Brownsville Economic Journal (Summer 2012 issue)

EJ Charting

The Course Of History

SpaceX

Vol. 1, No. 1 / Summer 2012

Growing Manufacturing Base

A glance at the Borderplex’s business activity

The South Texas Diamond

Regional economic alliance looks at marketing, recruiting internationally

Port’s Major Opportunity

A $6.5 billion LNG plant is one of first projects to result from the fracking

15

The only Texas Gulf city on the border braces for potentially the biggest project of its time.

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5 11 28

On the Cover: An artist rendition of the Dragon capsule with its solar panels extended as it hovers in space.

On This Page: The Falcon 9 rocket awaits on the launch pad at the SpaceX launch site at Kennedy Space Center in Cape Canaveral, Florida.

Below: Scott Pelley of 60 Minutes interviews Elon Musk, founder and chief designer of SpaceX.

American Manufacturing Magazine uses a model city for its marketing, prospect development, corporate recruitment.

Cascade Engineering CEO Fred Keller approaches life and business with a simple set of rules he carries in his wallet.

Do an online search for the interview on Elon Musk on 60 Minutes to understand his passion and inspiration for the aerospace industry.

Also find interviews from The Jon Stewart Show and The Late Night Show with David Letterman.

Economic Development Chief for the Texas Governor’s Office tells the Austin American-Statesman he wants all new jobs he can get for the Lone Star State.

PRESIDENT’SOUTLOOK

Florida and Puerto Rico will put up a fight against Texas

Brownsville, Texas is in stiff competition

with the Florida and Puerto Rico for a significant economic development project by

the name of SpaceX.

However, if it weren’t for Governor Rick

Perry’s Office of Economic Development and the Secretary of State Hope Andrade,

Brownsville would not be in contention for a SpaceX rocket launch site at this time.

The State of Texas has been extremely

supportive of the community and the com-

pany through the entire process. The Texas

Economic Development team originally

Jason Hilts

President & CEO

introduced the project to the Brownsville

EDC a little more than a year ago, know-

ing the paramount implications the project

would have in a city such as Brownsville.

A project, being dubbed as the ‘Commercial

Cape Canaveral’ by SpaceX, would change

the image of this region and provide opportu-

nities to all spectrums of our economy, which is recognized by the State of Texas.

This has truly been a collaborative effort

across all levels of government to have

Brownsville on the shortlist and we’ll all

continue to diligently work to keep Texas the No. 1 state for corporate recruitment.

Negotiations are ongoing and be rest as-

sured that Texas is at the table.

Remember, we are in an extremely com-

petitive environment and neither Florida

nor Puerto Rico will back down, especially against the 13th largest economy in the world – Texas. EJ

BEDC.com

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EDITOR IN CHIEF Gilberto Salinas COPY EDITOR Sylvia Rodriguez

CONTRIBUTING WRITERS Michelle Lopez Manny Ortiz Tony Vindell

COVER DESIGN & LAYOUT Jorge Montero Gilberto Salinas PHOTOGRAPHY BEDC Editorial Team Brad Doherty SOCIAL MEDIA Michelle Lopez

CORPORATE CONTACTS Lizzy de la Garza CIRCULATION Sylvia Rodriguez

ECONOMIC JOURNAL The Show KVEO Channel 23 (Cable Channel 8) In High Definition where available 11 a.m. CST Sunday mornings, monthly, check website for listing EDITORIAL OFFICE Brownsville Economic Development Council 301 Mexico Boulevard, Suite F1 (ITEC Campus) Brownsville, Texas 78520 Tel. (956) 541-1183 / Fax: (956) 546-3938 Site: BEDC.com E-MAIL CONTACTS gsalinas@bedc.com ldelagarza@bedc.com

mlopez@bedc.com srodriguez@bedc.com

The Economic Journal of the Brownsville Bordeplex is published on a quarterly basis and distributed according to the fair-use doctrine of U.S. copyright laws related to non-profit institutions, such as the BEDC, and for educational purposes.

Summer 2012

Brownsville Economic Journal

4

GUEST EDITORIAL

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Future model to recruiting, marketing a city It is simple mathematics and

not rocket science. The United States has nearly 20,000 mu-

nicipal governments, according

to the most recent U.S. Census Bureau count.

Each municipality has the

task of promoting a standard of living and sustainable eco-

nomic growth, of which each

city government houses, in one

way or another, an economic

development collective effort.

In the last decade, 150 manu-

facturing companies on aver-

age plan an expansion or

relocation project each year.

Yes, the odds are against eco-

nomic organizations. In

Brownsville, TX, we figured we would play a safer bet by

improving our odds and, at the

same time, increasing the

sweepstakes by going global.

During the economic down-

Photo by Sylvia Rodriguez

The North Brownsville Industrial Park is one of several tools the Brownsville EDC is using in its promotion and marketing of the Borderplex region.

From left to right, Dr. Rose Gowen, City of Brownsville Commissioner, Chair Sandra Lopez-Langley, of the Greater Brownsville Incentives Corporation, Mayor Tony Martinez, and Jose Herrera and Ruben Gallegos, board members of the GBIC, at the ground breaking ceremony of the NBIP in 2011.

Simple, yet paramount in its

a deep-water port with ship

nity joined hands in a business

we wanted to be an interna-

tional airport, an interstate

the world. The Brownsville

on how to rebound from the

Houston, Los Angeles, and

and a pipeline spanning from

1.2 million spanning from

town, the Brownsville commuforum by brainstorming ideas

economic slump and how to

set the region apart from the

competition in order to land

major projects.

We asked ourselves, “What

do we want to be when we grow up?”

BEDC.com

implications. We found out that tional city, alas the types of Miami.

Why not? We are the

“Brownsville Borderplex” and have all the necessary re-

sources. No other place in

South Texas can claim they

have four international bridges,

and barge traffic, an interna-

highway (under construction), the Port of Brownsville to

saw deep influence by China,

one of the largest economies in

Borderplex, a region of nearly Matamoros, Mexico, to

Monterrey, Mexico, for trans-

Brownsville and South Padre

ent modes of international

geous position to grow to-

porting petroleum – six differtransportation.

During the last decade, glob-

alization of the world economy Summer 2012

Island, TX, is in an advantagether with the large

economies of the world.

Turn To Page 26

Brownsville Economic Journal

5

Global Trade

The Texas South Alliance has met over the last year to unite the majority of cities spanning from Brownsville to San Antonio, and everything in between. Though all cities are in South Texas, they all differ in their economic and industrial identities.

COLLABORATION

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Mayors, economic developers think regional

New Alliance Forms A ‘Diamond Shape’ Economic Powerhouse Written by Michelle Lopez

The world will pass you by if you don’t

speak up, or at least promote yourself.

“You’ve got to start thinking globally,”

said Brownsville Mayor Tony Martinez.

“If you’re not, you’re not going to keep

up with the rest of the world,” he added

during a meeting of the newly-formed

Texas South–International Alliance in

June in San Marcos.

The mayors of Brownsville, San Antonio,

Corpus Christi, San Marcos, Edinburg and Laredo have united and met for the third

time in what will soon be a regional eco-

nomic development organization designed

Photo by Michelle Lopez

Brownsville Mayor Tony Martinez addresses a group of journalists during a pre-meeting press conference at the Historic Cueto Building in downtown Brownsville. Joining him are the Mayor of Corpus Christi Joe Adame and San Antonio Council Woman Elisa Chan.

“Collaboration and alignment among

South Texas cities can not only promote

to promote South Texas at the global level.

the attributes of our region but also lever-

economy with entry points to the United

statement.

South Texas offers a vibrant regional

States, a gateway to Latin America, world-

class logistics, excellent tourism, and historic cities leading the way in energy, biomedicine, and healthcare.

“San Antonio is part of a region that pro-

vides diverse industries and opportunities

for international business,” said San Anto-

nio Councilwoman Elisa Chan, one of the founders who originally approached

Mayor Martinez more than a year ago.

