December 4, 2008
Albuquerque Journal
Rio Rancho Pins Hopes on Hewlett-Packard
By Rosalie Rayburn, Journal Staff WriterIntel did it in the 1980s and 1990s; Rio Rancho officials are counting on computer giant Hewlett-Packard to do it starting next year.
They say the construction and opening of HP's 218,000-square-foot customer and technical support center in Rio Rancho will jump-start local economic activity much the way Intel's massive chip-making plant did here 20 years ago.
Hewlett-Packard has said it will provide 1,300 high-tech, high-pay jobs when it opens a year from now, Rio Rancho officials said Wednesday. The company expects to break ground next month.
HP has already begun making job offers from a temporary office in Albuquerque.
"We're actually here, and we're hiring," said Randall Davis, HP's Rio Rancho site manager.
Employees will do sales and provide technical support for HP products ranging from notebook computers to desktops, from servers to hand-held devices. Most employees will be hired locally, he said.
Rio Rancho officials and city and state economic development organizations have been working for months to entice the company to move to New Mexico. It has been offered millions of dollars in land, infrastructure and job training incentives.
"It's almost like open heart surgery," said Noreen Scott, president of Rio Rancho Economic Development Corp., at a briefing on the project at Rio Rancho City Hall.
Next week, Rio Rancho city councilors are expected to approve an ordinance and agreement that complete the arrangements between HP and the city.
The company has pledged to create 1,350 sales and technical support jobs by 2013 and 1,800 within 15 years. Most jobs will offer an annual salary starting at $40,000.
In return, the city has offered, subject to council approval, $2.1 million in land and building incentives. Councilors recently approved borrowing $5.2 million to provide road, water and sewer service for the HP site.
The state has pledged $16 million in capital funding for building improvements plus an estimated $39 million in job training and high-wage tax credits.
The deal includes safeguards requiring HP to return the land and repay a portion of the incentives if it fails to fulfill its promises.
Rio Rancho will be the largest of three U.S. sites where HP will consolidate operations supporting 10 divisions, including its PC, computer server and printer business lines. The other sites are in Georgia and Arkansas, said City Manager James Jimenez.
HP officials also were considering sites in Albuquerque until May, when they visited Rio Rancho and became excited about the opportunity to build in a new, fast-growing community, Mayor Thomas Swisstack said.
"The truth is, I think we made them feel that they were part of this community, that they could help shape part of this community," Swisstack said.
Davis expects HP to begin construction on the three-story center in January and hopes to open by Dec. 20, 2009. HP has not yet divulged the cost of the project, he said.
The center will be on a 17-acre site in the City Center area, northwest of the Santa Ana Star Center. Central New Mexico Community College and the University of New Mexico plan to open a campus nearby in 2010.
Rio Rancho has agreed, subject to council approval, to lease the land, appraised at $595,000, to HP for 50 years at $1 a year. The city will fast-track the building process and waive permit and impact fees.
The deal allows HP to assign its interest in the lease to a developer. HP has picked Titan Development, Jimenez said.
Both the land and the building revert to city ownership at the end of the lease. If HP falls short of its job objectives by 2014, it must repay the city a portion of the appraised value of the land plus interest.
With a population of 75,000, Rio Rancho officially became New Mexico's third-largest city in 2007, according to the U.S. Census Bureau.
HP, based in Palo Alto, Calif., reported net revenue of $28 billion for the third quarter of 2008, a 10 percent increase over the same period in 2007.