Brownsville Economic Journal (Summer 2012 issue)

Vol. 1, No. 1 / Summer 2012

Growing Manufacturing BaseA glance at the Borderplex’s business activity

The South Texas DiamondRegional economic alliance looks atmarketing, recruiting internationally

Port’s Major OpportunityA $6.5 billion LNG plant is one of first

projects to result from the fracking

SpaceX

Charting The CourseOf History

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The only Texas Gulf city onthe border braces for potentially the biggest

project of its time.

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5

On the Cover: An artist ren-dition of the Dragon capsulewith its solar panels ex-tended as it hovers inspace. On This Page: The Falcon9 rocket awaits on thelaunch pad at the SpaceXlaunch site at KennedySpace Center in CapeCanaveral, Florida. Below: Scott Pelley of 60Minutes interviews ElonMusk, founder and chief de-signer of SpaceX.

American Manufacturing Magazine usesa model city for its marketing, prospectdevelopment, corporate recruitment.

Do an online search for the inter-view on Elon Musk on 60 Minutesto understand his passion and inspi-ration for the aerospace industry.Also find interviews from The JonStewart Show and The Late NightShow with David Letterman.

Cascade Engineering CEO Fred Kellerapproaches life and business with a simple set of rules he carries in his wallet.11Economic Development Chief for the Texas Governor’s Officetells the Austin American-Statesman he wants all new jobs hecan get for the Lone Star State.28

Brownsville Economic JournalSummer 2012BEDC.com 4

EDITOR IN CHIEFGilberto Salinas

COPY EDITORSylvia Rodriguez

CONTRIBUTING WRITERSMichelle Lopez Manny OrtizTony Vindell

COVER DESIGN & LAYOUTJorge MonteroGilberto Salinas

PHOTOGRAPHYBEDC Editorial TeamBrad Doherty

SOCIAL MEDIAMichelle Lopez

CORPORATE CONTACTSLizzy de la Garza

CIRCULATION Sylvia Rodriguez

ECONOMIC JOURNAL The ShowKVEO Channel 23 (Cable Channel 8)In High Definition where available11 a.m. CSTSunday mornings, monthly, check website for listing

EDITORIAL OFFICEBrownsville Economic Development Council301 Mexico Boulevard, Suite F1 (ITEC Campus)Brownsville, Texas 78520Tel. (956) 541-1183 / Fax: (956) 546-3938Site: BEDC.com

E-MAIL [email protected] [email protected]@bedc.com [email protected]

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

Brownsville, Texas is in stiff competition

with the Florida and Puerto Rico for a sig-

nificant 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

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.

Florida and Puerto Rico willput up a fight against Texas

PRESIDENT’SOUTLOOK

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Jason HiltsPresident & CEO

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It is simple mathematics andnot rocket science. The UnitedStates has nearly 20,000 mu-nicipal governments, accordingto the most recent U.S. CensusBureau count. Each municipality has the

task of promoting a standard ofliving and sustainable eco-nomic growth, of which eachcity government houses, in oneway or another, an economicdevelopment collective effort.In the last decade, 150 manu-

facturing companies on aver-age plan an expansion orrelocation project each year.Yes, the odds are against eco-

nomic organizations. InBrownsville, TX, we figuredwe would play a safer bet byimproving our odds and, at thesame time, increasing thesweepstakes by going global.

During the economic down-town, the Brownsville commu-nity joined hands in a businessforum by brainstorming ideason how to rebound from theeconomic slump and how toset the region apart from thecompetition in order to landmajor projects. We asked ourselves, “What

do we want to be when wegrow up?”

Simple, yet paramount in itsimplications. We found out thatwe wanted to be an interna-tional city, alas the types ofHouston, Los Angeles, andMiami.Why not? We are the

“Brownsville Borderplex” andhave all the necessary re-sources. No other place inSouth Texas can claim theyhave four international bridges,

a deep-water port with shipand barge traffic, an interna-tional airport, an interstatehighway (under construction),and a pipeline spanning fromthe Port of Brownsville toMonterrey, Mexico, for trans-porting petroleum – six differ-ent modes of internationaltransportation.During the last decade, glob-

alization of the world economy

saw deep influence by China,one of the largest economies inthe world. The BrownsvilleBorderplex, a region of nearly1.2 million spanning fromMatamoros, Mexico, toBrownsville and South PadreIsland, TX, is in an advanta-geous position to grow to-gether with the largeeconomies of the world.

Future model to recruiting, marketing a city

EJGUEST EDITORIAL

Turn To Page 26

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.

Photo by Sylvia Rodriguez


Mayors, economic developers think regional

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

EJCOLLABORATIONGlobal Trade

The world will pass you by if you don’tspeak 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 keepup with the rest of the world,” he addedduring a meeting of the newly-formedTexas South–International Alliance inJune in San Marcos. The mayors of Brownsville, San Antonio,

Corpus Christi, San Marcos, Edinburg andLaredo have united and met for the thirdtime in what will soon be a regional eco-nomic development organization designedto promote South Texas at the global level. South Texas offers a vibrant regional

economy with entry points to the UnitedStates, a gateway to Latin America, world-class logistics, excellent tourism, and his-toric cities leading the way in energy,biomedicine, and healthcare.

“San Antonio is part of a region that pro-vides diverse industries and opportunitiesfor international business,” said San Anto-nio Councilwoman Elisa Chan, one of thefounders who originally approachedMayor Martinez more than a year ago.

“Collaboration and alignment amongSouth Texas cities can not only promotethe attributes of our region but also lever-age our resources,” she said in a preparedstatement. After the City of San Antonio partici-

pated in the 2010 Shanghai World Expo,Councilwoman Chan started a regional in-ternational economic development initia-tive by engaging South Texas mayors in adialogue about increasing foreign invest-ment in the region. The initiative receivedsupport from Mayor Julián Castro and SanAntonio City Council.

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

Photo by Michelle Lopez

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

7 major airports with worldwide connections

4.4 million people in 28-county region

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

Young, multicultural population

3 million live along U.S. side of border

Contributor of 13th largest economy in worldTurn To Page 27

New Alliance FormsA ‘Diamond Shape’Economic Powerhouse

Written byMichelle Lopez

Brownsville Economic Journal Summer 2012 BEDC.com 6

A decade ago all the buzz was about the need formore liquefied natural gas terminals in the UnitedStates to import all that LNG and the rest of theworld 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-ested in U.S. natural gas converted to liquid form.Examples abound, including Cheniere inLouisiana and Freeport LNG in Port Freeport,Texas, south of Houston.

Now the Port of Brownsville is getting in on theact. In February, the port's Board of Commission-ers approved a lease option agreement with lique-fied natural gas company Gulf Coast LNG Export,LLC for 500 acres of Port property, following theJanuary 10 filing of Gulf Coast LNG's application

with the UnitedStates Departmentof Energy seekingauthorization to export liquefied natural gas out ofa proposed facility on port property.“While authorization has not been granted by the

U.S. Department of Energy yet, Gulf Coast LNGExports and Port officials are highly optimistic dueto the significant demand for U.S. LNG and GulfCoast's sound business model,” said the release.“The partnership between the Port of

Brownsville and Gulf Coast LNG will include amulti-billion dollar direct investment by GulfCoast LNG Export,” said the port, “of which themajority will go towards the development of a

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

EJGLOBAL EXPORTLNG PLANT:

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 look-ing 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, in-cluding 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 iscapable of producing more than 6,000 barrel of natural gas liquids per day.

