Federal Reserve Leaves Interest Rates Near Zero | NAI Rio Grande Valley

Federal Reserve leaves interest rates near zero By Don Lee Los Angeles Times | Business

September 24, 2009

Reporting from Washington - The Federal Reserve said Wednesday that it would keep short-term interest rates near zero for the foreseeable future, even though the central bank acknowledged that the economy was recovering from its long downturn.

The announcement after a two-day Fed meeting makes clear that the agency is in no hurry to raise interest rates despite concerns that the federal government's soaring deficits and the Fed's extraordinary stimulus measures will eventually drive up inflation.

The Fed's policy-setting committee said evidence suggested "economic activity has picked up," compared with its Aug. 13 assessment that the economy was merely "leveling out."

This time the Fed also said that "activity in the housing sector has increased" and that businesses' pace of cutting back on investments and staffing had slowed.

But the panel, citing continuing job losses and constrained household spending, said in a statement that "economic activity is likely to remain weak for a time." Substantial slack, or unused capacity, will probably dampen cost pressures and keep inflation subdued for some time, the committee said.

The panel voted 10 to 0 to leave the target for the Fed's key short-term interest rate between zero and 0.25% for "an extended period," which many analysts interpret to mean until at least mid-2010.

Although that's good for consumers paying mortgages and credit cards, "if you're a saver, it's keeping rates down -- you hate it," said Babette Heimbuch, chief executive at the Los Angeles-based thrift FirstFed Financial Corp.

Jack Ablin, chief investment officer at Harris Private Bank in Chicago, said he was encouraged "by the unanimity of the Fed governors, that we have all of them behind this decision to keep rates low."

With high unemployment and bank lending still weak, Ablin added, "I think the Fed is taking a very realistic view. There certainly is a lot of stimulus in the system, but also a lot of slack."

The Fed also announced another cautious move toward eventually pulling back from its unusual interventions in financial markets to keep the economy from collapsing. The Fed is about two-thirds of the way through its previously announced plan to buy as much as $1.25 trillion of government agency mortgage-backed securities by the end of this year.

On Wednesday, the central bank said it would buy the full $1.25-trillion amount but would "gradually slow these purchases" until they are completed next March, along with another program to buy $200 billion in agency debt.

"The mortgage market has gotten a reprieve, and mortgage rates may stay low going into the spring of next year," said Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi in New York.

But, he added, "there might be some fear that rising interest rates next spring when the Fed stops buying mortgages could put the kibosh on the recovery."

The purchases of mortgage bonds issued by government agencies have helped push down the cost of home loans. They also have made the Fed, in effect, the principal source of financing for the housing market and have contributed to a ballooning of the central bank's balance sheet. Some analysts fear that the Fed's programs are supplying the economy with too much cheap money that will lead to spiraling inflation.

The Fed's plan to wind down the purchases of mortgage-backed securities indicates a stronger confidence in the housing market as the central bank seeks to shift the financing back to the private sector.

Yet it also buys the agency time, said G.U. Krueger, an economist at HousingEcon.com, a research and consulting firm in Los Angeles.

"They're hedging their bets a little bit, keeping their options open in case the market falls again," Krueger said.

With the economy showing signs of improvement, the Fed has come under increasing pressure to address the question of an "exit strategy" for its lending programs.

"The exit strategy will become the focal point of future policy deliberations," California State University economist Sung Won Sohn said in a research note. "After all, a firefighter's first rule of survival is 'Know your way out.' "

The Fed policy-setting panel's next meeting is Nov. 3-4.

don.lee@latimes.com

Ramon: Anzalduas International Bridge should be open before end of year

Ramon: Anzalduas International Bridge should be open before end of year
By Steve Taylor

McALLEN, Sept. 25 - McAllen Bridge Director George Ramon will be going to Washington, D.C., next week with Mayor Richard Cortez to see if he can get a firm date for the opening of the Anzalduas International Bridge.

“We will be talking to the U.S. Department of State and other agencies, trying to set up a date,” Ramon said.

“Hopefully, it will open before year's end. We are working with the appropriate federal agencies and stakeholders to bring this project online sometime in December. It behooves us to have this project ready to start operations when the busiest time for crossings is and that’s November and December.”

Ramon made his remarks in an insightful speech to the Rio Grande Valley-Tamaulipas Bi-National Chambers of Commerce group at the McAllen Chamber of Commerce offices on Thursday.

Giving the keynote address, Ramon spoke about Anzalduas Bridge and the importance of free trade for the Valley and northern Mexico. “Free trade is about breaking down the barriers and that is what NAFTA has done. It was worked,” Ramon said.

