San Diego Business Journal

Though drug cartel killings make the headlines, slowly and surely, construction along the U.S.-Mexico border is fostering a new wave of commercial expansion in the area.

"We're just thrilled that (state Route) 905 is under construction, and along with three border crossing projects that are planned, these are helping attract new businesses here," said Alejandra Mier y Teran, executive director of the Otay Mesa Chamber of Commerce.

In the last two years, a dozen new manufacturers have relocated to the area, or expanded existing operations, Mier y Teran says.

"A lot of it was because of these new projects," she said. "Transportation connections are a variable that companies think about before they decide to move."

Those three projects are a new Otay Mesa border crossing two miles east of the existing crossing; expansion of the current Otay Mesa crossing; and a cross border airline terminal connected to Tijuana's Rodriguez International Airport.

And to the west of Otay, a long-planned reconfiguration of the San Ysidro border crossing is expected to begin construction this year.

Presidential Permit Secured

The new Otay crossing received a presidential permit in December, and is in the midst of completing necessary environmental studies before construction begins. The estimated cost is $700 million to $800 million, says Gary Gallegos, executive director of the San Diego Association of Governments, the regional planning agency spearheading the project.

Gallegos says Sandag has secured $100 million (through state and federal grants) toward this sum, and intends to obtain the bulk of the financing through a bonding mechanism based on tolls charged for using the connecting road to the border crossing.

The existing Otay Mesa border crossing, one of the busiest at the border, recently obtained $21.3 million for a planned refurbishment from the federal government's stimulus funding package.

A private group looking to build a cross border terminal just west of the existing Otay crossing says it's nearing the point of seeking a required presidential permit. The terminal would allow passengers from the United States to cross over to use Rodriguez airport that abuts the border. The private development group, which includes billionaire Sam Zell, says it plans to spend at least $60 million on the project's first phase.

The reconfiguration of the San Ysidro port of entry has been in the planning stages for 15 years, and would be done in a phased approach. An expanded and upgraded southbound crossing into Mexico is to move west to Virginia Avenue, near Plaza de las Americas. The project cost was estimated at $577 million in 2007.

At a recent binational conference of government officials and others seeking improved border conditions, Thomas Winkowski, assistant commissioner of the U.S. Customs and Border Protection, expressed doubts about the tolling approach to financing the new Otay Mesa crossing.

While Winkowski applauded public private partnerships, he said there were legal issues to work out regarding the financing of a government project that needed to be resolved.

Sandag's Gallegos says the tolls that would be collected would not be for the use of the new border crossing, but for using state Route 11, a connecting road from the crossing to SR-905.

As to how the tolls would be collected, Gallegos says using electronic transponders attached to vehicles would probably be the most effective method. However, the exact details of the toll collection process haven't been decided.