PROFILE: COSTEP
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Liftoff in Rio South Texas

Rising opportunities in a region with border connections

PROFILE: COSTEP
by Gary Daughters
O

n the morning of March 14, Adam Gonzalez staked out a position on his back porch in Cameron County, Texas, cast his eyes eastward and watched in wonder as a SpaceX Super Heavy rocket hurtled skyward in a burst of flames from the Starbase spaceport on the Texas Gulf Coast. It was as if he were bearing witness not merely to the future of space flight, but to his own aspirations for the border region he calls Rio South Texas.

Gonzalez is president of COSTEP, a former student loan non-profit that in recent years has pivoted to promoting economic development across a stretch of seven Texas border counties combined with, consequentially, a swath of northern Mexico. SpaceX, with its expanding spaceport and production facility in the coastal town of Boca Chica, is emblematic of the impactful type of enterprise he hopes to help attract more of.

“Our focus,” he says, “is primary dollar industries. We want industries that are going to bring in money that are going to help lift the economic status of our region.”

Anchored by thriving Laredo, McAllen and the bustling port city of Brownsville, it’s a region that covers Cameron, Hidalgo, Jim Hogg, Starr, Webb, Willacy and Zapata counties in Texas; and 10 manufacturing-heavy municipios in the Mexican state of Tamaulipas.  For Gonzalez, “media hype” that consistently highlights border disorder obscures what he sees as the region’s singular combination of assets, beginning with its low cost of living, statistically youthful workforce, a deep bench of colleges and community colleges, generous economic incentives, agreeable weather and laid-back lifestyle. And lots of available land. Getting that message out forms COSTEP’s primary mission.

“They’ve done an excellent job of bringing in folks from around the country, in particular site consultants,” says Dale Fowler, economic and business development manager at the Texas electric utility AEP, “and giving them a much better understanding of what the region has to offer, how to do business there and the unique opportunities to do business partnering on both sides of the border.”

In the Middle of the Supply Chain

Embracing a “One Region, One Voice” mantra, COSTEP sells Rio South Texas as more than the sum of its individual parts.

“I can boast about 1.3 million people within a 29 to 30 median age group, which is the prime workforce age,” says Gonzalez. “I can boast about seven community colleges. Laredo is the biggest land port in the nation. I have the deep-water Brownsville port and other ports. Highways and railways. Great beaches and great lifestyle. So, the dynamics make it easier to promote as an entire region, and that’s with everything still being so close.”

And that’s not to mention the prime location.

“We are,” says Gonzalez, “the middle of the supply chain. We can take you all the way down to South America from here, or we can take it all the way up to Canada. We can get you to the West Coast and get you to the East Coast. Our deepwater port connects to the Intracoastal waterway which takes you all the way up the Mississippi. Between our highways, railways, airports, seaports and our spaceport — which will one day offer travel to Mars — we’re the only place in the county I know of that has five intermodal means of transportation.”

In addition to the region’s touted SpaceX venture, major LNG projects and a sprawling, new business park are underway at the Port of Brownsville. Indian software company Zoho opened an office in McAllen in 2022.

“The Rio Grande Valley is one of the most unique and fastest growing regions in the United States,” the company said, “making it a perfect place for us to set up shop.”

The Mexican Connection

Far from being a detriment, the border location and the entree it offers to partnerships and markets in Mexico has become a unique selling point.

“Mexico is key,” says Gonzalez. “You can have the more energy-intensive side of the operation on the U.S. side of the border and the more labor-intensive part on the Mexican side. A company can have twin plants. In some instances, a product might go back and forth across the border six times before you get a finished product.”

Yet due to various treaties and free trade zones, Gonzalez says, “you don’t pay tariffs until the product has finished and reached its final destination. It just creates a lot of opportunities.”

AEP’s Fowler believes the distinction between the two sides of the border “has become more fluid” as Mexican operators have accumulated enviable know-how.

“There’s technical expertise from Mexico working with the U.S. side that a lot of people aren’t aware of. With Mexico,” Fowler says, “it’s not just about the labor anymore because of the expertise they’ve gained through years of manufacturing and assembly.”

And with the carrot-and-stick movement of manufacturing operations out of China and other parts of Asia, the Mexican connection is becoming even more potent.

“We’re definitely seeing reshoring opportunities,” Fowler says, “And this is where Texas is uniquely positioned with its Mexican partners. I think Mexico will be a big a winner for reshoring opportunities, as will Texas over the long haul. There’s a real strategic advantage to this region.” 

Gary Daughters
Senior Editor

Gary Daughters

Gary Daughters is a Peabody Award winning journalist who began with Site Selection in 2016. Gary has worked as a writer and producer for CNN covering US politics and international affairs. His work has included lengthy stints in Washington, DC and western Europe. Gary is a 1981 graduate of the University of Georgia, where he majored in Journalism and Mass Communications. He lives in Atlanta with his teenage daughter, and in his spare time plays guitar, teaches golf and mentors young people.

 





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