First in a two-part series
When I was in college, I had a dorm suitemate at the University of New Mexico who was from Anthony, New Mexico. He invited a group of us to come to his house and to go on the then obligatory drinking tour of Juarez, Mexico. It was the early 1990s, and New Mexico Governor Bruce King was working with New Mexico’s congressional delegation to establish a new port of entry on the state’s border with Mexico. Rural Santa Teresa, just west of El Paso, Texas was eventually chosen, and I took advantage of my border trip to see the chosen site first-hand. I had already visited the Mexican Consulate in Albuquerque, which had archived press in its library on the port effort. The Mexican Consul was not very friendly, but he was kind enough to let me peruse through the archives, while berating me on everything negative pertaining to New Mexico.
After our Juarez visit, I drove my buddies up to the Santa Teresa mesa, saw four buildings in isolation surrounded by nothing but desert, and took a paved road past a metal building until the pavement turned into a washboard road. Feeling hesitant about where we were going, I entered the building and asked the receptionist if this was the road to the border. He looked at me quizzically and said, “Yes, why do you want to go there?” I told him about the intent of the state to establish a new port of entry and he just looked at me as if I were crazy. Jumping back in the car, I drove about five miles on the narrow, rough road until it stopped at a barbed-wire fence. This was New Mexico’s border in 1991.
Later that year, I graduated and took a job with the New Mexico Economic Development Department as a trade specialist. I became part of the team working with state and federal officials on both sides of the border to open up what became the new Santa Teresa Port of Entry, which was inaugurated in 1993. The port was opened without pavement for 12 miles on the Mexican side of the border. However, to its credit, the Mexican government immediately built brick and mortar permanent port facilities. On the New Mexican side, glitches occurred in federal and state funding, so the state hauled two pre-fab buildings from the state prison in Santa Fe to serve as the port facilities. In one of history’s comical twists, these were conjugal-visit buildings. After establishment, it wasn’t until 1998 that Mexico paved the road to the port and New Mexico finished construction on the permanent facilities that exist today.
The Santa Teresa Port of Entry was built on a “build it and they will come” attitude. Governor King was trying to capitalize on the discussion and negotiations of what eventually became the North American Free Trade Agreement (NAFTA). I remember when I took my trade specialist job, New Mexico, a border state, ranked behind Connecticut, New Hampshire, and Iowa in terms of exports to Mexico. At this time, the Intel plant in Rio Rancho, New Mexico, was routinely accounting for 80 percent of the state’s exports to the world.
A lot of hope was placed on the port bringing economic development activities to New Mexico and launching the state into the global market. Frustratingly, the growth of the Santa Teresa industrial base around the port was slower than was expected, as its location was perceived to be too far from El Paso and Juarez, even though it is only a few miles away. Money for infrastructure to support development was sporadic, and the Albuquerque-Santa Fe corridor, the population base of the state, tended to discount any development in the southern part of the state.
Being a Northern New Mexican who was raised in Española, I remember when I started working in Mexico and on the border I used to catch a lot of flak from southern New Mexicans, who told me that we northerners think that we are superior in everything from politics to culture, and that the south was always being short-changed in attention and funding. This reaction surprised me at the time, but I eventually began to see what they were talking about.
In addition to a new port of entry, Governor King also wanted to establish a commercial/tourism office in Mexico City, to make the state more visible when NAFTA came into effect. Lo and behold, he appointed me to set up and manage the office, which I did for three years. During this time, I worked with Mexican federal officials to open the Santa Teresa Port.
When I repatriated to New Mexico, I moved to Santa Teresa to be a part of the impending explosion of growth in the region. To my and many other people’s dismay, the port region did not magically grow as expected. Doubt set in as to whether the state had made a mistake, and many people, including legislators, started to question investing more money in the port region.
In those days, when I testified in front of legislative committees lobbying for infrastructure funding for the port region, I always spoke of potential. After a while, the word “potential” started being sarcastically used when referring to Santa Teresa. However, being young and idealistic, I knew that the port had more than potential – it had to succeed. However, aligning all of the pieces to make it succeed seemed overwhelming.
Part two
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.
