Santa Fe City Council eyes $18 million bond issue for food processing plant
A proposal to develop a Santa Fe, New Mexico, facility for high-pressure food processing is one step closer to reality.
Mayor Alan Webber and the City Council unanimously approved a resolution Wednesday declaring the city's intent to issue up to $18 million in industrial revenue bonds to help finance the nearly $27 million project, which proponents say has the potential to revolutionize the area's food economy.
On Sept. 25, the governing body will hold a public hearing to consider an ordinance authorizing the city to issue the tax-advantaged bonds on behalf of New Mexico Fresh Foods LLC.
"I have nothing but enthusiasm for this project," City Councilor Mike Harris said. "I see nothing but great potential."
If the city issues the bonds, it would only be lending its name to the deal and wouldn't be on the hook financially.
"The city is not financially responsible to the bond holders whether the project succeeds or fails," Fabian Trujillo, manager of the city's Office for Business Growth, said in an email. "NMFF has raised funds through the traditional equity and debt financing markets to finance this project. Therefore, if the NMFF fails, then they would be responsible in paying the financial institutions like any other business."
The proposed facility, which would be housed in a 42,000-square-foot building on Sixth Street between Cerrillos Road and St. Michael's Drive, would use a cold-water pressure process that can extend the shelf life of juices, hummus, salsa and other food products. Backers expect it will create 162 new jobs in Santa Fe County and indirectly create an additional 640 jobs statewide in food production, agriculture and transportation, according to an economic analysis.
Kelly Egolf, managing partner and CEO of the company, said the jobs will be targeted toward blue-collar workers .
"These are relatively low-skill jobs -- they're factory worker jobs," Egolf, who is married to New Mexico House Speaker Brian Egolf, said at a recent Finance Committee meeting. "Nonetheless, average wages are $43,000 a year."
Egolf told the council on Wednesday that the project "is about creating jobs and partnering with the local community to bring a revolution to local foods in not only Santa Fe, Santa Fe County, Northern New Mexico but truly a regional development project."
In a news release issued earlier this week, Webber touted the potential of the proposed facility, which the economic analysis projects will generate $21 million in new taxes, fees and revenues for the city over 10 years.
"Santa Fe is perfectly positioned to grow a thriving business in value-added food industry," the mayor said in a statement. "Healthy food, locally grown and locally produced are important parts of Santa Fe's historic identity and, just as important, a great opportunity for our future. It means jobs, but it's also another part of a sustainable, healthy way of life."
The proposal to issue tax-advantaged bonds to finance "the acquisition, construction, renovation, installation and equipping" of the facility comes as the governing body considers a separate request to issue up to $80 million in industrial revenue bonds to help finance construction of a new retirement complex at 401 Old Taos Highway.
Council members are less enthusiastic about the request from El Castillo Retirement Residences. That proposal calls for the city to issue bonds to finance the purchase of property at Old Taos Highway and Paseo de Peralta, as well as build and equip a 68-unit independent living facility run by El Castillo, which operates a facility for the elderly downtown on East Alameda Street. One city councilor has called the proposed retirement center "the country club of assisted living centers."