose is to “develop a more diversified and vital economy through the expansion and retention of businesses; develop appropriate industry clusters and recruit target industries; and assist new business start-ups and promote the film and music industries.”

According to its mission statement, the department supports the tourism and hospitality industries through collaboration and oversight of the City’s contractors.

The department also fosters international trade efforts and increased international business opportunities for Albuquerque companies.

The Keller Economic Development Department employs 11 full time employees with an approved annual budget of $3.9 million.

The 2018-2019 city council approved budget for Keller’s Economic Development Department’s only includes funding for the department’s core programs.

Those programs include supporting local businesses, aligning expenditures to keep tax dollars in the local economy “instead of flowing out of state.”

The approved budget also contains funding recruiting new businesses.

https://www.abqjournal.com/1178797/mayor-signs-citys-1-billion-budget.html

The approved 2018-2019 budget for the Economic Development Department alocates $360,000 in funding for continued economic development investments and includes:

$125,000 for Transit Oriented Development (TOD) corridors investment. (TOD is a type of development that includes a mixture of housing, office, retail and/or other amenities within reach of public transportation.)
$55,000 thousand for small business development,
$30,000 for Listen! ABQ. (Listen! Alb is a web site that promotes local music and music events which generate millions for the local economy.)
$150,000 for various local economic development investment projects.

The approved general fund budget for the department includes:

$1.6 million for “economic development” activities
$199,000 for the International Trade Program
$2.087 million for the convention center

COMMENTARY

Albuquerque has one of the highest unemployment rates in the country.

For the last 8 years, the prior administration failed to attract a single major corporation or company to relocate to Albuquerque.

After over six months in office, it is laughable that the city’s Economic Development Director objected so strongly to the Golftop project given the fact that the Department has failed to propose any meaningful economic development programs.

The Keller Administration approved budget of $3.9 million for the Economic Development is so a meager as to be an embarrassment given the fact that the city has a total operating revenue and approved budget of at almost a billion dollars at $955,300,000 for fiscal year 2018-2019.

To add insult to injury, the City Council enacted a one-eighth of a cent tax increase that will generate an additional $55 million a year.

The gross receipts tax increase was enacted by the city council in anticipation of a projected $44 million deficit.

Gross receipts tax revenues from the state are now being reported in excess of what was projected.

The city is seeing a 4% to 6.8% increase in gross receipts tax revenues compared to last year from the state as a result of increase in business activity.

https://www.abqjournal.com/1178079/abq-sees-bump-in-gross-receipts-revenue.html

Candidate for Mayor Tim Keller proposed as a “big idea” creating personal or individual Tax Increment Districts (TIDS), more use of industrial revenue bonds and tax incentives to attract new industry to Albuquerque and create jobs.

As Mayor, Keller failed to seek any major increased appropriation for economic development in the approved 2018-2019 budget.

As far as economic based jobs that provide higher wage jobs, the Keller Administration has yet to announce anything different, nor fund anything different, than what has been going on at city hall for the last 8 years.

Albuquerque can and must expand and find better ways to use financial incentives for economic development such as tax increment districts (TIDS), industrial revenue bonds, and even fund economic development investment programs such as initial startup funding with claw back provisions.

A good start would have been funding a $20 million initial startup fund for new businesses with claw back provisions with the program administered by the Economic Development Department.

The initial start up fund could have been funded by the newly enacted gross receipts tax.

Albuquerque needs to pursue with a vengeance real growth industry like heath care, transportation and manufacturing, and especially the film industry to diversify our economy, and yes, the recreational industry which is what Golftop represents.

New Mexico has some of the finest golf courses in the country on Indian tribal lands and within minutes from Albuquerque.

Public-private partnerships in the growth industries where ever possible should be encouraged and developed.

Albuquerque’s taxpayers must be convinced by Mayor Keller and the City Council of the importance of investing in major projects.

CONCLUSION

The Keller Administration has yet to announce any economic development plan that is any different than the previous administration.

If anything, it is identical.

Mayor Keller has failed to propose any of his “big ideas” he suggested as a candidate.

Before the Director of the City’s Economic Department can be taken seriously, it is suggested that the department get serious about economic development.

The department needs to come up and offer a viable economic development plan for the city to conform with Mayor Keller’s promises made during his campaign.

Until then the city can expect nothing new or different out of the new Keller administration that is any different than what we saw the past 8 years of the failed Berry Administration when it comes to economic development.

Albuquerque needs a community inspired economic development plan.

For more on a “Community Inspired Economic Development Plan” see:

http://www.petedinelli.com/2017/10/12/new-mayor-needs-a-community-inspired-economic-development-plan/

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About

Pete Dinelli was born and raised in Albuquerque, New Mexico. He is of Italian and Hispanic descent. He is a 1970 graduate of Del Norte High School, a 1974 graduate of Eastern New Mexico University with a Bachelor's Degree in Business Administration and a 1977 graduate of St. Mary's School of Law, San Antonio, Texas. Pete has a 40 year history of community involvement and service as an elected and appointed official and as a practicing attorney in Albuquerque. Pete and his wife Betty Case Dinelli have been married since 1984 and they have two adult sons, Mark, who is an attorney and George, who is an Emergency Medical Technician (EMT). Pete has been a licensed New Mexico attorney since 1978. Pete has over 27 years of municipal and state government service. Pete’s service to Albuquerque has been extensive. He has been an elected Albuquerque City Councilor, serving as Vice President. He has served as a Worker’s Compensation Judge with Statewide jurisdiction. Pete has been a prosecutor for 15 years and has served as a Bernalillo County Chief Deputy District Attorney, as an Assistant Attorney General and Assistant District Attorney and as a Deputy City Attorney. For eight years, Pete was employed with the City of Albuquerque both as a Deputy City Attorney and Chief Public Safety Officer overseeing the city departments of police, fire, 911 emergency call center and the emergency operations center. While with the City of Albuquerque Legal Department, Pete served as Director of the Safe City Strike Force and Interim Director of the 911 Emergency Operations Center. Pete’s community involvement includes being a past President of the Albuquerque Kiwanis Club, past President of the Our Lady of Fatima School Board, and Board of Directors of the Albuquerque Museum Foundation.