Everyone's heard about the billions of federal tax dollars that have gone to private businesses to stimulate the U.S. economy. On a much smaller scale, the city of Santa Fe is trying to do the same thing.

Over the last two years, its Economic Development Division has handed out more than $1 million in sales-tax revenues sponsoring a teenage jobs program, supporting new businesses, helping workers get housing and bolstering existing industries.

Other contracts include funding for artists, a solar startup, a high-school mentorship program and several consulting gigs.

Kathy McCormick, head of the Community Development and Housing Department, which was reorganized a year ago, said, "Economic Development in the past did not put a lot of money out the door into the community, and we did."

Hatching winners

The longest-running project that the city supports through its economic development money is the Santa Fe Business Incubator, a 10-year-old small-business support center that gets about $200,000 — a third of its operating revenue — from the city.

Its staff and volunteers maintain a facility with space for about 20 businesses at a time, offering help with overhead — such as shared copy machines and conference rooms — along with advice about building an enterprise.

"We are kind of a halfway house between the idea or the dining room table or the home garage business to a five-year lease on a commercial property," said incubator director Marie Longserre, who noted businesses that "hatch" from there are likely to stay in the community.

The Santa Fe Business Incubator reports it has taken on more than 70 clients, who have generated nearly 700 jobs. The investment the city makes is repaid by a factor of four over time, according to research cited by Longserre.

One of the businesses currently headquartered at the incubator off Airport Road is ApJet, an eight-person firm looking to commercialize technology developed at Los Alamos National Laboratory that treats textiles in an environmentally friendly way to make them water- and oil-proof.

Alex Padilla, ApJet's director of sales development, said the firm expects to earn "tens of millions" in royalties for fabric treated with its machines, which are manufactured by a South Carolina company, and eventually to employ 20 people in Santa Fe.

In an office down the hall, Caroline Seigel has a much more low-tech operation as the sole proprietor and employee of 20th Century West Inc., an art appraisal service. The incubator helped Seigel convert her liberal arts education into a career. She worked for another art appraiser before setting out on her own five years ago.

"It's been so easy to be here," she said. "I feel like on some levels I am just learning how to make use of the resources. For the first couple of years of my business, I was just really trying to figure out what was going on in the short term. Now I am getting into being more strategic."

Risky innovation; investment in youth, housing

In a rented space near the Santa Fe Railyard, Stephen Guerin's year-old Santa Fe Complex provides "a nonprofit workshop for people to explore the forefront of science, technology and art."

Guerin moved to the city to get involved with the work going on here in the field of complexity science, the study of complex adaptive systems such as the stock market, social structures and ant colonies. For example, one project that grew at the complex uses computer science, mapping and sculpture principles to create a three-dimensional data model called a Simtable that can be used as a tool for planning departments.

Just last week, Guerin was in Venice, Italy, explaining how the technology might work for the city officials there. Part of whatever money he brings back to Santa Fe will go into the complex. Right now, the city's funding of $165,000 makes up 60 percent of the operating budget for the space, but Guerin hopes that next year he'll need a subsidy of only 20 percent.

Organizers at the complex encourage lots of people to hang around. Instead of an office for individual businesses, it's more like a collective space where people can meet, merge and make things happen.

"I think Santa Fe is a ripe environment for this kind of thinking. There is kind of a movement where a lot of work is becoming very project centric instead of company centric. ... It's very progressive (for the city) to give this kind of place a shot," Guerin said.

McCormick considers that kind of venture capital investment the key to the city's grant portfolio.

"We did not look for the safe deal or the sure bet or any of that. We said, 'Let's look at things that are risky that would help us achieve our economic development goals, which are to create higher-wage jobs, jobs for kids who grew up here who are leaving,' " she said.

Another major contract is with YouthWorks for a Green Collar Jobs training program. The city's $162,000 helps pay the wages of young apprentices who work in environmentally friendly jobs.

So far, 25 youth have begun three-month stints at jobs such as the construction of energy-efficient homes and installation of water-harvesting systems. Tobe Bott-Lyons, YouthWorks program coordinator, said about 70 percent of apprentices finish their programs. But because the recession has slowed construction, there is more money available than businesses that are willing to participate.

"It's not a good time because a lot of businesses we have been working with are not hiring, or they are downsizing, in fact. It has become harder for us to place kids," he said.

The apprenticeship was an opportunity for Dominic Cantu, who was one of the first apprentices to work in the pilot program.

