Las Cruces: Economy

Major Industries and Commercial Activity

Like many other sunbelt communities, Las Cruces' economy is booming. The city is the fastest-growing metro area in New Mexico and among the top 10 in the United States. The median age is younger than the state or national average, providing a prime, mostly bilingual, labor source. Private and public sectors continue to fuel the economy, whereas the conditions in other parts of the country, such as climate, cost of living, and quality of life, are less attractive to people and companies looking to relocate.

The four mainstays of the local economy are agriculture, commerce, education, and defense/aerospace. Since World War II, federal, state, and local government have become the main source of jobs in the area, due to the proximity of New Mexico State University (NMSU) and White Sands Missile Range. NMSU is the city's largest employer, and it also provides training and education for research facilities at White Sands. White Sands Missile Range is the Army's largest installation, and the largest military installation in the Western Hemisphere covering more than 2.2 million acres, and is used by the Navy, Air Force, and NASA. Other government agencies, universities, private industries, and even foreign militaries conduct research there as well.

Although Las Cruces was never primarily an industrial town, manufacturing and commerce has been growing in importance. The North American Free Trade Agreement, or NAFTA, passed in 1994, has influenced this trend, as has the opening in 1991 of the border crossing at Santa Teresa, just 40 miles south of Las Cruces. Many companies are finding it advantageous to relocate in the Mesilla Valley area in order to do business with maquilladoras, (factories) in Mexico. NAFTA and the Mexican government's maquilladora program enacted in the 1960s encourage this type of trade by lowering or completely eliminating tariffs. For example, a U.S. company may send automobile parts to be assembled in Mexico; when the assembled car is shipped back, duties are paid only on the value added in Mexico. Molded plastics and electronic components are the top materials purchased by the maquilladoras.

On the U.S. side of the border, there are nine industrial and research parks in Dona Ana County. Reports from 2000 indicate the sale price of land in these developed lots ranged from only $.50 to $2.50 per square foot. Some are municipally owned and some private, but most have rail and interstate access and utilities included.

Las Cruces is definitely a land of peppers. Chile, cayenne, jalepeno, and bell peppers in every color imaginable are all raised locally. The pungent aroma of roasting peppers and the sight of strings of red peppers drying on rooftops enliven the local scene. Stahmann Farms on Highway 28, which originally focused on cotton and tomatoes, is now the world's largest producer of pecans. Other agricultural products include cotton, onions and various other vegetables, and dairy products. Research into developing new plant strains, particularly of peppers, takes place at New Mexico State University.

An enormous influx of retirees, students, and tourists has boosted the economy and has led to a building boom, including many senior citizen residences. A total of 796 new building permits for single-family units were issued in 2003, at an average cost of $144,900.

Items and goods produced: peppers, pecans, cotton and other agricultural products, electronics parts and molded plastics, repair parts for machines, packaging materials, chemicals.

Incentive Programs—New and Existing Companies

Local Programs

The city may issue Industrial Revenue Bonds (IRBs) for new businesses and industries, and will work with private bond counsel of the company and the State Investment Council to have the bonds purchased by the State Investment Pool or through a private placement. These IRBs can be used for construction, site costs, equipment, and training. The City Special Projects Office assists in expediting all permit applications. Dona Ana County also has the Investment Credit Act which encourages employers to locate in the area. The act requires companies to hire new workers and gives tax credits for machinery and other expenses. Las Cruces' 220 acre foreign trade zone exists in three sub-areas adjacent to the Las Cruces airport and West Mesa Industrial Park.

State programs

The city of Las Cruces participates in all New Mexico incentives for new businesses. These programs feature a 100 percent property tax abatement for up to 30 years; state income tax abatement or exemption; real property related business loans; 800/WATS phone line tax exemption; research and development tax reduction (both state and local); corporate child care tax credit; cultural preservation tax credit for businesses that restore a property listed in the New Mexico Register of Cultural Properties; and Community Development Block Grant (CDBG) loans for acquiring property, working capital, equipment, and construction. The Severance Tax Loan Program and the Community Development Revolving Loan Fund both provide money for establishing and expanding businesses in the area. New Mexico's 27J exemption helps small business ventures raise capital. State of New Mexico Investment Council Venture Capital Investment is a program that gives funds to experienced partnerships that have demonstrated successful investment performance. Still other state-wide programs include Enchantment Land Certified Development Company, which administers low interest, fixed rate, low down payment loans; and the New Mexico Community Development Loan program which is geared toward helping low income people. Funding for the latter, for example, can be used to build housing developments as well as business.

