The business of Santa Fe in 2007 ranged from big problems at the state's largest publicly traded company, Thornburg Mortgage, to a guaranteed wage for almost all of the city's workers and the promise of regional jet service offered by two airlines, American Eagle and Delta. Here are the year's top ten stories:


1. THORNBURG — The biggest story of the year — a $50 billion one — was the disastrous decline and near demise of Thornburg Mortgage, which until August was New Mexico's largest public company.

Following a collapse of the credit markets, Thornburg Mortgage, which is part of Thornburg Companies, lost half its market value and saw its stock fall from $18.06 on Aug. 10 to $7.61 on Aug. 14.

Even though Thornburg specialized in issuing jumbo mortgages to wealthy borrowers, the company fell victim to the subprime crisis, in which lenders extended mortgages to people with dubious credit histories.

As those loans faltered, banks and other lenders tightened loan requirements, making it difficult or impossible for Thornburg and other lenders to borrow money to originate new mortgages.

Thornburg Mortgage was forced to sell $20.5 billion of its safest investments at a steep loss. The company also canceled its third-quarter dividend. In December, Thornburg announced a fourth-quarter dividend of 25 cents per common share and named former chief operating office Larry Goldstone as chief executive officer.

Thornburg Mortgage's stock closed out the year at $9.33. The stock's 52-week high was $28.40 in May; the low was $7.49 in August. The company's assets fell from
$50 billion to today's $35.2 billion.

Despite the problems at Thornburg Mortgage, Thornburg Companies went ahead with construction of a planned 102,000-square-foot campus on North Ridgetop Road near N.M. Mexico 599. That building is expected to open at the end of 2008.


2. MINIMUM WAGE — Another big business story had more to do with small businesses in Santa Fe — starting Jan. 1, all Santa Fe businesses and not just those with 25 or more employees have to pay a wage of $9.50 per hour.

That was the result of a deal worked out between city officials and business leaders that avoided raising the minimum wage to $10.50 an hour in January of this year.

Workers will receive pay increases in coming years based on the rise in the consumer price index.

Many business people said the $10.50 wage would have made it more difficult to do business in Santa Fe and possibly forced some companies to go out of business.

An analysis by the Bureau of Business and Economic Research at The University of New Mexico showed the city's economy "has been performing well" since the living-wage ordinance went into effect in 2004.

The state of New Mexico in 2007 passed a law that increased the statewide minimum wage to $6.50 starting in January. That law exempts Santa Fe and Albuquerque, which already have minimum-wage laws in effect.


3. BUSINESS ASSISTANCE — Local business assistance groups had a busy year, with the Santa Fe Chamber of Commerce holding a membership drive that increased members, the Santa Fe Business Incubator celebrating its
10th year in business and Santa Fe Economic Development announcing plans to close.

About 160 chamber members took part in the drive, which were led by a professional facilitator.

The chamber increased its membership by 273 members, for a total of 1,353.

Chamber president Simon Brackley said he was "very excited ... by people's willingness to be involved in the business community."

The incubator, which provides services to energizing businesses, has served 64 client companies since its inception in 1997.

In 2007, the facility's tenants had revenues of more than $20 million, said CEO Marie Longserre.

Santa Fe Economic Development, which has helped grow the business community for two decades, said it was shutting down because of a lack of funding.

In July 1997, SFEDI, which was headed by Catherine Zacher, launched The Santa Fe Plan: The Cluster Approach to Economic Gardening.

Economic gardening refers to the cultivation of businesses already in the community and differs from economic hunting, which involves recruiting new businesses to relocate to the community.

4. JET SERVICE — America Eagle and Delta Airlines announced plans in 2007 to bring regional jets to Santa Fe, with service to Dallas, Los Angeles and Salt Lake City.

The two airlines are expected to start flying to Santa Fe in January and February.

At the same time, Great Lakes Aviation, which has provided service from Santa Fe to Denver and Albuquerque, will stop its flights on Monday. Great Lakes started flying to Santa Fe from Denver in 1998.

Delta and American Eagle originally wanted to begin flying to Santa Fe in December, but those plans were delayed because of problems with a Federal Aviation Administration environmental assessment.

Mayor David Coss and the City Council are advocates of improved air service to Santa Fe. That marks a turn-around from the policies of past administrations.

The Santa Fe Chamber of Commerce and the hospitality industry welcomed news of the improved air service, and the chamber purchased a Web site, fly-santafe.net, to promote air travel to Santa Fe and provide links to the airlines serving the city.


5. RETAIL — Santa Fe's retail industry was active in 2007, with the opening of a Kohl's department store in October in Valdes Business Park one of the top developments.

The reopening in the downtown area of Doodlet's pleased many shoppers, especially since the 50-year-old store had been closed for almost two years for renovation.

Also of importance was Whole Foods Markets' purchase in August of Wild Oats, which initially left workers at Santa Fe's Wild Oats wondering what would happen to them. But Whole Foods kept the local Wild Oats open and said it would upgrade the 19,000-square-foot store on St. Francis Drive.

Not remaining open is Santa Fe Supermart, which unexpectedly shut its doors in Rodeo Plaza shopping center due to a lack of business.

Also, a Florida firm purchased underoccupied Santa Fe Outlets and changed the name to Fashion Outlets of Santa Fe. Talisman Companies wants to bring Polo and Nike to the retail center by the spring of 2008.

Santa Fe Place, formerly Villa Linda Mall, also was sold and now is owned by Babcock and Brown, a global investment company based in Sydney.

