Union Pacific Plans Area Facility 
By Diana M. Alba Sun-News reporter Las Cruces Sun-News 
Article Launched:10/06/2006 01:00:00 AM MDT

SANTA TERESA, NM - Union Pacific Corp. plans a $150 million facility just west of here - a project that will create 285 jobs and spur other economic development, state officials announced Thursday.

Gov. Bill Richardson told a group of U.S. and Mexican dignitaries that Union Pacific will build the facility only if the state Legislature approves $5 million for a road to the planned site and removes a statewide tax on the sale of train fuel.

"I think it's the biggest economic development project on the border," he said. "This is going to put Santa Teresa on the map."

The project would initially entail a rail yard and fueling stop at Strauss, about four miles west of Santa Teresa. Eventually, Union Pacific would build an intermodal facility, a plant to transfer large shipping containers from one train to another or from trains to trucks.

Richardson and other officials said the greatest benefit of the project is that it will promote other industry in Santa Teresa and the southern New Mexico region.

The rail facility would be close to the Santa Teresa Industrial Park, the Doña Ana County Airport, an international border crossing and a 21,000-acre border city planned by the El Paso-based Verde Group.

Union Pacific CEO Jim Young said the construction of similar facilities around the country has prompted economic growth.

"... (I)t's not unusual to look at a 10-fold economic impact," he said.

Richardson said he's confident the Legislature will give needed approvals next year.

"It's almost a slam dunk," he said.

Speaker of the House Ben Lujan, D-Santa Fe, said lawmakers likely will favor the project.

"The Legislature is very open and is interested in companies that will help New Mexico," he said. "I anticipate the delegation from this area will ... support this."

Richardson said removing the tax will cost the state about $1 million annually.

State Economic Development Secretary Rick Homans said the project has been a goal ever since Richardson took office. He said there had been talk for years about a railroad facility in Santa Teresa, though few people thought it could become a reality. But after investigating the idea, he said, it seemed possible.

"All these good reasons came back and not one negative reason," he said.

Young said Union Pacific made the decision because the region offers one of the greatest potentials for expansion in the railroad industry. It's ideal for handling shipping from California into the heart of the United States and train traffic across the Mexican border, he said.

In addition, Union Pacific spokesman Mark Davis said the company's neighboring El Paso facilities have become outdated or are being used at capacity.

Union Pacific officials said initial construction could start in 2008, and the facility could open two years later, if the Legislature removes the train fuel tax in 2007. The intermodal facility would be built by 2015.

Davis said the facility would expand on the company's operations in the region and wouldn't impact its El Paso rail yards. Rail workers will report to work in Strauss instead of El Paso.

"There will be no job losses," he said. "The new facility in New Mexico is more of an enhancement than closing facilities in El Paso."

The proposed facility would be built on roughly 1,000 acres of Bureau of Land Management and state-owned land. Union Pacific has yet to purchase the property but plans to do so when the Legislature removes the fuel tax, Davis said.

Young said the Strauss location is at a key point in the railroad's distribution line. The company's track from California splits into three lines leading to Kansas City, Houston and Dallas.

Some El Paso officials have pushed for years for rail yards to move from the center of the city because of congestion. Union Pacific owns four rail yards covering some 250 acres in the city, and BNSF Railway has a 44-acre yard.

New Mexico Sens. Jeff Bingaman and Pete Domenici last year backed $14 million in a federal transportation bill to aid the relocation of El Paso's rail yards.

Jude McCartin, Bingaman spokeswoman, said the money - meant to be split between New Mexico and Texas - doesn't have tight restrictions and could be used to help build a road to the proposed Santa Teresa rail facility.

Domenici said in a news release the Union Pacific facility will be a boon.

"It's a result of teamwork between federal and state levels to bring the rail facility to Santa Teresa," he said.

U.S. Rep. Steve Pearce, R-N.M., agreed.

"We are beginning to capitalize upon our geographical advantage as the crossroads of the Southwest," he said in a news release.

Bingaman, also in a news release, said the federal government must continue to back the relocation of rail yards.


Diana M. Alba can be reached at dalba@lcsun-news.com