Empty shelves: Oil and gas boom challenges local Carlsbad businesses, housing market

Nov 11, 2018

Adrian C Hedden | Carlsbad Current-Argus | October 23rd, 2018

CARLSBAD —The oil boom in southeast New Mexico generated millions in surplus funds for the State of New Mexico.

In return, local communities that host the developments were heavily burdened as businesses tried to keep up with the growth and subsequent population explosion.

Even local grocery stores saw increased demand and were forced to innovate.

John Jameson, regional vice president of the United Family said Carlsbad's Albertsons utilized multiple initiatives to keep pace with the growing need.

A new kind of customer presented itself to the local grocery industry: one that needed items quick and in large quantities.

In the past year, Jameson said the changing needs of the community were obvious.

That meant more on-the-go-type offerings, intended to provide the unique needs of the fast-moving industry.

“One of the things we’ve had to do is add extra food services items,” Jameson said. “A lot of folks moved into Carlsbad, they’re living in an RV. They don’t have a lot of refrigerated spaces, so sandwiches, anything you can imagine, rotisserie chickens, quick grab-and-go items have been doing really well.

“We’ve really had to ramp up production in those areas.”

Dairy was a challenge, he said, as the store’s milk shelves were often left empty.

In response, Albertsons added twenty feet extra of space.

“One of the challenges we’ve had is keeping enough dairy on the shelves,” Jameson said. “So, we’ve had to come back in and just in the last year and a half we’ve added this whole extra case just so we can keep milk on the shelves, and stay up with demand.”

The meat aisle, he said, is the division’s second busiest, he said, but one of the smallest.

Of the 93 stores in the division, which comprises New Mexico and West Texas, Jameson said the Carlsbad store is the top performer.

That’s why Albertsons is planning an expansion.The current store at Canal and Church streets will be bulldozed for additional parking, and a new, larger store will be built in hopes of meeting the demands.

“We’ve really outgrown this store,” Jameson said. “It’s exciting to see all the excitement in the community, the growth from the boom, but it also has its challenges in staying ahead of it.”

In the meantime, the store employed various tactics to keep as much merchandise on the floor as possible, seeing its highest volume of business during the mid-to-late afternoon when workers are headed home for the night.

One such tactic, what Jameson called “sky shelves” sees the store stacking popular items such as toilet paper and paper towels several feet on the top shelves, so they can be quickly replaced when needed, also saving storage space in the back.

This method is key to Albertsons survival during the boom, he said.

“This is adapting and innovating,” he said of sky shelves. “We don’t have enough room in the back. There is no way we’d survive in this store without it.”

Another needed adjustment was switching the angled produce stands to flat tops able to hold more fruits and vegetables.

The store has also had to embrace more food trends, which Jameson said historically don’t reach into small towns such as Carlsbad.

Craft beer, organic food and other trends followed the population growth, leading to additional aisles and varieties.

“Beer and wine are really taking off,” Jameson said. “It’s a challenge because there are so many varieties.”

But if the customer demands it, Jameson said Albertsons will continue to order the expanded product offerings, easily able to sell out to the growing customer base.

“We tell them we need more, and they ask where we’re going to put it,” Jameson said of the company’s corporate leaders. “We tell them just send it and we’ll figure it out. We have that conversation a lot.”

Another new market that opened up during the boom was catering on job sites, and bulk quantities of needed products such as bottled water.

Special requests for the oilfield, he said, are about two or three per week on average.

“In regard to the oil boom, we’ve had a lot of special requests,” Jameson said. “Usually they give us a lot of notice, but sometimes we’re scrounging.”

Housing industry expanding to keep up

Aside from what people eat during the oil boom, another challenge for Carlsbad is where they can live.

Marie “Betty” Blea, a local developer, said the wealth and population pouring into Carlsbad hasn’t even peaked.

