WESLACO, RGV – At a luncheon hosted by the Society of Professional Marketing Services in Weslaco, McAllen City Manager Roy Rodriguez spoke of the double-edged sword the city faces with shoppers from across the border.
“When you have the highest retail sales per capita in the state of Texas that says something about you,” said Rodriguez. “But, part of the reason is because of our friends and family south of the border, and we all know that. And, so when things aren’t going well, we feel it. And, that’s what we have felt recently.”
Rodriguez explained that 35 to 37 percent of McAllen’s sales tax revenue comes from shoppers crossing over from Mexico, and, between this year and last year, the city has seen a loss of about $5 million.
Whatever the reason for the recent downturn – increased violence along the border, devaluation of the peso, or boycotts spurred by comments from President Trump – McAllen is feeling the effect.
“What is happening with our retail is real,” Rodriguez said. “I think that we are probably pretty close to hitting bottom.”
La Plaza Mall, which accounts for 17 percent of the city’s sales tax revenue by itself, is also being impacted, Rodriguez said. Representatives for the mall, as part of a delegation from McAllen, held an expo in Mexico City last month to try to attract Mexican shoppers. With the mall’s new 245,000-square-foot expansion, its success is crucial for the city.
“We’ve got a lot of eggs in that basket, and we need to ensure that they succeed. As a community, their success is as important to us as it is to them,” said Rodriguez.
Currently, the new wing of the mall is on schedule to open the first week of November. However, Rodriguez says they are behind on their leasing. Once 50 percent of the available store fronts in the expansion are leased, then, he says, there will be room to celebrate.
For now, city officials are continuing to work toward solutions for the decrease in Mexican shoppers. Earlier this year, they launched “Always Amigos,” a campaign to highlight the long relationship between McAllen and Mexico and detract from the negative rhetoric out of Washington and the state.
“One thing that’s for certain for us, is some of the things that you hear from Austin and D.C. … you know, that’s not our message. It just isn’t,” said Rodriguez.
Still, the city has had to walk a fine line when it comes to Mexico and the U.S. Last week, a resolution in opposition to the proposed border wall passed, but not without much consideration about the consequences of such an act.
“We look at that issue from a much more global perspective… Nowadays, it’s just not real smart to tell D.C. or Austin that they’re stupid because they got a bigger hammer than we do,” said Rodriguez. “So, we have to be very careful about that. We have to ensure that we treat people south of the border with dignity and respect, but we also have to agree that we need to protect our border. And, there’s got to be a way to balance that.”
Rodriguez did note that the domestic side of things were going well. Construction in McAllen has been strong for three years in a row, a positive trend he attributes to confidence in the city.
“We have a lot of blessings in McAllen, and … that double-edged sword is something that we are dealing with right now,” Rodriguez said. “And, we’ll get past it as we always have.”