YEAR IN REVIEW: Air cargo dreams fly away with Pan Am executive's arrest
It sounded too good to be true, and maybe it was.
In 2010 a company that would soon call itself Pan American Airways Inc. moved into the original 1930s Pan American Western Division headquarters building at the Brownsville South Padre Island International Airport.
Bob Hedrick, the new PAA’s former chief executive officer — now jailed and awaiting trial on child pornography charges — talked a big game. In 2011, for instance, PAA would begin 70 cargo flights a month between Brownsville and various Latin Ameri-can destinations, he said.
“We will be announcing the reopening of Pan American Airways,” Hedrick told The Herald in November 2010. “We will also be announcing the reopening of the gateway to Latin America, started by Pan American back in 1929. Then they’re going to rededicate this building at the same time.”
A rededication ceremony did in fact take place the same month, complete with mariachi band, vintage aircraft flyovers, box lunches, and local luminaries taking turns at the microphone to praise PAA and Hedrick’s vision.
Hedrick had identified the South American floral industry, which ships billions of dollars worth of flowers a year into the United States, as a natural market for a Brownsville-based air cargo operation. He reasoned that flowers and other perishables arriving by air could be trucked to central U.S. buyers from Brownsville faster than from Miami.
In 2011 Hedrick expanded his plans. He envisioned Brownsville as the future gateway for air cargo flowing into Latin America from China via Lambert-St. Louis International Airport in Missouri. Lambert officials had spent years attempting to nail down a deal with China Cargo Airlines to make the airport the U.S. hub for Chinese cargo flights.
Hedrick, with Brownsville officials in tow, traveled to St. Louis to meet with Lambert authorities and discuss a potential St. Louis-to-Brownsville link. He spoke of St. Louis-Brownsville as if it were practically a done deal, though Lambert officials stressed that everything was preliminary. St. Louis actually did get a China Cargo flight from Shanghai in September. It was supposedly the first of many to come, though China Cargo has canceled every scheduled weekly flight since then.
This is likely due in part to the Missouri Legislature killing a tax credit bill — dubbed “Aerotropolis” — that would have made the route financially competitive. A smaller volume of air cargo coming from China is another probable factor.
Hedrick said PAA wasn’t intended as a passenger service but that it probably would fly passengers at some point. He identified Monterrey and Mexico City as possible destinations. When Hedrick found out that then-Mayor Pat M. Ahumada Jr. and some city commissioners were pushing financial incentives to lure another carrier for passenger air service to Mexico — dubbed “Fly Fron-tera” — Hedrick cried foul, insisting PAA and other carriers be allowed to submit proposals for Mexico air service, rather than sneaking Fly Frontera in the back door.
He submitted his own proposal and went so far as to register the name “Fly Frontera” to prevent the firms behind it, Public Char-ter Inc. and Charter Air Transport, from using it. Apparently the principals hadn’t thought to register the name themselves. The city commission, meanwhile, voted to slow down and take a closer look at the Fly Frontera deal. In April, a less than glowing due diligence report by the Brownsville Economic Development Council caused crucial political support to evaporate, which prompted Fly Frontera’s principals to withdraw their proposal.
Hedrick appeared to enjoy his public battles with former commissioner Charlie Atkinson, a vocal Fly Frontera proponent openly contemptuous of PAA’s capacity for flying anything anywhere. Hedrick’s response was that big things were in the offing for Brownsville, and Atkinson would see.
In May, Hedrick received a boost to his credibility when the governor’s office bestowed upon PAA and Hedrick’s other Brownsville-based firm, World-Wide Consolidated Logistics Inc., the coveted Texas Enterprise Zone project designation. The des-ignation was awarded on the strength of Hedrick’s plan to make Brownsville the air cargo gateway to Latin America and connect with St. Louis for Chinese cargo.
It meant Hedrick would be eligible to apply for $2,500 per qualified job he created, based on PAA’s projections of 426 jobs created and $95.5 million in capital investment over five years. The Brownsville Economic Development Council had gone to bat in a big way helping PAA apply for the TEZ designation.
And then it was over: Federal agents arrested Hedrick at his Brownsville home on July 18. The arrest was on a federal complaint alleging that he shared multiple child pornography images over a three-month period with undercover investigators from Louisiana and Wisconsin. Hedrick is still in custody awaiting trial.
For BEDC officials and others who dared to believe Brownsville was actually on the verge of launching its own air cargo indus-try, under the venerable Pan American name no less, Hedrick’s unmasking and downfall must have seemed close to a betrayal. The city’s recent history is marked by more than one episode in which officials have thrown their support behind business ventures only to be left holding the bag. Taylorcraft and Titan Tire come to mind. The PAA debacle provided a new twist to Brownsville’s catalog of disappointments.
That said, 2011 was a good year for economic development in other ways. Among the highlights, according to BEDC: the North Brownsville Industrial Park christening; CK Technologies’ $20 million investment in its Brownsville truck part plant; AeroMexico’s inauguration of Brownsville-Monterrey passenger air service; and groundbreaking on new road projects and the West Rail Bridge, which will provide infrastructure for future commercial and industrial growth.
Also, Brownsville was designated a “Competitive Ready” city by the site selection/economic develop firm CR Group; and the Port of Brownsville advanced to third place — only behind Houston and New Orleans — in steel importing and exporting.
Salinas said the recession gave the BEDC time to step back, assess its goals and work toward them, with the result that 2012 should bring more good news.
“Our pipeline is full right now with projects from South America and Asia,” he said. “We’re very hopeful we’re going to be mak-ing an announcement in the next few weeks. 2012 is going to be banner year for Brownsville. I usually don’t like to say such a thing, but I think all the work we’ve done in 2010 and 2011 is going to pay off in 2012.”
As for PAA, Salinas said BEDC has heard little from Richard Alaniz (formerly Hedrick’s number two and now head of PAA), though he believes Alaniz is trying to secure Latin American cargo contracts. Hedrick was eager for media attention when he was running PAA. The same can’t be said for Alaniz, who has ignored multiple requests from The Herald for comment concerning the company’s future.
Salinas said that whatever happens to PAA, Hedrick’s observation that Brownsville is ideally situated geographically to take ad-vantage of the U.S.-Latin American cargo market holds true.
“He figured out that if Pan American Airways had its Latin American headquarters in Brownsville 50 years ago, it was for a rea-son,” Salinas said. “Now that we’ve been made aware of that, we’re going to do everything we can as a business community to pick up where he left off. We should have been doing this 30 or 40 years ago. Why were we not doing what Miami was doing? We’re really playing catch up with that one. Hopefully (PAA) will continue with the plan they had set in place. If not, there’s an opportunity for somebody else to do exactly that.”