Brownsville Economic Journal (Winter 2012 issue)

Moving forwardTxDOT announces more funding for I-69 project

Automotive industryBrownsville car dealerships expand to attract manufacturers

Foreign investmentTS-IA alliance will travel to Chinaon economic mission

Vol. 1, No. 2 / Winter 2012EJ

OpportunityBorderplex reaches outto attract emerging South American industries

Economic

Esco MarineShipbreaker puts Brownsville on themap in the ship-recycling industry

Understanding that reliable utilities are vital to the future of Brownsville, the Brownsville Public UtilitiesBoard (BPUB) has electric, water and wastewater facilities with enough capacity to meet and exceedlocal growth and welcome new industry. The successof your business is important to us.

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To deliver on this strong foundation, our key accountsprofessionals tailor services to suite your vision.

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1425 Robinhood Drive / P.O. Box 3270 • Brownsville, Texas 78523-3270 • www.brownsville-pub.com

Ana Lozano, BPUB Key AccountsManager; Cesar Garza, BrownsvilleIndependent School District Facilities/Maintenance Administrator and Saira Muñiz, BPUB Key AccountsRepresentative

EJ

Brownsvilletargets South

Americanemerging

industries inan effort to

bring them tothe region

20

5

On the Cover: Panama,Colombia, Ecuador, Peru,Chile and Argentina aresix of the emerging in-dustries in Latin Americathat have achieved suc-cess.

Design and illustration:Jorge I. Montero

Esco Marine helps Brownsville ownthe U.S. naval ship-recycling industry.

SpaceX nears site location decision forlaunch area; prepares second scopingmeeting for early 2013.10

The West Rail Bridge,the first built by U.S. andMexico in 100 years, isnear completion.

16 Get your motor running: Brownsvillecar dealerships expandto attract manufacturers

34

EDITOR IN CHIEFGilberto [email protected]

COPY EDITORSylvia [email protected]

CONTRIBUTING WRITERSJorge I. [email protected]

Tony Vindell

COVER DESIGN & LAYOUTJorge [email protected]

PHOTOGRAPHYBEDC Editorial TeamBrad Doherty

SOCIAL MEDIAMichelle [email protected]

CORPORATE CONTACTLizzy de la [email protected]

CIRCULATION Sylvia [email protected]

ECONOMIC JOURNAL The ShowKVEO Channel 23 (CableChannel 8) In High Definitionwhere available 11 a.m. CSTSunday mornings, monthly,check website for listing

EDITORIAL OFFICEBrownsville Economic Development Council301 Mexico Boulevard, SuiteF1 (ITEC Campus)Brownsville, Texas 78520Tel. (956) 541-1183 / Fax:(956) 546-3938

VISIT US ONLINEwww.bedc.com

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Forbes Magazine ranked theBrownsville MSA No. 7 in Job Growth inthe nation, a long way from when this areawas ranked on the bottom half of the 300MSA’s for job growth and creation.

Among the many reasons behind theBrownsville Borderplex’s growth, this re-gion of 1.2 million has a diversification ofattributes which are not present in othermedium size cities in the United States.

Beginning with infrastructure, notmany cities have access to six modes oftransportation, which includes highway, in-ternational rail, access to barge and deepwater traffic, air freight and of course, in-ternational bridges into Mexico. The areaalso is getting ready to post I-69 shieldsigns along US77 and in the near future,along FM511 and SH550 toward the Portof Brownsville.

The growth in our job market also hasbeen boosted by the international presenceof such major manufacturing facilities asSingapore-based Keppel AmFELS, whichhas landed several major contracts andadded hundreds of jobs to its yard at thePort.

The ship recycling industry also ispicking up at the port in addition to themaquiladora industry across the RioGrande in Matamoros. In turn, the addedbusinesses growth on the Mexican side isspurring logistical and warehousing activ-ity in Brownsville.

Our unemployment rate has decreasedin recent months by 2.5 percent.

Forbes Magazine projects our region tocontinue on a track of 3 percent annual jobgrowth, cost of living continuing to be oneof the most affordable in the United States,and also climbing on its current No. 64ranking of Cost of Doing Business and No.71 Best Places for Business and Careers.

Like the old adage states … We’vecome a long way.

But I like to say that the best is yet tocome. EJ

Forbes ranks BrownsvilleMSA No. 7 in job growth

PRESIDENT’SCORNER

EJ

Jason HiltsPresident & CEO

Brownsville Economic Journal Winter 2012 BEDC.com 4

The Economic Journal of the Brownsville Borderplex is published on aquarterly basis and distributed according to the fair-use doctrine of U.S.copyright laws related to non-profit institutions, such as the BEDC, andfor educational purposes.

Brownsville Economic JournalWinter 2012BEDC.com 5

EJGUEST EDITORIAL

On a recentFriday morn-ing, workersin the EscoMarine ship-

breaking yard in Brownsville,Texas, were dismantling a1944 U.S. Navy repair ship.This was the latest arrival in a

steady convoy of aging mili-tary vessels, Maritime Admin-istration ships, and merchantboats that have docked here, asa final stop, for years. Here inBrownsville, off the southerntip of Texas near the Gulf ofMexico, these old vessels get akind of “decent retirement,” in

the words of Esco's CEO,Richard Jaross.

This means asbestos andother hazardous materials willbe cleaned out. Some of thesalvaged equipment will windup on eBay. And then thou-sands of tons of steel will bestripped and recycled and sentto smelt shops and steel mills afew hours away by rail inMonterrey, Mexico. Much of itwill eventually return to theU.S. as remnants of old warcruisers and merchant marineships reborn as auto parts andappliances.

Brownsville’s role in thisprocess- ship-breaking, not tobe confused with ship-build-ing- has given the border cityof 200,000 with an Hispanicmajority a unique economicniche. Esco is one of five largeship-breaking operations clus-tered at the end ofBrownsville’s 17-mile shippingchannel inland from the Gulf.And there are only eight com-panies certified to dismantleNavy ships in the country. Thisfall, the Navy is contractingthree decommissioned ColdWar-era super aircraft carriers-

ESCO MARINE ship-breaking yard in Brownsville

How this Texas town owns theU.S. Naval ship-recycling industryWelcome to Brownsville, where athriving ship-breaking businessmakes old steel new again

Esco is one of five large ship-breaking operations clus-tered at the end of Brownsville’s 17-mile shipping chan-nel inland from the Gulf.

Photos courtesy of Esco


and the Constellation--and theywill likely take their retirementhere.

Those aircraft carrierseveryone has been waiting forcould each contain 60,000 tonsof scrap metal (as well as thepromise of hundreds more cut-ting and welding jobs). By law,none of those Navy ships canbe sent for scrapping overseas,which is why this work contin-ues in Brownsville when somuch other recycling and sal-vaging has gone abroad (justlook at what happens to yourdiscarded computer and cellphone). The U.S. government,for obvious reasons, doesn’twant a Chinese company dis-mantling the Navy’s fleet.After all, the same is true ofships and circuit boards andgame consoles: You can learnan awful lot about somethingby taking it apart.

Brownsville would repre-sent a dramatically differentdestination from some of theNavy’s previous retirementplans to “recycle” ships by

sinking them at sea, in thehopes of creating artificialreefs.

“Every warship I’ve takenapart has had a story to it,”Jaross says. “They all havemeaning because the lives ofmany people were put intobuilding that ship, maintainingit, and fighting at sea with it.”Esco Marine has recycled theU.S.S. Des Moines, a heavycruiser built at the tail end ofWorld War II, as well as atwin-hulled submarine rescueship, combat support ships, andtroop transport vessels.

Brownsville has becomethe country’s ship-breakinghub thanks to its port and thecheap land around it, its prox-imity to steel-processing plantsfurther down the food chain,

and its work force. Bay BridgeTexas, which relocated earlierthis year to Brownsville fromChesapeake, Virginia, cited thelocal labor pool among the fac-tors in its decision. “The rest ofU.S. has a scarcity of welders,”says Gilberto Salinas, execu-tive vice president of theBrownsville Economic Devel-opment Council. “For somereason, our welders don’t wantto leave town.”

Jaross cites one other rea-son why Brownsville disman-tles what others construct.“You have a community herethat welcomes the business. Alot of places, if a scrap yardcomes in, they don’t want thatthere,” he says. “No one wantsit in their community. It’s likehaving a coal operation.”

Economic developmentcampaigns are more oftenmeant to bring in gleamingbiotech campuses. Ship-break-ing, however, has very little incommon with the coal indus-try. “This is a business,” Jarosssays, “where we’re recyclingthings and creating resourcesfor the future.” In a sense,then, these are green jobs.

Salinas estimates that, inall, the steel industry tied to theport makes up as much as aquarter of the city’s economy.All of the steel coming to townin the form of hulking Navyvessels (as well as oil rigs andother ships) has made the portof Brownsville the third largestimporter and exporter of steelin the country.

“San Francisco has SiliconValley, New York has every-thing, Austin has their littleniche,” Salinas says. “But herewe are. Yeah, there’s Pitts-burgh, but then there’sBrownsville, Texas, where wehave been and continue tomold our lives based on steel.”

This article was written byEmily Badger and appeared in

the October edition of FastCompany Magazine

BBrownsville hasbecome the

country’s ship-breaking hub

thanks to its portand the afford-

able land aroundit, its proximity tosteel-processing

plants furtherdown the foodchain, and its

work force

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Cargo aboard specific Mexican trucks and boundfor the United States will soon be inspected byAmerican officials south of the border.

Binational trade

According to a recent storyin the Texas Tribune, cargoaboard specific Mexican trucksand bound for the UnitedStates will soon be inspectedby American officials south of

the border. This will allowtransport to avoid long waits atports of entry.

The announcement wasmade by Mexico’s ambassadorto the United States, ArturoSarukhan, during his visit toSan Antonio where he attendedthe NAFTA20 conference heldthere in November.

The Tribune reported thatSarukhan said the initiativewould be a giant step towardeliminating hours of long waitsfor cargo companies approvedfor the program.

“Whatever is sent over theborder does not have to stop,”he told a panel at theNAFTA20 conference. “Andthis is going to be huge.”

The exact date and port ofentry sites where the programis set to begin are unknown,but Sarukhan mentioned thatthe initiative would be offi-

cially announced soon by bothcountries.

According to the Tribune,Sarukhan said that the post-9/11 environment has led tothe gridlock witnessed at mostland ports because cargo in-spections are not “intelligencebased” but instead indiscrimi-nate.

The Mexican diplomatadded that companies have toapply and be vetted by bothgovernments before they areapproved to be part of the newprogram. EJ

EJLOGISTICS

Written byJorge I. Montero

Cargo aboard specific Mexican trucks and bound for the United States will soon be inspected by American officials south of the border as part of new cargo agreement.

Photo by Brad Doherty

New cargo agreement

U.S. and Mexico joint iniciativewould allow transport to avoidlong waits at ports of entry



Education and economic developmentare interdependent. Our community cannotdevelop and grow if the two aren’t workinghand in hand. Educators need to know whatkinds of careers and occupations are in de-mand so that they know how to adjust cur-riculums, what areas of study to focus on,and what kinds of skills they need to culti-vate amongst their students.

Employers need to realize that in sup-porting educators via internships and men-torships, they are investing in the futureworkforce and building their human capital,which will yield a large pool of qualifiedemployees, hence a high return on invest-ment.