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Brownsville Economic Journal Summer 2012

age our resources,” she said in a prepared After the City of San Antonio partici-

pated in the 2010 Shanghai World Expo,

Councilwoman Chan started a regional international economic development initia-

South Texas Assets:

No. 1 inland port on U.S.-Mexico border

No. 6 U.S. Customs district (Brownsville-Laredo) 5 marine ports on Gulf of Mexico

2 deepwater Ports (Brownsville, Corpus Christi) 14 land international bridges 2 international rail bridges 4 interstate highways

tive by engaging South Texas mayors in a

7 major airports with worldwide connections

ment in the region. The initiative received

More than 24% growth, outpacing U.S. rate

dialogue about increasing foreign invest-

support from Mayor Julián Castro and San Antonio City Council.

Turn To Page 27

4.4 million people in 28-county region Young, multicultural population

3 million live along U.S. side of border

Contributor of 13th largest economy in world BEDC.com

LNG PLANT:

GLOBAL EXPORT

Brownsville is the latest location to experience the satisfaction that comes from natural gas liquification.

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Courtesy Photos

Tugboats help navigate the Suez Neptune ship to an international port city where it will load up on liquid natural gas. At one point in time, the United States was looking outward at importation of liquid natural gas. Today, the U.S. has found the reverse trend where major companies are looking at port cities for LNG investment, including the most recent at the Port of Brownsville on the Texas Gulf Coast. BELOW: A natural gas processing plant is lit up at night in North Texas, where this plant is capable of producing more than 6,000 barrel of natural gas liquids per day.

Investment, Industrial Activity On The Rise From Natural Gas Port of Brownsville in discussion for $6 billion LNG Plant A decade ago all the buzz was about the need for

more liquefied natural gas terminals in the United

States to import all that LNG and the rest of the world was going to send.

The past two years have seen a literal reversal, as

it's become apparent the rest of the world is inter-

with the United

States Department of Energy seeking

authorization to export liquefied natural gas out of a proposed facility on port property.

“While authorization has not been granted by the

ested in U.S. natural gas converted to liquid form.

U.S. Department of Energy yet, Gulf Coast LNG

Louisiana and Freeport LNG in Port Freeport,

to the significant demand for U.S. LNG and Gulf

Examples abound, including Cheniere in Texas, south of Houston.

Now the Port of Brownsville is getting in on the

Exports and Port officials are highly optimistic due Coast's sound business model,” said the release.

“The partnership between the Port of

act. In February, the port's Board of Commission-

Brownsville and Gulf Coast LNG will include a

fied natural gas company Gulf Coast LNG Export,

Coast LNG Export,” said the port, “of which the

ers approved a lease option agreement with lique-

LLC for 500 acres of Port property, following the

January 10 filing of Gulf Coast LNG's application

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Brownsville Economic Journal Summer 2012

multi-billion dollar direct investment by Gulf

majority will go towards the development of a

Turn To Page 25

Major Presence at Port: Keppel AmFELS

Manufacturer of Off Shore Jack-Up Oil Rigs, headquartered in Singapore, part of FELS family of companies.

Ternium SA

Major steel company headquartered in Buenos Aires, listed on the (NYSE: TX) is the largest water borne user and client at the Port.

TransMontaigne Partners Terminaling services company (NYSE: TLP) with large system of fuel products and services to global clients.

BEDC.com

LOCALINDUSTRYCORNER

Generating Growth From Within A City, Bridging The Gap Between Education, Business, Workforce Business attraction or business retention?

While some communities may place all their

in is the Academic Leadership Alliance (ALA)

BEDC recognizes the value of retaining existing

who graciously agree to sponsor an extern from

eggs in the “business attraction basket,” the

BISD for two weeks.

Business Retention & Expansion (BRE) Pro-

stead of having student interns, the employer

hosts a teacher extern.

vestment in any community is generated by ex-

the worksite and be able to implement that into

isting businesses, according to the report “The

Job Generation Process” by Dr. David Birch, an

economist and former MIT professor.

An effective business retention program aug-

The teachers must gather what they learned at

their lesson plans, transferring the knowledge

and experience to the students, yielding an eye-

opening and valuable sense of awareness and

understanding that you won’t find in any class-

ments a community’s business recruitment ef-

room books.

prospects evaluate a community for investment

better prepare their students for the workforce

forts. One of the main ways that business

We believe initiatives like these are needed to

is by talking to the current business owners.

demands.

and collaborative initiative working to develop

for Postsecondary Success (PPS), whose mission

local industry, to build relationships with our

adults with postsecondary credentials with labor

The BRE Program is a continuous, proactive,

an ongoing awareness and familiarization with local business owners, and to connect

Brownsville companies to the community’s re-

sources and services that can help these compa-

nies grow and succeed in Brownsville.

The BRE Committee is meeting with employ-

ers from various industries, and at the same time,

working closely with the education institutions

to communicate the need for certain programs

The BEDC is also a key partner of the Partners

is to double the number of low income young market value by 2025.

The partnership received a $1.3 million grant

from the Bill and Melinda Gates Foundation to address the community’s needs and challenges regarding our human capital.

The Brownsville community has come a long

way in this past year. Companies are coming out

of “limbo” stage and finally able to see “growth

and the development of particular skills based on

and expansion” on the horizon.

We are working toward helping businesses find

structure, new equipment for new lines, and new

within our community. Together we are striving

duction and efficiency.

what the local industry is communicating to us.

and recruit capable, skilled employees from

to retain our human brain power by connecting

students and graduates to internships and em-

ployment opportunities in Brownsville.

BEDC.com

In essence it’s like an internship, except that in-

gram.

Up to 80 percent of new jobs and capital in-

Business Retention & Expansion

Program, where we identify certain employers

businesses and furthermore, helping them ex-

plore opportunities for expansion through the

Lizzy de la Garza

One of the initiatives the BEDC is participating

Some companies are investing in added infra-

employees with the overall goal to increase pro-

We still have room for improvement, but we’re

heading in the right direction, creating and re-

taining local jobs.

Summer 2012

EJ

Brownsville Economic Journal

9

Made in Brownsville

The jack-up offshore oil rig ‘Chiles’ greets visitors at South Padre Island as it’s tugged out to sea. The rig is one of many which were born from raw steel at the Keppel AmFELS shipyard at the Port of Brownsville.

Keppel AmFELS lands major contracts to once again begin ...

Building Floating Cities Written by Gilberto Salinas

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Courtesy Photo

jackup oil rig.

grateful to them for their contin-

ished and delivered by the first

said GS Tan, President of Kep-

The rig is scheduled to be fin-

ued trust and confidence in us,”

quarter of 2014 and will be

pel AmFELS, in a press release.

116E design. Its legs will be 511

name will be the Coatzacoalcos.

have the capability of drilling

condo challenges well,” he said

water depth of 375 feet.

moratorium imposed after the

based on the LeTourneau Super feet in length and the rig will wells up to 30,000 feet at a

“Keppel AmFELS has had a

When christened, the new rig’s

“We have endured the post-Ma-

in regards to the offshore drilling 2010 Gulf oil spill disaster.

The Brownsville-based sub-

great relationship with Per-

Marine Ltd. signed a contract in

to 2002. Once again, we are

for Perforadora ordered in 2011,

jackup, our fourth, for Per-

in the first quarter of 2013.

sidiary of Keppel Offshore &

foradora Central that dates back

April worth $205 million with

honored to be building another

SA de CV to build a repeat

foradora Central and are very

Mexico’s Perforadora Central

10

HEAVY INDUSTRY

Brownsville Economic Journal Summer 2012

AmFELS is currently working

on the Papaloapan jackup, also and is on schedule for delivery

Turn To Page 27 BEDC.com

CK TECHNOLOGIES:

MANUFACTURING

Large plastic injection molder contributing to community in more ways than just traditional manufacturing, employment

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CEO Fred Keller committed to a vibrant Brownsville Written by Michelle Lopez

CK Technologies LLC, a unit of Cascade Engineering and leading sup-

plier to the commercial truck and bus market, believed in Brownsville and invested more than $20 million to build a manufacturing facility for interior, exterior and functional assemblies.

This new company creates

vast opportunities for those

residing in Brownsville. CK

Technologies have provided dozens of jobs, helping our

unemployment rate which is currently higher than the state.

The grand opening took

place in November 2011.

Chairman of Cascade En-

gineering, Fred Keller, inaugurated the facility.

Others in attendance

were Brownsville Mayor, Tony Martinez; BEDC

President & CEO Jason

Hilts; and CK President Mark Miller.

