On a summer morning at the Enchanted Grounds Espresso Bar and Cafe in this quaint Northern New Mexico town, owner Katie Feldman greeted her usual eclectic blend of customers. The Raton police chief and a couple of officers stopped by, as did the head of the local biker's club, a family of tourists and the Colfax County manager. Feldman’s father had worked there when it was a bar named the Silver Dollar; Feldman had studied at the coffee shop when she was in high school. She and her sister, Jessica Barfield, bought the business in April.
“A lot of people think I’m crazy for investing in Raton, but I think this is the perfect time,” said Feldman, 25, who returned to her small town after attending college. “I think Raton is about to explode and more people are going to invest here.”
She’s not the only one who believes this. In the last year, two other restaurants, an aviation training school, a yoga studio, a technical trades education center and a custom knife manufacturer have opened. A renovated historic hotel opened Oct. 28 across from the newly beautified train depot. A brewery is scheduled to open in 2017 in one of Raton’s many historic downtown buildings. A Domino’s Pizza is taking over a formerly boarded up and abandoned Kentucky Fried Chicken building. An organic food cooperative is in the works. Established businesses, like Pappas Sweet Shop Restaurant and Solano’s Boot and Western Wear, survived the economic upheavals of the last decade and are seeing an influx of new customers.
Raton is an unlikely site for an economic boom. The town enjoyed growth without a real bust for a century, driven by coal and, for a time, horseracing. The town was once surrounded by eight coalmines, which employed more than 2,000 men and boys at the turn of the century. The number of coal jobs declined as coal-fired steam engines switched to gas, and then disappeared in the late 1990s as the Eastern steel mills that once relied on the region’s high-quality coal moved overseas to China.
For many towns, the disappearance of mining has proved a death blow. But Raton’s officials and town leaders have an economic strategy that doesn’t rely on coal, oil or gas — or cannabis, the crop that’s boosted economies just across the border in Colorado. Today Raton is betting on a whole new type of economy, a mix of small manufacturing businesses, health care and specialty services, and hospitality for travelers. Raton may lack a college and expansive recreational facilities, but it has plenty of advantages: lots of water, high speed Internet, a major transportation corridor and cheap commercial real estate – all pluses for a town trying to attract new ventures.
Raton’s leaders also know what they don’t want: One or two big companies that would make the town dependent yet again on one primary source of revenue. “If we had 20 small manufacturers that each employed 20 to 30 people, that would equal the jobs lost when the mines closed,” said Ron Chavez, a Raton city commissioner.
It’s too soon to know if Raton’s efforts will succeed in the long run. Like many rural communities, it still has a lot of boarded up buildings. But this small town’s calculated revitalization might hold lessons for New Mexico and other states that are enduring a sudden, painful decline in oil, gas and mining revenues. New Mexico’s lawmakers had to cut funding to all state agencies during a special session in early October to plug a $654 million budgetary gap due to a plunge in oil and gas revenues, from which the state derives a third of its general fund. On Oct. 26, state lawmakers learned that there was still a $100 million predicted deficit and no cash reserves.
“What you find is when you don’t diversify an economy in the good times, then when your commodity goes south, you take a big hit,” said Raton’s solid waste manager Jason Phillips. “You can wallow in it, but you can’t really change the course of fate. You’ve got to move forward.”
Raton knows. It’s been there.
Rise and fall
The town of Raton is cupped at the foot of a 75-mile long volcanic ridge known as the Raton Range, at the nexus of New Mexico’s high plains and the eastern edge of the Sangre de Cristo Mountains. It was a stop along the Santa Fe Trail, born during the United States’ westward expansion in the middle of the 19th century. From the beginning, Raton was a town of immigrants. Italian, Irish, Mexican, Russian, Scottish, Greek and Yugoslavian miners flocked there to dig coal. “Most of us who grew up here, our ancestors came to mine coal,” city manager Scott Berry said. “You had a lot of coal mining towns that needed labor. We came from everywhere.”
The first customer was the railroad, whose steam-powered trains needed coal to climb the steep Raton Pass into Colorado. Later Kaiser Steel used the Raton Basin’s coal for its massive steel works. As the mines expanded, they took a heavy toll: The Dawson mine suffered two massive explosions a decade apart, in 1913 and 1923. Crosses marking the graves of more than 380 miners who died in the two accidents line a local cemetery.
