Los Alamos County Manager Steve Lynne addresses Economic and Rural Development & Policy Committee members Thursday in Los Alamos. Photo by Maire O’Neill/losalamosreporter.com

BY MAIRE O’NEILL
maire@losalamosreporter.com

Los Alamos County Manager Steven Lynne welcomed the legislature’s Economic and Rural Development & Policy Committee members to Los Alamos Thursday where they convened in Council Chambers at the Municipal Building.  Lynne spoke to the committee about the tourism and film industries, the history of gross receipts tax in the County and the Los Alamos Commerce & Development Corporation as well as regional economic development in the region and the effects of the movie “Oppenheimer” on tourism visits.

“It may surprise you given that most of the employment here in Los Alamos is federally based, that there are actually two cannabis retailers here in Los Alamos. Also, when people throughout the state think about employment in Los Alamos, they just naturally think of Los Alamos National Laboratory, but there are other aspects of our economy that are evolving such as tourism and the film industry We had a little film that came out over the summer, including some very significant scenes in that movie that were filmed in Fuller Lodge and a few other parts of Los Alamos. I know some of you have heard about that film – “Oppenheimer”,” Lynne said “We actually don’t have numbers yet, but some reports have indicated that tourism visits over the last couple of months have increased 60 percent over the prior year. A portion of that might be some COVID recovery, but certainly we’re attributing a lot of that to the film and the impact doesn’t escape us. We’re grateful that it’s out there and that the history is now more obvious to see from a totally different perspective. In fact, many New Mexicans because of that movie are probably more aware of the history of Los Alamos than we’ve seen in the past.”

He noted that in many ways Los Alamos County is a lot like the other local governments in the state but that one of the main differences is that Los Alamos is a combined city-county.

“I think it’s a great arrangement for us. The efficiencies associated with a single entity are really helpful. We have all the responsibilities of both the city and the county. We also have some very significant responsibilities of providing services to the Lab such as our fire department and our utilities department, which are both much, much larger than you would see in a community this size,” Lynne said. “Eighty percent of the electricity that we produce is for the Lab. This whole thing of combined city-county, as well as those significant larger departments that we have, make our budget seem large. It’s also those factors that make it pretty difficult and complex to compare and benchmark Los Alamos data against other local governments. It’s something that comes up from time to time and we deal with over the years and it always creates a challenge.”

He said while Los Alamos is often recognized as a one-company town, many people don’t recognize how extreme and severe that is.

“We all kind of know it, but I want to share a couple of facts related to that. Several years ago we had an economic study done and the result of that study concluded that 97 percent of our local economy is either directly or indirectly the result of the Lab and 95 percent of the households in the county have at least one family member working at the Lab. So while we see this notion of one-company town and impact of industry even at the state level, it’s fairly unusual how concentrated it is here in Los Alamos,” Lynne said.

He said the notion of boom and bust, which some recognize at the state level with the oil and gas industry is similar, but that it is much more concentrated in Los Alamos County.  Like the oil and gas industry, he said it can be a little bit of a roller coaster as revenues go up and then as they go down.

“Today GRT revenues are up both for the state and for us. One of the things that I just know is that eventually they’ll go down. And there’s also the environmental downside. There’s always the benefit and there’s always the cost and up here in Los Alamos it’s a little more concentrated with some of the hazardous and radiological legacy waste associated with the Manhattan Project and then the operations in town,” Lynne said.

He noted that Los Alamos county government has a similar type of structure to other counties and cities in the state, and that like many other communities Los Alamos suffered a fair bit of business loss during the pandemic with worker staying at home

“Certainly restaurants and retailers closed. CB Fox, one of our main retailers right in part of downtown closed its doors – definitely having a big negative effect on what retail shopping would be available. Even prior to that, one of the issues Los Alamos has always dealt with is not enough retail. It’s something we’ve been working towards improving. Certainly the expanded Smith’s Marketplace has helped, but even today there’s still quite a bit of retail shopping that occurs off the hill and folks compare what they got at WalMart versus Whole Foods. It’s just always been a chronic issue here in Los Alamos and something we continue to work towards is improving the retail environment here,” Lynne said.

With a population of just shy of 20,000, he said, the County lacks medical providers, teachers and housing, like a lot of other communities in the state.

 “These are issues and when we get together with our peers across the state, they have the same common issues we’re dealing with,” Lynne said.  Some of that may not sound all rosy so don’t be too concerned. I’ll share some of the happier stuff that’s occurring as well and it will give a little more balanced look at Los Alamos as a community. I’ll also share what we’re doing with our regional partners.”