For many years the business communityand the education system have acted asstrangers, working in silos and at timeseven oblivious to the other’s world. At thesurface it’s understandable because at theend of the day each has their own goals andmetrics that hold them accountable.

However, if you take time to assimilatethe work at hand and focus on the ultimategoal, you realize that the two are part of thesame world and need each other to be suc-cessful.

With that said, the BEDC is being veryproactive in regards to educational andworkforce initiatives. Over the past year,BEDC has been an active player in thework of Partners for Postsecondary Success(PPS). Many would side with KennyRogers and agree that, “You got to knowwhen to hold ‘em, know when to fold ‘em,know when to walk away, and know whento run.”

However, the Brownsville communityalso knows “when to go All In,” and that iswhat many community leaders, includingthe BEDC, have committed to do. “All In”is a community-wide effort on a mission todouble the number of young adults withpostsecondary credentials with labor marketvalue by 2025. “All In” is about advancingeducation, creating careers, and transform-ing Brownsville.

The BEDC and the Greater BrownsvilleIncentives Corporation have also supported

RGV LEAD (Linking Economic & Aca-demic Development, formerly known asTech Prep) with the necessary funding tolaunch and manage the Brownsville CareerCenter Project. RGV LEAD relies on thebusiness/education connection to designjob-specific curricula to prepare studentsfor occupations currently in demand andthose projected to be in demand. The Proj-ect has been identifying targeted occupa-tions and correlating those occupations withBISD, TSC, TSTC, and UTB programs ofstudy.

Recently, the BEDC was invited to pres-ent at their annual conference, which wasan invaluable opportunity for both sides.Many educators were not aware of the busi-ness development or projects in thepipeline, so hearing about career opportuni-ties for their students was an exciting, eye-opening experience.

The BEDC has been honored to be apanelist at different events, including theRegional Workforce Summit and the TexasWorkforce Commission Annual Confer-ence. Having heard about the great partner-ships in Brownsville and our efforts toattract SpaceX, they invited the BEDC tomake a presentation, in which we spokeabout the paramount implications ofSpaceX and how Brownsville is using itslocal resources and assets to leverage anemerging aerospace industry.

As a community we need to build andcontinue to enhance our infrastructure, par-ticularly our human capital, in order to re-tain, expand, and attract new business.Other panel speakers included representa-tives of XCOR Aerospace, Boeing Com-pany, Texas Engineering ExtensionServices, and Texas Workforce Commis-sion.

Plain and simple, educators need busi-ness because these are the people that pro-vide career opportunities for their students.Businesses need educators because they de-pend on them to produce an educated,skilled workforce. Working together wecan build bridges to success.

Building our human capital, positioning ourselves for greater business development

LOCALINDUSTRYCORNER

Lizzy de la GarzaDir. of Business Retention & Expansion


By Staff Reports

Aerospace company makesadvances in construction of launching area XSPACE


SpaceX nears site location decisionfor launch area; Cameron Countyamong prospects

EJAEROSPACE INDUSTRYEyeing location

Cameron County is one ofthree sites in the running for arocket launch site. Space Ex-ploration Technologies, betterknown as “SpaceX”, is eyeinga location near Brownsville forfuture launches of the Falcon 9vehicle and other commercialspace vehicles.

“It’s being called the com-mercial Cape Canaveral," saidGilbert Salinas, executive vicepresident of the BrownsvilleEconomic Development Coun-cil.

The proposed area is pri-vately owned. It’s located at

the eastern end of State High-way 4, about three miles northof the Mexican border on theGulf Coast and about fivemiles south of Port Isabel andSouth Padre Island.

The area is an undevelopedzone. It’s an empty field full ofsand and grass. Authorities saythe wildlife most vulnerablecould be sea turtles, snakes andsandpipers.

“That is what they need.They need a whole lot of noth-ing out there to launch,” Sali-nas said.

The Brownsville Economic

Development Council, Gover-nor Rick Perry’s office, cityand county officials have beenworking with SpaceX for overa year. The project was keptsecret until early April whendetails of the project emergedin a Federal Aviation Adminis-tration (FAA) document detail-ing an environmental reviewthat must be completed beforeany construction is done.

According to the FederalRegister, SpaceX proposes tobuild a vertical launch area anda control center to support upto 12 commercial launches peryear.

“The Brownsville-Cameron County area is theonly site in Texas under con-sideration,” Salinas said. Theother two sites are in Floridaand Puerto Rico.

Up to 14 sites in Texas

were considered but SpaceXnarrowed the list down to 1,Cameron County.

"It’s exciting that we madeit this far," Salinas said.

SpaceX already has an ac-tive launch pad at CapeCanaveral Air Force Station inFlorida and is developing anew launch site at VandenbergAir Force Base in California.The company also operates arocket development facility inMcGregor, Texas.

Buying landIn September, The

Brownsville Herald reportedthat SpaceX has been purchas-ing property in CameronCounty since June.

According to informationThe Herald found in publicdocuments, the company hasacquired at least three lots inthe Spanish Dagger Subdivi-sion, located on the southwestof Laguna Madre Beach Sub-division, under the name Dog-leg Park LLC. That is besidesthe property that SpaceX iscontemplating for the launchsite.

“Though SpaceX’s pur-chase of real estate in the areais great news, in no way does itmean they have madeBrownsville the lone finalistfor a launch site,” Salinas toldThe Herald, adding, “It is notuncommon for major corpora-tions to purchase real estateduring the site selectionprocess in different locationsbefore their final decision.”

Salinas noted that SpaceXcontinues to regularly visit thearea, meet with local leader-ship and conduct their due dili-gence of the potential site. EJ

I t could literally beout of this world!

According to the Federal Register, SpaceX proposes to build a vertical launch area and a control center to support up to 12 commerciallaunches per year.

Courtesy photo


A second scope meeting onthe proposed launch site forSpaceX near Brownsville isscheduled to occur early nextyear after the Federal AviationAdministration’s Office ofCommercial Space Transporta-tion releases the findings of anenvironmental impact state-ment, which they expect to doso by the end of December.

Besides the scoping meet-ings, the FAA requires an envi-ronmental impact statement“before anything could bedone on the project.”

The EIS process could takeat minimum through the end ofthis year.

The company plans tomake an announcement in re-gards to a site location after theFAA’s decision on the EIS.

After the FAA developsand releases the Draft EIS, itwill open a public commentperiod of 45 days, duringwhich they will hold a publichearing on the draft.

The FAA will then addressthe comments made on theDraft EIS and will develop andrelease a Final EIS.

The project is at the handsof the FAA as it continues tocollect data from federal publicagencies in regards to riskswhich would need to be miti-gated in order to build a launchsite near Boca Chica beach.

The first public scopingmeeting was held on May 15 at

the International TechnologyEducation and CommerceCenter in Brownsville wheremore than 550 people showedat the event and many of whichpersonally met the SpaceX del-egation of six which were onhand for questions about theproject.

Of the 550, about 75 signedup to speak, of which 73 spokein favor of the project, oneneutral and one negative.

In April, the site selectionof a proposed launch site forSpaceX became public after anotice of a public scoping

hearing in Brownsville wasposted with the U.S. FederalRegister. The Notice of Intentto conduct an EnvironmentalImpact Statement was filed bythe FAA’s Office of Commer-cial Space Transportation.

Since, Brownsville has re-ceived considerable nationalattention and is being moni-tored closely by its competitorsfor the project – Puerto Ricoand Florida.

The notice states the sitewould support up to 12 com-mercial launches per year, in-cluding two Falcon Heavy

launches and ten Falcon 9launches.

Landing a launch sitewould create 600 jobs, infuseupward of $50 million in pay-roll to the region, help attractother companies in the aero-space industry, and ultimately,positively change the percep-tion of Brownsville.

It’s an exciting time forBrownsville residents but peo-ple need to support the project100%.

“If the people inBrownsville come out and saynot in my backyard, that justmight kill the whole deal. …The owner of the company hastold us that he prefers to gointo a community that wouldappreciate this,” Salinas said. EJ

Environmental study near completion

EJAEROSPACE INDUSTRYScoping meeting


SpaceX ready to move project forward;expects to have environmental impactresults in December

Besides the scoping meetings, the FAA re-quires an environmental impact statement“before anything could be done on theproject.”

Courtesy photo

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Brownsville might be destined for theaerospace business whether SpaceX buildsa rocket launch site here or not.

STARGATE, which stands for “SouthTexas Spacecraft Tracking and Astronomi-cal Research into Gigahertz AstrophysicalTransient Emission,” has a 90 percentchance of becoming a reality, according toFredrick Jenet, associate professor ofphysics and astronomy at the University ofTexas at Brownsville and director ofUTB’s Center for Advanced Radio Astron-omy.

STARGATE is Jenet’s concept for aradio frequency technology facility thatwould give students and faculty access tocutting-edge equipment with commercialas well as academic applications, includ-ing satellite and spacecraft tracking.

It would be located at Boca Chica inthe same general area SpaceX is consider-ing for a launch site. While the facilityclearly would improve Brownsville’s oddsof attracting SpaceX, STARGATE couldgo forward without it.

At the same time, Jenet is negotiatingwith SpaceX — and other high-tech firms— about getting STARGATE built, hesaid.

The Greater Brownsville IncentivesCorp. at its Oct. 18 board meeting ap-proved $500,000 in seed money for theSTARGATE project. According to minutesfrom the meeting, the board stipulated thatthe approved funds be released “once aMemorandum of Understanding was exe-cuted between (UTB) and Space-X andonce invoices were provided for the vari-

ous development stages (including pur-chase of land) of the project.”

“This type of radio frequency technol-ogy research center is the type of thingthat would make Brownsville very attrac-tive to any high-tech company, includingSpaceX,” Jenet said. “A facility like this isgoing to be extremely attractive to high-tech companies — to be able to see thatthis work is going on down here: Yes, wedo have high-tech workers that we aretraining and, yes, they are working withcutting-edge equipment. And we’re alsogoing to be making scientific discoveries.”

The main purpose of STARGATE is tobuild the local technology base by creatinga tech-savvy workforce. UTB’s radio as-tronomy center works with students fromhigh school through college, Jenet said.STARGATE is a logical extension of thecenter’s existing programs, he noted, in-cluding the Arecibo Remote CommandCenter, which gives students and faculty inBrownsville access to and control ofPuerto Rico’s Arecibo Observatory, thelargest single-dish radio telescope in theworld.

Jenet said UTB’s radio astronomy pro-gram is an effective magnet for attractingstudents into STEM fields — science,technology, engineering and math — andthat the skills they learn are highly trans-ferable to other areas of academia and in-dustry. STARGATE would also be runthrough the radio astronomy center.

He praised board members with GBICand the Brownsville Economic Develop-ment Council, which advises GBIC, for“insight and forethought” in their supportof funds to help build STARGATE, thefirst phase of which likely would cost be-tween $4 million and $6 million.

“Getting the initial seed money was re-ally great,” Jenet said. “We still have morefundraising that needs to happen. I’m posi-

tive we will be able to pull all this togetherin the near future.”

Gil Salinas, BEDC executive vicepresident, said STARGATE would be oneof just a handful of such facilities in theUnited States and would enhance his orga-nization’s ability to lure high-tech compa-nies to the Brownsville region.

