For the first quarter of 2021, the number of people crossing into the United States at the Nogales port of entry was down 47 percent, or slightly more than 1 million. Multiply that by any number you think is a reasonable estimate of the average spent by each person who crosses, and it equals some serious money lost by our local economy.
Removing the border-crossing restrictions imposed in March 2020 may result in a badly needed boost to our economy, but it won’t fix a lot of what has already been broken. We need to rethink the Nogales, Ariz. economy.
Nogales got stuck with the notion that Mexican shoppers were our saving grace, which they were for many decades. But like all good things, that has essentially ended and what we are left with is a produce hub worth billions of dollars, of which relatively little circulates within the community to help it prosper.
The hard lessons learned by local investors who built the Oasis Cinema in 2006 should not go unheeded. When it was still conceptual, it was generally believed a cinema was a great gamble for this community. There was no local competition and movie theaters in Nogales, Sonora were aging and uninviting. The thought was it would help draw other commercial development in Nogales. But it was too little too late.
Across the line, border native Apostolos “Pablo” Kyriakis was rolling out his own dream, a $17 million upscale mall. Two-and-a-half years later, it was more than 85 percent occupied, featuring a food court, specialty stores, designer clothing outlets, gourmet coffee shops, jewelry stores, cell-phone outlets, several kiosks, a video arcade, a casino and a 12-screen theater, pulling the rug out from under Oasis’ gamble that residents of that city would help fill its nine screening rooms.
Other pads near the 250,000 square-foot mall are Peter Piper Pizza and a Carl’s Jr. Alongside the south end of the mall is an Applebee’s Neighborhood Grill & Bar. Across the street to the east is a 130,000-square-foot Walmart.
Up until the turn of the century, except for some daily staples and other items, many of the residents in Sonora shopped for food, clothing and appliances in the United States, spending billions of dollars, namely in Nogales and Tucson.
As early as the 1970s, however, Kyriakis and others sensed the existence of a huge local untapped market, which inspired the arrival of international chains as well as the construction of Nogales Mall. In fact, about 60 percent of an estimated 400,000 or more people in Nogales, Sonora do not cross the border. And the Great Recession and the pandemic only reinforced that.
Citing the economic woes at the time, Kyriakis told the NI in 2008: “What happens is the people from here are also affected. They don’t go (across to shop) or cross less frequently and take advantage of what they have here.”
As a consequence of all of that development, Nogales, Ariz., was left in the dust economically. We can write letters and wage silly word wars about unsightly concertina wire on the international fence, and moan and groan about border-crossing restrictions, but Kyriakis’ advice to other business leaders at the time of the interview still rings true: “Communities should take responsibility and not wait for government to resolve their every problem. The question should be, ‘What am I doing to improve my situation?’ A majority of us have been slow to understand that the problems are ours. And what are we going to do to resolve them?”
“So we conducted all of the necessary studies – socio-economic, marketing – which supported our ideas. Thank God all of the pieces came together.”
Nogales’ business and elected leaders should take a page from Pablo’s playbook.
(Coppola is publisher of the Nogales International. Contact him at email@example.com.)