The Sweetheart Deal
How the South Valley is giving capitalism a good name
Tony Gallegos has a solid build. He’s a former wrestler with a vague resemblance to a 50-something Erik Estrada. His mind is in constant motion, making connections and synthesizing disparate information, and his mouth is rarely far behind. All the while, the wrestler in him stays on alert for leverage points on which to pivot the game to his advantage. And the game won’t be over, as far as he’s concerned, until his beloved South Valley is on an even playing field.
The South Valley, at 39 square miles, represents more than a third of Albuquerque’s metropolitan area. Many of its plazas, like Pajarito, Atrisco and Los Padillas, predate the existence of Albuquerque. But the South Valley remains unincorporated and stigmatized, and it’s plagued with vacant lots, pitted roads, higher poverty levels and a bad reputation.
“We suffer from the double-kicked-dog syndrome,” explains Gallegos. “Banks see us as too high-risk, too crime-ridden and without economic possibility, and they’ve been reluctant to lend here. The South Valley residents believe it, and they have an inferiority complex. We’ve become isolated like an Indian pueblo. And like a pueblo, if you’re lucky enough to get an education, you end up leaving because there’s no opportunity.”
Gallegos is the executive director of the South Valley Economic Development Center (SVEDC), a small business incubator that provides facilities, resources and training to support the development and expansion of all manner of small enterprises. Successful businesses will create jobs and stimulate economic revitalization, Gallegos says, reversing the momentum of brain-drain and double-kicked-dog syndrome. The idea is to generate a self-feeding chain reaction of improved opportunity and quality of life.
Thanks to SVEDC, big changes are cooking for the South Valley—and not just in its million-dollar commercial kitchen. From food enterprises to real estate to computer services to the only Spanish-language hypnotherapist in the South Valley, if somebody has an idea for a business, the SVEDC staff will work with them to make it happen.
And while the world economy stumbles—thanks in part to the ills of corporate excess—the SVEDC is doing its part to give capitalism a good name. It’s using market forces to pull the community up from within, without handouts. After years of hibernation, the sleeping giant that is the South Valley looks like it’s beginning to stir.
“When you’re in last place of the race, you can look ahead at the ones in front of you and learn from their mistakes,” Gallegos says, explaining how the South Valley’s lagging can also be seen as unrealized potential. And this is just one advantage of moving forward slowly.
“We still have traditional Hispanic families here that go back for generations. Old-word traditions will change slowly, and many of these traditions are worth keeping.
“One of the only McDonald’s in the country to fail was right there on the corner of Bridge and Isleta,” Gallegos says, pointing north. It failed, he thinks, because people around here know how to cook, can do so inexpensively, and they know how they like their food. “We can keep away Subway and Taco Bell because our businesses can make better food, just as fast, just as cheap.”
The SVEDC’s 3,500-square-foot commercial kitchen, which is open 24/7, gleams with all manner of stainless steel apparatuses, including convection ovens, steam jacket kettles, a tilting braising pan, a dough roller (that also can turn out tortillas, arepas and pita) and a $7,000 monster wok. It sits on a special base that aims a series of gas jets at the wok’s bottom.
The giant piece of equipment came from the owners of Sukhothai, which produces a line of frozen Thai meals. The company would have had to spend $200,000 on building a commercial kitchen, plus a lease on a space. It was cheaper for the company to buy this wok and have it installed in the SVEDC kitchen. Gallegos eventually decided to buy the wok from Sukhothai in order to guarantee it stays in the kitchen, hoping that other clients would find a use for it. “The sushi makers have been casting a lustful eye on that wok,” he confides.
The kitchen is used by caterers, candy makers, taco trucks and farmers. Their products are just as diverse—salsa, chile, jerky, candy, sushi, tamales, jam, mustard, barbecue, seviche and bread, to name a few.
While the cost of setting up a kitchen of one’s own is prohibitive—
“Say a guy in the hood is making 1,000 tamales a week with his wife and kids, and selling them wherever he can Downtown,” says Gallegos. “He’s been run out of the ballparks, every building, the parks, because he isn’t licensed. If I could bring him here he could go from 1,000 to 10,000 tamales. Not only would that create jobs, because he’s going to need a lot of help, but every business like this that you can take out of their home kitchen and put where they can be inspected, it’s good for public health.”