“It’ll just make our place more attrac-tive, and it will strengthen our position,”he said. “It’s perfectly in line with thetypes of companies we’re trying to recruit.If you start connecting the dots, you cansee we’re trying to lay a foundation anddevelop an aerospace cluster from scratch.Not many have done that. This is a projectthat would be beneficial to multiple com-panies in the aerospace industry.”

Jenet said that, if built, STARGATEwould send a powerful message that thingsare changing in the Rio Grande Valley.

“That’s also one of the strong pluses, isthat it’s a high profile thing that sort of re-defines what it means to be coming fromthe Valley,” he said. “I think you can prob-ably tell it’s going to play a key role in ef-fecting a lot of changes here in SouthTexas.”

Jenet described UTB’s efforts to de-velop STARGATE and the drive to land aSpaceX launch site as “parallel but coordi-nated.” Final word on STARGATE shouldcome down soon, he added, expressingconfidence that it indeed will come topass.

“We’ll definitely know by early nextyear if this is really going to happen,”Jenet said. “I think it will. I would startbetting now.”

This article was written by Steve Clark and appeared in the Tuesday, November 27, issue

of The Brownsville Herald.

Radio frequency technology facility receivesseed money to initiate research project headedby UTB professor

EJAEROSPACE INDUSTRYSpacecraft tracking

GBIC backs STARGATESpacecraft trackingfacility on horizonfor Brownsville


Approval of an additional $140 million for variousprojects along interstate will improve roadway

Moving forward

TxDOT announces more funding for I-69 route

EJINFRASTRUCTURE

The Texas Department of Trans-portation announced the approval ofan additional $140 million for vari-ous projects along the I-69 route inthe state, bringing related funding todate at more than $600 million.

The I-69 Texas route is plannedto run from the Rio Grande Valley,and Laredo to Texarkana and occupythe footprint of existing highways, in-cluding US 59, 77, 84 and 281 and SH44. In addition to a stretch of US 77 inSouth Texas designated as I-69 in 2011, about80 miles of US 59 in the Houston and five milesin the Texarkana area are being reviewed to determineif the sections meet interstate specifications.

The stretch of US 77 from Brownsville to Corpus Christiin South Texas is designated as part of the I-69 corridor.

In South Texas, $40 million in funding will go towardconstruction of a relief route in Premont on US 281. On US77, $60 million is dedicated to the design-build project fromDriscoll to Kingsville. In Laredo, $9 million will be used toconstruct an overpass on Loop 20.

Elsewhere in the state, a total of $17 million has been allo-cated to develop US 59 relief options at Lufkin, Nacogdochesand Corrigan. In the Liberty County area, $6 million was allo-cated to improve US 59 to a controlled access facility. An-other $12 million will fund frontage roads and ramps and theremoval of crossovers on US 59 from Loop 463 to US 87 inVictoria. Also, $6 million has been allocated to US 59 projectsin Fort Bend and Wharton counties.

These improvements were recommended by the citizenplanners of the I-69 segment committees.

“The citizen planners volunteering on the Segment Com-mittees have been vital to this community-driven planningprocess. These citizen-driven reports and project prioritiesgive direction to TxDOT on how we should continue movingforward on developing I-69 Texas,” said Texas TransportationCommission Jeff Austin, III. “This report validates the needfor I-69 and provides a helpful outline to make it a realitywithin our near future.”

The I-69 corridor will improve thesafety of the communities along the

interstate and help alleviate the in-creased amount of commercial andprivate vehicular traffic that hasrisen in those parts of the state dueto the growth in population regis-tered during the last decade.

Recent statistics reflect thatTexas grew by 4.3 million people

between 2000 and 2010, an in-crease of 20.6%. The counties along

the I-69 Texas system grew evenmore, by 23%, and have 8 million resi-

dents. Some counties along the I-69 sys-tem had population increases over 50% from

the 2000 to the 2010 Census.In the last decade, Brownsville’s population has

grown by 25.3% and over 175 thousand people call the cityhome. In that same period of time, the Rio Grande Valley hasreached a population of more than a million and a quarter, a29.2% increment.

Ports along the Texas Gulf Coast- such as the Port ofBrownsville- and inland ports on the Texas-Mexico borderanticipate a dramatic increase of cargo in the coming years. EJ


Photo courtesy of TxDOT

The I-69 corridorwill improve the safety of the communities along the interstate and help al-leviate the increased amount of commercial and private vehicular traffic that has risen in thoseparts of the state due to the growth in population registered during the last decade.


The first international rail bridge built by U.S.and Mexico in 100 years is near completion

EJINFRASTRUCTURERegional mobility

Mexico announces West Railbridge ready for operations


Mexico’s President Felipe Calderon speaks duringhis visit to Matamoros in November to oversee theconstruction of the rail bridge.

Courtesy photo

exican PresidentFelipe Calderonvisited the Bor-derplex area inNovember to re-ceive an update

on the construction of the Mata-moros Railway Bypass and the WestRail Bridge, where he announcedthat the new bridge is now ready tobegin operations. It is the first inter-national rail bridge built by the USand Mexico in 100 years.

“It gives me great pleasure tomake this visit and confirm that, fi-nally, this Matamoros-BrownsvilleInternational Rail Bridge is com-pletely finished,” Calderon said dur-ing a speech he made at the foot ofthe bridge in Matamoros. “It is avery important accomplishment forour bilateral relations”.

The West Rail Bridge, whichwas constructed to reduce trafficcongestion along the rail lines thatrun through Brownsville and Mata-moros, will now generate greater

competitiveness and economic de-velopment in the Borderplex area.

“This bridge will boost progressin a powerful way, not only in Mata-moros, but in Tamaulipas (state) andMexico,” Calderon said. “This proj-ect benefits train users in Mexico,primarily for cargo, because in thosetrains we transport the products thatwe Mexicans export, among others,many products for which we areleaders at the global stage.”

Calderon stated that some of theproducts where Mexico leads in ex-ports worldwide include the manu-facturing of smart phones, plasmascreens, and automobiles. Much ofthat merchandise is shipped by train,he said.

Through September, commercebetween US and Mexico totaledabout $369 billion, according toWorldCity, a media company whichtracks global trade partners.

The Mexican president was ac-companied by Dionisio Perez Ja-come, Mexican Secretary of Comm-

MGreenlight


As part of his trip to Matamoros, Mexican Presi-dent Felipe Calderon inaugurated the Matamoros-Monterrey Bypass, or LibramientoMatamoros-Monterrey, a highway loop that connectsthe Matamoros-Reynosa Highway with the Monter-rey-Reynosa Highway in Reynosa.

The Matamoros-Monterrey Bypass construction,which consisted of widening a stretch of 5.3 miles(8.6 km) of the existing highway from 4 to 8 lanes, ispart of a much more ambitious endeavor the Mexi-can Department of Communications and Transporta-tion is undertaking: the construction of theMazatlan-Durango highway, which is expected to befinished during the first part of 2013.

The Mazatlan-Durango road is the final piece ofthe Mexican Federal Highway 40, the East to Westcorridor that connects Mexico’s West Coast and thePacific Ocean to the Gulf of Mexico and theBrownsville-Matamoros BorderPlex.

The road, also known as the “Interoceanic High-way”, stretches across seven states in Mexico. Oncecomplete, it will reduce from 20 to 12 hours the timeto travel the 750 miles from Mazatlan, in the state ofSinaloa, to Matamoros.

“The road that we are opening, the Mazatlan-Matamoros (highway), is going to transform thenorthern part of the country,” said Dionisio Perez Ja-come, Secretary of Communications and Transporta-tion, during his visit to Matamoros.

Mexican authorities said the Matamoros-Monter-rey Bypass is part of the main axis of the Mazatlan-Matamoros highway. The region will benefitprimarily from better mobility, and will save manu-facturers time and costs of operation by speeding upthe shipment of goods.

It will also position the Borderplex area as anideal location for produce distribution, among othergoods, from Mexico into the United States.

Sinaloa is a top Mexican producer of large vol-umes of food year round exporting grains, vegeta-bles, and fruits. According to Sinaloa’s Departmentof Economic Development, the state produces 30%of the total food production in Mexico alone. EJ

Mexican highwayto connect theBorderplex withthe Pacific Coast

unications and Transportation,Tamaulipas state Governor EgidioTorre Cantu, Matamoros MayorVictor Alfonso Sanchez Garza, aswell as other state and federal offi-cials.

Perez Jacome mentioned thatthe Railway Bypass consists of amain road of 6.4 miles (10.3 km),and buildings that will house termi-nals and connections to the Monter-rey-Matamoros rail line. Theproject also includes the construc-tion of a rail yard with 12.6 miles ofrails (20.3 km) a capacity to store608 freight cars

“The infrastructure of commu-nications and transportation repre-

sents a strong push towards socialwellbeing and for economicgrowth. The foods, products and theraw materials necessary for theirfabrication reach our homesthrough the different modes oftransportation,” Perez Jacome said.

“Here, in the border with theUS, it is important to have efficientmeans to transport people andgoods. Matamoros is the big doorfor land commerce with our neigh-bors,” he added.

In total, the bypass and railbridge will cost Mexico a little over$73 million (955 million pesos).The bypass project is 65% com-


Turn To Page 18

Calderon inaugurated the Matamoros-Monterrey Bypass, or Libramiento Matamoros-Monterrey, a high-way loop that connects the Matamoros-Reynosa Highway with the Monterrey-Reynosa Highway inReynosa.

Courtesy photo

NMAZATLAN

DURANGO

TORREON

SALTILLO

MONTERREYBROWNSVILLE

MATAMOROS

TEXAS

UNITED STATES

MEXICO

InteroceanicHighwayThe Federal Highway 40stretches across sevenstates in Mexico. Oncecomplete, it will reducefrom 20 to 12 the hoursit takes to travel the 750miles from Mazatlan, inthe state of Sinaloa, toMatamoros/Brownsville.

plete, while the rail bridge is finishedand ready to begin operations. Thebypass project is projected to be fin-ished during the first quarter of2013.

The new rail bridge will reducetransportation times and operationcosts and companies will be able tomove their merchandise in less timeand more efficiently from Mexico tothe US and vice versa. The train ve-locity will increment from 12 to 37mph (20 to 60 kilometers/hour) andthe hours of operation will be ex-tended.

The rail bridge consists of an ele-vated structure of almost 3,000 feet(900 meters long), of which almost600 are on the Mexican side. It willbenefit the cargo that is transportedby train, and used for the export ofproducts.

Cantu mentioned that Tamaulipasis the Mexican border state nearestto the center of the country, whichfavors for commercial exchange be-tween both countries.

The State of Tamaulipas has 17international bridges, three of thoseare located in the Brownsville-Mata-

moros Borderplex. The rail bridge,will become the fourth internationalport of entry for commercial goodsin the area.

“Tamaulipas is the link betweentwo great nations. We are the entitywith the best communication withthe US,” Cantu said. “The Mata-moros-Brownsville InternationalRail Bridge is the first one con-structed in more than 100 years. It isthe key to international intermodaltransportation between Mexico andthe United States, and it is a productof both (federal) governments,Tamaulipas and Texas, and Mata-moros and Brownsville.”