Since then, Bott-Lyons said he's earned his high-school equivalency degree, got hired full time as a YouthWorks job supervisor and has enrolled in college drafting and engineering courses for the fall. To top it off, Cantu is traveling to Washington, D.C., to the attend the Congressional Hispanic Caucus as a guest of Rep. Ben Ray Luján, D-N.M.

"It's great to see an economic development partner that really sees the value of what we are trying to do," said Bott-Lyons. "It's been a long time that YouthWorks has been waiting for people in the community to see that ... we are getting kids off the streets, but what we are really trying to do is strengthen our economy."

Another big grant — $125,000 — went toward a down-payment assistance program for people with jobs in the city.

"The idea was if we can get the work force to live where they work in the city, they spend their money here and it's good for the economy and it's good for the businesses because it limits their turnover," said Mike Loftin, director of the nonprofit group Homewise.

The next big thing

Recruiting businesses to relocate here is one way of creating jobs, but the city is not necessarily expecting to lure a call center, a manufacturing plant or any other "big thing" to Santa Fe.

"We have a big reputation, but we are a small town," said Simon Brackley, executive director of the Santa Fe Chamber of Commerce. "It would be very difficult for a company to come here and say we are going to create 500 jobs tomorrow."

McCormick said she doesn't "see Santa Fe doing an Intel, for example. It's our smaller businesses that fit that Santa Fe model. We are not going to do what Rio Rancho does."

On the other hand, the city's decision to finance a public takeover of the College of Santa Fe campus and its consideration of a controversial plan to develop housing in the Northwest Quadrant might both eventually be major economic drivers for the city, she said.

Still, creating jobs is priority. When the Economic Development and Housing Division set its three-year goals last July, it aimed to create 900 jobs in the city that pay more than $40,000 per year. According to a recent progress report, the division takes credit for creating "or retaining" 226 jobs in the last year — including 137 related to businesses at the incubator. The report does not evaluate the salaries.

The Santa Fe Alliance, an independent business group, has a campaign called "Buy Local First," and will continue to use money it gets from the city to support local growers and food manufacturers.

That initiative is not to be confused, however, with the "Santa Fe: Buy Into It" campaign, on which the city plans to spend $60,000.

Alliance director Vickie Pozzebon said she's grateful for the city's support of her organization and generally supports all of its other economic-development priorities. But she's not pleased with the city's participation in a practice she calls "local washing."

The "Buy Into It" campaign, she said, co-opted the language of independent local business by encouraging shoppers to hit the nearby Target, Lowe's or Albertsons and calling it "local."

"We come from a very different idea and model of what economic development is," she said, noting that she always reminds consumers that money spent at locally owned businesses benefits the region more than spending at out-of-state corporate chains.

"So I actually kind of hate the words 'economic development' because for us it is really about long-term sustainability for the entire community," she said.

Looking back and ahead

Other criticism of the economic development spending comes from Leveo Sanchez, a Santa Fe native, who said the city's efforts have "bypassed the Hispanic population in general."

Sanchez, who returned home to retire about three years ago, said he sees in Santa Fe "three cities" of business: one where Mexican immigrants are scraping out a living by being "resourceful and very aggressive"; another of local Hispanics who are in long-standing businesses but have "sort of a lot of apathy" about expansion; and the "expatriates," who he describes as "well-heeled Anglos."

Sanchez, head of the fledgling Santa Fe Hispanic Chamber of Commerce, said the city's efforts have overlooked Hispanics, beginning with the Mayor's Advisory Board on Business and Economic Development, on which he briefly served. He said the city needs to carry on a more active effort to reach that population and include them more in economic developments plans.

"I left because the City Council and the mayor never seemed to pay attention to us," Sanchez said.

Others bristle at that idea. Brackley says racial bias is not a factor in the kind of economic development the city of Santa Fe and its business community are pursuing. Both the chamber and the incubator have earned recent awards for bilingual outreach, he pointed out.

Another investment that has raised eyebrows is the amount the city is spending on consultants to study and evaluate programs or do marketing. Although McCormick defends that spending as necessary, she said she plans to revisit the final process for approving contracts up to $30,000. Those are vetted by staff but don't get City Council approval, she said.

"We want to be fast and effective," she said, "but we also want to be able to defend what we are doing."

Contact Julie Ann Grimm at 986-3017 or jgrimm@sfnewmexican.com.