Arizona Town Could Get New Border Crossing — If It Foots The Bill

By Jude Joffe-Block
January 16, 2015
Jude Joffe-Block
The border crossing in the Arizona town of Douglas is outdated.

DOUGLAS, Ariz. – Outdated bridges and roads all around the country need upgrades. But federal funds haven’t kept pace with the demand.

That has left the private sector and other levels of government to pick up the slack.

Now that trend may be expanding to border crossings. Take the port of entry in the border town of Douglas in eastern Arizona.

In 2010, the federal government’s General Services Administration called the crossing “wholly inadequate" for Customs and Border Protection’s mission requirements.

But even so, the federal government isn’t expected to begin spearheading a new Douglas port anytime soon. It is, however, now accepting donations from public and private entities who want to pay to upgrade the country’s outdated ports of entry.

Douglas, a city of fewer than 18,000 residents, is now proposing a plan to build a new commercial port of entry to alleviate the congestion at its current crossing.

Douglas business leaders Oscar Vildosola and Carlos Fernandez have been pushing for a new port of entry for years.

“As you can see it is very tight, it is very inefficient,” said Vildosola on a recent visit to the current crossing. “There’s no space.”

Fernandez pointed through the border fence to a traffic jam on the Mexican side.

“It is 2 o’clock in the afternoon,” Fernandez said. “The line of trucks go on for quite some distance. They are not going to cross before 5 o’clock.”

Vildosola is a customs broker. Fernandez heads the local port authority and owns maquiladoras in Mexico that make aerospace parts.

Jude Joffe-Block
There has been a push for several years to renovate the Douglas port of entry because it is unable to handle its current level of traffic.

Both men spend a lot of time anxiously waiting for goods to make it through here. And they say the delays have been getting worse.

Fewer than 32,500 trucks crossed through Douglas during fiscal year 2013. That's just a fraction of the traffic seen at busier ports of entry along the border. But the Douglas port was never designed to handle even that volume.

Commercial traffic in Douglas jumped 30 percent between 2010 and 2014, according to Customs and Border Protection.

The crossing is too narrow, said Vildosola, especially for oversized mining equipment en route to mines south of the border.

“In the past we have had pieces of equipment that don’t fit through the door,” Vildosola said. “So we had to hire cranes coming from Tucson or Phoenix and lift those pieces across the fence and set them in Mexico.”

Not exactly a vision of efficient 21st century trade.

“We have ports of entry around the country like Douglas that are over 70 years old and do not meet the needs of the public in terms of trade or  traffic,” said David Murphy, program manager for CBP’s Tucson field office.

But Murphy said there isn’t money in the federal budget to keep up with all the needed renovations.

So his agency, along with the GSA, has started a new program that lets outside interests raise money for these upgrades. It’s known as the 559 Donation Acceptance Program.

“This allows private entities, public entities or cities to actually come in and partner with us to build or improve facilities,” Murphy said.

In 2013, CBP piloted a program that allowed private sector or public entities to reimburse the agency to pay for additional shifts of customs employees at ports of entry.

A number of ports, including the Houston and Dallas/Fort-Worth international airports, are participating in the program to add customs shifts, according to CBP.

The Donation Acceptance Program builds upon that pilot.

Murphy said CBP came up with the idea for these programs after cities came to the agency asking for services the federal government wasn’t in a position to fund.

“They are almost stop-gap measures,” Murphy said. “They are not meant as means for getting resources the way we do through Congress.”

Murphy said CBP will provide computers and technology for new buildings constructed under the Donation Acceptance Program. He said CBP partners will be expected to provide everything else.

Edward Alden of the Council on Foreign Relations said Congress has not allocated sufficient funding to maintain the nation’s ports of entry in recent years.

“Funding for ports of entry has consistently been a much lower priority in the last 15 years than upgrading border enforcement.” Alden said. “Even though from an economic perspective, the ports of entry are where we gain economically. Billions and billions of dollars in economic activity is at stake.”

Stimulus funding from the Obama administration helped to renovate the Mariposa border crossing in Nogales, Ariz. west of Douglas. Construction was completed last October.

Jude Joffe-Block
Douglas Mayor Danny Ortega, Jr. stands on city property he is proposing to donate to the federal government for a new commercial port of entry.

Douglas’ current mayor, Danny Ortega, Jr., said Douglas could have applied for the same stimulus funds, but local stakeholders were unable to agree on a proposal.

That’s one reason Ortega said he ran to be mayor in 2012.

“I won by a substantial margin because I said we need to get this new port of entry built,” Ortega said.

Ortega said residents in both Douglas and Agua Prieta on the Mexican side are frustrated with the overworked border crossing .

“Even going to birthday parties in Mexico could take a half a day to get back and forth when it is only a few blocks away,” Ortega said.

Late last month, Ortega submitted the city’s proposal to build a new port under CBP’s Donation Acceptance Program.

His proposal will renovate the current port and construct an additional commercial crossing for trucks.

The city is willing to donate to the federal government an 80 acre parcel of city property right next to the border fence for the new commercial port of entry.

The land is currently undeveloped desert dotted with mesquite and palo verde trees.

“The Mexican land owner just south of us is also willing to donate his land to the federal Mexican government in order to get this port project completed,” Ortega said.

Ortega and his allies had to get counterparts in the Mexican city of Agua Prieta, plus state governments on both sides of the border and the Mexican federal government to all agree on the proposal.  

Ortega believes a new commercial border crossing will alleviate congestion at the current port, which will make it easier for Mexican visitors to come shop at Douglas stores. Plus he expects the new port to spur other kinds of development that will help revitalize Douglas.

“There is a lot of land development for commercial, light manufacturing, warehousing type of jobs,” Douglas said. “It doesn’t look like much now, but I’m hoping two to three years from now it will be a real nice commercial area for Douglas.”

The city projects the new port will be operational by late 2019.

But first the city needs to pay for the construction — an estimated $37.7 million. It estimates an additional $9.25 million in financing costs.

Douglas plans to raise the money by setting up a municipal bond corporation that can issue bonds. The city is also considering the possibility of toll revenues or inviting private equity partners to invest.

The city hopes to convince the federal government to pay rent for the newly constructed port facility for the first 30 years.

Robert Puentes of the Brookings Institute believes partnerships with local governments and the private sector are all part of the new reality for infrastructure funding that used to be considered the federal government’s responsibility.

“There isn’t a lot of money coming from Washington anytime soon, there really is no cavalry coming to help,” Puentes said.

Puentes said creative solutions must be on the table to pay for infrastructure projects — even for border crossings, which may seem like an unlikely candidate for outsourcing.

“As debt and dysfunction kind of is the name of the game here in Washington, it doesn’t mean that we aren’t going to do things here in America,” Puentes said. “It just means we are going to find different ways to do them.”

CBP has received seven applications from potential partners for the new Donation Acceptance Program.

The agency will decide by the middle of this year which ones it will accept, and whether the Douglas port will be one of them.