gran plaza market study - border

Transcription

Research Highlights
Mexicali is that state capital of Baja California.
There are 12 Universities in Mexicali.
Over 10 million Mexican citizens are between 15 to 19 years old, and will soon be
entering the workforce to become consumers.
Gran Plaza’s Mexican trade area population grew by 49.6% from 1990 to 2000,
and is expected to continue. (California’s growth rate for the same period was
13.82%.)
Calexico Points of Entry (POE) into the US include the primary POE (Calexico
West) and the commercial port 10 miles to the east (Calexico East).
Approximately 60% of Mexicali residents have visas permitting cross border
travel. The total number of northbound crossings in 2007 equal just over 23.35
million, making Calexico the 3rd largest POE into the US from Mexico. Of the 1.38
million people entering the US at Calexico West each month, 33% are
pedestrian.
Clothing accounts for approximately 46% of total expenditures by Mexican
visitors in California.
Estimated 2004 expenditures of Mexican visitors entering the US in Imperial
County were $1.037 billion (by comparison, expenditures in El Paso County were
$944 million). Yuma (also within the Gran Plaza trade area) adds another $306
million.
In 2007, Mexicans held 13 million credit card accounts (2.5 times more than
2002). Credit card transactions have grown annually at approximately 10%.
Introduction
Due to the challenges of multi-national border demographic research, Epsteen
& Associates has compiled this research package to assist retailers with an
analysis of the Gran Plaza Outlets trade area. The data has been derived from
numerous sources believed to be reliable, and includes comparisons with
familiar US / Mexico border outlet retail trade areas.
Gran Plaza Outlets is a factory outlet center proposed in Calexico, CA, USA,
located adjacent to the primary border crossing into Mexicali, Baja CA, Mexico.
The initial Phase of the project is approximately 250,000 square feet, and upon
completion of Phase II, the center will be approximately 500,000 square feet.
The project is being developed by Los Angeles, CA, based Charles Company.
Leasing is by Epsteen & Associates in conjunction with marketing management
and promotion being handled by EWB.
In establishing Mexican trade areas for comparable analysis of border outlet
sites, the following Mexican cities for each trade area were used: (Cities over
120 miles away from the border were not included in the analysis)
Outlet
Cities
Gran Plaza Outlets
Las Americas Premium Outlets
Outlet Shoppes at El Paso
Laredo (proposed)
Rio Grande Valley Premium Outlets
Mexicali and San Luis Rio Colorado
Tijuana, Rosarito, Ensenada, and Tecate
Ciudad Juarez
Nuevo Laredo
Reynosa, Valle Hermosa, Rio Bravo, and
Matamoros
Executive Summary
A Booming Population
Mexico is undergoing a demographic transformation because of its young and
growing population. More than 10 million Mexicans are between the ages of 15
to 19 years old, and will soon be entering the workforce to become active
consumers.
Gran Plaza’s and Las Americas’ trade area in Mexico experienced population
growth of 49.76% from 1990 to 2000, which is approximately double any other
Mexican border outlet trade area. These growth rates are expected to continue
for the next 10 years. (California’s growth rate for the same period was 13.82%.)
Mexicali is the 3rd largest Mexican border city as well as the 12th largest city in the
entire country of Mexico.
Imperial County’s 2007 population growth was the highest in California at 3.4%
annual.
Northbound Border Crossings
Calexico is currently the 5th largest single Point of Entry (POE) on the US-Mexico
border, with 16.265 million crossings in 2007.
This Point of Entry is currently being planned for an expansion which will double
its vehicular and triple its pedestrian capacity; bringing crossings up to 37.77
million (approximately equal to #2 El Paso). Ground breaking has been
announced for Summer 2011.
Pedestrian crossings have increased by 31% from 2006 to 2007 in Calexico. This is
likely a result of increased vehicle wait times.
Actual current border crossings affecting the site include the commercial POE
10 miles east (Calexico East) due to excess demand for Calexico (West). This
crossing adds 7.8 million, making the total current crossings over 23.35 million (3rd
largest) in 2007.
The Mexican Shopper
Shopping is the primary reason for visiting the U.S. for 42-68% of Mexican visitors in
California.
Of total expenditures by Mexican visitors, clothing accounts for approximately
46% of purchases in California. Food and grocery expenditures follow at
approximately 37%.
$944 million). Within the Gran Plaza trade area is Yuma, which adds another
$306 million in expenditures.
Mexico is under-retailed, having 1.6 sf of retail space per capita, compared to
42.9 sf per capita in the US. This holds true even when adjusted for purchasing
power parity.
Economy
Mexicali is the state capital of Baja California.
The Mexicali / Imperial County region has become a beacon for clean and high
technology investment as exemplified by ING Clarion’s Silicon Border project
which recently secured a $3.5 billion investment from solar cell manufacturer, QCells.
Over 200 maquiladoras operate in Mexicali, and include companies such as:
Honeywell, Gulfstream, Cardinal Health, BF Goodrich’s aerospace division,
Mitsubishi, Daewoo, Kenworth, Black & Decker and Sony, among others.
Mexicali is also home to many food processing plants including: Nestle, Jumex,
Bimbo, Coca-Cola, and Sabritas, among others.
As a horticulture center, Mexicali hosts the Agrobaja convention every year
attracting farming professionals from the US and Mexico. Common crops grown
in Mexicali are scallion, green onion, asparagus, cotton, alfalfa, wheat, and
corn, among others.
The Mega-Region Initiative was funded in 2008 to assess infrastructure and
workforce needs in Cleantech, Logistics, Specialized Manufacturing,
Construction Materials, and applied Biotechnology in San Diego, Imperial Valley
and Baja California, for policy and initiative recommendations to nurture growth
in the above industries.
Renewable energies and bio-fuels will promote industry and regional growth
with clean inexpensive energy.
Mexicali’s Residents Are Well Educated
Mexicali is home to 12 Universities.
37.09% of the Gran Plaza trade area in Mexico over the age of 15 has a high
school or greater education. (Averages are approximately 5% lower in other
border outlet trade areas.)
The Gran Plaza trade area in Mexico also ranks #1 in population over the age of
15 with at least an eighth grade education (24.6%). (Note – Does not include
population with secondary or university education.)
The Gran Plaza trade area in Mexico achieves the top ranking again among
border outlet trade areas, with populations between the age of 15 and 24
currently attending school (39.94%). (Averages are approximately 5% lower in
other border outlet trade areas.)
Imperial County Recreation
Imperial County’s population virtually doubles from vacationers during certain
periods of the year from outdoor enthusiasts and snowbirds. Over a typical
Thanksgiving holiday about 200,000 visitors come to Imperial County in just 4
days.
The Imperial Sand Dunes Recreation Area attracts an estimated 1.4 million
visitors a year according to the Bureau of Land Management.
Average daytime temperature high in November is 78 degrees Fahrenheit, and
70 in December and January.
Mexican Standards of Living
The Gran Plaza trade area has the highest standard of living among Mexico’s
border outlet regions as measured by the Border Human Development Index
(BHDI).
BHDI is derived from per capita income, education and health indices for
measurement of a region’s overall standard of living.
BHDI of Mexican border regions is improving at a pace exceeding national
averages.
In 2007, Mexican residents held 13 million credit card accounts, which are 2.5
times more than existed in 2002. Credit card transactions have grown annually
at approximately 10%.
Mexicali’s Income
Gran Plaza’s trade area in Mexico has the 3rd highest Per Capita Income of the
Mexican border outlet trade areas.
Gran Plaza Outlets trade area in Mexico has the highest percentage of highly
paid workers when compared to other Mexican border outlet trade areas.
Highly paid workers in Mexico are described as earning over 5 times the national
minimum wage.
Gran Plaza Outlets
Lake
Lake Arrowhead
Arrowhead
Los
Los Angeles
Angeles
Norwalk
Norwalk
San
San Bernardino
Bernardino
Corona
Corona
Long Beach
Beach
Long
Long
Beach
Long
Beach
Beach
95
l
l
Cabazon Outlets
15
Irvine
Irvine
Yucca
Yucca Valley
Valley
Banning
Banning
Riverside
Riverside
Riverside
Riverside
Riverside
Riverside
Hemet
Hemet
Salome
Salome
Quartzsite
Quartzsite
Blythe
Blythe
10
Mecca
Mecca
Salton
Salton Sea
Sea
Fallbrook
Fallbrook
Borrego
Borrego Springs
Springs
Oceanside
Oceanside
Calipatria
Calipatria
15
San
San Diego
Diego
78
Julian
Julian
Brawley
Brawley
l
l
Viejas Outlet Center
l
l
Las Americas Premium Outlet Center
Tijuana
Tijuana
98
8
2
El
El Centro
Centro
Calexico
Calexico
MEXICALI
MEXICALI
n
Sun
Sun City
City
Phoenix
Phoenix
Chandler
Chandler
Arizona
Arizona
Maricopa
Maricopa
Gila
Gila Bend
Bend
8
Yuma
Tecolote
Tecolote Yuma
Wellton
Wellton
Gran Plaza Outlets
Rosarito
Rosarito
Pacific
Pacific Ocean
Ocean
Buckeye
Buckeye
Ajo
Ajo
Estacion
Estacion Coahuila
Coahuila
Guadalupe
Guadalupe
2
Arroyo
Arroyo Del
Del Sauz
Sauz
1 Ensenada
Ensenada
Sonoyta
Sonoyta
5
Cabo
Cabo Punta
Punta Banda
Banda
Sells
Sells
Colonia
Colonia Reforma
Reforma
El
El Alamo
Alamo
Quitovac
Quitovac
Lazaro
Lazaro Cardenas
Cardenas
3
Erendria
Erendria
Colnett
Colnett
Gulf
Gulf of
of California
California
Buenavista
Buenavista
Logos are for identification purposes only and may be trademarks of their respective companies.
5
Black
Black Canyon
Canyon City
City
Wickenburg
60 Wickenburg
New
New River
River
rr
R
Riivvee
rraaddoo
C
Coolloo
Avalon
Avalon
Congress
Congress
Parker
Parker
California
California
Indio
Indio
Laguna
Laguna Niguel
Niguel Temecula
Temecula
Cordes
Cordes Lakes
Lakes
Parker
Parker Strip
Strip
Big
Big River
River
Lat: 32.1322 Lon: -114.481 Zoom: 300 mi
Simi
Simi Valley
Valley
El
El Plomo
Plomo
San
San Felipe
Felipe
Colonia
Colonia Camalu
Camalu
Molino
Molino Viejo
Viejo
MEXICO
MEXICO
Puertecitos
Puertecitos
Gran Plaza Outlets Trade Area
La
La Ciene
Ciene
El
El Aguajito
Aguajito
This map was produced using data from private and government sources deemed to be reliable. The information herein is provided without representation
or warranty.
Puerto
Puerto
San
San Augustin
Augustin
©2008, SITES USA Inc., Chandler, AZ (480) 491-1112. All Rights Reserved.
z
z
#$
z
PHASE 2
PHASE 1
Mexicali, Baja California, Mexico
Pedestrian
Point of Entry
z
Pedestrian Path of Travel = 0.45 miles
Calexico Int’l Aiport
Highway 111
Calexico, CA, United States
t
Cesar Chavez S
N
!
é
Ol
A new customer is to be found
on the border of Mexico and
California in the twin cities of
Calexico and Mexicali. With a
combined population of over
1.75 million within the trade
area, it is arguably the most
prosperous of the border cities.
But the numbers don’t
tell the whole story ...
C a l e x i co, C A
Where Old Mexico Meets New California
The Mexican shoppers
crossing the border
are brand-driven
and fashion-seeking.
These are the modern day Mexican
consumers who demand the same
level of brand and value as their
north-of-the-border counterparts.
A prosperous university city with
a population of over one million,
Mexicali is the State Capital of Baja
California, replete with tourism and
both American and Mexican industry.
Mexicali has a vibrant middle class of
active consumers seeking to acquire
American and International brands.
Calexico, on the American side
of the border, is the gateway to
Imperial County, the fastest growing
county in California. The CalexicoMexicali border area’s economy
is based on a combination of
agriculture, renewable energies,
government contractors, education
(12 universities in Mexicali), high-tech
and clean manufacturing, creating
a market of highly-skilled, educated
and brand-oriented consumers.
Gran Plaza Outlets, situated at the border crossing for
optimal access and visibility, will provide both Mexican and American
shoppers with an exciting shopping experience close to home.
F Phase I opening Spring 2012
F 1.2 million population within just 25 miles
F E xclusive trade area population of over 1.75 million
served by no other nearby outlet center
F Educated, middle class Mexican national population of over
1 million, approximately 60% with daily entry visa to US
F Mexicali is the third most populated border city in Mexico
F 47,000 daily northbound border crossings projected to double
F Border expansion breaking ground Summer 2011
Two countries ... but a
common shopping point
Third
biggest
ty
border ci
!
in Mexico
z
z
Pedestrian Path of Travel = 0.45 miles
#$
z
PHASE 2
PHASE 1
Mexicali, Baja California, Mexico
Calexico Int’l Aiport
Highway 111
Calexico, CA, United States
t
Cesar Chavez S
N
Gran Plaza Outlets will be situated
directly adjacent to one of the busiest
border crossings in
the United States.
The Calexico/Mexicali
Point of Entry handles
47,000 average daily
northbound crossings as
a result of approximately
60% of the population
Pedestrian
Point of Entry
of Mexicali holding daily
z
visas enabling ready
access. Breaking ground
in Summer 2011, the
border Point of Entry
will undergo a major
expansion to increase
capacity for daily
crossings to 90,000.
5
C a l e x i co, C A
www.granplazaoutlets.com
For leasing information, please contact Joe Wojdowski [CA Lic: 01237995], Epsteen & Associates at 1- 858-536-8383 or [email protected].
Developer: The Charles Company Marketing by: EWB Development
Calexico, California, USA
Hwy 98
Hwy 111
avez y)
r Ch
tr
Cesa order en
re b
(futu
Calexico International Airport
order
SIT
E
International B
USA & Mexico
Border Crossing
**Both Under Expansion**
Plaza
Cachanilla
Mall
Mexicali, Baja CA, Mexico
(Population 1,000,000)
Regional Shopping Within 50 Miles
Imperial Valley Mall – 10 miles north
Anchors: Dillard’s, Macy’s, JC Penney, Sears & Ultrastar
Cinema
The information contained herein, while obtained from sources believed to be reliable is not guaranteed.
Population
A Booming Population
Mexico is undergoing a demographic transformation because of its young and
growing population. More than 10 million Mexicans are between the ages of 15
to 19 years old, and will soon be entering the workforce to become active
consumers.
Gran Plaza’s and Las Americas’ trade area in Mexico experienced population
for the next 10 years. (California’s growth rate for the same period was 13.82%.)
Mexicali is the 3rd largest Mexican border city as well as the 12th largest city in the
entire country of Mexico.
Imperial County’s 2007 population growth was the highest in California at 3.4%
annual.
P o pu l a t io n b y A g e D i s t r i b ut i on i n Me xi co
Mexico is undergoing a demographic transformation
because of its young and growing population. More than
10 million Mexican citizens are between the ages of 15
to 19 years old, and will soon be entering the workforce to
become active consumers.
Population Growth in Border Outlet Trade Areas in Mexico
Percentage Change in Population of Mexican Border States
From 1990 to 2000
60.00%
50.00%
49.76%
49.76%
40.00%
30.00%
25.02%
22.39%
22.39%
Laredo
Rio Grande
Valley
Premium
Outlets
20.00%
10.00%
0.00%
Gran Plaza
Outlets
Las Americas The Outlet
Premium
Shoppes at El
Outlets
Paso
Gran Plaza's and Las Americas' trade area in Mexico experienced population
for the next 10 years. (California's growth rate for the same period was
13.82%.)
Source: US Census Bureau Decennial Census 2000; INEGI XII General Population and Housing Survey, 2000
Tijuana, Mx
Mexicali, Mx
San Luis Rio Colorado, Mx
Juaréz, Mx
Nuevo Laredo, Mx
Reynosa, Mx
Matamoras, Mx
Monterrey, Mx
Site Map
US Mexico Border
Markets Comparison
EWB Development
RadiusOctober
Rings 20,
30/60/90
2008 Miles
©2007 ESRI
On-demand reports and maps from Business Analyst Online. Order at www.esri.com/bao or call 800-292-2224
Page 1 of 1
US-Mexico Border Markets Comparison
Radius Rings 30/60/90 Miles
Combined US and Mexican Demographics
Outlet
Population
30 miles
60 miles
90 Miles
Gran Plaza
Outlets
Las
Americas
Premium
Outlets
1,050,238
1,394,956
2,477,959
Per Capita Income
30 Miles $
14,531
60 Miles $
14,548
90 Miles $
19,566
The Outlet
Shoppes at
El Paso
3,485,300
4,629,142
6,689,516
$
$
$
23,500
25,100
27,383
Laredo
2,175,728
2,282,328
2,375,019
$
$
$
15,618
15,693
15,739
Rio Grande
Valley
Premium
Outlets
601,966
625,022
739,746
$
$
$
12,407
12,429
12,197
1,517,406
2,309,359
2,423,388
$
$
$
12,307
11,592
11,459
Data Note: 2008 US popultion and per capita income data is derived from forecasts by Environmental Systems Research Institute, Inc (ESRI). Mexican population
and per capita income data is from Instituto Nacional de Estadistica y Geografia (INEGI): Marco Geostadistico Municipal 2005. Mexican per capita income data
has been converted into 2008 US dollars for comparison. Mexican population and per capita income figures were determined by taking the population and per
capita income of Mexican municipalities viewed as having an impact on border outlet projects lying within a 30, 60, and 90 mile radius.
US-Mexico Border Markets Comparison
Radius Rings 30/60/90 Miles
US Demographics
Outlet
Gran Plaza
Outlets
Population
30 miles
60 miles
90 Miles
Las
Americas
Premium
Outlets
154,276
341,918
1,424,921
Per Capita Income
30 Miles $
60 Miles $
90 Miles $
16,259
17,488
23,980
The Outlet
Shoppes at
El Paso
2,074,613
3,054,116
4,701,009
$
$
$
28,741
30,061
32,641
Laredo
862,390
968,990
1,061,681
$
$
$
17,052
17,072
17,055
Rio Grande
Valley
Premium
Outlets
246,139
269,195
383,919
$
$
$
13,193
13,177
12,507
990,518
1,213,472
1,265,308
$
$
$
13,070
12,447
12,351
Mexican Demographics
Outlet
Gran Plaza
Outlets
Population
30 miles
60 miles
90 Miles
Per Capita Income
30 Miles $
60 Miles $
90 Miles $
Las
Americas
Premium
Outlets
895,962
1,053,038
1,053,038*
14,233
13,594
13,594*
The Outlet
Shoppes at
El Paso
1,410,687
1,575,026
1,988,507
$
$
$
15,792
15,480
14,954
Laredo
1,313,338
1,313,338*
1,313,338*
$
$
$
14,676
14,676*
14,676*
Rio Grande
Valley
Premium
Outlets
355,827
355,827*
355,827*
$
$
$
11,863
11,863*
11,863*
526,888
1,095,887
1,158,080
$
$
$
10,874
10,645
10,484
Data Note: 2008 US popultion and per capita income data is derived from forecasts by Environmental Systems Research Institute, Inc (ESRI). Mexican population
and per capita income data is from Instituto Nacional de Estadistica y Geografia (INEGI): Marco Geostadistico Municipal 2005. Mexican per capita income data
has been converted into 2008 US dollars for comparison. Mexican population and per capita income figures were determined by taking the population and per
capita income of Mexican municipalities viewed as having an impact on border outlet projects lying within a 30, 60, and 90 mile radius .
*We could not find data on additional Mexican municipalities within the expanded radius having a material impact, and therefore there is no change in the data.
