A national recession sparked by a big-city housing bust is now battering Española’s businesses.
In Española, 145 companies declined to renew their city business licenses for 2009 — 53 of them specifically because they were closing, another 92 without specifying why, according to a city business license database. About half of the businesses that closed were Española, including the Rio Grande Café and Feet First Shoes. The rest were out-of-town companies doing business in the city. Last year, 154 businesses let their business licenses lapse, all because of closures.
Those figures do not include businesses that have closed since January, among them Ed Corley Ford and Salazar Dodge, two of the city’s three car dealerships.
When recession hit in late 2008, Northern New Mexico was already reeling from high gas prices earlier that year, Valley National Bank President Al Hernandez said. While Española itself is not a major tourist destination, many of its businesses rely on tourists stopping on their way to destinations such as Chama and Taos. When gas prices spiked in early 2008, tourism fell, Roy Honstein Oil Company Manager David St. Martin said.
“Business has gotten steadier as gas prices have gotten steadier,” he said. “But we’re seeing a lot more local traffic, not so many big RVs, not so much people on big vacations. Not so many people spending at the store.”
Following national trends, the first industries to shrink here were real estate and construction, Hernandez said. This was indirectly due to the failure of large Wall Street investment banks.
“What happened there hurt us here,” Hernandez said. “(The closures) affected someone else, who affected someone else, who affected us here.”
Those bank failures prompted banks everywhere to stop lending — including those that had until recently financed mortgages in Rio Arriba. That slowed construction, and the recession spread to other industries, Hernandez said.
Local business owners and contractors agreed, and many are cutting costs to stay afloat.
Española Valley Chamber of Commerce Director Alice Lucero said at least five businesses have cancelled memberships in the past month because they could not afford dues. Others are resorting to paying those fees in installments, or even bartering services for their dues, she said.
“I hope those members can recover and come back,” she said. “I guess we’ll see.”
For the owners of Anthony’s at the Delta, which comprises a hotel, restaurant and flower shop, that recovery feels distant. Despite 33 years of relative prosperity, the flower shop in particular is struggling to the point where the public assumes it has closed, District 3 City Councilor Chayo Garcia, whose family owns the business said.
“People are calling and saying, ‘We’re sorry you closed, we miss you,’” she said. “Well we’re not closed, and we miss you too!”
The Delta cannot afford advertising to bring the public back, she said.
“We’re floundering,” Garcia said. “I’m praying really hard for a miracle.”
Dino Martinez, owner of Lovin Oven Bakery on Riverside Drive, said he is more optimistic, but he too has seen business fall off in the past year.
“I think there is money, but I think here isn’t where people are spending it,” he said. “I mean you see the casino parking lots all full, so it can’t be too bad in general, right?”
Martinez too has heard rumors that he is going out of business, though he has no plans to close.
“We’re just going through that cycle I think,” he said. “We’ll get through it.”
On the other side of town, Mariscos La Playa restaurant has temporarily stopped serving lunch in an effort to save money. They now serve only dinner, staff members confirmed. Management declined comment for this story.
Rio Arriba contractors are still hurting, despite millions of dollars in federal spending intended to stimulate the economy. Two major stimulus-funded construction projects in the Española area so far — renovations on Industrial Park Road and Highway 84/285 — have gone to one Albuquerque contractor, Star Paving. The company has hired one local subcontractor, Leroy’s Excavating, for both projects, project superintendent Fred Arellano said.
Louise George, who owns a small construction company with her husband, said they have had to make deep cuts because they haven’t had work. They have cut down from 70 employees to 10, she said. George and her husband also own JoJi’s Sushi and Teppan Grill on Riverside Drive.
“We’re only glad we have other options, but yes, it’s been hard,” she said.
The recession has led one developer to seek work elsewhere. Architect and builder David Schutz, whose company Great Northern Builders developed the Plaza del Norte development off Industrial Park Road, said he applied for a project director position at Northern New Mexico College because business had slowed so much.
Those contractors who have work, like Larry Mullally, of Mullally Construction, said they know how lucky they are.
“It’s really hit or miss right now,” he said. “One day you’ll have work and the next you just won’t. These are hard times for everyone.”