Nelson Balido, president of theBorder Trade Alliance, a nonprofitgroup of economists and private sec-tor interests that represent more than4.2 million members, told the TexasTribune that rail traffic hauls about6% of the goods that cross theUnited States’ southern border underNAFTA. The Mexican governmentpredicts that in the next five years, itwill increase to 35 percent, Balidotold the media outlet. EJ

Calderon oversees West rail bridge projectContinued from Page 17

President Felipe Calderon rode a train during his visit to Matamoros to oversee a pair of projects that,when finished, will improve the infrastructure of the Borderplex region.

Courtesy photo

The Port of Brownsville in Texas is look-ing to upgrade its port facilities and it maylook for private partners to help accomplishthat goal.

“There are less federal dollars out there,”said Eduardo Campirano, port director andCEO. “We have to look at the private sector.”

Costs & BenefitsA key initiative at the port is the deepening

and widening of the Brownsville Ship Chan-nel. A feasibility study for this initiative isnow underway.

“The preliminary estimate for the widen-ing and deepening of the channel is betweenUSD200m and USD250m,” Campirano said.“The US Army Corps of Engineers has not re-leased the estimated costs. Once we get those,we will determine the plan of finance. We an-ticipate funding sources to include federal,local and private sector sources.”

Possibilities include having companies thatwould benefit from deepening and wideningthe channel help finance the project. Anotherscenario lets port tenants, if they make an up-grade at their facilities, “own the revenuestream” that it generates, Campirano said.

Uptick in BusinessWhile many ports are deepening their

channels and improving facilities to makeroom for the megaships that will transversethe Panama Canal, the Port of Brownsvillewill not likely get visits from those vessels.However, the widening of the Panama Canalwill increase shipping activity on the GulfCoast, Campirano said.

The Port of Brownsville, located at thesouthern end of the Gulf Intracoastal Water-way on the US-Mexico border, handles a widevariety of bulk and liquid commodities. It is aleading importer and exporter of steel, due toits proximity to steel mills in northern Mexico.

This article was written byEugene Gilligan and appeared in the Au-gust edition of InfraAmericas Magazine.

Port of Brownsvillecould turn to P3s toupgrade facilities



Regional economic alliance to travel to Chinaon a trade mission to promote South Texas

Foreign investment EJECONOMIC ALLIANCE

TS-IA looks to bring foreign investmentMembers of the Texas South-Interna-

tional Alliance met in San Antonio to signa Memorandum of Understanding (MOU)to recruit foreign investment and increaseexports from the region, according to apress release from the city of San Antonio.

Representatives of the cities ofBrownsville, Corpus Christi, Edinburg,San Antonio, and San Marcos joined eco-nomic development leaders in signing theMOU during a ceremony held in Novem-ber at the International Center, 203 SouthSt. Mary’s Street, in San Antonio.

“Together we can leverage the re-gion’s assets to in-crease foreigninvestments and ex-ports to make theSouth Texas economyeven stronger,” saidSan Antonio Council-woman Elisa Chan,one of the founders ofthe alliance. “Thisstrategy will comple-ment each of our tra-ditional economic development efforts byincreasing market share.”

A delegation of TS-IA members willbegin their work with a trade mission toChina in early 2013. The group will visitthe area near the city of Shanghai.

“By promoting the key assets of theentire region, each city will brand SouthTexas as a strategic place for foreign in-vestors seeking to build factories or investin target industries of energy, bioscienceand healthcare, logistics, advanced manu-facturing and tourism,” said BrownsvilleMayor Tony Martinez, who attended theevent with Gilberto Salinas, ExecutiveVice President for the Brownsville Eco-nomic Development Council, and otherleaders from the community.

Strategic locationSouth Texas offers an abundance of

opportunities to potential foreign investorsbecause goods can easily be shipped byland, air or water. Across the region, tradethrives via five sea ports on the Gulf ofMexico, 14 land bridges, an efficient Inter-state freeway system that will soon be-come part of the I-69 corridor, sevenairports, and a future trans-border railroad.

According to the release, the region is

considered a key gateway to the WesternHemisphere, North American free trade,and the booming Texas economy. It isranked among the Top 50 regions forGlobal Trade, and ranks among the Top 10U.S. Customs Districts for its trade withLatin America.

The 28-county South Texas region hasa population of over 4.4 million people,while another 3 million live across the bor-der in Mexico, according to the release. Inthe decade between 2000 and 2010, SouthTexas counties grew by more than 24%,outpacing the growth rate of the state ofTexas and far exceeding the U.S. growthrate of 9.7% in the same period, the re-lease indicates.

TS-IA will focus on attracting foreigninvestment, increasing exports of goodsand professional services, and strengthen-ing civil society through exchanges intourism and culture, the release states. Ithas received support from U.S. AssistantSecretary of Commerce for Market Access& Compliance Michael C. Camuñez. EJ


San Antonio Express News

City Council member Elisa Chan speaks for representatives of the Texas South- International Alliance during a signingof a memorandum to recruit foreign investment on November 14, 2012.

TEXAS

MEXICO

LAREDO

EDINBURG

SAN ANTONIO

SAN MARCOS

CORPUSCHRISTI

BROWNSVILLE

TS-IAREGION

R

Cover story

Written by Jorge I. MonteroDesign and illustration: Jorge I. Montero

PANAMA

ECUADOR

COLOMBIA

PERU

CHILE

ARGENTINA

SOUTHAMERICA

Ranked by Forbes as one of the Best Places to do

Business, Brownsville offersmany benefits to South American

industries like its geographicallocation, logistics and a

deeply rooted and influentialLatin American culture.

EconomicOpportunity

Borderplex targets emergingindustries in Latin America

The economies in LatinAmerica have been enjoyingsuccess in the last couple ofyears and will continue to doso in 2013 as they climb theranks in the global economy,and Brownsville is lookingto bring those emerging in-

dustries to the Borderplex region.Despite global economic uncertainties, regional

economies in Latin America will grow by an esti-mated 3.8 percent, compared to 3.1 percent pro-jected for 2012, said Alicia Bárcena, executivesecretary of the United Nations’ Economic Commis-sion for Latin America and the Caribbean, during therelease of the Preliminary Overview of theEconomies of Latin America and the Caribbean2012.

According to ECLAC's Preliminary Overview,countries such as Colombia, Panama, Peru, Chile,Ecuador, and Argentina are projected to see contin-ued growth in 2013, although not as high as the ex-pected percentage for 2012. Out of this group,Argentina will be the only economy that will see anactual increment from this year (2.2 percent) com-pared to 2013 projections (3.9 percent).

Panama will remain the region's fastest growingeconomy for the third year in a row, with an esti-mated 10.5 percent for 2012 and a projected 7.5 per-cent for 2013. In 2011, Panama reported an

economic growth of 10.6 percent.Colombia’s economic growth for 2012 is pro-

jected to be 4.5 percent and it is expected to remainunchanged for 2013. Peru’s growth will also remainvirtually unchanged for the second year in a row,having reported a 6.2 percent increment for 2012and an expected 6.0 percent for 2013.

For next year, Chile and Ecuador will reportgains of 4.8 and 3.5 percent, respectively, but will beless than their gains in 2012 (5.5 percent for Chileand 4.8 for Ecuador).

That recent economic success has been observedby Brownsville officials as a prime opportunity forthe Borderplex to establish relations with leading in-dustries from these countries.

Recently, a delegation comprised ofBrownsville’s Mayor Tony Martinez, representativesfrom the Brownsville Economic DevelopmentCouncil, the Port of Brownsville, and other officialsvisited Colombia in September seeking economicopportunities for the city.

During the trip, Martinez said that there is agreat potential for commercial exchange betweenBrownsville and South American cities.

Ranked by Forbes as one of the Best Places to doBusiness, Brownsville offers many benefits to SouthAmerican industries like its geographical location,logistics and a deeply rooted Latin American culturethat can be an added plus to businesses that seek toinvest in the region.

ARGENTINA

SOUTHAMERICA

Chile is consid-ered the bestemerging econ-

omy in Latin America andit is one of the most recog-nized worldwide.

The country ranksnumber 17th among the 20best economies to do busi-ness in, according toForbes.

The World EconomicForum puts Chile in 33thplace in the Global Com-petitiveness Index for2012-2013. It is also thebest ranked Latin Ameri-can country from this list.

The Office of theUnited States Trade Repre-sentative reports that Chileis currently the UnitedStates 29th largest goodstrading partner with $25.1

billion in total (two ways)goods trade during 2011.Goods exports totaled$16.0 billion; Goods im-ports totaled $9.1 billion.The U.S. goods trade sur-plus with Chile was $6.9billion in 2011.

The United States is

Chile’s third most impor-tant commercial partnerand is number one in For-eign Direct Investment inthe South American coun-try, representing 24.6 per-cent of Chile’s FDI.

The main sectors forU.S. investment are in the

mining industry (27 per-cent), commerce (16.1%)and gas, water and electric-ity (13.8%). In 2011, U.S.capital investments inChile’s service industryamounted to $1.5 billion.

According to Forbes,“Chile has a market ori-ented economy character-ized by a high level offoreign trade and a reputa-tion for strong financial in-stitutions and sound policythat have given it thestrongest sovereign bondrating in South America.Exports account for morethan one-third of GDP,with commodities makingup some three-quarters oftotal exports. Copper aloneprovides one-third of gov-ernment revenue.”

CHILE POPULATION: 17.1 millionCAPITAL: Santiago

MAIN CITIES:Santiago, Valparaiso, Concep-cion, Antofagasta, Talcahuano,Talca, Temuco

GDP GROWTH*:5.5% (2012 estimate)4.8% (2013 projections)

*Source: ECLAC

Cover story

Chile is currently the U.S.29th largest goods tradingpartner with $25.1 billion intotal (two ways) goods tradeduring 2011.

EXPORTS:The top export categories to

Chile in 2011: mineral fuel (oil)($5.0 billion); machinery ($3.0billion); vehicles ($1.6 billion);electrical machinery ($1.1 bil-lion); and special other (low

value shipments) ($610 mil-lion).

IMPORTS:The five largest import cate-

gories to U.S. in 2011: copper($3.3 billion); edible fruit andnuts (grapes, blueberries)($1.5 billion); fish and seafood(salmon fillets) ($866 million);wood ($573 million); and pre-cious stones (gold and silver)($464 million).

TRADE FACTS

Ecuador movedup 16 placesin the WEF

Global CompetitivenessIndex and at number 86is one of the top 100countries best suited forbusiness developmentand economic growth.

The Department ofCommerce of Ecuadorstates that the economicgrowth is due to a betteraccess to technology,improvements in inno-vation, infrastructure,macroeconomic stabilityand the prospect of in-vestments in the miningsector.

The government

agency adds that the in-dustrialized exportsgrew by 72 percent be-tween 2006 and 2011.Some of the main ex-ports include: vegetableoils and extracts, fish

flour, textiles, leather,plastics, rubber, paperand cardboard.

According to Forbes,Ecuador is substantiallydependent on its petro-leum resources, which

have accounted formore than half of thecountry's export earn-ings and approximatelytwo-fifths of public sec-tor revenues in recentyears.

Ecuador, who isknown worldwide for itsflower industry, appearsin 122th place in ForbesBest Countries for Busi-ness List for 2012.

Texas is one ofEcuador’s biggest tradepartners in the U.S., re-porting $2.57 billion inimports and exportscombined between thetwo entities in 2009.

