Designs on Mexico

Dallas architect Armando Gallardo stands in the middle of what looks 1ike a bombed-out war zone. Buildings crumble behind fences erected to protect passers-by from falling chunks of stone. Pieces of jagged glass hang like stalactites from crushed window panes. Piles of rubble mark the graves of once-grand hotels. High-rise concrete skeletons, stripped of brick and glass, only hint at their former identities.

These modern ruins are in downtown Mexico City, nearly seven years after the earthquake that killed at least 10,000 people. They are stark reminders of the “old Mexico1’ that much of the world stereotyped as backward. The earth shook, and the poorly built walls came tumbling down.

Amid the devastation, Gallardo. his colleagues at RTKL Associates inc. and the Mexico City government are raising a monument of sorts to a “new Mexico.” A Mexico struggling to climb out of the past and join the developed world outside its borders. A Mexico looking to cities like Dallas for business partners and know-how.

Gallardo is the bridge between that new Mexico and RTKL. One of the largest architectural urban planning and design firms in the U.S., RTKL is helping plan and design several high-profile buildings in Mexico City, Monterrey and other cities. At 37, Gallardo is smart and aggressive-a lot like the young, U.S.-educated technocrats that Mexico President Carlos Salinas de Gortari has enlisted in his administration to modernize and open the Mexican economy. He’s an insider among the new generation of business and political leaders who are setting the stage for the new Mexico.

It’s a country Gallardo lived close to growing up in El Paso, a country he knows but wants to understand even better.

“Mexico is so close, but sometimes it feels like entering another world,” Gallardo says. He pushes open a rickety wooden gate and makes the point. The fence surrounds a vacant lot, yet there’s a man sitting on a bench, apparently guarding the property. A board propped up against the gate is the “lock.”

The elegant old Hotel Prado once stood here. Across the busy boulevard is the Alameda Central Park where lovers stroll, children play and office workers eat their lunches on wrought-iron benches under shade trees. White ceramic tiles that used to mark the hotel’s entrance are the only reminder that a building was ever here at all. Otherwise, it’s like a blank sheet of paper.

And RTKL is drawing all over it. The Dallas team, led by Gallardo, planned and designed a 22-story, 275,000-square-foot office tower and three-level retail center that will be the centerpiece of the destroyed area’s redevelopment. The buildings in the so-called Urbano Alameda project will be constructed to stringent government specifications so they will “give” in an earthquake rather than slam into other structures and break apart, as happened in the 1985 disaster.

The $100 million project, scheduled for completion in August 1993, occupies one of 11 blocks, around the Alameda Central Plaza historic zone, that suffered the heaviest earthquake damage. The sleek, modern complex will include an office building with a curved glass-and-steel facade and a cylindrical glass tower with a restaurant on the top two floors; 150,000 square feet of retail space; and parking for 1,000 vehicles (no small feat in space-pinched Mexico City). Plans also call for renovating a l930s-era building-once the Mexico headquarters of British Petroleum-into a 75-to 85-room luxury hotel. It’s a badly needed addition; the earthquake destroyed several high-rise hotels near the Zocalo, the historic town square.

Gallardo and his team spent days studying the streets around the site, a hodgepodge of modern and colonial architecture. “Even though it will be a very modem building it will still have some of the details and that context in it,” Gallardo says. Local artisans, for example, will design some areas around entrances and interior details.

The Alameda project is something of an international business coup for RTKL, based in Baltimore. The Dallas office, in a joint effort with Mexico City urban planners and private Mexican developer Grupo Danhos, is devising the master plan for the central plaza’s redevelopment. It’s the first redevelopment of the historic area since the earthquake and currently one of the most high-profile U.S.-Mexico partnerships. Trade officials say the Alameda project also is a model for the kinds of joint business deals that could be put together more easily and frequently if the pending North American Free Trade Agreement is ever signed.

“It’s a leading-edge project,” says Felipe Mondrag6n, ex-director of the Texas Department of Commerce’s Mexico City office. “It’s melding the best of both cultures.”



RTKL’S CITHER BIG PROJECT IN MEX-ico City is a commercial complex called the Centro Commercial, to be located in the upscale Bosques neighborhood. The high-end complex will have 181,000 square feet of retail space, 70,000 square feet of office space and a 1,200-space parking deck. Among the rumored tenants for the exclusive retail center is Neiman Marcus. (Although sources say Neiman’s had expressed interest earlier on, the company now denies planning any ventures outside the U.S.)