Heidi Eleftheriou and her brother Doug Findley grow five acres of organic raspberries in Corrales, and she processes them into jam in the SVEDC kitchen. Her business, Heidi's Raspberry Jam, has improved steadily, thanks in part to technical improvements in the facility. Whereas once she made her jam on the stovetop in 5-gallon batches, Eleftheriou now uses twin 40-gallon stainless-steel steam jacket kettles. She’s also invested in a jar filler and a labeler, which she keeps in her storage area at the facility. Eleftheriou recently hand-affixed additional nutrition fact labels printed in Chinese for a pallet of jam destined for Taiwan.
Her business has grown to where she’s hired employees from the area to help make the jam. And this, according to Gallegos, is the greatest success he could hope a client might achieve. Market forces are fanning small sparks into healthy fires in an area he regards as an economic tinderbox.
“It is the full picture of how a small, local business can grow, help the local economy and go global,” Gallegos says.
“The kitchen gives me an opportunity to create a value-added product with my locally grown berries,” Eleftheriou says. “Most food travels 1,500 miles before it’s consumed. Locally grown and processed food has a much smaller carbon footprint.”
Viewed from outside, the SVEDC facility looks like a work of modern art, with sharp, dramatic angles, sleek lines and diverse textures. Inside, the 17,000-square-foot space is spotless, with polished concrete floors and an open layout that hosts art shows and literary readings. There’s a conference room for rent where trainings and seminars take place.
Office space, available for $250 a month, includes furniture, a phone line, wireless Internet and custodial service. The rental agreement is month-to-month because, Gallegos says, he doesn’t want to lock people into a long-term lease if the venture isn’t working out—or if it’s working out so well the business needs to grow. As with the kitchen, the office rental service gives SVEDC clients the opportunity to start a business with as little investment and risk as possible.
“For people who get laid off, maybe now is the time to pull out Grandma’s recipe or try that thing you’ve always wanted to do,” explains Gallegos. “If anyone wants to give it a go and try working for themselves, now is the time.”
“Banks see us as too high-risk, too crime-ridden and without economic possibility, and they’ve been reluctant to lend here. The South Valley residents believe it, and they have an inferiority complex.”
SVEDC Executive Director Tony Gallegos
One success story, Hospice de la Luz, a health care company, grew from one to 24 employees in a few years. This growth was fueled partly because of the service SVEDC provided but also because the South Valley is fertile ground for new business, thanks to the fact that, historically, few have been willing to take a chance here.
He sees opportunity everywhere. “Everything that Albuquerque has would be new here,” he says. “We don’t have a movie theater, a bowling alley, a nice restaurant. If you were to come here with whatever works somewhere else, it will be the only one for 100,000 people.”
“Three-and-a-half years ago, this place was pretty much a tomb,” says Gallegos. “We had one kitchen user—Albuquerque Public Schools. They weren’t the kind of client we had in mind, because the facility was intended for the private sector, but we took what we could get. Now we have over 30 regular kitchen users.”
There are plans for a building in the empty lot behind SVEDC and possibly a greenhouse as well. The focus of the new building—slated for construction in 2011—will be agricultural research, catering to the South Valley’s rich agricultural tradition. It will include a vegetable cleaning area, milling machines and canning equipment.
Before other aspects of the new facility are decided, extensive community-based surveys will be done, says Tim Nisly, SVEDC programs manager. This inclusive, interactive approach is indicative of all of the SVEDC’s projects: created with, rather than imposed upon, its clients.
Meanwhile, the kitchen is becoming cramped, and it lacks adequate storage and space for more gear. So this summer the kitchen will be expanded, adding a commercial dishwasher and jar sterilizer, more storage space and a built-in restroom.
