Somewhere in the prosperous burbs of our nation's metropoli a well- rested couple sits in a sun-drenched breakfast nook, dabbing French jams on flaky croissants and giggling over a runaway stock market that's made them both paper millionaires.
"You know," Cliff says, "with
Athena off at Stanford and the Dow breaking 5,000, maybe now's the
time to cash in and get that place we've always wanted in Santa
"Whoa, lambchop," Leslie balks. "Not Santa
Fe. Mark and Sheila are still there, so's that guy with the nose
rings who futzed up my hair, Zeno, Zenon, whatever. Half the
country club moved there last year."
you adored Santa Fe," Cliff protests. "The galleries. The
piûon nuts. Remember that turquoise concha belt I got you at
"Yeah," Leslie snorts, "I wore
it to the Junior League bazaar last year and they're still calling
"But you always said Santa Fe made
you inspired," Cliff argues. "Energized. Closer to the land.
"It does," Leslie sighs. "I mean,
it did. It used to. It's ... it's just everybody else is either
there already or leaving. Besides, nothing's a bargain there
anymore. And remember those Mexican ... er, whatever, Hispanic kids
who flipped you the bird outside Coyote Cafe? What was their
problem? And that pushy woman mayor. I'm telling you, it's not the
same in Santa Fe."
"Well," says Cliff, "what
And so it
is on the refined fringes of Boston, Los Angeles and Dallas that
the comfortable class has decided Santa Fe has fallen from grace.
The closest thing to a formal announcement came last year when
Condé Nast Traveler, whose readers had named Santa Fe their
favorite destination in the world in 1992- surpassing even Rome and
Venice - published a poll in November listing it in 11th
"Santa Fe may very well be one of those
tourist destinations," explains John Mariani, food and travel
correspondent for Esquire, "that many or most people have gotten to
and there's no reason to return."
"It's been a
wonderful ride and it will occur again," says Howard Kurlansky of
Santa Fe's primo real estate firm, French and French Fine
Properties. "(Santa Fe has) ridden its wave of popularity. No place
stays popular forever."
Upscale tourism, hotel
occupancy and room rates in Santa Fe are significantly down, retail
sales are flat, construction starts are off 30 percent, several
galleries have closed and the rarified real estate market that once
boasted a median Santa Fe home price of about $262,500 - even as a
third of the rural county lived at or below poverty level - was
about $166,000 in the second quarter of 1995. (For comparison, the
Dallas median just topped $103,000; Aspen's has been $1
Empty stores on and around Santa Fe's
three-centuries-old Plaza, where the Manhattan-like rents can reach
$90 a square foot and more, are now commonplace, as are empty
tables at swank luncherias. Many art galleries, T-shirt shops and
Indian jewelry stores are longing for customers, while one
50-merchant indoor market called Santa Fe Mercado closed its doors
There's more public tension between
young Hispanics and whites, more graffiti and gang activity, and
increased violence in the much-maligned public schools, where the
alarming high school drop-out rate only feeds a growing and poorly
skilled underclass. Job cuts of nearly 1,000 employees at nearby
Los Alamos National Laboratories and continued shrinking of state
government have further squeezed the town's dwindling middle
There are a host of socio-economic causes
for all this - some unique to Santa Fe, others now rising with the
so-called world economy - but the hotel and tourism industry of
Santa Fe has isolated its villain: populist mayor Debbie
42-year-old former city councilor and mother of three grown boys,
was elected mayor two years ago over a mainstream Hispanic
businessman in an emotional campaign that had the town agonizing
over its racial, class and economic divisions (HCN, 8/8/94).
Newspapers were filled with letters and guest columns that
excoriated the last decade's influx of wealthy white immigrants for
isolating themselves from the town's day-to-day problems and
fueling resentment from poorer Hispanics.
her campaign, Jaramillo promised to put developers in their place,
demand more affordable housing, clean out deadwood in city hall and
discourage the most destructive aspects of
Funny, impassioned and hard-headed,
Jaramillo once said of the new immigrants: "They bring their
culture, their values, and we are supposed to assimilate. That has
got to change."
She made it clear she thought
Santa Fe was being sold to all the wrong people. "We don't need any
more (promotional) videos of people getting out of Porsches and
women on ski slopes," she says. "And you won't ever see me (like
former mayor, Sam Pick) hawking Santa Fe cologne or mixing
margaritas on the (Regis and) Kathie Lee Show."
