Artesia/Eddy County: a new face - New Mexico

Artesia, the cornerstone of the oil and gas industry in New Mexico with the first oil lease in the state in 1924, is diversifying its economic base with an eye toward major changes in the years ahead.

While the past seven decades of this town in the southeastern corner of the state has mirrored a dependence on oil and gas, Artesia Mayor Ernest Thompson says he's serious about seeking out new business and industrial opportunities.

"Artesia got serious about diversifying the economic base in the late 1980s," says Thompson. "Business leaders realized that if Artesia was going to grow, other industries needed to be built up."

Navajo Refining Company still produces 60,000 barrels of crude oil per day at facilities in Artesia and Lovington and remains Artesia's largest employer with 432 workers and a payroll of $17 million a year.

Yates Petroleum Corporation, New Mexico's largest oil field producer, has 214 workers -- the third largest employer in Artesia.

Both Yates and Navajo are mainstays in Artesia, providing even more jobs in the numerous oil and gas related service industries in Artesia.

But the rise and fall with oil field busts and booms are something Thompson sees as requiring a concerted effort to get diversified industries to move to Artesia, a buffer to stabilize the economy during oil business fluctuations.

That vanguard for change, in part, began taking shape in 1989 when U.S. Sen. Pete Domenici, R-NM, and the U.S. Senate Appropriations Committee allocated $7 million to renovate Artesia Christian College Campus into what is now the Federal Law Enforcement Training Center (FLETC) at Artesia.

Since then, an additional $5.8 million has been funded for additional construction including an athletic center, dormitories, firing and driving ranges, and paved streets and walkways, according to Dave McKinley, the center's director.

Overall, says McKinley, he estimates FLETC will have pumped $12-13 million into the Artesia economy through construction projects.

"I believe we've given the economy some stability because we're steadily growing," says McKinley, noting that despite tight budget squeezes on the federal level, FLETC remains stable with its 160 full-time government and contract employees.

About 2,100 students graduate from the center each year with the average student population at about 100 students at any given time, says McKinley.

That, says Monica McInerney, executive director of the Greater Artesia Chamber of Commerce, is having a mushrooming effect in the area's tourism industry.

"Students have a short amount of time in Artesia and it's really boosting the tourism dollar," says McInerney, noting that students and private consultants provide local hotels with consistent near-full capacity.

The law enforcement center also is a major factor in the sharp increase in lodgers tax revenue, says Sandy Johnson, manager of the Best Western Pecos Inn and Artesia Inn motels.

"FLETC was like a shot in the arm for our business," says Johnson. "We saw a small amount of growth before FLETC, but the center has definitely contributed to our success.

Along with the economic spinoffs from FLETC, entrepreneurs are feeling the effect in automobile rentals, transportation to tourist designations, bike rentals and other services.

The center has also had a major impact on the real estate market, according to Lois Oliver of Lois Oliver Real Estate. "It's stabilized the market," she says.

"There are a lot of families relocating to Artesia because of FLETC and they need a place to live," says Oliver. "Artesia, though, is really short of homes for a lot of families' price ranges."

Rentals are scarce, but among the better investments in Artesia, according to Oliver. "Good rentals are snatched up the day they go on the market," she says.

The few new homes being built in Artesia today are sold before they're finished, says Oliver.

Artesia, she says, is losing potential tax dollars when some families find it necessary to live in Roswell, Carlsbad or other communities because they can't find permanent lodging in Artesia, according to Oliver.

"Bringing in FLETC was one of the best things that could have happened to Artesia," says Dave Johnson, senior vice president at United New Mexico Bank. "I see its impact on a daily basis."

The center provides training for the Immigration Service, Border Patrol, Bureau of Prisons, Bureau of Indian Affairs Indian Police Academy, Bureau of Indian Affairs Branch of Drug Enforcement along with other federal, state and local agencies.

If FLETC was an economic eye-opener, a push to bring major dairy facilities to Artesia has becoming equally impressive.