ECUADOR POPULATION: 14.2 millionCAPITAL: Quito

MAIN CITIES:Quito, Guayaquil, Cuenca

GDP GROWTH*:4.8% (2012 estimate)3.5% (2013 projections)

*Source: ECLAC

Ecuador is currently the U.S.40th largest goods tradingpartner with $15.7 billion intotal (two way) goods tradeduring 2011.


Ecuador in 2011 were: mineralfuel (oil) ($2.3 billion); machin-ery ($1.1 billion); electrical ma-chinery ($427 million); andplastic ($290 million); and ve-

hicles (256 million).


gories to U.S. in 2011 were:mineral fuel (crude) ($7.5 bil-lion); fish and seafood (shrimpand prawns) ($673 million);edible fruit and nuts (bananas,plantains) ($511 million);cocoa ($247 million); and livetrees and plants (cut flowers-roses) ($149 million).

TRADE FACTS

Argentina ben-efits fromrich natural

resources, a highly liter-ate population, an ex-port-orientedagricultural sector, and adiversified industrialbase.

The country is thesecond biggest in landsize in Latin Americaand eight in the world.Argentina’s levels ofagricultural productivityare among the best in theworld. According to thecountry’s Department ofCommerce and Finance,Argentina boasts amplemining and forestry re-sources and rich fish and

seafood deposits. Argentina’s primary

sectors are agriculture,cattle, hunting, forestry,fishing and miningwhich represent 14% ofthe country’s economy.The Department of

Commerce reports thatbetween 2003 and 2011these sectors grew at amedian annual rate of2.3%.

The South Americancountry is also rich inmineral resources. The

majority of the mineraldeposits for lead, zinc,tin, silver, potassium,copper and gold are lo-cated along the LosAndes mountain range.

The country is thetop producer in theworld of unfermentedgrape juice, lemon juiceand leather and the thirdbiggest producer in soyand sunflower oils.

The World EconomicForum placed Argentinaat number 94 in theGlobal CompetitivenessIndex for 2012-2013,while Forbes listed thecountry the 113th bestcountry for business of2012.

ARGENTINA POPULATION: 41.2 millionCAPITAL: Buenos Aires

MAIN CITIES:Buenos Aires, Cordoba, Rosario,Mendoza, La Plata, San Miguelde Tucuman

GDP GROWTH*:2.2% (2012 estimate)3.9% (2013 projection)

*Source: ECLAC

Cover story

Argentina is currently theU.S. 43rd largest goods trad-ing partner with $14.4 billionin total (two ways) goodstrade during 2011.

EXPORTS:The top export categories in

2011 to Argentina were: ma-chinery ($2.1 billion); mineralfuel (oil) ($1.8 billion); electri-cal machinery ($1.0 billion); or-

ganic chemicals ($932 million);and plastic ($590 million).


gories in 2010 to U.S. were:mineral fuel and oil ($1.2 bil-lion); aluminum ($297 million);beverages (wine) ($277 mil-lion); iron/steel products ($221million); and preserved food($160 million).

TRADE FACTS

The UnitedStates isPeru’s top

commercial partner.According to the De-partment of Com-merce and Finance, in2010 16 % ($5.77 bil-lion) of Peruvian ex-ports went to the U.S.market.

The U.S.-PeruTrade PromotionAgreement enteredinto force on Februaryof 2009 and gave theopportunity forgreater trade and in-vestment between thetwo economies.

Eighty percent of

U.S. exports of con-sumer and industrialproducts to Peru be-came duty-free imme-diately after thepassage of the agree-ment, with remaining

tariffs phased out over10 years.

According toForbes, Peru’s econ-omy has been grow-ing by an average of6.4% per year since

2002. Growth in 2010was close to 9% andin 2011 almost 7%,due in part to an in-crement in private in-vestment, especiallyin the extractive sec-tor, which accountsfor more than 60% ofPeru's total exports.

The World Eco-nomic Forum putsPeru in 61th place inthe Global Competi-tiveness Index for2012-2013, while thecountry appears in the44th spot of Forbes’list of Best Countriesfor Business of 2012.

PERU POPULATION: 28.9 millionCAPITAL: Lima

MAIN CITIES:Lima, Arequipa, Trujillo, Chiclayo, Cuzco


*Source: ECLAC

Peru is currently the U.S.42nd largest goods tradingpartner with $14.9 billion intotal (two way) goods tradeduring 2011.


Peru in 2011 were: machinery($2.0 billion); mineral fuel (oil)($1.6 billion); electrical ma-chinery ($739 million); plastic($556 million); and vehicles

($430 million).


gories to U.S. in 2011 were:mineral fuel (oil) ($1.6 billion);precious stones (gold and sil-ver) ($1.0 billion); knit apparel($681 million); copper ($512million); and spices, coffee,and tea (mostly coffee) ($433million).

TRADE FACTS

Panama is one ofthe fastest grow-ing economies in

Latin America, expanding6.2 percent in 2010, withsimilar annual growth fore-cast through 2015, accord-ing to Forbes.

The U.S.-Panama tradeagreement, which enteredinto force in October of2012, will support Ameri-can jobs, expand markets,and enhance U.S. competi-tiveness by eliminating tar-iffs and other barriers toU.S. exports and expand-ing trade between our twocountries.

With the passage of thetrade agreement, more thanhalf of current U.S. farmexports to Panama becameduty free immediately and

most of the remaining tar-iffs will be eliminatedwithin 15 years.

According to the U.S.Department of Agriculture,Panama is already an im-portant market for Amer-ica’s farmers and ranchers.

In 2011, the UnitedStates exported more than$505 million of agricul-tural products to Panama.Top U.S. exports werecorn, wheat, soybean meal,dairy products, poultry, andrice.

With the Panamaagreement in place, agri-cultural trade between theUnited States and Panamawill change from a one-way street to a two-waystreet.

The Panama tradeagreement eliminates tar-iffs and other barriers onmost agricultural products,increasing export opportu-nities for a range of Texasproducts, including beef,poultry, and dairy.

The World EconomicForum placed Panama 40thin the Global Competitive-ness Index for 2012-2013,while Forbes listed thecountry at number 57 inthe Best Countries forBusiness List of 2012.

PANAMA POPULATION: 3.5 millionCAPITAL: Panama City


*Source: ECLAC

Cover story

Panama is currently the U.S.52nd largest goods tradingpartner with $8.6 billion intotal (two way) goods tradeduring 2011.

EXPORTS:The top export categories in

2011 to Panama were: mineralfuel (oil) ($4.0 billion); machin-ery ($624 million); aircraft($517 million); electrical ma-chinery ($478 million); and

special other (low value ship-ments) ($340 million).


gories in 2011 to U.S. were:special other (returns) ($127million); fish and seafood ($80million); precious stones (gold)($64 million); sugars (cane)($38 million); and edible fruitsand Nuts (bananas, pineap-ples) ($20 million).

TRADE FACTS

Colombia is con-sidered one ofthe six “key

‘next tier’ economies” in theworld with “relatively sta-ble, fast-growing markets,offering significant com-mercial opportunities” andanticipating “high GrossDomestic Product” growthrate in the next few years.

According to Forbes,Colombia's consistentlysound economic policiesand aggressive promotion offree trade agreements in re-cent years have bolstered itsability to face externalshocks.

The US–ColombiaTrade Promotion Agreement(TPA) passed by Congresson October 12, 2011, andimplemented this summer,will eliminate tariffs andother barriers to trade in

goods and services betweenthe United States andColombia.

Over 80 % of U.S. con-sumer and industrial exportproducts to Colombia be-came duty free immediately,with remaining tariffsphased out in 5 to 10 years.This is great news because

over 90 % of Colombianproducts entered the U.S.market duty-free in 2011,while U.S. merchandise en-tering Colombia faced tar-iffs averaging 9 %. Theagreement will supportmore American jobs, in-crease U.S. exports, and en-hance U.S. competitiveness.

The country’s GDP grew5.7 percent in 2011 and in-flation ended 2011 at 3.7%,continuing almost a decadeof strong economic per-formance. All three majorrating agencies have up-graded Colombia's invest-ment grade, Forbesreported.

The third largest LatinAmerican exporter of oil tothe U.S., Colombia is alsoone of the topworld produc-ers and exporters of flowers,coffee and semipreciousstones.

The World EconomicForum put Colombia in 69thplace in the Global Compet-itiveness Index for 2012-2013, while the countryappears in the 55th spot ofForbes list of Best Countriesfor Business of 2012. EJ

COLOMBIA POPULATION: 45.5 millionCAPITAL: Bogota

MAIN CITIES:Bogota, Medellin, Cali,Barranquilla, Cartagena


*Source: ECLAC

Colombia is currently theU.S. 25th largest goods trad-ing partner with $37.4 billionin total (two way) goods tradeduring 2011.


Colombia in 2011 were: ma-chinery ($2.9 billion); mineralfuel (oil) ($2.7 billion); electricalmachinery ($1.2 billion); or-ganic chemicals ($969 million);and plastic ($692 million).


gories to U.S. in 2011 were:mineral fuel and oil (crude)($16.8 billion); precious stones(gold) ($2.2 billion); spices, cof-fee, and tea (mostly coffee)($1.3 billion); live trees andplants (cut flowers) ($578 mil-lion); and edible fruit and nuts(bananas) ($211 million).

TRADE FACTS

The recent passage of the U.S.-Colom-bia Trade Agreement has madeBrownsville leaders aware of the impor-tance of creating relations with the SouthAmerican country in hopes of bringing itsbusiness to the Borderplex region.

Taking advantage of the agreementthat will eliminate tariffs to trade in goodsand services between the United Statesand Colombia, a Brownsville delegationcomprised of city Mayor Tony Martinez,representatives of the Brownsville Eco-nomic Development Council and the Portof Brownsville, along experts in immigra-tion, customs and logistics visited Colom-bia in September seeking economicopportunities for the city.

Martinez told The Brownsville Heraldthat the intention for the trip was to im-print Texas, specifically Brownsville, onthe minds of Colombia’s entrepreneurs.

The delegation hosted forums in thecities of Bogotá, Barranquilla, Cali andCartagena where they met with more than150 companies interested in doing busi-ness in the United States, BEDC VicePresident Gilberto Salinas told The Her-ald.

“We not only showed whatBrownsville had to offer but how youbreak into the U.S. market,” he informedthe Herald.

During the trip, Martinez told Colom-bian business newspaper La Republicathat there is great potential for commercialexchange of exotic fruits like Quito or-ange, passion fruit, soursop, dragonfruitand bananas.

“There are great opportunities (tomake business) with Colombia because ofthe complementarity of both markets.Colombia grows fruits that are not grownin the United States and are popularamong the 25 million Texans in the state.Also the automotive and textile industrieshave potential,” Martinez told La Repub-lica.

U.S.-Colombia Trade Promotion Agreement

The US–Colombia Trade PromotionAgreement (TPA) will eliminate tariffsand other barriers to trade in goods andservices between the United States andColombia.

The United States Congress passedthis agreement on October 12, 2011, andwas implemented in the summer of 2012.

Over 80 % of U.S. consumer and in-dustrial export products to Colombia be-came duty free immediately, withremaining tariffs phased out in 5 to 10years. This is great news because over 90% of Colombian products entered the U.S.market duty-free in 2011, while U.S. mer-chandise entering Colombia faced tariffsaveraging 9 %. The agreement will sup-port more American jobs, increase U.S.exports, and enhance U.S. competitive-ness.