The 300,000-square-foot

complex is located on

Paredes Line Road, next

to the North Brownsville

Excerpt from Inc.com on Fred Keller Following the letter of so many laws could easily become overwhelming, confusing, and — as opponents of regulation might argue — paralyzing.

But a well-thumbed card in Fred Keller's wallet has long served as a cheat sheet or a compass: Do all the good you can By all the means you can In all the ways you can In all the places you can At all the times you can To all the people you can As long as ever you can.

It's a quote from 18th-century theologian and social reformer John Wesley, co-founder of the Methodist movement. It's also a highly unusual set of business principles, but Keller doesn't hesitate to pull it out in the middle of meetings.

It's a gesture that might seem grandiose.

But since starting Cascade Engineering 38 years ago, Keller, by nearly all accounts, has walked the walk. He has built a $250 million company and helped uplift an entire community by steadfastly asking the question: What good can we do?

Industrial Park and just south of the FM-511 intersection. CK Technolo-

Photo by Brad Doherty

Fred Keller, founder of Cascade Engineering, the parent company of CK Technologies, speaks during the grand opening ceremoney of its CK-Brownsville plant in November 2011. The plant is one of the biggest in his portfolio of operations, which covers 13 companies including a renewable energy firm. His companies have been recognized by the White House’s Ron Brown Award for Corporate Leadership; Society for Human Resource Management's top 10 “Best Medium Companies to Work for in America”; Goodwill Industries’ “Employer of the Year” award, and Chrysler’s “Technology Role Model” award. Log onto Cascadeng.com for more on Keller and Cascade’s companies.

gies Brownsville will house a large-tonnage injection molding capability, as well as chrome electroplating, painting, assembly and

warehousing areas.

“CK Brownsville will anchor and help shape the North Brownsville Industrial Corridor, which connects manufacturers to North and

Latin America by way of five modes of international transportation,” said Jason Hilts, President & CEO of the Brownsville Economic

Development Council, in regards to the transporting product via rail, air, deep water, barge and interstate.

“We, as the Brownsville industrial and business community, will ensure that CK Technologies and Cascade Engineering have everything BEDC.com

Summer 2012

Turn To Page 27

Brownsville Economic Journal

11

BUSINESS&ECONOMICBRIEFS

Kauffman FastTrac® To Train Local Entrepreneurs

Program offers scholarship opportunities for 10 trainees per entrepreneurship session

By Staff Reports

In order to boost entrepreneurship through-

out the community, the BEDC has commit-

ted funds to provide 100 percent scholarships to 10 individuals seeking to complete an en-

trepreneurship training program.

The program is being provided by the In-

ternational Innovation & Entrepreneurship

Center (IIEC) of the University of Texas at

Brownsville.

The Tropical Texas Regional Center of

Innovation and Commercialization (TTR-

CIC) agreed to match the funds and already has contributed another 10

scholarships, bringing the total to 20.

The training course typically costs $700.

Though the summer course has already

filled, scholarships are available for an up-

coming Fall session.

Interested entrepreneurs can apply at

utb.affiliate.fasttrac.org or contact John Sossi or Ruben Ceballos at (956) 882-

4119.

The IIEC is providing Kauffman Fast-

Staff Photo

Coils hang on racks at Consulting Point in Brownsville, Texas. The coils are wound up and inserted during the final assembly of electric motors at the CP shop, which has built hundreds for different clients througout the nation. Founder and President Joel Gonzalez is one of many entrepreneurs which got their start at the International Innovation Center at the ITEC Campus in the early 2000s. Today, his firm has diversified its operations, which also builds pre-fabricated foam walls for different domestic clients. The Center, working with the Brownsville EDC, is now offering entrepreneur courses through the Kauffman Fastrac program.

Biomedical Research Facility Opens at UT-Brownsville

Mayor Focuses on Unity at Economic Luncheon

officially opened in February the 58,558-

leaders gathered inside a meeting room at

ing.

luncheon meeting of The Economic Club

The University of Texas at Brownsville

Trac® NewVentureTM training to entre-

square-foot Biomedical Research Build-

affiliate of Kauffman FastTrac® certified

The facility funded by $34 million in

preneurs in Brownsville. The IIEC is an

to provide the training. FastTrac provides

state tuition revenue bonds houses 12 lab-

determine the viability of the business

research areas and 12 science research fa-

the tools to develop a business concept,

concept, and outline the critical steps to a successful business launch.

The program encompasses 30 hours of

facilitated instruction and is broken up

into 10 sessions over a period of 10 weeks.

BEDC.com

Hundreds of business and community

the Holiday Inn in March for the inaugural

of the Brownsville Borderplex.

The BEDC formed the non-partisan and

oratories, four classrooms, eight faculty

nonprofit club.

cilities.

the club’s goal is to provide a venue for

edge research to address health issues in

issues on the local, national and interna-

BEDC President & CEO Jason Hilts said

The new building will produce cutting

the Rio Grande Valley and propel the

discussion of business, political and social

school to a higher tier in medical research.

tional level. Keynote speaker, Brownsville

Summer 2012

Turn To Page 23

Brownsville Economic Journal

13

Building Upward

DEVELOPMENT

The planned 38-story Kirana Tower is one of several projects keeping South Padre Island’s development sector healthy after the economic downturn.

EJ

Wave of Investment

South Padre Island construction activity helping fuel economy Written by Tony Vindell

Contractors, developers and construction-oriented busi-

nesses are eagerly waiting for the economy to improve not

only in the United States but well beyond its borders, par-

ticularly to the south.

Richard Franke Jr., an entrepreneur/developer with

Franke Inc.Realtors, along with his brother Dennis have

The Kirana Tower has yet to start construction as it is in the pre-development and sales stages at the time.

the north side of the Island where two decades ago was

He said they plan to build a $100 million-plus hotel/conven-

been involved into a multi-million-dollar upscale project on nothing but sand and surf.

Called The Shores, the development has been going

since the 1980s and has not shown any signs of slowing all

tion center on the beach side, a smaller hotel on the bay area and fancy shops, marinas, restaurants and other amenities.

“We are not yet ready to make an announcement,” he said.

things considered.

“Maybe in the next two months or so.”

ing the area in 1990,” Franke said of the 250-acre tract

include the 38-story Kirana Tower, which would be the tallest

the Gulf of Mexico to the Laguna Madre. “We wanted to

ducting predevelopment sales.

“We started buying property in 1981 and started develop-

along a stretch on both sides of Texas Highway 100 from have an upscale development to attract upscale people.”

Well, upscale is the key word.

The Frankes are now working on another project that

could lure even more upscale folks from the United States,

14

Graphic by Kirana Tower

Mexico, Canada and from other countries.

Brownsville Economic Journal Summer 2012

Other projects scheduled for this year at South Padre Island

building south of San Antonio. The company is currently conThe Island als will see the addition of a Schlitterbahn Beach

Resort and Indoor Waterpark Schlitterbahn, a new 221

room, year-round entertainment resort destination.

Schlitterbahn currently has a waterpark at the Island,

which is a major destination for vacationers.

BEDC.com

It was named

The Dragon

for a reason...

Writing A New Chronicle

The Most Successful Commercial Aerospace Startup In History Could Add Brownsville To Its Portfolio of Sites Written by Gilberto Salinas

side of the norm.

Such would be the case of the relationship between SpaceX and Brownsville, having no presence of a space industry in the region Nine days, 7 hours and 58 minutes. but with hopes this company will be the catalyst for sparking the From the launch to splashdown, it was the first chapter of what will aerospace cluster. The process starts with one company, which be the commercialization of space transportation, otherwise known could be the case for Brownsville vying for a rocket launch site. And as space history.