While many people think of free trade as a modern concept, because the North American Free Trade Agreement only started in 1994, its origins in Latin America go back at least 150 years, Ramon said.

He paid tribute to free trade pioneers of the 19th century, such as Benito Juárez of Mexico, Simón Bolívar of Venezuela, and José Martí of Cuba. “Their vision was free trade for the Americas,” Ramon said.

Free trade did not happen as quickly as it should have, Ramon said, not because of the complexity of the issue but because of a lack of trust. “The physiological barriers were there 150 years ago,” he said.

The advent of NAFTA, however, has created the largest trading bloc in the world, Ramon said. “Free trade has helped the border economies on both sides of the river,” he said.

In 2008, two-way trade between the U.S. and Mexico was valued at $340 billion, Ramon said. Of this, 80 percent went through Texas and a large part of it went through South Texas. “Trade has increased and the barriers have come down,” he said.

The big problem now, Ramon said, is the port of entries themselves. “Why? Because they are very congested and obviously the events of 9/11 have forced a more dramatic review of people, goods and documents coming into the country, hence the need for new border crossings,” Ramon said.

Ramon joked that he learned the art of patience while working on the Anzalduas International Bridge project. He said he started work on it when his oldest son was in first grade elementary school. That son is now in his third year of college. “It’s been a rather costly, somewhat cumbersome, process but we are here and very near completion of the project,” he said.

The City of McAllen is the managing partner in the Anzalduas bride project. The cities of Mission, Hidalgo and Granjeno are also involved. The City of McAllen has invested $42 million, Ramon said, the federal government $25.5 million, and the state of Texas $28.5 million, not including ancillaries such as utilities, drainage and in-kind contributions. “So, we are looking at well in excess of $100 million in capital investment to benefit the region,” Ramon said.

From the border station on the U.S. side to the border station on the Mexican side, the distance is 3.2 miles. Ramon said the bridge has been designed specifically to facilitate trade. It will have Radio Frequency Identification (RFID) technology that allows scanners to read laser visas, passports and other entry documents from a distance. It will also have a SENTRI lane, which is a dedicated commuter lane for low risk travelers.

“What we are trying to do is take away some of that congestion from other bridges so as to allow a more efficient flow of goods and people across our bridges. I would like to say this is the port of the future,” Ramon said. “We are going to have the latest and the greatest technology out there. The crossing-the-border experience is going to be much easier.”

Ramon said McAllen city leaders do not necessarily view Anzalduas as a revenue generating bridge in terms of toll collections. “What’s important to us is that it be a trade facilitator. It’s what happens beyond the bridge that’s important to the development of our communities and that’s how we view it,” he said. “This is not just for McAllen. It is for Reynosa, Monterrey, and beyond.”

Ramon added that the construction of Anzalduas International Bridge was yet another example of McAllen “doing something with a regional vision.” He pointed to the expansion of the airport and the local hospitals and the construction of the new convention center as further examples of this regional approach.

“We are doing something not even in our own town, it’s in another city (Mission), just like the bridge we own in Hidalgo (is not in our city). The vision has always been one to improve the border economy and improve the quality of life,” Ramon said.

McAllen Launches New Marketing Web Site | McAllen, TX in the Rio Grande Valley

McAllen launches new marketing Web site

Rio Grande Guardian Staff
Photo by RGG/Steve Taylor

McALLEN, Sept. 24 - The City of McAllen, the McAllen Chamber of Commerce and the McAllen Economic Development Corporation have launched a new Web site to assist visitors and residents with key information about entertainment, recreation, and business.

The Web site address is http://www.exploremcallen.com/.

McAllen Mayor Richard Cortez said that with the launch of the Web site, local nightlife, art and culture, entertainment, shopping, and restaurants are only a “click” away.

“This is only the first step for opening the front doors to our community to residents across the region and parts of northern Mexico,” Cortez said. “I invite residents and visitors to view the site at their convenience. McAllen is a vibrant American city on the border.”

Cortez said that as a growing, diverse city, McAllen’s entertainment offerings are ever expanding. This includes more parks and outdoors spaces, pro sports or new restaurants, stores and clubs, he said.

Having all the information about his bustling city located on one easy to navigate Web site is like one-stop shopping for visitors from around Texas and Mexico, Cortez said. In addition, McAllen residents will be able to use the site to find things to do with their families or when they get out of town visitors, the mayor said.