“As of now, Colombian exporters cansend their goods to the main distributiondestinations located in California, Texas,Florida, New York, Georgia and Illinois,which offer opportunities for a complete

business package, that is, from raw materi-als and consumable goods to finishedproducts,” said Sergio Díaz-Granados,Colombia’s Minister of Commerce, Indus-try and Tourism, in a press release.

Diaz-Granados added that the sectorsthat will benefit the most from this agree-ment are: textile-clothing; design andfashion; automotive parts and vehicles;cosmetics; metalworking and iron andsteel; health tourism and ecotourism; soft-ware and TI; fruit and vegetable growing;biofuel; bovine meat; chocolate making,pastry and its raw materials; dairy andshrimp industries, among others.

Overall, the International Trade Com-mission (ITC) has estimated that the tariffreductions in the Agreement will expandexports of US goods alone by more than$1.1 billion, supporting thousands of addi-tional American jobs. The ITC also pro-jected that the Agreement will increase USGDP by $2.5 billion.

Colombia will become the 5th largestopen market for U.S. exports in the worldafter Canada, Mexico, Singapore and Aus-tralia. EJ

Delegation promotes Brownsville in ColombiaCover story

Brownsville Mayor Tony Martinez chats with Elsa Noguera De la Espriella, the Mayor of Barranquilla, Colombia, duringa recent trip to that country to promote business opportunities in Brownsville. From left, Noguera, Michelle Lopez,Director of Public Affairs and International Development for the Brownsville EDC; Jason Hilts, Brownsville EDC’s pres-ident and CEO; Martinez and Claudia DaCunha, director of special projects for Barranquilla. The photo was taken ona balcony outside Noguera's office in the city, which is Colombia’s fourth largest.

Staff Photo



Employment GrowthTexas gained 22,900 jobs in October

after adding 23,600 jobs in September.Current Texas employment stands at 10.95million.

The Texas unemployment rate edgeddown to 6.6 percent in October from 6.8percent in September. The Texas rate re-mains lower than the U.S. rate, which was7.9 percent in October.

ExportsQuarterly Texas exports edged up 0.1

percent in the third quarter of 2012. Thethird-quarter level of exports was 5 per-cent higher than a year earlier.

Exports to Mexico, Texas’ largest trad-ing partner, rebounded 3.2 percent, whileexports to Asia rose 1.6 percent. Exportsto Canada, China and the European Unionfell 2.8 percent, 2.8 percent and 5.4 per-cent, respectively.

ManufacturingTexas factory activity changed little in

November, according to the Texas Manu-facturing Outlook Survey. The productionindex, a key measure of state manufactur-ing conditions, came in at 1.7, suggestingoutput barely increased from October.

Leading IndexThe Texas Leading Index, which uses

key economic indicators to forecast futureeconomic activity, rose 1.2 percent fromAugust to October.

SOURCE: Federal Reserve

Bank of Dallas

TEXAS


Gross Domestic ProductReal gross domestic product -- the out-

put of goods and services produced bylabor and property located in the UnitedStates -- increased at an annual rate of2.7 percent in the third quarter of 2012(that is, from the second quarter to thethird quarter), according to the “second”estimate released by the Bureau of Eco-nomic Analysis. In the second quarter,real GDP increased 1.3 percent.

Annual Industry AccountsRetail trade and durable goods manu-

facturing were the leading contributorsto the deceleration in U.S. economicgrowth in 2011, according to revised sta-tistics on the breakout of real gross do-mestic product (GDP) by industry fromthe Bureau of Economic Analysis. RealGDP growth slowed in 2011, increasing1.8 percent after increasing 2.4 percentin 2010. The revised statistics do notchange the general picture of the econ-omy: 12 of 22 industry groups con-tributed to the slowdown in real GDP.

International Transactions The U.S. current-account deficit—the

combined balances on trade in goods andservices, income, and net unilateral cur-rent transfers—decreased to $117.4 bil-lion (preliminary) in the second quarterfrom $133.6 billion (revised) in the firstquarter. The decrease in the current-ac-count deficit was accounted for by a de-crease in the deficit on goods and anincrease in the surplus on income.

SOURCE: U.S. Department of Commerce Bureau of Economic Analysis

UNITED STATESGross Domestic Product

The pace of economic growth moder-ated in the third quarter as gross domes-tic product only grew 1.8 percentquarter over quarter (annualized rate),down from 3.3 percent in the secondquarter and 5.4 percent in the first quar-ter. In the third quarter, goods-producingindustries, including manufacturing,construction, utilities and mining, ex-panded at a 2.9 percent rate. Service-re-lated activities (including trade,transportation, services and govern-ment) grew 3 percent from the previousquarter. Agricultural output fell –2.2percent.

ExportsExports fell again in October, down

0.2 percent after falling 1 percent inSeptember. Exports have been trendingdown steadily this year, suppressed byfalling oil exports. Oil exports are down5 percent in the first 10 months of theyear over the same period in 2011,while manufacturing exports havegrown 5.6 percent. Total exports in-creased by just 4.1 percent during theJanuary–October period, a substantiallyslower pace than the 15.3 percentgrowth seen a year ago.

Industrial ProductionIndustrial Production (IP) bounced

back in September, increasing 0.8 per-cent month over month after falling 0.7percent in August. Weaker growth inMexico IP follows on the heels ofsharply lower U.S. IP since July. Mex-ico’s IP typically tracks U.S. IP, due inpart to the U.S. automotive industry’slarge presence in Mexico. However,since the end of the recession, MexicanIP has grown much faster than U.S. IP,which has yet to reach its pre-recessionpeak.

SOURCE: Federal Reserve Bank of Dallas

MEXICO

Baryonyx Corp., the Austin-based firmthat has been pursuing development ofwind farms offshore of the Rio GrandeValley, is one of seven projects selectedfor funding through the U.S. Departmentof Energy’s Wind and Water Power Pro-gram.

Once the final contract details areworked out, Baryonyx will receive an ini-tial DOE grant of $4 million to conductenvironmental and feasibility assessmentsand pay for front-end engineering costs ona three-turbine offshore demonstrationproject capable of producing 18megawatts, or 18 million watts.

Baryonyx has dubbed the project “GulfOffshore Wind” or “GO Wind.”

Although seven projects were chosenfor the initial grants, no more than threewill receive additional DOE funding — upto $47 million each — for siting, construc-tion and installation. The goal is for theseprojects to be in commercial operation by2017.

The DOE effort to advance innovativeoffshore wind technologies is part of theObama administration’s comprehensiveNational Offshore Wind Strategy to de-velop a sustainable offshore wind industryin the United States.

Ian Hatton, CEO of Baryonyx, said ina phone interview he feels confident hiscompany will gain final approval towardactual construction. That’s because he andother Baryonyx executives were part ofEclipse Energy, a British company thatconceived and developed the groundbreak-ing “Ormonde” wind farm project operat-ing in the Irish Sea.

“We’re the only team in the whole ap-plication process who’s actually built oneof these things before,” Hatton said.

Baryonyx leads the consortium thatsubmitted the GO Wind application toDOE. The other members are Keppel Am-

FELS, the Brownsville-based offshore oilrig fabricator; Siemens AG, the Germanmanufacturer of the massive 6MW tur-bines GO Wind plans to use; Offshore De-sign Engineering Ltd., Eclipse’s partner onthe Ormonde project; and Texas A&MUniversity, the lead partner of the project’sacademic group, which also includesTexas Tech and the University of Texas(Austin and Brownsville).

Hatton said the key objective of GOWind is to show how to drive down theunit cost of offshore power through the“excellent wind resource” the Gulf ofMexico provides, highly efficient turbinesfrom Siemens, and the fabrication expert-ise of Keppel AmFELS.

He believes significant cost reductionsshould be achievable through the ability ofKeppel AmFELS to mass produce the sub-structures to support wind farm towers andturbines. Siemens turbine technology hasevolved rapidly, meanwhile, leading to alarger, lighter machine with very little in-ternal friction and thus much more effi-ciency in recovering energy from thewind, Hatton said.

There’s a reason the focus is on lower-ing cost: The wind industry is facing newcompetition from cheaper natural gasthanks to several recent discoveries of gasreserves in the United States and world-wide. This has driven down the cost ofproducing electricity from gas-fired powerplants. The challenge is to prove that elec-tricity produced by offshore wind cancompete price-wise with electricity gener-ated by natural gas.

Onshore wind has proven itself to becompetitive with gas-fired generation,Hatton said. Offshore wind energy costsmore to produce, but it delivers a betteryield-to-cost ratio, he said. Also, low elec-tricity prices are discouraging constructionof the new gas-fired plants necessary to

satisfy growing electricity demand, Hattonsaid.

If everything goes as planned, the en-vironmental study and other aspects ofphase one for GO Wind will begin in Feb-ruary and take two years to complete. As-suming the project moves to the nextphase it will be generating electricity bythe third quarter of 2017, Hatton said. Ifthe demo succeeds, the next step will be alarger, commercial-scale project.

Baryonyx’s ultimate goal is to erecthundreds of turbines on more than 41,000acres offshore of Cameron County, on twoleases it has secured from the Texas Gen-eral Land Office and dubbed “Rio GrandeNorth” and “Rio Grande South.” GOWind, which would be built within the RioGrande South lease, will cost about $120million to develop and require matchingcontributions from the various consortiummembers in addition to DOE support.

Hatton said that having GO Wind se-lected for funding by the DOE is a bigdeal, though not as big as what will hap-pen if Baryonyx is able to carry out itslarger vision. For instance, the economicimpact of Keppel AmFELS fabricatinghundreds of giant substructures would beimmense, he said.

“It’s going to be a pretty big thing forSouth Texas in terms of an economic shotin the arm if it all pans out,” Hatton said.“That’s one of the interesting things aboutrenewable energy projects. They quiteoften benefit communities which histori-cally haven’t often benefited from oil andgas or other forms of mineral extraction.”

This article was written by Steve Clark and appeared in the Friday, December 14, issue

of The Brownsville Herald.


Company receives DOE grant to conductenvironmental feasibility assessments

EJALTERNATIVE ENERGYWind farm

Baryonyx chosen for federal funding


BUSINESS&ECONOMICBRIEFS

Brownsville gets AA- score

Brownsville’s proximity to Mexico andan expanding transportation grid areamong the factors contributing to thecity’s continued robust bond rating, ac-cording to a recent spate of reports fromFitch Ratings, Moody’s and Standard &Poor’s.

The big news according to city financedirector Pete Gonzalez is that S&Pbumped Brownsville’s rating up to AA-,bringing it in line with the other two agen-cies. He noted that S&P’s upgrade willsave the city $55,000 in bond insurance —a one-time savings but a savings nonethe-less.

Fitch, in its Nov. 30 report, affirmed itsAA- of city securities in the form of $13.5million in combination tax and revenuecertificates of obligation. Among the proj-ects to be paid for by the proceeds of thosebonds are an aircraft hangar atBrownsville South Padre Island Interna-tional Airport that will be leased to the pri-vate sector, street construction projectsand the city’s share of two FEMA emer-gency domes.

One of the FEMA domes will be builtat the main library on Central Boulevardand the other most likely at theBrownsville Sports Park, Gonzalez said.FEMA is paying the lion’s share of thecost for both of the domes, which are de-signed to be used for gymnasiums, com-munity centers or other facilities when notneeded for emergency shelters.