Calexico
801 W 2nd St
Calexico, CA 92231
©2007 ESRI
Gran Plaza Outlets Market Area
Site Map
Calexico/Mexicali
EWB Development
Radius Rings
October30/60/90
20, 2008 Miles
Latitude: 32.666156
Longitude: -115.50733
Page 1 of 1
San Ysidro
4211 Camino De La Plz
San Ysidro, CA 92173
©2007 ESRI
Las Americas
Market Area
Site Map
San
Ysidro
EWB Development
RadiusOctober
Rings 30/60/90
20, 2008 Miles
Latitude:
32.545461
Page 1 of 1
El Paso
7051 S Desert Blvd
Canutillo, TX 79835
©2007 ESRI
Site Map
The Outlet
at El Paso
EWBShoppes
Development
Radius Rings
October30/60/90
20, 2008 Miles
Latitude:
31.916219
Page 1 of 1
Laredo
Santa Maria Ave AT Zaragoza St
Laredo, TX 78040
©2007 ESRI
Site Map
Laredo
Market Area
EWB Development
Radius
Rings
30/60/90
Miles
October 20,
2008
Latitude: 27.502198
Page 1 of 1
Rio Grande
5001 E Expressway 83
Mercedes, TX 78570
©2007 ESRI
Rio Grande
Site Market
Map Area
Mercedes,
TX
EWB Development
Radius October
Rings 30/60/90
20, 2008 Miles
Latitude: 26.1605
Longitude: -97.8903
Page 1 of 1
Border Crossings
Northbound Border Crossings
Calexico is currently the 5th largest single Point of Entry (POE) on the US-Mexico
border, with 16.265 million crossings in 2007.
This Point of Entry is currently being planned for an expansion which will double
its vehicular and triple its pedestrian capacity; bringing crossings up to 37.77
million (approximately equal to #2 El Paso). Ground breaking has been
announced for Summer 2011.
Pedestrian crossings have increased by 31% from 2006 to 2007 in Calexico. This is
likely a result of increased vehicle wait times.
Actual current border crossings affecting the site include the commercial POE
10 miles east (Calexico East) due to excess demand for Calexico (West). This
crossing adds 7.8 million, making the total current crossings over 23.35 million (3rd
largest) in 2007.
Incoming Border Crossings From Mexico
Average Daily Northbound Border Crossings (2007)
140,000
126,615
120,000
100,000
88,026
80,000
63,708
60,000
49,297
40,000
20,000
10,271
0
Gran Plaza
Outlets
Premium Shoppes at El
Outlets
Paso
Laredo
Rio Grande
Valley
Premium
Outlets
Source: US Department of Transportation, Research, and Innovative Technology Administration, Bureau of Transportation Statistics, Border Crossing/Entry Data; based on data from US Department of
Homeland Security, Customs, and Border Protection, OMR database
Incoming Border Crossings From Mexico
Annual Northbound US Border Crossings (2007)
50,000,000
46,214,230
45,000,000
40,000,000
35,000,000
32,129,426
30,000,000
25,000,000
23,253,411
17,993,376
20,000,000
15,000,000
10,000,000
3,748,820
5,000,000
0
Gran Plaza
Outlets
Las
Americas
Premium
Outlets
The Outlet
Shoppes at
El Paso
Laredo
Rio Grande
Valley
Premium
Outlets
Source: US Department of Transportation, Research, and Innovative Technology Administration, Bureau of Transportation Statistics, Border Crossing/Entry Data; based on data from US Department of
Homeland Security, Customs, and Border Protection, OMR database
US Incoming Border Crossings From Mexico (2007)
Gran Plaza Outlets
Calexico, CA Border Crossing: .5 miles to center
Vehicle Passengers
Pedestrians
Annual Crossings Average Daily Crossings
10,949,336
29,998
5,290,977
14,496
Calexico, CA East Border Crossing: 10.08 miles to center
Vehicle Passengers
Pedestrians
Total
7,003,669
9,429
19,188
26
23,253,411
63,708
San Ysidro, CA Border Crossing: .67 miles to center
Vehicle Passengers
Pedestrians
Otay Mesa, CA East Border Crossing: 9.3 miles to center
Vehicle Passengers
Pedestrians
Total
28,390,175
77,781
7,756,569
21,251
8,656,559
1,410,927
23,717
3,866
46,214,230
126,615
The Outlet Shoppes at El Paso
El Paso, TX Border Crossing: 17.6 miles to center
Vehicle Passengers
Pedestrians
23,674,992
64,863
8,454,434
23,163
Total
32,129,426
88,026
Laredo
Laredo, TX Border Crossing: .5 miles to center
Vehicle Passengers
Pedestrians
Total
13,367,960
36,625
4,625,416
12,672
17,993,376
49,297
Progreso, TX Border Crossing: 10.5 miles to center
Vehicle Passengers
Pedestrians
Total
2,292,163
6,280
1,456,657
3,991
3,748,820
10,271
Source: US Department of Transportation, Research, and Innovative Technology Administration, Bureau of Transportation Statistics, Border Crossing/Entry Data; based on
data from US Department of Homeland Security, Customs, and Border Protection, OMR database
Border Crossings (Northbound) in the Greater Area
Gran Plaza Outlets
Calexico, CA Border Crossings: .5 miles to center
Personal Vehicle Passengers
Bus Passengers
Pedestrians
Total
10,949,336
29,998
25,425
70
5,290,977
14,496
16,265,738
44,564
Calexico East, CA Border Crossing: 10.08 miles to center
Bus Passengers
Pedestrians
Total
7,003,669
19,188
28,064
77
9,429
26
7,041,162
19,291
Andrade, CA Border Crossing: 55.7 miles to center
Bus Passengers
Pedestrians
Total
1,161,051
3,181
N/A
N/A
1,538,028
4,214
2,699,079
7,395
San Luis, AZ Border Crossing: 86.5 miles to center
Bus Passengers
Pedestrians
Total
4,712,950
12,912
1,758
5
2,939,684
8,054
7,654,392
20,971
San Ysidro, CA Border Crossing: .67 miles to center
Bus Passengers
Pedestrians
Total
Annual Crossings
Average Daily Crossings
28,390,175
77,781
875,450
2,398
7,756,569
21,251
101,431
37,022,194
Otay Mesa, CA Border Crossing: 9.3 miles to center
Bus Passengers
Pedestrians
Total
Annual Crossings
8,656,559
23,717
296,637
813
1,410,927
3,866
28,395
10,364,123
Tecate, CA Border Crossing: 45.3 miles to center
Bus Passengers
Pedestrians
Total
Annual Crossings
1,830,661
5,016
5,066
14
547,290
1,499
6,529
2,383,017
Source: US Department of Transportation, Research, and Innovative Technology Administration, Bureau of Transportation Statistics, Border Crossing/Entry Data; based
on data from US Department of Homeland Security, Customs, and Border Protection, OMR database
Santa Teresa, NM Border Crossing: 14.52 miles to center
Bus Passengers
Pedestrians
Total
1,287,207
3,527
4,307
12
23,824
65
3,604
1,315,338
El Paso, TX Border Crossing: 17.6 miles to center
Bus Passengers
Pedestrians
Total
23,674,992
64,863
442,191
1,211
8,454,434
23,163
32,571,617
89,237
Fabens, TX Border Crossing: 52.14 miles to center
Bus Passengers
Pedestrians
Total
1,192,362
3,267
N/A
N/A
21,472
59
1,213,834
3,326
Laredo
Laredo, TX Border Crossing: .5 miles to center
Bus Passengers
Pedestrians
Total
Annual Crossings
13,367,960
899,461
4,625,416
18,892,837
36,625
2,464
12,672
51,761
Source: US Department of Transportation, Research, and Innovative Technology Administration, Bureau of Transportation Statistics, Border Crossing/Entry Data; based on data
from US Department of Homeland Security, Customs, and Border Protection, OMR database
Roma, TX Border Crossing: 75.3 miles to center
Bus Passengers
Pedestrians
Total
2,491,986
6,827
29,713
81
301,524
826
2,823,223
7,735
Rio Grande City, TX Border Crossing: 59.4 miles to center
Bus Passengers
Pedestrians
Total
2,159,046
5,915
N/A
N/A
44,403
122
2,203,449
6,037
Hidalgo, TX Border Crossing: 29.1 miles to center
Bus Passengers
Pedestrians
Total
13,304,851
36,452
310,225
850
2,168,660
5,942
15,783,736
43,243
Progreso, TX Border Crossing: 10.5 miles to center
Bus Passengers
Pedestrians
Total
2,292,163
6,280
8,463
23
1,456,657
3,991
3,757,283
10,294
Brownsville, TX Border Crossing: 37.8 miles to center
Bus Passengers
Pedestrians
Total
13,062,876
35,789
59,638
163
3,096,911
8,485
16,219,425
44,437
Source: US Department of Transportation, Research, and Innovative Technology Administration, Bureau of Transportation Statistics, Border Crossing/Entry Data; based on data
from US Department of Homeland Security, Customs, and Border Protection, OMR database
Border Expansion
Current Conditions Redevelopment/Expansion Area
Gran Plaza Outlets
SITE
Commercial activity has been relocated to Calexico East.
All administration, pedestrian, and vehicular facilities are currently in the “Main Building.”
New Pedestrian Configuration
1/2 mile from
pedestrian entry in
“Main Building” to
Gran Plaza Outlets SITE
After expansion/renovation, the main building will accomodate pedestrians and buses only.
Pedestrian capacity will triple.
New Vehicular Configuration
Gran Plaza Outlets
SITE
After expansion/renovation all vehicles will travel through land area of former commercial port.
Vehicle capacity will double.
Traffic will utilize Cesar Chavez to mitigate effects to 111.
2
1
2
5
2
4
6
3
7
1
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8
Calexico west border station
1. Site Entry Landscape
5. Employee Parking
2. Water Collection Zones
6. Benefits Parking
3. Landscape Below
7. New River
4. Pedestrian Entry
8. New Bridge (3 Lanes)
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ARCHITECTURE
SITE PLAN
August 20, 2009
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ARCHITECTURE
LANDSCAPING PLAN
August 20, 2009
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9. Landform Articulation
ARCHITECTURE
Aerial View Looking North
August 20, 2009
1
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1. Entry Landscaping
ARCHITECTURE
Aerial View Looking South
August 20, 2009
Rockwood Avenue
Paulin Avenue
First Avenue
Pedestrian
Building
ARCHITECTURE
Pedestrian Entry Plaza
August 20, 2009
NB Auto
Primary Inspection
Administration
Building
NB Auto
Pre-Primary Inspection
ARCHITECTURE
Northbound Auto Inspection
August 20, 2009
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Second Avenue
Employee
Parking
SB
Inspection
ARCHITECTURE
Southbound to Mexico
August 20, 2009
Mexican Shopper
The Mexican Shopper
Shopping is the primary reason for visiting the U.S. for 42-68% of Mexican visitors in
California.
Of total expenditures by Mexican visitors, clothing accounts for approximately
46% of purchases in California. Food and grocery expenditures follow at
approximately 37%.
$944 million). Within the Gran Plaza trade area is Yuma, which adds another
$306 million in expenditures.
Mexico is under-retailed, having 1.6 sf of retail space per capita, compared to
42.9 sf per capita in the US. This holds true even when adjusted for purchasing
power parity.
The Economic Impact of Mexican Visitors
Along the U.S.-Mexico Border: A Research Synthesis
Suad Ghaddar
Research Associate, Center for Border Economic Studies
University of Texas -Pan American
[email protected]
Cynthia J. Brown
Director, Center for Border Economic Studies
Associate Professor, Department of Economics and Finance
University of Texas -Pan American
[email protected]
ABSTRACT: The U.S.-Mexico border region hosts an influx of visitors who cross
on a regular basis from Mexico to shop, socialize, vacation and seek a multitude of
services in U.S. border communities. Based on a synthesis of regional research and
on input-output analysis, Mexican visitors’ expenditures along the U.S.-Mexico
border generate an estimated eight to nine billion dollars in output (sales) and help
support more than 150,000 jobs.
December 2005
I. INTRODUCTION
Mexican visitors constitute an important component in the economy of communities
along the U.S.-Mexico border. These visitors enter the U.S. regularly for shopping,
tourism, work, and socialization with family and friends. In the process, a considerable
amount of money is spent on a multitude of items (groceries, clothing, appliances,
furniture, etc.) and services (hotels, restaurants, medical facilities, etc.). Several studies
have been undertaken to examine and evaluate this cross-border shopping activity at the
regional level. This paper synthesizes the findings of these studies, outlines a profile of
the typical Mexican crosser, provides estimates of direct expenditures by Mexican
visitors and measures the economic impact of these expenditures in local communities.
The paper also hopes to trigger interest in a comprehensive study of Mexican visitors
along the U.S. southern border.
To achieve these objectives, several studies in the border states of Arizona (Charney and
Pavlakovich-Kochi, 2002), California (Cox, 1998; Kada and Kiy, 2004; San Diego
Association of Governments, 2005; San Diego Dialogue, 1994; Sierra López and Serrano
Contreras, 2002) and Texas (Ghaddar et al., 2004; Guo et al., 2005; Simpson et al., 2005;
Vincent et al., 2003) were analyzed. The data extracted from these studies provided a
profile of Mexican shoppers and an estimate of their expenditures, which were then
analyzed using an input-output model to arrive at the economic impact to border
communities. Results reveal a substantial overall impact in the range of eight to nine
billion dollars along the U.S.-Mexico border.
1
The next section provides some background information on the U.S. -Mexico border
region followed by a review of the data obtained from regional studies. Section IV
discusses the methodology and reports the results. The last section concludes.
II. BACKGROUND
The U.S. -Mexico border extends 1,952 miles (3,141 km) from San Diego, California on
the Pacific to Brownsville, Texas on the Gulf of Mexico. The region is home to more
than 12 million people who live primarily in sister cities on both sides of the political
borderline. A high level of interaction between the two sides takes place on a daily basis
as evidenced by the large volume of crossings that occur. People cross frequently from
side to side, either in cars, buses, and/or on foot. In 2004, the number of northbound
crossers exceeded 240 million people, the majority of whom, around 80 percent, crossed
in personal vehicles. Estimates from border officials indicate that at least half of this
crossing activity is attributed to Mexican nationals who enter the U.S. using a laser visa1
or some other form of legal documentation (I-94, resident alien card, etc.). U.S. citizens
comprise the other half. The Texas border is the busiest in terms of crossings by
passengers in private vehicles, buses and on foot. The California border is a close second
followed by the Arizona border. Minimal crossing activity takes place along the New
Mexico border line (Table 1).
1
A laser visa is a type of visa issued to Mexican citizens allowing them to stay in the U.S. for up to 30 days
and to travel within 25 miles of the border (75 miles in the case of Arizona).
2
Port of Entry
Arizona
California
Table 1
2004 U.S.-Mexico Border Crossings - Northbound
(in thousands)
Passengers in
Passengers on Pedestrians
Personal Vehicles
Buses
25,114
209
9,186
Total
34,509
66,394
1,315
18,197
85,906
1,601
18
261
1,880
97,828
1,846
20,440
120,114
U.S.-Mexico Border
190,937
Source: Bureau of Transportation Statistics
3,389
48,084
242,409
New Mexico
Texas
The majority of Mexican visitors to the U.S. arrive for the purpose of shopping. To cater
to this need, malls, shopping plazas and downtown retail areas in border communities
have emerged and, in some cases, exist and thrive merely because of Mexican shoppers.
Interviews with retailers, hotel owners and business people attest to this fact: border
tourist attractions such as South Padre Island in Texas attribute more than half of their
activity to Mexican visitors during certain seasons (Ghaddar et al., 2004) and in South
San Diego County, Baja Californians account for 10 to 69 percent of area businesses’
retail sales (Crossborder Business Associates, 2002). Furthermore, economic crises in
Mexico appear to have a significant impact on sales levels in border cities and counties:
Patrick and Renforth (1996) find that the 1994 Mexican peso devaluation resulted in a
41.8 percent decline in retail sales in Texas border cities. The 1982-83 devaluation had
similar impacts in Texas (Diehl, 1983; Prock, 1983). Gerber (1999) also reports a decline
in total taxable sales in California’s San Diego and Imperial counties in response to
unanticipated peso devaluation. Further evidence of Mexican nationals being an
important component of retail sales activity in border regions is the combination of low
3
per capita incomes along side high per capita retail sales (Table 2). For example, the city
of McAllen’s per capita income constitutes around two-thirds of the national average
while its per capita retail sales are twice the national average. Adkisson and Zimmerman
(2004) incorporate this observation in an empirical model and report a positive border
effect, whereby retail sales relative to local income are higher in border metropolitan
statistical areas (MSAs) than in non-border MSAs.
Table 2
Per Capita Retail Sales and Income of Select Border Cities
City
2002 Per Capita Retail Sales
2000 Per Capita Income
Percent of National Average
Percent of National Average
San Diego, CA
105%
109%
Calexico, CA
141
46
Yuma, AZ
129
78
Nogales, AZ
172
47
El Paso, TX
91
67
Del Rio, TX
107
57
Laredo, TX
105
51
McAllen, TX
205
69
Brownsville, TX
93
45
Source: U.S. Census Bureau: Census 2000, 2002 Economic Census
III. DATA
This study utilizes data from reports and research projects that evaluate the economic
impact of Mexican visitors to various border regions. For the state of Arizona the study
included is The Economic Impacts of Mexican Visitors to Arizona: 2001 (Charney and
Pavlakovich-Kochi, 2002). The study administered surveys to 2,612 Mexican visitors as
they exited the U.S. through land and air ports of entry in Cochise, Pima, Maricopa, Santa
Cruz and Yuma counties. Estimates of these visitors’ expenditures amounted to $962.9
million in 2001.
4
For California, several studies were considered. The first is Who Crosses the Border: A
View of the San Diego/Tijuana Metropolitan Region (San Diego Dialogue, 1994), which
was administered to 5,663 crossers as they entered into San Diego County through land
ports of entry. The study estimated annual expenditures of Mexican visitors at $2.8
billion in 1992. The second is a report prepared by Cox (1998): Survey of Border
Crossers: Imperial/Mexicali Valleys. The report covers findings of 3,188 surveys
administered to crossers into Imperial County, California. The results reveal that Mexican
crossers spent about $840 million in the County in 1998. The third study reports the
findings of Patrones y Hábitos de Consumo en Baja California (Sierra López and
Serrano Contreras, 2002), a paper which examines the spending patterns of Baja
California border residents. The results of 786 surveys show that Baja Californians along
the U.S. border spend $1.6 billion annually in the U.S. The last study is a recent research
project undertaken by the San Diego Association of Governments (2005) to estimate the
economic impact of border wait times. Data was collected from 3,603 crossers at three
ports of entry along the San Diego-Baja California border. Findings reveal that border
delays result in foregone trips and, consequently, an output loss of $2.3 billion in San
Diego County and $0.2 billion in Baja California.
Three Texas studies examine Mexican visitors to the Rio Grande Valley, two of which
are tourism reports of visitors to the area (Simpson et al., 2005; Vincent et al., 2003). The
third study, The Economic Impact of Mexican Visitors to the Lower Rio Grande Valley
2003 (Ghaddar et al., 2003), looked at 1, 027 visitors to malls and shopping districts in
5
Cameron and Hidalgo counties. Survey results estimated 2003 expenditures at $1.4
billion.
The above studies were analyzed to estimate expenditures by Mexican visitors per party
per trip. Expenditures per trip vary mainly by mode of travel ranging from around $30 for
pedestrians to over a $1,000 for air travelers 2 , with car travelers spending an average
$100-200 per trip and bus travelers paying more or less $75 per visit (Table 3).
Table 3
Average Expenditures/Party/ Trip by Mode of Entry3
Arizona
$92
Pedestrians
$39
Car
$99
Bus4
$69
Airplane
$1,317
California 5
$142
Pedestrians
$39
Car
$170
Bus
$80
Texas
$152
Pedestrians
$20
Car
$182
Bus
$80
Airplane
$2,038
To arrive at annual expenditures of Mexican shoppers, estimates of per visit expenditures
were projected on 2004 crossing statistics. For Arizona, it is estimated that Mexican
2
Airplane travelers are those who either enter the U.S. through the airport of an American border city, or
those who travel by air from the interior of Mexico to a Mexican border city and then enter the U.S.
through a land port. These shoppers constituted a small fraction of collected surveys (10.6 percent of
Arizona study and 1.4 percent of Texas study).