The Web site has been under development for several weeks and was designed by city staff.

“We wanted to make it as interactive as possible. This is only the first phase and we plan to continue to improve and add more features as the demand for information increases,” Cortez promised.

No.1 - McAllen, Texas: Forbes’ “Best Mid-Sized Cities” for Job Seekers

Midwest cities great for job seekers

By David Balinsky
Forum Columnist
Share this article Published: Wednesday, September 23, 2009

Too often, recent graduates look to cities such as New York, Boston, and Los Angeles to find jobs thinking these locales have a plethora of opportunities.

This year, however, east and west coast cities are not the places to look. Looking closer to home might likely prove more fruitful, according to Forbes. In two lists, one for large cities and another for mid-sized cities, Forbes.com lists the best cities for jobs in 2009.

Overall, Texas dominated the list, but Oklahoma found a spot on the list, as well.

Six Midwest cities found themselves on Forbes’ list for the ten best large cities in America.

Overall, Texas dominated the list, but Oklahoma found a spot on the list, as well.

No. 6 - Oklahoma City - Oklahoma City jumped from 30th on last year’s list. Employment rose a meager 0.4 percent, but considering many large cities lost jobs, this is actually very good.

— Most promising sectors: natural resources, mining and construction

No.5 - Dallas, Texas - Dallas is one of those cities that experienced negative growth. However, it has lost only 0.1 percent employment over the past year. Wholesale and manufacturing are two sectors that led the contraction in employment.

— Most promising sectors: government, education and health services

No. 4 - Ft. Worth, Texas - The economy has slowed but not as much as cities in the Northeast and West coast.

— Most promising sector: transportation

No. 3 - San Antonio, Texas- Education and health care have done quite a bit to spare San Antonio from much of the problems seen in the rest of the country.

— Most promising sectors: health care and education

No. 2 - Houston, Texas- Houston seems to be one of the most stable cities in America. Many job sectors experienced slow and stable job growth despite the economic turmoil the rest of the country experienced.

— Most promising sectors: education, health care, mining, natural resources and wholesale

No. 1 - Austin, Texas - Austin’s job growth during the past year was effectively zero. However, job prospects in many different job sectors make it rate as the best large city in the nation.

Most promising sectors: education, health care, leisure and hospitality

Forbes’ “Best Mid-Sized Cities” ranks four Midwest Cities in the top ten.

Many of these cities have oil and mining supporting them through these tough times. Again, Oklahoma has a representative on this list.

No. 6 - Corpus Christi, Texas - Last year, Corpus Christi was 111th on Forbes’ list. This year oil and construction have helped give it a boost.

— Most promising sectors: natural resources, mining and construction

No. 5 - Kansas City, Kan. - In 2008, Kansas City lost only 600 jobs. This stability is due to everything from oil to business services.

— Most promising sectors: natural resources, business services and government

No. 2 - Tulsa - Oil is usually the first thing most people think of when Tulsa comes to mind. However, Tulsa has found itself in great shape in many different sectors. Business services, health, education and government have all experienced double digit growth over the past year.

— Most promising sectors: natural resources, business services, health, education and government

No.1 - McAllen, Texas - Education and health care grew almost 50 percent over the past five years. Government also employs about a quarter of the population.
— Most promising sectors: health, education and government

Steelcase announces new location in Reynosa South Texas Border Town

Steelcase announces new location in Reynosa
Blog Post by MEDC

Steelcase, a leading manufacturer of designer office furniture, announced plans to open operations in Reynosa. This facility will focus on chairs and will begin production in early 2010.

From the Steelcase news release:

“This will help us improve gross margins and allow the three affected plants to focus on their core product lines,” says Hamid Khorramian, vice president, North America Operations. “The new plant, located near the U.S. – Mexico border and about 250 miles south of San Antonio, Texas, is ideally located so we can serve customers across North America while controlling our shipping costs.”

To read full post by MEDC click here

McAllen, TX one of America’s Best Cities for Jobs: Forbes.com | McAllen, TX in the Rio Grande Valley

Forbes.com has recently named McAllen as one of the top ten cities in American for jobs. The study found that more companies plan to hire employees, resulting in about a 9-percent expected increase in the next quarter.

McAllen has also been named one of the top cities to sustain and grow despite the economic slowdown.

Full Story...

Cameron County gets $4 million grant for rail relocation

Cameron County gets $4 million grant for rail relocation
By LAURA B. MARTINEZ, The Brownsville Herald

The federal government has provided Cameron County with a $4 million grant that will be used to help fund the West Rail Relocation Project.