Fitch also affirmed the AA- rating forthe city’s $149.8 million in outstandingdebt, as well as $16.6 million in sales taxbond debt the Brownsville CommunityImprovement Corporation incurred tobuild the Sports Park. The GIBC bonds arebacked by a .25 percent city sales tax anda cash reserve fund.

Of the $149.8 million in outstandingdebt, $141.9 million is being paid fromproperty taxes and the remainder from var-ious other sources of income. The $13.5million in new bonds is secured by an an-nual property tax levy of $2.50 per $100of taxable assessed valuation, surplus rev-enue from Brownsville’s municipal land-fill and surplus airport revenues.

AA- minus, or Aa3 according to

Moody’s ratings system, is considered a“high grade” credit risk. In addition, thecity’s credit outlook is “stable,” accordingto the rating agencies, whose purpose is togauge the credit health of businesses andmunicipalities.

Among the “key rating drivers” Fitchidentifies are a tax base and economicgrowth that have remained steady through-out the recession, in large part due to in-vestment from Mexico. That investmenthas been spurred not just by the city’snearness to Mexico but also by “an exten-sive and expanding transportation net-work” that encourages international tradeand tourism, according to Fitch.

The report notes that Brownsville isthe only port of entry from Mexico withall four shipping modes: highway, air, railand water. More than 5.5 millions tons ofcargo move through the Port ofBrownsville each year, much of it to serv-ice the maquiladora industry. The city’seconomic growth is bolstered by a lowcost of living, even if income and wealthlevels lag behind state and national aver-ages.

According to Fitch, Brownsville alsobenefits from a veteran financial manage-ment team, conservative budgeting andmaintenance of adequate general fund re-serves.

“We need to have reserves for anyemergency that comes about,” Gonzalezsaid. “Our reserve policy is to have at least15 percent of total expenditures in reserve,and we’re meeting that percentage. Theylook at that.”

Rating agencies also take a close lookat the local economy — namely salestaxes and property values, both of whichhave been growing, he said. But debt isthe key factor. In Brownsville’s case, mostof the principal debt is paid off within adecade, something rating agencies like tosee. In the view of all three agencies, thecity’s debt is manageable, which helpslead to a strong bond rating.

Gonzalez noted that the city’s creditrating has been rising steadily since thelate 1980s, when it was just “mediumgrade.”

“There are three more grades aboveAA-,” he said. “We’ve been climbing andit’s going to be very difficult to climb anymore, especially right now with the econ-

omy the way it is. We see cities beingdowngraded. We don’t see too many citiesbeing upgraded. We’re very proud that wehave a good bond rating.”

This article was written by Steve Clarkand appeared in the Tuesday, December

11, issue of The Brownsville Herald

BPUB to control natural gas system

A city-owned gas utility system will beestablished in Brownsville, and it will bemanaged by the Brownsville Public Utili-ties Board.

The Brownsville City Commission ear-lier this week approved an ordinance tocreate such a utility system and gave au-thorization for BPUB to manage and con-trol it.

The first step BPUB must take is to getthe necessary permits from the Texas Rail-road Commission for the construction of apipeline that will transport natural gas asfuel for a proposed generation facility, of-ficials said.

The pipeline would also transport natu-ral gas to the existing BPUB generationfacilities and other locations.

Brownsville PUB officials said theutility company has no other plans for thegas utility system other than using it as anatural gas pipeline.

This article appeared in the Friday, December 14, issue

of The Brownsville Herald

Fed to spend $45B tosustain bond purchases

The Federal Reserve will spend $45billion a month to sustain an aggressivedrive to keep long-term interest rates low,The Associated Press reported.

The Fed also set a goal of keeping akey short-term rate near zero until unem-ployment drops below 6.5 percent.

The policies are intended to help aneconomy that the Fed says is growing onlymodestly with 7.7 percent unemploymentin November.

Six months ago, TheBrownsville Economic Devel-opment Council embarked on ajourney to bring the Rio GrandeValley residents a monthly tele-vision program where they cangrasp on the many thingsBrownsville, as a whole, isdoing, whether it’s on the jobfront like a large business open-ing up, an existing business’ssuccess or non-profit events,like the Build a Better Block,Market Days, CycloBia, etc.

These are the type of storieswe have aired since May andwill continue to do the verysame this upcoming 2013.

We’ll feature more successstories, more companies settingup shop in our city, more eventsto bring unison to our city andmuch more.

Economic Journal, the show,airs monthly on KVEO. EJ

Economic Journal The Show

MARKETINGCORNER

Michelle LopezDir. of Public Affairs &International Development

Brownsville Economic Journal BEDC.com 32

Top: A man works on apainting recently during theBuild a Better Block eventheld in Historic DowntownBrownsville. Left: Dozensof people attended theevent, which included differ-ent activities such as, artsand crafts making, painting,and playing chess.

Courtesy photos

Top: Students listen duringclass at Brownsville Early Col-lege High School. The schoolhelps students to graduate infour years with a high schooldiploma and an associate’sdegree from college. Left: Thousands of childrentook part in the third annualHooked For Life fishing tourna-ment held at the BrownsvilleEvents Center.

Winter 2012

BUILD A BETTER BLOCK

BROWNSVILLE EARLY COLLEGE HIGH SCHOOL

HOOKED FOR LIFE

Tru-Tone will benefit the Borderplex area by offering dozens of manufacturing jobs and helpreduce the unemployment rate in the region

EJMANUFACTURINGEmployment generator

Tru-Tone Finishing Inc., an industrialcoating company based out of Chicago,will be expanding its operations to theBrownsville Borderplex area.

The company from Addison, Illinois,will move into a 50,000-plus square-footfacility at the Brownsville Industrial AirPark, on Billy Mitchell Boulevard, whichis home to companies such as Trico Tech-nologies, Starkey, UPS, Portage Plastics,Little Farms Frozen Foods, Fisher Dy-namics and Saint Gobain Abrasives.

Tru-Tone will benefit the Borderplexarea by offering dozens of manufacturingjobs and help reduce the unemploymentrate in the region.

“We’re very excited about the project,”said Greg Klemenswicz, the owner of thecompany, to The Brownsville Herald.“We’ve been working on it for a couple ofyears now and we finally got everything inplace. We’re going to be making the movethere pretty quickly.”

Klemenswicz told The Herald that theBrownsville site will operate one shift of35 to 50 employees, mostly assemblyline workers and a handful of man-agers. He also said that the plantshould be operational by Decem-ber and at full production capac-ity by the first of the year.

With its arrival toBrownsville, Tru-Tone looks toserve clients and suppliers inNorthern Mexico as well asSouth Texas.

“We are pleased to welcomeTru-Tone not only as a member ofour manufacturing and supplierbase, but as a partner in our businesscommunity,” said Jason Hilts, president& CEO of the Brownsville EDC.

Tru-Tone was founded in 1974 by the

Klemenswicz family and since hasadapted to the ever changing demands andneeds of its industrial clients, in particularthe automotive industry.

“The Klemenswicz family has much incommon with Brownsville – they valuehard

work, quality product, superb customerservice and a family environment.”

According to its website, through theyears Tru-Tone has expanded its capabili-ties to meet the ever changing needs anddemands of their customer base. Throughthe use of new technologies, Tru-Tone hasgrown from a small liquid coating com-pany into a multi-functional full servicefinishing corporation.

Tru-Tone Finishing is a full-serviceISO 9001:2000 certified e-coat and pow-der coating company that has provided su-perior quality and service to theMidwestern United States and now looksto expand its reach to Texas and Mexico.

The Brownsville EDC has been work-ing with the company since 2010, helpingfacilitate their entrance into the local mar-ketplace.

“Tru-Tone will provide a valuableservice to the local metal working industryand in the process, will generate trafficand opportunity for the local workforce,”Hilts said.

“We, as an industrial and businesscommunity, will make sure to embrace thecompany,” Hilts said.

Tru-Tone’s Chicago plant providesboth e-coating and powder coating,

which is typically more expensiveand tends to be used in decorative

applications. The companycounts John Deere and Caterpil-lar among its powder coatingcustomers, Klemenswicz saidto The Herald.

E-Coating ProcessAccording to its website,

Tru-Tone Finishing has multiplecathodic black epoxy e-coat lines

which provide a “Class A” finish ona broad range of metal parts. The cru-

cial component in any finishing opera-

Industrial coater expands into BrownsvilleWritten by

Jorge I. Montero

TRU-TONECAPABILITIES

Custom packing

Light assembly

In-house lab

Custom packing

Office racking and inspection

Computer controlledprocesssing

Custom masking

Custom masking

Turn To Page 37


“”

“We’re very excitedabout the project...

We’ve been workingon it for a couple ofyears now and we fi-nally got everything

in place.”

Greg Klemenswicz, owner of Tru-Tone

Dealerships revamp showrooms and extend theirstock of vehicles to better serve the Borderplex area

Renovate or Die EJAUTOMOTIVE INDUSTRY


After a tumultuous begin-ning of the decade, theautomotive industry hasbeen trying to get backup to its feet after suffer-

ing a tremendous blow four years agowhen the world was hit by a global reces-sion, forcing some auto manufacturers anddealerships to the brink of bankruptcy andothers to cease existence.

Since then, manufacturers and dealer-ships have been trying to find ways tobring back customers, whose consumerconfidence dropped to the floor due to un-employment, a decline in home values,personal bankruptcies and rising oil pricesthat came along with the financial crisis of2008.

Across the country, car dealers are re-modeling and updating their showrooms atthe request of manufacturers, who want alldealerships to have a more modern lookwith hopes that sleek-looking showroomswill lead to more sales.

And Brownsville is no exception.

Dealerships like Don Johnson Motorsand Tipton Motors Inc. have recently re-modeled or are in the process of upgradingtheir showrooms in order to attract cus-tomers to their businesses and recoup fromseveral years of low sales. And CharlieClark Nissan has been added to the mix inBrownsville after it recently opened a newcar dealership in hopes to expand its busi-ness.

For Tipton, it’s renovate or dieCompetition has become fierce, and

renovation is the key, according to JimTipton, president of Tipton Motors Inc.,located on 3840 N. Expressway 77/83.

After the 2008 global crisis, carmakershave since cut back on production andnow are manufacturing a less percentageof vehicles, forcing the dealerships to findways to beat out the competition for ac-quiring new models.

your motorGet

runningCar dealerships expand to attract manufacturers

Written byJorge I. Montero “ ”

“Our dealership is due for amakeover in order to attract

manufacturers to acquire newvehicles. This is a national

trend, dealerships nationwideare renovating.”

- Jim TiptonPresident of Tipton Motors Inc.


With some manufacturers willing todish out money for renovation projects,and with financial institutions offering lowinterest rates for financing the construc-tion, Tipton decided to update his facility.

“Our dealership is due for a makeoverin order to attract manufacturers to acquirenew vehicles. This is a national trend,dealerships nationwide are renovating dueto incentives from dealers to modernize

the stores,” Tipton said.The dealership, which has been at its

current location of Expressway 77/83 andMorrison Road for the past 26 years, re-cently acquired the Hyundai line fromDon Johnson, so making space for theirnew addition of vehicles made sense.

