Planning January 2016

Blurring Borders

Arizona took heat for its tough immigration law, but its proximity to Mexico has more advantages than disadvantages.

By Perla Trevizo

If trade with Mexico and managing the border seem like the exclusive purview of federal or state authorities, tell that to the Arizona cities and counties whose economies depend on a relationship with our neighbors to the south.

Staffing ports of entry, building better roads, or preventing the closure of banks in border communities are indeed handled higher up, but local governments are heavily involved, too, because those activities tie directly to commerce and trade with one of the fastest growing economies in the world.

"We are 60 miles straight up I-19 with a bilingual population [and a] ready workforce," says Tucson Mayor Jonathan Rothschild, "so you've got to see this as a regional effort."

Mexico is Arizona's largest international trading partner with $16 billion in yearly trade — more than all the trade between Mexico and Asia-Pacific Rim, and nearly as much as Mexico trades with Germany. In 2014, nearly 100,000 Arizona jobs were supported by trade with Mexico.

Go to any of the border towns and the stores are filled with Mexican shoppers. In Tucson, the largest city close to the border, shopping mall parking lots are full of cars with license plates from the Mexican states of Sonora and Sinaloa.

Those with border crossing cards can travel up to 75 miles into Arizona. On average, Mexican consumers spend $8 million a day in the state.

"This is a very dynamic border," says David Farca, president of the Arizona-Mexico Commission, of the 300 miles Arizona shares with Mexico. "Whether it's trade, everyday life, health-related issues, security issues ... it's a pretty large, dynamic relationship."

The role of the commission, a state agency created nearly 60 years ago, is to be at the forefront of relations and issues related to Arizona and Mexico, Farca says. It was a trailblazer when it launched and it continues to be, he adds, as other states and countries turn to Arizona to see how it acts as a region that reaches beyond its borders.

Arizona border crossings see a lot of traffic. Here, shoppers head into Nogales, in the Mexican state of Sonora. Both Mexicans and Americans shop on both sides of the border, many crossing by foot to get to nearby businesses

Arizona border crossings see a lot of traffic. Here, shoppers head into Nogales, in the Mexican state of Sonora. Both Mexicans and Americans shop on both sides of the border, many crossing by foot to get to nearby businesses. Photo by Jahi Chikwendiu/The Washington Post via Getty Images.

SB 1070

The fact that Arizona was among the first states to connect with Mexico might be surprising to those who have followed the news over the last few years.

In 2010, the state passed SB 1070, then called the toughest immigration law in the country. Since its approval, the courts have blocked many of its provisions, except for the so-called "show me your papers" section, which requires local law enforcement officers to ask about the legal status of people they have stopped or arrested for other reasons.

The state's economy took an immediate hit as a result of the rhetoric around the law. The tourism sector lost 2,761 jobs and $253 million in economic output, a report by the Center for American Progress found.

The Arizona Hotel & Lodging Association counted 23 canceled meetings the first week the controversial legislation was signed into law for a loss of between $6 and $10 million, the Washington Post reported in May 2010.

At the time, at least 14 cities across the country announced boycotts and Arizona-based businesses saw contracts cancelled or were turned away from bidding. Arizona's agricultural and crop production employment dipped significantly, while it increased in competing states like California and New Mexico, the Cato Institute reported.

"I understand the frustration on the state side of not having any action or any attention from the federal level [on immigration issues], and I think the intentions might have been on the right side, but perception and relationship-wise, it was very detrimental," Farca says.

Arizona-Mexico At a Glance

$16 billion: Arizona's bilateral trade with Mexico

48 million: Number of people that crossed the border

16 million: Number of cars

760,000: Number of trucks

1,800: Number of trains

$450 million-plus: Investment in border infrastructure in the past seven years

Source: Arizona-Mexico Commission

Changing image

While improvements have been made since, more still needs to be done to change the state's association with being "anti-immigrant," city and state officials say.

The new state administration is more focused on business development and realizes that being a border state is an advantage rather than a disadvantage, Farca says. "We are at the beginning of what I would consider golden years to come."