The Santa Fe tourism industry is not
"Since the last election in Santa Fe,"
says Art Bouffard, director of the New Mexico Hotel & Motel
Association, "we have seen an attitude (from Jaramillo) that is
anti-growth and anti-tourism. As an industry, we anticipate some
dips (in the market), but the situation in Santa Fe is more
Dan Baxter, director of the Santa Fe
Lodgers' Association, says Jaramillo's "outrageous remarks' in the
national press have hurt tourism. "After that recent New York Times
article (Sept. 12)," says Baxter, "we had some cancellations."
Actually, Mayor Jaramillo is never mentioned in
that story - written by Times reporter and Santa Fe resident George
What is cited are Santa Fe police
statistics that show, through last August, 44 robberies, including
purse snatchings, in downtown Santa Fe. Two city councilors told
the Times that Santa Fe hurts from "mass production tourism" and
economic inequality that breeds "resentment."
Although Jaramillo didn't say those things, she
is still on the hook. Bouffard and Baxter are angry that Jaramillo
won't spend an estimated $1.2 million from the city's lodger tax on
tourism promotion. "You must constantly keep the vision, the
opportunity, in front of people," says Bouffard. "If you start
cutting back on advertising, "fam" (familiarization) tours for the
press, and other freebies, eventually it starts to affect you."
Now, Bouffard is delighted that amendments to
the Lodgers' Tax Act will be introduced and, he thinks, passed in
the current legislative session. They will require using about 60
percent of a community's lodger tax for tourism and promotion. Had
this been in place in 1995, Bouffard says, "We could have had an
additional $1.3 million for promotion."
possible that no amount of advertising could ever maintain the last
decade's level of world-wide fascination with Santa
"Hogwash," in Bouffard's view. "We've by no
means exhausted the population out there. Santa Fe should start
looking more to the middle class, and to Canada, Europe and the
French. We don't get our fair share of Canadians."
Hearing these charges, the mayor laughs and
confesses. "You're damn right that lodgers' tax money isn't going
to buy more glossy ads to get rich Canadians and Japanese. These
people refuse to recognize what I said three years ago. I said we
were at the end of our (tourism) cycle. I said, keep this up and
it'll be our downfall. I've always said we can remain popular by
being ourselves," she
is probably saying (or did say) much the same thing in Aspen, Vail,
Jackson, Park City, even Telluride, which is now proudly displaying
its handful of new Hollywood celebrities in work shirts and gimme
caps. Each town lies somewhere along the boom-bust continuum that
starts with rural tranquility and beauty, then moves into hipness,
media exposure, land speculation, saturation and eventually,
Aspen is the best example of a
Western resort town with virtually no middle class. There are the
wealthy, and those who serve the wealthy. As in Jackson, Sun Valley
and Santa Fe, Aspen's waiters, maids and public employees often
live 30 or even 60 miles or more away. While that may be just an
inconvenience in summer, the inevitable car accidents caused by
twice-a-day commutes in winter, often over treacherous passes, have
made the issue of affordable housing one of public safety.
One indication of Aspen's top-heavy nature and
current problems came in a recent Wall Street Journal article that
reported home sales down 40 percent in 1995. At the end of
December, there were some 156 houses on the market priced at $1
million or more.
In Jackson Hole, Wyo., where
some 300 Realtors are licensed in Teton County (pop. 15,000),
Realtor Doug Herrick says home prices are also declining, but
nothing like in Santa Fe or Aspen. What would $150,000 buy in his
market? There is a brief silence on the other end of the phone.
"Well, there are about three homes in the town of Jackson," Herrick
says. "They're marginal, about 1,200 square-feet, 50-by-150-foot
lots, between seven and 15 years old. There will have to be a
leveling off of this market," Herrick concedes, "just to bring it
back to some kind of reality."
It is tempting to
see the West's hot towns as interchangeable: Santa Fe, Jackson,
Bozeman, Aspen, Sun Valley, Telluride ... But after decline, or
bust, these towns may face very different futures. Ski towns,
almost always locked into narrow, high-elevation valleys, appear to
have little choice: They must remain resorts and second-home
enclaves. Their challenge is just how high-end their clientele will
be, where their workers will live and what those workers will be
But Santa Fe sprawls, and water permitting,
it may grow even more. This small town has become a small city of
60,000 because of high-end tourism. Until recently, that choice
served it well.
"Santa Fe blew through a couple
of national recessions without even feeling them," notes Eddie Dry,
director of the Tourism Management Program at the University of New
Mexico. "(In the last decade) Santa Fe has had nothing whatsoever
to do with the national economy. And given that they made the
choices not to diversify their economy, this is not unexpected.
