THE thousands of cultural tourists and art lovers who visit this Southwestern city regularly are witnessing what could be a sea change in the Santa Fe art scene this summer.
This year is shaping up as the year of record high rents but dramatically lower business receipts in this northern New Mexico city of 55,000 residents. The whispered talk at art-exhibition openings and Santa Fe's armada of cafes is that art-gallery sales are down by 30 to 50 percent.
A number of galleries sell what's come to be known as Santa Fe-style art: the dreamy, Southwestern landscapes and romantic images of a Pocahontas-like native American woman cradling a wide-eyed child. But the buyers of such works today have limited art budgets and even more limited exposure to notions of how creative compromises turn fine art into commercial schlock.
With the trend in Western clothing and home furnishings exhausted, many downtown merchants are talking about moving to some place with the potential to become ''the next Santa Fe.''
Curiously, the two segments of the local visual-arts scene that are not only weathering these shifts but profiting from them, are galleries selling contemporary art and Latin American art.
A number of downtown and Canyon Road (the city's popular arts district) galleries selling art with little connection to Santa Fe have been attracting attention from well-heeled art collectors. These people, many of whom come from metropolitan areas on the East and West Coasts, are proving to be the anchors holding the remainder of Santa Fe's visual-arts scene in place.
Contemporary art has arrived here, in an even bigger way, with the inaugural staging of Site Santa Fe, an international exhibition that takes its cues from the contemporary-art festivals held in Basel, Switzerland; Venice; and Sydney.
That 31 prominent artists such as Bruce Nauman, Rebecca Horn, Marta Maria Perez Bravo, Andres Serrano, Jenny Holzer, Rebecca Belmore, and Carlos Capelan participated in the first year of this show is a tribute to the connections and organizational skills of Bruce Ferguson, the director, and Vincent Varga, administrative director.
Between these two Canadians are dozens of years of experience in the organization and staging of multinational art exhibitions at museums, art fairs, and festivals. All their skills, and a few new twists, have come into play in assembling a complex show in this, the state that has made Georgia O'Keeffe and R.C. Gorman household names in the United States.
''We thought this area hadn't been very well served in the contemporary art realm,'' Mr. Ferguson said during a tour of Site Santa Fe's 19,000-square-foot main exhibition facility. ''And we had to prove ourselves against the perception that this area is apart from other aspects of what's urban and cosmopolitan.''
The exhibition is being held at two locations in downtown Santa Fe. The New Mexico Museum of Fine Arts, under the direction of David Turner, is exhibiting nearly one-third of the show's works, while the bulk of Site Santa Fe's pieces are being shown in a converted warehouse.
Privately funded through a locally based board of directors, Site Santa Fe's origins trace back to gallery owner Laura Carpenter, whose namesake art space has been Santa Fe's contemporary-art mecca since its 1992 founding.
''I was in Basel at the art fair two years ago and thought 'Why not Santa Fe?','' Ms. Carpenter says.
The show's organizers have earned mostly positive responses from both the contemporary-art world and the Santa Fe public.
A bonus is that they've motivated the region's other contemporary-art groups to swing into action. The Center for Contemporary Arts, the Governor's Gallery at the State Capitol building, and the Santa Fe Council for the Arts have organized exhibitions of their own, taking place simultaneously with Site Santa Fe.
''We've tried to take advantage of Site Santa Fe's momentum by showing visitors what New Mexico's contemporary-art scene is about,'' says Stuart Ashman, director of the Governor's Gallery.
And, during Site Santa Fe's opening weekend, New York art consultant Mark Fletcher organized an art fair at one of the city's Southwestern-style hotels. It featured independent art dealers from across the US and Europe, each of whom exhibited in individual hotel rooms.
''It's all an experiment,'' says New York gallery owner Matthew Marks, one of the art fair's exhibitors. ''Some of the most sophisticated contemporary-art collectors I know enjoy spending their vacations in Santa Fe, and since Site Santa Fe is the type of show I should see, exposing some of my artists to the people who would be here for the show seemed like a smart thing to do.''
Site Santa Fe's theme, ''Longing and Belonging: From the Far Away Nearby,'' was taken seriously by New York-based photographer Alison Rossiter.
Her installation at the Museum of Fine Arts ''is about the creation of the world's first atomic bomb and the fact that it happened in New Mexico,'' she says.
Images of clouds above Los Alamos, the ground-zero test site, and clamshells gathered on the New Jersey shore constitute Rossiter's exploration of science, nature, and death.
Canadian artist Rebecca Belmore's bow to Site Santa Fe's theme is more personal, having to do with her own experiences in driving from her Ojibwe reservation home in Ontario to Santa Fe.
''I thought about a human relationship to the earth,'' she says, ''about how our purpose in life is to understand the essence of living.''
* Site Santa Fe continues through Oct. 8.