Uncertainties stemming from a roller-coaster economy and rising costs of Operation Iraqi Freedom have combined to keep the construction industry sputtering along in most parts of the United States.

One of the exceptions continues to be Texas as metropolitan areas such as Houston, Austin and the Dallas/Fort Worth Metroplex seem to continue to boast a wide variety of large and midsize projects in a myriad of arenas.

But the continued success enjoyed by the Texas construction industry is not limited to the large cities. The vast Rio Grande Valley, particularly the most southern portion that stretches from Laredo to Brownsville, has experienced tremendous growth during the last decade in population and the construction associated with it.

Small border towns such as Rio Grande City, Mission, Edinburg, Pharr, Mercedes and San Benito that were once merely dots on the Texas map, have watched their populations swell in recent years. As a result, the need for additional housing, infrastructure, schools, retail stores and eateries has grown at a high rate.

The same holds true for the larger, more-established cities of Laredo, McAllen, Harlingen and Brownsville. According to McGraw-Hill Construction Dodge reports in early April, more than a dozen projects worth $5 million or more were under construction in Laredo and the surrounding Webb County area. Included were a pair of high-profile ventures: a $35 million second campus at Laredo Community College and the new $33.7 million Laredo Federal Courthouse.

Meanwhile, the Texas Department of Transportation has taken steps to address the need for additional highways in the area. Already under way are expansion projects of the U.S. Highway 83 and 77 intersection in Harlingen and upgrades of U.S. 83 as it makes it way between McAllen and Harlingen. Those two projects alone carry a combined value of more than $143.8 million.

"These are the types of projects we are addressing," said TxDOT executive director Michael Behrens. "That area has experienced a tremendous amount of growth in the past few years and alleviating congestion on Texas roadways and making them safer for Texas motorists is our department's top priority."

Those two highway projects were among more than 50 identified in early April by McGraw-Hill Construction Dodge currently under way in Texas' southernmost counties of Starr, Hidalgo, Willacy and Cameron, projects boasting combined contract values of nearly $650 million.

Most local officials agree the enactment of the North American Free Trade Agreement between Canada, the United States and Mexico in 1994 brought about much of the area's growth. Truck traffic makes its way along U.S. 77 from the border towns of Matamoros and Brownsville fans out toward Corpus Christi and Laredo before heading to San Antonio and other points farther north.

"I don't think there's any question that NAFTA is a big part of it," said Conrad Qualley, project manager for Sherman-based Mitchell Enterprises overseeing construction of Laredo's new federal courthouse. "There are two major highways between Laredo and Monterrey (Mexico) and then the Interstate 35 corridor heading north.

"Our trucking crossing the bridge has gone from around 300 to 500 per day in the pre-NAFTA days to about 5,000 trucks per day over four bridges. And a fifth bridge is in the planning stage. I think 99 percent of our growth is due to the increased trade with Mexico, much of which goes right through Laredo."

Qualley has lived in the Valley for nearly 30 years and has seen marked change throughout the area during that time.

"Laredo has been booming more and for a longer time than the rest of the Valley, which is just now catching up," he said. "But that is because of the proximity to Monterrey, which is the industrial capital of Mexico. Laredo has been experiencing a boom for pretty much all of the last 10 years. We reached the peak probably about two years ago, but there is still a lot going on here."

While Monterrey and Nuevo Laredo have grown exponentially with manufacturing plants, Laredo continues to build warehousing and forwarding facilities.

"For example, the last survey I saw said that Laredo was the second-fastest growing city in terms of construction in the United States, trailing only Las Vegas," Qualley said. "Of course, I'm a little prejudiced, but since Las Vegas blows up its old buildings and builds new ones on top of them, the fact that we're building all new down here should make us number one."

Population Overflow

While Laredo's population expands past the 200,000 mark, some of the overflow has already migrated to the southeast toward McAllen, Harlingen and Brownsville.