3
Average expenditures are for the years 2001 for Arizona, 2004-2005 for California, and 2003 for Texas.
4
The Arizona study did not include bus travelers. Reported estimate was calculated as the average of
pedestrian and car travelers’ expenditures.
5
San Diego Association of Governments’ study provides the $142 figure as overall expenditures per
crosser. No breakdown by mode of entry is available. Pedestrian, car and bus estimates were calculated
based on that figure, the weight of each mode of entry (obtained from 2004 crossing statistics along the
California border), and expenditure patterns depicted by the Arizona and Texas studies.
6
shoppers spend around a billion dollars a year. In California, these expenditures are close
to $3.8 billion and they exceed three billion dollars in Texas annually, for a total of
almost eight billion dollars along the U.S.-Mexico border in 2004 (Table 4).
County
Table 4
Estimated Expenditures of Mexican Visitors by County6
(in thousands)
Mexican Crossing Parties 7 Estimated Expenditures 8
Arizona
Cochise County
Pima/Santa Cruz Counties 9
Yuma County
11,522
2,417
5,871
3,234
$1,014,976
$237,870
$470,132
$306,974
California
Imperial County
San Diego County
26,709
7,609
19,101
$3,768,506
$1,037,276
$2,731,230
Texas
Cameron/Hidalgo Counties 9
El Paso County
Webb County
Other border counties 10
22,238
7,486
7,211
3,862
3,679
$3,201,592
$1,117,350
$944,853
$516,662
$622,728
U.S.-Mexico Border
60,469
$7,985,073
IV. METHODOLOGY AND RESULTS
The analysis of existing studies had two objectives, the first of which was to establish a
profile of the average Mexican shopper. The second objective was to obtain the data
6
Airplane visitors were excluded from the analysis.
Border crossing statistics along the U.S. -Mexico border were adjusted to reflect crossings by Mexican
visitors based on the ratio of Mexican/alien crossings to total crossings as reported in the studies cited.
These numbers were then divided by average party size by location and mode of travel to arrive at the
number of crossing parties.
8
2004 dollars
9
Pima and Santa Cruz data are combined because, given the counties’ geography and location of ports of
entry, it is difficult to determine the proportion of visitors who cross through one county’s port of entry and
then visit the other county. The same is true for Cameron and Hidalgo counties in Texas.
10
Other border counties in Texas include Val Verde, Maverick, Presidio, and Starr counties.
7
7
needed to measure the economic impact of expenditures by these shoppers. To achieve
the first objective, results of existing studies were reviewed and integrated within a
framework that describes the characteristics of Mexican crossers along two dimensions:
location and mode of travel/entry. To achieve the second objective, this profile provided
the data needed to conduct the input-output analysis . A description of this methodology is
presented in section B.
A. Profile of Mexican Visitors
General Characteristics of Mexican Visitors
Characteristics of Mexican visitors vary widely: they stay anywhere from a few hours to
several days, they spend little or considerable amounts of money and their visiting
frequency can range from once a year up to once a day. One distinguishing feature,
though, is the mode of travel. Pedestrians appear to have a distinct profile from those who
enter in their private vehicles. Airplane travelers also seem to be different from the above
two groups. Location is another feature that may impact crossing and spending
characteristics. Thus, in our attempt to profile this group we take into account the mode
of travel as well as the location of crossing.
Shopping is the primary reason to cross into the U.S. for more than two-thirds of
Mexican nationals. Other reasons are social in nature, like visiting family and friends, or
are work related (Table 5). Around 80 percent of crossers enter in their private vehicles
since a car allows them freedom of movement between different shopping locations in
the U.S. as well as enough room to handle the volume of their purchases. Pedestrians
8
constitute 20 percent of crossers with the remaining few (about one percent) crossing by
bus (Table 1). Those who cross into California seem to visit more frequently than those
who cross into Texas, with around half of California visitors crossing daily or on a
weekly basis compared to 16 percent for Texas visitors 11 . Pedestrians generally cross
more frequently than those using other modes of travel (Table 6). Regarding the length of
their stay12 , almost all of Mexican shoppers to Arizona enter and leave the U.S. the same
day. Though the majority of Texas visitors are day trip visitors as well, a considerable
portion (36 to 40 percent) stay overnight for usually up to seven nights. Pedestrians,
along with bus crossers, are predominantly day visitors, while around 43 percent of those
who enter in their personal vehicles tend to stay overnight (Table 7). One possible reason
why visitors to Texas stay longer is that these visitors are more likely to have traveled
from farther south. Visitors to Arizona border towns are primarily from sister cities right
across the border. About a third of visitors to Texas, on the other hand, come from cities
farther from the border such as Monterrey 13 . Another variable increasing the likelihood of
longer trips in Texas is the proximity of vacation destinations such as South Padre Island
to the border.
11
No data is available to evaluate Arizona visitors’ frequency of crossing.
No data is available to evaluate California visitors’ length of stay. However, given the higher crossing
frequency of this group, it might be concluded that California visitors tend to stay for shorter periods of
time relative to Texas visitors.
13
Monterrey is the industrial capital of northern Mexico with a population exceeding 1.5 million. It is less
than 150 miles from the cities of McAllen and Laredo on the Texas border.
12
9
Arizona
California
Texas 14
Table 5
Primary Reason for Visit
Shopping
Social Visits
72%
8%
California
Texas
Pedestrians
Car
Bus
Airplane
Arizona
Pedestrians
Car
Airplane
California
Texas
Pedestrians
Car
Bus
Airplane
Other
6%
42-68%
9-12%
8-29%
7-21%
85%
41%
10%
48%
Daily or
Almost Daily
Arizona
Work
14%
NA
Table 6
Frequency of Visits
1 to 2 Times
Several
per Week
Times per
month
NA
NA
Several
Times per
Year
NA
Once
per Year
NA
11-19%
29-36%
14-34%
9%
9-17%
6%
12%
4%
2%
0%
10%
16%
9%
2%
0%
35%
47%
33%
33%
15%
45%
26%
49%
48%
39%
5%
0%
5%
16%
46%
Table 7
Length of Stay
Day Trip
1 to 7 Nights
96%
3.8%
97%
3%
97%
3%
7%
74%
8 or more nights
0.2%
0%
0%
19%
NA
NA
NA
56-63%
98%
55%
71%
8%
36-40%
3%
43%
27%
75%
1-4%
0%
1%
2%
17%
14
Multiple responses were possible for Texas' sample, since question asked about reasons for visiting
rather than the primary reason.
10
Mexican visitors spend their money on a variety of items and services. Clothing items
constitute more than 40 percent of total expenditures. Groceries are another important
category along with food-related expenses such as dining at area restaurants (20-35
percent). Texas visitors also spend a considerable portion on lodging (around eight
percent) given their proclivity to stay over night. Figures 1, 2, and 3 provide a breakdown
of Mexican shoppers’ expenditures in Arizona, California and Texas, respectively.
Figure 1: Expenditures by Category
Arizona
Business
6%
Other
4%
Transportation
13%
Groceries
25%
Clothing
42%
Dining
10%
California
Personal Hygiene
5%
Appliances &
Furniture
6%
Other
6%
Clothing
46%
Food & Groceries
37%
11
Texas
Appliances
12%
Other
9%
Clothing
46%
Medical
6%
Lodging
8%
Groceries
9%
Dining
10%
Shopping Traits of Mexican Visitors
An assessment of the shopping traits of Mexican visitors to the South Texas border
region revealed that Mexican shoppers exhibited a very high level of brand loyalty, were
very price and quality conscious, and had especially favorable views of U.S. products in
terms of their technological advancement, price competitiveness, high quality, and
variety of choices (Vincent et al., 2003). Similar findings were reported for Mexican
shoppers from Baja California who pointed to prices, variety and quality as main reasons
for shopping in the U.S. (Sierra López and Serrano Contreras, 2002; San Diego Dialogue,
1994). Guo et al. (2005) further explore Mexican nationals’ motives to shop in the U.S.
beyond the external motives of product quality, variety and competitive pricing. Based on
structural equation modeling, they find that psychological factors (desire to show off
power, enjoyment of a more civilized shopping environment, aspiration to be an opinion
leader, and yearning to be a successful person) are positively associated with cross border
shopping frequency.
12
B. Economic Impact of Mexican Visitors’ Expenditures
Economic Impact Analysis
Economic impact analysis is the study of changes in the level of economic activity in a
given area in response to changes in demand for goods and services. In this case, the
change in demand is triggered by Mexican visitors’ expenditure outlays. To perform this
type of analysis, an input-output model, which depicts inter-industry relationships within
an economy, is utilized. Based on monetary transaction flows, both between businesses
and between businesses and final consumers, the model estimates a series of impacts
(direct, indirect, and induced) to a regional economy. Direct effects are the result of direct
spending by Mexican visitors on merchandise, food, accommodations, etc. This direct
spending generates sales of goods and services, local tax revenue and employment of
workers. Indirect effects are due to inter-business purchases in response to these direct
expenditures. The induced effects are the result of households increasing their
expenditures when receiving income through the direct and indirect expenditures. Total
economic impacts are the sum of direct, indirect and induced effects. In this study, the
2002 IMPLAN (IMpact Analysis for PLANning) model is used to measure the economic
impact of Mexican visitors’ expenditures to counties along the U.S.-Mexico border.
Economic Impact Results
Mexican nationals who cross into the U.S. through southern land ports of entry make a
significant contribution to local economies. Tables 8, 9, 10, and 11 report the economic
impact analysis results in terms of output, indirect business taxes, labor income and
13
employment, respectively15 . Mexican visitors’ direct expenditures in border communities
result in total output impact of $8. 8 billion, around half of which occurs in California, 35
percent in Texas (approximately $3 billion) and the remaining 15 percent in Arizona
(more than one billion dollars). As a result of this output, over a billion dollars are
generated in the form of taxes (Table 9) and $3.6 billion are in the form of labor income
(Table 10). This economic cycle supports more than 150,000 jobs in border cities and
towns (Table 11).
County
Arizona
Cochise
Pima/Santa Cruz
Yuma
Table 8
Output (Sales)
(in thousands)
Direct
Indirect
$1,014,976
$96,122
$237,870
$18,876
$470,132
$53,102
$306,974
$24,144
California
Imperial
San Diego
$3,768,506
$1,037,276
$2,731,230
Texas 16
Cameron/Hidalgo
El Paso
Webb
U.S.-Mexico Border
15
16
Induced
$120,529
$22,034
$72,419
$26,076
Total
$1,231,627
$278,780
$595,653
$357,194
$256,268
$51,537
$204,731
$422,656
$69,800
$352,856
$4,447,430
$1,158,614
$3,288,816
$2,578,864
$1,117,350
$944,853
$516,662
$168,973
$56,521
$78,306
$34,146
$343,912
$149,745
$135,507
$58,661
$3,091,749
$1,323,615
$1,158,666
$609,468
$7,362,346
$521,363
$887,097
$8,770,806
Dollar amounts reported in the tables reflect 2004 values.
Excludes the following counties: Val Verde, Maverick, Presidio, and Starr
14
Table 9
Indirect Business Taxes
(in thousands)
County
Arizona
Cochise
Pima/Santa Cruz
Yuma
$135,675
$31,709
$63,193
$40,774
$4,348
$914
$2,405
$1,029
$7,882
$1,528
$4,640
$1,714
$147,905
$34,151
$70,237
$43,517
California
Imperial
San Diego
$578,045
$163,964
$414,081
$10,595
$2,141
$8,454
$28,223
$5,598
$22,626
$616,863
$171,702
$445,160
Texas 16
Cameron/Hidalgo
El Paso
Webb
$384,075
$173,637
$136,483
$73,955
$8,807
$2,388
$4,295
$2,124
$23,993
$10,157
$9,402
$4,434
$416,875
$186,183
$150,180
$80,513
U.S.-Mexico Border
$1,097,796
$23,749
$60,098
$1,181,643
County
Arizona
Cochise
Pima/Santa Cruz
Yuma
Table 10
Labor Income 17
(in thousands)
Direct
Indirect
$416,413
$32,626
$96,564
$5,894
$194,829
$18,168
$125,021
$8,564
Induced
$40,460
$6,926
$24,631
$8,902
Total
$489,499
$109,384
$237,628
$142,487
California
Imperial
San Diego
$1,638,758
$441,815
$1,196,943
$96,708
$18,305
$78,403
$145,958
$21,979
$123,979
$1,881,424
$482,099
$1,399,325
Texas 16
Cameron/Hidalgo
El Paso
Webb
$1,100,351
$478,463
$401,180
$220,709
$55,294
$18,751
$25,571
$10,972
$112,147
$49,424
$43,891
$18,832
$1,267,791
$546,638
$470,641
$250,512
U.S.-Mexico Border
$3,155,522
$184,628
$298,565
$3,638,714
17
Labor income includes employee compensation and proprietors’ income.
15
County
Arizona
Cochise
Pima/Santa Cruz
Yuma
Table 11
Employment
Direct
Indirect
19,968
1,073
4,368
204
8,916
568
6,684
301
Induced
1,450
270
858
322
Total
22,491
4,842
10,342
7,307
California
Imperial
San Diego
60,943
17,679
43,264
2,361
587
1,774
4,254
839
3,415
67,558
19,105
48,453
Texas 16
Cameron/Hidalgo
El Paso
Webb
57,544
25,237
20,458
11,849
1,861
688
792
381
4,209
1,948
1,526
735
63,614
27,873
22,776
12,965
U.S.-Mexico Border
138,455
5,295
9,913
153,663
The contribution of Mexican visitors’ dollars to local economies varies from one
community to the other (Table 12). In certain areas, the economic impact of Mexican
visitors’ expenditures as a percentage of employment and output figures is close to 40
percent (Imperial County), while in others it does not exceed four percent (Pima/Santa
Cruz counties, San Diego County). This is not surprising since the economic impact of
cross border expenditures usually varies in importance depending on several factors such
as the relative size of the U.S. border city, distance to the border, and type of
retail/shopping district (Clark, 1994; Patrick and Renforth, 1996). Within Arizona, the
largest relative impacts are felt in Cochise and Yuma counties. In California, Imperial
County benefits from the most significant impact 18 , and in Texas, Webb County seems to
18
Similar to the findings of Cox (1998), the size of Mexican visitors’ expenditures in Imperial County
relative to the size of the County’s economy seem unreasonably large. Gerber (1999) concedes that this
may be due to the fact that some of these expenditures take place outside Imperial County.
16
be the one where Mexican visitors make the largest contribution, in percentage terms, to
the local economy.
Table 12
Economic Impact of Mexican Visitors’ Expenditures
Share of County Employment 19
Share of County Output 20
Arizona
Cochise
Pima/Santa Cruz
Yuma
9.4%
2.4%
11.7%
10.0%
2.5%
9.9%
California
Imperial
San Diego
38.5%
3.4%
37.1%
3.1%
Texas
Cameron/Hidalgo
El Paso
Webb
7.7%
8.5%
16.6%
8.5%
7.9%
16.9%
V. CONCLUSION
The U.S. -Mexico border region is a unique example of social and economic integration,
where cross-border shopping is one aspect of that reality. Mexican citizens cross
frequently into the U.S. to shop, work, dine, vacation, and visit friends and family. What
they spend on those visits results in a key contribution to local economies. Overall,
expenditures are estimated at almost eight billion dollars along the U.S.-Mexico border.
These expenditures generate a total of approximately $8. 8 billion in output (sales), $1. 2
billion in business taxes, $3. 6 billion in labor income, and more than 153,000 jobs.
19
Total employment impact divided by 2004 county employment (Bureau of Labor Statistics).
Total output impact (in 2004 dollars) divided by total personal income as reported by 2002 IMPLAN
data files (in 2004 dollars).
20
17
Despite the conservative nature of these estimates, the reader has to be aware of several
limitations given that this paper utilizes data from several studies at different points in
time. First, each of the included research projects uses a different survey, different survey
locations and a different sampling design. For example, the Arizona study administers
surveys to Mexican visitors as they exit the U.S., compared to as they enter for
California, while the Texas studies conduct surveys at area malls. Second, there is an
underlying assumption that whatever patterns of crossings, expenditures, etc. existed at
the time of each analysis still exist today. Third, in the cases where no expenditure or
breakdown data was available, data from other studies was projected for those areas. For
instance, the expenditures for Texas’ Cameron and Hidalgo counties were assumed to
hold for El Paso and Webb counties where there are no recent studies exploring Mexican
visitors. Nevertheless, the estimates reported in this paper serve to shed a light on the size
of this often overlooked market segment and fall in line with educated guesses of local
community leaders. The limitations merely serve to highlight the importance of a
coordinated and comprehensive research effort between academic institutions and
business entities in different regions along the border area to better understand and more
reliably evaluate the impact of Mexican shoppers on US border communities.
18
REFERENCES
Adkisson, R. and L. Zimmerman. 2004. Retail Trade on the U.S.-Mexico Border during
the NAFTA Implementation Era. Growth and Change, 35: 77-89.
Bureau of Transportation Statistics. 2005. Border Crossing/Entry Data: 2004.
http://www.bts.gov/ . Downloaded November 2005.
Charney, A. and V. Pavlakovich-Kochi. 2002. The Economic Impacts of Mexican Visitors
to Arizona: 2001. Economic and Business Research Program, College of Business
and Public Administration, University of Arizona.
Clark, T. 1994. National Boundaries, Border Zones, and Marketing Strategy: A
Conceptual Framework and Theoretical Model of Secondary Boundary Effects.
Journal of Marketing, 58: 67-80.
Cox, M. 1998. Survey of Border Crossers: Imperial/Mexicali Valleys. San Diego, CA:
University of California, San Diego.
Crossborder Business Associates. 2002. Border Value$ 2002: San Diego-Tijuana Study.
Diehl, P. N. 1983. The Effects of the Peso Devaluation on Texas Border Cities. Texas
Business Review, 57: 120-125.
Gerber, J. 1999. The effects of the depreciation of the peso on cross-border retail sales in
San Diego and Imperial counties. San Diego, CA: San Diego Dialogue.
Ghaddar, S., C. Richardson, and C. Brown. 2004. The Economic Impact of Mexican
Visitors to the Lower Rio Grande Valley 2003. Center for Border Economic
Studies (CBEST), University of Texas-Pan American.
Guo, C., A. Vasquez-Parraga. and Y. Wang. 2005. An Exploration Study of Motives for
Mexican Nationals to Shop in the U.S.: More than Meets the Eye. Journal of
Retailing and Consumer Services, forthcoming
Kada, N. and R. Kiy (eds.). 2004. Blurred Borders: Trans-Boundary Impacts and
Solutions in the San Diego-Tijuana Border Region. International Community
Foundation.
Minnesota IMPLAN Group, Inc. 2002. IMPLAN Professional, version 2.0.1025.
Stillwater, MN: Minnesota IMPLAN Group.
Patrick, J. M. and W. Renforth. 1996. The Effects of the Peso Devaluation on Cross
Border Retailing. Journal of Borderlands Studies, 11: 25-41.
19
Prock, J. 1983. The Peso Devaluations and Their Effect on Texas Border Economies.
Inter-American Economic Affairs. 37: 83-92.
San Diego Dialogue. 1994. Who Crosses the Border: A View of the San Diego/Tijuana
Metropolitan Region. San Diego, CA: University of California, San Diego.
Sierra López, O. and S. Serrano Contreras. 2002. Patrones y Hábitos de Consumo en Baja
California. Comercio Exterior, 52: 701-709.
San Diego Association of Governments. 2005. Estimating Economic Impacts of Border
Wait Times at the San Diego-Baja California Border Region.
Simpson, P. and W. Thompson. 2005. Rio Grande Valley Winter Visitors and Local
Market Report 2004-2005. Valley Markets and Tourism Research Center, College
of Business Administration, University of Texas-Pan American.
U.S. Census Bureau. 2005. Census 2000. http://www.census.gov/. Downloaded
November 2005.
