BELEN — The world’s largest chain of coffeehouses will soon build its first in the Hub City thanks to an economic development incentive.
The Belen City Council approved a Local Economic Development Act application for Starbucks in order to build a new, 2,293 square foot coffeehouse at 401 N. Main St., just north of Walgreens.
With the city’s approval, the national corporation now has the go-ahead to start construction, including needed infrastructure to access the property.
Joshua Kerns, the city’s community and economic development director, told the council the company has been trying to work with the New Mexico Department of Transportation for the last two years to come up with a solution to the access issue from Main Street into the property.
According to the application, NMDOT indicated it wasn’t going to allow the proposed project access from Main Street. After investing heavily in traffic studies, NMDOT agreed it would allow Starbucks a “left-in” movement only from Main Street.
“In order to do that,” Kerns said, “Starbucks and it’s developer, CenterPointe Development, would have to restrict Chavez Avenue to ‘right-in, right-out’ on both sides of Main Street by installing what they call ‘pork chops.’ The developer would also be required to install a raised median and create a left turn pocket for cars.”
This is where the LEDA incentive from the city kicks in. Starbucks will pay $260,000 up front for these infrastructure improvements, but city councilors agreed to forgo 100 percent of the business’ gross receipt taxes they would pay to Belen until that amount is reimbursed to the company — which is estimated to be about 14 years.
Starbucks projects sales of $1.1 million in gross sales its first year in Belen, and expects to start building in April, with construction to be completed within eight to nine months.
Kerns said when the coffeehouse opens, it will employ between 18-40 employees, with about 25 percent being full-time and 75 percent being part-time.
“If there are no LEDA funds or grants, this project will die,” the application states. “Cory Bertram at Starbucks has indicated that they just can’t support more dollars on this project.”
The company estimates the total capital investment of the project to be $2.2 million with off site costs of $380,000.
Belen Mayor Robert Noblin said during the meeting Monday there had been an email thread about the project between the city and Starbucks going for eight months before he was included when he took office last year.
“It was a delay after delay with NMDOT,” Noblin said. “So we got together with the regional manager of Starbucks, and he flew in from Denver. Our DOT rep came down from Santa Fe, and we all sat at the tale and asked, ‘What can we do to make this happen?’”
The mayor said when a company wants to come into town and locate on Main Street, which is a state highway, they have to comply with the state’s restrictions. It’s up to that developer to fund any infrastructure improvements.
“It could be very prohibitive for businesses in Belen who want to be located on Main Street,” Noblin said. “The Local Economic Development Act allows the city … to allow the city’s portion of gross receipts (taxes) to be reimbursed by the developer.”
Councilor Danny Bernal Jr. said he was a bit conflicted about the LEDA application, saying, “Starbucks isn’t one of those places that need the money. They have billions of dollars to pay for things, but we have to extend good faith to bring something our citizens want.”
Bernal encouraged the community to continue to shop local.
Councilor Steve Holdman agreed, but said Starbucks would bring in some other needs people would like.
“I think a national company like a Starbucks, whether they need the money or not, sends a message to other national retail that they can come to our city.”
“I heard someone her say, ‘It’s the price of business,’” said Councilor Frank Ortega.
The council unanimously voted to approve the LEDA application for Starbucks.
The city council also approved a similar incentive for Champion Carwash last month, which plans to build a facility at 833 N. Main St., south of the old Mesa Motel.
Because of the lack of infrastructure on the west side of Main Street, the company will be required to tie into the sewer and storm drain on the east side of the highway. In total, the cost is estimated to be $176,780.
The total potential investment of Champion Carwash will be about $4.8 million, with approximate revenue of $1 million per year. The company plans to hire between 12-18 employees.
Clara Garcia is the editor and publisher of the Valencia County News-Bulletin.
She is a native of the city of Belen, beginning her journalism career at the News-Bulletin in 1998 as the crime and courts reporter. During her time at the paper, Clara has won numerous awards for her writing, photography and typography and design both from the National Newspaper Association and the New Mexico Press Association.