Newly elected Gov. Doug Ducey was the first Arizona governor to visit Mexico in almost 10 years. He expanded the role of the director of the governor's Southern Arizona office to oversee operations in Sonora as well.

Both the city of Tucson and Pima County passed resolutions establishing themselves as immigrant-
friendly. "We've got to ensure everything we do is bilingual, to be inclusive," Mayor Rothschild says. Parts of the city's website are in English and Spanish and the city helps host export-import workshops with the Arizona Small Business Association.

Over the years, cities along the border have formed groups such as the Nogales Community Development Corporation, a nonprofit that offers professional industry-based training such as warehousing skills training, accounting, entrepreneurial skills development, and business English. There is also the Ambos Nogales Partnership, a binational coalition of public and private partners that works to develop infrastructure to support business expansion. (Ambos Nogales is the joint name given to Nogales, Arizona, and Nogales, Sonora.)

More recently, the state and cities opened offices in Sonora to serve as an information source and coordination point for corporations and entrepreneurs wanting to do business in Tucson and Pima County. Those offices also address more basic questions, including what to do about a traffic citation on this side of the border or who to call if a pipe bursts in an Arizona home.

"We want to ensure our neighbors feel welcome and that we are available to facilitate the process," Pima County Administrator Chuck Huckelberry has said.

In 2014, the Arizona Commerce Authority opened an office in Mexico City, and Phoenix and Tucson joined in. The fully staffed office sets up meetings with companies or government officials looking to do business in the state.

Tucson and Pima County have hired bilingual and bicultural coordinators of economic development and international projects who travel to Sonora regularly. Pima County also printed brochures in Spanish to attract Mexican businesses and has a regular presence in Ambos Nogales.

"It's a breath of fresh air," says Juan Padres, economic development specialist for international trade for Tucson and a native of Nogales, Sonora. "Go visit the office, you can deal with us directly; if you have a question or are looking to do business, call me."

"Everybody from Nogales to Mazatlán (Sinaloa) has been visited by the city of Tucson in addition to the city of Mexico and Guadalajara (Jalisco)," he says, pointing to the range of potential business partners the region is hoping to tap.

Increasingly, officials see the 300-mile border between Arizona and Mexico as an economic development plus, rather than a negative

Increasingly, officials see the 300-mile border between Arizona and Mexico as an economic development plus, rather than a negative. Photo by Perla Trevizo.

Business resources

While the border region is a dynamic one, the focus for most local and state officials is how to attract more business — to either side of the border. Many of the factories on the Mexican side operate under the twin-plant or maquiladora concept in which the U.S. side serves as the warehouse distribution point and the Mexican counterpart as the manufacturing epicenter.

The maquiladora industry in Nogales, Sonora, includes about 110 assembly-for-export plants that employ about 35,000 people, many of whom have visas to cross into the U.S. For every 100 jobs in this export-related sector, an additional 56 jobs are generated in the local economy through ripple effects, a recent study for the Nogales/Santa Cruz County area found.

For the second year in a row, the Arizona Daily Star, one of the state's main newspapers, and the Tucson Hispanic Chamber of Commerce created the Arizona-Sonora Business Resource Guide. The directory of more than 2,000 companies is meant to facilitate contact between suppliers, vendors, and customs brokers, something that hadn't been easy before.

"A lot of Arizona businesses might be buying products from far away," says Lea Márquez-Peterson, president and CEO of the Tucson Hispanic Chamber of Commerce. Those firms might not know that there's a local company that can serve them.

The Mariposa port of entry in Nogales is one of the 10 busiest cargo ports along the U.S.-Mexico border. Nearly half of all the winter produce consumed in the U.S. comes through Nogales.

Other efforts include a Pima County economic development webpage to serve as a regional resource guide and tool to promote business opportunities. The Maricopa Association of Governments also developed BIEN — Building an International Economic Network — as a business-to-business e-platform to connect individual companies across international boundaries in Mexico and Canada.

The Arizona Commerce Authority is also working with border communities to develop an online database of existing land and buildings available for development to help site locators.