The new development announcements keep rolling. On Cinco de Mayo, SVEDC will work with the Media Arts Collaborative Charter School and Quote ... Unquote, Inc. to launch a new station: Encantada TV, on Channel 26. The station’s programming will highlight local arts, educational features, and cooking shows on topics like ethnic cuisines and heart- and diabetic-friendly recipes. Some programs will feature different products and businesses coming out of SVEDC, and students from the Media Arts Charter School will participate in the production of new shows. (See next week’s News section for a profile of Encantada TV.)
Once upon a time, Gallegos was a guitarist for a rock ’n’ roll band that toured with The Yardbirds. His first “real job,” he says, was training chimpanzees to go into orbit for NASA. Since then he’s had stints in the U.S. Navy and as Sen. Pete Dominici’s regional director. It’s the kind of experience that has taught him to welcome change and question skeptics who tell him his dreams aren’t possible. “Aerodynamically, the bumblebee shouldn’t be able to fly, in terms of its shape and size,” he says. “But somebody forgot to tell the bumblebee.”
To keep this dream going, his eyes are open for opportunities that might result from the stimulus bill, but Gallegos is proud of the fact that the SVEDC’s budget isn’t dependent on grant money, be it government or private. Instead, the budget is floated primarily by market forces; most revenue is generated by successful clients paying rent on their office space and kitchen time.
“We don’t have to go to the feds and beg for money for poor people; the least amount of government interference the better. We’re small—I don’t want 100 employees. We’re quick. We’re agile. I want to stay that way: lean and mean.”
There is a fine line here. Hopefully, a time will come when a business gets big enough that it needs to fly the coop—as happened with Cupcakeology, another SVEDC venture, and Hospice de la Luz. Sometimes they stake out on their own willingly, and sometimes it takes a little prodding.
“We incubate them until they know what they’re doing, then we kick them out of the nest so they can fly away and make room for the next guy.”
There is a small café built into the front of the SVEDC building. Gallegos describes it as a turnkey operation. “It’s got a $6,000 espresso maker, display refrigerators, patio furniture. If someone wants to try their hand at a café business, instead of taking out a $20,000 loan and signing a year lease, they can rent this business and be the only place in South Valley where you can get a latte. All someone has to do is come in, pay rent—$750, month-to-month, including utilities—buy a sign and some food. To decorate, they could let a local artist hang some art on the walls.”
While the South Valley is Gallegos’ immediate priority, he’s keenly aware of how it could, with its strong agricultural background, fit into a larger picture of statewide ag renewal. To illustrate, he grabs a piece of paper and starts diagramming.
“This piece of paper is New Mexico, OK? The best cherries are grown here, in Cloudcroft and High Rolls; the best pistachios are here, in Alamogordo; the best pinto beans are from the Estancia Valley by Española; the best apples are in Dixon; the best green chiles and pecans are in Las Cruces and Hatch; the best raspberries are from Mora.”
But, he explains, these products are spread out across the state, while the primary market is in Albuquerque, which is also the transport hub for interstate commerce. So he’s scheming about how to get these products to Albuquerque.
Training is the primary goal of SVEDC, but Gallegos says something else is becoming a priority: solving the puzzle of New Mexico’s agriculture system. And now that the incubator has momentum and a solid staff, he’s able to turn his attention there.
Transport is the toughest nut to crack, he says, speculating that it will take some combination of government and private sector efforts to realize the state’s diverse agricultural possibilities. But if he can get statewide produce into the SVEDC facility for processing, that could keep a lot of people busy and keep a lot of money in-state.
“Albuquerque Public Schools feeds 90,000 kids, and they would love to buy local food. But they’re not going to go farm-to-farm with 100 different contracts,” Gallegos says. “We need to form a collaborative to pool these agricultural products and be a bridge between the small farmers and the large institutions.”
It’s a tightrope Gallegos walks between offering support for clients’ dreams and pushing them in ways they wouldn’t go if left to their own devices. But he seems to relish the challenge.
“When someone comes out as bold and crazy as me, there will always be naysayers,” he says. “But if we all used that mentality when we’re trying to learn to walk, we’d all be crawling. We can’t keep doing things the same way because we’re comfortable with it. You gotta put yourself in a position of stress if you want to grow.”