Officials: Local economy is heading in right direction but obstacles remain

McALLEN — Unemployment has hovered around 4%, a low for the region. Sales tax revenues hit a record year, eclipsing $63 million. Multiple bridges have brought in millions year after year for the city, too.

The city of McAllen has seen swells across various segments of its economy recently, city leaders raved at an economic forum this week at the Chamber of Commerce. McAllen Mayor Jim Darling ticked off various points of pride about the city’s economy, and noted that the city’s population balloons during weekdays, with 25% of the people who work here not living in the city.

But the city’s economy isn’t where it should be yet, Darling said.

“We’re approaching levels where we really need to make sure we have a trained workforce to meet the needs of the companies that come in,” Darling told the McAllen Citizens League at the chamber as he spoke alongside Keith Patridge, president of the McAllen Economic Development Corporation and Jorge Sanchez, vice president of business development and start-ups.

It is a hurdle that officials have said represents the biggest obstacle to elevating the South Texas economy and workforce. The Rio Grande Valley’s population is young — the average age is 29 — and becoming increasingly educated, Darling and Patridge said, citing the various higher education opportunities now available in the region between South Texas College, University of Texas Rio Grande Valley and the new Texas A&M University Higher Education Center in McAllen.

However, large swaths of those students who earn college degrees or complete post-graduate programs leave the region, Patridge said. They are pursing greater opportunities elsewhere, such as Austin, Dallas, Houston or San Antonio.

“We’re graduating Ph.D.s and masters holders and they can’t find a job, so we’re sending them off to somewhere else,” Patridge said. “This becomes an economic issue that mayor and I have talked about often.”

Patridge added: “Every student who leaves here is costing us at least a quarter of a million dollars as a community. How are we going to keep our best and brightest here?”

The average age in the Rio Grande Valley is 29, and officials have said they see that as an advantage.

“At 29 you start to get married, buy homes, start families,” McAllen Chamber of Commerce President Steve Ahlenius said earlier this year. “Those are major purchases. So I see nothing but positive growth for the next 10 to 20 years in this region.”

Beyond that, though, Patridge said it takes a vision.

“The mayor and commissioners have recognized that this is going to require long-term planning and investment to put in place infrastructure to support companies that need those types of jobs,” Patridge said. “When we start talking about higher income, higher skilled jobs, that’s what every other city, county, state in the world wants,” so the city has to take advantage of its location on the border.

Patridge and the MEDC has focused on recruiting manufacturing companies to McAllen and Reynosa, though most of those companies have settled in Reynosa.

“There are over 140,000 manufacturing jobs created in Reynosa over last 30 years. Now, those are all in Mexico,” Patridge said, before noting what return on investment McAllen has seen from that. “What we saw was the houses that the managers bought, their kids going to our schools.”

But that impact has dwindled compared to investments of years past.

“How do we use what we have over there to bring that investment into McAllen?” Patridge said.

Not everyone is looking to join large-scale companies, though. Sanchez noted the various grant programs the Chamber of Commerce has in place for entrepreneurs and small businesses since, after all, they are the backbone of the country, he said.

And there’s one program in May working with young entrepreneurs that Sanchez was proud of.

“We have more than 400 kids selling lemonade,” Sanchez said. “We want to teach them how to become entrepreneurs and manage the money that they earn.”

mferman@themonitor.com