But not all business has to be large scale. Felipe Garcia, executive vice president of Mexico marketing for Visit Tucson, tells the story of a woman from Magdalena, Sonora, who would come to Tucson every weekend to sell her cookies at a swap meet. After several months, a customs officer at the port of entry opened the trunk and saw it was, in fact, packed with cookies. They had no label with ingredients or nutritional value. She had no permit to bring them into the U.S.

"We talked to her about help and assistance to follow the rules to bring her product into the United States," Garcia says. Visit Tucson works with a group that helps startups in Tucson go to Mexico and helps companies that want to enter the U.S. market. In return, they ask Mexican counterparts to do the same with Arizona companies.

"I see a lot of opportunities south of the border," Garcia says. "We are still in very infant stages of building those relationships."

Different kinds of tourism

More than 40 million people cross the border between Arizona and Sonora in a given year. In border communities in Arizona, as much as 57 percent of total Mexican spending in the state comes from retail establishments, to the tune of about $1.5 billion.

In Douglas, Arizona, more than 70 percent of the city sales tax revenue is directly attributed to the Mexican consumer, the Arizona Daily Star reported.

It's no surprise that Arizona cities are doing everything they can to make sure they attract those visitors and that those visitors are using their time to shop and dine instead of waiting in line at the port of entry.

Visit Tucson, funded by the city, county, and private monies, is the main office in charge of tourism in southern Arizona. In 2007, it convened community leaders, government officials, hoteliers, and other stakeholders who gathered to look at what a typical Mexican visitor was doing in Arizona and what the community as a whole could do to reach out to this group.

One result: an effort to better tell Arizona's story in Mexico, Garcia says. Now, a local television station in Sonora runs a weekly segment about Tucson to promote the region as a destination.

Businesses also need to know how to better serve current Mexican visitors, he says. Garcia partners with other groups to train frontline staff at hotels, restaurants, and medical offices, even on basic cultural differences such as waiting for a Mexican customer to request a restaurant check before it's brought to the table.

The Visit Tucson website is in English and Spanish, but each page offers something different. The English version sells cowboy life, the desert, and Mexican food, Garcia says. The Spanish version focuses more on shopping and entertainment.

"In Mexico they already have saguaros; we share the same desert," Garcia says. "They are coming here for the nightlife, dining, concerts, and shopping."

While it is not uncommon to see U.S. residents along the border cross over for a much cheaper dentist visit or to take their pets to the vet, the opposite is also a growing trend.

Pima County is working with Visit Tucson and the medical community to enhance medical tourism from Mexico. Recently Mexican investors chose to build a new hospital in Arizona's Green Valley, and a new hospital in Sierra Vista is actively marketing to Sonoran patients.

And then there's sports. Baseball continues to be very popular in Mexico and Pima County wants to take advantage of that. Officials are trying to secure long-term Mexican Minor League baseball teams to use its Kino Sports Complex.

Tips for Border Towns

How can you promote positive relationships with local Mexican leaders and customers?

1. Involve the mayor. He or she needs to have a vision and an understanding of the potential market.

2. Develop a strategy plan.

3. Tell your story, market, advertise, promote.

4. Help local companies understand the value of the Mexican visitor.

5. Have a strong relationship with federal agencies and your congressional delegation.

6. Work with Mexican leaders. Build trust and understand opportunities on both sides of the border.

Source: Felipe Garcia, executive vice president, Visit Tucson

Telling example

On their own, Arizona border communities are quite small, but add their cross-border partners, and their potential for growth is considerably larger.

For instance, the two cities of Nogales have grown from a rail stop in the late 1800s to a combined community of nearly 400,000 people — about 21,000 from the Arizona side. To the east, Douglas has about 17,000 but another 100,000 live in Agua Prieta, its sister city to the South.

"We understand, as sister cities, that we are here together," says Danny Ortega, mayor of Douglas.

The city organizes binational concerts, with bands playing on either side of the border fence, and the mayors from both sides shaking hands through the bollard fence as a symbolic gesture of unity.

"It is not just about the economy, it's a piece of what we do," Ortega says.

The mayors of Douglas and Agua Prieta often call each other to follow up on initiatives, Ortega says. The fire chiefs, police chiefs, and city managers meet monthly. "It's a constant effort," he says, to remain in communication. The city of Douglas even wants to make it possible for city employers to use their health insurance across the border; some people already seek medical services there.