SpaceX, the commercial space industry’s most successful start-up, And the Brownsville Borderplex is eagerly hopeful and optimistic has proven to the world that a young entrepreneur with a childhood the next chapter will be written here. dream, can in fact launch a rocket to space, connect a capsule to “In economic development, this is a project called a community the International Space Station, deliver cargo, and return to Earth, changer,” said Sandra Lopez Langley, chair of the Greater both successfully and profitably. He also did it by way of naming the Brownsville Incentives Corporation, which is working with the Falcon 9 rocket after the famed ‘fastest ship’ the Millennium Falcon, Brownsville EDC in maintaining a competitive edge as Brownsville a spaceship from one of his favorite films as a child – Star Wars. is one of three areas in contention for a rocket launch site and “Welcome home baby,” SpaceX Founder, CEO and Chief Delaunch command center. signer Elon Musk said in a post-flight briefing after the Dragon cap“In my time living in South Texas, never have I seen an opportusule returned to earth by splashing into the Pacific Ocean. “It’s like nity come our way such as seeing your kid come SpaceX. We hope this home.” project is the beginning of The Dragon was named an aerospace cluster and after the fictional “Puff the hope to one day be reMagic Dragon,” from the hit ferred as the next ‘Space song by music group Peter, City USA,’” she said in rePaul and Mary. Musk said gards to the nicknames of he used the name because Houston and Titusville, many critics considered his Florida. goals impossible when he In economic developfounded SpaceX in 2002. ment, two types of projects Today, SpaceX holds a Courtesy of SpaceX are handled by cities, $1.6 billion contract with those that are generated An artist rendition of the Falcon 9 with mounted Dragon Capsule is depicted traveling in space. On NASA to make 12 robotic from the current industries May 22, SpaceX performed a successful launch of its Falcon 9 Rocket from Kennedy Space Center, supply missions to the Cape Canaveral, Florida. that are the genetic space station. This flight, makeup of a certain comthough, was a demonstramunity or region. Such as the case for Brownsville, it would be in tion flight and not part of the 12. It also was SpaceX’s second traditional manufacturing, where a company hires hundreds to dedemonstration flight under the 2006 COTS (Commercial Orbital sign, engineer, manage and manufacture from start to finish a cerTransportation Services) program with NASA. tain product.

SpaceX is headquartered in Hawthorne, California, in a former faBest put, Brownsville makes things. cility used to assemble fuselages for Boeing 747s in the outskirts of The other type of project is one that's outside of the box, or outLos Angeles.

Courtesy of NASA

With one second to go, the Falcon 9 Rocket is shown lifting off on May 22 on NASA TV. The launch was SpaceX’s second demonstration flight under the 2006 COTS (Commercial Orbital Transportation Services) program with NASA.

He also has a research and rocket test center in McGregor, Texas, just west of Waco, a launch site at Cape Canaveral, and is building a second launch site at Vandenberg, California.

Cape Canaveral was the site where the Falcon 9 launched the Dragon capsule and forever carved it into the chronicles of space history.

When asked for his initial thoughts on Dragon’s capture and move into the history books, Musk stated “just awesome.”

Two words that clearly define the culture of SpaceX. Launching the Falcon 9 A towering white rocket, with SpaceX etched in blue on its side along with the U.S. flag and the emblem of the Dragon, the nose cone covering the Dragon capsule and the countdown begins at around 20 seconds.

Hardly being able to contain the excitement, the last five seconds are the longest.

A split of a second before the countdown, the launch begins with a slight flash of the 9 Merlin rocket engines nestled at the base of the 180-foot space-bound vehicle.

In just another half-second, the pitch black night sky lights up and its jet-like noise reverberates through the dense brush and shallow flats.

Courtesy of NASA

A training Space Shuttle sits idle on the parking lot of the Kennedy Space Center at Cape Canaveral, Florida, on May 22 as the SpaceX Falcon 9 Rocket leaves a trail of light on its way to orbit Earth and eventually connect to the International Space Station.

“The streak from the rocket just lit up the night sky,” said Jason Hilts, BEDC President & CEO, who was on hand with SpaceX for the historic launch.

Off is the Falcon 9 Rocket carrying the Dragon capsule into space. A few minutes later, it’s safely and strategically orbiting the planet we call home – Earth.

Now, imagine it in Brownsville, Texas, says Hilts.

SpaceX, short for Space Exploration Technologies Corp., made space history on May 22 by becoming the first private enterprise to launch a spacecraft and connect an unmanned capsule to the International Space Station.

The launch occurred shortly after 3:44 a.m., EST, from Cape nificant amount of cargo from the space station. Other cargo Canaveral, Florida. vehicles serving the space station, those from Russia, Japan “Today marks the beginning of a new era in exploration,” said and the European Space Agency, can carry cargo, however, all Charles Bolden, NASA Administrator, after the liftoff at the vehicles are destroyed after leaving the station.

Cape.

Intelsat signs contract “And while there is a lot of work ahead to successfully comShortly after the successful launch, Intelsat, the world's leadplete this mission, we certainly are off to a good start,” he ing provider of satellite services, and SpaceX announced the added. first commercial contract for the Falcon Good start indeed. The Heavy rocket. dragon was successfully ma“SpaceX is very proud to have the neuvered and put in a posiconfidence of Intelsat, a leader in the tion for the ISS astronauts to satellite communication services in“grab it” with the mechanical dustry,” Musk stated in a press rearm. lease.

Musk said the Dragon per“The Falcon Heavy has more than formed very well, exceeding twice the power of the next largest expectations on some fronts, rocket in the world. With this new vehiincluding solar panels that cle, SpaceX launch systems now produced more power than cover the entire spectrum of the expected. There were a few launch needs for commercial, civil and problems during the mission, national security customers,” he starting with an aborted first added.

Courtesy of NASA launch attempt as the Falcon If developed in Brownsville, the Fal9’s rocket engines were start- Elon Musk smiles from the Launch Command Center at the SpaceX head- con Heavy would be flying twice from quarters in Hawthorne, California when the Dragon Capsule connects with the proposed launch site at Boca ing. A problem with the the International Space Station on May 25.

Dragon’s laser range-finding Chica beach. device that caused some unThis is also the first commercial conplanned maneuvers during the approach to the station was tract for SpaceX's Falcon Heavy launch vehicle. Under the also fixed, according to Musk. agreement, an Intelsat satellite will be launched into geosynDays later, the Dragon was emptied of its contents, repacked chronous transfer orbit (GTO). with materials coming back to earth, detached and on its way “Timely access to space is an essential element of our comback to the Pacific Ocean for splashdown. mercial supply chain,” said Thierry Guillemin, Intelsat CTO. On June 13, the capsule was on exhibit at SpaceX’s testing “As a global leader in the satellite sector, our support of sucand research center in McGregor. cessful new entrants to the commercial launch industry reThe capsule served as the backdrop for a press conference duces risk in our business model. Intelsat has exacting hosted by Musk and joined by Bolden to deem the mission a technical standards and requirements for proven flight heritage success. for our satellite launches. We will work closely with SpaceX as The Dragon the Falcon Heavy completes rigorous flight tests prior to our fuWith the success of the demonstration mission, SpaceX now ture launch requirements,” Thierry said. needs the official confirmation from NASA and then it will begin The Falcon Heavy fulfilling cargo resupply missions to the ISS later this year.

Falcon Heavy is the most powerful rocket in the world and SpaceX plans another launch from the Cape later in the year. historically is second only to the Apollo-era Saturn V moon The company has a contract for 12 cargo missions while it rocket. Capable of lifting 53 metric tons (117,000 pounds) to continues to develop the manned version of the Dragon for fly- low Earth orbit and more than 12 metric tons (26,000 pounds) ing astronauts to the ISS and elsewhere in low Earth orbit. to GTO, Falcon Heavy will provide more than twice the perWhile the Dragon was attached to the Space Station, astroformance to low Earth orbit of any other launch vehicle. nauts unloaded 1,146 pounds of cargo, including food and This will allow SpaceX to launch the largest satellites ever other crew provisions, student experiments and a laptop that flown and will enable new missions.

Dragon had delivered from Cape Canaveral. That, among Building on the reliable flight proven architecture of the Falother checklist items crossed off, helped prove to NASA that its con 9 vehicle, Falcon Heavy is also designed for exceptional plan to turn over such tasks to private companies could be reliability, meeting both NASA human rating standards as well successful and may ultimately allow the space agency to save as the stringent U.S. Air Force requirements for the Evolved the money it pays Russians for transportation.

Expendable Launch Vehicle (EELV) program, making it an atThe Dragon is the only spacecraft capable of returning a sigtractive solution for commercial, civil and military customers.

18

Brownsville Economic Journal Summer 2012

BEDC.com

New commercial-only launch site In April, the site selection of a proposed launch site for SpaceX became public after a notice of a public scoping hearing in Brownsville was posted with the U.S. Federal Register. The Notice of Intent to conduct an Environmental Impact Statement was filed by the Federal Aviation Administration’s Office of Commercial Space Transportation.