The project calls for the relocation of the international rail bridge from the downtown areas of Brownsville and Matamoros to less populated areas in both cities.

Construction on the West Rail Relocation Project is expected to begin in spring 2010, County Judge Carlos H. Cascos said Tuesday.

"This critical funding will help close the current funding gap on the estimated total amount for the construction of the new rail bridge," Cascos said. ‘‘This award of $4 million will allow us to go to construction with the necessary funding in place."

The construction cost on the United States side of the rail relocation project is estimated at $35 million.

Local, state and federal funds are funding the project. The county’s West Rail Relocation Project is among seven projects nationwide that were awarded funding by the Federal Railroad Administration’s Rail Line Relocation and Improvement Program.

To be eligible for grant funding, a project must include the reduction of adverse effects of rail traffic on safety and motor vehicle traffic flow and not negatively affect a community’s quality of life, according to the FRA.

In addition, grant recipients are required to pay at least 10 percent of the project’s cost.

Cameron County is contributing $2.5 million to the project.

The relocation project will move the rail bridge to the west side of Brownsville near the River Bend area. Moving the rail bridge is expected to reduce traffic jams and help expedite emergency medical help when needed around the Cameron County area.

Officials said the new rail bridge would also improve the ability for trains to cross at all hours. It should eliminate the three-to six-hour delays when trains are not allowed to cross during peak motor vehicle travel times during the morning and evening hours.

In late 2008, county officials traveled to Washington, D.C., to make a technical presentation to the FRA prior to submitting its application.

The project has been in the works for nearly a decade.

SPI's 'leaning tower' to be demolished

SPI's 'leaning tower' to be demolished
By Rio Grande Guardian

SOUTH PADRE ISLAND, Sept. 21 - Ocean Tower, the 31-story building dubbed by many as the “leaning tower of South Padre Island," is to be demolished.

The 158-unit skyscraper, situated on the north end of the island, was sinking slowly into the sand.

The tower will be demolished, probably in mid-November, through implosion by Controlled Demolition, Inc., the company that set a Guinness World Record when it “imploded” the Seattle Kingdome.

“After careful consideration, we believe it is in the best interest of all parties involved, including the people of South Padre Island, to demolish Ocean Tower,” said Ocean Tower, LP, in a prepared statement.

“Unfortunately, multiple engineering studies have led us to the conclusion that it is not economically feasible to complete the building and to provide the caliber of condominium tower that we intended to build. We believe the responsible action at this point is to clear the site to enable potential future development of the property.”

In the statement, Oceans Tower said it is important for residents and visitors to know the problems with the building are specific to this project. “We believe South Padre Island remains a viable and desirable place to build that continues to attract economic development and growth,” the statement said.

Construction of Ocean Tower was halted in summer 2008 after it was determined that the building had experienced differential settlement of more than 14 inches, which resulted in cracks in the beams and columns of the structure.

It was supposed to offer a luxurious setting for South Padre Island tourists, with 134 condominiums on 25 floors. Four high-speed elevators were installed along with fine interior design, luxurious bathrooms, gourmet kitchens, security, hydro-jet pools, a Beach Club; a Kid’s Club, a gym & spa, a media room and much more. Penthouse and condominiums levels were available ranging from two-bedrooms with two-baths to three-bedrooms with three-baths.

Developers of nearby properties were concerned that news about Ocean Tower's safety would hurt their projects.

Last November, Antun T. Domit, of Ocean Tower SPI, sent a letter to buyers of condominiums in Ocean Tower to say there were no immediate prospects for completion of the project. Local realtors had begun selling units in the building to local Rio Grande Valley residents, as well as some from Mexico, Canada and Europe.

”Over the past six months, we attempted to maintain the commitment of Ocean Tower’s
general contractor and lenders while studying the settlement and repair of the building,” Domit said.

“Unfortunately, our efforts have been unsuccessful. Last week, with a proposal pending for the study and repair of the tower, the general contractor discharged its subcontractors and walked off the job.”

Domit said the contractor’s refusal to participate further in the study came at a time when Ocean Tower’s lenders refused to advance additional funds for the study, repair, and/or construction of the tower.

“With the future of Ocean Tower in serious question, we release you from your purchase
agreement and plan to immediately return your earnest money,” Domit said.

“This has been a difficult decision for us to make, but under the circumstances and given our desire to maintain your trust, we feel that we have no alternative. Obviously, no one anticipated the extensive delay or the problems the project is presently suffering. We are taking steps to have your earnest money returned. Please take a look at the attached release.”

