|Aerial view of CEMEX McKelligon Canyon Quarry. |
Photo by Scott Cutler
Not the stock - the McKelligon Canyon quarry. Here's why:
There is no way to close down the quarry. That was tried several years ago when Caballero was Mayor. The effort failed and it helped lead to the political demise of Ray Caballero and the election of Joe Wardy.
There is one fact in Texas law that no one can get around unless there is a huge sea change in Texas politics leading to a re-writing of its Constitution. In Texas private property is sacrosanct. It trumps all other considerations. CEMEX owns the land at the quarry to the ridge of the mountain. Although at a certain point it may become logistically impossible to do any further quarrying, CEMEX can continue to scar the Franklin Mountains for the foreseeable future and there is nothing anyone can do about it.
Nor can the City easily boycott that quarry and not allow them to bid on city projects. It’s very hard to blacklist a vendor. They have to have a really bad record with the city (or the state or the feds) such as an inability to perform. A construction industry insider said this to me: "I bet the city won’t even blacklist Basic IDIQ even after all the drama at San Jacinto. It can be challenged legally too. You can’t blacklist CEMEX simply because they own a quarry and are destroying the mountain. Won’t work."
The City can reduce the amount of rock and screenings used in landscaping. Although that may impact other quarry businesses, if the City ever gets serious about really fixing our streets and sidewalks, that should be a big plus for that industry that would easily offset any loss of landscaping business.
Finally, CEMEX as a corporation is in trouble. The Street, a financial media company, gives CEMEX a rating of D+. Their recommendation to stock traders:
"We rate CEMEX SAB DE CV (CX) a SELL. This is driven by a number of negative factors, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally disappointing historical performance in the stock itself and poor profit margins."
You can download the Street's full report and get more information about CEMEX by going HERE.
Simply put, CEMEX needs cash. Their selling the quarry would be advantageous to their corporate survival.
Who should buy? Certainly not the General Land Office of Texas that owns the mineral rights. That would make no sense. The GLO would simply want to find someone else to quarry the rock so that royalties can be paid to the Texas Permanent School Fund.
The City of El Paso can't afford it, so . . .
That leaves the Texas Parks and Wildlife Department that runs the Franklin Mountains State Park.
The deal could be structured over a period of three or four years. Once part of the TPWD, the face of the Franklins can be conserved. Now that El Paso is beginning to realize the huge economic value of eco-tourism, working in concert with others to buy and shut-down the quarry, and preserve the face of the Franklins from any further unsightly damage will only mean economic gain for the City.
It's time to consider that option.