Recyclers Welcome

During the past several decades, scrap materials processors have often received “not in my back yard” (NIMBY) input from neighboring property owners when trying to expand or relocate a facility. There, however, is at least one place where the NIMBY attitude seems to have been set aside.

Recyclers with operations in Southern California or those who otherwise want to serve the market there (and the adjacent “maquiladora” market in northern Mexico) are being welcomed by the developers of the East Otay Mesa Recycling Park (EOMRP, www.otaydevelopments.com/recyclingpark.html).

Scrap recyclers who hail from a family business background may be heartened to know that the developers of the East Otay property share a similar heritage. The De La Fuente family of property developers—like many scrap recyclers—started small but eventually built a significant business presence in their community.
 

Land, Banks and Automobiles
Roque De La Fuente started his business career in the 1960s in Southern California by purchasing used cars there and reselling them across the border in Tijuana.

Hard work, trading savvy, persistence and an ability to save and invest eventually propelled De La Fuente into the new car business.

According to Roque’s granddaughter Katita, the persistence aspect came into play when Roque set his mind on becoming a Volkswagen dealer in Southern California. “He kept asking and asking VW for a dealership; he even traveled to Germany without an appointment and sat in the VW lobby to wait to speak to the person who could grant him a franchise,” Katita says.

Volkswagen eventually relented, and in time Roque was granted a franchise to sell many Volkswagen Beetles to Southern Californians who grew fond of the quirky cars in the1970s and 1980s.

Roque used the VW franchise as a springboard not only to additional car dealerships but also in the acquisition of properties, real estate and a bank. The family’s involvement in the lending industry helped open a door to grow its real estate business in the 1990s, when it acquired several properties from the Resolution Trust Corps (RTC), the federal agency that sold assets formerly held by bankrupt savings and loan companies.

Today, the real estate holdings acquired by Roque (and later, his son Roque II) operate under the name National Enterprises Inc., with Katita as the business development officer and David Wick as CEO.

Among the properties being developed by National Enterprises is the EOMRP, a 150-acre parcel of land located along the U.S.-Mexico border in San Diego County.

Not only are recycling companies unlikely to meet opposition at the EOMRP, but they have been genuinely invited by the public. “In June 2010, 85 percent of voters approved a ballot measure to designate [the property] as a future landfill and recycling center,” says Wick.
 

Zoned and Ready
The lack of public opposition is one of the key reasons the EOMRP can be a good fit for scrap recyclers, says Wick, but it is not the only one.

“The land’s zoning is designated as ‘heavy industrial’ under the East Otay Mesa Specific Plan; there are very few heavy industrial zoned land parcels within San Diego,” he remarks.

“All residential areas are approximately 5-plus miles away,” says Wick, who adds that neighboring tenants are from within industrial business sectors.

“Neighboring properties we own, which are also zoned ‘heavy industrial,’ harbor tenants such as Calpine Power, Apex Power and a Vulcan Materials asphalt batch plant,” Wick says. “These types of users have created a ‘city of industry’ in of itself within San Diego.”

And while the land appears undeveloped (its prior use was as cattle pasture or farm land), utilities infrastructure in the form of water (including recycled water), sewer, electricity and natural gas service is in place.

About one-half-mile away is a 310-acre parcel set aside for a recycling and landfill facility (which is in the process of obtaining final permits), which serves as a buffer between the EOMRP land and any nearby residences. “It’s an ideal heavy industrial location,” Wick comments. (National Enterprises also is involved in the development of that land, with plans calling for a recycling center to be situated within that parcel.)

Of the 150 acres in the EOMRP, five tenants have already signed contracts for a combined 50 acres of land, leaving 100 acres available. “That could be one large tenant or it could be 50 small ones,” says Wick. “It’s more about bringing in the right businesses.”

Those “right businesses” can come from any of a variety of recycling sectors, according to Wick, “from auto wreckage, green waste recycling, plastics, tire, carpet, etc.”

Wick says the zoning and land use situation should be in place for the very long term, providing prospective tenants with a sense of security. “Tenants have the stability of knowing they can stay forever,” he remarks.

National Enterprises Inc. also is touting the cross-border opportunities or aspects of the East Otay Mesa location. “Mexico is the largest importer in Latin America and is one of the largest markets for steel mill products, car parts for assembly, repair parts for motor vehicles and other metal related items,” says Wick.

Locating in the EOMRP, says Wick, “can be very strategic for any metal-related recycling company.”

The land is close to major border crossings, says Wick, and also offers ready access to the U.S. interstate highway system in the form of connections to I-125 and I-905.

Those highway connections lead to the Port of San Diego and to a port facility in Ensenada, Mexico. “We also have about 240 acres leased as truck parking drop yards,” says Wick. “These are places where companies can park trailers and tractors that can go to and from the U.S. to maquiladoras in Mexico.”

“It is an active bi-national trading zone,” Katita says. “In 2010 alone, according to the U.S. Department of Transportation, more than 1.4 million trucks utilized the Otay Mesa Border Crossing

“In 2011, according to the Foreign Trade Census, the U.S. imported $263.1 billion in goods from Mexico,” she continues. “That same year, the U.S. exported to Mexico more than $197.5 billion worth of goods. Combined, this is $460.6 billion in trade. This magnitude is remarkable and the numbers speak for themselves.”
 

Additional Incentives
Recycling company owners—like all business owners—will scrutinize tax issues when researching a new location.

In marketing the EOMRP, Wick says National Enterprises has some good news to offer regarding tax incentives. Because the land is within a Market Development Zone, “if tenants qualify, they can take advantage of what the zone has to offer,” he comments.

Wick says these advantages can include “technical assistance with permitting, business plan evaluation, marketing, etc. Financial assistance may include reduced tax rates, tax rebates, low interest loans, reduced utility rates and reduced business license fees.”

If scrap company owners, having encountered NIMBY responses in the past, remain skeptical, De La Fuente notes that National Enterprises was successful on another industrial zoning front in East Otay Mesa that has long been a challenge in California.

“Several years ago, Calpine brought online its gas-fed 550-megawatt power plant,” she comments. “It was the first baseload generation plant to be built in San Diego in 30 years. And there is more yet to come, as Apex Power has already initiated its entitlement process [for a 325-megawatt power plant].”

Wick and De La Fuente say the planning is well thought out and they are ready and willing to speak with recyclers who are have an interest in Southern California.

“We envision a well organized recycling center [that] will be the site of major recycling companies,” states Wick. “We hope that it will be a ‘go to’ hub for all recycling products.”

The author is editorial director of Recycling Today and can be contacted at btaylor@gie.net.