RTKL has landed all its Mexico business in the past two years, even without a trade agreement. In the late 1980s, the company decided to expand internationally as a hedge against the U.S. economic downturn. Now foreign billings represent about 14 percent of the firm’s overall billings, compared with an industry average of about 2 percent.

RTKL got its foot in the door in Mexico largely because of a U.S. business contact. One of its clients went to graduate school with one of President Salinas’ young advisers. The client made an introduction, the adviser liked the firm’s ideas for projects in Mexico, more introductions were made, and RTKL was in. “Once you get a little crack, one thing leads to another,” says Joseph J. Scalabrin, vice chairman of RTKL’s Dallas office. “In the last two years it’s been like a fast-growing tree.”

In the old nationalized Mexico, a U.S. firm wouldn’t have been allowed to take such a prominent role in a highly visible project, given the country’s former trade restrictions. But Mexico’s economy is going private, and RTKL was in the right place with the right person: Armando Gallardo. He understands the culture, the language and-perhaps most importantly-the subtleties of doing business in a country that many Americans know only for beach resorts like Acapulco and border towns like Matamoros.

“We couldn’t do this [level of business in Mexico] without a person like Armando,” says Scalabrin. “I couldn’t have done what he’s done. Culturally and business-wise, he’s credible down there. It’s going to take someone like that to create a bridge and understand how business is done here and down there and try to find common ground.”

Gallardo now spends about half his working time in Mexico, running among RTKL’s various projects in the capital, in Monterrey and San Luis Potosi to the north and in Her-mosillo, south of Tucson. He may even open an RTKL office in Mexico City if the firm’s foray into Latin America generates enough new business. He’s already looking for an apartment in the city because he spends so much time there.

A lot hinges on what Congress does with the proposed free trade agreement fusing Mexico, Canada and the United States into a market of 360 million people. It would be the largest free market in the world and, since the average age in Mexico is only 14, one with enormous potential. Such a pact could lure more U.S. and Canadian companies across the Mexican border-companies that will need office complexes, manufacturing facilities and other buildings.

For now, though, Dallas is close enough to Mexico City (just over two hours by air) (hat Gallardo can hop on a plane to meet with clients on short notice. Yet so much of Mexico and its customs are still foreign to its northern neighbor. “In some ways it’s like going back 20 years,” says Scalabrin.

With Urbano Alameda, the Mexican government is trying to fast-forward its backward image. The Federal District of Mexico City (or D.F., as it’s called, similar to the District of Columbia) has made redeveloping the central plaza area a top priority-something of a shrine to the future.

As RTKL’s associate principal and director of the Urbano Alameda project, Gallardo is the link between the architects and engineers in Dallas and the city officials and developers in Mexico City. As such, he’s become we!l acquainted with Jorgé Gamboa de Buen, general coordinator of D.F.’s urban development and ecological preservation, and José Daniel Kabbaz, president of Grupo Danhos, the Mexican developer working on the project. He’s also met officials in the Salinas government, chief executives of major Mexican companies and Mexican contractors-key contacts in a country where the business world is like a large family. Not just anyone can marry into this close-knit clan. “Relationships are extremely important in Mexico,” Gallardo says. “The first thing you’ve got to do is be patient. You”ve got to allow them to develop and constantly be there, nurturing those relationships. Family is very important and that carries over into business. People like to do business with people they know.”

Gallardo spends a great deal of time cultivating his relationships, and it shows. He regularly has dinner with his Mexican clients and tries to meet in person with them as often as possible. In Monterrey, he calls on one of his clients, the Club Industrial, an exclusive private club for business executives at the top of a high-rise office building. Gallardo, who’s overseeing the club’s new 60,000-square-foot hillside building, gets the red-carpet treatment. He’s ushered into a private room, offered a soft drink, a mobile phone and a place to stash his luggage for a couple of hours. The club’s manager and public relations director stop by for a chat.

In Mexico City, when Gallardo meets Felipe Mondragon for breakfast, the two men greet each other in the traditional embrace reserved for close friends and family. Says Mondragon: “Armando brings to the table both cultures.”

