More Mexicans investing in U.S. side of the border
MAKING MONEY: Cheap land, a new customer base and a dwindling dollar are enticing incentives.

10:00 PM PDT on Saturday, June 7, 2008
By CHRISTOPHER SHERMAN
The Associated Press

MCALLEN, TEXAS - While poor Mexicans cross the border to take advantage of higher wages and a social safety net, their wealthy countrymen are seizing on the slowing U.S. economy to achieve their own American corporate dream.

Anyone unfamiliar with the U.S.-Mexico border region might expect that private investment only flows from north to south. The Mexican side of the border in south Texas is loaded with factories American companies have opened since NAFTA cleared the way for them to take advantage of inexpensive labor.

Two-way Cash Flow

But between the two countries, billions of dollars are moving in both directions each year. In the South Texas Rio Grande Valley, Mexicans and their corporations are pouring their money into real estate, businesses and retail shopping on the U.S. side.

Factors at work in the money streaming north include valuable real estate at reasonable prices, a desire to access American consumers, opportunities created by a cooling economy and weaker dollar, as well as amenities such as shopping, South Padre Island and putting distance between their businesses and the kidnappings and drug cartel violence.

"They prefer to purchase land in the U.S. because they consider it good as gold," said Gilberto Salinas, a spokesman for the Brownsville Economic Development Council. "There's money there (in Mexico). We're the ones going to them."

In 2006, Mexican companies' investment in the U.S. grew by 60 percent to $6.1 billion. U.S. companies' investment in Mexico is far larger, but grew only 13 percent to $84.7 billion during the same year, according to preliminary figures from the U.S. Department of Commerce's Bureau of Economic Analysis. In 1999, Mexican companies' direct investment in the U.S. was $1.7 billion.

Salinas, of the Brownsville EDC, said his office has been working with a Monterrey, Mexico, investor who wants to develop 1,400 acres he owns on the edge of the city that would become the "new front door of Brownsvillle."

Two years ago, Monterrey-based Banorte paid $259 million for a 70 percent stake in Inter National Bank hoping to tap the U.S. Hispanic market and sell cross-border mortgages.

"With the downturn in the U.S. economy, we get calls every day from Mexican nationals wanting to know where the opportunities (for investment) are," said Carlos Garza, Inter National's president and chief executive.

Some say the security situation in Mexico -- federal troops coming to the border area to confront drug cartels and the kidnappings in the major cities -- has played a role in an investment bump perceived more recently.

An Exit Strategy

An investment of $1 million -- or $500,000 in some targeted employment areas -- and creating 10 jobs is enough to get visas for an investor's family. In 2007, the U.S. approved 806 investor visas -- that included investors from around the world and their family members -- according to the Department of Homeland Security's Yearbook of Immigration Statistics. That was a marked increase from the 64 investor visas approved five years earlier, but still a miniscule number. Data on how many were for investments made in Texas were not available.

"Citizens of Mexico who can afford to, are saying, 'I'm going to move my family out,'" said Keith Patridge, president and chief executive of the McAllen Economic Development Corporation.

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