Imports from Asia and strong NAFTA volumes spur economic activity.

Many metro areas of the Southwest region of the United States are among the fastest growing in the country, and that trend doesn’t seem to be slowing. The region is home to a growing population base, making it ideal for expansion and relocation projects.

Texas led the nation in population growth during the first decade of the 21st century, according to the 2010 U.S. Census. Other states to have large population gains include Arizona, Nevada, and Utah.




 

Space to grow in Levelland, Texas

Space is the major strength for companies considering an expansion or relocation to Levelland, Texas, located about 300 miles west of Dallas. “We have relatively inexpensive land costs, with room to develop,” says Dave Quinn, executive director of the Levelland Economic Development Corp., adding that the region is ideal for companies looking to locate in Texas, but at a lower cost of living and doing business and without the congestion and hassles of cities such as Dallas, Houston, or San Antonio.

Levelland is in a region that also includes the cities of Lubbock, Midland, Odessa, and Amarillo, giving expanding companies a greater talent pool in which to choose their workforces.

The region is a traditional home to oil and gas operations. A large portion of exploration wells and petroleum refining facilities are within a 500-mile radius of Levelland. The region is trying to build on that energy experience by growing a cluster of alternative energy companies, including wind energy, solar energy, and biofuel.

“Our workforce is strong in the traditional energy sector,” Quinn points out. “There are numerous machinists and welders in the region, as well. We believe that this transitions us naturally into alternative energy when you are talking about maintenance and construction of the wind farms, as well as the maintenance of turbines and other parts.”

In addition, Levelland is home to numerous headquarters operations, value-added agriculture companies, and distribution and logistics operations.

The region is also a part of the Southwest Power Pool, a regulated utility market, which gives companies, on average, lower utility rates than in other parts of Texas, Quinn says, because most of the rest of the state is unregulated.




 

Port of Houston prepares for Canal expansion

The Port of Houston lies in the southeast corner of what is considered the Texas Triangle, with Dallas-Fort Worth and the Austin/San Antonio region. It is a market of more than 25 million consumers. Within 1,000 miles of Houston is a population of 100 million people.

From a cargo and freight-moving perspective, the Port of Houston is a centralized location for shipments to and from an area that encompasses east of the Rockies, west of the Ohio Valley, and south from Canada, says Alec G. Dreyer, CEO of the Port of Houston Authority. “We characterize ourselves as the maritime gateway from Texas to the Heartland of America,” he emphasizes.

To meet future business, the port is upgrading its two container facilities, Barbours Cut and Bayport. Barbours Cut is at full build-out and can easily handle 1.7 million TEUs per year. Dreyer says plans are on the board to refurbish the container facility.

Bayport is being built in phases, as dictated by business. The port authority is adding 1,330 feet of berthing space to the current 2,000 feet and adding 50 acres of container yard to the current 110 acres.

And, in anticipation of increased volume due to the Panama Canal expansion, the port is further expanding the facility. At build-out, Bayport will have a design capacity of 2.3 million TEUs. The channel has already been widened to 530 feet and deepened to 45 feet, which will allow the port to handle larger vessels. Target date for completion of Bayport is 2018.

The Port of Houston expects to invest about $1.5 billion in the two container facilities.

Houston is the largest breakbulk port in the country. Dreyer emphasizes investment needs to continue in this category to accommodate the trend of heavier, more concentrated cargo. The port expects to invest up to $3 billion during the next 15 years to stay ahead of the curve, in what Dreyer sees as a growth potential for the port.

“We [also] know we have to continue to upgrade the infrastructure for road and rail,” Dreyer says. “The landside infrastructure has to receive a corresponding investment as the building of the waterside infrastructure.”




 

Port Freeport continues to grow

Dole, Chiquita and Turbana use Port Freeport, located about 50 miles from Houston, as the banana import base of their operations, while people around the world sustain their desire for rice goods produced at the on-port facilities of American Rice Inc./Grupo SOS.

Port Freeport is expanding its operations with the construction of the first phase of its Velasco Terminal, which will add cargo-handling capabilities. The terminal will have a new 800-foot-long dock and 20 acres of backlands. Eventually, the port will offer 2,400 feet of berthing space and more than 90 acres of supporting land.

Land has long been one of Port Freeport’s greatest advantages, with about 7,500 acres, advantageously located to the open Gulf waters, and available for future development, says A. J. Reixach Jr., executive director and CEO of Port Freeport.

On the rail side, Union Pacific Railroad is putting a new bridge in place over the Old Brazos River, eliminating present weight restrictions. Roadway developments are led by the launch of a design and engineering project to elevate a major intersection involving Texas Highway 36.

The port is designing a high-efficiency truck queuing area and continues to work in conjunction with federal and state officials to deepen and widen of the port channel.




 

NAFTA helps boost San Antonio

The North American Free Trade Agreement (NAFTA) has perhaps had no greater impact on a U.S. metro area than it has on San Antonio. Of course, location is a major reason. San Antonio is located near the U.S.-Mexican border, making it a natural gateway for imports and exports.

“We consistently see U.S. and international companies come to San Antonio to do business in Mexico,” says Mario Hernandez, president of the San Antonio Economic Development Foundation. “We have companies locating here each year that have direct ties to Mexico. This is directly a result of NAFTA and the increasing trade between the two countries.

“We have always tried to look south to Mexico for opportunities,” he adds. “It has been a focal point for us.”

In many instances, companies that manufacture product in Mexico have established warehouse and distribution operations in San Antonio for shipping to the United States. Hernandez cites several examples, including R.G. Barry Corp., which manufactures Dearfoams Slippers in Mexico and uses San Antonio as its U.S. distribution gateway. Another example is Caterpillar, which manufactures diesel engine blocks in Monterrey, Mexico, then ships them to San Antonio, where they are finished and distributed.

Going the other way, numerous Japanese automobile suppliers have located in San Antonio, not only to supply Toyota’s plant in the metro area, but also to supply automobile manufacturing plants in Mexico. And when Microsoft was looking to build a new data center, it did so in San Antonio as way to stay connected with potential business in Mexico and South America.

“These types of expansions have really accelerated since NAFTA,” Hernandez says.

To ensure that transportation remains smooth, there have been numerous improvements in the metro area’s logistics infrastructure with considerable funding for rail- and highway-related projects. When Kelly Air Force Base shut down in the mid 1990s, the community responded by converting it into a city-owned industrial park-Port San Antonio-that today emphasizes the transportation and logistics industry with a focus on Mexico, Hernandez says. The park has more than 2,000 acres, which includes warehouse and distribution facilities.

San Antonio is also at the crossroads of Interstates 10 and 35, which gives manufacturers coming over the border immediate access north to Canada and to both the east and west coasts.

“Most goods are still shipped by truck, and the highway system is very important to us,” says Hernandez, adding that San Antonio has more freeway miles than just about any other city in the U.S., except Los Angeles. “The continued investment in highway infrastructure from federal, state, and local governments continues.”

There is also direct access to the ports in Houston and Corpus Christi.

San Antonio continues to try to parlay its success with NAFTA into additional business opportunities. Hernandez says local officials are trying to establish relationships with seaports on Mexico’s western coast in an effort to provide an alternative route for companies with manufacturing operations in China to ship their product to the U.S. After being unloaded at a Mexican port, product would be shipped via rail to San Antonio and distributed nationwide. “We can save [manufacturers] a tremendous amount of time and money,” Hernandez emphasizes.  wt



Contributing writer Ken Krizner is based in Cleveland, Ohio, where he writes often on economic development and technology issues.