Since, Brownsville has received considerCourtesy of NASA able national attention and is being monitored Bystanders cheer as the Falcon 9 makes its historic launch and closely by its competitors for the project – lights up the night sky on May 22 at the Kennedy Space Center in Puerto Rico and Florida.

Cape Canaveral, Florida.

The notice states the site would support up to 12 commercial launches per year, including two Falcon Heavy launches and ten Falcon 9 launches.

It also states that “before anything could be done on the project, an environmental impact statement, a public scoping period and a public scoping meeting would need to be held.”

The EIS process could take at minimum through the end of this year.

The company plans to make an announcement in regards to a site location after the FAA’s decision on the EIS. The first public scoping meeting was May 15 at the ITEC Campus where more than 550 showed at the event and many of which personally met the SpaceX delegation of six which were on hand for questions about the project.

Of the 550, about 75 signed up to speak, of which 73 spoke in favor of the project, one neutral and one negative.

The project is at the hands of the FAA as it continues to collect data from federal public agencies in regards to risks which would need to be mitigated in order to build a launch site near Boca Chica beach.

The proposed site is a private tract of land, just south of Highway 4 about a quarter-of-a-mile before the Gulf of Mexico. The site is three miles north of the Rio Grande and five miles south of South Padre Island.

The long stretch of baron land before getting to Boca Chica beach is extremely similar to the long stretches of protected wildlife property at Cape Canaveral, an environmentally sensitive area which has flourished due to the presence of the launch sites there. The drive out to Vandenberg from Lompoc, three hours northwest of Los Angeles, also is long and desolate, however, with mountains.

The difference between a site in Brownsville and the current SpaceX launch sites in Florida and California is accessibility.

“It would be a purely commercial launch site, whereas Cape Canaveral and Vandenberg are actually Air Force bases – in the case of Cape Canaveral, it’s sort of a joint NASA-Air Force activity,” Musk recently told MSNBC. “So it makes sense to have NASA and DeCourtesy of NASA fense Department launches occur from Cape Canaveral and Vandenberg, but then proba- The Falcon 9 hovers in space directly above Morrocco during its orbit and before it connected to the International Space Station. bly shift most of our commercial launches to a purely commercial launch site that’s really aimed at being the best customer for a commercial provider,” he said. “Just as there are Air Force bases and commercial airports … there’s some logic to separation.”

BEDC.com

Summer 2012

Brownsville Economic Journal

19

Economic Impact

Casually decked out in jeans and a short-sleeve

shirt, Musk hosted a press conference at his McGre-

gor facility to showcase the charred Dragon capsule.

A few hours later, a personal Twitter message from

Gov. Rick Perry shows a photo him and a suited

Musk together at the Texas Capitol where they discussed SpaceX’s proposed commercial launch site

for the Brownsville area.

“Great meeting with SpaceX’s Elon Musk, a true

space pioneer,” stated the Governor in his twitter

shortly after them getting together.

In the meeting, it was noted that

South Texas is the leading candidate for a launch site for the company.

The two met in regards to

potential incentives and other issues for the project.

Earlier in June, Perry

wrote to Musk “Please be as-

sured that as you seek to ex-

pand the capabilities of SpaceX

Official Launch Patch

to launch spacecraft, whether unmanned or manned,

the State of Texas stands ready to support you and

the work of your talented employees who are blazing a new trail into space.”

Texas, however, is facing stiff competition from

Florida and Puerto Rico.

As the newspaper The Orlando Sentinel recently

reported: The ongoing rivalry only has intensified in the weeks since SpaceX became the first. None of the rivals have made public the incentives each is

offering; And the stakes are high – hundreds of good paying jobs at SpaceX, the supporting companies

that would pop up around its operation, as well as the prestige.

Space Florida, the economic development entity

courting SpaceX, has publicly said it intends to be

aggressively competitive by way of financial incenCourtesy of NASA

The Dragon capsule is seen on the earth’s horizon connected to the International Space Station.

tives. Florida also plans to offer converting a pad formerly used by the space shuttle at Kennedy

Space Center into a facility for SpaceX, recently reported by The Sentinel.

In addition to significant financial incentives

and tax breaks, Puerto Rico’s economic and com-

merce department is marketing its geographic lo-

cation for the project, being that it’s closest to the

equator than Brownsville for Cape Canaveral.

A key for the launch site is being close to the

equator, in a remote and unpopulated area, and

next to a major body of water where a rocket can

launch in an easterly direction.

“Brownsville and the Governor’s Office have

collaborated in the past for major projects. Our

city and state is well known for being assertive in corporate recruit-

ment and now is

the time to ag-

gressively go after a project, such as

SpaceX,”

said Mayor

Official Launch Patch

Tony Martinez,

who since day one,

has been instrumental in

directing different public and private entities to

support the project in the Greater Brownsville Borderplex.

The company plans to invest $80 million in a

launch site and launch command center on a foot-

print no larger than 5 acres of land. Once fully

operational, SpaceX would create upward of 600

direct jobs with a direct economic impact of more

than $51 million annually.

SpaceX, which employs about 1,800, first

started with 10 employees in 2002. Of those 10 was Steve Davis, the project leader for the Brownsville site.

“It is really important to go to a place that wants

us to be there and to know both the positive im-

pacts and the negative impacts and really judge

that,” Davis told The Brownsville Herald during

an interview at the May 15 public scoping hearing.

“That is kind of the stage we are in right now. It

has been very, very positive, which has been great.”

21

EJ

Brownsville Economic Journal Summer 2012

BEDC.com

IRON MAN

Elon Musk: Is the head of SpaceX and Tesla Motors the real-life Tony Stark?

THINKERS & INVENTORS

EJ

Parallels have been irresistable to many fans

Tony Stark, alias Iron Man, is powered car, according to the suave, brilliant and mega-rich.

Palo Alto-based company, Sounds an awful lot like Elon which Musk co-founded in Musk, the South African entre- 2003. preneurial wunderkind who But Musk was already occuspent his May 22 shooting a pied Tuesday, watching his rocket into space and making a Falcon 9 rocket launch with an major advance in electric vehi- unmanned Dragon capsule on cles. a mission to the International The 40-year-old Space Station. served as an inThe project, deFrom Time Magazine: spiration for the veloped by fictional genius Musk’s Elon Musk makes no sense — and that's the reason I know billionaire in the Hawthornehim. When I was trying to bring "Iron based SpaceX, the character of genius billionMan"movies, ac- aire Tony Stark to the big screen marks the first cording to directime a private in Iron Man, I had no idea how to make him seem real. tor Jon Favreau. company has Robert Downey Jr. said, "We Musk even sent a spacecraft need to sit down with Elon makes a cameo to the space staMusk." He was right. in one of the tion.

Musk, 38, is a rocket scientist.

He designed the Falcon 9 films.

He helped booster ... He is also a green piBut the comparcousins Lyndon oneer. He helped create Solar isons are really and Peter Rive City, the largest provider of getting some come up with the solar-power systems in the U.S. And he designed the Tesla, one traction now, idea for their of the first electric cars of the with the comic soon-to-be pubmodern era. Bob Lutz, the vice book character lic SolarCity chairman of General Motors, playing a pivotal solar panel comcredits him with catalyzing GM role in the block- to move toward electric cars. pany, which he buster "The serves as chairWritten by Jon Favreau, director of Iron Man and Iron Man 2, in the April Avengers" at the man. Oh, by the 2010 issue of Time Magazine. same time that way, Musk also Musk kicks two founded PayPal, of his grandest ventures into which he sold to EBay for $1.5 high gear. billion.

“Elon Musk is obviously The parallels to American inTony Stark from another unidustrialist-engineer Stark -verse,” tweeted user Dromeda. whose expertise in mathematOn the same day of the ics, chemistry, computer sciSpaceX historic launch, ence, alternative energy and Musk’s Tesla Motors Inc. said more helps him design a techit would begin delivering its nologically advanced suit that Model S high-end electric car aids in his crime-fighting efto customers in late June, forts -- have been irresistible to ahead of schedule. fans.