"About 10 years ago they started down this road
of explosive growth with very little planning involved," says Dry.
"This has been a rude awakening for them. They are not invincible."
Santa Fe's awakening comes from what had been
its twin engines of growth: real estate and high-end hotels. The
Santa Fe Association of Realtors reports that sales in the first
half of 1995 were down some 35 percent from 1994, which was a
record year. Homes in the $300,000 to $750,000 range seemed the
hardest to move. "The best bargains," one Realtor confided, "are
anything above $500,000. Now, they're all over-priced." Santa Fe
Realtors - all 795 of them - are having to relearn some old
"Important Price Reductions," teases an
Oct. 8 headline in the Santa Fe New Mexican, offering a
three-bedroom, three-bath, 2,635-square-foot home for just
$345,000. A few weeks ago it cost $90,000
"Owners are slowly coming back to reality,"
one land merchant noted as she pointed out a listing for a
sprawling adobe "ranchito" north of town, reduced $100,000 to
$750,000. On the balcony of a two-story fake adobe selling for
$445,000, a Realtor said her calls are picking up. "Everyone wants
to bargain now, especially Texans," she said. The Santa Fe shakeout
is an "exhilarating time," Coldwell Banker agent Suzanne Field says
in one of Santa Fe's many real estate free newspapers, "because it
forces us to be more creative."
"My business is
probably off 25 percent from last year. But I'm not hurting," real
estate agent Ken Ahler reports.
happening is healthy," says real estate heavy and American Indian
art connoisseur Christopher Webster, "something that needs to
So, who's buying? "I still get folks in
from Southern California," says Ken Ahler, "but nothing like
before. It used to be every time they had a good earthquake we'd
have a thousand people out here looking for houses. I get "em from
Texas and the East Coast. Houston. Dallas. The Texans are wanting
second homes, investment property.
ago," he says, "people were saying it was a down market. They
didn't have any idea what a down market was. We've seen some good
size real estate firms - Prudential and Hallmark - hit the road
To visitors not shopping for houses,
the more apparent indicator of Santa Fe's evolution is the
re-appearance of the vacancy sign. Not only has the once-saturated
downtown apartment market shown an 11 percent vacancy rate (second
quarter, 1995), but the occupancy rate of hotels and motels dropped
to 82 percent last July, nearly 5 percent off 1994's marks, a trend
that continued into the winter.
The decline was
almost predictable. Surrounding states had reported lackluster
summers for tourism. For example, Colorado registered a 30 percent
drop in summer visitors, according to a report by the New Mexico
state tourism office. Perhaps they felt the pinch from what
California tourism officials said was a 10 percent decline in the
number of their outbound tourists during the first part of
Another obvious explanation for Santa Fe's
lower hotel/motel occupancy rates is the construction of several
new economy and mid-range motels on Cerrillos Road, such as Hampton
Inn and Holiday Inn Express. These properties have added nearly
1,000 new rooms over the last five years that can often be had for
less than half of the town's average daily room rate of about $127,
still among the highest in the
this be Santa Fe's future: Growing middle-class tourism living with
high-end visitors? The same Condé Nast survey that showed
world travelers bumping Santa Fe down the desirable list also
showed the city ranking second for U.S. travelers. This trend may
soften Santa Fe's fall, but it's hard to see how the city can hang
on to both markets. Quick, name a town of 60,000 where world-class
opera, museums and pretentious restaurants thrive alongside casinos
and Wally World.
It's not that the Wal-Mart crowd
can't have a good time watching the rich choose wine; it's that the
rich (and their designers, hoteliers, developers, etc.) usually
insist their tourism experience be unobstructed by a loud, messy,
mall culture. Jaramillo and others would love to see the the
current economic downturn force Santa Fe to become a more normal
place - one that could withstand the fickle whims of people of
wealth. They want it to become a healthy middle-class town that
could attract a broad range of tourists, and companies that would
pay living wages to 100 to 300 employees.
don't think that will happen because of the cost of land, housing
and such," says Dry, of the UNM Anderson School of Management.
"They may have lost that window of opportunity to attract that kind
Jaramillo hasn't given up trying,
though. She has always championed small businesses and wants to
start requiring "economic impact statements' from mega-store
operations (such as Wal-Mart and outlet malls) that want to move to
Santa Fe. She has pushed for affordable housing, so that the
companies she hopes to attract will have a labor pool to pick from.
Savvy developers know they had better throw in some low-cost units
with their plans or their upscale projects will move like molasses
through the permitting process.
