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| El Paso-owned and proud |
Jul. 25 - Jul. 31 |
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HP may build at Santa Teresa
IT company considers NM distribution center
By Timothy Roberts |
Hewlett Packard, the largest technology company in the world, is considering Santa Teresa, N.M., as the location for a one million square-foot distribution center, according to several business people with an interest in the border.
The center would most likely distribute computers built by contract manufacturer Foxconn at its plant near the airport in South Juárez, sources say.
The move is not certain. HP (NYSE: HPQ) is reportedly also looking at other locations on the Mexican border, including Laredo.
Hewlett Packard Co., of Palo Alto, Calif., would not comment on its plans, but a spokesman for the company said the company expected to add jobs in Texas and New Mexico.
“HP is proud of its facilities through the Southwest and in particular New Mexico and Texas,” she said. “We want to create jobs that benefit the local and regional economies.”
Economic development officials were also tight-lipped about the HP prospect, but the project is much discussed among commercial real estate brokers.
El Paso Mayor John Cook said he was aware that HP was looking at the area. He said he believed that the company was working with the Regional Economic Development Corp., or REDCo, to find a location.
Bob Cook, president of REDCo, said he could not comment on HP, but he said that El Paso is well on its way to becoming a notable location for electronics distribution and manufacturing.
“If you look at the trends in the way that certain industry clusters are developing, in the next three to five years, the El Paso-Juárez area will have a global leadership position in high-tech electronics,” Bob Cook said.
Lots of land
The move by HP would come as good news for Verde Realty, which owns about 24,000 acres at Santa Teresa.
Verde Realty, which rarely comments on its activities, did not return a phone call asking about HP. But in its application to make an initial public offering in January, the company said it had developed only a small portion of its Santa Teresa land, and “we no longer intend to pursue large-scale development of this land.”
Verde, however, did say that it would consider selling portions of the land. It said in its SEC filing for the IPO that it had four letters of intent to sell 932.4 acres of Santa Teresa land for $14.3 million, a deal it expected to close this year.
The Santa Teresa location would be across the border from a Foxconn plant that makes computers for Dell Inc. Those computers are shipped directly from the plant to the consumer.
It would make little sense for a company shipping directly from the plant to build a distribution center on the U.S. side of the border, says Jim Gaines, a research economist with Texas A&M’s Real Estate Center.
“Why would they need it?” he asked.
Build to inventory
HP has a more traditional business model, making large numbers of computers that are held in a warehouse and shipped in quantities for retail distribution. Dell builds to order. HP builds to inventory.
It can take a day to get goods across the border, says Alan Russell, president of TECMA Group, which builds and operates maquiladoras in Juárez for a variety of manufacturers.
Having the inventory on the U.S. side would speed shipping, Russell said.
People with knowledge of the potential deal say that New Mexico and Texas economic development officials need to move quickly if they want to snag the deal.
The biggest need is for an expansion of port facilities to speed the movement of products across the border.
There is a border crossing there that was once just a cattle crossing – it’s still the largest cattle crossing on the border – but is expanding.
Last week New Mexico Senators Jeff Bingaman and Tom Udall and Rep. Harry Teague announced $10 million in federal funding to expand the port. The money comes from the Recovery Act.
The money will pay for increasing passenger lanes from two to five and adding commercial inspection lanes from two to three.
“This investment is key to the continuing development of the Santa Teresa Port of Entry,” Udall said in a statement.
HP’s revenues of $114.6 billion last year make it the largest technology company in the world by revenue.
HP closed Friday at $46.15, up .08, on a volume of 18.9 million shares. Its 52-week high is $54.75; its 52-week low is $40.63.
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