There are more than 10,000 “Phenomenal,” tweeted user orders already for the batteryArchit Gupta. “Elon Musk is

22

Brownsville Economic Journal Summer 2012

Elon Musk was the inspiration behind Tony Stark, the protagonist in the movie series ‘Iron Man’ and ‘The Avengers,’ according to Wikipedia. Including himself, Musk’s Tesla Motors high-end sports car makes a cameo in the movies. like real-life Tony Stark. Boys, go big or go home.”

“Yeah!! He needs a Musk tower .. and some body armor,” wrote user MorgothG. “We need more comic book style billionaires,” tweeted Zachary Cohn of Seattle.

For now, though, Musk is

basking in glory.

And if President Obama can get his own comic book, seems like Musk and his larger-thanlife history deserve one too. EJ This article was written by Tiffany Hsu and appeared in the May 23 edition of the Los Angeles Times.

BEDC.com

Wind Farms Create Logistics Opportunities, Port Lands Tiger IV Funds Mayor Tony Martinez, spoke to the area’s

T-Mobile Announces Closure, Reimburses City Incentives

Brownsville Economic Development

between the private and public sectors.

poration announced in April it was reim-

of a 78,000-square-foot call center. The

Brownsville,” he said. “Without communi-

incentives paid to T-Mobile USA over the

Continued from Page 13

business leadership about communication “We’re building the house of

cation our foundation will falter.”

Martinez also stated that the downtown

area will be revitalized in order for it to be

the front door and “welcome mat” for

Brownsville.

“There are so many things we can show-

case in Brownsville. We just need to do it,” he added.

Club meetings will be on a quarterly

basis and feature high-profile keynote speakers.

Logistics Opportunites Spurred

by Gulf Coast Wind Farms

Two turbines of E.ON Climate & Renew-

able's $150 million “Magic Valley” project

have recently appeared throughout

is close to raising its first tower also.

GBIC approved a $3.5 million job creation

bursed $2.5 million in job creation

last four years for its Brownsville call cen-

ter.

incentives package in order to oust the

other two finalists for the project, Charlotte, North Carolina, and Jackson, Mississippi.

About a month after T-Mobile announced

“This was a badly needed infrastructure project ... (it) will create jobs in or region and help us meeting increasing demand.”

it would close its Brownsville call center, city officials said the company has reimbursed the city for $2.5 million in incentive money. The 2007 contract T-Mobile

signed with Brownsville included a clause that stated the company would have to reimburse incentive money should it decide to leave the area.

Port Lands $12 Million In Tiger IV Grant Funds

The Port of Brownsville was awarded

$12 million in June through the U.S. De-

- Eduardo A. Campirano Director & CEO Port of Brownsville

new era of development in Willacy

said its contractor, Wanzek Construction,

Council in early 2007 for the development

The Greater Brownsville Incentives Cor-

Brownsville and Harlingen, ushering in a County. A spokesman for Duke Energy

T-Mobile started working with the

partment of Transportation TIGER IV Grant Program.

The funds will be applied to the construc-

tion of a new cargo dock, Cargo Dock 16.

T-Mobile announced in March it will

The Port’s application consisted of the

consolidate its call center operations from

construction of a new cargo dock. The

24 to 17 facilities by the end of June.

total project, however, will include pur-

Willacy County by the end of 2012.

center impacted by the consolidation. As

track mobile, in addition to rail improve-

bines.

year incentive agreement with the GBIC.

Both companies have projected comple-

tion of the wind turbine projects in

E.ON will build a total of 112 wind tur-

Duke Energy is planning to build a total

of 171 in its Los Vientos I and Los Vientos

II projects.

The addition of hundreds of windmills

will change the economic base of Willacy County, which is currently dependent on

natural gas production for 57 percent of its

Brownsville was T-Mobile’s newest call

chasing a new mobile harbor crane and

such, T-Mobile was in year four of a 10-

ments.

T-Mobile was in full compliance with the

project and we are very thankful for the

the other impacted call center locations, T-

sional delegation. … And the support we

“This was a badly needed infrastructure

terms of the agreement, however, unlike

Mobile had not yet fulfilled its incentive obligations in Brownsville.

uardo A. Campirano.

ad valorem property tax revenue, accord-

gotiate with companies interested in open-

zales, Jr.

facility.

ing to Willacy County Judge John F. GonBEDC.com

ing a call center in the Brownsville

received on a local and State level for this

project,” said Port Director and CEO Ed-

The GBIC and the BEDC are working

closely with T-Mobile to identify and ne-

support we received from our Congres-

“The project will create jobs in our re-

gion and help us meet increasing demand,” he added.

Summer 2012

Turn To Page 24

Brownsville Economic Journal

23

MARKETINGCORNER

Economic Journal The Show, The Magazine, The Website

ating Economic Recovery, was initiated in 2009 as part of the U.S. Government’s stimulus plan.

United States.

the world’s leading manufacturer of custom high

Many times, Brownsville residents don’t

know how well the city is doing. That is

why the BEDC has launched the Economic Journal a monthly TVprogram on KVEO-

TV to bring about those positive economic

Spellman High Voltage Electronics Corporation,

voltage power conversion products, announced in late 2011 the opening of its newest production facility in Matamoros, Mexico, part of the Brownsville Borderplex.

Spellman de Mexico’s new plant was constructed

stories.

in collaboration with the FINSA Corporation to

magazine and semi-annual webinars.

place its former Plant No. 1. The Governor of the

The EJ also is the name of the quarterly

The Brownsville EDC launched a new

website to accommodate web visitors,

making it easier to navigate through.

One of the new features is a Custom Re-

port Builder. This enables visitors, such as

site selectors, to select information as they navigate through the site and build a re-

port. Once the report is complete, you’re

able to view the report online, email, share

it with others, convert it to PDF, or print it.

The new website also features a video

film strip that will connect you to our

meet LEED Gold Standard Certification and re-

State of Tamaulipas, the Mayor of Matamoros and other elected officials were on hand for the ribbon cutting ceremony.

“By working together and driving towards results

we have collectively helped Spellman grow to be-

come the world’s leading provider of precision high voltage power conversion products while creating growth opportunities for Spellman’s employees,

suppliers and local communities,” said Ken Chandler, Spellman’s General Manager.

“The key to achieving our goals will continue to be

‘the power of purpose, processes and people,” he said.

able to view our videos.

University continues adding acreage to campus, accomodate growth

website is also connected to our several so-

purchased 20 acres near East Avenue and Express-

Twitter feed.

versity’s soccer field.

YouTube and Vimeo accounts so you’re Aside from the video film strip, the new

cial networking outlets, including a direct The BEDC has also implemented a

“Share This” feature that allows visitors to share the website through the multiple social media outlets.

The University of Texas at Brownsville recently

way 77/83, adjacent to the 80-acre site of the uniIn May 2011, the Board of Regents approved

UTB’s purchase of new student housing as well as several tracts of land for university expansion.

The university also recently approved a new mis-

A “Keyword Search” was added so visitors

sion statement, admission standards and a $30 mil-

tain keyword. We created a website that was

engineering and mathematics education in the Rio

can easily find information related to a cer-

24

The TIGER, or Transportation Investment Gener-

city of Brownsville a prosperous one, one

that can compete with larger cities in the

Marketing & Communication

Continued from Page 23

Spellman Opens Doors to LEED Building in Matamoros

The Brownsville EDC strives to make the

Michelle Lopez

The Port, Spellman and UTB

easy and more helpful for your needs.

Brownsville Economic Journal Summer 2012

EJ

lion investment focused on science, technology,

Grande Valley.

EJ

BEDC.com

Port of Brownsville Poised for Economic Spinoff from Natural Gas Fracking Continued from Page 8

natural gas liquefaction facility and LNG

export terminal located on Port property, in

addition to infrastructure improvements

the second most

important crite-

rion after good

marine facilities.

necessary to support this business.”

Then came a

developed in the United States in recent

organization.

“The huge amount of natural gas reserves

years,” said Michael Smith, principal

supportive port “It's critical for

owner and CEO of Gulf Coast LNG Ex-

this siting to be

tional demand for LNG, will allow for

amounts of natu-

terminals in the U.S. The United States is

tion, so once you

port, LLC, “and the significant interna-

the development of multiple LNG export now believed to have more natural gas than it can use in a century.”