About five years ago, dairies, some from California, began to relocate to Artesia; five dairies with about 10,000 dairy cows currently operate in the area supporting 150 employees.

"The dairies compliment an already established economic trade, namely hay sales," says Johnson.

Meanwhile two new chili dehydration plants have relocated to the Artesia area, creating another 50-60 jobs during the harvest.

"Agriculture has become a very stable part of our economy because of the dairies," says Thompson. "I'd predict, however, that most of our farming areas will decrease because of the growth of dairies."

Because New Mexico is one of the largest milk producers in the nation, the Greater Artesia Chamber of Commerce has spent the last several years trying to recruit a milk processing plant, using part of its $34,000 Department of Development budget.

"It makes sense. Artesia is a perfect area because of the local and regional dairies," says McInerney.

Terry Maupin, co-owner of Terry's Electronics and Radio Shack and Terry's Rent-to-Own in Artesia, says merchants are continually trying to recruit new businesses to the town.

His father and business partner, James Maupin, owns shares in five local businesses, including J&J Building Center and the Heritage Inn Bed and Breakfast.

"We feel positive that Artesia is where we need to be," says Terry Maupin. "We're willing to take the chance with some of these new businesses."

Thompson says while Artesia has been aggressive in its business recruiting campaign, but as with any small town, it takes a lot of hard work and planning to get an industry or business to relocate.

"I don't think there's been a lack of effort," says Terry Maupin. "It's just hard to attract an industry to a small town."

The Artesia Industrial Park is at full occupancy with 16 tenants, says Thompson, and he doesn't expect a vacancy there within the next five years.

"If a business can't find the location they're looking for, then they may have to build," says Thompson.

Security Environmental Service (SES), a hazardous waste transportation and storage company, has already begun plans to relocate in Artesia.

The plant would initially employ about 30, according to Steven Grossman, SEC president, but if the company can get another permit from the state to store waste for up to a year, the work force would expand to 80.

"The jobs SEC can add to the community will definitely be an economic boost," says Kathy Hay, membership services director for the Greater Artesia Chamber of Commerce.

SEC's arrival in Artesia would be the first new industry since FLETC.

"We've been trying for a long time to recruit an airline to Artesia," says Thompson. "Having air service out of our airport would not only strengthen the city's relationship with FLETC, but would add jobs and keep some traveling dollars in Artesia."

Negotiations with Peacock Air, headquartered in Albuquerque, are underway.

Regardless of the outcome of the negotiations with Peacock Air, Thompson says efforts will continue to recruit air service.

The arrival of FLETC, the growth of the dairy industries and other efforts to diversify Artesia's economy are having an impact on Artesia Public Schools as well, according to superintendent Mike Phipps.

"Our student population has risen three to five percent every year for the last few years because of the families moving in associated with these industries," says Phipps.

Despite the growing pains in the school system, Phipps says the system with a $22.4 million annual budget is financially sound and free of debt.

The school system has 340 employees, making it the second largest employer in the city. Construction has begun for Yeso Elementary School, a $3 million new addition.

"It's still a struggle to diversify the economic base in a town like Artesia because of its dependence on oil," says Thompson. "Everyone is affected: our merchants, schools, businesses, community."

But McInerney stresses there is a lot of effort being made to recruit businesses and retain existing businesses.

Overall, say McInerney and Thompson, Artesia is doing well in the beginning stages of diversifying the economic base.

"A lot would have to go wrong now for Artesia to be in trouble," says McInerney.

". . . We're now dependent on not only oil and gas, but FLETC and the dairies as well."

Old-timers in Artesia still recall the early oil boom days beginning in 1922 when Martin Yates III and William Dooley went to Santa Fe and purchased leases of 50,000 acres of state land for 15 cents an acre.

Those were the golden days for Artesia in the oil and gas industry continuing until the price of oil collapsed in the mid-80s.

Diversified businesses and the Golden Age of dairies are Artesia's new hopes.

Jennifer Bell is a freelance writer based in Artesia.

COPYRIGHT 1994 The New Mexico Business Journal
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