U.S.
Andres Leighton
SANTA TERESA, N.M. — Over a low bluff west of El Paso, Texas, in the barren desert of the Rio Grande Basin, at the point where New Mexico, Texas and Mexico meet, Union Pacific Railroad opened a sprawling train yard 11.5 miles long and a mile wide today. This $412 million, state-of-the-art facility will transform a rough, sandy plot dotted with mesquite bushes into a channel through which global capital passes at high speed.
The thoroughfare of concrete and steel stretches into the horizon east and west. From the air, they say, the Santa Teresa yard looks like a snake that has just swallowed its prey: narrow at the head, with a thick girth and a very long tail.
The huge yard is a sign of the building boom in the rails, spurred by shipments of chemicals for fracking and transportation of oil extracted from shale. The new development has created a boundary-busting boomtown in this desolate part of the border region. Just as the Obama administration is spending as much as $3.2 million a mile to build a tall fence that rises 18 feet into the air and can extend 6 feet underground, the Mexican and American governments are working to eliminate all barriers to commerce on the seven-square-mile plot adjacent to the yard.
The U.S. Department of Transportation predicts that rail freight traffic will increase 50 percent by 2040, propelling a capital investment in construction not seen since the Gilded Age, when these train tracks were first laid down. This year the nation’s railroads are expected to spend a record $26 billion improving their track and facilities, up from the previous record of $14 billion spent in 2013, according to the American Association of Railroads, an industry-funded organization.
The El Paso border crossings, just 13 miles away, are heavily policed by the border patrol; even at midnight, stadium lights turn the riverbed of the Rio Grande, which forms the boundary between Texas and Mexico, to a perpetual noon. In contrast, the recently constructed crossing at the rail yard, a freestanding building surrounded by acres of empty land, is a lonely outpost.
Jon Barela
New Mexico's secretary for economic development
On the Mexican side, visible from the Santa Teresa crossing, is the Taiwanese-owned Foxconn Technology plant, which primarily manufactures Dell computers for the U.S. market. This year the company will expand its operation in Juarez fourfold, adding three huge new electronics assembly buildings to the existing one.
Foxconn built its own 3.7-mile road from the plant to the Santa Teresa crossing to speed the passage of its products into the United States, says Pancho Uranga, vice president for the company’s Latin American operations, which includes six plants in Mexico.
Uranga says he is in negotiations with U.S. Customs and Border Protection to establish a pilot project in which officials will clear cargo before it leaves the Foxconn plant, as opposed to each truck individually waiting to cross at the border. He has set aside a large building on company property and outfitted it for the use of customs officials, anticipating the day, perhaps later this year, when computers and other goods the company manufactures can go swiftly from the plant to market without stopping.
“Like many communities on the border, we have a much more fluid idea about crossing it,” says New Mexico’s secretary for economic development, Jon Barela, who grew up in the southern part of the state and whose grandparents owned a farm near the border.
Until the New Mexico government stepped in to provide infrastructure, Santa Teresa was an unincorporated part of greater El Paso, an idea for a town rather than a destination, with no mayor, no city hall, no school system, just a few scattered houses and no water or electricity. But that also is about to change.
“When I was a kid in high school, this is where we’d go when we wanted to make noise,” says Captain Scott, a railroad contractor who grew up in El Paso. He and his friends would camp out and shoot, stand around a fire and drink, because they knew that “no one could hear us and no one would bother us. Now our favorite place to build a fire is crawling with federal railroad police.”
The next phase of this binational collaboration is the construction of two towns meant to eventually ignore the border altogether. Last year, New Mexico Governor Susana Martinez and Chihuahua, Mexico, Governor Cesar Duarte signed a formal agreement that the two states would cooperate on a master plan to build adjacent towns: Santa Teresa in New Mexico and San Jeronimo across the border.
New Mexico and Chihuahua are combining efforts on infrastructure for roads, water, energy, waste treatment and power. Streets in Santa Teresa will be contiguous with streets in San Jeronimo, awaiting the day when the border is no longer a barrier, when, as people say in Santa Teresa, it’s no longer “made in America,” but “made in North America.”
