U.S. Border Cities See Profits in Bridges to Mexico

Wednesday, February 2, 2011

U.S. Border Cities See Profits in Bridges to Mexico

Forget the border wall. Leaders see economic development opportunities in opening and updating international bridges.

BY: RYAN HOLEYWELL | FEBRUARY 2011

Donna, Texas, a sleepy farming town of about 18,000 people, is perhaps best known for its corn maze. The eight-acre agricultural attraction draws families from across the region. But without it, most drivers along U.S. Route 83 -- the highway that snakes the U.S.-Mexico border in Texas -- would likely speed past the community without a second thought.

City leaders here hope that will soon change, thanks to the new multimillion dollar, eight-lane Alliance International Bridge across the Rio Grande, which opened in December. If the bridge is as popular as city leaders anticipate, it could transform Donna into an industrial center, bringing much-needed jobs and money along the way. For Donna -- whose leaders initially began discussing a bridge 50 years ago -- the linkage across the water to Rio Bravo, Mexico, could be a game changer. Officials envision Donna becoming a hub for warehousing and shipping businesses servicing companies that transport goods north across the border.

Those hopes are based largely on a proposal by Rhodes Enterprises, a company that plans to invest, through the Alliance River Crossing Project, more than $950 million to develop 900 acres of land surrounding the bridge. Ernesto Silva, a consultant hired by the city, says the development could nearly triple the city’s tax base. Meanwhile, Ken DeJarnett, director of development at Rhodes Enterprises, says the project could boost Donna's annual sales tax revenue to $36 million annually -- it's currently around $1.5 million -- and create 7,000 new jobs. That's nearly the number of working age adults currently living in the city.

If that happens, the fortunes of Donna, whose poverty rate is 40 percent, could be forever changed. "It would be a whole new town," says Silva, a former assistant city manager of nearby Pharr, Texas, which has an international bridge of its own. "These bridges are economic engines."

At a time when politicians in Washington and state capitals are hotly debating the topic of immigration, and the federal government has literally built walls between the U.S. and Mexico, leaders in border cities and counties are increasingly making it easier to enter the country. By becoming host to a land port linking the U.S. and Mexico, a locality hopes to create a valuable hub for businesses that facilitate the international transport of goods -- and in the process yield revenue from tolls and taxes on businesses, property and sales.

The gamble is risky. Although federal and state money paid for much of the project, Donna is still on the hook for about $28 million. And the bridge, which opened with a ceremony that included Mexican President Felipe Calderón, is coming on line when fewer people are making the trip between the two countries, amid fears of drug cartel violence. Commercial traffic -- a prerequisite of any industrial development -- is not yet allowed on the bridge, because U.S. Customs and Border Protection has not yet committed to staff commercial inspection stations.

Still, despite the obstacles, it's a chance Donna is willing to take, says DeJarnett. "You’ve got to risk a little to gain a lot."

Wednesday, February 2, 2011