City commissioner Ron Chavez and most of his family worked for a coalmine, including his sister, his brothers and his father. Chavez was a safety engineer at the York Canyon Mine, making good money like most of the workers. He retired and opened his own business. “When I left, there were 670 people working at the mine,” he said.
Mine workers could make $20 an hour with a high school education.
The town reflected its prosperity. In the 1980s, when the population was at its height of 8,200, there were more than ten bars, a dozen gas stations and two fine dining restaurants.
“When I was in high school, the town was booming,” said Ann Marie Pappas, a professor of business at Trinidad College, who is also trying to keep alive the Pappas Sweet Shop Restaurant her grandparents opened in 1923. “You couldn't find a parking place. There were always dances. Lots of stores. Now so many of them are closed.”
Horseracing was a major pastime for Raton locals beginning in 1946, and also brought in Texas oil barons and tourists from around the mid-West. Like coal, racing was in Raton's blood.
But horseracing died in 1992 when the La Mesa track near town closed.
The coal mines closed one by one, beginning with Dawson in 1950 and the final one, York Canyon, in 2003. Media mogul Ted Turner bought the Vermejo Park ranch that included the York Canyon Mine with no plans to reopen it.
There’s still plenty of coal in the valley, but Berry and Chavez figure it’s likely to stay there. “It was economics,” said Chavez. “Kaiser Steel bought the largest coalmine there to make steel. Competition from China over steel sank the market.”
Berry acknowledged that Raton, like many towns in New Mexico and the state as a whole, owes its growth to extractive industries. “But it’s cyclical,” he said. “Mining in the Raton Basin was important to the region for 100 years. But in the early 2000s, it just stopped. And it is not the business of the future.”
As the mines closed and the jobs left, Raton turned its hopes back to horseracing.
In 2009, Raton won approval from the New Mexico Racing Commission for the state's final racing license, with plans to build a $50 million racehorse track and casino. The 53,000 square foot facility would include racetracks and stalls for Thoroughbred and Quarter Horses, as well as 600 slot machines. It meant more than 300 direct and indirect jobs.
In the end, though, the “racino” never came to fruition. Financing and construction problems cropped up between the development partners, and the state pulled the plug in 2010. The land leased for the project ended up entangled in a lawsuit.
As the racino dream died, Raton struggled to hold on. By 2010 the population had declined to 6,100. Businesses closed, boarding up windows and doors. Savings ran out. Feldman's parents tried for seven years to sell their home and move. “No one would touch it,” she said.
Now there are only a couple of bars and a couple of gas stations open.
The decline in gross receipts and other taxes hit the town and county hard. Colfax County lost half a million a year in oil and gas receipts out of its $13.5 million budget. Gross receipt taxes dropped 20 percent, said new county manager and long-time Colfax County rancher Mary Lou Kearns.
Today, the county jail is full, too. “There’s a huge increase in the prison population, unfortunately drug related,” Kearns said. “Meth and heroin are bad right now. We’re having to take prisoners to other facilities because we are over capacity.”
“Drug problems, poverty, abandoned buildings — it all ties back to the loss of the economic base,” Phillips said.
Scott Berry didn't plan on returning to his Raton hometown after he graduated from high school. An engineer by training, Berry came back to help run the family ranch after his dad fell ill, and eventually opened his own business as a consulting engineer to coalmines. He was hired two years ago as city manager.
Tasked with turning the town around, he and the city commission set about identifying how Raton could attract new businesses and tax revenue, examining models successfully deployed by other towns. They looked to form partnerships and work with the school district, businesses and the local hospital — a tactic used by Farmington and Hobbs, two New Mexico towns in the heart of oil and gas fields.
First, Raton had to be willing to accept more public money. For years, said Phillips, the town prided itself on funding its own way, largely through tax revenues from coal mining and auxiliary jobs that supported the industry. In the last two years, however, the town has applied for state funds to help rebuild its economy, including two New Mexico Mainstreet grants. In October, Raton was awarded $320,000 to build safe road crossings, improve sidewalks, install street lamps and finish building a park next to the Amtrak stop in the heart of the town. It's an effort officials hope will help get businesses back into boarded-up commercial spaces.
City officials also knew they needed to get more people to drive into Raton and not just past it on their way to Denver, Albuquerque or Amarillo. A state Department of Transportation study found 19,000 vehicles a day drove Interstate 25 along Raton's edges, many stopping at the town's McDonald's and Lemus Cafe or the nearby hotels. Stearns figures “9.5 of 10 New Mexicans don't know what we have here.”