Cross-border training for first responders is also frequent. Recently, federal, state, and local agencies from Arizona and Sonora gathered at the port of entry in Douglas for a simulated chemical spill.

"The way we look at it, we need to help our counterparts," says Douglas Fire Chief Mario Novoa. "If we can mitigate an emergency on the Mexican side by training and offering equipment," it needs to be done — in part because a lot of hazardous chemicals cross the border and spills don't respect national borders.

Each country can provide emergency services for up to 100 miles on the other side of the border. Good communications, sharing pertinent data, and, most importantly, a good working relationship with customs officers on both sides are essential.

Last year, during severe flooding, Mexican officials were searching for several people who were swept away. When they ran out of fuel, they called Novoa, who made arrangements with Customs and Border Protection to allow them to purchase some from the Douglas airport and continue their search efforts.

"Without communication, who would they have called?" Novoa asked. "It's takes a binational effort to take care of both sides of the border."

It's important to understand that despite the fact that the conversation is often about illegal immigration, says Garcia with Visit Tucson, "the largest amount of people [coming here from Mexico are] by a landslide, people coming here legally with visas and money in their pockets."

"Yes, we have problems to fix in the border," he says, "but the opportunities are great and the benefits are great."

Perla Trevizo is the border reporter for the Arizona Daily Star.

Crafting a Cross-Border Master Plan for Infrastructure

By Perla Trevizo

When anyone talks to mayors, county administrators, and state officials about the issues in border communities, one word continues to come up: infrastructure.

Better ports of entry and roads makes Arizona more competitive, they say, which in turn helps local economies and job markets.

One unique model along the southern border is the Arizona Department of Transportation's Arizona-Sonora Border Master Plan, which U.S. stakeholders and their Mexican counterparts developed to identify key projects for the next couple of decades (

The plan was a 14-month project that kicked off in December 2011 and concluded in 2013 at a cost of $1 million, according to Rudy Perez, project manager for the plan. The goal is to update it, but officials are waiting until after the presidential elections.

Constantly being lobbied by communities along the border saying their port of entry or their project was the most important, federal agencies wanted to know the region's true priorities when it came to land ports of entry, connectivity, infrastructure, and transportation, says Perez.

The idea was for the departments of transportation in states on both sides of the border to formalize the planning process and prioritize projects for the entire region. "We took our time building consensus," Perez says, "which was key to our particular border master plan."

They reviewed 164 projects within 25 miles of the border, which included improvements to the San Luis port of entry, pedestrian and vehicular rail overpasses at the Nogales port of entry, and improvements to State Road 189, which connects the Mariposa port of entry with Interstate 19.

Among the lessons learned, Perez says, was the importance of being inclusive and flexible to meet the needs of those on both sides of the border. For instance, instead of starting meetings at 8 a.m., they would start at 9 a.m. or 10 a.m. to make it easier for those crossing from Mexico. They also offered simultaneous interpretation and provided lunch when possible.

At the end of the process, the projects with more points (categories included cost-effectiveness, project readiness, capacity, economic benefit, and binational coordination) were prioritized.

The group also created an online tool for following the progress of each individual project: So far, street improvement projects and some port of entry projects have been concluded.

"(This process) is important for both [countries, which are] trying to secure funding in D.C., but also in Mexico City," Perez says.

In June 2013, the governors of Arizona and Sonora also signed a declaration of cooperation saying the plan will be implemented. "To document and formalize the process hopefully does hold people accountable on both sides of the border," Perez says.

Last May, he was asked to present to counterparts on the Canadian border in a meeting in Detroit. "They are very interested in going through a similar process in some of the northern states and replicating what we've done here in the Southern border."

The takeaway from all of this, says Laura Douglas, spokesperson for ADOT, is that "it goes to our overall plans to enhance commerce, trade, tourism, and key commerce corridors," which is all for the greater good of the state.


Arizona-Mexico Economic Indicators:

Arizona-Mexico Commission:

BIEN, Building an International Economic Network:

Visit your app store to download the Arizona-Sonora Business Resource Guide.