“We believe the Port of Brownsville is in

a strategic geographic location to assure

near large

ral gas producget east of

Louisiana, it be-

comes less and

less attractive,”

the success of this project, and we envision

says Smith.

Port,” said Smith, who is also CEO and

was Texas and

this to be a long-term relationship with the

“So our focus

Staff Photo

gasification facility near Freeport, Texas.

The Port of Brownsville, shown in the aerial photo, is the No. 3 steel importer and exporter in the United States. The proposed liquification natural gas plant would be used though we did go for export to different parts of the world. The port already handles liquid cargo for all the way into PEMEX and other petroleum companies in Latin America. The combination of steel, natural gas, petroleum products and bulk commodities will bump it to one of the larger Mississippi. ports along the Gulf of Mexico coastline.

demand for imported LNG, so the Freeport

closest to the Eagle Ford (shale) produc-

founder of Freeport LNG Development,

L.P., which owns and operates a 2-billion-

cubic-feet-per-day LNG receiving and re-

Reached by phone, Smith says there is no

facility has not been sending out any gas.

Louisiana, even

Brownsville is

construct, and operate the terminal at the

tion in southwestern Texas, and rose above

Port.

porary storage of LNG for re-export, keep-

port facility.”

in 2018 and is forecasted to bring thou-

facility is adding its own liquefaction and

will be “north of $6 billion.”

The only ship activity involves some teming it always in liquid form. The Freeport

export capability.

Regarding the Brownsville decision, he

says, “There was a site selection process, but the reality is that there is only a very

limited number of ports with a deep

enough channel that had all the necessary

requirements to be an excellent site for an LNG export facility.”

The scope of the site search extended

from Brownsville to the Mississippi Gulf

Coast. Smith says natural gas supply was BEDC.com

the rest that aren't already planning an ex-

Smith says the investment in Brownsville

The project is expected to be operational

sands of jobs during the construction phase

and hundreds of jobs once the facility is

operational.

Some tax abatements will probably kick

“This project falls in line with our mission

in as they have done in Freeport, he says,

of bringing more quality jobs to the region,

but adds they were not a factor in the site

decision. As for partners, he says, “I and

and it also allows us to continue to diversify

Coast LNG. We are not looking at any

opening up a new industry for us,” said Port

the type of cargo handled at the Port, while

my daughters own 100 percent of Gulf

partners at this time.”

CEO Eduardo A. Campirano.

Gulf Coast LNG will initiate the review

This article was written by Adam Bruns and ap-

Commission to receive authorization to site,

Magazine.

Once the D.O.E. approves the application

process with the Federal Energy Regulatory

EJ

peared in the May 2012 issue of Site Selection

Summer 2012

Brownsville Economic Journal

25

City, region needs to find identity before conducting corporate recruitment Continued from Page 5

Brownsville-Matamoros is the second

Doors, all in need of a place with a geo-

We have prepared an aggressive plan-of-

graphic logistical advantage to getting their

action to recruit companies in Latin Amer-

on the Texas-Mexico border, behind El

shipping to other parts of the world.

Asia and certain countries in Europe.

Laredo-Nuevo Laredo and McAllen-

international location, this region has ex-

largest cross-border manufacturing region

Paso-Cd. Juarez and ahead of the likes of Reynosa, all of which have different manufacturing and logistical niches.

However, all have one thing

in common – the future of manufacturing in North

America. The manufacturing model of this region has employed three generations

of families. There has been

tweaking and altering, but not necessarily changes to its entirety.

Labor-intensive work occurs on

the Mexican side, with final assembly work on the

U.S. side. That is equal to jobs in the thousands on the Mexican side and well

paying jobs in the hundreds on the Texas side.

products in and out of Mexico, as well as Since finding its new identity as a truly

ica, specifically South America, as well as

Yes, there are violent incidents and issues

in all of the Republic of Mexico, but our

The Brownsville Borderplex, a region of more than 1.2 million spanning from Matamoros, Mexico, to Brownsville and South Padre Island, TX and is in an advantageous position to grow together with the large economies of the world.

Continued recognition of the Brownsville

regional economy continues to

grow in a positive direction.

For example, we have recently

invested millions of dollars in a

number of projects including se-

curing acreage for a shovel ready industrial park that will serve as

the region’s mega site, infrastructure at the international airport, a new interstate to the Port of

Brownsville, as well as infra-

structure at the port, and an up-

grade at our municipally owned power company.

We have invested millions into

the expansion of our largest inter-

national bridge truck crossing,

and in a few months, we will be

celebrating the opening of the area’s fifth new international

bridge crossing into Matamoros,

perienced a surge in international projects

Mexico.

of automotive interiors – everything from

Borderplex would land anywhere between

– increasing activity in the manufacturing

steering wheels, and even the small knobs

$50 to $70 million in capital investment

Borderplex is for the manufacturing

the car seats and frames to the radios,

during the last 18 months. Historically, the five to seven projects, worth a combined

and locks.

and upward of 300 to 500 jobs.

in this region include Delphi Automotive

$10.5 billion in capital investment and

Companies recognized for superior work

Today, the top 10 projects are worth

and Dura Automotive, both of which have

more than 5,000 well-paying jobs in such

America here at the Borderplex.

processing & manufacturing, food R&D,

the largest manufacturing plants in North Most recent investments include CK

Technologies, a large plastic-injection

molding facility for the truck industry,

Spellman Voltage, Joerns, and Overhead

26

Brownsville Economic Journal Summer 2012

industries as heavy manufacturing, food

renewable energy R&D and generation, a

This has all been with one result in mind

and logistics sectors.

In the end, we have found an identity,

and as a result, we are bustling with activ-

ity so much so that U.S. companies wanting to locate in the Brownsville

Borderplex would be what we Americans call gravy.

The guest editorial, authored by Gilberto

steel mill, aviation, and aerospace.

Salinas, of the Brownsville EDC, was

direct investment.

can Manufacturing Magazine.

Of those 10 projects, seven are foreign

printed in the April 2012 issue of AmeriBEDC.com

Promoting the South Texas Diamond

CK Investing For Planned Growth

Martinez said Chan came to see

they need in order to be successful in the Greater

Continued from Page 6

him in Brownsville shortly after

This strategic approach has re-

ceived recognition from Texas

Secretary of State Hope An-

Continued from Page 11

Brownsville Borderplex,” Hilts said.

he moved into the mayor’s office

drade.

mission.

Texas even stronger and more

terested. … It was really her

omy by combining the excep-

Engineering Inc., founded in 1973 with six employees.

respective cities and the infra-

U.S. states and Budapest, Hungary, and has $300 million in

and discussed a possible trade

“I said we’d be very much in-

“They make themselves and

competitive in the global econ-

CKT's expertise includes chromed and painted exterior

surfaces, under-the-hood components, interior consoles and instrument panels.

CKT is one of 14 divisions of Michigan-based Cascade

Today the company has more than 1,000 employees in four

idea,” he said.

tional workforce of the

Marcos, the different cities

structure assets sought after by

annual sales.

across the country and around

pand.

stated in a San Antonio press re-

one in March, so that’ll make a total of five machines.

At the June meeting in San

worked on a resolution which

would include the cities as

founding members. Next will be

the planning of the group’s first

business and industry leaders

the world,” Secretary Andrade

international business recruit-

lease.

China in 2013.

a committee comprised of the

ment mission, which will be to The Texas South name was

voted and adopted at the previ-

ous meeting, which was in April

at the Cueto Building in down-

town Brownsville.

“The TS-IA is very important to

the economic development of

South Texas,” said Mayor Guerrero.

“The City of San Marcos is

highly excited to play a signifi-

cant role in the continued development of the shared resources

The organization has developed

But CKT isn’t stopping here. The company’s plan is to ex“We have two more machines coming, one in January and

That’ll hold us for a year or two if not more, depending on the demand.”

At the Brownsville plant, they’ve started working on the

different city’s economic devel-

addition of a paint line operation, to compliment the strong

keting campaign to brand Texas

Northern Mexico.

opment officials to create a mar-

South and using the Formula 1

United States Grand Prix event in November to market the name.

The cities are each working on

a Memorandum of Understand-

ing, most of which will be presented at their respective city

council or commission meetings.