Investment, Industrial ActivityOn The Rise From Natural Gas

Major Presence at Port:

Keppel AmFELSManufacturer of Off Shore

Jack-Up Oil Rigs, headquar-tered in Singapore, part ofFELS family of companies.

Ternium SAMajor steel company head-quartered in Buenos Aires,

listed on the (NYSE: TX) is thelargest water borne user and

client at the Port.

TransMontaigne PartnersTerminaling services company(NYSE: TLP) with large sys-

tem of fuel products and serv-ices to global clients.

Port of Brownsville in discussion for $6 billion LNG Plant

Turn To Page 25


Courtesy Photos

Business attraction or business retention? While some communities may place all their

eggs in the “business attraction basket,” theBEDC recognizes the value of retaining existingbusinesses and furthermore, helping them ex-plore opportunities for expansion through theBusiness Retention & Expansion (BRE) Pro-gram. Up to 80 percent of new jobs and capital in-

vestment in any community is generated by ex-isting businesses, according to the report “TheJob Generation Process” by Dr. David Birch, aneconomist and former MIT professor. An effective business retention program aug-

ments a community’s business recruitment ef-forts. One of the main ways that businessprospects evaluate a community for investmentis by talking to the current business owners. The BRE Program is a continuous, proactive,

and collaborative initiative working to developan ongoing awareness and familiarization withlocal industry, to build relationships with ourlocal business owners, and to connectBrownsville 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 institutionsto communicate the need for certain programsand the development of particular skills based onwhat the local industry is communicating to us.We are working toward helping businesses findand recruit capable, skilled employees fromwithin our community. Together we are strivingto retain our human brain power by connectingstudents and graduates to internships and em-ployment opportunities in Brownsville.

One of the initiatives the BEDC is participatingin is the Academic Leadership Alliance (ALA)Program, where we identify certain employerswho graciously agree to sponsor an extern fromBISD for two weeks. In essence it’s like an internship, except that in-

stead of having student interns, the employerhosts a teacher extern. The teachers must gather what they learned at

the worksite and be able to implement that intotheir lesson plans, transferring the knowledgeand experience to the students, yielding an eye-opening and valuable sense of awareness andunderstanding that you won’t find in any class-room books. We believe initiatives like these are needed to

better prepare their students for the workforcedemands. The BEDC is also a key partner of the Partners

for Postsecondary Success (PPS), whose missionis to double the number of low income youngadults with postsecondary credentials with labormarket value by 2025. The partnership received a $1.3 million grant

from the Bill and Melinda Gates Foundation to ad-dress the community’s needs and challenges re-garding our human capital. The Brownsville community has come a long

way in this past year. Companies are coming outof “limbo” stage and finally able to see “growthand expansion” on the horizon.Some companies are investing in added infra-

structure, new equipment for new lines, and newemployees with the overall goal to increase pro-duction and efficiency. We still have room for improvement, but we’re

heading in the right direction, creating and re-taining local jobs.

Generating Growth From Within A City, BridgingThe Gap Between Education, Business, Workforce

LOCALINDUSTRYCORNER

Lizzy de la GarzaBusiness Retention & Expansion

EJ


The Brownsville-based sub-sidiary of Keppel Offshore &Marine Ltd. signed a contract inApril worth $205 million withMexico’s Perforadora CentralSA de CV to build a repeat

jackup oil rig.The rig is scheduled to be fin-

ished and delivered by the firstquarter of 2014 and will bebased on the LeTourneau Super116E design. Its legs will be 511feet in length and the rig willhave the capability of drillingwells up to 30,000 feet at awater depth of 375 feet.

“Keppel AmFELS has had agreat relationship with Per-foradora Central that dates backto 2002. Once again, we arehonored to be building anotherjackup, our fourth, for Per-foradora Central and are very

grateful to them for their contin-ued trust and confidence in us,”said GS Tan, President of Kep-pel AmFELS, in a press release.When christened, the new rig’s

name will be the Coatzacoalcos.“We have endured the post-Ma-

condo challenges well,” he saidin regards to the offshore drillingmoratorium imposed after the2010 Gulf oil spill disaster. AmFELS is currently working

on the Papaloapan jackup, alsofor Perforadora ordered in 2011,and is on schedule for deliveryin the first quarter of 2013.

The jack-up offshore oil rig ‘Chiles’ greets visitors at SouthPadre Island as it’s tugged out to sea. The rig is one of manywhich were born from raw steel at the Keppel AmFELS ship-yard at the Port of Brownsville.

EJHEAVY INDUSTRYMade in Brownsville

Keppel AmFELS lands majorcontracts to once again begin ...

Building Floating Cities

Written byGilberto Salinas

Turn To Page 27


Courtesy Photo

CK Technologies LLC, a unit of Cascade Engineering and leading sup-plier to the commercial truck and bus market, believed in Brownsville andinvested more than $20 million to build a manufacturing facility for inte-rior, exterior and func-tional assemblies.This new company creates

vast opportunities for thoseresiding in Brownsville. CKTechnologies have provideddozens of jobs, helping ourunemployment rate which iscurrently higher than thestate.The grand opening took

place in November 2011.Chairman of Cascade En-gineering, Fred Keller, in-augurated the facility.Others in attendance

were Brownsville Mayor,Tony Martinez; BEDCPresident & CEO JasonHilts; and CK PresidentMark Miller.The 300,000-square-foot

complex is located onParedes Line Road, nextto the North BrownsvilleIndustrial Park and just south of the FM-511 intersection. CK Technolo-gies Brownsville will house a large-tonnage injection molding capability, as well as chrome electroplating, painting, assembly andwarehousing areas.

“CK Brownsville will anchor and help shape the North Brownsville Industrial Corridor, which connects manufacturers to North andLatin America by way of five modes of international transportation,” said Jason Hilts, President & CEO of the Brownsville EconomicDevelopment 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

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

CK TECHNOLOGIES:

CEO Fred Keller committed to a vibrant Brownsville

EJMANUFACTURING

Photo by Brad Doherty

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

Excerpt from Inc.com on Fred KellerFollowing the letter of so many laws couldeasily become overwhelming, confusing, and— as opponents of regulation might argue —paralyzing. But a well-thumbed card in Fred Keller's wallethas long served as a cheat sheet or a com-pass:

Do all the good you canBy all the means you canIn all the ways you canIn all the places you canAt all the times you canTo all the people you canAs long as ever you can.

It's a quote from 18th-century theologian andsocial reformer John Wesley, co-founder of theMethodist movement. It's also a highly unusualset of business principles, but Keller doesn'thesitate to pull it out in the middle of meetings.It's a gesture that might seem grandiose. But since starting Cascade Engineering 38years ago, Keller, by nearly all accounts, haswalked the walk. He has built a $250 millioncompany and helped uplift an entire communityby steadfastly asking the question: What good can we do?

