The Sunland Park-Santa Teresa Project: An Interview With Jerry Pacheco

The South Mesilla Valley is today, arguably, the biggest economic development project in New Mexico history, driven by two major factors: first, is the $5 billion expansion of El Paso's Ft. Bliss, which is causing West El Paso to spill over into New Mexico between El Paso and Anthony, and, to a lesser extent into the Chaparral area. The second is the growth of Cd. Juarez on the West Side, between Anapra and the Santa Teresa border crossing, which promises to create all kinds of business synergies on the U.S. side. No one is better equipped to explain the cross-border environment in the Sunland-Santa Teresa area than Jerry Pacheco, executive director of the International Business Accelerator, a consulting firm for businesses considering locating in the Southern Dona Ana County region.

Pacheco served briefly as Deputy Secretary of Economic Development in 2003 and, before that, as the New Mexico trade representative in Mexico City. He worked for several years with the Santa Teresa Real Estate Development Corporation, purchased a few years ago by the Verde group. Among his other activities he is currently putting together the program for the annual NAFTA Institute Trade Conference, which will bring suppliers and buyers together on June 11 and 12 at the Sunland Park Racetrack and Casino. He generously agreed to this interview over lunch at the Santa Teresa Country Club today.

I've known Pacheco for perhaps twenty years, since the Charlie Crowder days when the Santa Teresa crossing was a figment of Charlie's imagination, combined with a lot of jackrabbits and dirt and mesquite bushes near the U.S.-Mexico border. And, although I've known Pacheco always to be passionate about economic development in the Paso del Norte region, I have never seen him as excited and animated about the current status of the border region as he was today, leaning toward me literally on the edge of his seat as he spoke.

Pacheco points to three inter-related projects, begun within the past year, that are going to transform the Santa Teresa-Sunland Park region profoundly.

First, Foxconn, the largest manufacturer of electronic and computer equipment in the world, has just completed phase one of its assembly plant, located on the Mexican side of the border just yards away from the border and from the crossing at San Jeronimo-Santa Teresa. Foxconn is assembling desktop computers and servers for Dell at this facility--the largest maquila plant in Mexico--which has two production complexes, one warehouse, one hotel for visiting executives, and one cafeteria for employees. At the present time there are more than a thousand workers, moving in 3 shifts, at the plant. However, last week a Foxconn manufacturing facility at the Juarez airport burned down, and 800 of those workers will shift to the San Jeronimo plant. By the end of the year there should be 5000 workers and depending on the state of the economy, thousands more to come, up to 30,000 workers according to current plans. With that many workers, West Juarez is assuredly going to go through a boom in low-cost housing, commercial development, and urban sprawl. On the U.S. side there will be a reciprocal demand for more upscale housing for managers, trucking facilities for the increased traffic at the port and more businesses serving the Juarez maquila sector, like Expeditors.

A key strategic reason for Foxconn to locate at San Jeronimo was the availability of ample space on both sides, very near the border crossing, and the presence of a user-friendly international border crossing. Expeditors International, a large logistic services company, has constructed a facility on the U.S. side of the fence, across from Foxconn, from which they will supply Foxconn with the inventory of parts needed to assemble Dell computers. Since Dell operates with real-time delivery schedules, it was optimal to locate at a border site where wait times are considerably less than the 20 minutes to 2 hours or more available at the El Paso-Cd. Juarez crossings. As supplies for computer assembly are needed at Foxconn, Expeditors will deliver them from a location just a few hundred yards away, on the U.S. side.

The second project is the recently completed road from downtown Juarez through Anapra to the San Jeronimo crossing. Just seven miles long, this road connects downtown Cd. Juarez directly to the border crossing for the first time. Previously, the only way to get from downtown Juarez to the crossing was a 16-mile run through the Casas Grande highway to the San Jeronimo turnoff, and then another 12 miles to the San Jeronimo crossing, in traffic, a solid hour or more. Now you can make the trip in 20 minutes, as I noted in my blog last week. By the end of the year this road, now gravel from Anapra to the cattle crossing, will be completely paved. The Santa Teresa-San Jeronimo crossing is about to become very busy.

The Foxconn-Expeditor project aside, the new road now links New Mexico directly to the fifth largest city in Mexico, without having to go through downtown El Paso or the cumbersome, circuitous route through the Casas Grande highway. Given the severely crowded urban areas on both sides of the El Paso-Juarez divide, as well as crowded bridges, the open spaces at Santa Teresa, combined with border crossing wait times that are much shorter than those of El Paso, Pacheco indicated he thinks for the first time New Mexico has a geographic advantage over El Paso for the location of complementary plants on the border.

The third project is the railroad spur to be built, linking the railroad in Mexico as it moves north toward Juarez from Samalayuca to the West side of the Santa Teresa crossing, and into the United States (see map). President Calderon has approved this spur in his national infrastructure plan, and Union Pacific has pledged to begin a $300 million project to place a diesel refining station near Santa Teresa as the first step in a long-term project to remove the railroad yards out of El Paso. The second atep will be the building of an inter-modal facility for building trains. Given the logistical difficulties of linking trains from Juarez into El Paso, the completion of the railroad spur will provide New Mexico with the competitive advantage over El Paso of offering rail transportation directly to the central North-South rail routes of Mexico.

Cd. Juarez is growing rapidly, in spite of all its current problems. The area West of downtown Juarez, along the border to San Jeronimo, now lies in the path of development, and one can expect that in the coming decade or two hundreds of thousands of people will move into this largely uninhabited area, which is just South of the New Mexico line. Inevitably, although Juarez cannot spill over into New Mexico like El Paso is doing in the Anthony area, the implications, opportunities and synergies posed by the existence of a city almost as large as all of New Mexico, linked to New Mexico through a border crossing just seven miles from downtown Juarez and a railroad heading toward Central Mexico, are richer than most of our imaginations can absorb.