Ben Gonzalez was born in El Paso, graduated from the University of Texas at El Paso in 1984 – “a very interesting year to graduate” – and helped build one of the first denim stonewashing facilities in the country.
He earned an MBA from Harvard, leapt into the heady world of investment banking in New York and led investments in major textile firms around the world.
Now Gonzalez, 52, has returned to El Paso. Last month, he found a business home at the upstart Borderplex Alliance, where he heads economic development for the region.
Gonzalez walks and talks at the speed of New York City and is all business, packing a lot into a more leisurely El Paso minute.
The Borderplex Alliance was formed two years ago by the merger of the El Paso Regional Economic Development Corp., or REDCo, and the Paso del Norte Group.
It was formed by the private sector, in part, to address problems raised by a 2011 study by Edward Feser, a highly touted economic development consultant, who was hired by the city to pinpoint what was wrong with economic development in the region.
Feser’s recommendations included the creation of a private sector-led organization that would focus on regional economic development. That became the Borderplex Alliance, now headed by Rolando Pablos.
Many of the people Borderplex has recruited have stories similar to Gonzalez’s: They left, built a successful career and returned home, bringing their connections and skills with them.
Gonzalez grew up in West El Paso and attended El Paso High School. His father was an urban planner with the city. His mother worked for William Beaumont Army Medical Center.
After graduating from UTEP with a business degree, he applied for three jobs and received four offers. Oil was at an all-time high and Texas was booming.
His first job was in El Paso where he worked as a credit analyst for InterFirst Bank.
Later, he was hired as the chief financial officer of East-West Apparel, a local jeans finishing facility that quickly grew from zero to 3,000 employees. It was sold to a South Carolina-based textile firm that had its commercial operations in New York.
“I was going to go to law school and the president of the company said, ‘Don’t go to law school; there are too many lawyers. Come to New York and we will find something for you to do,’” Gonzalez said.
So he moved to New York City in the early 1990s.
“We got a letter from JPMorgan Chase saying that they had a client in Venezuela who was interested in forming a relationship with a U.S.-based textile firm. Would we be interested? So my boss came in and said, ‘Here. You speak Spanish; go to Venezuela.’
“That started a five-year shopping trip where we were running around the world with various investment bankers and entering into investments with other textile firms,” Gonzalez said.
But he burned out on travel and decided to go back to school. He graduated from Harvard Business School in 1999. It was a bad time to graduate, because the economy was on the brink of collapse as the tech boom came to an end.
So Gonzalez ended up working on financial restructurings, representing companies in transactions involving Brazilian media conglomerate TV Globo, U.S. Airways, Fruit of the Loom, Barneys and Bank of America.
Most recently, Gonzales was a founding partner in the restructuring practice of KPMG and a managing director of KPMG Corporate Finance, where he covered private equity firms.
He sat down with El Paso Inc. in the Borderplex offices in the historic Centre Building Downtown and talked about attracting capital to the El Paso region, why private equity firms are interested in the city and what art has to do with economic development.
Q: I know you are still settling in here, but what are you hearing from businesses? How are they feeling about the region’s economy?
I have talked to a lot of people who are doing business here, and they’re very bullish on this economy. There are a couple of investors in particular who are on our board who have very big plans for the region.
Anecdotally, from what I hear, it does seem like the El Paso region is at a point where it is going to boom.
What I’m trying to do is take that thesis and talk to private equity firms or restructuring firms, people who I know in New York, who are not aware of the things going on here.
Q: How do those conversations go? Do you have to start by explaining where El Paso is?
There are actually a lot of private equity firms who have been doing business in the region, so we are not off of their radar screens. I have talked to some of the larger firms; they’ve done a lot of research on the area.
Their primary interest is buying companies, but they are also interested in what’s out there. For example, if they need to relocate a business or expand a business.
Part of what I want to talk about with all of these companies is that there is hidden purchasing power here. I also want them to know that if they were looking for a partner in the region, we could help facilitate that. We can help clarify the myths about the region.
Q: Hidden purchasing power?
If you look at a lot of the metropolitan data for El Paso, sometimes it looks like El Paso can’t support certain retail. But if you look at the restaurants in town, they are packed all the time. West Elm opened its biggest store in the chain in El Paso, and I understand it is doing very well.
A lot of that is because of the purchasing power in Mexico that does business here, that we can’t quantify.
Q: I understand El Paso is largely a cash economy, which makes things hard to track.
Right, it is harder to capture where that money is coming from.
Q: What’s your vision?
To connect the El Paso region to the private equity community, which controls more than $2 trillion in assets in the world.
There are more than 7,500 companies in the United States that are managed by private equity firms. So if there is a large business in the region that is looking for more capital to grow, I want the private equity community to engage with us and to understand the opportunities that are here, because right now I don’t think they do.
Or there might be a company in El Paso looking to sell its operations, they don’t really have a succession plan, so a private equity firm may buy it and grow it in the region.
I am looking at a few ideas. The private equity initiative is one. Another is to target specific companies we would like to see doing business in the region. Goya Foods, for example, would be a great fit to have some of their operations here.
Some of the messaging capabilities we have as a Hispanic community, I think, would be important to Madison Avenue.
There are also some smaller firms in El Paso that I think could be rolled up into a larger firm so they could have the buying power and access to financing they don’t have today.
