Port Grande, a prospective multi-phase logistics park in the heart of the largest inland port in the country, is soon to become a reality as the company and the city finalize a deal for a 30-year tax increment reinvestment zone.
Majestic Realty Co., the country’s largest privately-held industrial and portfolio developer, plans to make the project the epicenter of South Texas trade and even the epicenter of all North American trade as they expect for Mexico’s dominance in various industries like manufacturing to grow in the coming years and decades. The 2,000-acre project would be the largest construction project by the company in terms of acreage.
This prospective partnership comes after years of negotiations between the company and city.
Majestic Realty has had a presence in Laredo for over 20 years. Six years ago the company purchased the former Mercedes Benz testing track off mile marker 13 and went on to build phase 1 of the Port Grande project.
Tom Simmons, a development partner and vice president at Majestic Realty, said Port Grande was a new challenge for the company. “Majestic has been focused on cross-border real estate for the past decade after seeing the shift in investment patterns from Asia-Pacific to the United States and Mexico after seeing the new USMCA and NAFTA 2.0,” he said.
According to Simmons, most of all their negotiations have centered on the City of Laredo, but they are also talking with Webb County. City Council has preliminarily approved of the tax deal, but nothing has been presented to the Commissioners Court yet.
The proposed logistic park falls under the City of Laredo’s District VI, represented by Councilmember Dr. Marte Martinez, who was one of the main proponents of the project.
Martinez noted that this is an industry-sponsored project. The company came to the city and proposed this partnership, where the city would put aside a portion of the developer’s taxes over the
term of the agreement in order to reinvest into the infrastructure and public improvements needed in the development process.
The project will allow the City of Laredo to finally compete with their true direct competitors, Martinez said.
“Competitively speaking, we wanted to compete with the Los Angeles, the Houstons and the New Yorks, which are the ports that we actually compete with. So these are the kind of deals that they actually do,” Martinez said. “The negotiations were done through a team of management, the economic department director along with our legal department and directly with the leaders of Majestic that are in charge of the project.”
The project will expand the warehousing space in Laredo for all the goods that come into the largest inland port in the country. Majestic plans to attract new businesses to the area and to create both direct and indirect jobs with the project.
According to Simmons, the project will help bring many of the multinational and Fortune 500 companies that have yet not arrived to Laredo. Since Majestic
Realty already has many of these companies in their portfolio, Simmons expects for these new companies to come to the area. They will also work in marketing the Laredo area heavily to make this happen, he said.
“We have been there in Laredo for 20 years and the projects that we began are already still ongoing,” Simmons said. “We have happy tenants there and businesses that have been creating jobs and tax revenues … for decades, and we will continue to do that. The market will tell us how fast we can get it done. I think we will be pleasantly surprised with the increase of Mexico trade in the coming decades.”
In total, 10,000 permanent jobs are expected to be created by the time the project is fully completed in 30 years, according to a company hired by Majestic to estimate potential job creation. Simmons states that these 10,000 jobs do not include the temporary construction jobs that will be created.
Martinez believes this project will help Laredo’s economy recover and grow following the pandemic. Because international trade has done well following the initial COVID- 19 shutdowns last
year, Laredo’s leaders have been reminded of this industry’s importance to the area. That and job creation are why Martinez and other council members have supported the project.
Teclo Garcia, the city’s economic development director, notes that there will be secondary job creation as well — perhaps in the form of more restaurants, hotels or a diesel mechanic facility.
“Those people then earning those paychecks, then will spend their money in town or maybe buy a home or buy appliances for their place or maybe even buy a vehicle. You never know, but this is all induced activity that this project will help get going,” Garcia said.
Ultimately, Simmons, Martinez and Garcia agree that Laredo is one of the most important ports in the North American region and that this project will only cement that reality and finally showcase the might of Laredo’s footprint in the trade industry.
Martinez states that one of the biggest legacies that he wants to leave behind whenever he finishes his time on council is to leave
the distinction that Laredo is a premier port area.
“Laredo needs to understand who it really and what we really represent. Let’s think big and make big decisions that put us strategically on the map,” he said.
Simmons agrees that Laredo is worthy of more notoriety.
“I think that even Laredo often does not realize how big of a deal it is,” Simmons said. “We feel strongly that as this project really starts taking hold that Laredo will kind of start to receive and understand, and the larger trade community will also get to understand as well, that Laredo is a great logistic and distribution market.”
Laredo City Council reached an agreement for the tax deal for the 2,000-acre logistics park to be created off mile 13 that will cost approximately $1 billion when finalized. The final
agreement for the project will be discussed at their meeting on Feb. 16 and then public hearings will be held to discuss the further development of the project as well.