But just holding
back Wal-Marts and providing affordable housing won't cause a
small-business renaissance. New businesses did open at a high rate
last year - 125 - from Enchantment Trash Liners to Kokopelli Kaffe
and Deli. This would be more encouraging, says graphic designer
Vince Foster, owner of Santa Fe's Get Type & Graphics, if the
law of supply and demand actually worked in Santa Fe. Foster says
hundreds of small businesses that meet no consumer need continue to
come to Santa Fe and quickly die, like lemmings leaping into the
"That's why the economy is so skewed,"
observes Foster, a former magazine photographer from Texas who
moved to Santa Fe in the early "80s. "The new guy (business owner)
doesn't come in with the knowledge of the guy he replaced. You
really see that in galleries and restaurants. You can tell who they
are before they've unpacked their Volvo. They've done no research
Santa Fe, which sees 3 million tourists
a year creep up the fast-food boulevard of Cerrillos Road, is also
beset by competitors nearby. Downtown businesses have been hurt,
Foster says, by a sprawling and popular flea market near the Santa
Fe Opera, a new casino at the Tesuque Pueblo north of town and a
large outlet mall on the way to Albuquerque, off Interstate
Despite the negative signs, city councilor
Cris Moore, a 27-year-old Green Party activist, has not given up
hope that Santa Fe can create a normal economy, and do it without
"We don't need to be on a crusade
to get fewer rich people to move here," he says. "We just need more
housing under $100,000. But what do you do for a down payment if
you don't have a good-paying job? I'm not sure I can name a person
in town who has a livable-wage job with a promising career track in
front of them."
While efforts continue to
attract better-paying jobs, Moore and the Green Party have begun
focusing their efforts on getting unions into Santa Fe's service
economy - hotels, motels, restaurants. These workers usually make
between $5 and $8 an hour, but Moore, quoting data from the Hotel
Employees and Restaurant Employees International Union, says that
in order to pay for a one-bedroom apartment, health care, food,
clothing, transportation and taxes, a Santa Fean needs to make
about $12.60 an hour.
"That's how big the gap is
between wages and cost of living in this town," he says with a
shrug. "Pretty absurd, isn't it?"
the Lodgers Association director, says unions will only hurt Santa
Fe. "If unions get a foothold (in Santa Fe hotels) that could be
dangerous," he says. "Unions aren't necessary here. There is no
poor, oppressed class. If you have unions and some of these hotels
incur another $100,000 in (labor) costs, they could shut down."
Could hotel maids make a livable wage in Santa
"Of course not," he said. "They don't
anywhere in this country. But the work isn't bad. You get meals.
You do have to make beds and clean toilets. They're not abused.
They're not taken advantage of. With education and a good work
ethic they can get out of those jobs."
And go to
what? This is the conundrum for Santa Fe.
has grown too expensive for its natives, so people need high-paying
jobs. But the companies that have those jobs can't afford to move
to Santa Fe because outsiders have driven up the cost of land and
Will the current decline reverse that
trend, and provide openings for new economies to take hold? Or will
outsiders, even if they're not as upscale as in the past, continue
to move to Santa Fe, keeping prices too high for a local
"I don't think this will stop," says
Lynda Taylor, who works on border issues for the Southwest Research
and Information Center in Albuquerque. "I don't see people in
Chicago suddenly saying, "I love these winters." I don't think many
communities in the West will escape this migration."
Everyone in Santa Fe has a
stake in what happens next. Outrage over the conquest of Santa Fe
by affluent newcomers helped elect Mayor Jaramillo. There are many
native Santa Feans who will enjoy watching real estate agents,
developers and the idle rich get their comeuppance in this
declining market. But the gloaters must realize that low-skill but
relatively well-paid construction jobs, and well-paying blue-collar
work like plumbing and carpentry - jobs that employ many of the
town's Hispanic working class - will take massive hits if Santa Fe
It is easy today for some Santa
Feans to look back to the very recent "good old days' that were
fueled by upscale tourism and newcomers. In reality, they weren't
so good. Then, as now, the town's young people, often poorly
educated and embittered, left their homes, families and friends to
find work elsewhere. Of those who remain, many experience problems
with alcoholism, divorce and family violence.
this despite a massive influx of wealth and an apparently thriving
It's easy to feel morally superior to
Santa Fe and its shameless boosters. How could they have screwed up
such a wonderful place? But they are far outnumbered by their
victims, and onlookers can only hope they find some miracles and
re-invent themselves in a self-sustaining way.
Bruce Selcraig writes from
Austin, Texas. He may be reached by e-mail: