BROWNSVILLE, RGV – Speaking at a Rio South Texas Economic Council board meeting, Eddie Campirano gave details about a new franchise agreement the Port of Brownsville plans to enter into with a commercial real estate firm.
Campirano is port director of Brownsville Navigation District and chairman of the board for RSTEC.
“This is something new for us,” Campirano explained. “The management and operation of the BRG Railroad will be undertaken by a private concern but more importantly it also involves the development of a 1,200-acre industrial park. This is a partnership with a large capital company by the name of the Broe Group.”
A 73-page franchise lists an agreement between the Brownsville Navigation District and Omnitrax, Inc. The agreement states that once 80 percent of the 1,200-acre industrial park has been built out, the two parties will enter into negotiations to allow Omnitrax to develop a further 2,000 acres for industrial use.
Campirano said the Broe Group, which owns Omnitrax, is a private company that deals primarily in commercial real estate development, transportation and energy. He said he could see “great synergies” between Broe and the Port of Brownsville.
“One of the companies they (Broe) operate is Omnitrax, which has 17 short line railroads around the country. So, they are one of the largest private owners of railroads. That obviously fits in really nicely with our synergies of rail service. And, since they are a real estate developer, obviously industrial parks are another big issue for them.”
Campirano said the Broe Group also owns an energy company, Great Western. He pointed out that the energy industry is going to play a more significant role in the Rio Grande Valley in the coming months and years, partly because of the impact of Eagle Ford Shale, partly because of Tamaulipas’ version of Eagle Ford Shale, in the Burgos Basin, and partly because of oil and gas exploration and production in the Gulf of Mexico. “We are going to see a lot more energy play down here,” Campirano predicted.
One of the biggest benefits of the franchise agreement, Campirano said, is the opportunity for the Port of Brownsville to leverage its land with private sector capital investment. “We are not selling the railroad. That is usually the first thing that is asked. No, we are not. For us it represents an opportunity to leverage with someone that has certain resources that we do not have, to grow the railroad, to service the port customers, grow the port business, but more importantly merge that with the opportunity to have private sector investment development of the industrial park.”
Campirano said the Broe Group will have to spend its own money in the “common area element units” of developing the industrial park, including the master planning. “The Port will always maintain approval over any of the major decisions,” he explained.
Another part of the agreement involves the development of a 227-acre incubation center that will be used to “grow small businesses in the port that may be too small to lease their own site or too small to obtain the capital to build a rail spur or provide transportation services,” Campirano said.
Three public hearings on the franchise agreement are being held. The first took place last Wednesday. The second is on May 1 and the third on May 8. “Each of those public hearings has to be followed by natural consideration of the franchise so there has to be three separate votes,” Campirano said. “The reason we chose a franchise route is because it does provide more opportunity for public input. We want this process to be very transparent.”
Campirano added: “It does, obviously, represent a big opportunity for the Port. We will have representation in Mexico with an office in Mexico City. The marketing power of that group both from an industrial development standpoint and attracting industry from a marketing standpoint, we think will bode well for the area.”
In an interview with the Guardian later, Campirano said: “The franchise covers the operation and management of the railroad. We are not selling it. But, more importantly, it also includes development of the industrial park. These two things are not independent. They are mutual of one another. This is one franchise that covers and governs how both of those things are going to work. If one of those things fails it would breach the agreement and the whole thing falls apart. It is very important that they are integrated and part of one large project.”