Turn To Page 27


Written byMichelle Lopez

In order to boost entrepreneurship through-out the community, the BEDC has commit-ted funds to provide 100 percent scholarshipsto 10 individuals seeking to complete an en-trepreneurship training program. The program is being provided by the In-

ternational Innovation & EntrepreneurshipCenter (IIEC) of the University of Texas atBrownsville. The Tropical Texas Regional Center of

Innovation and Commercialization (TTR-CIC) agreed to match the funds and al-ready has contributed another 10scholarships, 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 JohnSossi or Ruben Ceballos at (956) 882-4119.The IIEC is providing Kauffman Fast-

Trac® NewVentureTM training to entre-preneurs in Brownsville. The IIEC is anaffiliate of Kauffman FastTrac® certifiedto provide the training. FastTrac providesthe tools to develop a business concept,determine the viability of the businessconcept, and outline the critical steps to asuccessful business launch.The program encompasses 30 hours of

facilitated instruction and is broken upinto 10 sessions over a period of 10 weeks.

Biomedical Research FacilityOpens at UT-BrownsvilleThe University of Texas at Brownsville

officially opened in February the 58,558-square-foot Biomedical Research Build-ing. The facility funded by $34 million in

state tuition revenue bonds houses 12 lab-oratories, four classrooms, eight facultyresearch areas and 12 science research fa-cilities.The new building will produce cutting

edge research to address health issues inthe Rio Grande Valley and propel theschool to a higher tier in medical research.

Mayor Focuses on Unity at Economic LuncheonHundreds of business and community

leaders gathered inside a meeting room atthe Holiday Inn in March for the inauguralluncheon meeting of The Economic Clubof the Brownsville Borderplex.The BEDC formed the non-partisan and

nonprofit club.BEDC President & CEO Jason Hilts said

the club’s goal is to provide a venue fordiscussion of business, political and socialissues on the local, national and interna-tional level. Keynote speaker, Brownsville

Kauffman FastTrac® To Train Local Entrepreneurs BUSINESS&ECONOMICBRIEFS

Program offers scholarshipopportunities for 10 traineesper entrepreneurship session

By Staff Reports

Coils hang on racks at Consulting Point in Brownsville, Texas. The coils are wound up and inserted during the final assembly of electricmotors at the CP shop, which has built hundreds for different clients througout the nation. Founder and President Joel Gonzalez isone 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, workingwith the Brownsville EDC, is now offering entrepreneur courses through the Kauffman Fastrac program.

Staff Photo

Turn To Page 23


Contractors, developers and construction-oriented busi-nesses are eagerly waiting for the economy to improve notonly in the United States but well beyond its borders, par-ticularly to the south.

Richard Franke Jr., an entrepreneur/developer withFranke Inc.Realtors, along with his brother Dennis havebeen involved into a multi-million-dollar upscale project onthe north side of the Island where two decades ago wasnothing but sand and surf.

Called The Shores, the development has been goingsince the 1980s and has not shown any signs of slowing allthings considered.

“We started buying property in 1981 and started develop-ing the area in 1990,” Franke said of the 250-acre tractalong a stretch on both sides of Texas Highway 100 fromthe Gulf of Mexico to the Laguna Madre. “We wanted tohave 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,Mexico, Canada and from other countries.

He said they plan to build a $100 million-plus hotel/conven-tion center on the beach side, a smaller hotel on the bay areaand fancy shops, marinas, restaurants and other amenities.

“We are not yet ready to make an announcement,” he said.“Maybe in the next two months or so.”Other projects scheduled for this year at South Padre Island

include the 38-story Kirana Tower, which would be the tallestbuilding south of San Antonio. The company is currently con-ducting predevelopment sales. The Island als will see the addition of a Schlitterbahn Beach

Resort and Indoor Waterpark Schlitterbahn, a new 221room, year-round entertainment resort destination.Schlitterbahn currently has a waterpark at the Island,

which is a major destination for vacationers.

The planned 38-story Kirana Tower isone of several projects keeping SouthPadre Island’s development sectorhealthy after the economic downturn.

EJDEVELOPMENTBuilding Upward

South Padre Islandconstruction activityhelping fuel economy

Wave of Investment

Written by Tony Vindell

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

Graphic by Kirana Tower


It was named

The Dragon for a reason...

Writing A New Chronicle

Nine days, 7 hours and 58 minutes. From the launch to splashdown, it was the first chapter of what willbe the commercialization of space transportation, otherwise knownas space history. And the Brownsville Borderplex is eagerly hopeful and optimisticthe next chapter will be written here. “In economic development, this is a project called a communitychanger,” said Sandra Lopez Langley, chair of the GreaterBrownsville Incentives Corporation, which is working with theBrownsville EDC in maintaining a competitive edge as Brownsvilleis one of three areas in contention for a rocket launch site andlaunch command center.“In my time living in South Texas, never have I seen an opportu-nity come our way such asSpaceX. We hope thisproject is the beginning ofan aerospace cluster andhope to one day be re-ferred as the next ‘SpaceCity USA,’” she said in re-gards to the nicknames ofHouston and Titusville,Florida.In economic develop-ment, two types of projectsare handled by cities,those that are generatedfrom the current industriesthat are the geneticmakeup of a certain com-munity or region. Such as the case for Brownsville, it would be intraditional manufacturing, where a company hires hundreds to de-sign, engineer, manage and manufacture from start to finish a cer-tain product. Best put, Brownsville makes things. The other type of project is one that's outside of the box, or out-

side of the norm. Such would be the case of the relationship between SpaceX andBrownsville, having no presence of a space industry in the regionbut with hopes this company will be the catalyst for sparking theaerospace cluster. The process starts with one company, whichcould be the case for Brownsville vying for a rocket launch site. AndSpaceX, the commercial space industry’s most successful start-up,has proven to the world that a young entrepreneur with a childhooddream, can in fact launch a rocket to space, connect a capsule tothe International Space Station, deliver cargo, and return to Earth,both successfully and profitably. He also did it by way of naming theFalcon 9 rocket after the famed ‘fastest ship’ the Millennium Falcon,a spaceship from one of his favorite films as a child – Star Wars. “Welcome home baby,” SpaceX Founder, CEO and Chief De-signer Elon Musk said in a post-flight briefing after the Dragon cap-sule returned to earth by splashing into the Pacific Ocean. “It’s like

seeing your kid comehome.”The Dragon was namedafter the fictional “Puff theMagic Dragon,” from the hitsong by music group Peter,Paul and Mary. Musk saidhe used the name becausemany critics considered hisgoals impossible when hefounded SpaceX in 2002.Today, SpaceX holds a$1.6 billion contract withNASA to make 12 roboticsupply missions to thespace station. This flight,though, was a demonstra-

tion flight and not part of the 12. It also was SpaceX’s seconddemonstration flight under the 2006 COTS (Commercial OrbitalTransportation Services) program with NASA. SpaceX is headquartered in Hawthorne, California, in a former fa-cility used to assemble fuselages for Boeing 747s in the outskirts ofLos Angeles.

An artist rendition of the Falcon 9 with mounted Dragon Capsule is depicted traveling in space. OnMay 22, SpaceX performed a successful launch of its Falcon 9 Rocket from Kennedy Space Center,Cape Canaveral, Florida.

Courtesy of SpaceX

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

Written byGilberto Salinas

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 con-nect to the International Space Station.

Courtesy of NASA

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

Courtesy of 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 buildinga second launch site at Vandenberg, California. Cape Canaveral was the site where the Falcon 9 launched theDragon capsule and forever carved it into the chronicles of spacehistory.When asked for his initial thoughts on Dragon’s capture andmove 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 sidealong with the U.S. flag and the emblem of the Dragon, the nosecone covering the Dragon capsule and the countdown begins ataround 20 seconds. Hardly being able to contain the excitement, the last five secondsare the longest. A split of a second before the countdown, the launch begins witha slight flash of the 9 Merlin rocket engines nestled at the base ofthe 180-foot space-bound vehicle. In just another half-second, the pitch black night sky lights up and itsjet-like noise reverberates through the dense brush and shallow flats.

“The streak from the rocket just lit up the night sky,” said Jason Hilts, BEDCPresident & CEO, who was on hand with SpaceX for the historic launch. Off is the Falcon 9 Rocket carrying the Dragon capsule into space. A fewminutes 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 his-tory on May 22 by becoming the first private enterprise to launch a spacecraftand connect an unmanned capsule to the International Space Station.

The launch occurred shortly after 3:44 a.m., EST, from CapeCanaveral, Florida. “Today marks the beginning of a new era in exploration,” said

Charles Bolden, NASA Administrator, after the liftoff at theCape. “And while there is a lot of work ahead to successfully com-plete this mission, we certainly are off to a good start,” headded. Good start indeed. Thedragon was successfully ma-neuvered and put in a posi-tion for the ISS astronauts to“grab it” with the mechanicalarm. Musk said the Dragon per-formed very well, exceedingexpectations on some fronts,including solar panels thatproduced more power thanexpected. There were a fewproblems during the mission,starting with an aborted firstlaunch attempt as the Falcon9’s rocket engines were start-ing. A problem with theDragon’s laser range-findingdevice that caused some un-planned maneuvers during the approach to the station wasalso fixed, according to Musk.Days later, the Dragon was emptied of its contents, repackedwith materials coming back to earth, detached and on its wayback to the Pacific Ocean for splashdown. On June 13, the capsule was on exhibit at SpaceX’s testingand research center in McGregor. The capsule served as the backdrop for a press conferencehosted by Musk and joined by Bolden to deem the mission asuccess.

The Dragon With the success of the demonstration mission, SpaceX nowneeds the official confirmation from NASA and then it will beginfulfilling cargo resupply missions to the ISS later this year. SpaceX plans another launch from the Cape later in the year.The company has a contract for 12 cargo missions while itcontinues to develop the manned version of the Dragon for fly-ing astronauts to the ISS and elsewhere in low Earth orbit. While the Dragon was attached to the Space Station, astro-nauts unloaded 1,146 pounds of cargo, including food andother crew provisions, student experiments and a laptop thatDragon had delivered from Cape Canaveral. That, amongother checklist items crossed off, helped prove to NASA that itsplan to turn over such tasks to private companies could besuccessful and may ultimately allow the space agency to savethe money it pays Russians for transportation. The Dragon is the only spacecraft capable of returning a sig-

nificant amount of cargo from the space station. Other cargovehicles serving the space station, those from Russia, Japanand the European Space Agency, can carry cargo, however, allvehicles are destroyed after leaving the station.

Intelsat signs contractShortly after the successful launch, Intelsat, the world's lead-ing provider of satellite services, and SpaceX announced the

first commercial contract for the FalconHeavy rocket.“SpaceX is very proud to have theconfidence of Intelsat, a leader in thesatellite communication services in-dustry,” Musk stated in a press re-lease.“The Falcon Heavy has more thantwice the power of the next largestrocket in the world. With this new vehi-cle, SpaceX launch systems nowcover the entire spectrum of thelaunch needs for commercial, civil andnational security customers,” headded. If developed in Brownsville, the Fal-con Heavy would be flying twice fromthe proposed launch site at BocaChica beach. This is also the first commercial con-

tract for SpaceX's Falcon Heavy launch vehicle. Under theagreement, an Intelsat satellite will be launched into geosyn-chronous transfer orbit (GTO).“Timely access to space is an essential element of our com-mercial supply chain,” said Thierry Guillemin, Intelsat CTO. “As a global leader in the satellite sector, our support of suc-cessful new entrants to the commercial launch industry re-duces risk in our business model. Intelsat has exactingtechnical standards and requirements for proven flight heritagefor our satellite launches. We will work closely with SpaceX asthe Falcon Heavy completes rigorous flight tests prior to our fu-ture launch requirements,” Thierry said.

The Falcon HeavyFalcon Heavy is the most powerful rocket in the world andhistorically is second only to the Apollo-era Saturn V moonrocket. Capable of lifting 53 metric tons (117,000 pounds) tolow Earth orbit and more than 12 metric tons (26,000 pounds)to GTO, Falcon Heavy will provide more than twice the per-formance to low Earth orbit of any other launch vehicle. This will allow SpaceX to launch the largest satellites everflown and will enable new missions. Building on the reliable flight proven architecture of the Fal-con 9 vehicle, Falcon Heavy is also designed for exceptionalreliability, meeting both NASA human rating standards as wellas the stringent U.S. Air Force requirements for the EvolvedExpendable Launch Vehicle (EELV) program, making it an at-tractive solution for commercial, civil and military customers.


Elon Musk smiles from the Launch Command Center at the SpaceX head-quarters in Hawthorne, California when the Dragon Capsule connects withthe International Space Station on May 25.

Courtesy of NASA

New commercial-only launch siteIn April, the site selection of a proposedlaunch site for SpaceX became public after anotice of a public scoping hearing inBrownsville was posted with the U.S. FederalRegister. The Notice of Intent to conduct anEnvironmental Impact Statement was filed bythe Federal Aviation Administration’s Office ofCommercial Space Transportation. Since, Brownsville has received consider-able national attention and is being monitoredclosely by its competitors for the project –Puerto Rico and Florida. The notice states the site would support upto 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 state-ment, 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 de-cision on the EIS. The first public scoping meeting was May 15 at the ITEC Campus where more than 550showed at the event and many of which personally met the SpaceX delegation of six which wereon 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 federalpublic agencies in regards to risks which would need to be mitigated in order to build a launchsite near Boca Chica beach. The proposed site is a private tract of land, just south of Highway 4 about a quarter-of-a-milebefore the Gulf of Mexico. The site is three miles north of the Rio Grande and five miles south ofSouth Padre Island. The long stretch of baron land before getting to Boca Chica beach is extremely similar to thelong stretches of protected wildlife property at Cape Canaveral, an environmentally sensitivearea which has flourished due to the presenceof the launch sites there. The drive out to Van-denberg from Lompoc, three hours northwestof Los Angeles, also is long and desolate,however, with mountains. The difference between a site in Brownsvilleand the current SpaceX launch sites in Floridaand California is accessibility. “It would be a purely commercial launch site,whereas Cape Canaveral and Vandenberg areactually Air Force bases – in the case of CapeCanaveral, it’s sort of a joint NASA-Air Forceactivity,” Musk recently told MSNBC. “So it makes sense to have NASA and De-fense Department launches occur from CapeCanaveral and Vandenberg, but then proba-bly shift most of our commercial launches to apurely commercial launch site that’s reallyaimed at being the best customer for a commercial provider,” he said. “Just as there are AirForce bases and commercial airports … there’s some logic to separation.”


The Falcon 9 hovers in space directly above Morrocco during itsorbit and before it connected to the International Space Station.

Courtesy of NASA

Bystanders cheer as the Falcon 9 makes its historic launch andlights up the night sky on May 22 at the Kennedy Space Center inCape Canaveral, Florida.

Courtesy of NASA

Economic ImpactCasually 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 suitedMusk together at the Texas Capitol where they dis-cussed SpaceX’s proposed commercial launch sitefor the Brownsville area.

“Great meeting with SpaceX’s Elon Musk, a truespace pioneer,” stated the Governor in his twittershortly after them getting together. In the meeting, it was noted that

South Texas is the leading candi-date for a launch site for thecompany. The two met in regards to

potential incentives andother issues for theproject. Earlier in June, Perry

wrote to Musk “Please be as-sured that as you seek to ex-pand the capabilities of SpaceXto launch spacecraft, whether unmanned or manned,the State of Texas stands ready to support you andthe work of your talented employees who are blaz-ing 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 inthe weeks since SpaceX became the first. None ofthe rivals have made public the incentives each isoffering; And the stakes are high – hundreds of goodpaying jobs at SpaceX, the supporting companiesthat would pop up around its operation, as well asthe prestige.Space Florida, the economic development entity

courting SpaceX, has publicly said it intends to beaggressively competitive by way of financial incen-tives. Florida also plans to offer converting a padformerly used by the space shuttle at KennedySpace Center into a facility for SpaceX, recently re-ported by The Sentinel.

Official Launch Patch

The Dragon capsule is seen onthe earth’s horizon connected tothe International Space Station.

Courtesy of NASA

In addition to significant financial incentivesand 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 theequator than Brownsville for Cape Canaveral. A key for the launch site is being close to the

equator, in a remote and unpopulated area, andnext to a major body of water where a rocket canlaunch in an easterly direction.

“Brownsville and the Governor’s Office havecollaborated in the past for major projects. Ourcity and state is well known for being assertive in

corporate recruit-ment and now is

the time to ag-gressively goafter a proj-ect, such asSpaceX,”

said MayorTony Martinez,

who since day one,has been instrumental in

directing different public and private entities tosupport the project in the Greater BrownsvilleBorderplex. 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 fullyoperational, SpaceX would create upward of 600direct jobs with a direct economic impact of morethan $51 million annually. SpaceX, which employs about 1,800, first

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

“It is really important to go to a place that wantsus to be there and to know both the positive im-pacts and the negative impacts and really judgethat,” Davis told The Brownsville Herald duringan interview at the May 15 public scoping hear-ing. “That is kind of the stage we are in right now. It

has been very, very positive, which has beengreat.” EJ


Official Launch Patch

Tony Stark, alias Iron Man, issuave, brilliant and mega-rich.Sounds an awful lot like ElonMusk, the South African entre-preneurial wunderkind whospent his May 22 shooting arocket into space and making amajor advance in electric vehi-cles.The 40-year-old

served as an in-spiration for thefictional geniusbillionaire in the"IronMan"movies, ac-cording to direc-tor Jon Favreau.

Musk evenmakes a cameoin one of thefilms.But the compar-isons are reallygetting sometraction now,with the comicbook characterplaying a pivotalrole in the block-buster "TheAvengers" at thesame time thatMusk kicks twoof his grandest ventures intohigh gear.

“Elon Musk is obviouslyTony Stark from another uni-verse,” tweeted user Dromeda.

On the same day of theSpaceX historic launch,Musk’s Tesla Motors Inc. saidit would begin delivering itsModel S high-end electric carto customers in late June,ahead of schedule.There are more than 10,000

orders already for the battery-

powered car, according to thePalo Alto-based company,which Musk co-founded in2003.But Musk was already occu-pied Tuesday, watching hisFalcon 9 rocket launch with anunmanned Dragon capsule ona mission to the International

Space Station. The project, de-

veloped byMusk’sHawthorne-based SpaceX,marks the firsttime a privatecompany hassent a spacecraftto the space sta-tion.

He helpedcousins Lyndonand Peter Rivecome up with theidea for theirsoon-to-be pub-lic SolarCitysolar panel com-pany, which heserves as chair-man. Oh, by theway, Musk alsofounded PayPal,

which he sold to EBay for $1.5billion.The parallels to American in-

dustrialist-engineer Stark --whose expertise in mathemat-ics, chemistry, computer sci-ence, alternative energy andmore helps him design a tech-nologically advanced suit thataids in his crime-fighting ef-forts -- have been irresistible tofans.

“Phenomenal,” tweeted userArchit Gupta. “Elon Musk is

like real-life Tony Stark. Boys,go big or go home.”“Yeah!! He needs a Musk

tower .. and some bodyarmor,” wrote user MorgothG.

“We need more comic bookstyle billionaires,” tweetedZachary Cohn of Seattle.For now, though, Musk is

basking in glory. And if President Obama can

get his own comic book, seemslike Musk and his larger-than-life history deserve one too.

This article was written by TiffanyHsu and appeared in the May 23edition of the Los Angeles Times.

Elon Musk was the inspiration behind Tony Stark, the protagonist inthe movie series ‘Iron Man’ and ‘The Avengers,’ according toWikipedia. Including himself, Musk’s Tesla Motors high-end sports carmakes a cameo in the movies.

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

IRON MAN

Parallels have been irresistable to many fans

EJTHINKERS & INVENTORS

From Time Magazine:

Elon Musk makes no sense —and that's the reason I knowhim. When I was trying to bringthe character of genius billion-aire Tony Stark to the big screenin Iron Man, I had no idea howto make him seem real. Robert Downey Jr. said, "We

need to sit down with ElonMusk." He was right. Musk, 38, is a rocket scientist.

He designed the Falcon 9booster ... He is also a green pi-oneer. He helped create SolarCity, the largest provider ofsolar-power systems in the U.S. And he designed the Tesla, one

of the first electric cars of themodern era. Bob Lutz, the vicechairman of General Motors,credits him with catalyzing GMto move toward electric cars.

Written by Jon Favreau, director ofIron Man and Iron Man 2, in the April2010 issue of Time Magazine.

EJ


Mayor Tony Martinez, spoke to the area’sbusiness leadership about communicationbetween the private and public sectors.

“We’re building the house ofBrownsville,” he said. “Without communi-cation our foundation will falter.”

Martinez also stated that the downtownarea will be revitalized in order for it to bethe front door and “welcome mat” forBrownsville.

“There are so many things we can show-case in Brownsville. We just need to doit,” he added.Club meetings will be on a quarterly

basis and feature high-profile keynotespeakers.

Logistics Opportunites Spurredby Gulf Coast Wind FarmsTwo turbines of E.ON Climate & Renew-able's $150 million “Magic Valley” projecthave recently appeared throughoutBrownsville and Harlingen, ushering in anew era of development in WillacyCounty. A spokesman for Duke Energysaid its contractor, Wanzek Construction,is close to raising its first tower also.

