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Boom on the border: NM, El Paso battle for business

Twin Cities Services owner Ed Hazelton steps off a backhoe at the company’s new location being built in Santa Teresa. At least 10 companies have left El Paso for Santa Teresa since 2011, many in anticipation of the new Union Pacific rail facility. (Roberto E. Rosales/Albuquerque Journal)

Twin Cities Services owner Ed Hazelton steps off a backhoe at the company’s new location being built in Santa Teresa. At least 10 companies have left El Paso for Santa Teresa since 2011, many in anticipation of the new Union Pacific rail facility. (Roberto E. Rosales/Albuquerque Journal)

Copyright © 2014 Albuquerque Journal

SANTA TERESA – There is a part of the New Mexico state line with Texas that curves in such a way that, when driving, you find yourself in one state or the other every few blocks.

Anthony, N.M., cozies up to Anthony, Texas. Nearby, the booming industrial district of Santa Teresa, N.M., sits a stone’s throw from El Paso. The Mexican border is minutes away.

The proximity of southern New Mexico and West Texas communities – and their mutual neighbor to the south, Ciudad Juárez – makes them necessary, if not always comfortable, bedfellows on a host of issues from water rights to workforce development.

Now as development explodes in Santa Teresa – and companies are moving out of El Paso to relocate there – conflicts have emerged even as the region attempts to work together to attract new business to the borderlands.

“This is truly a region with a high potential,” said Garrey Carruthers, former New Mexico governor and president of New Mexico State University. “It just has a couple of complications: two countries, three states, some of us speak two languages, some of us don’t. The restraints and constraints that are created by the public sector oftentimes inhibit regional development.”

New Mexico’s thorny relationship with Texas is nothing new but the current friction centers on a new $400 million rail hub belonging to Union Pacific. The railroad has shifted many of its operations from El Paso to the sprawling yard in Santa Teresa, which is expected to be a magnet for commerce – possibly at El Paso’s expense.

Growth can be seen in the rising international trade between the U.S. and Mexico at Santa Teresa, and in the logistics businesses already springing up near the hub. The expectation is that manufacturing operations will be drawn to the easy access to a major east-west rail corridor now offered at the New Mexico site.

At least 10 companies have left El Paso for Santa Teresa since 2011, many in anticipation of the new rail facility, according to Jerry Pacheco, executive director of the International Business Accelerator at Santa Teresa.

“I don’t think anybody is against regionalism in solving common issues at the 30,000-foot level,” Pacheco said. “But we are competing against El Paso for companies, and especially the recruitment function, we’re going to keep that vested in our own camps.”

Tiff over trade

Santa Teresa’s share of the $500 billion annual trade between the U.S. and Mexico has increased from less than half a percent seven years ago to 5 percent of the total in 2013, according to Roberto Coronado, assistant vice president of the El Paso branch of the Federal Reserve Bank of Dallas.a00_jd_13apr_Border

Together, Santa Teresa and El Paso account for nearly a quarter of total U.S.-Mexico trade and represent the No. 2 trade corridor on the U.S.-Mexico border behind Laredo, Texas.

But in recent months, a tiff over trade has sprung up between El Paso and Santa Teresa.

In January, the El Paso City Council voted unanimously to request the new Union Pacific rail hub in Santa Teresa be moved from the Santa Teresa port code to the jurisdiction of El Paso’s port code – a paper move that would essentially classify commerce there to El Paso.

The vote rubbed many leaders in New Mexico the wrong way. New Mexico officials and business leaders saw the vote as an attempt by El Paso to co-opt Santa Teresa’s trade numbers, already growing and expected to surge as business at the rail yard ramps up.

El Paso Councilman Larry Romero said he viewed the vote as a step toward consolidating regional economic development “since we were going to try to attract business on a trilateral basis.” Ann Lilly Morgan, an El Paso councilwoman, offered a different explanation: “We want all the federal credit we can get,” she said. “Eventually, it means money. We want the traffic recorded more to El Paso, of course.”

The council’s move prompted U.S. Sen. Tom Udall, a New Mexico Democrat, to write a letter on behalf of the state’s congressional delegation to Customs and Border Protection opposing any change – and El Paso has now retracted its request, according to an El Paso City Hall spokeswoman.

That latest quarrel may have died down, but there have been others. An idea late last year to rename the El Paso International Airport the El Paso-Las Cruces International Airport fell flat, ostensibly for lack of support in El Paso.

“Let’s make no doubt about this: Even though regionalism and exposure is positive to work together on, when it comes down to working to attract companies with jobs, we’re all competing for the business,” said Davin Lopez, chief executive of the Mesilla Valley Economic Development Association. “I don’t think we’re going to get away from those jurisdictions.”

Friends and foes

But there are efforts to work together and marketing the region as a whole makes sense.

With a total population of 2.3 million, the area around El Paso, stretching to Las Cruces, boasts more universities, a deeper pool of skilled workers and more varied real estate choices.

The answer to regional partnership could lie in the private sector, say participants in a year-old effort called the Borderplex Alliance. The El Paso-based group has attracted friends and foes in New Mexico since its founding.

“You can’t get the Texas legislature to invest in a project in New Mexico if you wanted to and vice versa,” said Carruthers, a founding member of the alliance. Other members include West Texas construction mogul Woody Hunt and billionaire Paul Foster of El Paso’s Western Refining, among other prominent businesspeople in Texas, southern New Mexico and Ciudad Juárez.

“And you can’t get the Mexicans to invest over here, except privately,” Carruthers said. “So, when you look around, it’s all about private investment. It’s going to make things happen, if anything is going to happen.”

“The idea is that, if we are able to leverage our common assets, tackle our shared challenges and seize upon the opportunities that benefit all of us, then we would become more prosperous,” said Rolando Pablos, who serves as the group’s chief executive. “Conversely, if we continue to work separately and allow these political boundaries to divide us, then we’re not going to get ahead.”

For more than a decade, different groups have tried to take up the banner of mutual marketing only to see efforts trumped by competing political agendas. One of the Borderplex Alliance’s predecessor organizations, REDCo, handled economic development for El Paso. The Alliance has inherited that mission, creating an obvious point of friction when it comes time to share leads on companies looking to relocate.

Pablos says the group is working to help El Paso build its own internal economic development group and will eventually relinquish the job. The Borderplex Alliance is leading an effort “to create one regional strategic plan,” he said.

Lopez says that the Mesilla Valley development group would like to see “firewalls” in place to make sure “there is an equalization of information being shared on a specific client, whether it be the city of El Paso or ourselves.” The Borderplex Alliance, he said, should “be a lead generator and not a project manager for a client that comes in.”

Borderplex Alliance board member Raymond Palacios owns Bravo Cadillac Chevrolet dealerships in Las Cruces and El Paso, and says, from his perspective on both sides of the state line, “a win is a win.”

“If there is competition for a plant, the last thing we want is for us not to cooperate and have it go to Oklahoma City,” he said. “I don’t see borders here. I see this as one community. We really have to think regionally because if we don’t start working together we’re going to lose.”

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