Private landholders anticipate a huge profit. The 70,000 acres on both sides of the border that will together form this planned community are held by two big real estate concerns: Verde Realty in New Mexico and Corporacion Inmobiliaria in Mexico.
Corporacion Inmobiliaria is breaking ground on the first housing development in San Jeronimo: 500 modest houses, about 800 square feet each, that will cost about $20,000 a piece. With Foxconn workers earning roughly $50 a week, the price is still substantial. The chief architect for the development, Octavio Lugo, notes that Foxconn employees will get Mexican government assistance for the down payment on their homes. “We’re going to set up a sales office for these houses right in the Foxconn plant,” Lugo says.
Santa Teresa’s plan to develop more housing, albeit in the $100,000 to $300,000 range, is also underway. Jerry Pacheco is the executive director of the International Business Accelerator, which brokers the leases for industrial space near the new yard. Pacheco predicts that Santa Teresa will have a 50 percent increase in new housing construction in the next five years.
Barela has helped free up state funds for infrastructure development so that the manufacturing operations near the new train yard can expand rapidly.
For more than a century, rail traffic to this region came through the train yard in El Paso. As the city has grown, the rail yard, which is adjacent to downtown El Paso and within sight of Juarez, has been increasingly hemmed in by development; meanwhile, the size and weight of trains has increased dramatically.
No longer the belching behemoths that befouled the air, the trains now describe themselves as green transportation, boasting how a train can move a ton of freight a mile on a gallon of fuel, in contrast with the cost of trucking. The new trains stretch up to two miles long and travel at speeds of up to 70 miles an hour. To stand next to the double-stacked containers, taller than a two-story building, is to be, literally, dwarfed by global commerce. These trains, often assembled in Long Beach, California, with containers off-loaded from ships that come from Asia, are too large to be handled efficiently in a rail yard like El Paso’s.
Meanwhile, as U.S.-Mexico trade has grown, El Paso’s four border crossings with Juarez are so jammed with car, truck and pedestrian traffic that local radio stations report the wait to cross at the border along with the traffic report. For trucks carrying goods manufactured in Mexico and waiting to be loaded onto trains in El Paso, these waits can be two to four and even six hours long. Santa Teresa is also depending on the fact that the older bridges that cross the Rio Grande to El Paso will strain under the weight of heavy intermodal traffic, meaning freight that travels via ships, trains and trucks, before reaching the final destination. Having to cross that river on bridges constrains cargo weight limits because old bridges can only handle so much tonnage, Barela says.
If anyone can be seen as the mayor of the not-yet town of Santa Teresa it is Pacheco, who can explain the details of every tax break, rewritten regulation, infrastructure improvement and much of the business in the seven-square-mile free-trade zone where he leases industrial space to companies from Germany, Japan, Turkey, Canada and Mexico.
Pacheco, who works with the state legislature to get subsidies, tax breaks and regulatory relief for the Santa Teresa development, knows where the discretionary funds for economic development are hidden and how to get them released. He’s adept at writing legislation to get special privileges for the economic zone and finding a legislator to sponsor the bill. Although New Mexico’s legislature is only in session for 30 days a year, Pacheco spends that month in Albuquerque advancing the interests of Santa Teresa. Besides getting the state and federal governments to pay for roads, water pumps, wastewater treatment and hazardous-material facilities, he worked to get individual income tax waived for Texas residents working in the industrial zone. The special consideration he’s proudest of, however, is the overweight-truck zone.
In the weeks before the train yard opened, the otherwise desolate Santa Teresa had all the bustle of a boomtown. As Pacheco turns onto a main street in the industrial park he points to a newly arrived New Jersey-style prefab diner, dropped down wholly formed in the parking lot of a recently finished 56-room motel that, he says, will add 20 more rooms to house the train crews.
The promotional video for the Santa Teresa/San Jeronimo development calls San Jeronimo “the most interesting city in the world,” although at this point there is nothing there. “It’s all underground,” says Lugo, the architect. “Infrastructure you cannot see, but we have worked very hard to place it there.”
Pacheco isn’t perturbed that the development is, at least for now, little more than an illusion.
“That’s the advantage,” he says, recalling a time back in 1989 when he and his wife drove over the cattle trails that now have become the roads to the manufacturing plants. “This is a blank slate where business can do practically anything it wants.”
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