Both companies have projected comple-tion of the wind turbine projects inWillacy County by the end of 2012. E.ON will build a total of 112 wind tur-

bines. Duke Energy is planning to build a total

of 171 in its Los Vientos I and Los VientosII projects.The addition of hundreds of windmills

will change the economic base of WillacyCounty, which is currently dependent onnatural gas production for 57 percent of itsad valorem property tax revenue, accord-ing to Willacy County Judge John F. Gon-zales, Jr.

T-Mobile Announces Closure,Reimburses City IncentivesThe Greater Brownsville Incentives Cor-

poration announced in April it was reim-bursed $2.5 million in job creationincentives paid to T-Mobile USA over thelast four years for its Brownsville call cen-ter.

T-Mobile announced in March it willconsolidate its call center operations from24 to 17 facilities by the end of June.Brownsville was T-Mobile’s newest call

center impacted by the consolidation. Assuch, T-Mobile was in year four of a 10-year incentive agreement with the GBIC.T-Mobile was in full compliance with theterms of the agreement, however, unlikethe other impacted call center locations, T-Mobile had not yet fulfilled its incentiveobligations in Brownsville. The GBIC and the BEDC are working

closely with T-Mobile to identify and ne-gotiate with companies interested in open-ing a call center in the Brownsvillefacility.

T-Mobile started working with theBrownsville Economic DevelopmentCouncil in early 2007 for the developmentof a 78,000-square-foot call center. TheGBIC approved a $3.5 million job creationincentives package in order to oust theother two finalists for the project, Charlotte,North Carolina, and Jackson, Mississippi.About a month after T-Mobile announced

it would close its Brownsville call center,city officials said the company has reim-bursed the city for $2.5 million in incen-tive money. The 2007 contract T-Mobilesigned with Brownsville included a clausethat stated the company would have to re-imburse incentive money should it decideto leave the area.

Port Lands $12 Million In Tiger IV Grant FundsThe Port of Brownsville was awarded

$12 million in June through the U.S. De-partment of Transportation TIGER IVGrant Program.The funds will be applied to the construc-

tion of a new cargo dock, Cargo Dock 16.The Port’s application consisted of the

construction of a new cargo dock. Thetotal project, however, will include pur-chasing a new mobile harbor crane andtrack mobile, in addition to rail improve-ments. “This was a badly needed infrastructure

project and we are very thankful for thesupport we received from our Congres-sional delegation. … And the support wereceived on a local and State level for thisproject,” said Port Director and CEO Ed-uardo A. Campirano.

“The project will create jobs in our re-gion and help us meet increasing de-mand,” he added.

Turn To Page 24

Wind Farms Create Logistics Opportunities, Port Lands Tiger IV FundsContinued from Page 13

“This was a badlyneeded infrastruc-ture project ... (it)

will create jobs in orregion and help usmeeting increasing

demand.”- Eduardo A. Campirano

Director & CEOPort of Brownsville


The Brownsville EDC strives to make thecity of Brownsville a prosperous one, onethat can compete with larger cities in theUnited States.

Many times, Brownsville residents don’tknow how well the city is doing. That iswhy the BEDC has launched the EconomicJournal a monthly TVprogram on KVEO-TV to bring about those positive economicstories. The EJ also is the name of the quarterly

magazine and semi-annual webinars. 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 assite selectors, to select information as theynavigate through the site and build a re-port. Once the report is complete, you’reable to view the report online, email, shareit with others, convert it to PDF, or print it. The new website also features a video

film strip that will connect you to ourYouTube and Vimeo accounts so you’reable to view our videos.Aside from the video film strip, the new

website is also connected to our several so-cial networking outlets, including a directTwitter feed.The BEDC has also implemented a

“Share This” feature that allows visitors toshare the website through the multiple so-cial media outlets.A “Keyword Search” was added so visitors

can easily find information related to a cer-tain keyword. We created a website that waseasy and more helpful for your needs.

Economic Journal The Show,The Magazine, The Website

MARKETINGCORNER

Michelle LopezMarketing & Communication

The TIGER, or Transportation Investment Gener-ating Economic Recovery, was initiated in 2009 aspart of the U.S. Government’s stimulus plan.

Spellman Opens Doors to LEED Building in MatamorosSpellman High Voltage Electronics Corporation,

the world’s leading manufacturer of custom highvoltage power conversion products, announced inlate 2011 the opening of its newest production fa-cility in Matamoros, Mexico, part of theBrownsville Borderplex. Spellman de Mexico’s new plant was constructed

in collaboration with the FINSA Corporation tomeet LEED Gold Standard Certification and re-place its former Plant No. 1. The Governor of theState of Tamaulipas, the Mayor of Matamoros andother elected officials were on hand for the ribboncutting ceremony.“By working together and driving towards results

we have collectively helped Spellman grow to be-come the world’s leading provider of precision highvoltage power conversion products while creatinggrowth opportunities for Spellman’s employees,suppliers and local communities,” said Ken Chan-dler, Spellman’s General Manager. “The key to achieving our goals will continue to be

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

University continues adding acreage to campus, accomodate growthThe University of Texas at Brownsville recently

purchased 20 acres near East Avenue and Express-way 77/83, adjacent to the 80-acre site of the uni-versity’s soccer field.

In May 2011, the Board of Regents approvedUTB’s purchase of new student housing as well asseveral tracts of land for university expansion.The university also recently approved a new mis-

sion statement, admission standards and a $30 mil-lion investment focused on science, technology,engineering and mathematics education in the RioGrande Valley.

The Port, Spellman and UTB

EJ EJ

Continued from Page 23


natural gas liquefaction facility and LNGexport terminal located on Port property, inaddition to infrastructure improvementsnecessary to support this business.”“The huge amount of natural gas reserves

developed in the United States in recentyears,” said Michael Smith, principalowner and CEO of Gulf Coast LNG Ex-port, LLC, “and the significant interna-tional demand for LNG, will allow forthe development of multiple LNG exportterminals in the U.S. The United States isnow believed to have more natural gasthan it can use in a century.”“We believe the Port of Brownsville is in

a strategic geographic location to assurethe success of this project, and we envisionthis to be a long-term relationship with thePort,” said Smith, who is also CEO andfounder of Freeport LNG Development,L.P., which owns and operates a 2-billion-cubic-feet-per-day LNG receiving and re-gasification facility near Freeport, Texas.Reached by phone, Smith says there is no

demand for imported LNG, so the Freeportfacility has not been sending out any gas.The only ship activity involves some tem-porary storage of LNG for re-export, keep-ing it always in liquid form. The Freeportfacility is adding its own liquefaction andexport capability.Regarding the Brownsville decision, he

says, “There was a site selection process,but the reality is that there is only a verylimited number of ports with a deepenough channel that had all the necessaryrequirements to be an excellent site for anLNG export facility.”The scope of the site search extended

from Brownsville to the Mississippi GulfCoast. Smith says natural gas supply was

the second mostimportant crite-rion after goodmarine facilities.Then came asupportive portorganization.“It's critical for

this siting to benear largeamounts of natu-ral gas produc-tion, so once youget east ofLouisiana, it be-comes less andless attractive,”says Smith. “So our focus

was Texas andLouisiana, eventhough we did goall the way intoMississippi.Brownsville isclosest to the Eagle Ford (shale) produc-tion in southwestern Texas, and rose abovethe rest that aren't already planning an ex-port facility.”Smith says the investment in Brownsville

will be “north of $6 billion.” Some tax abatements will probably kick

in as they have done in Freeport, he says,but adds they were not a factor in the sitedecision. As for partners, he says, “I andmy daughters own 100 percent of GulfCoast LNG. We are not looking at anypartners at this time.”Once the D.O.E. approves the application

Gulf Coast LNG will initiate the reviewprocess with the Federal Energy RegulatoryCommission to receive authorization to site,

construct, and operate the terminal at thePort. The project is expected to be operational

in 2018 and is forecasted to bring thou-sands of jobs during the construction phaseand hundreds of jobs once the facility isoperational. “This project falls in line with our mission

of bringing more quality jobs to the region,and it also allows us to continue to diversifythe type of cargo handled at the Port, whileopening up a new industry for us,” said PortCEO Eduardo A. Campirano.

