Edition: July 2008



 The Connection

 By Patrick Osio


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Normal Will Do, For Now
A new Otay crossing opening
in 2015 would be worth billions





Northbound traffic backups like these at the Mexican border will ease by 2015 if a new border crossing gets financed for east Otay Mesa.

In December 2001, San Diego City Council declared a state of economic emergency due to the sudden drop in northbound border crossings after the 9/11 terrorist attack. Baja Californians in droves stopped crossing to San Diego due to several hour delays caused by very thorough auto and pedestrian inspections. Adding stress to the delays was the fear factor of not knowing if terrorists would attack in San Diego.

San Diego felt the economic pain, which punctuated the interdependence of the San Diego-Baja region. In time, fears subsided, and the cross-border flow of traffic was to some degree speeded, although delays measured in hours still persist and continue to be an economic impediment on both sides of the border.

As we reported here in August, a study conducted by the San Diego Association of Governments and California Department of Transportation, “Economic Impacts of Wait Times at the San Diego-Baja California Border,” concluded “a 45-minute northbound border crossing delay costs the San Diego-Baja California (Tijuana-Tecate-Rosarito-Ensenada) economy $2.5 billion each year. Every additional 15-minute delay adds another $1 billion. So a 2 1/4-hour crossing delay, now fast becoming the norm, means a regional economic loss of $8.5 billion a year.”

In November 2007, the tables were turned. Americans and other countries’ tourists in great numbers stopped visiting Baja due to reports Americans were in danger of being held up along the coastal highway from Tijuana to Ensenada, cars were being stolen and rogue policemen were shaking down visitors.

Mexico President Felipe Calderon declared war on the drug thugs as the capos turned on each other for more control of the hugely profitable smuggling and trafficking business. The U.S. and Mexican press had a field day sensationalizing the events and for months Baja’s economy, 40 percent of which depends on tourism, suffered. Now it seems that Americans are flocking back to Baja. Why?

The short answer is saving money trumps fear. Gasoline is available anywhere in Baja for about $2.55 a gallon, a $2 a gallon saving from what it costs in San Diego. Savings on diesel fuel are even greater, with American demand catching Baja shorthanded.

Once again, events highlight the regional economic interdependence.

Waiting to fuel up his Ford pickup, Robert Kline of Orange County said once he began seeing nightly news reports on the cars crossing for gas, he figured things can’t be that bad. So he returned to Baja and his favorite weekend retreat. Kline is not alone and this summer travel patterns will begin to approach normal.

But a simple return to “normal” is not really a good option for San Diego and Baja California. “Normal” means continuing to lose more than $8 billion a year due to border crossing delays, and those amounts will swell if border delay times continue to increase.

If the San Diego-Baja stars align right, the answer may lie with the proposed Otay Mesa East Port of Entry. A new study from the San Diego Regional Chamber of Commerce and Economic Research Bureau estimates the economic benefits over a 10-year period would be $31.6 billion.

The new port is “likely to happen” but not a certainty. A number of tasks remain. Among them are obtaining the environmental clearances and securing the Presidential Permit every new port of entry requires. Expectations are that both these items will be completed this year. Soon after environmental compliances comes the matter of financing. A revenue bond issuance in 2010 is planned for obtaining the financing, which at this time is pegged from $550 million to $660 million. If it all goes well, construction will begin in 2012 and be operational by 2015.

In the meantime, we need to survive “normal” and pray that nothing happens to get us off track. Stay tuned. We will keep you posted.

Patrick Osio Jr. can be reached at posiojr@sandiegometro.com. The veteran consultant also has issued The Mexican Perspective, an intensive primer on business culture and protocol. Copies are available at hispanicvista.com/sales/book_sale.htm.


Story Comments

The crossing east of Otay Mesa does not really make economic sense. What is needed is a crossing WEST of the present entry that will lead directly to the QUOTA or toll road that leads to Rosarito and Ensenada. Almost 100% of USA visitors to northern Baja are going to these cities or their vacation or retirement homes along the coast via this route. Why would some government bureaucrat plan an entry east of Otay Mesa where no body will cross? So there is concern about the Tijuana estuary. Why not build a bridge or on stilts like the trolley in Mission Valley but not in the east. It does not make sense!

Posted by Gernot Trolf at 12:58pm on 2008 July 01

The crossing at Otay is out of the way. The bang for the buck of creating another crossing East of TJ doesn't make sense. The crossing needs to be West of downtown TJ and eliminate the need to drive through downtown TJ. The idea of making a crossing West of the current crossing makes the most sense to me. I think anyone voting on the location of any new crossing should spend a couple weeks traveling the different crossings so that they can truly experience how horrible the delay is. My mantra: Otay - No Way, West is Best

Posted by Tim Hmelar at 1:44pm on 2008 July 01

Of course, a more western Port of Entry is needed. However, a major economic problem is the delay in truck traffic. Trucks are not permitted to cross west of Otay Mesa. The second Otay crossing will be a great help in alleviating the delays in truck traffic. Also, Tijuana has spread much further east that a second Otay Mesa crossing, the day-to-day crossing for cars and pedestrians will be an economic benefit.

Posted by James Clark at 1:56pm on 2008 July 01

Agreed! Truck should continue to cross in the east but people in the WESTT !!!!

Posted by Geernot Trolf at 9:39am on 2008 July 02

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