For the past several years, the City of Laredo has focused on creating a safe environment that promotes both a high quality of life for its citizens and a business-friendly atmosphere where various industries can prosper. Although some have expressed concerns about the situation on the Mexican side of the border, the U.S. side is safer than many mid-to-large cities and our economy is booming. With our prime location on the U.S./Mexico border, access to Interstate 35, and both Union Pacific and Kansas City Southern rail lines, international trade is the city’s major industry, as reflected in our status as the nation’s No. 1 inland port on the U.S.-Mexico border. Laredo will be the first city in the nation to house Mexican Customs officials pre-clearing air cargo charters leaving Laredo. This allows the cargo to land in Mexico as “domestic cargo” which can then be sent immediately to the manufacturing facility. Additionally, with the recent discovery of the Eagle Ford Shale, a new industry is developing that will fuel Laredo’s, and the state’s, economy for years to come.
Economic Conditions Support Growth Along Texas-Mexico Border in Laredo
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Geography has certainly played well into the growth and development of the community, with more than $216 billion in annual trade passing through the city. Laredo leaders are active in recruiting new businesses to the community, have invested heavily in infrastructure to help attract trade partners from Central and South America, and are engaged in successful negotiations with incoming, job-creating businesses regarding economic incentives such as tax abatements, fee waivers and Chapter 380 agreements. By creating specific economic agreements that are tailor-made to each company, such as Exel Logistics and Select Energy Services, the City of Laredo ensures that expansion to Laredo is not only feasible but attractive.
With all of the trade comes a need for warehousing on the U.S. side and manufacturing facilities on the Mexican side. According to Carlo Molano of Best/White Real Estate, a brokerage firm that specializes in industrial real estate along the U.S.-Mexico border, the industrial vacancy rate is 2.5 percent, with a market size of 35 million square feet. He is currently working on the first-ever commercial vacancy report for Laredo, which should be ready by the end of the first quarter of this year.
With the city’s proximity to the Eagle Ford Shale Play, Laredo is rapidly becoming an integral part of the state’s resurgence in the oil and gas industry, and has seen companies such as Select Energy Services, Pioneer Wireline and Lewis Energy expand their operations. From fiscal year 2010 to fiscal year 2012, the Eagle Ford Shale, along with the an increase in the amount of shoppers from Mexico, has caused sales tax and hotel/motel tax to increase 14.76 percent and 31.73 percent respectively. The approximate 10 percent increase in hotel/motel occupancy rates has helped bring Laredo’s unemployment rate down to 6 percent, which is lower than the state average and the lowest on the Texas-Mexico border. Laredo is projected to lead the nation in percentage of job gains over the next decade.
One of the major developers in Laredo has seen a large increase in their projects due to the improving economy and Eagle Ford Shale traffic. “Commercial, residential, and retail has picked up in the last 12 to 24 months. The City of Laredo built 200 residential lots in 2012, and will build 200 to 300 more in 2013,” says Pat Murphy, vice president of San Isidro Management. “Independence Plaza, a 410,000-square-foot shopping center on Loop 20, only has 7,000 to 8,000 square feet vacant. Clients that have opened recently include: Walmart Super Center, Verizon Wireless, Panda Express, Starbucks, James Avery, and Time Warner. Laredo also has an 80-room hotel on Loop 20 that is at 100 percent occupancy most nights due to Eagle Ford Shale workers.”
Laredo anticipates two retail centers opening in 2013 and is in discussions with a nationally recognized retail developer. Although several new apartment complexes have been built, the city continues to have a need for multifamily and/or low income housing. In 2010, our apartment occupancy rate was 96.2 percent. In 2011, apartment occupancy still held strong at 96 percent, even with a 3.5 percent increase in average rent.
Finally, the city is also working on increasing the quality of life for residents and incoming businesses. Per our 2010 Annual Report, we have invested more than $68.7 million in projects ranging from a major sports complex to miles of hike and bike trails that illustrate the City’s commitment to the health. In fact, the Maria Luisa & James Haynes Health & Wellness Center, designed by local firm Frank Architects, has already received two awards for its environmentally conscious design and is up for consideration for a Green Dot Award. Two other major quality of life projects that the city has invested in are the Max A. Mandel Municipal Golf Course, a Robert Trent Jones II signature-designed golf course on 270 acres along the Rio Grande and the $18 million Uni-Trade Stadium, home of the Laredo Lemurs, Champions of the American Association Baseball League South Division in their first year in the league. Laredo is not just open for business, the city is a place for businesses and residents to thrive.
— Timothy Franciscus-Timm, marketing manager of City of Laredo