This article was written by Adam Bruns and ap-peared in the May 2012 issue of Site SelectionMagazine.

Port of Brownsville Poised for Economic Spinoff from Natural Gas Fracking

The Port of Brownsville, shown in the aerial photo, is the No. 3 steel importer and ex-porter in the United States. The proposed liquification natural gas plant would be usedfor export to different parts of the world. The port already handles liquid cargo forPEMEX 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 largerports along the Gulf of Mexico coastline.


EJ


Staff Photo

Brownsville-Matamoros is the secondlargest cross-border manufacturing regionon the Texas-Mexico border, behind ElPaso-Cd. Juarez and ahead of the likes ofLaredo-Nuevo Laredo and McAllen-Reynosa, all of which have dif-ferent manufacturing andlogistical niches.

However, all have one thingin common – the future ofmanufacturing in NorthAmerica. The manufacturingmodel of this region has em-ployed three generationsof families. There has beentweaking and altering, but notnecessarily changes to itsentirety.Labor-intensive work occurs on

the Mexican side, with final as-sembly work on theU.S. side. That is equal to jobs inthe thousands on the Mexicanside and wellpaying jobs in the hundreds onthe Texas side.

Continued recognition of the BrownsvilleBorderplex is for the manufacturingof automotive interiors – everything fromthe car seats and frames to the radios,steering wheels, and even the small knobsand locks.

Companies recognized for superior workin this region include Delphi Automotiveand Dura Automotive, both of which havethe largest manufacturing plants in NorthAmerica here at the Borderplex.Most recent investments include CK

Technologies, a large plastic-injectionmolding facility for the truck industry,Spellman Voltage, Joerns, and Overhead

Doors, all in need of a place with a geo-graphic logistical advantage to getting theirproducts in and out of Mexico, as well asshipping to other parts of the world.Since finding its new identity as a truly

international location, this region has ex-

perienced a surge in international projectsduring the last 18 months. Historically, theBorderplex would land anywhere betweenfive to seven projects, worth a combined$50 to $70 million in capital investmentand upward of 300 to 500 jobs.Today, the top 10 projects are worth

$10.5 billion in capital investment andmore than 5,000 well-paying jobs in suchindustries as heavy manufacturing, foodprocessing & manufacturing, food R&D,renewable energy R&D and generation, asteel mill, aviation, and aerospace.

Of those 10 projects, seven are foreigndirect investment.

We have prepared an aggressive plan-of-action to recruit companies in Latin Amer-ica, specifically South America, as well asAsia and certain countries in Europe.Yes, there are violent incidents and issues

in all of the Republic of Mexico, but ourregional economy continues togrow in a positive direction. For example, we have recently

invested millions of dollars in anumber of projects including se-curing acreage for a shovel readyindustrial park that will serve asthe region’s mega site, infrastruc-ture at the international airport, anew interstate to the Port ofBrownsville, as well as infra-structure at the port, and an up-grade at our municipally ownedpower company. We have invested millions into

the expansion of our largest inter-national bridge truck crossing,and in a few months, we will becelebrating the opening of thearea’s fifth new internationalbridge crossing into Matamoros,

Mexico. This has all been with one result in mind

– increasing activity in the manufacturingand 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 want-ing to locate in the BrownsvilleBorderplex would be what we Americanscall gravy.

The guest editorial, authored by GilbertoSalinas, of the Brownsville EDC, wasprinted in the April 2012 issue of Ameri-can Manufacturing Magazine.

City, region needs to find identity before conducting corporate recruitment



The Brownsville Borderplex,a region of more than

1.2 million spanning fromMatamoros, Mexico, toBrownsville and South

Padre Island, TX and is inan advantageous positionto grow together with the

large economies of the world.

Martinez said Chan came to seehim in Brownsville shortly afterhe moved into the mayor’s officeand discussed a possible trademission.

“I said we’d be very much in-terested. … It was really heridea,” he said. At the June meeting in San

Marcos, the different citiesworked on a resolution whichwould include the cities asfounding members. Next will bethe planning of the group’s firstinternational business recruit-ment mission, which will be toChina in 2013. The Texas South name was

voted and adopted at the previ-ous meeting, which was in Aprilat the Cueto Building in down-town Brownsville. “The TS-IA is very important to

the economic development ofSouth Texas,” said Mayor Guer-rero. “The City of San Marcos is

highly excited to play a signifi-cant role in the continued devel-opment of the shared resourcesand relationships of the allianceand in the marketing and recruit-ment of foreign firms to thearea,” said Guerrero, who alsowas present at the June meeting. Texas South was designed to

focus on international investmentto generate a net gain of jobswithout taking domestic invest-ment from one part of Texas orthe U.S. and moving it to another,Councilwoman Chan added.

This strategic approach has re-ceived recognition from TexasSecretary of State Hope An-drade.

“They make themselves andTexas even stronger and morecompetitive in the global econ-omy by combining the excep-tional workforce of therespective cities and the infra-structure assets sought after bybusiness and industry leadersacross the country and aroundthe world,” Secretary Andradestated in a San Antonio press re-lease. The organization has developed

a committee comprised of thedifferent city’s economic devel-opment officials to create a mar-keting campaign to brand TexasSouth and using the Formula 1United States Grand Prix eventin November to market thename.The cities are each working on

a Memorandum of Understand-ing, most of which will be pre-sented at their respective citycouncil or commission meetings.

“San Marcos has many assetsthat are attractive to internationalcompanies, but to have the forti-tude of the other cities and theircollective international experi-ence provides the greatest impactto market South Texas in aglobal arena and recruit foreignbusinesses and their interests toour region,” stated Amy Madi-son, President & CEO of theGreater San Marcos Partnership. “It just makes sense.”

Promoting the South Texas Diamond

EJ

“Having recently secured the Ocean Onyx semisubmersiblemajor upgrade and a series of repairs, this new jackup addsto a healthy workload through (the) first quarter 2014,” hesaid. “We also continue to pursue projects from PEMEXand we are optimistic about our chances.”Perforadora, a Mexican corporation, provides offshore and

onshore drilling services for PEMEX.Jackup rigs are known as self-elevating mobile offshore

drilling units which have telescopic legs, dropping to theseafloor and ‘jacking up’ the actual platform above theocean’s surface.