The new Hyundai showroom, whichwill be located on Morrison Road acrossfrom Target, will be ready by the begin-

ning of 2013. Tipton said he received fi-nancing from Hyundai to help build theshowroom.

He expects to have a soft opening forthe new showroom in January, followedby a grand opening in February.

Though he declined to specify on theamount spent in the project, he estimatedthat the investment surpassed one milliondollars.

Besides a brand new showroom fullwith all the bells and whistles, the dealer-ship has other tricks up its sleeve to helpseal a deal and sell a car or truck.

One is the new EcoBoost engine thatFord designed to give the driver “morekick with less gas.”

EcoBoost is a series of turbochargedengines produced by the Ford Motor Com-pany and used in some of their newermodels, like the F150, one of the best-sell-ing vehicles in the US for over 30 years,Tipton said.

According to Ford, EcoBoost technol-ogy improves fuel economy and at thesame time greater power.

The other is the Hyundai line of vehi-cles, which are rated top of the line inquality, and offer the consumer the lookand styling of an expensive car at a moreaffordable price, Tipton said.

His dealership, which has been a fam-ily owned business since 1923, has ex-ceeded its goals in 2012 with their newlyacquired Hyundai line. And Ford sales“are right on top of the projected num-bers,” he said.

For 2013, Tipton expects a good yearalso. They project to sell between 600-700units of Hyundai and Ford each – between1,200 to 1,400 units in total.

That is an optimistic outlook, but no-body has a crystal ball, Tipton said, statingthat the numbers are his projections, bar-ring any setback from the economy orother obstacles such as gas prices or fi-nancing.

Currently, the dealership employs 115people. At the moment, Tipton said theydo not project on hiring more employees.

From cars to trucks, Don Johnson has you covered

In August Don Johnson, owner and op-erator of Don Johnson Motors on CentralBoulevard, broke ground on the 11,000-square foot expansion of his dealership,which will feature a new, much largershowroom and parts department.

During the summer he added Dodge

EJAUTOMOTIVE INDUSTRY

Don Johnson, owner and operator of Don Johnson Motors, shows an artistic rendering of his new showroom. In August Johnsonbroke ground on the 11,000 square foot expansion of his dealership.

Staff Photo

Turn To Page 37

Cameron County Regional Mobility Authoritychooses proposed route for new Island bridge

EJINFRASTRUCTURELink to the mainland

A critically needed second access routeconnecting South Padre Island to themainland of Texas is one step closer to re-ality, and developers are preparing them-selves for an expected economic boom onthe north side of the Island and the LagunaMadre Area, where the proposed bridgewould be built.

The Cameron County Regional Mobil-ity Authority (CCRMA) and the Texas De-partment of Transportation (TxDOT) havecleared a number of environmental hur-dles and chosen the route for the proposedSouth Padre Island 2nd Access Project forfurther processing.

“This is great news for South Padre Is-land, Port Isabel, Laguna Vista, and theRio Grande Valley,” said David Allex,Chairman of the CCRMA Board of Direc-tors, in a press release.

CCRMA announced in June that theFederal Highway Administration (FHWA)had approved the Draft Environmental Im-pact Statement (DEIS) for the proposedsecond causeway. A month later, they pre-sented the proposed route for the bridgeduring a public hearing held in SouthPadre Island.

Selecting the routeIn July, Cameron County officials with

cooperation from the Texas Department ofTransportation and the Federal HighwayAdministration, hosted a public hearingmeeting in South Padre Island, where theyannounced the preferred route chosen forthe new bridge.

Officials opted to go with OptionNumber 6 from a total of 11 alternativesthat had been drawn for the second con-nection to the Island.

From the Island, Option 6 would startbetween Beach Accesses 5 and 6, and ex-

tend to Holly Beach on the mainland. Itwould connect to FM 510 and also toHighway 77.

The bridge would extend 7.9 milesacross the Laguna Madre to north of thecity of South Padre Island. Officials saythere are about 1,000 acres of developableland in that area.

Authorities believe the second cause-way is a sure thing, though a few hurdlesstill lie ahead.

CCRMA is now waiting for clearanceof the remaining environmental obstacles,which are expected to take a year to be ap-proved.

In the release, Allex said that one ofthe biggest reasons for the proposed sec-ond access point is to facilitate evacuationfor the Island.

“As we remember, in 2001, the Islandwas isolated after the barges crashed intothe Queen Isabella Memorial Causeway’ssupport columns and totally disabled the

bridge, closing it for two months. As longas we only have one way on and off the Is-land, our residents’ and guests’ safety is anon-going concern, especially during hurri-cane season,” Allex said.

Allex said it's a bit too early to talkabout cost or when construction wouldstart as they have not even gotten close tothe bidding process, but he estimated thecost of the project at $400 million.

“Of course,” Allex said, “that couldchange one or two years from now.”

He said financing the bridge will beover a 50-year term and will pay itself bya toll system.

Economic boomThe construction of a second causeway

would not only give its residents and visi-tors a second alternative to get on and offthe Island, but also will help generate eco-nomic development on the Island and inthe region, local officials said.

Second SPI causeway closer to realityWritten by

Jorge I. Montero and Tony Vindell


Turn To Page 37

QUEEN ISABELLACAUSEWAY

Port Isabel

LagunaHeights

LagunaVista

South PadreIsland

PADRE BLVDOCEAN BLVD

STATE PARKRD 100

STATE HWY 100

STATE

HWY 4

8

FM 510

Laguna AtascosaNational Wildlife

Refuge

Laguna AtascosaNational Wildlife

Refuge

FM 510

BUEN

A VIS

TA

DRIVE

GENERAL BRANT ROAD

PROPOS

ED ROUT

E FOR

SECOND

CAUSE

WAY

LEGENDProposed routeCity or town

SOUTH PADRE ISLANDSECOND ACCESS PROJECT


Ram to his Chrysler Jeep fran-chise, and after obtaining thedeal, he needed more space toaccommodate his new inven-tory of trucks, he told TheBrownsville Herald. With thenew acquisition of Dodge Ram,he has the car and truck marketcovered, he said.

“We can now participate inevery market, from compactcars to heavy duty trucks andeverything in between,” John-son told The Herald.

With his new inventory,Johnson, who has operated thedealership since 1974, said thathe expects to have a good 2013.

“In Texas trucks are king,”he told The Herald. “I thinkthat Texas sells 47 percent ofall the trucks in the U.S. That’squite a bit. That’s why wewanted the Ram. We wantedtrucks and of course a completeline of cars.”

Johnson’s dealership al-ready employs 56 people andwill probably add five or 10more employees once the ex-pansion is complete.

Charlie Clark, the new guy in town

Charlie Clark finally gotwhat he wished for: a new cardealership in Brownsville.

The automotive entrepre-neur said he always saw theeconomic potential this city hasand he is confident that he isgoing to do well here with hisnew Nissan dealership, whichopened its doors in August.

“This is a dream come truefor me,” he said. “I have beenasking for a full service dealer-ship in Brownsville since 2000and finally got it.”

The used car lot he ran for anumber of years inBrownsville where 10 companyemployees sold vehicles from atrailer house has now been re-placed by a 28,000-square feetfacility built at a price tag ofabout $8 million.

“I paid the debt on the prop-

erty with the used cars lot,” hesaid. “I bought the six-acreproperty betting it was going tobe a wonderful location.”

He credits the success of hisbusiness to his administrativestaff and to his fine team ofworkers.

“We wouldn't be here if itweren't because of our team,"he said. "It's really amazinghow we got the project off theground.”

A little more than 10 yearsof being in business, Clarkearned the distinction of run-ning the number 2 Nissan deal-ership in the nation and hopesthat his new venture will movethem a little closer to the topspot.

“We are Number 2 in thenation, beating places like Dal-las, Miami and Los Angeles,”he said. “And with this newdealership we believe we aregoing to double our sales.”

Christopher C. Cobb, areageneral manager for the centralregion with Nissan NorthAmerica Inc. in Irving, said theClark dealership is number twoout of 1,100 the company hasnationwide.

“It's great to sell a lot ofcars, but when you treat yourcustomers and your employeesright this is what you get,” hementioned.

Clark said he will employfrom 80 to 130 people to workat the new dealership.

“Even though the gamble ishaving the two stores so closetogether, we do have a formulafor success,” he said. “OurBrownsville customers will beshopping here instead of goingto Harlingen and we also haveMatamoros and beyond. “Weare going to increase our mar-ket share,” he said, before con-cluding with a resonant,“Oraleee.” EJ

Tony Vindell contributed to this article

Car dealerships revamp showroomsContinued from Page 35

tion is the proper pretreat-ment and cleaning of theparts which are to be coated.

Tru-Tone's e-coat sys-tems are specialized whichallow for different levels anddegrees of pretreatment de-pending on the metal sub-strate being coated.Aluminum, galvaneal, pre-galvanized, zinc castings,cold rolled steel, etc. all re-quire different levels ofcleaning, conditioning, orzinc phosphating for aproper finish. Your typicalmonorail or auto-indexing e-coat system cannot cleanand pretreat every load ofparts differently.

Only Tru-Tone Finishinghas the capability of provid-ing such customized pre-treatment. The result of this

specialized all reverse osmo-sis 11-stage pretreatmentsystems is a properlycleaned, conditioned, andzinc phosphated part regard-less of substrate which pro-vides our customers with the"Class A" finish that theydemand.

Powder coatingTru-Tone Finishing main

plant of 80,000 sq ft offersunique power coatingprocesses. All of its equip-ment and processes are EPAapproved and ISO-9001:2000 certified. The companyhas 4 in-line spray boothswhich can accomodate con-veyorized mass productionor individual parts of anycolor, chemistry, or texturedfinish. EJ

Tru-ToneContinued from Page 33

“The proposed project iscritical on a day-to-daybasis, giving the Island’sresidents and visitors a sec-ond option to get on and offthe Island. Besides trans-portation reasons for thisproposed project, we alsoneed the infrastructure inorder to support economicdevelopment on the Islandand in the region,” said PeteSepulveda, Jr., CCRMA Ex-ecutive Director.

Richard Franke Jr., anentrepreneur/developer withFranke Inc.Realtors, hasbeen involved along withhis brother Dennis in amulti-million-dollar upscaleproject on the north side ofthe Island called TheShores.

The development, lo-cated just south of the pro-posed site of the secondcauseway, is in a prime spotfor residential and commer-cial development that wouldhave a tremendous benefi-cial impact with the con-struction of the new bridge.

Franke said one of theirnewest projects that is closeto completion is LosCorales, an 84-unit condo-minium complex that isabout 30 percent sold.

Besides Los Corales,The Shores has many singlefamily three-story housespriced at $700,000 and up.

Franke said they have anew tract of land just northof the existing developmentthat is ready to go. EJ

SPI second causewayContinued from Page 36

North Brownsvil

T h i s p r o p e r t y h a s t h e c o v e t e d ‘ S h o v e l R e a d y ’ s e a l b y a n

le Industrial Park

i n t e r n a t i o n a l s i t e s e l e c t i o n f i r m , T h e A u s t i n C o m p a n y .

™™™

“Texas is a state where a dream can be put to work.”- Texas Governor Rick Perry

It’s a commitment to create and sustain an environment that fosters business and entrepreneurship, trains the workforce of the future, and helps

to your growth and success Come to Texas, we’re

Wide Open for Business

Documents

Brownsville Economic Journal (Winter 2012 issue)