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The State of the RGV Real Estate and Construction Market forum was hosted by the newly-formed Rio Grande Valley Society for Marketing Professional Services and held at the offices of the McAllen Chamber of Commerce.

MCALLEN, RGV – The prospect of SpaceX building rockets in the Rio Grande Valley for its launch site at Boca Chica beach was discussed at a recent State of the RGV Real Estate and Construction Market forum.

The four speakers at the event were Ramiro Garza, principal at Noble Development, Mike Blum, partner in NAI Global, Oscar Garcia, principal at Jacobs Engineering Group, and Raudel Garza, CEO of Harlingen Economic Development Corporation. All four agreed that in order to attract new businesses, the Valley needs to have good schools, access to healthcare and better infrastructure.

The event was hosted by the newly-formed Rio Grande Valley Society for Marketing Professional Services and held at the offices of the McAllen Chamber of Commerce.

Discussion about SpaceX and the commercial space industry began when Garcia said his company, Jacobs, works in the industry, not only with NASA but also companies like SpaceX, Virgin Galactic, and United Launch Alliance (ULA). Garcia said, “dynamic changes” are on the way.

“If you look at the commercial space side you are seeing both NASA and the DoD (Department of Defense) move away from handling a lot of that industry. They are throwing that over the fence, so, thus comes in the ULAs and the SpaceXs of the world, to be able to take up that,” Garcia said.

“They (NASA) shut up the space program. Well, they still need someone to take something up to the space center or to the space station. They still need satellites deployed. They are creating a whole new industry on the commercial space side.”

Garcia said the SpaceX rocket launch site on Boca Chica beach “is the first, privately-owned, vertical, commercially-owned, big boy rocket site.” He said it was incredible to think it was being built in the Rio Grande Valley.

“That is happening in the RGV, that is happening in Brownsville. What does that mean downstream? They are going to be launching rockets,” Garcia said.

Billionaire entrepreneur Elon Musk owns SpaceX. Musk won praise from Garcia, who speculated on the possibility of SpaceX’s business model changing.

“Elon Musk has been the Henry Ford of this time. He wants to vertically integrate his entire world. He wants to own rubber tree plantations all the way up to producing that rocket,” Garcia said. “But when you talk to the procurement folks, they are saying we cannot sustain ourselves, we have to change our model or else we are not going to be able to produce enough rockets to be able to launch one every month. And we are not going to be able to produce the Falcon Heavy’s that we need to in order to really make our margins, to be able to get where we want.”

Garcia said procurement is likely going to have to change, which provides the Valley a great opportunity.

“We are going to have to change the way we do procurement, which means, in my mind, that they are going to move to an Apple or Sysco type of model where you have organizations that are responsible for design and then you have an organization responsible for manufacturing,” Garcia said.

“This, I think, puts the RGV in a great position to be able to receive that type of industry here. Because, if you can launch the rockets here, then you can build the rockets here. At some point, you are going to have to assemble them. We know that within the next five to ten years, that, once SpaceX starts to move to the Falcon Heavy, that construction and assembly has to happen here, just because of the size of those rockets.”

Garcia said he sits on biweekly, commercial space industry conversations. “When you hear other people talk about all the things that are happening in Cameron County and all the things that are happening in the RGV, I am getting excited and I also start to sweat. Wow, we really have to get our stuff together. What is that dramatic shift going to look like? We need better schools, we need better infrastructure, and a better push from the public side to anticipate where that industry is going. And that is just commercial space.”

Blum, of NAI Global, agreed with Garcia that the potential of impact of SpaceX on the Valley is immense. Blum said the Valley’s population is bigger than nine states in the union. He said the Valley does not realize the power it has. He said many in the Valley do not realize what SpaceX could bring.

“They don’t get what Space X means 20 years for the Valley from today. I was born and raised in Houston. In 1964, I graduated from high school in Space City USA, which was Clear Lake. It was a rice paddy. They don’t launch rockets from Space City USA. But, look at Clear Lake, Texas, today. It has created unbelievable economic activity in that particular part of the Houston metropolitan area,” Blum said.

“It is not knowable, in my opinion, what SpaceX could mean for the Valley. You (Garcia) just said some things I did not know about. I know Elon Musk has grand vision. If you did not see the TV program on the Discovery Channel about going to Mars, the reason there was a movie was because of him. He made that movie happen. It was a fascinating look at what it is going to take for America to get to Mars. It is a 2030 challenge. But he knows you have got to have a rocket that you can reuse in order to have the economy of scale to have this thing… anyway, I am extraordinarily optimistic.”

Population growth

Blum pointed out that the Valley’s population is currently 1.3 to 1.4 million. By 2040 it is projected to be 2.5 million, he said. The population of the region, according to the Cameron County Regional Mobility Authority, is about three million. This includes Reynosa, Matamoros and Rio Bravo. “It will be seven million, binationally, by 2040. Half of that is on our side. That is a lot of schools, a lot of roads and a lot of public infrastructure, police and fire stations and on and on and on. There is no reason it will not be that way,” Blum said.

Ramiro Garza, of Noble Development, said he, like Blum and Garcia, is “very optimistic” about the future of the Valley. He pointed to projections from UT-Rio Grande Valley which show that half the Valley’s population will live north of State Highway 107 in the years to come. “You can only imagine what that means, in terms of infrastructure,” Ramiro Garza said.

Ramiro Garza said he still believes the Valley needs to merge its two metropolitan statistical areas. One is currently titled McAllen-Edinburg-Mission. The other is titled Brownsville-Harlingen. “We need to have one MSA for the region. McAllen is the 66th largest MSA in the country. Brownsville is 126. Together, we would be in Top 50. It is critical for our region.”

From the audience, Eli Olivarez, a designer of high end retail space, bemoaned the fact that bond issues are often voted down in the Valley. “How can we deal with the infrastructure and expansion (if the bonds fail)?” Olivarez asked. “It is a challenge for all of us. What is our message. We have to take responsibility. If we cannot get them passed, where is the money going to come from. We are so focused on no taxes. We have to educate our population that taxes will create a better lifestyle.”

Asked to respond to Olivarez’s point, Raudel Garza of Harlingen EDC, said the answer lies in more public-private partnerships. He pointed to two positive developments in his city – construction of a new bus terminal and imposing a fee on water utility bills to pay for key road improvements.

Brian Godinez, of the Rio Grande Valley Society for Marketing Professional Services, said his group has two upcoming forums. One in May will focus on SpaceX, Godinez said, and one in June will look at ways in which local talent can be hired for big projects. The latter, he said, will be held in conjunction with the Rio Grande Valley Partnership.

Editor’s Note: The main image accompanying this story shows SpaceX’s 53,360-square-foot facility in Port Canaveral, Florida.