AmFELS Lands Rig Contracts

EJ


they need in order to be successful in the GreaterBrownsville Borderplex,” Hilts said. CKT's expertise includes chromed and painted exterior

surfaces, under-the-hood components, interior consoles andinstrument panels.CKT is one of 14 divisions of Michigan-based Cascade

Engineering Inc., founded in 1973 with six employees.Today the company has more than 1,000 employees in fourU.S. states and Budapest, Hungary, and has $300 million inannual sales. But CKT isn’t stopping here. The company’s plan is to ex-

pand.“We have two more machines coming, one in January and

one in March, so that’ll make a total of five machines.That’ll hold us for a year or two if not more, depending onthe demand.”At the Brownsville plant, they’ve started working on the

addition of a paint line operation, to compliment the strongsupply-chain logistics the facility has with its customers inNorthern Mexico.CKT’s customers are North American commercial truck

manufacturers Daimler, the German company that ownsFreightliner; PACCAR, owner of Peterbilt and Kenworth;Volvo, which also owns Mack; and Navistar, which makesInternational Harvester. CKT’s customers are located in the United States, Mexico

and Canada.

CK Investing For Planned GrowthContinued from Page 11Continued from Page 6

EJ



Gov. Rick Perry has made job creation a cor-nerstone of his administration. It doesn't matterwhether those jobs originate here or come infrom out of state, Perry wants 'em all.Lately, he's been getting them, too. Although

critics question how much of the credit for thatgrowth should go to Perry and his administra-tion, no one can argue that Texas isn't outper-forming most states in terms of job creation.Since the recession officially ended in mid-2009, the state has accounted for roughly halfthe nation's total job growth.Aaron Demerson has played a key role in fuel-

ing that growth. As director of the governor's of-fice of economic development and tourism, heoversees and coordinates many of the adminis-tration's job recruitment and tourism efforts.

Demerson has an extensive history in thestate's economic development efforts. He previ-ously served as director of Texas business de-velopment, guiding the state's NAFTA office inMexico City, and he served with the Texas De-partment of Economic Development before itwas folded into the governor's office.

In a conversation with the American-States-man, Demerson talked about the challenges andopportunities facing the state's economic devel-opment efforts.American-Statesman: Texas has become one

of the nation's primary destinations for jobs andpeople. What changed over the years to makethe state such an attractive place for companiesto be?Demerson: I think it helps to have a governor

who has really focused on creating jobs andlooking at what we can do as a state to spur that

growth, starting with our business-friendly taxand regulatory environment. The governor isTexas' best salesman/CEO. A lot of folks aresurprised at how involved he is in recruitingbusinesses. He'll make phone calls CEO toCEO, and I think they really respond to that per-sonal interaction. The ability for him to talkwith a CEO and give them a chance to ask ques-tions is a great tool.At the end of the day, we understand compa-

nies are looking to succeed, to be profitable, tomaximize shareholder wealth. And when theycompare tax rules and the cost and time it takesto get a facility up and running, Texas is quiteoften the best choice for them. We understandthat it's important for companies to know thatthere are educated and skilled employees to fillnew positions.

The governor's focus over the last 10 yearshas been to make economic development acollaborative effort starting with the localcities, counties and even school districts, onup to the state. That cooperation is what helpsus aggressively recruit businesses and com-pete with other states. If a company is lookingto expand their operations, we're going tomake sure they have an opportunity to do it inTexas first.

Statesman: In your experience, what are thebiggest challenges to the state's ongoing busi-ness recruitment and economic development,and how is your office approaching them?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 futureholds, but when there's more uncertainty thanusual, businesses are less likely to take risks.

Governor’s Recruitment Chief:

Texas Wants Every Job It Can Get

QUESTIONANSWER

Aaron DemersonDirector of Texas Governor’s Office of Economic DevelopmentAnd Tourism

Austin American-Statesman

That's why here in Texas, Gov. Perry hasworked to create stability in taxes, in regula-tions, with our courts. And I think that's whyyou've seen Texas continue to thrive whileother states and the national economy arestruggling. There will always be risks withbusiness, but any certainty you can providegives companies the confidence to invest ingrowth. That message of low taxes, reason-able regulations, fair courts and skilled work-force 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 diversitythere. How do you gear your economic de-velopment efforts to boost the health of thestate economy as a whole?Demerson: Texas is a huge state, but hav-

ing that statewide cooperation in economicdevelopment helps tie us all together.Whether it's a manufacturing facility, datacenter or headquarters, it's all based on jobcreation. We can sing that song in Tyler,Seguin, Brownsville, San Antonio, Austin, ElPaso. It resonates in every community. Youmay not find that in other states, wherethere's a disconnect or more fragmentationbetween state and local efforts. It's a prettyunique approach.Statesman: How do you balance the push

between recruitment and organic job growth?Demerson: In Texas, we have positioned

ourselves for local expansion and growth op-portunities while also aggressively pursuingany available recruitment opportunities. Forus, the bottom line is job creation. That's themost important thing. Not only does eachproject create direct jobs, it also creates indi-rect jobs, then property taxes in the localcommunity, then sales taxes. There's adomino effect to each job that's created here.An example of both recruitment and organic

growth is Caterpillar. They're headquarteredelsewhere and decided to open an 800,000-square-foot plant in Seguin with about 1,400jobs. When the request for an additional fa-cility went out, they opted to open a new fa-cility in Victoria with more than 500 jobs.And of course, both communities are work-ing with suppliers and vendors in those com-munities, which spurs even more growth forthat region and industry.Statesman: Texas has attracted a lot of jobs

and people from other states, particularlyCalifornia. Do you see those states as com-petitors? How do you balance cooperation asfellow states in the union with the constantpush to bring in more jobs for Texas citizens?Demerson: I'm sure you've heard the gov-

ernor say time and time again that states arethe real laboratories of innovation in ourcountry. A strong California, New York orFlorida makes us all work that much harderto compete, and collaboration with each othermakes our nation better as a whole.For example, a number of elected officials

from California came to Texas a year or so

ago and met with Gov. Perry to talk aboutwhat they could do to make their state betterfor business. That's how the system is sup-posed to work: different states trying differ-ent approaches and sharing notes to see ifwhat works in one state will work in another.We have the right formula here in Texas forjob creation, so it's no surprise that otherstates would want to take a page from ourbook.Now, of course, we don't share all the trade

secrets. When there's a company looking tomake a business decision and they haveTexas and another state on the list, that'swhen we become really competitive. If thereare jobs at stake, we're going to compete forthem. That's when the gloves come off.That's where the strong support from ourlocal communities comes in to make surewe're doing all we can to help them chooseTexas.

The article was written by Dan Zehr andwas published in the June 16 edition of theAustin American-Statesman.

Economic Development Chief: All Cities In Texas Should Take Same Approach

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

Photo by Sylvia Rodriguez


North Brownsvil

T h i s p r o p e r t y h a s t h e c o v e t e d ‘ S h o v e l R e a d y ’ s e a l b y a n

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 .T h i s p r o p e r t y h a s t h e c o v e t e d ‘ S h o v e l R e a d y ’ s e a l b y a n

Documents

Brownsville Economic Journal (Summer 2012 issue)