Economic Development?

Y’all remember when they pitched those 2102 Quality of Life bonds, they said it was “an economic development issue”.

Here’s what successful regional economic development expert Jerry Pacheco had to say in this week’s El Paso Inc.

A Taiwanese friend of mine who runs a major production operation in Mexico made me aware of the observations of Yang Yingchao, who is the chief consultant of Yikang Group and Qingxing Capital, and the chairman of Kirkland Capital. While there is a cost gap in terms of establishing a plant in the U.S. versus China, Yingchao has an interesting take on this.

. . .

The last part of Yingchao’s Arizona thoughts is of great insight. When recruiting a manufacturer that wants to develop a build-to-suit facility, the cost of the land is generally one of its smaller costs and factors less in a deal than most people think. 

The cost of land might pique a company’s interest to initially look at a site. A good recruiter will use the land as “bait” to highlight the more important factors such as a quality workforce, proximity to buyers and suppliers, and reasonable utility costs – essentially pitching the total cost of business. 

El Paso has the highest electric rates in Texas. Well, you might be able to find higher electric rates if you’re looking for high electric rates, but who looks for high electric rates?

And of course El Paso is far from everyplace, so we can rule out “proximity to buyers and suppliers”.

Our “progressive” 2012 City Council encouraged the Quality of Life bonds, and subsequent City Councils have allowed El Paso’s utility rates to increase every chance they got. You know, when property taxes go up, that increased expense gets built into the next rate case.

El Paso has too much self-interest from people in positions of authority, and too little community interest. You know who they are.

True progressives stand up for the people, and not just their campaign donors.

4 comments

  1. JERRY HAS BEEN SUCCESSFUL THRU HARD WORK AND BECAUSE NEW MEXICO OFFERS SOME OF THE LARGEST INCENTIVE PACKAGES IN THE NATION. ADD DONA ANA COUNTY AND LAS CRUCES AND YOU HAVE A PERFECT STORM. MOST LARGE COMPANIES DO NOT BUY PROPERTY…THEY LEASE.

    1. And Jerry got that big rail yard. But that in no way diminishes what he says.

      And it may come as a surprise to you, but the cost of land and property taxes have a direct influence on the lease.

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