Boundary Change Set for San Diego’s Foreign Trade Zone Near Border Crossing
The NAFTA train has a new owner.
RailTex Inc., the San Antonio-based company that operates the San Diego & Arizona Eastern Railway, was sold to Boca Raton, Fla.-based RailAmerica in a $325 million stock merger that closed Feb. 8.
With the merger, the Nasdaq-listed rail company will own or have equity interests in 50 railroads operating over 12,500 miles of track in the United States, Canada, Chile, Mexico and Australia.
Among the lines RailAmerica acquired in the deal is the SD & AE;, which once connected San Diego to El Centro. Today, the line operates sporadically and over fewer miles because of collapsed bridges and tunnels that occurred mostly in the early 1980s.
The RailAmerica deal was viewed as a positive one by local officials, who say reopening the line and extending its reach eastward would generate more trade and jobs.
Jack Limber, deputy general manager for the Metropolitan Transportation Development Board, said since the merger creates a larger company with more capital, it may be in a better position to do the repairs.
But no matter who owns the line, they aren’t going to invest anything until the matter of the operating rights for the Mexican portion of the line is resolved, Limber said.
Forty-four miles of track on the line are located in Mexico.
San Diego elected officials have lobbied to obtain federal, state and local funds for the railroad in recent years, but the project has been stalled for several reasons, including the Mexican government not awarding the concession yet.
The government has held two rounds of bidding without getting an acceptable price.
According to some sources, the Mexican government is considering transferring the rights on the 44 miles of track south of the border to the Baja California state government. Once that happens, the state bureaucracy will hold an auction to award freight concession rights to a private operator.
In another positive development for the line’s future, work has started to remove a fallen tunnel just east of Tecate. Once that tunnel is reopened, a tourist excursion that runs from Campo to the Mexican side of Tecate will resume.
That project was initiated by the San Diego Railroad Museum, but has received help from the Baja California Ministry of Tourism, the city of Tecate, and the Tecate Brewery. The Mexican town was losing lots of tourist dollars since last April when the tunnel collapsed, Limber said.
“We’re extremely pleased to see this happen,” Limber said. “This is a major milestone. The level of cooperation that’s been evident in getting this done has been unparalleled.”
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Trade Zone Amended: Because of changes to the city of San Diego’s Foreign Trade Zone, new development at the two Otay Mesa business parks will be able to escape or defer paying taxes on imported goods used in manufacturing.
The amended trade zone involved taking some 185 acres of vacant land not being used in Brown Field and moving these over to the two business parks.
Iliana Worthen, project administrator for the zone, said the size of the zone remains the same at 1,565 acres.
Mike Murphy, president of Murphy Development Co., said one building is completed already at the Siempre Viva Business Park, and two others are under construction. At buildout, the park covering 119 acres will provide 2.2 million square feet of warehouse space.
The San Diego Coil Center is the first signed tenant at the new building.
The Brown Field Technology Park, covering 74 acres and planned for 1 million square feet of space, should begin construction next year, Murphy said.
The foreign trade zone is used by large and small companies and include importers, distributors, product assemblers, and exporters, but 70 percent of the users are small companies, according to the city of San Diego.
Trade Down Under: The Port of San Diego expects to see an increase in its trade with Australia and New Zealand after contracting with a trade representative, McArthur Shipping recently. The Sydney consultant maintains 26 offices in the two countries and has had success in arranging trade missions, said Paul Speer, this year’s chairman of the board of port commissioners.
“The fact that we’re the closest maritime port in the continental United States to Australia, combined with that region’s abundance of natural resources and other commodities makes for a perfect match,” Speer said.
Both Asian nations have commodities that are well-suited to be imported through San Diego, including fruits, vegetables, meats, steel, minerals and forest products.
In the last two years, the port has received many shipments from the region, primarily citrus fruit and cottonseed.
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Global Trade Program: United States International University began offering the area’s first global logistics specialist program this month.
The program is targeted at professionals working in the fields of logistics, shipping, freight handling, and import-export, USIU said.
Those taking the program will be able to plan, implement and control the flow and storage of goods and services from the point of origin to the point of consumption, university officials said.
The Port of San Diego and the Sony Technology Center, San Diego each contributed $10,000 toward the new USIU program.
Skip Colbert, Sony’s vice president, said Sony’s involvement in the curriculum’s development ensured it was “relevant and immediately applicable to local and international industry.”
The cost for the GLS program is $2,995. The first session runs through Feb. 23.
New Deal: Overland Data Inc., a San Diego manufacturer of data storage and back-up products, signed a distribution agreement with Bell Microproducts Canada Inc.
The deal will expand Overland’s North American marketplace, giving Overland access to Canadian industrial and commercial original equipment manufacturers, systems integrators and resellers.
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Trade Winds: The San Diego Library hosts an international film festival during February, March and April. Films screen alternately at three locations beginning at 6 p.m., with the second film from Jamaica on Feb. 16 at the Central Library at 820 E Street. The San Diego World Trade Center hosts a mayoral debate Feb. 17 at 5:30 p.m. at UCSD’s Mandville Auditorium. A South Korean delegation from Kangnung City will present a seminar on investment opportunities March 14 at the Hilton La Jolla Torrey Pines, from 10:30 a.m to 1 p.m.