For Gallardo. working in Mexico perfectly meshes his background with his expertise. Even as a kid in El Paso. he was always drawing and building things. The interest led him to Lubbock and Texas Tech University, where he graduated with a bachelor of architecture degree in 1978.

Gallardo went back to El Paso for his first job with an architectural firm. A year later the city of Dallas’ architectural division offered him a job. Next came a stint with another Dallas firm before he joined RTKL in 1980.

He spent his early years at the firm working on a lot of shopping malls: the expansion of North Hills Mall in a Fort Worth suburb, Valley View Center in North Dallas, the Galleria in Redondo Beach, Calif., and other malls in Las Vegas and California.

Gallardo favors simple, elegant yet functional designs. Not surprisingly, he admires the work of Frank Lloyd Wright and I.M. Pei, who, among other things, designed Dallas City Hall. When his whirlwind schedule allows, he paints watercolors, mostly abstracts.

Family is important to him. He and wife, Marti, a manager in the classified advertising department at The Dallas Morning News, have three young daughters. They live in North Dallas in a two-story house which Gallardo, always the architect, is redesigning.

Not only is Gallardo the right man in the right place, but his timing isn’t bad either. He’s working in Mexico just as the country is changing, however slowly. Since 1988, President Salinas has been tearing down trade barriers. In the last seven years, about three-quarters of the nearly 1,200 state-owned companies have gone private. Tariffs dropped from about 30 percent on most products to below 20 percent.

Investment between Mexico and Texas already is booming. In recent years Texas businesses exported almost a third of their products-about $12 billion worth-to Mexico. Gov. Ann Richards, a staunch supporter of the free trade agreement, says the pact could boost Texas exports to Mexico by 17 to 25 percent. “Texas is beginning to recognize the business potential,” says Mondragon of the Texas Commerce Department.

While some express concern that free trade may mean wealth for the middle and upper classes at the expense of the poor, in general there is an optimism in Mexico not felt in a long time. Although its big cities still have horrible problems with pollution, traffic, overcrowding and poverty, many working-class Mexicans think the country’s situation will improve if it reaches out to (he developing world for expertise and commerce instead of just money. “I like what Salinas is doing,” says Sergio Villegas Montes, a Mexico City cab driver, “Some people don’t. It may be hard at first, but the country will be better off in the long run.”



IT’S A HOT. MUGGY DAY IN DOWN-town Monterrey, an industrial city of 3,000,000 people about 125 miles south of Laredo. Gallardo has taken off his suit jacket to give a visitor a walking tour of the Macro-plaza. The sprawling city center is alive with sound and color-fountains splashing, children laughing, red, yellow and purple flowers blooming, city workers trimming hedges in curved patterns so they roll like green waves.

There’s a new library, a new contemporary art museum, a new home for the state legislature, a new municipal theater, a towering sculpture that looks like a giant terra-cotta prism. The Monterrey Foundry, once the largest steel mill in Latin America, has been turned into a park that’s also the site of the new convention and international trade center, the Cintermix. The first stretch of a new mass-transit rail system recently opened. A new eight-lane bridge near Laredo will give faster and easier access to the United States.

Despite its shanty-town suburbs, its network of factories, its pollution, traffic and overcrowding, Monterrey is where tilings are really happening in Mexico. Gallardo obviously likes being in the thick of it.

He points to the site across the plaza where RTKL has proposed a 35-story office building and a city center plan that would fill in empty spaces and link the plaza to nearby markets and shops. “We’re trying to fill the void,” he says. “But we want to keep it at a very pedestrian scale. Parking would be below the building. You always have that conflict in urban projects-the pedestrian against the onrush of traffic.”

The site is surrounded by a 125-year-old private club and the new theater and the old colonial cathedral. Here, too, Gallardo envisions bringing in local craftspeople to carve traditional designs into the building’s facade. He wants to use adoquinas-carved oblong stones frequently used in town plazas and around cathedrals-instead of concrete for the sidewalks.

In addition to the downtown planning and the new Club Industrial, Gallardo is pursuing other projects in Monterrey and in Juarez and Guadalajara, which suffered major damage in a recent sewer system explosion. While Scalabrin says RTKL would like to help rebuild Guadalajara, it’s too early to tell what will happen. “’It seems to be more of an infrastructure issue right now,1” Scalabrin says. “Just like the Alameda project in a sense was created by the earthquake, some development may be created by that tragedy.”

