Unusual deals keep Deming food jobs going - New Mexico Business Weekly:

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Deming, NM 88030 3640 McCan Rd. SE NM 88030 Two food processors in Deming are stilkl in business thanks to twounusual interventions, one by the states of New Mexico and one by a nonprofitg lender. Proper Foods was on the brinkk of closing whenthe state’zs Economic Development Department made $500,000 available, via the city of to keep the plant running. And High Deserr Chile, squeezed by the national credity crisis, turned to in a first-of-its kind deal wherebg the nonprofit lenderprovided $750,000 in bridge financing to venturew capital firm to help High Desert starg processing green chile.
Proper, in businessd for 18 years, makes prepared frozemn foods like tamales, stuffed peppers and cabbage rolls for majorrestaurant chains. The companty chose exactly the wrong time to expand and remodell said President and CEOJohn Johns. The restaurant industr has been reeling from fuel prices and raw material costs like soybean oil andmasa (made of corn), Johns Fred Mondragon, secretary of economic development, said the state felt it was necessaryh to act. “Luna Countgy has the worst unemployment rate in the like 12 to 14 said Mondragon.
“So if you’re looking at the possibilitgy of laying off 120 to140 people, that’s a very significanyt impact in a county that’s already suffering.” The statr is making a grant of $500,000 to the city of which in turn is lending the money to Proped Foods at a 3 percent interest rate, with final payment schedule d for June 2021. The city will keep the loan payments, but must use them for economifcdevelopment purposes. Under the agreement, Prope r must maintain at least92 full-timse employees, said Richard McInturff, Deming’s city administrator. The loan is securedx by the factory, he Johns said the company hadslowes production, but is gearing back up.
He anticipatez employment rising to 150to 200. However, he said, the state’sd new minimum wage of $7.50, which takes effecr in January, will hurt the company’sx ability to compete for contracts since the federal minimum wage does not riseto $7.254 until next summer. “I have no problem with an increasedminimum wage,” Johns “It’s just difficult for New Mexican businesses that sell around the country to competes when we’re not in step with the federalo government.” Johns said the company planzs to expand its customer base and producg line to be more competitive.
Deming Mayord Andres Silva said the city will starf a loan pool with the funds Propedr repays so it can lend money to othe r smallbusiness owners. High Desert Chile was the biggesgt deal in TheLoan Fund’s history and it’sd the first time it has worked with a venture capitak firm, said Leroy executive director. He anticipates there will be more such dealsa inthe nonprofit’s future. Mesa Capital Partners in Sants Feinvested $1 million to acquire a bankruptr chile plant earlier this year and convert it into a frozen-green-chilew processor, said Managing Partner Les Matthews.
Mesa controlss 75 percent of the company and a locakl management group has a 25 percent Matthews said they approached The Loan Fund when the blossomingh credit crisis made permanent financing impossible to The clock was ticking because the company had contractws in place to buy chile andit didn’ty have the equipment to process it. “We would have had to — no pun intended eat the chile. And there’ws a point where you can’t eat any more,” he The Loan Fund money allowed them to buy equipment andstarrt production. They closed on permanent financing with in Los Angeles in July and repaicd TheLoan Fund.
The plant has abourt 45 employees processing frozen and fresh green chile. A formal grand opening will takeplac Sept. 24. “In today’s banking environment, this will become more the normthan usual,” Matthewx said of the deal.