U.S. Census Bureau. 2005. 2002 Economic Census Reports. http://www.census.gov/.
Downloaded November 2005.
Vincent, V., W. Thompson and M. Williamson. 2003. Winter Visitor Study 2002-2003.
Center for Tourism Research, College of Business Administration, University of
Texas-Pan American.
20
Features
Expanding Opportunities in Mexico’s Retail Sector
Strong Fundamentals Drive Growth
David Lynn,* and Bohdy Hedgcock**
Abstract: This article argues that strong economic and demographic fundamentals should continue to drive growth in Mexico’s
retail sector. Public spending, relatively low inflation rates and a growing middle class should keep the Mexican economy
afloat. Strong domestic demand will likely be a key driver for the country’s developing retail sector. The informal segment,
which historically dominated Mexico’s retail market, will likely continue to lose market share to large national chains that
offer the consumer greater variety and value. A young and growing population, rising household income and developing
consumer credit will continue to boost retail spending. Growing metropolitan areas with strong local economies—where retail
spending is expected to remain strong—are likely poised for expanding retail development opportunities. Large metropolitan
areas with an established consumer base and high land prices, such as Mexico City, are more likely to see retail expansion or
value-added investments.
Mexican Economy Remains Sound
Similar to other emerging economies, Mexico’s
retail sector has historically been lacking in both
quantity and in quality of retail product, under-serving
the country’s growing population and creating a
significant amount of untapped demand. A sound
economy over the past six years has helped uncover new
opportunities within the sector, which has increasingly
captured the attention of foreign retailers, developers and
investors alike.
After posting gross domestic product (GDP) growth
of 4.8% in 2006 and 3.3% in 2007, Mexico’s economy
showed signs of a slowdown in the first quarter of 2008,
expanding at an annualized rate of 2.6%.1 Given the
deceleration of the United States (U.S.) economy, and
the expected impact on manufacturing activity, exports,
employment and the flow of remittances2—and,
concomitantly, household spending—the Economist
Intelligence Unit (EIU) forecasts GDP growth of 2.3%
for 2008. A package of government spending on
infrastructure projects and a fiscal stimulus package
including tax cuts and social security exemptions will
likely help mitigate a rise in unemployment and a
decline in consumer expenditures. Nonetheless, as the
slowdown in the U.S. continues, the EIU expects
Mexico’s GDP to expand at a slower rate of 1.6% in
2009.3
At year-end 2007, the national (formal)
unemployment rate stood at 3.8% and is expected to
climb to 4.2% by 2009.4 The national figure fails,
however, to capture Mexico’s large partial and informal
employment sectors where the rates were estimated at
9% and 27%, respectively, at the end of 2007.5
Underemployment is greatest among Mexico’s southern
states, which are dominated by an informal economy
comprised of self-employed workers or people working
without official contracts. As a result, Mexico’s official
unemployment rate does not fully capture the oversupply
of labor.6
Standards of living have improved considerably in
Mexico over the past decade. Middle income groups are
expanding and consuming goods and services that are
more in line with similar classes in OECD countries. The
daily minimum wage in Mexico was raised slightly in
2008 to 52.59 pesos, or about $5.23.7 According to the
Instituto Mexicano del Seguro Social (IMSS—the
Mexican Social Security Institute)—the average actual
wage of the 14.5 million registered workers in June of
2007 was well above the (then) minimum figure of 50.57
pesos per day, at 209 pesos per day (US$20.79).8
* Managing Director and Head of the Research & Investment Strategy Group, ING Clarion Partners
** Associate, Research & Investment Strategy Group, ING Clarion Partners
1
“Country Report: Mexico,” Economist Intelligence Unit (EIU), July 2008, p.6.
Wages earned by Mexican workers in the U.S. and sent to families in Mexico.
3
“Country Report: Mexico,” op. cit., p.6.
4
EIU, August 28, 2008, accessible at http://eiu.bvdep.com/version-2008226/cgi/template.dll?product=101.
5
“Encuesta Nacional de Ocupacion y Empleo (National Survey of Occupation and Employment),” Instituto Nacional de Estadística y Geografía (INEGI), July
2007, accessible at http://www.inegi.gob.mx/est/contenidos/espanol/ proyectos/encuestas/hogares/enoe/bd/consulta2/tsr.asp?s=est&c=10830. “Partial
employment” refers to people employed part-time. “Formal employment” includes those jobs covered by the federal social security (IMSS) system.
6
Ibid.
7
“Mexico raises minimum wages by 4 percent, to around US$4.85 (€3.37) a day,” Associated Press, December 22, 2007. The conversion to U.S. dollars is as of
July 29, 2008. The minimum wage figure is a national average, as there are varied minimums for urban and rural areas and for different regions.
8
INEGI, 2008 at http://dgcnesyp.inegi.org.mx/cgi-win/bdiecoy.exe/538?s=est&c=13068.
2
RESEARCH REVIEW, VOL. 15, NO. 2, 2008
20
Features
Mexico has enjoyed relatively modest inflation rates
recently, when compared to the double-digit rates of the
late 1990s. However, the rising cost of commodities
combined with strong domestic demand are pushing
Chart X-1
35000
16.0%
30000
14.0%
12.0%
USD (Millions)
25000
10.0%
20000
8.0%
15000
6.0%
10000
4.0%
5000
Retail % of Total FDI
Total Foreign Direct Investment (FDI) and Retail Share in
Mexico
2.0%
0
0.0%
2000
2001
2002
2003
FDI
2004
2005
2006
2007
Retail Share
Source: Instituto Nacional de Estadistica y Geografia (INEGI), 2007
prices higher. After several years of sub-4% inflation, the
rate has been climbing steadily, hitting the highest level
since 2004 in June 2008, at 5.26%. The EIU anticipates
that rate will climb to 6.2% by the end of 2008.9
Mexico exhibits the second highest foreign direct
investment (FDI) flows in Latin America, with close to
US$20 billion in 2007.10 Even though the manufacturing
sector attracts the majority of foreign capital (with close
to 50% in 2007), Mexico’s retail industry commands a
strong share, ranging between 2% and 14% over the past
eight years, as shown in Chart X-1.11
The Growing Importance of National Retail Chains
Mexico is home to a growing retail sector, driven by
a general shortage of formal retail space in most markets
and strong annual retail sales growth. The retail sector in
Mexico is largely informal with family-owned local
convenience stores and street vendors far outnumbering
the country’s large national supermarket and
hypermarket chains. There are an estimated 500,000
independent retailers in Mexico, relative to nearly 600
hypermarkets and more than 650 modern supermarkets.12
These informal retailers are most prevalent in the south
of the country where the majority of households have
incomes that fall below the national average (estimated
to range between US$9,000 and $11,000). As major
retailers have entered the Mexican market, the share of
sales in older “traditional” retailers has fallen,
representing just 55% of total retail sales in 2007.13
National chains are gaining market share as consumers
develop a preference for big-box formats and as these
stores expand into new cities, undercutting their
competitors’ prices.
Four large national chains—Wal-Mart, Soriana,
Comercial Mexicana and Chedraui—account for an
estimated 40% of the nation’s large chain retail sales.
(See Table X-1). With the recent acquisition of Grupo
Gigante by Soriana for $1.35 billion in November 2007,
Soriana will not only expand into new Mexican markets,
but also reach the American consumer, as the acquisition
includes Gigante’s seven outlets in Los Angeles,
California.14
These four chains represent a significant part of
Mexico’s retail food industry, which includes
supermarkets, convenience stores, bakeries and other
retailers of food for off-the-premises consumption.
Datamonitor estimates that the industry will grow by
3.1% annually through 2010, compared to 2.0% average
annual growth from 2002 to 2007. The rapid increase in
Table X-1
Leading Chain Retailers in Mexico
2006
Founded in
Gross Leasable Area
Company
Mexico
Stores/Restaurants
(Square Feet in
Millions)
Wal-Mart
1997
582/319
30.7
Soriana
1968
234
18.8
Comercial Mexicana
1930
204/67
15.6
Chedraui
1920
114
8.2
Sales (U.S.
Dollars in
Millions)
$18,022
$5,305
$4,148
$2,504
Sales per
Square Foot
$587
$282
$266
$305
Sources: Datamonitor, Rockwood, Commercial Real Estate Advisors, 2007
9
“Country Report: Mexico,” op. cit., p.7.
INEGI, Secretaría de Economía, Dirección General de Inversión Extranjera, 2008.Accessible at http://dgcnesyp.inegi.org.mx/cgi-win/bdiecoy.exe/571?c=12607.
Ibid.
12
Evette Treewater and John Price, “Navigating Latin American Distribution Channels,” September 18, 2007, accessed online on August 28, 2008 at
<http://outsourced-logistics.com/global_markets/outlog_story_8984/>. Hypermarkets are a combination of grocery and department stores.
13
DTZ Rockwood, “Mexico Retail: Undersupplied?” Inmobiliare Magazine, 41, October 2007, p.20.
14
“Gigante Sale to Soriana Approved,” Los Angeles Times, December 25, 2007.
10
11
21
Features
retail sales rose by 1.6 percent in 2007, slowing
from the 3.4 percent increase in 2006.17 ANTAD
reported the growth rate for members’ same-store
sales fell to 1.1 percent in 2007, compared with 4.3
percent in 2006.18
Formal retail development has been concentrated in
major urban areas. As a result, urban markets have
become increasingly competitive and saturated,
leading many developers to explore entry into
secondary and tertiary markets. While these markets
offer new opportunities, the lower average incomes
limit sales and profit potential.
Chart X-2
Net Retail Sales by Urban Area
2004
2005
2006
2007
180
Retail Sales Index
100 = 2003 Net Retail Sales
160
140
120
100
80
60
40
20
0
Tampico
Campeche
Morelia
Querétaro
Villahermosa
Chihuahua
Colima
Cancún
Durango
Oaxaca de
Juárez
Source: Instituto Nacional de Estadistica y Geografia (INEGI), 2008
food prices—more than 42% in the first five months of
2008—is adding to supermarket revenues.15 As a result,
the supermarket sector is expected to be the leading
source of revenue growth in the Mexican retail market.
Retail Growth Should Remain Strong
Even though consumer confidence has declined over
the past several quarters from its 2006 peak, consumer
spending remains robust, particularly for non-durable
goods. The EIU forecasts overall private consumption to
increase by 3.4% in 2008.16
INEGI reports nationwide retail sales growth in
supermarkets and department stores at an average of
7.3% per year since 2004, although the results vary
considerably by market. Durango and Oaxaca de Juarez
have exhibited the strongest growth in retail sales of all
urban areas since 2003, as shown in Chart X-2. Total
Strong Fundamentals Underpin Mexico’s Retail
Boom
With more than 108 million residents in 2007,
Mexico is home to a young and growing population.
Formerly characterized by both high birth and death
rates, Mexico has undergone a demographic transition.
Now, more than 10 million Mexicans fall between the
ages of 15 and 19 years old and are currently entering, or
will soon attempt to enter, the workforce and become
active consumers. (See Chart X-3.)
The standard of living has improved considerably in
Mexico over the past decade. Middle income groups are
expanding notably; as a result, they are consuming
goods and services that are more in line with the
developed countries that are part of the Organization for
Economic Cooperation and Development (OECD).
According to International Strategic Analysis, more than
Chart X-3
Mexico Population Distribution Comparison: 1980 and 2010
Population Distribution by Age Cohort - 1980
80+
Percent Female
Percent Male
70-79
70-79
60-69
60-69
50-59
50-59
40-49
40-49
30-39
30-39
20-29
20-29
10-19
10-19
0- 9
0- 9
40
20
0
20
40
Percent Female
Percent Male
80+
Age
Age
Population Distribution by Age Cohort - 2010
30
Percentage of Population (%)
20
10
0
10
20
30
Percentage of Population (%)
Sources: U.S. Census Bureau, International Data Base
15
“Country Report: Mexico,” International Strategic Analysis, July 2008, p. 6.
“Country Report: Mexico,” EIU, 15, July 2008.
17
Ibid., p.18.
18
“Mexican retailers sales pace slows in 2007-ANTAD,” Jan 2, 2008. Accessible at
idUSN0210907220080103.
16
http://www.reuters.com/article/consumerproducts-SP/
22
Features
Chart X-4
Quarterly Growth in Credit Card Accounts and Transactions in
Mexico
14
120
Credit Card Accounts
Transactions
100
10
80
8
60
6
40
4
20
2
Q3 2007
Q2 2007
Q1 2007
Q4 2006
Q3 2006
Q2 2006
Q1 2006
Q4 2005
Q3 2005
Q2 2005
Q1 2005
Q4 2004
Q3 2004
Q2 2004
Q1 2004
Q4 2003
Q3 2003
Q2 2003
Q1 2003
Q4 2002
Q3 2002
Q2 2002
0
Q1 2002
0
Source: Banamex, 2008
10% of the population is considered middle-to-upper
class, while more than 20% of the population lives in
households where earnings exceed US$25,000.19
Although the strong growth in remittances came to a halt
in 2007, they still represent an important source of
household income, totaling $24 billion in 2007.20
The market for consumer credit continues to grow.
Despite global financial troubles that have caused some
pullback, confidence in the banking sector has rebounded
from the 1994 peso crisis. In the third quarter of 2007
there were more than 13 million credit card accounts,
which is 2.5 times more than those in the same quarter in
2002. Credit card accounts have increased at a compound
annual growth rate of 17% since 2002, while credit card
transactions have grown at 10% per year (see Chart X4).21 Mortgage lending increased by 13% over the past
year, which is the smallest gain since 2005, but still
substantial.22 Overall, the consumer credit market in
Mexico represented US$43 billion at the end of 2007 or
approximately 5% of GDP.23
Mexico Remains Under-Retailed
In 2006, Mexico was home to approximately 72
million sq ft of formal retail space, or approximately 1.6
sq ft per capita,24 far below the 2008 U.S. average of 42.9
sq ft per capita for total retail space.25 Retail space was
highly concentrated in large metropolitan areas such as
Mexico City, which accounted for 18% of total supply or
Transactions (Millions)
Accounts (Millions)
12
14.1 million sq ft, Guadalajara with 8 million sq ft and
Monterrey with 6 million sq ft. Table X-2 lists the 10 top
Mexican cities that account for 70% of shopping center
supply in Mexico. With less than one square foot of
supermarket space per capita, compared to 3.4 sq ft in the
U.S., new development has trended toward groceryanchored neighborhood centers in emerging residential
areas. (See Table X-3.)
Even though Mexican households have lower income
levels than the U.S., when salaries are adjusted for
remittance flows, purchase power parity and sales/VAT
taxes, Mexico is still acutely under-retailed. It should be
noted that Mexican retail goods are about 67% as
expensive as those in the U.S. Most cities could support
at least twice their current retail space. 26
In 2006, the last year for which data can be
confirmed, rental rates for retail space varied from $1.25
per sq ft for spaces over 3,000 sq ft to $2.00 for those
under 500 sq ft. (See Chart X-5.)
Table X-2
Major Retail Markets in Mexico
City
Mexico City
Guadalajara
Monterrey
Tijuana
Juarez
Aguascalientes
Puebla
Leon
Toluca
Cancun
Size (Million
Square Feet)
14.1
7.9
5.7
5.3
4.6
2.6
2.3
2
1.9
1.5
Sources: Eduardo Bross Tatz; Commercial Real Estate Advisors
Where is Retail Development Headed?
The rapid development of retail centers in major
metropolitan areas has led to competitive pressures for
developers, investors and retailers in many of these
cities. Capitalization rates for new developments have
declined steadily from 14.5% two years ago to 12%
today, while those for acquisitions currently range
between 9% and 10%.27 As a result, growth in the retail
market has shifted to mixed-use developments in major
19
“Country Report: Mexico,” International Strategic Analysis, July 2008, p.21.
Dianne Solis and Alfredo Corchado, “Remittances to Mexico drop as U.S. economy slows, enforcement increases,” Dallas Morning News, Jan 31, 2008.
Accessed online on August 28, 2008 at http://www.dallasnews.com/sharedcontent/dws/news/world/mexico/stories/013108dnintremit.3d3d0e6.html .
21
Banxico, August 28, 2008.
Accessible at
http://www.banxico.com.mx/SieInternet/ consultarDirectorioInternetAction.do?
Accion=consultarCuadro&idCuadro=CF256&sector=5&locale=es.
22
“Country Report: Mexico,” EIU, 13, July 2008, p.13.
23
INEGI, Secretaría de Economía; Dirección General de Inversión Extranjera, 2008, http://dgcnesyp.inegi.org.mx/cgi-win/bdiecoy.exe/571?c=12607.
24
Eduardo Bross Tatz, “Global Tracks: Focus on Mexico and Central America,” presentation at 2007 ICSC Spring Convention, May 22, 2007 and CREA.
25
CoStar, ICSC Research.
26
Baer, Bob, “Mexico Retail by MSA: Under Supplied?” presentation delivered at the ICSC Spring Conference, May 22, 2007. Accessed online on August 28,
2008 at http://www.icsc.org/srch/mt/speaker/2007SC/0456.pdf.
27
Tatz, op.cit. and CREA 2007.
20
23
Features
Table X-3
Chart X-5
Retail Formats by Type
Average Rental Price per Retail Space in 2006
Number
186
58
52
43
14
16
4
373
Size (Square Feet)
25,134,150
18,638,087
11,570,453
7,355,457
5,372,681
2,794,451
1,310,568
72,175,847
Source: Commercial Real Estate Advisors, 2007
cities and to urban areas with populations with more
than 250,000 people who boast a strong local economy.
Convenience is a growing issue for consumers. An
expanding middle class has spurred growth in auto sales,
which has heightened the importance of good
accessibility and ample parking. As a result, many
developers are stressing the importance of these two
components as a way to differentiate their projects.
Strong retail expenditures and a limited number of
major retailers have attracted new players to the
Mexican market—such as Best Buy, Ripley and Saks
Fifth Avenue. With increasing spending power,
Mexicans are also becoming more aware of luxury
brands such as Louis Vuitton, Hermes and Ermenegildo
Zegna, among others, which have enjoyed great success
so far. Other brands that have also successfully
penetrated the Mexican market include: C&A, FCUK,
Nine West and Grupo Inditex (which includes the Zara
and Massimo Dutti brands, among others). Zara, which
opened its first store in 1992, has grown at a yearly rate
of three stores to more than 44.
Increasing competition has led developers to strive
to differentiate their projects through innovative designs
and retail concepts—particularly those that promote
group gatherings and entertainment as a means of
attracting customers to a retail center.
Good Development Opportunities Exist
Metropolitan areas with strong projected population
growth and solid base population and GDP per capita
levels likely present the best opportunities for retail
$2.50
$2.00
Rental
Price: $/SF
Category
Neighborhood Centers
Fashion Malls
Community Centers
Power Centers
Regional Centers
Entertainment Centers
Outlet Centers
Total
$1.50
$1.00
$0.50
$0.00
200 to 500
500 to 1000
1000 to 1500
1500 to 3000
over 3000
Size (Square Feet)
Source: Cushman & Wakefield
center developers. Based upon a weighted ranking of
metro areas by total population, population growth, and
GDP per capita, Cancun in Quintana Roo and Tijuana in
Baja California are expected to be prime markets for
retail development. Overall, the most attractive markets
for development tend to be near the border with the US
and in central states such as Baja California, Coahuila
and Queretaro.
Strong credit card issuance in major urban areas has
spurred the demand for large shopping centers and
fashion malls. In 2007, an estimated 35 new shopping
malls opened in Mexico, representing total investment of
US$1.2 billion. Mexican fashion malls are typically
anchored by one of three important retail chains: Grupo
Liverpool (28 Liverpool stores and 26 Fabricas de
Francia stores), Grupo Carso (54 Sears stores and 68
Dorians stores) and El Palacio de Hierro (9 stores). As a
result, there is a shortage of major retailers in this sector,
giving existing players a significant competitive
advantage in terms of lease rates, terms and conditions.
