Santa Fe on the rebound?

Spark of hope that recession is fading as gross-receipts taxes come inWhen Santa Fe city officials got this month’s gross-reciepts tax report from the state, they saw something not seen in awhile: Growth.

For the first time in four years, revenues collected from businesses in the city during the month of June were higher than those collected the same month in the prior year.

The $7.7 million delivered by the state this week is evidence of what some merchants in Santa Fe said earlier this summer — that business appears to be on the rebound.

Revenue had hit an all-time high in June 2006 when shopkeepers, service providers and manufacturers collected $8.4 million — not including proceeds from a levy enacted in 2005 to fund water-system construction. The next year, however, that figure began to slide. It bottomed out last year, when collections totaled $7.3 million — about the same amount that was collected in June 2005.

A standard two-month delay between sales and the state report means the figures just released on Monday were from June business activity. It’s data — and money — that the city had been banking on.

Collections during June were about 4.3 percent higher than those the prior year, which is enough to stay in line with what the city budgeted for spending.

The August report of June sales is typically one of the city’s highest revenue months of the fiscal year, which begins July 1, said Helene Hausman, the city’s cash management and investment officer. February, which reflects sales that occurred during the Christmas season, is another peak, she said.

Breakdowns of the data by industry show construction continues to slump. A comparison of the past 12 months compared to the previous 11 months shows a 23 percent drop in tax revenue from construction. While a year earlier the industry reported $1.8 million in tax collection, the current report shows $1.4 million.

Although numbers are still lower than the year before, they do show an uptick this season that is evident in more activity at the city’s Land Use Department.

“We are seeing more people coming in to the permit division just in general, people asking questions and people applying for permits,” said Department Director Matt O’Reilly. “It’s a qualitative feeling. It is just feeling busier here.”

In the last two weeks, the department began reviewing permit applications for properties worth about $18 million. These include the Walmart Super Center being built on the southern end of Cerrillos Road and three custom homes valued at more than $1 million each. A $1 million Walgreens on Airport Road will be under construction soon, he said.

“That is significant, because we have not seen in the last 18 months that kind of stuff,” O’Reilly said. “We have been seeing lots of additions and remodels and some smaller homes, but not the big kind of custom homes that we used to see five years ago.”

The report shows increased activity in arts entertainment and recreation, and accommodations and food service, all indicators that tourism is returning.

The city’s Convention and Visitors Bureau also sees its June numbers — collected from the Smith Travel and Research Trend Report — as promising, because they show a 13 percent increase in lodging occupancy and a 2 percent increase in average rates charged, which is the first time in about 14 months that number has gone up.

“It says that people are willing to spend more,” said Keith Toler, CVB director. “For the past year, they have been looking at value. ‘What am I getting for my dollar? Maybe I don’t need to stay at the Eldorado. Maybe I will be just as happy staying at the Courtyard by Marriott for that price and still get to take my vacation and come to Santa Fe and spend less overall.’ ”

Hotel lodging reports give part of the picture, he said, but marketing research shows up to 40 percent of visitors stay with friends or family. Just walking around the downtown area, he said, you can tell that it’s been a busy summer.

“I’m finding myself waiting in line at restaurants,” he said.

Even if the trip is brief, tourists are finding Santa Fe.

Lourdes and Miranda Gonzalez said Tuesday that they were happy to be able to spend a day and night here on a cross-country road trip on the way to college in California.

The mother and daughter duo visited the city on a similar road trip a few years ago. This time, they found what they described as a “great deal” on a room at La Posada on Monday night and went out to dinner at Geronimo before hitting the streets for a little shopping and art browsing early the next day.

“It’s still very beautiful and very authentic here,” said Miranda. “We’ve been to a few places on this trip that were … cheesy, and where more people were trying to take advantage of that image of what was once a cool place.”

Beale Street in Memphis, for example, was a disappointment, she said.

“Santa Fe has managed to make it not crass and commercial,” her mother added. “They have not over commercialized it, which is the reason people come here in the first place.”

The city has also collected a tax increment for capital infrastructure projects for its water system since 2005. So far this fiscal year, that fund has received $1.2 million. The city’s other municipal tax revenues total about $14 million this fiscal year. 

Julie Ann Grimm | The New Mexican
Posted: Tuesday, August 17, 2010 – 8/18/10