“The toughest part about Raton is getting you here for the first time,” agreed Phillips. “Once people see the town, a lot of them fall in love with it.”
A higher education center
Luring people to Raton has long been impeded by the fact that it’s one of the few towns its size in New Mexico that has no community college or university. Berry and a former mining lawyer named John Davidson knew they needed a higher education center. “A university is a good economic development driver for your town that is fairly stable,” Berry said. “Las Cruces would be nothing without New Mexico State University. Soccorro would be nothing without New Mexico Tech.”
Davidson, another Raton native, worked with the town and volunteers to form Sustain Raton, a nonprofit. With a donated building, donated funds and the state’s blessing, they formed a partnership with Santa Fe Community College. On Oct. 14, they opened The Center for Sustainable Community, where they’ll work with SFCC’s Trades and Advanced Technology Center to offer certificates in greenhouse management, solar energy and more.
“We're really excited about partnering with them,” Berry said. “Sounds funny, this town of coal miners, seeing this as part of our future.”
The hope is to train a local workforce in the skills that might attract new kinds of businesses developing in a “clean energy” economy. Berry and others have their sights on small, high added-value manufacturing.
“I don't see a New Mexico town that has built their economy around any kind of manufacturing,” Berry said. “We would like to.”
Some town officials also have a long-range dream to one day have an independent power utility for Raton, a facility that will require specially trained workers.
Although other New Mexico towns can offer more amenities, Raton has one big advantage: rights to millions of gallons of water stored at Angel Fire reservoir and in Sugarite Canyon lakes. The city is one of only two in the state that dedicates a portion of its gross receipts taxes to maintaining the water system. The town also put in a wastewater treatment facility and plumbed its parks to use the recycled resource decades ago.
That aquatic asset is key to attracting some types of businesses. For instance, Jim Stearns and his civil engineer wife, Karen, moved to Raton in 2014 from Albuquerque to open a craft brewery in an area with good water and a need for jobs. They are a few months from turning on the taps at the Colfax Ale Center, housed in a renovated stone building on the town's Main Street.
Raton also has an airport with a runway long enough for larger jets to use. That helped the town sign a lease recently with Doss Aviation of Colorado to open a flight training branch in the former National Guard Readiness Center. The 46-year-old company offers classes for fixed and rotary wing aircraft, handling basic flight training for all U.S. Air Force pilots and other military branches.
Doss already had a successful flight training school in Pueblo, Colo. What the company needed to expand flight classes was air space, a building and a welcoming community. They found all three in Raton.
“It’s been very helpful and easy to do businesses in New Mexico,” said Mark Lester, chief operating officer with Doss Aviation, who predicts they’ll hire about 30 people when the training classes are up and running. “It has left us free to find customers, instead of fighting a bureaucracy.”
Near Raton are two other amenities: the National Rifle Association’s Whittington Center and the Philmont Scout Ranch. Both bring in more than 100,000 visitors annually to camp, shoot, take classes and enjoy the scenery. Those shooting and camping enthusiasts represent a critical influx of customers at local restaurants, hotels and other businesses, Berry said.
Chavez and Berry said town officials are spending a “significant amount of time” contacting companies that might be enticed to Raton. They want businesses that are invested in the community, entrepreneurs who grew up in small towns, understand the culture and want to stick around.
Building out a health care industry
Finally, Raton has Miners Colfax Hospital, which has its own dedicated fund at the State Land Office and the only mobile respiratory clinic for miners in the nation. The hospital provides long-term care for miners and critical care and primary care for the public, including the only obstetrics service between Colorado and Santa Fe.
Hospital CEO Shawn Lerch and the hospital board, of which Berry is a trustee, has undertaken a five-year-plan that started with building a new hospital two years ago. The hospital included space for some outpatient behavioral health services, part of Lerch’s integrated health goal to provide both mental and physical care to patients. The next step is getting permission from the state to leverage $10 million of the hospital's money into renovating the old hospital into a full-fledged in-patient behavioral health facility. Ultimately, he believes the integrated approach will save everyone money and lead to more effective treatment, and that the facility will create 150 more jobs. “Having an exceptional health care facility is key to bringing in other organizations and companies,” Lerch said.
Ultimately, said Pappas, whose father was Raton’s long time mayor years ago, “We have to never become complacent again. We are always going to have to look for new trends, new ideas and not become reliant on one or two industries the way we were on coal and horse racing for so long.”