Metropolitan areas targeted for existing shopping
center expansions include Mexico City (Federal
District), Monterrey and Guadalajara. With a large,
established consumer base, these metropolitan areas
have lower population growth forecasts and relatively
high land prices, thus curbing the appeal of retail
development and making acquisitions of successful retail
centers or value-added opportunities more attractive.
Dr. David Lynn is Managing Director and Head of the Research & Investment Strategy Group at
ING Clarion Partners. Bohdy Hedgcock is an Associate in the Research & Investment Strategy
Group. ING Clarion Partners offer tailored real estate investment management services to
institutional investors, including the management of capital invested in private market real estate for
both U.S. and international clients. They can be contacted at [email protected] and
[email protected].
24
Economy
Economy
Mexicali is the state capital of Baja California.
The Mexicali / Imperial County region has become a beacon for clean and high
technology investment as exemplified by ING Clarion’s Silicon Border project
which recently secured a $3.5 billion investment from solar cell manufacturer, QCells.
Over 200 maquiladoras operate in Mexicali, and include companies such as:
Honeywell, Gulfstream, Cardinal Health, BF Goodrich’s aerospace division,
Mitsubishi, Daewoo, Kenworth, Black & Decker and Sony, among others.
Mexicali is also home to many food processing plants including: Nestle, Jumex,
Bimbo, Coca-Cola, and Sabritas, among others.
As a horticulture center, Mexicali hosts the Agrobaja convention every year
attracting farming professionals from the US and Mexico. Common crops grown
in Mexicali are scallion, green onion, asparagus, cotton, alfalfa, wheat, and
corn, among others.
The Mega-Region Initiative was funded in 2008 to assess infrastructure and
workforce needs in Cleantech, Logistics, Specialized Manufacturing,
Construction Materials, and applied Biotechnology in San Diego, Imperial Valley
and Baja California, for policy and initiative recommendations to nurture growth
in the above industries.
Renewable energies and bio-fuels will promote industry and regional growth
with clean inexpensive energy.
Silicon Border and ING Real Estate Close Science Park Joint Venture Agreement
Page 1 of 2
October 01, 2008 10:00 AM Eastern Daylight Time
Funding Provides Capital to Complete the Infrastructure for Multi-Billion Dollar Solar Expansion
SAN DIEGO--(BUSINESS WIRE)--Silicon Border Development and ING Clarion Partners announced today they have finalized
collaboration and financing plans to build a large, state-of-the-art science park specifically targeting solar, LCD, nanotechnology,
aerospace, and semiconductor companies. The Silicon Border Science Park, located in Mexicali, Baja California, Mexico, has
already begun to attract leading edge companies in these markets.
Silicon Border recently announced an investment of up to $3.5 billion from Q-Cells, the world’s largest independent solar cell
manufacturing company. The park will become the cornerstone to turn Mexicali, Mexico and the Southern California region into
a dominant player in the aforementioned markets. Additionally, the park’s location provides a gateway for North America to
become a global leader in capital intensive, high technology manufacturing.
“We expect other prominent companies to soon follow Q-Cells’ lead,” stated Daniel J. Hill, Chairman and CEO, Silicon Border
Development. “We are in talks with a variety of companies that support photovoltaic products such as silicon suppliers, glass
suppliers, metal components, wiring, converter boxes, support infrastructure, equipment manufacturers, chemicals, gases and
other raw materials. Also we are creating the only science park that provides technology companies with the total infrastructure
solution, and duty free access to the North American market, Latin America and Europe.”
Silicon Border’s initial focus is to create and build out its solar cluster. It is expected that a portion of the solar products will stay
in this region and be used to build solar power plants, commonly referred to as “solar farms.” Ultimately, Silicon Border’s
customers and utilities in the Baja California-Southern California region will conceptualize, design, manufacture and use these
products. The goal is to make this region a worldwide destination for anyone participating or seeking to participate in solar
technology.
Silicon Border Science Park enables the rebirth of science based manufacturing on the North American Continent. It is the
kernel around which scientific and technology clusters grow along the border of California and Baja California.
Science parks differ from industrial parks because they are designed to house everything required for leading edge
manufacturing. In addition to special electrical infrastructure and plumbing for water, the Silicon Border Science Park will be laid
out similar to a college campus and will feature a university, technical training and research facilities, as well as recreation
facilities and a clubhouse in which employees, executives, and academia can interact. The park will be modeled after science
parks in Asia and is expected to be the first of its kind in North America. Additionally, the border location enables the cost
structure to be competitive with those throughout Asia.
“The trend has been to shift manufacturing to South Asia over the past 20 years and we are now providing an alternative to that
model,” added Hill. “We will see a portion of manufacturing remain in North America, enabling both Mexico and United States to
participate in the technology. Global industry leaders can take advantage of the talent in this region in order to service this part
of their market. North America now has its own leading edge technology haven that will enhance effective competition with the
rest of the world.”
James Hendricks, managing director at ING Clarion Partners said, “Mexico has been successful in attracting companies from
around the world because of the stable environment and aggressive support for job growth and education. We see tremendous
opportunity in Mexico’s commercial real estate sector; we have been making investments throughout the country and will
continue to do so. Going forward, we expect our Silicon Border partnership to open the door for opportunities to provide buildto-suit services to the world-class companies moving here for the unique infrastructure Silicon Border, the state and federal
Government are providing.”
The Silicon Border Science Park is a joint venture and is being developed in four phases. The first is currently underway and is
expected to be complete January 2009. The infrastructure for the first phase will cost $35 million. The remaining three phases
will be created and completed over a 10-year period. ING, besides providing the capital for infrastructure, also offers build-to-suit
leases to companies interested in the park. Silicon Border Development is responsible for the marketing of the project and the
management of the Science Park.
http://www.businesswire.com/portal/site/home/template.NDM/news/more/?javax.portlet.tpst=0b2c9a4dd...
10/1/2008
Page 2 of 2
About Silicon Border
Silicon Border is a 10,000 acre high-technology development project catering to the specialized needs of the semiconductor
process technology/solar and other capital-intensive technology sectors. Planned for development along the U.S.-Mexico border
in Mexicali, Silicon Border enables a cost-effective and competitive manufacturing alternative in North America for emerging and
global companies. Improving upon the world’s leading technology parks, the project’s 15 square miles of world-class
infrastructure and education will support the stringent requirements of the semiconductor, flat panel display, solar, aerospace
and biotechnology industries. More information about Silicon Border is available online at www.siliconborder.com.
About ING Clarion
Founded in 1982, ING Clarion and its affiliates manage almost $50 billion in assets in the private equity, public equity, and public
debt sectors of the real estate markets. The ING Clarion organization has almost 500 associates located in major markets
throughout the United States.
The firm is the U.S. investment management arm of ING Real Estate, a global real estate company active in investment
management, development and finance. With a total business portfolio of almost $160 billion and offices in 22 countries in
Europe, the United States, South America, Canada, Asia and Australia, ING Real Estate ranks among the world's strongest real
estate companies.
ING Real Estate is part of ING Group, a global financial institution of Dutch origin offering banking, insurance and asset
management to over 75 million private, corporate and institutional clients in more than 50 countries.
More information about the firm is available at www.ingclarion.com.
Contacts
Silicon Border
Michael Oliver, 858-748-9700
[email protected]
or
Octavio Garza, 011-52-686-552-2224
[email protected]
or
Media Contacts:
Shelton Group
Jason Caldwell, 972-239-5119 x206
[email protected]
or
Melissa Conger, 972-239-5119 x137
[email protected]
or
ING Contacts:
MacMillan Communications
Mike MacMillan/Sara Gormley, 212-473-4442
[email protected]
Permalink: http://www.businesswire.com/news/home/20081001005306/en
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10/1/2008
Imperial Valley
Agribusiness
2006 Agricultural Production Gross Value (In $ millions)
Apiary $3.1
Seed & Nursery $56.2
Fruit & Nut $32.2
Agriculture has had a rich and fruitful tradition in Imperial Valley. Today,
the region is becoming fertile ground for the location of biotechnology
firms that recognize the advantages of locating here:
›
Proximity to biotechnology firms and research
›
Optimal climate for year-round growing season
›
Publicly owned water and energy delivered at an affordable cost
›
Designated Enterprise Zones to attract businesses through tax
credits and other benefits
›
Availability of a youthful workforce
›
Available land zoned for agricultural and commercial use
›
Central location to major southwest markets
›
Access to three international ports
Livestock $410.9
Veg. & Melons $558
Field Crops $308.7
Source: Imperial County Agricultural Crop & Livestock Report
Top Ten Crops for 2007
Rank Crop
Gross Value
1 Cattle
$333,781,000
2 Alfalfa Hay
$113,853,000
3 Leaf Lettuce
$ 100,810,000
4 Lettuce
$ 75,252,000
5 Broccoli
$ 61,283,000
6 Misc. Vegetables $ 59,303,000
7 Misc. Livestock
$ 57,690,000
8 Sudan Grass Hay $ 49,065,000
9 Carrots
$ 49,658,000
10 Onions
$ 39,602,000
Source: Imperial County Agricultural Crop & Livestock Report
Resources
Imperial Valley Vegetable Growers
Association
http://www.ivvga.com/
University of California Agricultural
Extension Center
http://ceimperial.ucdavis.edu/
Imperial County Farm Bureau
http://www.icfb.net/
Imperial County Agricultural
Commissioner
http://www.co.imperial.ca.us/ag/
More at www.IVEDC.com:
› Available Properties
› Imperial County Economic Development Strategic Plan
› Imperial Valley Regional Profile
› City Profiles
› Business Resources
› Investor Directory and much more…
1224 State Street, Suite C, El Centro, CA 92243 | P: (760) 353-8332 | F: (760) 353-9149 | www.ivedc.com
The Imperial Valley Economic Development Corporation (IVEDC) is a private corporation designed to assist businesses in expanding or relocating to
the Imperial Valley region of California. Our investors include a host of private and public corporations that benefit from the growth of the economy.
Agribusiness
Bio-Fuels
Renewable energy is growing
quickly in Imperial Valley. With its
rich and fruitful tradition in
agriculture, the region is becoming
fertile ground for the location of bio
-fuel companies that recognize the
advantages of locating here:
›
›
Opportunities with Bio-Fuels
Algae
Ethanol
Publicly owned water and energy delivered at an
The Imperial Valley is
working with San Diego to
develop a regional model
centered on the research
and commercial production
of algae. Algae can be
used as a bio-mass for biofuel.
Sugarcane for ethanol is
already being grown in the
Imperial Valley. There are
also opportunities with
sweetsorghum, sugarbeets,
switchgrass, and other
plant varieties.
affordable cost
Bio-Diesel
With the wide variety of
crops grown in the Imperial
Valley, many different
types of organic matter can
be used for bio-mass,
which can be converted
into bio-diesel.
Available land zoned for agricultural and
commercial use
The Imperial Valley is a
prime location for the
production of bio-diesel
from algae and manure.
Bio-Mass
›
Optimal climate for year-round growing season
›
Central location to major southwest markets
Top Ten Crops for 2007
›
Proximity to biotechnology firms and research in
Rank Crop
San Diego
1
Cattle
$333,781,000
Designated Enterprise Zones to attract
2
Alfalfa
$113,853,000
businesses through tax credits and other
3
Leaf Lettuce
$100,810,000
benefits
4
Head Lettuce
$75,252,000
5
Broccoli
$61,283,000
6
Misc. Vegetables
$59,303,000
7
Misc. Livestock
$57,690,000
8
Carrots
$49,658,000
9
Sudangrass Hay
$49,065,000
10
Onions
$39,602,000
›
›
Availability of a youthful workforce
›
Access to three international ports
2007 Agricultural Production Gross Value
(In $ millions)
Gross Value
Source: Imperial County Agriculture Crop and Livestock Report
Apiary, 3.1
Field Crops,
30 8.7
Fruit & Nut
Crop s, 32.2
Livestoc k,
410.9
Vegeta bles &
Melons, 558
Seed &
Nursery,
56.2
Source: Imperial County Agricultural Crop and Livestock Report
› Imperial County Economic Development
Strategic Plan
› City Profiles
› Incentives
1224 State Street, Suite B, El Centro, CA 92243 | P: (760) 353-8332 | F: (760) 353-9149 | www.ivedc.com
The Imperial Valley Economic Development Corporation (IVEDC) is a private corporation designed to assist
businesses in expanding or relocating to the Imperial Valley region of California. Our investors include a host of
private and public corporations that benefit from the growth of the economy.
Energy
Renewables
California’s Imperial County will be
“The Renewable Energy Capital of
the World.”
Facts At-A-Glance
New geothermal facilities with a capacity of 522 MW
are currently in various stages of development and
construction.
Imperial Valley Currently has two enterprise zones,
(20,000+ acres) to help businesses expand and
save money through tax credits and other benefits.
Powered For Growth
The State of California has set a mandate that
utility companies generate 20% of their
electricity from renewable energy sources by
2010.
Attributes like abundant sunchine, low-priced
land, geothermal activity and water rights
make Imperial Valley a “natural” to be the
renewable energy leader. Some advantages
of locating here are:
Central Location
To Major Southwest Markets
Abundant Public And Private Land Available
Renewable Energy Potential
Technology
Geothermal
Solar
Wind
Biomass
Total
All
CSP
Distributed
All
All
Technical
Potential
(MW)
2,488.00
28,600.00
346.00
10,755.00
94.70
42,283.00
Economic
Economic
Potential-Base Potential-High
Case (MW)
Case (MW)
1,682.00
1,976.00
17,875.00
93.00
4,493.00
94.70
24,531.00
246.00
40.70
1,969.00
Current Transmission Capacity Of 1,000 MW
Renewable energy potential information based on public documents
Oil/Gas
Monthly Rate
146 (18%)
Hydroelectric 68.83 (9%)
Geothermal 570.69 (73%)
Power Rate
Schedule
Large General
(100+kW demand)
Customer Charge Demand Charge
NA
$2.75 per kW of
billing demand
Energy Charge
per kWh
$0.0659
There are additional State-mandated charges that may affect the customer’s energy costs, including the
Public Benefits Charge (2.85% per KWH) and the California Energy Surcharge ($.0003/KWH).
18%
9%
73%
Source: California Energy Commission
› Imperial County Economic Development
Strategic Plan
› City Profiles
› Incentives
1224 State Street, Suite B, El Centro, CA 92243 | P: (760) 353-8332 | F: (760) 353-9149 | www.ivedc.com
Border Crossings at the Calexico Ports of Entry, 2005-2006
Calexico - Downtown
Buses
Personal Vehicles
Bus Passengers
Pedestrians
Calexico - East
Trucks
Loaded Truck Containers
Empty Truck Containers
Trains
Loaded Rail Containers
Empty Rail Containers
Buses
Personal Vehicles
Train Passengers
Bus Passengers
Pedestrians
International Trade/
Logistics
Ranked the fastest growing county in the state, Imperial Valley is emerging as
Southern California’s newest hot spot for growth.
With the newly formed International Committee, Imperial Valley Economic
Development Corporation (IVEDC) is seeking to maximize the county’s position
in the global marketplace. Globalization for IVEDC is now.
Imperial Valley’s Advantages
› Three ports of entry with Mexico
› Railway access to Los Angeles, San Diego, Arizona and mainland Mexico
› Access to I-8 and I-10
› Specific planned areas for international logistics
Mesquite Lake - 5,100 acres
Gateway to the Americas - 1,700 acres
2005
2,217
6,234,602
29,956
11,846,703
4,481,014
2005
320,212
171,745
139,391
415
3,881
8,477
284
3,271,961
1,239
4,889
6,492,882
1,456
2006*
3,004
8,021,360
43,572
15,034,720
2,897,140
2006
425,744
233,240
172,168
441
3112
9,704
1,152
5,232,936
1,928
2,668
10,724,156
5,760
*2006 projected amounts based on actual first quarter data.
Source: U.S. Department of Transportation, Research and
Innovative Technology Administration, Bureau of Transportation Statistics, Border Crossing/Entry Data; based on data
from U.S. Department of Homeland Security, Customs and
Border Protection, OMR database.
Value of Trade Thru the Calexico East Port of Entry, 2000-2006
2000
2001
2002
2003
2004
2005
2006
Total
Mexico to U.S.
4,822,487,355
4,148,865,332
4,764,714,036
5,120,083,717
5,625,417,165
6,047,749,247
6,175,814,885
36,705,131,737
U.S. to Mexico
3,497,061,328
3,198,811,555
3,644,136,604
3,769,872,569
4,317,299,464
4,702,484,864
4,623,113,763
27,752,780,147
*2006 data is for January to November.
Source: Bureau of Transportation Statistics.
Resources
California Center for Border and
Regional Economic Studies
www.ccbres.sdsu.edu
Imperial Valley Foreign Trade Zone ITC Diligence, Inc.
www.ftzconsultants.com
District Export Council
www.us-dec.com
San Diego World Trade Center
www.sdwtc.org
Imperial Valley Enterprise Zone
www.ivez.com
More at www.IVEDC.com
›
›
›
›
›
›
Available Properties
Imperial County Economic Development Strategic Plan
Imperial Valley Regional Profile
City Profiles
Business Resources
Investor Directory and much more…
1224 State St, Ste B, El Centro, CA 92243 Phone (760) 353-8332 Fax (760) 353-9149 www.ivedc.com
The Imperial Valley Economic Development Corporation (IVEDC) is a private corporation designed to assist businesses in expanding or relocating to
the Imperial Valley region of California. Our investors include a host of private and public corporations that benefit from the growth of the economy.
Education
Mexicali’s Residents Are Well Educated
Mexicali is home to 12 Universities.
The Gran Plaza trade area in Mexico also ranks #1 in population over the age of
15 with at least an eighth grade education (24.6%). (Note – Does not include
population with secondary or university education.)
The Gran Plaza trade area in Mexico achieves the top ranking again among
border outlet trade areas, with populations between the age of 15 and 24
currently attending school (39.94%). (Averages are approximately 5% lower in
other border outlet trade areas.)
Education in Border Outlet Trade Areas of Mexico
Percentage of Population Older Than 15 With High School
Education or Greater (2005)
38.00%
37.09%
37.00%
36.00%
35.00%
34.27%
34.00%
32.49%
33.00%
32.00%
32.89%
30.91%
31.00%
30.00%
29.00%
28.00%
27.00%
Gran Plaza Las Americas The Outlet
Outlets
Premium
Shoppes at
Outlets
El Paso
Laredo
Rio Grande
Valley
Premium
Outlets
Source: Instituto Nacional de Estadistica y Geografia (INEGI): Marco Geostadistico Municipal 2005.
Percentage of Population Older Than 15 With High
School Education or Greater (2005)
Data Breakdown by Mexican Municipality
Gran Plaza Outlets
Mexican Municipality
Mexicali
SLR Colorado
Weighted Avg
% Higher
38.58%
29.00%
37.09%
% Higher
Tijuana
Ensenada
Tecate
Rosarito
Weighted Avg
34.63%
35.02%
30.21%
28.16%
34.27%
% Higher
Juarez
Weighted Avg
30.91%
30.91%
Laredo
Nuevo Laredo
Weighted Avg
% Higher
% Higher
Reynosa
Valle Hermoso
Rio Bravo
Matamoros
Weighted Avg
32.49%
32.49%
34.75%
27.81%
26.97%
32.95%
32.89%
Source: Instituto Nacional de Estadistica y Geografia (INEGI): Marco
Geostadistico Municipal 2005.
Percentage of Population Over the Age of 15 With at Least an
Eighth Grade Education (2005)
25.00%
24.60%
24.50%
24.13%
23.90%
24.00%
23.50%
23.25%
23.27%
23.00%
22.50%
Gran Plaza
Outlets
Premium
Shoppes at El
Outlets
Paso
Laredo
Rio Grande
Valley
Premium
Outlets
The Gran Plaza Trade Area in Mexico also ranks #1 in population over the age of 15
with at least an eighth grade education (24.6%). (Note-Does not include population
with secondary or university education.)