“San Marcos has many assets

supply-chain logistics the facility has with its customers in CKT’s customers are North American commercial truck

manufacturers Daimler, the German company that owns

Freightliner; PACCAR, owner of Peterbilt and Kenworth;

Volvo, which also owns Mack; and Navistar, which makes International Harvester.

CKT’s customers are located in the United States, Mexico

and Canada.

EJ

AmFELS Lands Rig Contracts Continued from Page 10

and relationships of the alliance

that are attractive to international

ment of foreign firms to the

tude of the other cities and their

major upgrade and a series of repairs, this new jackup adds

ence provides the greatest impact

said. “We also continue to pursue projects from PEMEX

and in the marketing and recruit-

area,” said Guerrero, who also

was present at the June meeting.

Texas South was designed to

companies, but to have the forticollective international experi-

and we are optimistic about our chances.”

businesses and their interests to

onshore drilling services for PEMEX.

son, President & CEO of the

drilling units which have telescopic legs, dropping to the

global arena and recruit foreign

without taking domestic invest-

our region,” stated Amy Madi-

ment from one part of Texas or

the U.S. and moving it to another,

Councilwoman Chan added.

BEDC.com

to a healthy workload through (the) first quarter 2014,” he

to market South Texas in a

focus on international investment

to generate a net gain of jobs

“Having recently secured the Ocean Onyx semisubmersible

Greater San Marcos Partnership.

“It just makes sense.”

EJ

Perforadora, a Mexican corporation, provides offshore and

Jackup rigs are known as self-elevating mobile offshore

seafloor and ‘jacking up’ the actual platform above the ocean’s surface.

EJ

Summer 2012

Brownsville Economic Journal

27

QUESTIONANSWER

Governor’s Recruitment Chief:

Texas Wants Every Job It Can Get Austin American-Statesman

Gov. Rick Perry has made job creation a cor-

nerstone of his administration. It doesn't matter whether those jobs originate here or come in

surprised at how involved he is in recruiting businesses. He'll make phone calls CEO to

critics question how much of the credit for that

with a CEO and give them a chance to ask ques-

tion, no one can argue that Texas isn't outper-

sonal interaction. The ability for him to talk tions is a great tool.

At the end of the day, we understand compa-

forming most states in terms of job creation.

nies are looking to succeed, to be profitable, to

2009, the state has accounted for roughly half

compare tax rules and the cost and time it takes

Since the recession officially ended in mid-

maximize shareholder wealth. And when they

the nation's total job growth.

to get a facility up and running, Texas is quite

ing that growth. As director of the governor's of-

that it's important for companies to know that

Aaron Demerson has played a key role in fuel-

fice of economic development and tourism, he

oversees and coordinates many of the administration's job recruitment and tourism efforts.

Demerson has an extensive history in the

state's economic development efforts. He previ-

ously served as director of Texas business de-

velopment, guiding the state's NAFTA office in

Mexico City, and he served with the Texas De-

partment of Economic Development before it

was folded into the governor's office.

In a conversation with the American-States-

often the best choice for them. We understand there are educated and skilled employees to fill

new positions.

The governor's focus over the last 10 years

has been to make economic development a collaborative effort starting with the local

cities, counties and even school districts, on

up to the state. That cooperation is what helps

us aggressively recruit businesses and com-

pete with other states. If a company is looking

to expand their operations, we're going to

make sure they have an opportunity to do it in

man, Demerson talked about the challenges and

Texas first.

opment efforts.

biggest challenges to the state's ongoing busi-

of the nation's primary destinations for jobs and

and how is your office approaching them?

opportunities facing the state's economic develAmerican-Statesman: Texas has become one

people. What changed over the years to make

the state such an attractive place for companies to be?

Demerson: I think it helps to have a governor

who has really focused on creating jobs and

28

Texas' best salesman/CEO. A lot of folks are

CEO, and I think they really respond to that per-

growth should go to Perry and his administra-

Director of Texas Governor’s Office of Economic Development And Tourism

and regulatory environment. The governor is

from out of state, Perry wants 'em all.

Lately, he's been getting them, too. Although

Aaron Demerson

growth, starting with our business-friendly tax

looking at what we can do as a state to spur that

Brownsville Economic Journal Summer 2012

Statesman: In your experience, what are the

ness recruitment and economic development,

Demerson: Instability in the national and inter-

national economies makes businesses more con-

servative in their expansion and growth plans.

Of course, you never know what the future

holds, but when there's more uncertainty than

usual, businesses are less likely to take risks.

BEDC.com

Economic Development Chief: All Cities In Texas Should Take Same Approach That's why here in Texas, Gov. Perry has

worked to create stability in taxes, in regula-

tions, with our courts. And I think that's why

you've seen Texas continue to thrive while other states and the national economy are

struggling. There will always be risks with

business, but any certainty you can provide

gives companies the confidence to invest in growth. That message of low taxes, reason-

able regulations, fair courts and skilled workforce is what we've worked hard to spread,

and companies really respond to it.

Statesman: When you look at the Texas

economy as a whole, there's a lot of diversity

there. How do you gear your economic de-

velopment efforts to boost the health of the state economy as a whole?

Demerson: Texas is a huge state, but hav-

Photo by Sylvia Rodriguez

At center, Aaron Demerson, director of Texas Economic Development & Tourism for the Governor’s Office, and his team were presented the 2011 Brownsville EDC Outstanding Leadership Award in September at the Alonso Building. From left to right, front row, are members of the Governor’s team which include Michael Treyger, Larry McManus, Demerson, Leticia Flores and Phil Rocha. Back row left to right are Brownsville Mayor Tony Martinez, Jason Hilts and David Hughston.

ago and met with Gov. Perry to talk about

growth is Caterpillar. They're headquartered

ing that statewide cooperation in economic

elsewhere and decided to open an 800,000-

what they could do to make their state better

Whether it's a manufacturing facility, data

jobs. When the request for an additional fa-

posed to work: different states trying differ-

development helps tie us all together.

center or headquarters, it's all based on job

creation. We can sing that song in Tyler,

Seguin, Brownsville, San Antonio, Austin, El

for business. That's how the system is sup-

square-foot plant in Seguin with about 1,400

ent approaches and sharing notes to see if

cility went out, they opted to open a new fa-

what works in one state will work in another.

cility in Victoria with more than 500 jobs.

And of course, both communities are work-

We have the right formula here in Texas for

Paso. It resonates in every community. You

ing with suppliers and vendors in those com-

job creation, so it's no surprise that other

there's a disconnect or more fragmentation

that region and industry.

book.

and people from other states, particularly

secrets. When there's a company looking to

may not find that in other states, where

between state and local efforts. It's a pretty unique approach.

munities, which spurs even more growth for

Statesman: Texas has attracted a lot of jobs

Statesman: How do you balance the push

California. Do you see those states as com-

Demerson: In Texas, we have positioned

fellow states in the union with the constant

between recruitment and organic job growth?

petitors? How do you balance cooperation as

ourselves for local expansion and growth op-

push to bring in more jobs for Texas citizens?

any available recruitment opportunities. For

ernor say time and time again that states are

portunities while also aggressively pursuing

us, the bottom line is job creation. That's the

most important thing. Not only does each

Demerson: I'm sure you've heard the gov-

community, then sales taxes. There's a

makes our nation better as a whole.

An example of both recruitment and organic

from California came to Texas a year or so

rect jobs, then property taxes in the local

domino effect to each job that's created here.

BEDC.com

Texas and another state on the list, that's

when we become really competitive. If there are jobs at stake, we're going to compete for

them. That's when the gloves come off.

we're doing all we can to help them choose

to compete, and collaboration with each other For example, a number of elected officials

make a business decision and they have

local communities comes in to make sure

country. A strong California, New York or

Florida makes us all work that much harder

Now, of course, we don't share all the trade

That's where the strong support from our

the real laboratories of innovation in our

project create direct jobs, it also creates indi-

states would want to take a page from our

Texas.

The article was written by Dan Zehr and

was published in the June 16 edition of the

Austin American-Statesman.

Summer 2012

Brownsville Economic Journal

29

North Brownsvil

This property has the coveted

‘Shovel Ready’ seal by an

le Industrial Park

i n t e r n a t i o n a l s i t e s e l e c t i o n f i r m T h e A u s t i n C o m p a n y.