Despite Mexico’s progress, however, there are plenty of signs of lingering inefficiency. At a Monterrey highway construction site across from the modern Cintermix, for example, workers unload a pile of bricks by forming a line and tossing them to each other. A forklift could have accomplished the task in minutes. Amid the sea of green and yellow Volkswagen Beetle taxis, a farmer brings his melons to market in a horse-drawn cart. Such scenes are part of Mexico’s charm, but they’re also helping keep some U.S. businesses on the other side of the border.

One thing Gallardo, Scalabrin and their colleagues have learned in doing business in Mexico is how to be flexible. Mexicans’ concept of time is a little different than Americans’. Their days begin later; they eat lunch later (2 or 3 p.m.) and dinner later (10 p.m. to midnight) Planning meetings in advance often is a frustrating task because many Mexican companies operate on less structured schedules than U.S. firms. And because of the generally poor public telephone service, the traffic and urban sprawl, cellular phones are even more prevalent in Mexico City than in Dallas.

Gallardo doesn’t complain about any of that. It’s just part of doing business-like adjusting to the long, silent negotiating tactics of the Japanese or the get-it-done-now pace of New Yorkers. “Many of the problems here are no different from those in New York or Los Angeles or any other big city,” he says.

San Antonio used to be the focal point in Texas for business in Mexico. Then, during the energy boom, it was Houston. Now it’s Dallas. “The service firms-law, accounting, architectural-seemed to pick up on this,” Mondragon says. “Dallas is now in the lead.”

Indeed, Dallas leads the Texas Department of Commerce’s list of companies doing business in Texas and Mexico in many categories: investments in Mexico, companies with maquiladoras-twin manufacturing plants-on the border and the numbers of Mexican companies established in Texas.

Gallardo agrees that Dallas offers a lot of benefits to companies wanting to do business in Mexico. “They look on Dallas as a financial center, as a shopping center,” he says. “It’s an advantage being in Dallas.”

Other Dallas-area architectural firms, real estate developers and real estate management companies are setting their sights on foreign business as a change from the overbuilt and underfunded U.S market. What they’re selling is their expertise, their services. “Mexico is willing to pay a premium for expertise,” Scalabrin says. And the service industry is one of the few business areas in which the United States runs a consistent international trade surplus.

Compared with Dallas’ soft real estate market, Mexico looks pretty good. It’s a country that still celebrates architecture. Even the most modern office buildings often incorporate traditional elements into their designs-brightly colored tile borders, carved doorways, tile entryways. The problem is, some buildings in Mexico were designed and constructed without much thought to their use or targeted tenants. “Architecture is held in such high regard here,” says Gallardo. “Sometimes buildings are built for the sake of building them. We in the United States have been able to take designs and make them viable.”

Betting part of its long-term future on Mexico and Latin America may be a gamble, but it’s one that RTKL officials expect will pay off. The firm has had a Dallas office since 1979, but in the past it focused on projects in North America, Europe and Japan. Mexico now represents about 15 percent of RTKL Dallas’ revenues. Scalabrin expects the figure to grow over the next three to five years, but he doesn’t know by how much. About a dozen people are working on the Mexico projects in Dallas, most of them bilingual. RTKL is looking for more bilingual architects; Scalabrin expects the staff working on Mexico projects to double within the next two years.

Gallardo’s work in Mexico is making him a popular speaker on the conference circuit and Gov. Richards tapped him for her advisory council on doing business in Mexico. The group meets for breakfast once a month to talk about business developments in Mexico, the progress of the trade agreement and how to get more Texas companies to do deals across the border.

Dealing is truly an art in Mexico, practiced for centuries in village markets and now in downtown high-rises. It’s an art of negotiation, of building relationships, of people constantly interacting, on the largest but also the smallest transactions.

Walking through one of the many street markets in Mexico City, Gallardo stops in front of an old woman sitting on a blanket selling brightly colored embroidered hair bands. He wants some to take back to his two oldest daughters. “How much if I buy two?” he asks her. The seller won’t budge from her price unless he buys four. Then she’ll cut the price. It’s a deal too good to pass up. Gallardo picks out four hair bands for about $6. “Everyone down here is an entrepreneur” he says, smiling.