He said part of the history in Los Alamos that some folks are aware of is that prior to 2007 Los Alamos received much less gross receipts tax.

“ Many people believe we received none because the University of California who operated the Lab for the first 40 years of its existence was nonprofit. We didn’t receive zero but it was about 30 percent of what we would normally receive because of the GRT laws. That first 40 years, we as a community really didn’t have normal revenues to operate. A lot of our budget was focused on just bare bone items and not very much was invested in our infrastructure and there was really just us as a community trying to get on our feet and fulfill some basic roles and provide basic amenities to support the Lab and the community.” Lynne said.

Early on, he said the County was very fortunate to have some very determined citizens and entrepreneurs in the community.

“Back in 1983 they started what back then was the Economic Development Corporation. Today it’s the Los Alamos Commerce & Development Corporation. They’re an umbrella corporation that includes our chamber of commerce and they support a lot of the retail and other small businesses within the community as well as the technology and research spinoffs from the Lab. They’ve all that time been a partner to the County and we certainly know having an active partner in the community is critical and vital to our success,’ Lynne said. “After 2007, once our GRT normalized, we finally started investing in our infrastructure and the other thing we did was recognize the importance and we started investing significantly with partners throughout the region as well as our schools.”

He described how in 2009 the County started talking with its neighbors about a regional transportation system, regional economic development and regional broadband.

“All this was under the umbrella of a program we started called Progress through Partnering. This led to the creation of the North Central Regional Transportation District, which is now very successful and an entity all on its own, REDINet, which is a regional broadband backbone in Northern New Mexico, as well as the Regional Economic Development Plan.” Lynne said.

Revenues are up now, Lynne said, and they went up quite a bit in 2007 when the Lab contractor turned over. He said it wasn’t long after that that the County had one of those significant decreases.

“Over a two-year period, from 2012-2014, our revenue shrunk 30 percent. Part of the risk side of the benefit-risk equation of having a very significant employer is our work force decreased. It was definitely a hard lesson for us but we were somewhat prepared for it and fortunately we didn’t have to totally disengage with our neighbors. We continued with our regional partnership programs and we made sure they continued.” Lynne said.

He said he knows all across New Mexico, local governments are working to to diversify their economies.

“Certainly for us lack of diversity has always been an issue. I always say we will never be diverse because of how large the Lab is but to the extent that we can be a little more diverse, it benefits us and that’s always been a goal. A large part of our efforts though and a large part of our strategy are still focused on supporting the Lab as a major wealth provider not just for Los Alamos but for the region,” Lynne said. “Some of our recent activities include supporting more housing, which is a very big issue, including for the first time recently the possibility and availability of low income housing and low income senior housing and we continue to work on ways to diversify our housing stock. We recently update our building code to allow for greater densities in our downtown as one example.”

He noted that the County has also reached out to its neighbors in Espanola trying to help them to increase housing stock down there.

“We just recently initiated a regional effort through the Communities of Excellence program with both Rio Arriba and Santa Fe Counties and the Eight Northern Pueblos to work on workforce development. That’s one of the most common things we hear is how difficult it is to get employees and we are just determined to find new alternatives to help, again not just Los Alamos, but the whole region. We recently signed two economic development memoranda of understanding with both Santa Fe County and Rio Arriba County. We’re also working on regional broadband initiatives,” Lynne said. “We also have two MOUs under our Progress through Partnering program with the City of Espanola and Rio Arriba County supporting projects such as a care facility for the elderly in Rio Arriba County as well as assistance for the North Central Solid Waste Authority.”

Lynne said the County is really trying to capitalize on the benefits of increased revenues while they are here, while trying at the same time to recognize the risk of future declines.

“At any time Congress can choose to change the programming at the Lab and shift the resources elsewhere. We’ve seen it occur in other communities. We recently had a peer exchange with folks from Savannah River here. So that’s always a risk. We’ve seen it happen before. Again we know there will be some decreases in the future. We just continue to maintain our focus on supporting the Lab and the region and we continue to look for new business opportunities and new economic development opportunities. We’re definitely looking forward to this next legislative session. All of your work provides catalysts for all these new opportunities both across the state and hopefully here in Los Alamos and Northern New Mexico,” Lynne said.

Asked how much Los Alamos County currently receives in GRT, Lynne noted that at the end of FY2023 GRT receipts county-wide were approximately $95 million.