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Guillermo Canedo Sternenfels has been Edinburg's business recruitment consultant in Monterrey, Mexico. He is pictured in a file photo from September, 2012. (Photo: RGG/Steve Taylor)

EDINBURG, RGV – Edinburg Economic Development Corporation has decided to close its Monterrey, Mexico, office.

The decision was made during a budget workshop held on Thursday. It means the roughly $100,000 a year paid to business recruiter Guillermo Canedo Sternenfels will cease. Canedo was credited with helping bring Brazilian denim manufacturer Santana Textiles to Edinburg.

Mark Iglesias
Mark Iglesias

Edinburg EDC President Mark Iglesias said the decision to close the Monterrey office has nothing to do with not wanting any more Mexican investors. Far from it, he said. Rather, he said, the decision was based on the legal opinion of the EDC’s attorney, David Flores.

“When we were reviewing all the budget items we noticed we did not have a contract with him (Canedo). The contract was originally with the City of Edinburg, the Edinburg Chamber and the EDC. A few years ago the City and the Chamber stopped funding him,” Iglesias said. “Our lawyer indicated to us that if we continued funding the Monterrey office the way it was we would be in a potential violation worth $10,000 every time we paid him. We decided to cut that and agreed to look at it again later on. We may look at initiating another contract with him later on.”

Iglesias said Edinburg was very much “open for business” when it comes to luring Mexican investors to the city.

“We are always looking to partner with our closest neighbor. We would like to continue that. It is just the way it was structured, since we are a relatively new board, we wanted to start fresh and start looking at something else in that area,” Iglesias said. Asked how much Canedo was being paid, Iglesias said that on average it was about $100,000 a year. “He could be brought back. He knows the area.”

Asked what might happen, should the EDC get a call from a prospective investor in the interior of Mexico once the Monterrey office is closed, Iglesias said: “That is a good question. We would have to get together as a team and see how we respond to that. We are open for business with prospective investors from Mexico.”

Edinburg EDC’s new budget comes out at about $6.5 million. Iglesias said about $5.1 million of this comes from local sales tax collections.

Much of the media focus surrounding this year’s budget deliberations has focused on funding cuts for Valley Initiative for Development and Advancement, a workforce training project championed by Valley Interfaith. On a 3-2 vote, the EDC board voted to cut VIDA funding from $292,000 to $100,000, subject to a legal opinion from the state’s attorney general. Iglesias said the decision to trim the amount given to VIDA was also based on legal opinion.

“It is not that we have a smaller budget. It is just that as we all are new board members, four of the five are new, and since I was appointed chairman I told our lawyer, I want to look into everything to make sure everything is correct, everything is legal and that we are able to fund VIDA the way we are funding it now,” Iglesias said. “His finding was that it was not legal to fund VIDA the way we were funding them. He did suggest that we could fund VIDA through our marketing budget. State law requires that we only spend ten percent of our budget on marketing. So, that is a smaller budget. We were trying to figure out what was a reasonable amount to fund VIDA through our marketing budget. On condition the state says we can actually do it, we will fund VIDA through that.”

Iglesias dismissed claims that the decision to cut funding for VIDA was made for political reasons. “I know a lot of people were indicating it was political, that it was a political move but there was no political motivation at all. It was all because of legal concerns,” Iglesias said.

Asked for his observations on how the Edinburg EDC budget process went, given that four of the five board members are new, Iglesias said: “It is a huge learning curve, learning where the money comes from, where it goes, where we can spend money and where we can’t. One of the things we have to be cognizant of is that the surrounding cities, McAllen, Mission, Pharr, Weslaco, Harlingen, are all in competition with us for the same kinds of businesses. We want to have room in our budget to attract new businesses, manufacturing, warehousing, to come to Edinburg, so we can compete with these other cities. We want to make sure that we are in a position where we are capable, should someone major come to our city, of coming to the table and offering them a proposal that would make them choose to Edinburg.”

The five Edinburg EDC board members are Mark Iglesias, its president, Harvey Rodriguez, its vice president, Edinburg Mayor Richard Garcia, Ellie M. Torres, its secretary and treasurer, and Richard W. Ruppert.