In its statement on Monday, Ocean Tower, LP, acknowledged that litigation is currently pending against the geotechnical and structural engineers of Ocean Tower. There are claims that the settlement of the condominiums is the result of a flawed engineering design.

Ocean Tower, LP, said it has hired one of the nation’s premier demolition firms, Controlled Demolition, Inc. (CDI), to demolish the tower through implosion. The company promises as little impact as possible on the local community.

CDI has safely demolished thousands of structures worldwide, including the Seattle Kingdome, the Stardust Hotel in Las Vegas and the RCA Dome in Indianapolis.

Mark Loizeaux, president of CDI, said his company is in the process of establishing a site office and mobilizing resources at Ocean Tower. He said CDI will maintain frequent communication with regulatory agencies and adjacent property owners to ensure the local community’s concerns are addressed.

“In the coming weeks, we will be contacting nearby property owners, listening to their needs and keeping them informed throughout the process,” Loizeaux said. “We have been demolishing structures for more than 65 years and have an unparalleled safety and success record. Our methods are designed to minimize disruption, optimize safety and protect adjacent properties and the environment. We will conduct the Ocean Tower demolition with the utmost sensitivity to the local community.”

More than 98 percent of the above-grade materials used to build Ocean Tower will be recycled or reused, including all steel and concrete, according to Ocean Tower, LP. Steel and concrete can be recycled for other development projects in the region. Items that can be removed safely and reused, such as bathtubs, granite flooring and windows, are currently being removed from the building, the company said.

Record numbers of students attending STC, UTPA

Record numbers of students attending STC, UTPA

Dave Gragg
The Monitor

McALLEN — Student enrollment is on the rise at the Upper Rio Grande Valley’s two main schools of higher learning.

South Texas College reported the number of students enrolled in its campuses jumped by more than 5,000 students this year compared to a year ago. The University of Texas-Pan American, meanwhile, has almost 1,200 more students than it had at this time last year.

Enrollment in community colleges typically goes up when the economy slows down and jobs are scarce, said Juan Mejia, STC’s vice president of academic affairs.

"The economy played a role, but not the only role,” he said.

He also credits several joint initiatives with school districts and economic development corporations such as dual-enrollment programs, in which students receive both high school and college credit for taking a course.

“The community has built a college-going and workforce-readiness culture,” Mejia said.

The college also has increased its online offerings and night and weekend classes, he said.

The more than 27,000 students at STC are equivalent to almost 20,000 full-time students, so many students are taking bigger course loads than they have in the past, Mejia said.

STC’s strong relationship with UTPA makes it easier for students to take basic courses at the lower-cost STC, then transfer those credits to finish out their bachelor’s degrees at the university, he said.

UTPA’s 18,000 students translate into about 14,000 full-time students, according to the university’s Office of Institutional Research and Effectiveness, although official numbers won’t be available until mid-October.

Dave Gragg is the metro editor for The Monitor. He can be reached at (956) 683-4435.

Local University Makes Forbes "Best Public Colleges" List | NAI Rio Grande Valley

Forbes Ranks UTPA as One of the Best Public Colleges in the Country

Posted: 09/16/2009

Author: UTPA Office of University Relations

Forbes has rated The University of Texas-Pan American as one of country’s Best Public Colleges in its recently published “America’s Best Colleges 2009” rankings.

"As I have said before, UTPA is a jewel in our midst and a lot of people don’t appreciate that. This is a sterling example of the importance and value of UTPA to the region," Dr. Charles A. Sorber, UTPA interim president said.

UTPA ranked No. 32 in the top 100 list for “America’s Best Public Colleges” category. Overall, the Edinburg campus was listed at 218 in the complete list of “America’s Best Colleges” rankings, which profiled 600 universities and colleges from across the nation.

Taking the No. 1 spot in the overall and public colleges categories was the U.S. Military Academy. Other Texas universities that made the public colleges list included The University of Texas at Austin (No. 19), Texas A&M University – College Station (No. 23), Texas Tech University (No. 55), The University of Texas at El Paso (No. 72), and The University of Texas at Arlington (No. 84).

The second annual rankings were collected by Forbes and the Center for College Affordability and Productivity and were based on student evaluations of courses and faculty, post-graduate success, average student debt after four years, and four-year college graduation rates.

To read more about the Forbes’ “America’s Best Colleges” rankings, visit http://www.forbes.com/2009/08/02/best-colleges-ratings-opinions-ranking-2009_land.html.

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