In other retail activity, Regal Stadium 14 movie theater opened in San Isidro Village in April.

In the auto sector, auto dealer Don Chalmers bought the Capitol Ford Lincoln Mercury franchise in the Santa Fe Auto Park. Chalmers also owns Don Chalmers Cadillac Saab in Santa Fe.


6. REAL ESTATE — Santa Fe real-estate sales remained relatively strong through the first three quarters of the year but flagged in October and November, when the median sales price dropped in the city.

The number of homes sold in the first quarter of 2007 was down 35 percent over the same period in 2006, but the median sales price rose 15 percent to $354,125.

In the second quarter, the number of homes sold continued to fall, but the median sales price rose again, to $403,000.

The median sales price in the third quarter was also up, to $349,500, but lower than the median sales price in the second quarter. The number of city homes sold in the third quarter was down 23 percent.

Fourth-quarter numbers won't be available until next week, but if November is any indication, both the number of homes sold and the median sales price were down in both the city and the county.

The city median sales price came in at $355,000, while the price in the county was $428,278.

Realtors' expectation for 2008 range from very optimistic for a return of a strong market to concern that it could be a flat year.


7. HEALTH CARE — In the health care industry, St. Vincent Regional Medical Center is exploring the formation of a partnership with Christus Health, one of the country's largest health care systems, in an effort to cut debt and to allow the hospital to expand to the city's fast-growing south side.

A decision is expected in February.

Christus, a Roman Catholic health system based in Irving, Texas, has more than 40 hospitals and other medical facilities in 70 cities in the U.S. and Mexico, and about 29,000 employees.

The partnership was generally welcomed by St. Vincent workers, including doctors.

There were some concerns that the merger with a Catholic institution such as Christus would limit medical choices, including reproductive-health services and end-of-life decisions.

St. Vincent has proposed forming a separate nonprofit called SVH Supportco to insulate Christus from involvement in procedures that are not in keeping with Catholic health practices.
 

8. CONSTRUCTION — Construction abounded in and around Santa Fe in 2007, much of it in the downtown area.

The largest project was the city of Santa Fe's conference center, at the corner of Marcy Street and Grant Avenue. It's expected to be finished in the summer of 2008.

The Museum of New Mexico expansion project, on Lincoln Avenue, won't be done until 2009.

Also downtown, renovation started on La Esquina building, across from City Hall on Marcy Street at Lincoln Avenue. The New Mexican building on Marcy Street was remodeled, and staff moved back in early August after more than a year at the former White Swan building on Cerrillos Road.

Future construction projects include one by First National Bank and Greer Enterprises in a space now occupied by the bank's parking lot between West San Francisco Street and Palace Avenue.

Greer Enterprises is also proposing a project of its own — Villas at the Lensic, a retail and condominium project, also in a space now used by Greer as a parking lot. It's at the intersection of Sandoval Street and West San Francisco streets and Palace Avenue.

Villas at the Lensic came under criticism by the Business Capitol District/Development Review Committee but received a conditional approval from that panel.

Other major construction projects included Thornburg's new campus off N.M. 599 and Pojoaque Pueblo's casino/hotel in Pojoaque.


9. LODGING INDUSTRY — No new hotels opened in Santa Fe in 2007, but Encantado, a luxury property on the site of the former Rancho Encantado, will open for business in July.

The property features 65 casitas in what the owner Auberge Resorts calls a "world-class spa" with 15 treatment rooms. The hotel also features a restaurant and lounge, all on 57 acres of land in Tesuque. A fitness center and yoga studio are also planned.

In another hotel development, The Inn and Spa at Loretto was acquired by Lowe Enterprises, a national real-estate investment, development and management firm based in Los Angeles.

The 134-room hotel sold for $47.5 million.

Also, a partnership led by the Gencom Group purchased the 157-room La Posada de Santa Fe for an undisclosed amount.

RockResorts remains the management company at La Posada.

At year's end, Corporacion de La Fonda, parent company of La Fonda, and The Peters Corp. announced a plan whereby La Fonda would buy all stock in the hotel holding company owned by Gerald and Kathleen Peters and The Peters Corp.

The Peters group had owned stock in La Fonda since 1985.


10. RESTAURANTS — The restaurant industry was busy again in 2007. Among the restaurants opening were Amavi on Shelby Street and La Boca on Marcy Street.

Yummy Cafe, a Chinese restaurant, opened in St. Michael's Village West shopping center, and Celebrations moved from Canyon Road to the same center.

Miklo's Coffee House was the first business to open in Tierra Contenta's commercial space, Plaza Contenta. Restaurants opening in San Isidro Village included Josh's Barbecue, Wild Wild Wok and Patsy's New York Pizza. Back Road Pizza opened a second location in Turquoise Trail Business Park

The Pink Adobe reopened under new ownership following the sale of the property by the Hoback family to the Garrett Hotel Group. Close by, the Rio Chama Steakhouse completed a remodel.

The Little House Chinese restaurant moved to a restaurant space in the College Plaza South shopping center.

The food court at Santa Fe Place took a hit with the closing of Ichi Bon Express and The Big Enchilada. Only Famous Wok, Dairy Queen and Sbarro Italian Eatery remains.

Among other restaurants that closed were Fox's Upstairs Bar and Grill off
St. Michael's Drive, Señor Lucky's at the Place in downtown Santa Fe and Red Skye Grill on Old Pecos Trail.

Contact Bob Quick at 986-3011 or bobquick@sfnewmexican.com