The small town of Hidalgo, situated across the border from the burgeoning Mexican city of Reynosa, has grown in population from just over 5,000 less than five years ago to more than 8,500. As a result, large construction projects are cropping up throughout the area including the $18 million Rio Grande Valley Events Center. The 6,500-seat multipurpose facility will soon be home to the city's new Central Hockey League franchise and a variety of other events.

"The events center is easily the largest project in this part of the Lower Valley since the Texas State Bank was built four or five years ago," said Virgil Gonzalez, a building and code enforcement office for the City of Hidalgo. "We have experienced a lot of steady growth in the past five years or so.

"I've been with the city about three years and in that time we have experienced a huge growth in the residential and commercial construction. We average about 12 to 17 houses per month just in residential and probably two or three good-sized commercial projects."

Gonzalez agreed that NAFTA was one of the reasons for the growth of smaller cities along the Rio Grande. "But another reason, I think, is people wanting to get away from some of the larger city areas," he said. "Hidalgo is not very big, but we have a city that provides the full scale of services that larger cities have but we offer them within a small community."

Pharr-based Williamson Construction won the contract for building the events center and although project manager Gonzalo Rodriguez said it was one of the company's largest projects ever, he expected there would be similar projects being built in the area in the near future.

"When I first arrived here, everyone in this area said, 'Oh, this construction cycle will last about five years and then it will die down like it does in every other city,'" he said. "Well, I've been here 10 years now and it never has. It's been growing, it continues to grow and it will just keep on growing. I don't see any signs that it will ever stop, at least in the foreseeable future."

Strong Forecast

The area's economic forecast for 2003 appears to back up Rodriguez's claims. According to the McAllen Chamber of Commerce, new construction increased a whopping 11.9 percent in 2002 in the area encompassing McAllen, Edinburg, Mission and Pharr.

Likewise, new housing starts moved ahead by 18.4 percent and retail sales grew at a rate of 6 percent. And the organization predicted the trend would continue.

"I think our area continues to be extremely strong in terms of housing construction and total construction," said chamber president and CEO Steve Ahlenius.

Part of Ahlenius' bright forecast stems from the fact that interest rates are expected to remain low in 2003, which means there should be plenty of money still available for new building projects throughout the Valley.

One of those projects was unveiled in early March when the Brownsville Urban System and Fort Worth-based engineering and consulting firm Carter & Burgess Inc. unveiled plans for a one-stop transportation outlet designed to enhance downtown activity and facilitate connections across the international bridges to Mexico.

The proposed terminal would increase the amount of transit bays from the Market Square bus terminal in Brownsville as well as add 15 intercity bus bays. A parking garage, retail outlets, restaurants, rental car establishments and a visitor information center are also part of the plans.

The terminal, which is expected to become operational in about three years, will cost an estimated $8.7 million with the 290-space parking garage valued at an additional $2.75 million.
Project officials indicated they would seek between 50 and 80 percent federal funding and have identified other revenue sources, such as developing retail space, advertising revenue and lease payments.

Increased Infrastructure

Increased population throughout the Rio Grande Valley means upgrades to other infrastructure services as well as roadways, bus terminals and other transportation-related facilities.

Construction began late last year on a $15.2 million water treatment plant in McAllen. Two Houston-based companies are in charge of the project: Environmental Infrastructure Group is the general contractor while Montgomery Watson Americas Inc. is serving as the civil engineer.

Two other key members of the project team are local firms, however. The IDEA Group Inc. of McAllen is serving as architect while Edinburg-based Melden & Hunt Engineers Inc. is the consulting engineer.

The plant is scheduled to handle up to 8.25 million gallons of water per day.

Raw water facilities currently under construction include a canal intake, raw water piping and a 200-million-gallon storage reservoir with intake structure. The main plant's facilities will include a low lift pump station, a flocculation/sedimentation basin with chlorine dioxide disinfection chamber, dual-media filters, a transfer pump station and associated yard piping.

Additionally, sludge handling facilities are part of the project including a backwash equalization basin, a plate settler, lagoons and decant pump station. There are also ancillary facilities such as a chemical building and chemical feed systems, buildings for electrical and operations, paving, drainage and landscaping.