Percentage of Population Older Than 15 Who Have
Completed Education Through Eighth Grade (2005)
Gran Plaza Outlets
Mexicali
SLR Colorado
Weighted Avg
% Basic
24.72%
23.94%
24.60%
% Basic
Tijuana
Ensenada
Tecate
Rosarito
Weighted Avg
24.67%
21.68%
22.76%
24.00%
23.90%
% Basic
Juarez
Weighted Avg
23.25%
23.25%
Laredo
Nuevo Laredo
Weighted Avg
% Basic
% Basic
Reynosa
Valle Hermoso
Rio Bravo
Matamoros
Weighted Avg
23.27%
23.27%
25.11%
19.23%
20.81%
24.52%
24.13%
Percentage of Population Ages 15-24 That Attend School (2005)
45.00%
40.00%
39.94%
35.35%
36.50%
35.00%
33.95%
33.07%
Laredo
Rio Grande
Valley
Premium
Outlets
30.00%
25.00%
20.00%
15.00%
10.00%
5.00%
0.00%
Gran Plaza
Outlets
Premium
Shoppes at El
Outlets
Paso
The Gran Plaza trade area in Mexico achieves the top ranking again among border
outlet trade areas with populations between the ages of 15 and 24 currently
attending school (39.94%). (Averages are approximately 5% lower in other border
outlet trade areas.)
Percentage of Population Ages 15-24 That Attend School
(2005)
Gran Plaza Outlets
Mexicali
SLR Colorado
Weighted Avg
% Attend
40.86%
34.94%
39.94%
% Attend
Tijuana
Ensenada
Tecate
Rosarito
Weighted Avg
34.35%
39.31%
33.70%
32.67%
35.35%
% Attend
Juarez
Weighted Avg
36.50%
36.5
Laredo
Nuevo Laredo
Weighted Avg
% Attend
% Attend
Reynosa
Valle Hermoso
Rio Bravo
Matamoros
Weighted Avg
33.95%
33.95
30.81%
30.94%
31.11%
36.52%
33.07%
Recreation
Imperial County Recreation
Imperial County’s population virtually doubles from vacationers during certain
periods of the year from outdoor enthusiasts and snowbirds. Over a typical
Thanksgiving holiday about 200,000 visitors come to Imperial County in just 4
days.
The Imperial Sand Dunes Recreation Area attracts an estimated 1.4 million
visitors a year according to the Bureau of Land Management.
Average daytime temperature high in November is 78 degrees Fahrenheit, and
70 in December and January.
Monthly Average Temperatures For Calexico, CA
Source: Weather.com
120
107
106
103
101
100
94
91
86
80
79
76
75
71
70
Degrees Farenheit
78
77
70
68
61
60
59
54
49
47
45
40
41
41
20
0
Jan
Feb
Mar
Apr
May
Jun
Average High
Jul
Aug
Average Low
Sep
Oct
Nov
Dec
Standard of Living
Mexican Standards of Living
The Gran Plaza trade area has the highest standard of living among Mexico’s
(BHDI).
BHDI is derived from per capita income, education and health indices for
measurement of a region’s overall standard of living.
averages.
In 2007, Mexican residents held 13 million credit card accounts, which are 2.5
times more than existed in 2002. Credit card transactions have grown annually
at approximately 10%.
Standard of Living
BHDI of Border Outlet Trade Areas in Mexico
0.755
0.752
0.750
0.745
0.742
0.741
0.740
0.738
0.737
0.735
0.730
0.725
Gran Plaza
Outlets
Premium
Shoppes at El
Outlets
Paso
Laredo
Rio Grande
Valley
Premium
Outlets
The Gran Plaza trade area has the highest standard of living among Mexico's
(BHDI).
averages.
A Note on BHDI: The Human Development Index (HDI) was established as an alternative to relying on real per capita income to measure a country's economic
development. Minor modifications were made to the HDI to get the BHDI, due to available information for a more local perspective. Both indicies use a combination of per
capita income, education, and health to more accurately convey an areas prosperity.
Source: Anderson, Joan and Jim Gerber (Oct. 2006), "Human Development Index for the Mexico-US Border Regions," University of San Diego, Trans-Border Institute Border Brief
Mexicali, Mx
Tijuana, Mx
Juaréz, Mx
Nuevo Laredo, Mx
Reynosa, Mx
Matamoras, Mx
BHDI of Border Outlet Trade Areas in Mexico
Gran Plaza Outlets
Mexicali
SLR Colorado
Weighted Avg
BHDI
0.757
0.725
0.752
BHDI
Tijuana
Tecate
Weighted Avg
0.743
0.734
0.742
BHDI
Juarez
Weighted Avg
0.741
0.741
Laredo
Nuevo Laredo
Weighted Avg
BHDI
BHDI
Reynosa
Matamoros
Rio Bravo
Valle Hermoso
Weighted Avg
0.738
0.738
0.745
0.737
0.709
0.713
0.737
Source: Anderson, Joan and Jim Gerber (Oct. 2006), "Human
Development Index for the Mexico-US Border Regions," University of San
Diego, Trans-Border Institute Border Brief
A Human Development Index for the Mexico-US Border Regions
Joan Anderson, University of San Diego
James Gerber, San Diego State University
In the 1980s, researchers in the United Nations Development Program (UNDP)
created the Human Development Index as an alternative to relying on real per capita
income for measuring a country’s economic development. While it had long been
recognized that per capita income could not capture the multidimensional nature of
economic development, other attempts at indices were either too complex or had ignored
the income dimension. Under the intellectual guidance of economist Mahbub ul Haq, the
UNDP developed a simple but broader index, the Human Development Index, or HDI.
This index includes per capita income, and also education and health indices as a broader
reflection of economic development. The HDI is calculated for most countries of the
world and has been published in the Human Development Report every year since 1990
(http://www.undp.org).
The index ranges from 0 to 1.00, with countries above 0.8 arbitrarily classified as
high human development, those between 0.5 and 0.79 as medium human development
and those below 0.5 as low human development. Importantly, a country’s HDI ranking
can differ substantially from rankings based on income alone, especially where income is
distributed unequally (Human Development Report, 2000, pp. 147-50).
The Border Human Development Index (BHDI) is our adaptation of the UNDP’s
methodology. Our purpose is to provide a comparison of levels of economic
development for the 25 US and 38 Mexican communities that touch the border. This
index follows the methodology of the UNDP, maintaining the combination of income,
education, and health, but in order to maintain cross-border comparability at the local
level, we make a few minor changes with respect to the specific variables we use. We
hope that this is the beginning of a richer and more nuanced discussion about
comparative development, border needs, and the trajectory of Mexico-US integration in
the border region. In the remainder of the brief, we describe a Border Human
Development Index (BHDI) and explore what it tells us about the development needs of
the border region.
Defining human development
In order for humans to have a chance in life, they need three basic resources:
income, health, and education. With income, the material necessities of life can be
obtained, while good health provides individuals with the physical capacity to achieve
and to enjoy the fruits of their achievement, and education increases opportunities and
choices, along with increasing individuals’ productive capacity. Our BHDI shares the
limitations of the HDI in that these are simplifications of many dimensions and
complexities of human development. For example, they do not say anything about
political and civil freedoms, the absence of which can severely limit individual freedom,
opportunities and choices. The point of this exercise, however, is not to have the last
word on what is development, but rather to provide a more sophisticated alternative to
per capita income, and to encourage an examination of a wider range of indicators.
Measuring income, education, and health
The income component of the BHDI is per capita income in constant 1996 dollars.
1
Since Mexican income is only officially measured at the state and national levels, we
estimated income per capita for the border municipios using employment data from the
census and official estimates of income in each sector of each border state’s economy.
Mexican pesos were translated into U.S. dollars using purchasing power parity exchange
rates in order to compensate for price differences between the US and Mexico (Penn
World Table Version 6.1, Heston, Summers, and Aten, 2002). Following the UNDP
methodology, per capita income was converted to logarithms in order to reduce the
impact of extremely high values of income in the index. So, for example, incomes per
capita of $27,334 in San Diego in the year 2000 are less of an advantage over Imperial
County’s $18,508 than the dollar difference ($8,826) implies.
The educational component of the BHDI is composed of two variables, the
proportion of school-aged population that are enrolled in primary and secondary school
and the proportion of population 25 and older who have graduated from high school (i.e.
completed 12 years of schooling). This is a modification of the UNDP’s index, which
combines enrollments with literacy instead of high school graduation rates. Literacy
rates are available for local areas along the Mexican border, but the US Census Bureau
ceased gathering literacy data at state and local levels after 1970. Both countries report
high school completion rates of local populations.
The UNDP’s index includes a measurement of life expectancy at birth as its
indicator of health. Life expectancy data is available at the national and state levels for
both the US and Mexico, but not at the county or municipio level. Hence, in calculating
the BHDI we substitute the infant mortality rate, which is closely correlated with life
expectancy and is a good proxy for medical care and conditions of housing, sanitation,
and water quality.
Income, education, and health are each converted to a scale that ranges from 0 to
1.00 by taking the difference between the actual value and a hypothetical maximum and
dividing it by the difference between the hypothetical maximum and minimum values, as
shown in the following equation:
Index = (Maximum value – actual value) / (Maximum value – Minimum value).
In effect, this ratio is the percentage of the difference between the maximum and
minimum values that has been traveled by a region. Each of the three indexes are then
combined using equal weights of one-third. For the health and education variables, the
maximum value is assumed to be 100 percent and the minimum values are set at 0
percent. In the case of income per capita, we use the UNDP’s definitions of the
maximum and minimum as $40,000 and $100, respectively. These are arbitrary numbers
and their values influence the value of the income index, but not the ranking of counties
and municipios.
Income, education and health indexes
Our sample includes all 25 US counties and 38 Mexican municipios that touch the
border. The primary data sources are the US and Mexican census for 1990 and 2000.
Income
Figure 1 shows the trend in real per capita income (regional gross product per
capita, or RGP per capita) from 1969 to 1999. Real per capita income has increased for
both border regions, as well as both nations. Mexico’s border region income has
consistently been slightly higher than the national level while the US has lower border
2
1000s of 1996 US Dollars
incomes with a growing gap. The absolute gap in per capita income between the US and
Mexico has also grown.
Looking at individual counties and municipios, the data reveal that the two
communities with the highest per capita incomes in both 1990 and 2000 are San Diego,
California, and Pima (Tucson), Arizona. The communities with the lowest per capita
incomes were Janos, Chihuahua, in 1990, and Santa Cruz, Sonora, in 2000. In general
and as expected, incomes in US counties are above Mexican municipios, but there are a
few exceptions. In 2000, Ciudad Acuña and Ciudad Juárez were both above the Texas
counties of Maverick and Presidio. An additional 12 municipios, including all the Baja
California municipios, were above Starr county, Texas, the poorest county in the US
border region.
Fig. 1 Gross Product per Person
35
30
25
20
15
10
5
0
15.6
14.2
9.5
9.0
7.4
1970
U.S.
21.3
19.0
1980
U.S. Border Region
11.1
1990
2000
Mexico
MX Border Region
These dollar values are then converted to an index where 1 is the maximum and 0 the
minimum, according to the UNDP methodology. Figure 2 shows the income index for
1990 and 2000.
Fig. 2: Border Income Index
1.20
0.94
Index
1.00
0.80
0.72
0.97
0.88
0.76
0.72
0.9
0.79
0.60
0.40
0.20
0.00
1990
Mexico
2000
MX Border
United States
US Border
Individual counties and municipios have indexes that range from 0.94 to 0.69 in 1990 and
from 0.97 to 0.69 in 2000. Figure 2 represents averages for each side of the border along
with estimates for the US and Mexico as a whole. For the border regions, the gap in
gross regional product decreased slightly from 0.12 index points in 1990 to 0.11 points in
2000. The rankings for all counties and municipios are in Table A.1 in the appendix.
Education
Both Mexico and the US have increased the percentage of population, ages 6 to
19 that are enrolled in primary and secondary school, but the increase is most dramatic on
3
the Mexican side of the border. (Secondary refers to both middle school and high school
or preparatoria). In 1950, the Mexican border region (the combined border municipios)
had 39 percent of its 6 to 19 year old population in school, compared to 27 percent
nationally. This increased to 69 percent in 1990 and 75 percent in 2000 in the Mexican
border regions, while the Mexican national figure stood at a nearly identical 76 percent in
2000. The US border region proportions are slightly lower than the national figures,
with 83 percent of the age cohort enrolled in 1990 (compared to 87 percent nationally)
and 90 percent in 2000 (93 percent nationally).
Fig 3: Percent of Adults with High School
100
Percents
80
60
40
20
0
1950
1960
Mexico
1970
1980
MX Border
US
1990
2000
US Border
For educational attainment this study uses the proportion of adult population, 25 years
and older who have completed 12 or more years of education. Figure 3 shows the trend
in this proportion from 1950 through 2000. In 1950 only 34 percent of adults in the US
border region had 12 or more years of education, increasing to 74 percent in 2000, but
always remaining below the national rate. In the Mexican border region in 1950, only 2.6
percent had 12 or more years of education, increasing to 30 percent by 2000, almost up to
the1950 US level. The Mexican border region, though higher in per capita income is
lower in educational attainment than the national average.
Index
Fig. 4: Border Education Index
0.90
0.80
0.70
0.60
0.50
0.40
0.30
0.20
0.10
0.00
0.79
0.85
0.73
0.45
0.45
0.38
0.45
1990
Mexico
0.8
2000
MX Border
United States
US Border
Enrolment and high school completion rates are combined into an educational
index using weights of one-third for enrolment and two-thirds for the high school data.
The results for 1990 and 2000 are shown in Figure 4, where it is easy to see a substantial
4
gap between the US and Mexico, both nationally and in the border regions. As Table A.2
in the appendis shows, in 1990, at the local level, the education index ranged from 0.81 in
San Diego county to 0.16 in the municipio of Ascension, Sonora. In 2000, the range was
from 0.86 in Pima, Arizona, to 0.22 in Manuel Benavides, Chihuahua. There is no
overlap between US and Mexican border communities for this index. Starr, Texas, was
the lowest US county in 1990 but still 0.10 index points above the highest Mexican
municipio, Mexicali (0.52 to 0.42). By 2000, the gap between the lowest US county
(Starr, 0.54) and the highest Mexican municipio (Cananea, Sonora, 0.504) had shrunk to
approximately 0.04 index points. In general, however, the cross border gap in education
is very large, even larger than the income gap.
Health
The variable used to measure health is infant mortality, measured in number of
infant deaths per 1000 live births. In both countries the rate of infant mortality has
steadily decreased, falling faster in Mexico than in the US, so that by 2000, the gap
between infant mortality rates was very small. The rate on the border is very close to the
national rate in both countries. For Mexico, the data is only available for the 1990 and
2000 censuses at the local (border) level.
To use this data in the Human Development Index, the infant mortality rate is
translated into the infant survivability rate. This index is shown in Figure 5. US-Mexico
comparisons across time indicate that differences in health conditions are shrinking and
the differences are smaller than those for income or education. The gap between the US
and Mexican border regions decreased from .016 to .010 between 1990 and 2000.
Fig. 5: Health Index
1.00
0.991
0.986 0.985
Index
0.99
0.98
0.993 0.995
0.993
0.976 0.977
0.97
0.96
1990
MEXICO
MX Border Region
2000
UNITED STATES
US Border Region
As shown in Table A.3 in the appendix, this index more than the others, has a
great deal of overlap between US counties and Mexican municipios. Mexico made major
gains in health and has narrowed the gap with the US, at least in infant mortality. At the
same time, health issues continue to be a serious problem on the US border, as shown by
the fact that the communities with the lowest infant survivability index for the combined
Mexican and US regions in 2000 are two Texas counties, Kinney and Hudspeth, with
0.973 and 0.968, respectively.
The Border Human Development Index (BHDI)
Figure 6 shows the results of combining the income, education and health indexes
into the Border Human Development Index. In the aggregate there is a significant gap
between the US and Mexico and their respective border regions. The US border region’s
BHDI is below that of the US and slightly more below in 2000 than in 1990. The
Mexican border region, while slightly below the national HDI in 1990, is above the
5
Mexican national rate in 2000. It increased by .04 in the 10 years, while in the US border
region it only increased by .019, narrowing the overall BHDI gap.
Fig. 6: Border Human Development Index
BHDI Index
1.00
0.80
0.91
0.72
0.93
0.89
0.72
0.71
0.91
0.74
0.60
0.40
0.20
0.00
1990
Mexico
2000
MX Border
US
US Border
The indexes for the border communities ranged from 0.62 to 0.92 in 1990 and
from 0.65 to 0.94 in 2000. San Diego has the highest BHDI of all the border counties
and municipios, followed by Pima County, Arizona, in both years. At the bottom of the
ranking are three Mexican municipios: Janos and Manuel Benavides, Chihuahua, and
Hidalgo, Coahuila. Overall, there is no US county lower than the highest Mexican
municipio, even though there is a considerable amount of overlap of counties and
municipios in the infant survivability sub-index and some overlap in the per capita
income sub-index. See Table A.4 in the appendix for the rankings of all counties and
municipios.
Conclusions
Although the Border Human Development Index is a relatively simple index, its
construction is a useful exercise. It not only allows us to directly compare economic
development levels of border communities on both sides of the border, it also lets us
compare the components of the index. Through an examination of the BHDI sub-indexes,
we find that education is the area where cross border differences are greatest. This stems
from the lack of high school in Mexico as the standard for school leaving. Rather,
Mexican law sets the 9th grade as the end of compulsory education, a level that the US
exceeded in the 1920s and 1930s. By comparison, there is a much smaller gap in cross
border health indicators, and income differences, while notable, are still less than
education differences. Recognizing education as a major factor in the development gap,
helps point towards policies that could narrow the gap.
In his discussion of the UNDP’s human development index, Nobel Laureate
Amartya Sen recognized the “inescapably crude” nature of the HDI, but also pointed out
that it can “broaden substantially the empirical attention that the assessment of
development processes receive,” due in part to the fact that it is “not exclusively focused
on economic opulence” (Sen, Human Development Report, 1999, p. 23). In this regard,
we think that the BHDI serves as a useful but rough comparison of the counties and
municipios along the US-Mexico border.
For a more detailed description of the BHDI, see Joan B. Anderson and James Gerber, (2004) “A Human
Development Index for the United States-Mexico Border.” Journal of Borderlands Studies. 19:2. 1-26.
