BROWNSVILLE, RGV – Brownsville leaders will host site selectors from around the world in a spinoff event connected to SelectUSA’s annual summit in Washington, D.C., in June.
SelectUSA is a U.S. government program led by the U.S. Department of Commerce whose mission is to facilitate job-creating business investment into the United States and raise awareness of the critical role that economic development plays in the U.S. economy.
Since its inception, SelectUSA has facilitated more than $64 billion in investment, creating and/or retaining over 86,000 U.S. jobs. This year’s summit runs June 1-3 at the Washington Hilton in Washington, D.C.
Mario Lozoya, executive director of the Greater Brownsville Incentives Corporation (GBIC) said Brownsville was one of just a handful of cities that were fortunate to secure a spinoff event.
“When an investor group from, say, China, goes to a conference in, say, Chicago, it is a big expense. It merits more than a one-day conference. The investors say, ‘we are in the U.S. What else can we do?’ A spin-off event allows them to do that ‘what else’,” Lozoya in an exclusive interview with the Rio Grande Guardian.
“We have just received notice that we were successful in our application, one of only 15 cities that will host a spin-off event. We are requesting that the site selectors visit us on June 3-4.”
Asked what type of site selectors Brownsville leaders are interested in bringing to their city, Lozoya said: “Those involved in the aerospace, manufacturing, IT, and energy industries. We want to make the case that they should come see us when they make their investment decisions. We are by the border, by the sea. We can help mitigate their potential tariff costs.”
Lozoya said the site selectors will first be given a presentation by city leaders. He said they will then tour downtown Brownsville, the Port of Brownsville, and the city’s industrial parks. “We will be working with city and county and Brownsville Community Incentives Corporation to make sure it is a successful event.”
One major talking point for site selectors from abroad will be the United States-Mexico-Canada Agreement, the successor trade deal to NAFTA. Asked if USMCA will help Brownsville attract more foreign direct investment, Lozoya said: “There are some key changes when it comes to Rules of Origin for manufactured goods. The original NAFTA had most at 50 percent, that 50 percent of the value of the raw materials should be from the NAFTA countries. The new agreement puts it at 62.5 percent. This is especially relevant to the auto industry. We need to take advantage. There is an immediate opportunity to expand foreign investment in our region, to bring a function from China.”
As a member of Rio South Texas Economic Council, GBIC also benefited from its recent Familiarization Tour, which brought over site selectors from Europe. “My colleague Ramiro Alemen and I were pleased to meet with these site selectors. It was a great visit,” Lozoya said.
Recently, Lozoya made a presentation to local VIPs at a breakfast event hosted at the Brownsville Events Center by the Brownsville Chamber of Commerce. The message from all the speakers was that Brownsville is open for business with ambitious plans for growth.
One jarring statistic introduced by Lozoya, however, was the fact that around 32 percent of the local community lives in poverty, with many workers earning no more than $15,000 a year. Lozoya said the statistic applied just as much to the metropolitan statistical areas of McAllen and Laredo as it did Brownsville.
Asked about this sobering statistic afterwards, Lozoya said: “I like to be frank. That is who I am. We cannot improve if we cannot expose our gaps. We have to be all in with the chamber, with Workforce Solutions, with the Texas Workforce Commission, with the city and county. We have to be all in with the school districts, the community colleges and the universities. We have to work together to mitigate the gaps that exist in our community. If we ignore it then we we will stagnate ourselves like we have for the last 30 years.”
Lozoya said that despite the incredible growth in economic activity in the Rio Grande Valley over the past 25 years, due in large part to NAFTA, the per capita income has not risen very much. “It is the same across the whole Valley, including McAllen. We have brought more stores to the malls but the worker earns the same amount. The income stays the same. The three MSAs (Brownsville, McAllen and Laredo) still today are the poorest in the country.”
One proposal Lozoya is pitching to local and statewide leaders, as well as think tanks and universities, is for a study to be undertaken that would put a cost to the state of having a high level of poverty. Once the costs are known, Lozoya said leaders from across the region could put forward recommendations to reduce those costs. Among the solutions, he said, could be changing the incentive packages offered to potential investors by the State of Texas, for investing in the border area.
Wood. I had a private meeting with him, Julian joined. LRGVDC provided some input, Sergio provided some input.
“What is the overall impact of the 32 percent average poverty. We have about two million-plus people in the three South Texas MSAs. That is about 600,000 people. What is the cost of that poverty to the state?” Lozoya asked.
“We want to work with the State of Texas and groups like the Mexico Institute and, hopefully, a local university, to address this. We need to collect the data to see what looks like. What is the impact to the state and how can we mitigate it, working with the state?”
Wood said he had a private conversation on this subject with Duncan Wood, the director of the Mexico Institute, and Julian Alvarez, a member of the Texas Workforce Commission, on their recent visits to the Valley.
“We need to find a way to capitalize on USMCA. It can be a win-win for us and the state. It all ties together. Duncan Wood loved the idea. He said his institute can help. Julian said he would look to see what he has in the Workforce Commission in the toolbox.”
Lozoya added that the 32 percent poverty rate figure came from the 2010 Census. He said he hopes there will be a reduction when the 2020 Census figures are published.
Before joining GBIC, Lozoya worked as a senior executive at Toyota in San Antonio. Asked if the Valley could land a auto manufacturer like Toyota, Lozoya said:
“It is tough. When Toyota arrived in San Antonio the city had one percent manufacturing. It is difficult, we do not have the workforce, we have the people but not the right skills. But, we are working on it. We have Tier 2 suppliers in the border region that make small components for the auto industry. We can grow them and strengthen them. Then we can go to company like Toyota or VW, or Mazda or Ford or Chrysler. We do have a supplier base here, we do have the logistics with the port and NAFTA corridor and we do have the people now and we do have the right training so we now we can mitigate the cost of bringing a $2.2 billion investment or so to the border region.
He added: “My job is to prepare the process that will create the result.”
Editor’s Note: Click here to view a fact sheet produced by the Greater Brownsville Incentives Corporation.