JUDY WOODRUFF: Now a second story about business and the economy and bet on development through
the arts.
Last month, economics correspondent Paul Solman took us to New Mexico, where state and local
officials are betting on entrepreneurship to fashion an economic comeback.
Tonight, a short follow-up from the Land of Enchantment, a venture unlike anything Paul
has seen before.
It's part of his weekly series, Making Sense.
PAUL SOLMAN: New Mexico's economy tumbled head over heels during the crash of '08, and
has pretty much frozen for the decade since it hit bottom.
VINCE KADLUBEK, CEO, Meow Wolf: So, this is the House of Eternal Return.
PAUL SOLMAN: Return on investment?
(LAUGHTER)
VINCE KADLUBEK: Well, maybe.
MAN: Hello, and welcome to our house.
PAUL SOLMAN: And maybe even a small step towards the return of the New Mexico economy, says
CEO Vince Kadlubek.
So, it melted or something?
VINCE KADLUBEK: Yes.
PAUL SOLMAN: If, that is, this mystery fun house filled with portals to other space-time
dimensions should realize its ambition of becoming the next big thing in immersive entertainment,
following the lead of the Rain Room at New York's Museum of Modern Art, say, Toronto's
Lost and Found escape room, or the Crystal Universe in Singapore.
VINCE KADLUBEK: It perfectly expresses the type of immersive artwork that is becoming
wildly popular around the country.
Instead of walking up to a painting, you actually let audiences walk inside of the painting.
PAUL SOLMAN: But here in Santa Fe, it's immersion with a plot.
Opened in March of 2016, the House of Eternal Return is already a business sensation.
It needed 125,000 paying customers at up to $20 a pop to break even on operating expenses
in year one.
Instead, it drew 400,000, taking in nearly $7 million, its profits alone covering most
of the original investment.
WOMAN: We're in the closet.
PAUL SOLMAN: The paying visitors are the sleuths, scanning notes and diaries scattered midst
the maze.
VINCE KADLUBEK: Here's one of the portals right through the fireplace.
PAUL SOLMAN: We're going through the fireplace.
VINCE KADLUBEK: Yes.
PAUL SOLMAN: Thank God I play tennis all the time.
Which leads to the skeleton of a musical mastodon.
But can this techno-netherworld really do anything to revive a state like New Mexico,
whose economy keeps losing its best and brightest to the coasts?
Well, here are jobs robots can't compete with: a hippie artist collective called Meow Wolf
that became a business, convinced "Game of Thrones" creator George R.R.
Martin to buy a defunct bowling alley and lease it to them, and converted it into, well,
something hard to describe or sometimes even to see.
VINCE KADLUBEK: So, this is the laser harp.
And this is the sort of ethereal zone that is in between life and death.
PAUL SOLMAN: There's no map, no GPS, just room after room of you figure it out fantasy.
VINCE KADLUBEK: So, here's that aquarium that you were in, that you saw were inside the
house.
And now you're inside of it.
PAUL SOLMAN: But this is like virtual reality, except it's actual reality.
VINCE KADLUBEK: Right.
It's actual -- it's virtually actual reality.
PAUL SOLMAN: This is artwork designed and crafted by more than 150 artists, many of
them millennials like the 35-year old CEO, who started off as an artist himself, switched
to deal-maker.
VINCE KADLUBEK: I learned some basic business aspects, and I figured out what debt meant.
And I figured out how to...
PAUL SOLMAN: Did that come as a shock?
VINCE KADLUBEK: It was amazing to me.
Like, I grew up thinking that debt was this big, evil thing.
Our whole generation does.
It's like, you fall into debt, and you spend the rest of your life trying to get out of
it, and stay away from debt.
And when I realized what debt actually was, that somebody was willing to lend me money
to build something incredible that would end up paying them back, plus a little bit of
a return, and I, like, crunched the numbers, I was like, oh, yes, this makes total sense.
WOMAN: Take me to the galactic center.
Whoo!
PAUL SOLMAN: So, they borrowed $1.5 million, have created about 200 jobs so far, and promised
to more than double that in the next three years.
So, what does an artist make here?
VINCE KADLUBEK: We have an entry level, just graduated from high school, 19-year-old artist
who's making $50,000 with full health care benefits.
And then we have fabricators and designers making upwards to $70,000 or $80,000 salary,
with full benefits.
PAUL SOLMAN: Which is double that, if it were in a major urban area, right, I mean, because
of costs here?
VINCE KADLUBEK: I would say that these wages, $70,000, $80,000 in Santa Fe are some of the
sweetest that you will find, yes.
PAUL SOLMAN: Plus stock in the company Meow Wolf has become, with more jobs opening up
in a newly-acquired former Caterpillar assembly plant, for example, to create future exhibits.
Finally, there's the gift shop, featuring predictable items, and not-so-predictable,
like the Experience Tube.
John Feins, Meow Wolf's marketing director.
JOHN FEINS, Marketing Director, Meow Wolf: It is a chance for people to actually talk
to each other, the original social media, no distractions, no cell phones, just two
people.
PAUL SOLMAN: Add up all the revenues, says the CEO, and:
VINCE KADLUBEK: We have discovered a business model that is 50 to 60 percent net profit.
PAUL SOLMAN: If you take in $10 million, you're earning?
VINCE KADLUBEK: Five to six on top of it, after all expenses.
PAUL SOLMAN: So who's the lucky investor who gets the payoff?
VINCE KADLUBEK: We are withholding our profits.
We are reinvesting them, so that we can build something like this three or four times the
size in major cities around the country.
PAUL SOLMAN: So, I put the question to a pair of visiting out-of-towners.
Would it work in San Diego?
WOMAN: I think it would.
PAUL SOLMAN: And Athens?
WOMAN: I think it would work in Athens, yes, or Atlanta, yes, I think.
PAUL SOLMAN: And while Meow Wolf isn't exactly Amazon, looking to locate a second headquarters,
Kadlubek says he's received some sweet offers.
VINCE KADLUBEK: Now, we had other cities around the country knocking on the door and saying,
not only build one of these in our city, but we want your entire company to move.
PAUL SOLMAN: The House of Eternal Return's dark story ends in the Infinity Spa, where
the CEO summed up the mission.
VINCE KADLUBEK: Break down some paradigms, you know, bust through some new dimensions,
into a whole different way of thinking about what the state can be and what economy can
be in the state.
PAUL SOLMAN: Immersive art as economic engine, breaking down some paradigms to create jobs.
OK, a few hundred are a drop in the bucket.
But, hey, think Cirque du Soleil or Disney.
They too started out small and weird, which is what provoked me to sign off this story
from inside my favorite item in the gift store.
For the "PBS NewsHour," this is economics correspondent Paul Solman reporting from Meow
Wolf's Experience Tube in Santa Fe, New Mexico.