6
Appendix
BHDI Rankings of US and Mexican Border Communities
Table A.1
Income Sub-Index: Gross Regional Product per Capita
1970
MEXICO
0.670
Border Region 0.719
UNITED STATES
0.861
Border Region 0.828
1980
MEXICO
0.724
Border Region 0.752
UNITED STATES
0.896
Border Region 0.845
1989
MEXICO
0.720
Border Region 0.761
UNITED STATES
0.936
Border Region 0.877
1999
MEXICO
0.731
Border Region 0.786
UNITED STATES
0.966
Border Region 0.896
SD
0.862 SD
0.894 SD
0.926 SD
0.953
Terrell
0.833 Jeff Davis
0.875 Pima
0.896 Pima
0.920
Pima
0.833 Imperial
0.866 Terrell
0.886 Terrell
0.907
0.874 Brewster
0.893
Imperial
0.831 Pima
0.863 Hidalgo, NM
Cochise
0.820 Brewster
0.855 Imperial
0.871 Cochise
0.879
Yuma
0.814 Cananea
0.850 Cochise
0.870 Yuma
0.876
Grant
0.808 Grant
0.849 Yuma
0.870 Grant
0.869
0.849 Brewster
0.859 ElPaso
0.867
Culberson
0.801 Nava
Cananea
0.797 Yuma
0.844 Grant
0.855 Imperial
0.867
donaAna
0.791 Hidalgo, NM
0.844 donaAna
0.852 Hidalgo, NM
0.865
ElPaso
0.786 Santa Cruz, AZ 0.838 ElPaso
0.849 donaAna
0.865
0.834 Jeff Davis
0.844 Santa Cruz, AZ 0.858
Santa Cruz, AZ 0.783 Terrell
0.783 Cochise
0.834 Santa Cruz, AZ 0.838 Val Verde
0.854
Hidalgo, NM
Jeff Davis
0.782 Culberson
0.834 Val Verde
0.836 Culberson
0.842
Luna
0.780 donaAna
0.819 Luna
0.836 Jeff Davis
0.839
Val Verde
0.774 Presidio
0.815 Kinney
0.824 Kinney
0.836
Brewster
0.772 ElPaso
0.806 Cameron
0.822 Cameron
0.836
Tijuana
0.754 Luna
0.801 Webb
0.819 Luna
0.834
Hudspeth
0.752 Val Verde
0.801 Hidlago, TX
0.806 Webb
0.834
Presidio
0.751 Hudspeth
0.790 Acuna
0.799 Hudspeth
0.830
Nogales
0.824
0.751 Cameron
0.784 Culberson
0.795 Hidlago, TX
Acuna
0.747 Kinney
0.777 Presidio
0.794 Acuna
0.824
Webb
0.740 Webb
0.776 Hudspeth
0.789 Zapata
0.813
Agua Prieta
0.740 Piedras Negras0.773 Juarez
0.786 Juarez
0.805
Caborca
0.739 Hidlago, TX
0.772 Zapata
0.785 Tijuana
0.798
Kinney
0.735 Naco
0.771 Nava
0.782 Nava
0.798
SLR Colorado 0.735 Acuna
0.771 Nogales
0.777 Nogales
0.790
Cameron
0.734 Tijuana
0.770 Piedras Negras0.772 Piedras Negras0.790
Puerto Penasco0.732 Zapata
0.767 Tijuana
0.768 Maverick
0.789
Piedras Negras0.732 Nogales
0.767 Maverick
0.761 Presidio
0.788
Anahuac
0.759 Mexicali
0.730 Mexicali
0.765 Ascension
0.787
Santa Cruz, Son0.729 Agua Prieta
0.763 Cananea
0.757 Cananea
0.780
Mexicali
0.727 Guerrero, Tam 0.758 Mexicali
0.756 Anahuac
0.774
Saric
0.727 Tecate
0.755 Nuevo Laredo 0.747 Tecate
0.771
Naco
0.725 Nuevo Laredo 0.750 Caborca
0.745 Ojinaga
0.770
Tecate
0.722 Juarez
0.747 Puerto Penasco0.744 Nuevo Laredo 0.768
Nuevo Laredo 0.716 SLR Colorado 0.743 Tecate
0.743 Reynosa
0.765
0.715 Matamoros
0.742 Matamoros
0.743 Agua Prieta
0.765
Hidlago, TX
Altar
0.709 Ocampo
0.740 Agua Prieta
0.741 Jimenez
0.761
Mier
0.708 Reynosa
0.735 SLR Colorado 0.739 Puerto Penasco0.759
Juarez
0.704 Puerto Penasco0.732 Anahuac
0.738 SLR Colorado 0.758
Matamoros
0.703 Maverick
0.732 Reynosa
0.738 Caborca
0.757
Miguel Aleman 0.698 Miguel Aleman 0.728 Ojinaga
0.737 Guadalupe
0.757
Guerrero, Tam 0.697 Caborca
0.724 Starr
0.736 Matamoros
0.756
Gustavo Diaz Ordaz
0.687 Saric
0.719 Naco
0.730 Starr
0.751
Reynosa
0.687 Santa Cruz, Son0.718 Jimenez
0.729 Miguel Aleman 0.748
Zapata
0.684 Valle Hermoso 0.713 Miguel Aleman 0.725 Guerrero
0.744
Maverick
0.679 Rio Bravo
0.713 Guadalupe
0.716 Ascension
0.743
Nava
0.673 Mier
0.712 Camargo
0.712 Praxedis G. Guerrero
0.742
Valle Hermoso 0.671 Anahuac
0.711 Santa Cruz, Son0.712 Ocampo
0.737
Camargo
0.665 Altar
0.703 Ocampo
0.712 Naco
0.734
Rio Bravo
0.665 Camargo
0.701 Praxedis G. Guerrero
0.711 Camargo
0.730
Hidalgo, Coa 0.662 Starr
0.688 Rio Bravo
0.710 Mier
0.728
Ocampo
0.654 Guerrero, Coa 0.685 Gustavo Diaz Ordaz
0.709 Hidalgo, Coa 0.728
Starr
0.651 Gustavo Diaz Ordaz
0.679 Altar
0.708 Rio Bravo
0.728
Ojinaga
0.727
0.646 Ojinaga
0.660 Mier
0.700 Gustavo Diaz Ordaz
Manuel Benavides
0.643 Hidalgo, Coa 0.656 Valle Hermoso 0.699 Valle Hermoso 0.725
Ascension
0.640 Ascension
0.648 Hidalgo, Coa 0.695 Manuel Benavides
0.725
Janos
0.616 Guadalupe
0.641 Guerrero
0.693 Janos
0.724
Guadalupe
0.614 Jimenez
0.693 Altar
0.631 Manuel Benavides
0.721
Jimenez
0.609 Janos
0.608 Guerrero, Tam 0.690 Guerrero, Tam 0.720
Guerrero, Coa 0.599 Praxedis G. Guerrero
0.600 Saric
0.690 Saric
0.695
Praxedis G. Guerrero
0.594 Manuel Benavides
0.598 Janos
0.689 Santa Cruz, Son0.695
Mexican municipios in bold
7
Table A.2
Education Sub-Index
MEXICO
MX Border Region
UNITED STATES
US Border Region
1990
0.448
0.381
0.791
0.763
SD
Cochise
Pima
Jeff Davis
Grant
Hidalgo, NM
Terrell
donaAna
Brewster
ElPaso
Yuma
Luna
Kinney
Santa Cruz, AZ
Val Verde
Imperial
Culberson
Zapata
Cameron
Webb
Hudspeth
Hidlago, TX
Presidio
Maverick
Starr
Mexicali
Tijuana
Nogales
Naco
Gustavo Diaz Ordaz
Nuevo Laredo
Reynosa
Matamoros
Piedras Negras
Juarez
SLR Colorado
Agua Prieta
Tecate
Caborca
Miguel Aleman
Cananea
Rio Bravo
Acuna
Mier
Valle Hermoso
Guerrero, Tam
Nava
Altar
Ocampo
Camargo
Anahuac
Puerto Penasco
Ojinaga
Santa Cruz, Son
Hidalgo, Coa
Saric
Guerrero, Coa
Guadalupe
Janos
Manuel Benavides
Jimenez
Ascension
0.812
0.798
0.796
0.768
0.758
0.752
0.749
0.736
0.728
0.716
0.711
0.690
0.681
0.658
0.657
0.650
0.642
0.636
0.632
0.623
0.611
0.609
0.586
0.528
0.520
0.420
0.403
0.400
0.397
0.396
0.392
0.385
0.383
0.382
0.377
0.376
0.369
0.361
0.347
0.347
0.332
0.328
0.323
0.320
0.314
0.312
0.299
0.295
0.293
0.287
0.283
0.250
0.248
0.247
0.243
0.232
0.223
0.221
0.206
0.206
0.199
0.195
0.159
2000
0.453
0.453
0.845
0.800
Pima
SD
Brewster
Grant
Cochise
Jeff Davis
Terrell
Hidalgo, NM
Kinney
ElPaso
Yuma
donaAna
Santa Cruz, AZ
Imperial
Val Verde
Culberson
Cameron
Webb
Zapata
Hidlago, TX
Luna
Hudspeth
Presidio
Maverick
Starr
Cananea
Mexicali
Nogales
Reynosa
Matamoros
Nuevo Laredo
Tijuana
Tecate
Caborca
Juarez
SLR Colorado
Miguel Aleman
Agua Prieta
Valle Hermoso
Mier
Rio Bravo
Puerto Penasco
Gustavo Diaz Ordaz
Piedras Negras
Acuna
Ojinaga
Altar
Nava
Anahuac
Camargo
Guerrero, Tam
Ocampo
Naco
Ascension
Santa Cruz, Son
Guadalupe
Saric
Jimenez
Guerrero, Coa
Janos
Hidalgo, Coa
Manuel Benavides
8
0.860
0.858
0.843
0.836
0.835
0.816
0.814
0.768
0.764
0.750
0.743
0.733
0.720
0.705
0.698
0.680
0.680
0.664
0.660
0.644
0.623
0.618
0.612
0.589
0.539
0.504
0.502
0.492
0.483
0.466
0.457
0.449
0.445
0.439
0.439
0.433
0.422
0.421
0.416
0.416
0.407
0.402
0.402
0.401
0.390
0.389
0.367
0.367
0.363
0.352
0.348
0.336
0.325
0.321
0.308
0.288
0.285
0.283
0.257
0.254
0.246
0.246
0.217
Table A.3
Health Sub-Index: Infant Survival Rate
MEXICO
Border Region
UNITED STATES
Border Region
Santa Cruz, Son
Hudspeth
Culberson
Jeff Davis
Terrell
Kinney
Guadalupe
Starr
Hidlago, TX
Valle Hermoso
Camargo
Imperial
Luna
Val Verde
Maverick
Cameron
Grant
ElPaso
Webb
SD
Anahuac
Yuma
donaAna
Pima
Cochise
Presidio
Santa Cruz, AZ
Rio Bravo
Guerrero, Tam
Zapata
Hidalgo, NM
Miguel Aleman
Gustavo Diaz Ordaz
Ascension
Janos
Naco
Matamoros
Manuel Benavides
Nuevo Laredo
Brewster
Reynosa
Nava
Puerto Penasco
Piedras Negras
Acuna
Mexicali
Ojinaga
Caborca
Guerrero, Coa
Ocampo
Tecate
Jimenez
SLR Colorado
Altar
Nogales
Tijuana
Saric
Cananea
Juarez
Agua Prieta
Mier
Hidalgo, Coa
1990
0.976
0.977
0.991
0.993
1
1
1
1
1
1
0.999195
0.997899
0.995641
0.994439
0.993837
0.99375
0.993715
0.993651
0.993562
0.993485
0.99315
0.993007
0.992879
0.992572
0.992552
0.992233
0.992147
0.992053
0.991959
0.99176
0.991525
0.990679
0.990044
0.989899
0.989848
0.989583
0.989432
0.987203
0.987013
0.985915
0.985612
0.984986
0.983051
0.982843
0.981982
0.981449
0.980723
0.98041
0.977754
0.977586
0.977376
0.97686
0.975439
0.975
0.974684
0.974328
0.972868
0.97134
0.970588
0.970495
0.969573
0.96875
0.968254
0.959424
0.956853
0.954545
0.931034
9
2000
0.986
0.985
0.993
0.995
Saric
Manuel Benavides
Hidalgo, Coa
Guerrero, Tam
Culberson
Jeff Davis
Presidio
Terrell
Zapata
Cameron
Santa Cruz, AZ
Valle Hermoso
ElPaso
Val Verde
Imperial
donaAna
Hidlago, TX
Yuma
SD
Maverick
Webb
Pima
Mier
Starr
Cochise
Miguel Aleman
Nava
Rio Bravo
Brewster
Janos
Anahuac
Grant
Nuevo Laredo
Gustavo Diaz Ordaz
Guadalupe
Matamoros
Ascension
Ocampo
Piedras Negras
Naco
Camargo
Acuna
Hidalgo, NM
Caborca
Reynosa
Tecate
SLR Colorado
Cananea
Santa Cruz, Son
Altar
Mexicali
Tijuana
Jimenez
Ojinaga
Juarez
Puerto Penasco
Luna
Nogales
Guerrero, Coa
Agua Prieta
Kinney
Hudspeth
1
1
1
1
1
1
1
1
1
1
0.996392
0.996241
0.996034
0.99559
0.995501
0.995334
0.995041
0.994987
0.994679
0.994059
0.993976
0.993941
0.993926
0.993865
0.993831
0.993667
0.993432
0.992982
0.992751
0.991304
0.991124
0.991091
0.990476
0.990176
0.990123
0.989418
0.988328
0.98797
0.987952
0.987607
0.9875
0.987406
0.987165
0.987013
0.986577
0.986232
0.985159
0.984058
0.983689
0.983607
0.983402
0.981839
0.981574
0.9801
0.979927
0.979649
0.979144
0.979003
0.978592
0.977778
0.973333
0.972973
0.967742
Table A.4
Border Human Development Index
MEXICO
Border Region
UNITED STATES
Border Region
1990
0.715
0.706
0.906
0.878
SD
Pima
Cochise
Terrell
Hidalgo, NM
Jeff Davis
Grant
donaAna
Yuma
Brewster
ElPaso
Luna
Imperial
Kinney
Santa Cruz, AZ
Val Verde
Cameron
Culberson
Webb
Zapata
Hidlago, TX
Hudspeth
Presidio
Maverick
Starr
Mexicali
Nogales
Tijuana
Piedras Negras
Juarez
Nuevo Laredo
Naco
Matamoros
Reynosa
Acuna
Gustavo Diaz Ordaz
SLR Colorado
Tecate
Caborca
Agua Prieta
Miguel Aleman
Nava
Cananea
Rio Bravo
Anahuac
Valle Hermoso
Camargo
Guerrero, Tam
Ocampo
Mier
Puerto Penasco
Altar
Ojinaga
Santa Cruz, Son
Guadalupe
Ascension
Jimenez
Saric
Guerrero, Coa
Janos
Manuel Benavides
Hidalgo, Coa
0.910
0.895
0.887
0.878
0.872
0.871
0.869
0.860
0.858
0.856
0.853
0.840
0.838
0.835
0.829
0.829
0.816
0.812
0.812
0.804
0.803
0.800
0.790
0.761
0.751
0.718
0.716
0.714
0.711
0.707
0.707
0.704
0.704
0.701
0.700
0.697
0.695
0.693
0.689
0.689
0.687
0.687
0.686
0.676
0.671
0.669
0.664
0.664
0.660
0.658
0.658
0.658
0.654
0.653
0.645
0.638
0.635
0.633
0.630
0.630
0.627
0.625
0.623
2000
0.724
0.741
0.934
0.897
SD
Pima
Brewster
Terrell
Cochise
Grant
Jeff Davis
Hidalgo, NM
Yuma
ElPaso
Santa Cruz, AZ
Kinney
Imperial
Val Verde
Culberson
Cameron
Webb
Zapata
Hidlago, TX
Luna
Hudspeth
Presidio
Maverick
donaAna
Starr
Mexicali
Cananea
Nogales
Reynosa
Tijuana
Juarez
Nuevo Laredo
Matamoros
Tecate
Acuna
Caborca
Piedras Negras
SLR Colorado
Miguel Aleman
Agua Prieta
Nava
Puerto Penasco
Ojinaga
Mier
Valle Hermoso
Anahuac
Rio Bravo
Gustavo Diaz Ordaz
Altar
Camargo
Guerrero, Tam
Ocampo
Ascension
Naco
Guadalupe
Jimenez
Santa Cruz, Son
Saric
Guerrero, Coa
Hidalgo, Coa
Janos
Manuel Benavides
10
0.935
0.924
0.909
0.907
0.903
0.899
0.885
0.874
0.871
0.871
0.858
0.858
0.855
0.849
0.840
0.837
0.830
0.825
0.821
0.812
0.805
0.800
0.791
0.789
0.761
0.757
0.756
0.753
0.745
0.743
0.741
0.738
0.737
0.734
0.734
0.728
0.726
0.725
0.721
0.720
0.719
0.713
0.713
0.713
0.713
0.709
0.709
0.706
0.690
0.690
0.689
0.687
0.684
0.682
0.677
0.677
0.666
0.662
0.659
0.658
0.658
0.654
0.647
Income & Wages
Mexicali’s Income
Gran Plaza’s trade area in Mexico has the 3rd highest Per Capita Income of the
Highly paid workers in Mexico are described as earning over 5 times the national
minimum wage.
Per Capita Income in Border Outlet Trade Areas in Mexico
Per Capita Income (2002 US Dollars) in Mexico by Trade Area
$14,000
$12,620
$12,000
$12,385
$11,471
$10,011
$10,000
$8,847
$8,000
$6,000
$4,000
$2,000
$0
Gran Plaza
Outlets
Premium
Shoppes at El
Outlets
Paso
Laredo
Rio Grande
Valley
Premium
Outlets
Gran Plaza's trade area in Mexico has the 3rd highest Per Capita Income of the
Source: Human Development Index, 2002; INEGI: Marco Geostadistico Municipal 2005
Tijuana, Mx
Mexicali, Mx
Juaréz, Mx
Nuevo Laredo, Mx
Reynosa, Mx
Matamoras, Mx
Monterrey, Mx
Per Capita Income (2002 US Dollars) in Mexico by Trade
Area
Gran Plaza Outlets
Mexicali
SLR Colorado
Weighted Avg
Per Capita Income
$12,011
$8,393
$11,471
Per Capita Income
Tijuana
$13,327
Ensenada
$10,929
Tecate
$11,213
Rosarito
$10,294
Weighted Avg
$12,620
Per Capita Income
Juarez
$12,385
Weighted Avg
$12,385
Laredo
Nuevo Laredo
Weighted Avg
Per Capita Income
$10,011
$10,011
Per Capita Income
Reynosa
$9,176
Matamoros
$9,313
Rio Bravo
$6,607
Valle Hermoso
$6,452
Monterrey
$15,350
Weighted Avg
$8,847
Source: Human Development Index, 2002; INEGI: Marco Geostadistico
Municipal 2005
Upper Income Wage Earners in Border Outlet Trade Areas in
Mexico
Percent of Mexicans Earning More Than 5 Times Minimum
Wage (2000)
25.00%
22.05%
21.96%
20.00%
16.22%
17.11%
15.00%
13.41%
10.00%
5.00%
0.00%
Gran Plaza
Outlets
Premium
Shoppes at El
Outlets
Paso
Laredo
Rio Grande
Valley
Premium
Outlets
Highly paid workers in Mexico are described as earning over 5 times the
national minimum wage.
Source: INEGI XII General Population and Housing Survey, 2000; INEGI: Marco Geostadistico Municipal 2005
Tijuana, Mx
Mexicali, Mx
Juaréz, Mx
Nuevo Laredo, Mx
Reynosa, Mx
Matamoras, Mx
Monterrey, Mx
Percent of Mexicans Earning More Than 5 Times
Minimum Wage (2000)
Gran Plaza Outlets
Mexicali
SLR Colorado
Weighted Avg
% Earning
22.34%
20.52%
22.05%
% Earning
Tijuana
Tecate
Rosarito
Ensenada
Weighted Avg
23.92%
18.80%
18.61%
16.30%
21.96%
% Earning
Juarez
Weighted Avg
16.22%
16.22%
Laredo
Nuevo Laredo
Weighted Avg
% Earning
% Earning
Reynosa
Matamoros
Rio Bravo
Valle Hermoso
Monterrey
Weighted Avg
17.11%
17.11%
15.13%
12.79%
10.18%
10.10%
20.42%
13.41%
Source: INEGI XII General Population and Housing Survey, 2000; INEGI:
Marco Geostadistico Municipal 2005
In The News
The Other Mexico: A Wave of Investment - BusinessWeek
Page 1 of 5
COVER STORY April 9, 2009, 5:00PM EST
The Other Mexico: A Wave of Investment
Who says it's a "failed state"? Ignoring the drug wars, multinationals are pumping in billions
to set up factories
By Pete Engardio and Geri Smith
K. Alan Russell has spent 23 years clearing bureaucratic and logistical hurdles for U.S. companies running lowcost plants in Ciudad Juárez. Never has he had to do as much hand-holding as now. Each time the Mexican city
makes headlines—for kidnappings, murders, or police battles with drug cartels—Russell does damage control.
He calls the headquarters of the 28 tenants at his company's industrial parks to tell executives their staff and
property are safe. "They need to hear from Ground Zero that there [were] no disruptions and the violence is not
affecting their people," he says.
He has his work cut out. Since early 2008 the corpses of 2,050 victims of a turf war among narco-traffickers have
been dumped around this city of 1.4 million. Twice, Russell had to remove ATMs from his facilities after thieves
attempted heists—once with a forklift. Juárez Mayor José Reyes Ferriz estimates the violence cost 20 foreign
projects last year that would have created 5,000 jobs.