Job Training Programs

On-site and classroom job training is available at NMSU through the State of New Mexico Industrial Development Training Program. Some features of the program include training customized to individual companies' needs, and freedom of the employers to select training candidates. It is not limited to economically disadvantaged people.

Development Projects

Housing needs are on the minds of developers and planners in Las Cruces and any fast growing city. Las Cruces issued over 1,200 permits in 2004 for construction of all types of commercial and residential buildings. The Community Development Department has cooperated with 16 agencies to obtain over $1.1 billion for services for low income families, including helping 25 families though its Home Rehabilitation Program. This city department has also helped rewrite zoning codes according to citizen's requests, and has designed the future Mesquite Historic District community garden.

A major accomplishment was to facilitate commercial airline service at Las Cruces International Airport as of November 2004. Before this, the nearest full service airport was 40 miles away in El Paso, Texas. In the mid-2000s, a $3 million construction project dubbed "Community of Hope" is ongoing, renovation of the downtown Rio Grande Theatre was completed, playground equipment was replaced in 25 parks, and there were many other renovations of various city facilities, such as flood drains, street signs, and traffic signals. The importance of water and wastewater management to the region was not overlooked. A two million gallon capacity Telshor water tank was restored and nearly $1 million was spent for various upkeep projects on Las Cruces' more than 390 miles of water lines and 50 wells.

Economic Development Information: Mesilla Valley Economic Development Alliance, 2345 East Nevada, Las Cruces, NM 88001; telephone (505)525-2852; fax (505)523-5707. Las Cruces-Dona Ana County Economic Development Council; telephone (505)524-1745

Commercial Shipping

Overnight shipping is available to most major western cities, including Dallas, Houston, San Antonio, Phoenix, San Diego, Los Angeles, and Denver. Two Railroads provide direct rail services: Burlington Northern-Santa Fe and Union Pacific-Southern Pacific, and the newer border crossing at Santa Teresa is to be a future rail port of entry. Air freight service is provided by all major companies. Six major commercial trucking firms offer freight service for the area.

Labor Force and Employment Outlook

The city's labor force has been described as capable, technically skilled, dependable, and cost effective. Job growth continues to increase by roughly two percent per year.

The following is a summary of data regarding the Las Cruces labor force, 2004 annual averages.

Size of nonagricultural labor force: 61,700

Number of workers employed in . . .

construction and mining: 3,900

manufacturing: 8,800

trade, transportation, and utilities: 9,500

information: 1,100

financial activities: 2,400

professional and business services: 4,900

educational and health services: 9,000

leisure and hospitality: 6,100

other services: 1,500

government: 20,300

Average hourly earnings of production workers employed in manufacturing: $12.86

Unemployment rate: 6.8% (February 2005)

Las Cruces: Economy

Largest county employers Number of employees
New Mexico State University 6,980
White Sands Missile Range 4,357
Las Cruces Public Schools 3,316
NASA 1,500
City of Las Cruces 1,251
Memorial Medical Center 1,198
Walmart 700
Allied Signal Aerospace 667
Excel Agent Services 300

Cost of Living

The following is a summary of data regarding several key cost of living factors for the Las Cruces metropolitan area.

2004 (3rd Quarter) ACCRA Average House Price: $275,188

2004 (3rd Quarter) ACCRA Cost of Living Index: 99.5 (U.S. average = 100.0)

State income tax rate: Ranges from 1.7% to 8.2%

State sales tax rate: 5.0% (prescription drugs and certain food and medical expenses exempt)

Local income tax rate: None

Local sales tax rate: 7.0%

Property tax rate: $27.53 per $1,000 of 33.3% of assessed value

Economic Information: Greater Las Cruces Chamber of Commerce, 760 W. Picacho, Las Cruces, NM 88005; telephone (505)524-1968. Mesilla Valley Economic Development Alliance, 2345 E. Nevada, Las Cruces, NM 88001; telephone (505)525-2852. New Mexico Department of Labor, Las Cruces Area Office, 200 E. Griggs Avenue, Las Cruces, NM 88001; telephone (505)526-9622.