HARLINGEN — A $50 million distribution facility that would have brought more than 500 jobs to the city and lavished tens of millions of dollars more in wages on workers over the next decade is on indefinite hold.
Executives with Cardone Industries Inc., which already has a warehouse in Harlingen, one in Brownsville and a brake manufacturing facility in Matamoros, Mexico, informed city officials that due to “internal issues” within the company the new Harlingen mega-warehouse will not be built this year.
Existing Cardone facilities in Cameron County and in Mexico will remain operational, city officials said last night.
“It was a big investment but they were looking forward to it,” Raudel Garza, chief executive of the Harlingen Economic Development Corp., said last night. “There are some issues they need to work out and it’s going to take them a while to fix those things.”
Neither Garza nor City Manager Dan Serna indicated what the company’s issues that derailed the new facility might be. Both stressed that, given the dozen or so years Cardone has been in Harlingen, the Philadelphia-based company that primarily produces remanufactured auto parts will remain a major employer in the city and county.
“They’re not going anywhere,” Serna said. “They’re just down the street and have been part of the family for a long time — they’re not looking to move or go anywhere. It’s just their needs have changed so they’re going to slow things down a little bit and they’re going to continue their operations here in Cameron County in Harlingen and Brownsville.”
Officials had predicted starting warehouse jobs at the new Cardone facility would have ranged from $8.50 to $9 an hour, but stressed there would be a valuable multiplier effect.
They predicted the economic ripples from the new Cardone facility would have a major financial impact on the city, not just in direct wages for workers hired by Cardone, but for other existing businesses which would have provided goods and services to help keep the new distribution warehouse running.
Garza said while Cardone officials have not informed him of their operational plans, the company probably will continue to use its Dallas-area warehouse as a distribution center in Texas.
“They have had a facility in Dallas for a long, long time,” he said. “About as long as they’ve had one down here. Basically the Dallas facility handled distribution for the south part of the country and to the west.”
The 20-acre property at the city’s industrial park was put together by the HEDC from about five different owners to lure Cardone here, Garza said. A groundbreaking was held at the site in December, and the facility was to have been up and running by the end of the year.
Since it is highly unlikely Cardone will meet the terms of its agreement to build a new facility by the end of this year, at that time the property will revert back to the HEDC which will seek to attract another major tenant, Garza said.
“Our agreement with Cardone related to the property was subject to them building a distribution center by a certain date which was basically the end of this year,” he said. “If they don’t meet that deadline, which they won’t, they basically would be in default so we get the property back and we move on from there and we market the property.”
Both Garza and Serna stressed the now consolidated acreage at the industrial park will prove more attractive to another company.
“It was assembled by us and as five different separate properties, they had a certain value,” Garza said. “As one, they’re more valuable.”
Garza and Serna are two of hundreds of officials, business owners, development experts and more in Harlingen, Cameron County and Austin who put in countless hours to bring the new Cardone plant to the city.
“It’s disappointing, but we put forth the effort on all our projects, on all the economic development projects that we’re trying to bring to town,” Serna said. “This happens from time to time — its part of the process sometimes.
“It is disappointing, but again they have a great footprint in Harlingen, and that hasn’t changed,” he added. “We have 250 employees at Cardone here in Harlingen, and that’s not going to change. … The future for them here is long-term.”