Commentary:
This is part two of a two-part series.
In my last column, I wrote about how the Santa Teresa Port of Entry, on New Mexico’s border with Mexico, came to be established in 1993, and how it was the state’s best hope of capitalizing on the U.S.’s growing trade with Mexico. However, despite all the hope that this new project would generate economic development opportunities, growth was slow. Many people started to question the new port, and even policymakers started to wonder if further funding of infrastructure around the port was warranted.
In a port project, just as much promotion has to be directed to policymakers as to potential industrial and logistical tenants. The bulk of the population base of New Mexico lies in the Santa Fe-Albuquerque corridor, with the state capital being Santa Fe, more than 300 miles away from Santa Teresa. Add to the fact that Santa Teresa lies in the El Paso media market (which roughly extends to Truth or Consequences) rather than the one in northern New Mexico, and marketing the Santa Teresa region becomes more difficult.
For about 15 years after the Santa Teresa Port of Entry was opened, commercial traffic and activity was light, and successes in attracting major manufacturers and distribution firms were scarce. I remember being a part of a team handing out coupons for a free Burger King Whopper to truckers who would cross at Santa Teresa in order to try to generate traffic. Then, the Great Recession hit in 2008. All of a sudden, companies started looking for more efficient and economical places to locate their operations. Leasable space in Santa Teresa was available and at a reasonable price. Little by little, companies began moving into the industrial parks around the port.
Then in 2009, the Taiwanese contract manufacturer Foxconn decided to locate a 1.5 million-square-foot computer plant just across the border from Santa Teresa in San Jeronimo. This operation employs thousands of workers and can produce up to 70,000 Dell-brand computers every day. Even though this operation was not technically in Santa Teresa, it was important for two reasons. Foxconn uses a system in which third-party logistical operations on the U.S. side consolidate the components it needs for production, and then sends them to Mexico in a just-in-time system. This means that warehouse space in Santa Teresa is leased related to Foxconn’s operations in Mexico. It also resulted in pushing more commercial traffic through Santa Teresa, which meant more commercial opportunities. This, in turn, leads to funding from the state and federal governments.
In 2013, Union Pacific inaugurated its diesel-refueling station, crew-changing station, and intermodal container yard in Santa Teresa. This resulted in companies related to the railroad moving to Santa Teresa. A hotel and 24-7 diner were constructed just north of the port of entry for crew changes. After the Union Pacific project was constructed, a privately-owned short-line railroad was installed, which now manages rail-served clients on thirteen miles of rail.
When industrial activity picked up, interest from legislative committees, the state’s congressional delegation, and other officials began to pique, and more knowledge about the Santa Teresa project was imparted, which meant more funding for the port project. Many people began to refer to Santa Teresa as an overnight success, although it had been a long time in development.
Recently, the Santa Teresa Port of Entry has ranked as high as fifth in terms of largest commercial ports of entry in terms of trade, with more than $31 billion in goods passing through this port annually. The Santa Teresa region now accounts for approximately 63 percent of New Mexico’s exports to the world. A recent NMSU study revealed that Santa Teresa contributes approximately $2 billion to the state’s economy and supports 7,000 jobs. Currently, approximately 1.5 million square feet of industrial space is being built in Santa Teresa and another 1.5 million square feet in San Jeronimo.
Due to the increase in activity in Santa Teresa, a feasibility study is being conducted by the General Services Administration to determine the best way to modernize and expand the Santa Teresa Port of Entry. This little port, which punches above its weight, currently has three northbound and one southbound commercial lanes, and four northbound and one southbound private vehicle lanes. There is serious discussion about expanding the commercial lanes to twelve and adding more private lanes. This project could require a federal government appropriation of up to $200 million. The expansion has the likelihood of pushing even more trade to the Santa Teresa region.
Traditionally, New Mexico’s economy has been dominated by the petroleum industry, government spending (both state and federal), and the tourism industry. Development around the Santa Teresa Port of Entry is rapidly becoming one of the best ways for New Mexico to diversify its economy.
Jerry Pacheco is President of the Border Industrial Association. Jerry Pacheco's opinions are his own and do not necessarily reflect the views of KRWG Public Media or NMSU.
