HARLINGEN — After at least two years of courtship, Harlingen and Cardone Industries Inc. announced their engagement earlier this month.
The massive $50-million distribution facility the Philadelphia-based automotive manufacturing company is about to build will become the second-largest industrial building in Cameron County at 920,000 square feet.
Initially, 550 new jobs will be created, and when the facility is running full-bore, that number will rise to 750 jobs.
The facility will be the second Cardone plant operating in Harlingen and the third in Cameron County. The company also established a brake caliper manufacturing center in Matamoros last year.
The decision by Cardone executives was a dramatic stamp of agreement with city officials whose sales pitch to big business has been Harlingen’s central location in the lower Rio Grande Valley and its easy access to Mexico and points north via I-69 and east-west via I-2.
Cardone’s big financial investment just might be the catalyst for even more industrial activity, and jobs, for the city.
Cardone’s impact
Harlingen Mayor Chris Boswell believes the Cardone decision to site its new distribution facility at Harlingen’s industrial park lays down a very visible marker for other major employers looking to expand or relocate.
“Not only is it a great thing for this project itself, and the fact that there’s going to be a huge construction benefit from that and a huge long-term job creation benefit, but it also sends a message to others that this is a great place to do business,” Boswell said.
“We’ve talked for a long time about Harlingen being an ideal site for logistics and distribution and this just sort of ices that argument,” he added.
The Harlingen Economic Development Corp., which led the drive to land Cardone’s new plant, always seems to be negotiating new projects for luring businesses to the city.
And since economic development is a very competitive pursuit among cities, counties and states, all of these are wrapped in strict secrecy to prevent another entity from poaching a potential business relocation or start-up.
Could the Cardone investment open a spigot for other major business announcements in the coming year?
“I think there are going to be some other big projects that you’re going to see in the coming year, and they’re not necessarily going to be logistics and distribution, although I hope that’s going to follow,” Boswell said. “But I do believe we’re going to be able to announce other big projects.”
Freeport tax factor
Practically everyone agrees the Cardone decision to locate its distribution facility in Harlingen would not have occurred without a vote by the Cameron County Commissioner’s Court in December 2016 to exempt businesses from the freeport tax.
The freeport tax imposes a levy on warehouse inventory which, in the case of Cardone and many others with distribution centers, is often a deal-breaker when it comes to locating a new facility.
Most Texas counties and municipalities have issued exemptions to the freeport tax, thinking probably accurately the exemption improves their chances of landing new businesses, or at least those with a major warehouse component.
The county also issued $1.7 million in tax abatements for Cardone and its new distribution facility.
The freeport tax is paid by about 110 companies with inventory in Cameron County, and generates approximately $1.6 million a year in taxes for the county. County commissioners will have to replace a good portion of those funds in their budget when the freeport exemption goes into effect in 2018.
Now Cameron County can boast a “triple freeport exemption” which means none of the traditional taxing entities — the county, cities or schools – impose a tax on warehouse inventory.
2018 and beyond
Raudel Garza, chief executive of the Harlingen Economic Development Corp., like Boswell, downplayed the prospects of another Cardone type mega-facility locating in Harlingen in 2018, yet there are prospects out there.
“We’re continuing to market property off of Roosevelt and I-69 North and actually that property has got a lot of bites, so we might see some development out there in the near future,” Garza said.
“On the retail side, we’ve kind of started focusing our energies again on making sure that we keep up with the Joneses and make sure that the franchises and the national chains that are looking to grow in South Texas have enough options in the Harlingen area as well,” he said.
“You’re seeing that with the development on the west side, with some of the stuff that’s going on next to Target, with the shadow boxes that are being built right adjacent to Sam’s,” he added. “And some of the other stuff downtown as well.
“Downtown is doing very well,” Garza said.