But the road to economic rehabilitation will not be a smooth one. Just ask Mauricio Lemus, who was fifteen when he fled war-torn El Salvador three decades ago for the United States. He had successful businesses in California before heading east to buy a restaurant off Interstate 25 in 2006. He recently bought the adjacent hotel, which he’s now renovating.
Lemus chose the location for its proximity to interstate travelers and for Raton’s laid-back reputation. He didn’t expect staffing to be his number one problem. He says he has a 50 percent turnover rate. Some people show up for a day and never come back. Others call him a few minutes before their shift to offer a variety of excuses about why they can’t come to work. “Here there is a joke that if you show up, that's 75 percent of the job,” Lemus said, sitting in his restaurant. “Here you have people coming in to apply for jobs in their pajamas and no shoes. I kid you not.”
All of the city’s efforts to bring in companies and jobs won’t help unless there’s a trained, skilled and willing work force, Lemus added. “The city manager can see the big picture on economic development, but sometimes I think we need to learn to take care of the smaller things first,” he said.
Lemus is not the only business owner who feels this way: two others griped about the challenges of staffing off-the-record.
Other businesses face different work force problems.
Pappas has few issues with her ten employees, except she can only afford to hire them part-time. They all work full-time jobs to make ends meet and still help her keep the off-the-beaten path cafe open.
Stearns can’t find professional tradesmen with specialized skills to finish work on his brewery. Hiring them from Denver or Albuquerque would be prohibitively expensive. “It’s taking a long time and a lot of finagling,” Stearns said, all of which slows down the opening date for the brewery, a business many think will help pull travelers into town.
Lessons for a state
Raton, like New Mexico as a whole, faces deep challenges. It is a big task to shift an economy that's depended for a century on natural resources dug and pumped from the ground, industries that go through cyclical booms and busts.
Raton’s approach to shifting its economy is similar to the one adopted by Hobbs, New Mexico, a town in the heart of the Permian Basin's oil fields that’s survived its own industrial booms and busts. City officials say they’ve learned from the past. During boom years recently, Mayor Sam Cobb said all the major agencies, from the town to the school district to the hospital, met to decide what they should invest in to prepare for another downturn. They set aside millions of dollars to invest in housing and recreational facilities, infrastructure they thought could help Hobbs expand its business base beyond oil and gas.
Hobbs’ tactics don’t just provide lessons for Raton — they could also offer a blueprint for the entire state. New Mexico State University economist Jim Peach recently told the state’s Tax and Revenue Committee that New Mexico would need 147,000 jobs to bring employment back to what it was before the recession. According to Peach, if the state had grown jobs at a rate of one percent a year for the last decade, the resulting tax revenues would have offset most of the losses from oil and gas.
"New Mexico’s economic problems are not insoluble,” Peach told lawmakers. “But the solutions require a new approach to economic development... and substantial investment in both human capital and physical infrastructure.” That’s more or less the approach being followed right now by Hobbs and Raton.
What can New Mexico do now? “We can be a vendor to the world with the internet. We have to adopt a philosophy beyond big companies,” said Cobb, who manages the production of the vegetarian BocaBurgers, all of which are made in Hobbs. “We would be much better off having 1,000 ten-employee businesses selling over the internet than one 1,000 employee Tesla.”
The road ahead
On May 19, Raton residents turned out by the hundreds at the old Shuler Theater to welcome home native son Paul Modrich, who had recently been honored with a Nobel Prize in chemistry.
He represented so much of what small towns like Raton believe about themselves and what their children can achieve.
But Modrich didn’t stay home in Raton to win his prize. He built his career elsewhere. People like Berry, Chavez and Kearns want to see that change. “I want this to be a place where my children and grandchildren can return if they want to,” Chavez said.
Berry figures it will take five more years to know if all the efforts have paid off.
They want to build the opportunities to bring their brightest back and to bolster the entrepreneurs who take a risk and return, like coffee shop owner Katie Feldman. Feldman is seven months into her venture and it’s going well. “We're having fun. It’s always busy,” she said.
The renovated park next to the train station, the Center for Sustainable Education across the street, and the expanding hospital across town are all helping. Everywhere she sees signs that she was right. Raton is picking up steam. “It feels alive again,” she said.
This story is part of the "Small towns, big change" project through the Solutions Journalism Network.