Talon News - Good Local News

By Jacque Ritchie
TALON 

AZTEC HUB LOOKS FOR PATH

 

December 29, 2017



The long-standing question of how to attract business to Aztec has been the subject of local debate for years. Out of this discussion has grown the HUB. The small business incubator known as the HUB was the 2015 brainchild of Mayor Sally Burbridge, former Aztec Community Development Director Bil Homka, and former City Manager Josh Ray, who hoped that the HUB would bring entrepreneurs/inventors and small business to Aztec. The HUB is a collaborative facility designed to develop and incubate small businesses. The goal is to provide spaces, shared utilities, technology, and training resources for entrepreneurs or inventors to grow their ideas out of the garage.

After looking at the local market for spaces suitable for this type of incubation work, the city decided to make use of the old Pueblo Plaza building at 119 South Church, in Aztec. After contacting the owners and negotiating a workable agreement, the city entered into a lease/purchase agreement with the Aztec Presbyterian Church in 2015 for the building. According to Aztec Finance Director Kathy Lamb the purchase price was $135,000 for the building on two lots. Thus far the city has completed $60,000 in improvements and repairs in lieu of rent. “The number sounds large but it is not a true reflection of money spent.” According to Lamb, repair and improvement costs have been off-set by a $17,000 PNM grant, and insurance covered much of the $23,000 roof repair. Lamb said the city has actually paid about $20,000 of the actual repair/improvement costs including $11,000 for asbestos removal.

Unfortunately, what began as an effort to create positive economic growth by stimulating small business startups has become, what some consider a fiduciary albatross. Financing plans for the HUB and other City of Aztec operations depend on a combination of grants and Gross Receipts Tax revenue from the state. GRT revenue to the city coffers is generated from goods and services purchased within the city. Changes in spending habits, including the impact of online shopping and local energy industry changes have reduced this revenue. Lamb says, “Even if the GRT (2017 Gross Receipts Tax revenue) hadn’t fallen on its face, we haven’t really actively marketed the HUB, so it hasn’t come as far along as we had hoped.”

The HUB is a multi-year project, much like any startup business. The question of how to fund the HUB project going forward sparked a spirited exchange at a Special Budget Resolution Workshop on Monday, December 4. The bone of contention between city commissioner’s and citizens was from which city fund to appropriate money for continuing the HUB project. At the workshop Lamb submitted a Summary Report that included anticipated future costs and funding options for the commissioners consideration. The report concluded that the city should plan on $251,000 for the purchase and related costs including further building improvements, marketing and operating costs for 2018.

In the December 12 City Commission meeting, commissioners voted to use $50,000 from the Economic Development fund; with the remaining $201,000 funded in the form of a loan from the city’s Joint Utility Fund with a reported 3% rate of interest.

Despite the initial cost, Lamb believes, “It’s still a great idea for that person who has a business that has outgrown their kitchen table but is not quite ready for a stand alone.” According to Lamb, “Businesses coming in get subsidized rent which means they can have space at a substantially lower than market rate.” Lamb adds, “They also get training in financial planning, business planning and basically learn how to grow a successful business.”

Currently, the HUB incubator is home to three small business startups including Tethering Ideas, The Aztec Chamber of Commerce, and 550 Brewing.

Got an idea for a business but have no idea how to get it off the ground? The HUB could be the answer for you. For more information contact Steven Saavedra, City of Aztec, at 505-334-7605.

 

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