But there also is surprising truth in Russell's message. Even as American TV anchors report on "the war on our
border," the city's 285 maquiladoras—factories making goods for export—are not fleeing. Each day, 9,000
managers cross the Rio Grande without incident from their homes in El Paso to the Juárez plants of Johnson
Controls (JCI), Cummins (CMI), Emerson Electric (EMR), Visteon (VC), Delphi Automotive (DPHIQ.PK), and
others. Travel to Monterrey, Guadalajara, Mexicali, and Querétaro, where Whirlpool (WHR), Honeywell
International (HON), Daimler (DAI), and Lenovo (LNVGY) have been expanding, and you'll think that talk of
Mexico as a "failed state" seems absurd. "Not only are we not going anywhere, but more and more of our key
suppliers are in Mexico," says Randy E. Wilcox, president for the Americas for Otis Elevator. "It's the hub of our
supply chain for North America."
A VALUABLE PARTNER
Manufacturers have good reason to hang tough. The 41% drop in the peso against the dollar since August has
made Mexico an even cheaper place to manufacture: Factory workers in Juárez can be hired for $1.50 an hour.
When President Barack Obama visits Mexico in mid-April, he will find a nation that has enhanced its position as
a global manufacturing and design base for everything from appliances to aircraft parts. If Mexico can rein in the
drug cartels—a huge if—it could emerge a more valuable partner than ever for U.S. industry.
Mexico's economy is reeling now. Nationwide, foreign investment plunged 46% in 2008, to $18.6 billion, and the
economy in January shrank at a 9.5% annual clip. The country will probably lose half a million jobs in this year's
first half.
But the slump is almost entirely due to the global recession—not economic mismanagement as in the past.
Manufacturing has crashed everywhere, China included. Attacks on foreign staff and factories, moreover, have
been rare in Juárez and other border towns along drug-trafficking routes, such as Reynosa, Nuevo Laredo, and
http://www.businessweek.com/print/magazine/content/09_16/b4127034232864.htm
4/15/2009
Page 2 of 5
Tijuana. The narcos seem focused on each other and police and politicians who stand in their way. Indeed,
though the crime wave was obvious early last year, investment kept coming—until the global financial meltdown.
Meanwhile, a quiet transformation has begun south of the border. For much of the decade, Mexican officials
watched with dismay as multinationals crated up maquiladora operations and moved to lower-cost havens in
Asia. Mexico's schools, roads, and bureaucracy still rate poorly in international competitiveness rankings, making
it hard to graduate to more sophisticated industries.
Yet national statistics obscure the progress several Mexican states and cities have made in boosting their ability
to compete. Studying successful models in Asia, the U.S., and Europe, local governments collaborate with
universities and private industry to upgrade their workforces, parts-supply networks, research and development
programs, and infrastructure. They have become magnets for factories that go well beyond assembly work.
Mexican exports of aerospace products, for example, have nearly tripled, to $3 billion, since 2003. In March,
French President Nicolas Sarkozy announced that Eurocopter would invest $550 million to make helicopters in
Querétaro, a rising production and engineering base for General Electric (GE), and Bombardier.
On the national level, sound fiscal and monetary policies after the 1994 financial crash have made Mexico better
able to endure global shocks. "You can now do business here in a stable macroeconomic environment," says
World Bank country director Axel van Trotsenburg.
Mexico also stands to benefit from a subtle but steady shift in strategic thinking by U.S. manufacturers, who are
reassessing their reliance on Asia and focusing more on "near-shore" options. Rising Chinese costs and fears of
higher trans-Pacific shipping prices if oil spikes again are part of it. With capital scarce and markets hard to
forecast, companies don't want to tie up cash in inventory as they wait for their cargo to arrive. Such reasons are
driving precision manufacturers like GKN Aerospace, a maker of aircraft engine components, to cluster close to
the border in cities like Mexicali. "If you have to reduce costs, China is too far away. Our products can cost
$80,000, so we can't afford mistakes," says GKN Mexicali plant manager Ardy Najafian.
Other big factors are China's rampant piracy, quality failures, and communication problems. In Mexico, U.S.
companies can better control their operations than in China, where they often must work with government-linked
partners. When Fusion Specialties, the No. 1 maker of mannequins, moved some work offshore in 2007 to cut
costs, it chose Juárez over China because goods can reach such U.S. retailers as Nike (NKE), Gap (GPS), and
J. Crew (JCG) in two days rather than five weeks. Also, "it was a definite risk that we would lose our intellectual
property in China," says Richard Moran, vice-president for operations at Fusion, which holds patents for its
polyurethane molding process.
A recent survey of 136 U.S. manufacturers by Boston supply-chain consulting firm AMR Research confirms
Mexico's rising business stature. While 15% of respondents said they expect to cut output in China, only 5% plan
to do so in Mexico. Companies intending to expand in Mexico outnumber those planning to cut back by 5 to 1. In
China, that ratio is 2 to 1. "Mexico clearly is gaining at China's expense," says Kevin O'Marah, AMR chief
strategy officer. As for Mexico's violence, O'Marah says compared with other things multinationals confront
daily—disease outbreaks in China, abrupt policy shifts in Moscow, riots in South Africa—"it's scary, but not
enough to prevent you from going." So when U.S. demand returns, says Boston Consulting Group Senior
Partner Harold L. Sirkin, expect a "significant increase" in Mexican manufacturing.
MOVING TO MEXICALI
Some sectors that were devastated by China are already reviving. In February, Beijing's Lenovo opened a plant
4/15/2009
Page 3 of 5
in Monterrey to make up to 5 million ThinkPad notebook PCs a year. Since October electronics contract
manufacturer Jabil Circuit (JBL) of St. Petersburg, Fla., has more than doubled to 8,000 the staff at its
Guadalajara plant, where it shifted some assembly of BlackBerry smartphones from China. Electronics
manufacturers Foxconn Electronics of Taiwan and Flextronics (FLEX) have expanded their huge Mexican
campuses as well.
Factory jobs are moving from the U.S., too. In Mexicali, Skyworks Solutions (SWKS), a Woburn (Mass.) maker of
semiconductors for mobile phones and PDAs, is adding 100 jobs to a factory to produce items that had been
made in Maryland. Skyworks also has built a 300-strong engineering team. J.C. Nam, the plant's general
manager, says two years ago Skyworks considered relocating some work to China, but decided Mexico is
actually cheaper because its skilled workforce is more efficient. With engineers' pay averaging around $25,000,
including benefits, Nam contends Mexicali's high-tech industry can take off. "We believe there is opportunity in
crisis," he says.
A sprawling city of 1 million close to San Diego and Phoenix, Mexicali has been largely spared the violence of
nearby Tijuana. While the financial crisis has stalled many new projects, Mexicali has still attracted such
industries as microelectronics, aerospace, and medical devices. Gulfstream has expanded its facility to produce
sections of executive jets. Honeywell, which has large manufacturing operations in Mexicali, recently opened a
$40 million center where 300 engineers run simulations for next-generation aircraft. Last year, an affiliate of
Goodrich Corp. opened a 120-worker aircraft parts plan with plans to expand to 160 by yearend. Intuitive
Surgical (ISRG) of Sunnyvale, Calif., started up a factory to manufacture the EndoWrist, an instrument modeled
after the human wrist that is used for robotic-assisted, minimally invasive surgery.
David J. Hill, the former National Semiconductor (NSM) executive leading development of a 10,000-acre hightech park called Silicon Border near Mexicali, likes what he sees. "People work as hard as they did in Silicon
Valley, Singapore, and Taiwan in the 1980s," he says. Hill is unfazed by the violence. One of his partners helped
build a chip packaging plant in El Salvador in the 1970s during an attempted coup. Hill was based in Malaysia in
the mid-1980s when criminals kidnapped a Hewlett-Packard (HPQ) exec. Those incidents didn't stop
construction. "This is life for expatriates," says Hill, who hopes soon to land a big investment from German solarcell maker Q-Cells.
In the past five years the Mexicali campus of Universidad Autónoma de Baja California (UABC) has doubled its
engineering enrollment, to 4,000. UABC and CETYS Universidad, a top private school, recently added
bachelor's and graduate programs in aerospace engineering, microelectronics, bioengineering, radio frequency
design, and renewable energies. The curriculum is partially designed by Honeywell, Gulfstream, Skyworks, and
others. Fluency in English is a requirement. "All these companies say they will do more engineering and design
here if we have the skilled professionals," says UABC Secretary Felipe Cuamea Velázquez.
Even bigger ambitions are being pursued in Monterrey, the industrial capital and home to huge plants for
Whirlpool, General Electric, Chrysler, Ford, and others. Monterrey was rocked by gangland shootouts and even
a grenade attack on the U.S. consulate last year, but now is relatively tranquil.
Monterrey and surrounding cities are nurturing engineering centers and high-end component suppliers such as
Nemak, which makes lightweight aluminum engine blocks for major automakers. Monterrey certainly can't match
Bangalore or Shanghai in sheer numbers of engineers. But a $250 million IT services industry has taken root,
doubling in five years, to 7,000 workers. The concept of Mexico as a near-shore alternative to India was
pioneered by Monterrey software firm Softtek, which counts 17 of America's 50 biggest corporations as
4/15/2009
Page 4 of 5
customers. Indian outsource shops Infosys (INFY), Wipro (WIT), and Tata Consultancy Services have followed
Softtek's lead. To improve the quality of local IT workers, 25 Monterrey university educators spent eight months
studying training methods at the Infosys campus in Mysore, India, where tens of thousands of raw recruits a year
are turned into software developers.
With engineering salaries in Mexico starting at around $12,000, the cost gap with India isn't huge. In terms of
hourly rates, India is 25% to 30% cheaper than Mexico, says Jagmohan S. Nanaware, general manager of the
Monterrey development center of Sasken Communication Technologies, an Indian maker of cell-phone software.
But add the indirect costs of travel, high Indian staff turnover, and collaboration at odd hours on complex jobs
with colleagues half a world away, and the real gap is closer to 15% to 20%. For many U.S. companies within
just an hour or two by air, Monterrey makes more sense. Quality is good, too. "At first we didn't know what kind
of engineers we would get, so we brought over six from India," says Nanaware, who doubled his Monterrey staff,
to 120, in two years. Within six months, "Mexican engineers were contributing beyond our expectations."
A FRAGILE BEGINNING
Tight collaborations with industry and universities are essential. "Our aim is that for every dollar we invest, we
get two from industry," says Mario A. Martínez Hernádez, dean of engineering at the Tecnológico de Monterrey.
Foreign schools pitch in, too. The CarTec Project is a tieup with Virginia Tech and Tec de Monterrey to train 50
Mexican students to design cars, from the fiberglass molds used to make body parts to the engine and interior
ergonomics. The students are developing a compact car, but Tec's ultimate aim is to build a talent pool skilled
enough to make Monterrey a global center of car design, rather than just assembly.
Would that all of Mexico were like Mexicali and Monterrey. Sadly, it is not. Many states are making slow
progress, and the central government does a poor job of coordinating development. Some executives fear drug
violence and government corruption could eventually again snuff out enthusiasm for Mexico. "You can't have
investment in a country that's perceived as lawless," says Julio A. de Quesada, president of the Executive
Council of Global Companies, a group of 38 multinationals operating in Mexico.
Yet if it can make headway in solving these problems, Mexico's bigger moment could arrive when recovery
comes and multinationals start to invest anew. Many now look to China for manufacturing and to India for
engineering. By becoming a top locale for both low-cost production and design right on America's border, Mexico
could offer a better alternative. That helps explain why tenants are keeping their space in Russell's Juárez
industrial parks. "Nobody," he says, "wants to be caught without capacity when this market turns."
BUSINESS EXCHANGE: READ, SAVE, AND ADD CONTENT ON BW'S NEW WEB 2.0 TOPIC
NETWORK
An Unfinished Agenda
Mexico ranked No. 52 among 131 countries surveyed in the latest edition of the Global Competitiveness
Index, compiled by the World Economic Forum. While that places Latin America's second-largest economy
ahead of other emerging-market powerhouses such as Brazil and Russia, the report's authors note that
Mexico still has lots of work to do in areas such as labor-market reform, improving the integrity of its public
institutions and building up the skills of its population.
To read the full report, go to http://bx.businessweek.com/mexico-business/reference/
Engardio is an international senior writer for BusinessWeek . Smith is BusinessWeek's Mexico bureau chief.
4/15/2009
Square Feet - Clearing a Path for Development at the U.S.-Mexico Border - NYTimes.com
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South-of-the-Border Silicon
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JULY 14, 2004
NEWS ANALYSIS :TECH
By Robert McNatt
South-of-the-Border Silicon
An ambitious plan to build a high-tech industrial park in Mexicali aims to move a big slice of chip
production away from Asia
Most of the world's computer chipmaking capacity is based in Asia, where outfits in China, Taiwan, Singapore, and Korea
crank out the millions of silicon wafers needed for PCs, cell phones, and a myriad of other electronic devices. But two former
U.S. semiconductor industry executives are aiming to bring that manufacturing closer to home: Mexico.
Aided by private U.S. real estate capital, the government of Mexico, and the Mexican state of Baja California, Ron Jones and
Daniel Hill -- both chip-industry veterans -- say they're looking to build in the town of Mexicali a 10,000-acre industrial park
that will be known as Silicon Border and cater to chipmakers and other high-tech businesses. "There are people worried
about the dependence on Asia," says Jones, former vice-president for worldwide operations at Amkor Technology (AMKR ),
a contract chipmaker that grossed $1.6 billion in fiscal 2003.
DECADES TO BUILD. It will cost $400 million just to build Silicon Border's infrastructure. The location was chosen, in part
because of the availability of water and a good natural gas supply, each important to chipmakers. While enough power is
now available for companies locating there, Silicon Border plans eventually to construct new generating plants at a cost of
about $750 million.
When fully built between 10 years and 20 years from now, Silicon Border could employ as many as 100,000 workers. Hill
and Jones won't disclose their backers, describing them only as institutional real estate investors. Contracts to purchase land
for the huge project, the pair say, should be signed within the next three months, and construction could start as early as
January, 2005. Silicon Border is targeting chipmakers, chip-equipment makers, and others in the semiconductor business.
Electronics companies have long had assembly plants in Mexico along the border. But many have left in recent years,
migrating to cheaper venues. So to lure new jobs, the Mexican government has agreed to reduce taxes on Silicon Border
plants to make them competitive with Asian counterparts, giving Mexico's economy a high-tech push.
SEMICON SALES PITCH. Says Baja California Governor Eugenio Elorduy Walther: "We will get the added value of having
high-tech investment and the jobs." Talks are already under way with a handful of unnamed companies considering building
on the site. Baja officials, with the blessings of Mexican President Vicente Fox, will work at enticing others this week at
Semicon West, the industry trade show in San Francisco.
Some industry reps say it's just common sense to have supply available in more than one part of the world. "Geographic
diversity is not a bad thing," says Anne Craib, director of international trade and government affairs for the Semiconductor
Industry Assn. "We would have an interest in a viable industrial park."
McNatt is a BusinessWeek associate editor in New York
Advertising | Special Sections |
http://www.businessweek.com/print/technology/content/jul2004/tc20040714_9829_tc024.... 4/15/2009
Project Roster
Project Roster
Gran Plaza Outlets
COMPANY
NAME
ADDRESS
PHONE NUMBER
EMAIL ADDRESS
Arman Gabay
1888 Century Pk East
Los Angeles, CA 90067
(310) 247-0900
[email protected]
Scott Cairns
Norma Barrett
12220 El Camino Real,
Suite 200
San Diego, CA 92130
(858) 793-4777
[email protected]
[email protected]
Planning
Armando Villa
608 Heber Ave
Calexico, CA 92231
(760) 768-2105
[email protected]
Utility Service
Luis Estrada
608 Heber Ave
Calexico, CA 92231
(760) 768-2180
[email protected]
Airport Engineering (City)
Peter Bonello
11081 Coronel Rd,
Suite 200
Santa Ana, CA 92705
(714) 573-1211
[email protected]
BJ Engineering (City)
Harvey Jurnigan
1850 W Main St
Calexico, CA 92243
(760) 353-3552
Charles Company
Architects
Smith Consulting Architects
City of Calexico
EIR
Pending
Civil Engineering
Stuart Engineering
Stuart Peace
Brian Faraci
7525 Metropolitan Dr
Suite 308
San Diego, CA 92108
(619) 296-1010
[email protected]
[email protected]
Britain Yonker
508 W Mission Ave
Suite 101
Escondido, CA 92025
(760) 781-3956
[email protected]
Brett L. MacDonald
26071 Bellis Dr
Valencia, CA 91355
(661) 755-3689
[email protected]
Milan Garrison
595 E Colorado Blvd
Suite 528
Pasadena, CA 91101
(62^) 584-1098
[email protected]
Barry Dauphinee
450 Golden Gate Ave
San Francisco, CA
94102
(415) 522-3193
[email protected]
Dry Utilities
Power Plus
Geotech/Hazmat
Coordination
Governmental
Entitlements
MG Resolutions, Inc
GSA
Property Development
Leasing
Epsteen & Associates
Joe Wojdowski
Nancy Johnston
9524 Kearny Villa Rd
Suite 203
San Diego, CA 92126
(858) 536-8383
[email protected]
[email protected]
EWB, LLC
Andrew Boyle
1820 N Valley Rd
Suite 100
Malvern, PA 19355
(610) 251-2784
[email protected]
Giltner Realty Advisors
John J. Caroll IV
1888 Centry Pk East
Suite 450
Los Angeles, CA 90067
(310) 888-0088
[email protected]
Lisa Wagner
6220 Tilden Lane
N Bethesda, MD 20852
(703) 346-8098
[email protected]
RH Properties, LLC
Ron Holley
1151 Dove St
Suite 175
Newport Beach, CA
92663
(949) 282-9334
[email protected]
3N SW, LLC
Chuck Hall
3120 W Carefree Hwy
Suite 1-118
Phoenix, AZ 85086
(602) 358-1963
[email protected]
David Bejarano
2421 Fenton
Suite A
Chula Vista, CA 91914
(619) 851-0201
[email protected]
Sara Soudani
1701 Solar Dr
Suite 250
Oxnard, CA 93030
(805) 766-3835
[email protected]
Legal
Marketing
EWB, LLC
Project Managers
Security
Presidential Security
Services
Title
Landamerica
Feasibility Study
Feasibility Study Highlights
Introduction
The Charles Company commissioned a survey, conducted by Trevino Creativo
and IMERK Opinion and Market Intelligence, to determine the feasibility of opening an
outlet center, based on identifying the habits and needs of potential consumers
belonging to the high socioeconomic level (ABC+) and middle socioeconomic level
(C), as well as establish the luxury brands that are best known and preferred by the
Mexicali, B.C., Mexico, consumer. The survey was conducted in Mexicali by companies
based in Mexicali.
Results Summary
•
•
•
•
•
•
•
•
•
•
•
•
•
Shopping is the main reason people visit the U.S. at 89.2%.
Women primarily purchase apparel and groceries during their visit to the U.S.
Women’s clothing and shoes are the top purchased articles by category.
Top two reasons women prefer their favorite mall are variety and convenience.
Women tend to shop in groups of 2 or 3, mostly accompanied by family
members.
Visiting frequency to the U.S. is 1 to 3 times per month. During the last month,
women have been to a U.S. city an average of 2.3 times a month.
8 out of 10 women visit U.S. shopping malls.
3 out of 10 women have been to an outlet center before.
7 out of 10 women know what an outlet center is.
9 of 10 women consider an outlet center in Calexico a good option.
8 out of 10 women have a favorite clothing brand. The top 10 favorites are
Guess, Aeropostale, GAP, Hollister, Old Navy, Polo Ralph Lauren, Levi’s, American
Eagle, Nike, Forever 21, and Victoria’s Secret.
The most known brands are Guess, Polo Ralph Lauren and Puma.
The most requested brands are Guess, Hollister, Gucci and Levi’s.
(Full report by Trevino Creativo and IMERK Opinion
and Market Intelligence is available upon request.)

gran plaza market study - border

Transcription

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