“Everybody says it’s booming in Carlsbad. I understand it’s not even boomed yet,” she said. “It’s coming and right now, we’re short housing. I mean, I know a lot of people that have actually lived in their cars, have gotten jobs that have left Carlsbad because there was no place to live.

“It’s just gotten to the point where we can’t hire good people for different business, because there’s no place to live here.”

Her solution: subdivisions of custom-built homes that could attract wealthy corporate executives as their operations expand in the Permian Basin region of southeast New Mexico and west Texas.

She is planning such a development near the corner of Cherry and Canal streets, seeking upper-class residents willing to pay in the $450,000-range for homes.

There was some tension around developing the tract of land, now a large field of grass near the La Huerta just outside the Carlsbad city limits.

Besides meeting the expanding demands, Blea said developing in Carlsbad can raise the ire of residents looking to preserve their way of life – even as the community changes.

“The public isn’t ready to let go of their open spaces," she said. "People are very protective, especially here in La Huerta. Apparently this is like a little farm town, and always has been a farm location, and they don’t want to see the open spaces go away.”

Changing needs create conflicts

For now, it’s a community with continuously evolving needs, said Wesley Hooper, director of Community Services for Eddy County.

Even outside of city limits, where the county’s jurisdiction lies, Hooper said RV parks, man camps and other workforce housing is being installed to meet the demands of the industry.

The county has no zoning regulations, he said, which could present an issue for county residents who moved to the outskirts to escape the bustle of city life, but now find themselves too close for comfort to the expanding activity.  

“Issues are created whenever you’ve got businesses trying to go into where there’s housing,” Hooper said. “So, we start getting a lot phone calls whenever some of the residents don’t want certain businesses there. 

"But without zoning, there’s really nothing the county can do.”

Efforts to zone the county were voted down numerous times by voters opposed to proposals brought before the Eddy County Commission.

Recently, the county enacted a temporary housing ordinance, hoping to quell local concern by regulating man camps and RV parks, establishing setbacks and other guidelines to avoid impeding the local way of life.

It was also meant to give guidance to often-hastily-built housing, ensuring safety amid the growth.

“With the boom, there’s not a lot of places for people to stay that are moving in,” Hooper said. “People were putting them up there at their houses and running extension cords that were unsafe, so we looked at basing that ordinance off of those types of things.”

The City of Carlsbad has a bit more teeth when it comes to housing.

Vested with zoning rights, the City’s administration recently formed a committee to look at how much housing is needed, and where it should go.

The City of Carlsbad recently released a report updating several housing developments across the city. 

The developments included 189 units by White Oak Development on Boyd Drive and Hidalgo Road, 114 singe family residential lots in phase six of the Farmview Subdivision, and 311 new single family lots in the Oasis Subdivision. 

One hundred and eight units are coming to Martin Farms, with 204 planned for the Pecos Vista Apartment complex. 

Target Logistics is planing to install a man camp, read the report, with 530 beds in modular unites, and Copperstone Apartments is adding 104 apartment units to the complex on Callaway Drive. 

The Montclair Master Planned Community is a 1,300 acre development planned for the eastern side of National Parks Highway and south of Derrick Road, per the complaint. 

To expand where developments can be built and serviced, the City can also annex portions of land outside the city limits, and zone them for more housing.

Carlsbad Mayor Pro Tem and City Councilor Eddie Rodriguez said fluctuations in the housing market are directly tied to oil prices.

With more growth, he said, comes more responsibility for the city to manage the population explosion by supporting the industry and encouraging more development in Carlsbad.

Unifying the private housing industry toward the common goal, Rodriguez said, presented a challenge of its own.

“It’s a multi-faceted issue that’s hard to get a handle on, kind of like nailing Jell-O to a tree,” Rodriguez said. “Companies are reluctant to give out a lot of their personal information that may give information to their competitors.

“It’s a problem a lot of cities in New Mexico would love to have. We’re looking this gift horse in the mouth, but we are doing our best to make sure we address the needs of the community.”