San Juan County Manager Mike Stark and Farmington Economic Director Warren Unsicker, citing rising inflation, declining oil and gas revenue, and high unemployment, remain optimistic that new projects will attract new industry.
“Things are humming along. We’ve got a lot of projects in the works. With all the new grants that the feds are rolling out, we’ve got our hands full,” said Unsicker, referring to the $1.2 trillion Infrastructure Investment and Jobs Act, passed Nov. 6, 2021.
Both intend to continue working with groups including Four Corners Economic Development to promote outdoor recreation business and tourism and to bring long-range projects like a proposed freight rail line and a two major transportation proposals to fruition.
Pinon Hills Boulevard Extension Project is scheduled for Farmington with Phase 1 of the construction from Main Street to Hubbard Street – to begin in March.
And Phase 2 of the East Aztec Arterial Project is under review by New Mexico Department of Transportation, with an expected finish in January or February.
Unsicker considers the redesign and rebuild --- with turnabouts and widened sidewalks --- on Main Street in downtown Farmington, to be a “positive step forward.” “Downtown has been a wonderful success on multiple fronts. It turned out to be a “little bit of blessing” that construction was going on during the shutdown due to the pandemic …. while some businesses were closed.”
He said 16 businesses have come into downtown since completion. “We’re seeing people move here after they’ve looked around town and gone downtown and have seen what we’ve invested in.” “They say this is a place that’s investing in itself, taking pride and we want to be a part of that.”
Stark, on the other hand, focused on the need for new jobs.
“With the erosion of long-standing, economic-based, high-paying, middle-class jobs from the extractive industries in San Juan County, it has been a high priority of the County Commission to find ways to diversify our economy,” he said, adding that the county’s recently adopted five-year plan dedicates “eight of our 20 initiatives” to economic development.
About 1,500 jobs disappeared with the closure of the San Juan Generating Station in September, even as job growth in the next 10 years is expected to be 18.2% in the county, compared with a U.S. average of 33.5%.
“We’re certainly an economy that’s undergoing some change,” Stark said. The station was the second-largest taxpayer in the county, behind Four Corners Power Plant.
“It’s not only the tax base, it’s the jobs that go with it,” Stark said.
The New Mexico Energy Transition Act, passed in March, 2019, created the opportunity for up to 450 megawatts of power to be replaced by two solar projects in the county. Industrial revenue bonds were issued for both projects, now being developed by D.E. Shaw Renewable Investments Co. (DESRI). One project is 300 megawatts; the other, 130 megawatts.
Construction will create short-term jobs, lasting about a year. When complete and operational in 2024, one of the solar facilities would require about 10 people to run, Stark said.
Farmington and San Juan County officials face a challenging set of economic data.
The unemployment rate in San Juan County was at 5.2% in September, according to the U.S. Bureau of Labor Statistics, compared with 5.3% in August and a year-to-date high of 6.6% in January. Although the figures might not reflect the “actual” unemployment rates, they compare to a U.S. unemployment rate of 3.5% in September and 3.7% in August.
The average income of a county resident is $21,992 a year, compared with $28,555 nationwide, with household income at $48,824, compared with $53,482 nationwide.
The tax rate for San Juan County is 7.7%, compared with 7.3% nationwide. The income tax rate for San Juan County is 4.9%, and 4.6% nationwide.
The freight rail project, discussed for years, took a step forward in February 2020 after former county Commissioner Jack Fortner and Navajo Nation President Jonathan Nez agreed to a feasibility study.
On Sept. 1, 2021, the county received a $2 million BUILD planning grant from the U.S. Department of Transportation that is being administered by the Federal Railroad Administration. HDR Inc. was selected to provide engineering services. The analysis will examine the freight traffic demand and other relevant factors, such as input and output.
Two public information meetings were held last month to share “the what, the why and the how,” said Stark, who has assumed the lead role for the project. “We’re at the very initial stages of actually soliciting input.”
He said freight rail spur from the I-40 Burlington Northern Santa Fe line to San Juan County and the Navajo Nation was a high priority in the strategic plan and would “open up the doors of economic opportunity.”
“Once that study is done, the hope is there will still be some of these federal programs and funding that we’ll be able to apply for,” Unsicker said.
“We’re a little bit landlocked … we don’t have interstate, we don’t have rail, and we don’t have a commercial air service,” Unsicker said.
Businesses such as PESCO Inc., Raytheon Missiles and Defense, and Navajo Agricultural Products Industry would be able to ship large pieces of equipment more cost-effectively to the coasts, allowing for international shipment, he said.
“On the other end of that equation, all your raw materials become a lot easier to get here, as well. You think about buildings materials, steel, wood, even some retail goods – automobiles … put them on rail cars.”
“We’ve invested over $1.2 million from the state recreational trails program fund to enhance over 30 miles of mountain bike and OHV trails here in SJC,” Stark said.
The mountain bike skill park north of Farmington on Bureau of Land Management land is part of that effort.
Since taking the city’s development job in 2019, Unsicker has pushed hard for outdoor recreation and developed the Outdoor Recreation Industry Initiative, with its goal to build a high-level outdoor recreation infrastructure to stimulate tourism.
Unsicker called it a “three-pronged approach” with his department, the Convention and Visitors Bureau and the Parks Department. By using grant funding, they developed trails, and he believes they have inspired entrepreneurs to join the effort.
Further, a city incubator project acquired a building from an oil/gas remediation project that the city leases to outdoor businesses Desert River Guides Rafting Co. and the Bear Automotive company, which offers off-road vehicle repair, fabrication, rescue and touring services.
Unsicker sees “access to distribution” as a major obstacle.
“We need to make a business case for how they get their things to market,” he said. “It’s why we focused too on expanding our airport (runway system), such that it can now handle jet service.”
He’s also focused on “value-added agriculture.”
The city has been “partnering with the college” by leasing a building that was the Roof Shelter. It’s been converted into the Harvest Food Hub and soon will be the Harvest Kitchen.
San Juan College received a $900,000 grant to build the Harvest Kitchen, which will serve as a test kitchen to help food entrepreneurs develop their product.
Unsicker referred to the Food Hub as a “food aggregator” that allows farmers to store and sell their products to bigger customers. Vendors from the Farmers Market can take what the didn’t sell to that location for dry, cold and freezer storage.
“We all are pushing in the same direction,” he said.
