Keller Goes From “F” to “D-” For Economic Development Strategy

On July 20, 2018, after a near full 8 months in office, Mayor Tim Keller finally unveiled his administration’s economic development strategy for the city.

https://www.abqjournal.com/1198935/mayor-unveils-economic-development-strategy-for-abq.html

Mayor Keller held a press conference at the Glorieta Station development downtown.

The Keller Economic Development plan has six areas it will focus on:

INCREMENT OF ONE: supporting homegrown entrepreneurship and “game-changer” business already in the community.

COMMENTARY: The operative word is “already” in the community but little mention of newly locally created startup businesses. The suggestion that new businesses to add one more employee (“an increment of one”) for the sake of economic development does not make much sense to a business owner who does not need the additional staff nor who cannot afford the additional overhead.

SMART RECRUITMENT: recruiting business in a strategic way. Recruitment outside of the state will focus on businesses that align with the city’s priorities.

COMMENTARY: The extent of financial incentives to be offered to businesses to be recruited will determine the extent of success and a businesses own priorities may not align with the city’s.

INTERNATIONAL BUSINESS: capitalizing on “unique placement” along two interstates with an international airport and foreign trade zone. Keller cited the Railyards as an example of the “Placemaking” initiative. In 2007, the city purchased the Railyards for $8.5 million and it is now being used for weekend markets and other events

COMMENTARY: This is identical to what I proposed 4 years ago when I ran for Mayor. Further, the north-south runway of the airport has now been taken out of all service and no longer exists having been graded away with an industrial park being developed on the city land.

CREATIVE ECONOMY & FILM: emphasizing culture, cuisine, art music and film industries as key to economic development. The Keller Administration wants to establish a code of conduct for film productions here.

COMMENTARY: For the past 16 years, the City’s Economic Development Department has had a “Film Industry Division” that has assisted the film industry with support services and it has been very successful.

INTERNATIONAL MARKETING: The city will continue to market itself to businesses internationally, targeting Israel, Singapore, Taiwan, Germany and Japan, and is exploring how to bring a direct flight to Guadalajara, Mexico, to the Albuquerque International Sunport.

COMMENTARY: Trying to market the city to the foreign countries listed may not make much sense in the age of Trump with the tariff wars and the Economic Development Department’s budget (see below: $199,000 for International Trade Program) is so meager as to be insignificant for international trade promotion. The word “international” referring to the Sunport is rather embarrassing seeing that in order to catch a plane for an international flight one must go to Chicago, Atlanta, New York or Washington, DC.

CITY BUYING LOCAL: Directing more government purchases to local businesses. City departments will be required to seek out local vendors with vendor registrations made available to all who want to register to do business with the city.

COMMENTARY: This is not new. City hall for at least the past 16 years has provided preferential treatment ratings or points to local venders wanting to bid on city business through the Request for Proposal (RFP) process.

KELLER’S ECONOMIC DEVELOPMENT DEPARTMENT

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 for the 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 allocates $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 Economic Development Department includes:

$1.6 million for “economic development” activities.

$199,000 for the International Trade Program.

$2.087 million for the convention center.

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.

AN EQUITY PROFILE OF ALBQUERQUE

On June 19, 2018, a report entitled “An Equity Profile of Albuquerque” was released by the Keller Administration.
You can read the entire report here:

http://nationalequityatlas.org/sites/default/files/ABQ_Profile_Final.pdf

The report is a racial profile of the city and the impact race has on the city economy.

The Equity Profile Report examined the indicators of economic and social inclusion and found that “equitable growth” leads to a stronger local economy.

In the report, and “equitable city” is defined as “when all residents – regardless of their race/ethnicity, nativity, gender, income, neighborhood of residence, or other characteristics – are fully able to participate in the city’s economic vitality, contribute to the region’s readiness for the future, and connect to the region’s assets and resources.”

(See “An Equity Profile of Albuquerque”, page 11).

Not surprising, the report found persistent inequities by race and gender are holding the city back from having a stronger local economy.

The report identifies 22 industries that are expected to grow over the 10-year period from 2014 to 2024.

The report also identified 22 specific occupations that are expected to grow over the 10-year period from 2014 to 2024.

When the report was release, Mayor Keller said the report would serve as a guide for the city’s newly reorganized Office of Equity and Inclusion.

Based on the economic development plan Keller announced, you can only wonder if the Equity Profile of Albuquerque was even read by Keller or Keller’s Economic Development Department given the fact there is no concentration on the cities job growth industries with no real investment by the city other than public encouragement.

COMMENTARY

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.

After 8 months in office, you would think the Keller Economic Development Department could do better than the “none existent” economic development plan announced by Mayor Tim Keller.

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 be funding a $20 million initial startup fund for new local businesses with claw back provisions with the program administered by the Economic Development Department.

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 the recreational industry.

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 economic development in the growth industries and not the service industries.

Our elected officials and the business community, including the Greater Albuquerque Chamber of Commerce, Albuquerque Economic Development (AED), the Economic Forum, NAIOP and the banking, finance and development industries, need to think long and hard about finally doing something to attract new industry instead of just being satisfied with protecting their own financial interests and bottom lines.

Mayor Keller in announcing his economic development said:

“This is not a silver bullet, not a single idea. … It’s sort of the opposite of that … It’s about creating an inclusive and safe city for all of us.”

Noble words about “creating an inclusive and safe city for all of us”, but words do not make you safe and do not put food on the table when you have no job and in debt.

On June 8, 2018, the Albuquerque Journal published my guest editorial commentary where I gave a “report card” regarding Mayor Tim Keller’s job performance for his first 6 months in office giving him a “C” average for all around job performance.

You can read the entire editorial comment here:

https://www.abqjournal.com/1183092/keller-earns-a-c-in-his-1st-semester.html

The grades given were “A” for Public Relations, “B” for Political Appointments, “C” for Public Safety, “D” for DOJ Reforms and “F” for Economic Development.

A blog article listing grades, accomplishments and missteps of Keller’s first 6 months in office can also be read here:

http://www.petedinelli.com/2018/06/08/mayor-tim-kellers-first-semester-report-card-and-low-test-scores/

Originally, Mayor Keller was given an “F” in Economic Development for his failure to outline or propose any economic development plan or strategy during his first 6 months in office to bring new industry and jobs to Albuquerque.

Mayor Keller now has gone from an “F” to a “D-”for Economic Development.

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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.