Q: You mentioned that there are a lot of private equity firms who have been doing business in El Paso. Really?
I was surprised, too. Private equity firms are attracted to businesses with revenues in excess of $50 million, and in the region, there are more businesses that are generating revenues in excess of $50 million than you would realize.
Q: How many?
So far I’ve identified more than 50 companies.
Q: What might a private equity firm find attractive about the El Paso region? What do you tell them?
I talk about our assets. Things like the life sciences or the military community. They are running a lot of sophisticated operations at Fort Bliss and Holloman Air Force Base. There are some private equity firms that are heavily invested in aerospace and defense.
I talk to them about what is happening with the Medical Center of the Americas, the business incubators that are here – those types of conversations.
I’ve been putting together a pitch stack. These guys are busy and don’t have a lot of time. At the end of the day, my goal is to put us on their radar screens and make sure they know they have a point of contact in the region.
Q: You mentioned that there are myths about the region. What are some examples?
That the violence in Juárez has spilled over to El Paso…
Q: That still comes up? Even though the violence peaked there more than four years ago and has plummeted since?
Yes. Quite a bit.
There is also a perception that El Paso is poor and purchasing power is low and businesses won’t do well here. The reality is businesses you wouldn’t expect to thrive here are thriving.
Q: How much progress has been made implementing Feser’s recommendations? He talked a lot about the need for a coherent, regional economic development strategy.
The regional focus is important because it gives us more buying power to be a borderplex of 2.6 million people. Overall, it’s better to operate as a region rather than individually.
One of the things Feser talks about in the report is that recruiting businesses using economic incentives alone is a low-impact strategy.
In talking with a company, I have to bring the “more.” The economic incentives are a given – they can get that anywhere – so we need to talk about quality of life.
There is world-class art here in the region with the Kress Collection. Not too far from here, you have Marfa where you have Andy Warhol’s “Last Supper” and other important collections.
Q: So you literally talk about art when recruiting companies?
I am talking about everything: manufacturing, weather, art, Hueco Tanks, Carlsbad Caverns.
Q: You mentioned that the regional focus is important. That’s something folks here on the border have been saying for a long time. Getting everybody to work together is easier said than done.
It’s something Borderplex does very effectively. We have quarterly meetings where we meet with leaders from all sides, interacting, brainstorming and having conversation about how we can better work together.
We’ve also done a lot to coalesce the region. We’ve grown from 16 to 58 board members. We’ve got 230 members now. We have members from New Mexico, Juárez and El Paso who are on the steering committee.
Q: How do you gauge success? Do you simply count jobs and companies recruited?
We can tell you the economic impact of the jobs we’ve brought to the region, but one of the things I’d like to do is bring better jobs to the region.
For example, I mentioned messaging to the Hispanic community. If that means moving an aspect of an advertising firm on Madison Avenue to the El Paso region, that would bring high-paying, professional jobs to the region.
We could also work to bring more headquarters or financial services companies to the region. And that would attract people who maybe would like to move back to El Paso but don’t have something to do here.
Q: What jobs has Borderplex brought to the region?
In 2014, we helped bring 3,500 jobs to the region and $235 million in investment.
Q: And then, as you said, you have to consider the quality of those jobs. Some of them are lower-wage jobs.
But even with that, you’ve got to think about what happens, right? Prudential was attracted here, and they brought in a number of jobs and spent a lot of time here.
We’ve engaged with the CEO of Prudential, which is pretty rare. He likes the region, so they are committing to more jobs in the region. And once you start doing business here and, in particular, training that workforce, they move up so you get better jobs. I would like to start seeing more of that happen.
Who knows where Prudential will be 10 years from now in El Paso.
Q: We’re now on their radar.
Right. We are on their radar big time. And the CEO sits on boards of other companies. He likes El Paso. He tells his friends he is doing business here.
Q: How has the El Paso economy changed since you were a young graduate here? The laundry and jean washing industry is long gone.
There have been two major changes in the world: one is globalization and the other is technology.
For example, when I worked here in El Paso, we had a large banking community and people who went through bank training programs were trained to make credit decisions.
You see that less and less. Now they are keying information into computers and those decisions are being made elsewhere, with the exception of the local community banks.
Q: Economic development folks here would like to see more El Pasoans graduate from high school college ready and able to compete on a global level – to do what you did: build a career, meet people, attend a top graduate school and then bring those skills back to El Paso.
There are probably a lot of people who have done that but just haven’t returned. And we need to find reasons for them to return. That is why I was so attracted to the Borderplex Alliance.
Q: What brought you back to your hometown?
I came back for personal reasons. My stepfather had died, and I didn’t want to leave my mom alone. I had been in New York for a long time and decided I was done with New York. I moved back without a plan, not knowing what I was going to do.
I’ve known Marcos Delgado, who works at Borderplex, for a long time and he introduced me to Borderplex CEO Rolando Pablos.
Both of them had been away from the El Paso region for a long time and had come back. Actually, the same could be said for most of the team here, so that was very attractive to me.
Q: How has El Paso changed since you left?
El Paso is at an inflection point. There’s a lot more business here and a lot more collaboration.
The region is receiving more attention from businesses. Part of that is due to globalization and the access El Paso has to the world. And more people here are working to leverage that.