Wednesday, May 17, 2006

Kansas City 'SmartPort' on hold

Goal is to speed trade with Mexico

Customs facility hung up in review


By Rick Alm
The Kansas City Star
Copyright 2006

A planned Mexican customs facility in Kansas City has been delayed awaiting State Department approval, but project officials are still saying that ground can be broken next month.

City officials had hoped that the first foreign customhouse on U.S. soil would be built and opened by June, but federal approval has bogged down.

Local sponsors of the project said they remained optimistic and did not think the recent controversy over Mexican immigration and border issues played any role in the delay.

At a seminar Tuesday in Kansas City on doing business in Mexico, KC SmartPort spokeswoman Larin Payne told about three dozen regional business executives about the planned groundbreaking.

But in an interview later, Payne acknowledged there was still no breakthrough in a long-awaited decision by the State Department on whether and how to proceed with the project.

“We are waiting for the final OK from the State Department,” she said. “We’re hoping in the next month they will figure it out.”

SmartPort President Chris J.F. Gutierrez discounted any effects from the escalating immigration controversy. “This is about U.S. exports. It has nothing to do with border issues or the president’s remarks last night,” Gutierrez said Tuesday.

“We’re still on track as far as I’m concerned,” he said, with a groundbreaking before Mexico’s presidential election in July.

But he acknowledged, “We expected a much quicker review.”

Under the agreement — already approved by Mexican authorities — Mexico-bound American truck freight would be inspected by U.S. and Mexican border authorities in Kansas City and then sealed for movement directly to Mexican destinations, with fewer costly delays at border choke points such as Laredo, Texas.

At Tuesday’s seminar, Dan Ward, an officer with Kansas City-based Western Forms International, said trucks loaded with his company’s concrete construction forms faced routine delays at the border as long as three weeks.

Under the Kansas City plan, Mexican shippers and deepwater port operators in Manzanillo, Lazaro Cardenas and other Pacific ports would cooperate with rail and highway transportation and foreign trade zone warehousing groups here to market a seamless international trade pipeline. By using the Mexican port, freight also could avoid capacity-strained U.S. ports in Long Beach and Oakland, Calif., and Seattle.

“A planned customs facility in Kansas City would grow the region’s economy and mean more efficient transportation of goods,” Sen. Kit Bond said Tuesday in a written response to questions about the project.

The Missouri Republican’s office did not respond to questions about reasons for the apparent federal delay in approving the project. “I will continue to work with all of the interested parties to move this project forward,” Bond said.

One local critic of U.S. immigration policies is skeptical of the Mexican customhouse proposal.
Public relations consultant Joyce Mucci formed the Mid-America Immigration Reform Coalition on a platform that undocumented immigrants are “a stress on social services, on our hospitals, on our schools. We have our own problems here, and we can’t afford to take care of everybody.”

Mucci said Tuesday the group had more questions than answers at this point about the customs project.

“We’re in favor of economic development and jobs,” she said. “But we are concerned about the sovereignty of the state of Missouri” and whether the facility will be considered to be on Mexican or U.S. soil.

“The Mexican (customs) bottleneck will be moving here,” Mucci said. “We’re going to take on that extra burden. … This has never been done before. We may get lucky, we may not.”

But Mexican business operators and consumers do not appear ready to boycott American goods or services over border issues, Patricia Meza, a Missouri Department of Economic Development trade representative in Mexico City, said Tuesday.

“There’s no backlash,” Meza said. “They understand the complexities of the problem.”
Mexican consumers are not fickle about buying American goods, Meza added. “If it’s a good product and affordable, they’ll go for it,” she said.

The Kansas City Council last year approved a $2.5 million loan to SmartPort to build the 26,000-square foot customs facility on city-owned land in the West Bottoms east of Liberty Street and mostly south of Interstate 670.

Nonprofit SmartPort would lease the site from the city and repay the loan over 10 years with user fees paid by international shippers.

Mexican officials recently named a veteran diplomat in its Washington embassy to head the Kansas City operation.

Last summer city officials signed similar cooperative trade agreements with the city of Winnipeg and the Canadian province of Manitoba. Next month they plan a trade mission to Veracruz, on Mexico’s southern Gulf Coast, which could offer Kansas City a trade link to European sea shipping lanes.

Meanwhile, the city has announced an agreement to sell the Richards-Gebaur Memorial Airport to private interests for redevelopment as an intermodal transit hub that would probably include a Mexican customs component for rail cargo. A Kansas City Port Authority official said Tuesday that construction could begin in 2007.

First glance

_ The Kansas City Council last year approved a $2.5 million loan to SmartPort to build the customs facility in the West Bottoms.

_ U.S. and Mexican authorities would inspect Mexico-bound American truck freight in Kansas City then seal it for shipping directly to Mexico.

To reach Rick Alm, call (816) 234-4785 or send e-mail to

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