In the 1980s, many historical buildings and homes of historical significance were torn down for urban renewal. Española followed many other New Mexico cities in this trend, but in Española, it failed. More modern business began to moved into town, but the growth of Española had now expanded east across the Rio Grande. Although several buildings of historical significance remain in downtown Española, many are unused or abandoned. Strip malls became visible in Española, the first being the 'Big Rock shopping center', founded by oil tycoon Roy Honstein. With the beginnings of Manhattan Project in the nearby city of Los Alamos, many locals would find jobs at the Los Alamos National Laboratory, which would later employ nearly 9% of Española's population.
In the 1990s, a controversial plan to build a "plaza" and mission church where many historic buildings once stood was up for consideration. The city agreed to the plan, and locals supported the plaza. Although a plaza never existed in Española before the railroads, it was built to pay tribute to the Spanish culture in the area.
In 1998, Española celebrated the 400th anniversary of the colonization by the Spanish and the founding of the first permanent European colony in North America. The event was celebratory for some and controversial for
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