San Diego Metropolitan - The Connection

One of the most famous clichés to come from the Watergate investigation was “Follow the money.” This is all well and good when there is a trail of money to be followed. But when it comes to economic development, the question should be, “Where is the money?” And so it is that in our binational region plentiful projects are under discussion, any one of which would create hundreds of jobs and add millions of dollars to our economy. But where is the money?

San Diego being San Diego, it is not enough to identify sources of investment money, it is also a matter of overcoming conventional and environmental politics and the “not in my backyard” attitude of community residents. In some cases the capital is available but held back, mired in a cesspool of politics, turf wars, and the ever important protection of a moth, a butterfly, a lizard or a mouse.

Air quality politics also play a role. No one stops us from buying one, two, three or more cars whether we need that many or not, although car emissions are the greatest contributors to air quality problems. But mention building a power plant to produce electricity we really need, and suddenly the emissions from the plant and power lines are the greatest contributors to air quality problems. And so the game goes.

In the long run, it may be easier to identify sources of capital for a number of regional and binational developments beneficial to the greater regional community, than it will be to actually get them going.

For instance, the privately financed construction of an energy power plant is proposed along the Otay Mesa border. The investment is identified, but the local communities, which the power lines would cross, already have said they will oppose the project on environmental grounds.

In the Tijuana River Valley, the present sewer treatment facility does not meet secondary treatment levels, making it necessary to build a secondary treatment facility. Environmentalists and water treatment experts can’t agree on which method is better. So there is no action. A private group steps to the table willing to invest in constructing the secondary treatment facility in Tijuana under contract for treating the waste, stipulating that if they do not meet the quality standards as imposed, they will not get paid. Most everyone agrees, except the general manager of the International Boundary Water Commission, whose preferred treatment system was not the chosen one. So, he has refused to begin the dialogue with his Mexican counterparts.

But in spite of the frustrating adversities, the region inches forward and with a positive attitude continues to plan for the future. It is in this spirit that a number of projects are either in the planning stages or are ready if the financial resources can be found.

Likewise, promising developments from Tijuana to Ensenada are searching for financing. Examples include expanding the port of Ensenada, running a railroad from the port to Tijuana/Tecate, building a trolley system in Tijuana, expanding the aqueduct and general road and highway expansions.

On a binational basis we need to reopen and modernize the railroad line in East County. This would complete access from San Diego’s port to the Midwest and Eastern states. For Baja it would provide rail service for the maquiladora industry, Ensenada port and Guadalupe Valley wineries.

An air passenger terminal and parking annex on Otay Mesa, connected by bridge to the Tijuana International Airport, would reduce border automobile traffic, expand air service and bring relief to Lindbergh Field.

The sale of bonds as a potential source for financing for these kinds of projects is drawing fresh interest. In the last few years Mexico has, for the first time, begun to investigate this method of long term financing. It has moved very rapidly to qualify and obtain the needed Standard & Poor’s rating.

Additionally, when the North American Free Trade Agreement was signed, North American Development Bank was created to provide financing for border region infrastructure projects. In particular, it was set up to help those projects that would serve the dual purpose of protecting the environment while providing economic development.

The South San Diego County Economic Development Council is hosting its 12th annual Economic Summit later this month. The theme: “Where is the money?” The keynote speaker is Steven G. Zimmerman, managing director of Standard & Poor’s western regional office. Baja California has recently received ratings from S&P, but of utmost interest to the binational region is this: Is it possible for binational projects to qualify for bond rating? And if so, how?

The morning keynote speaker is Raul Rodriguez, chief executive and managing director of NADBank. Here again, what projects could qualify for financing, and how could the binational region qualify for common infrastructure projects, such as water aqueducts?

In addition to the keynote speakers, break out sessions will cover topics such as border health, infrastructure needs, technology for border security, emerging businesses in San Diego/Tijuana and cross-border communications. And, a new report, “Who crosses the border?” will be released.

Let’s hope we learn a little bit more about where the money is, so we can get back to arguing about not doing the projects.

Patrick Osio Jr. can be reached through San Diego Metropolitan or by e-mail at posiojr@aol.com.