Tag Archives: Greater Maricopa Foreign Trade Zone

Greater Maricopa Foreign Trade Zone - AZ Business Magazine July/August 2011

West Valley Cities Are Looking Toward Foreign Trade Zone To Boost Their Local Economies

After three years of hard work and dedication, WESTMARC and West Valley city leaders finally saw their labor come to fruition with the formal granting of the Greater Maricopa Foreign Trade Zone (GMFTZ) in December.

The establishment of the Foreign Trade Zone began following the Foreign Trade Zone Act of 1934.

Most FTZs are applied for by a single city, but Harry Paxton, economic development director for the city of Goodyear, says the GMFTZ is one of only a few in the United States that was supported by a consortium of cities for an entire region. The application fees were paid by landowners of the properties in the region requesting FTZ status.

“It is vital to high-volume importers and exporters (foreign or domestic) operating the United States in reducing duty fees and speeding up the supply chain, allowing companies operating … to maintain competitiveness,” Paxton says.

The GMFTZ, he adds, “is a valuable tool that is useful in attracting and retaining businesses, and creating new job opportunities.”

Paxton is a member of the GMFTZ Advisory Council, which was formed so each city participating in the GMFTZ would have representation.

The cities in the West Valley that are participating in the FTZ are Avondale, Buckeye, El Mirage, Gila Bend, Glendale, Goodyear, Surprise and Wickenburg. WESTMARC became involved in the process after community leaders with Goodyear and Surprise approached the organization requesting its support.

The approval in December gave FTZ General Purpose Zone status to four sites:

AIRPORT GATEWAY AT GOODYEAR

This 230-acre site located from Van Buren Street south to Yuma Road, will have approximately three million square feet of industrial and work space. It is located in close proximity to Phoenix Goodyear Airport, which is constructing an additional 4,300-foot runway and a new entrance to the facility, which will be adjacent to the FTZ site.

SURPRISE POINTE BUSINESS PARK

Located on the southeast corner of Waddell and Litchfield roads, this 130-acre site has access to the Burlington Northern Santa Fe Rail Line, which will send goods to Los Angeles ports.

PALM VALLEY 303

Located north of Indian School Road along Loop 303, the site features 1,600 acres and has designated 235 acres for FTZ status. Development of the entire project will be phased over the next 20 years and is expected to feature 20 million square feet of office, retail, warehouse and industrial space.

10 WEST LOGISTICS CENTER

This 318-acre site is located on 339th Avenue and the I-10 in Buckeye, providing easy access to the freeway.

Several additional sites throughout the West Valley are under consideration for FTZ status, including the Goodyear Crossing Industrial Park, a 198-acre site at the northeast corner of MC 85 and Cotton Lane.

WESTMARC

The benefits to being in an FTZ, Paxton says, are numerous.

“Businesses in FTZs are treated as though they are outside U.S. Customs territory, and merchandise that is repacked, assembled, manufactured, displayed or placed in storage can be brought into the FTZ duty-free,” Paxton says. “Imports can be moved more quickly, without full Customs formalities. In addition, qualifying businesses located in a FTZ in Arizona are eligible for substantial reductions — currently 75 percent — on real and personal property taxes.”

Several large companies already have started construction or announced plans to start a location on the FTZ sites. A facility for appliance manufacturer Sub-Zero, based in Wisconsin, is under construction and will bring an estimated 380 jobs to Goodyear. In addition, the plastics manufacturing company Schoeller Arca Systems, based in the Netherlands, will hire an initial 45 employees for its new site in Goodyear.

Companies based in an FTZ, Paxton explains, must comply with regulations set by U.S. Customs officials. Communities benefit from these regulations as well, he says, due to the higher levels of security for imports.

Moving forward, Paxton says his goals for the GMFTZ revolve around helping not only the city of Goodyear, but also the entire West Valley.

“(I want to) ensure that each community that has a desire to participate has the best opportunity to succeed in helping existing employers expand and attract new employers to their respective communities, which will create new jobs for our citizens.”

Arizona Business Magazine July/August 2011

new WESTMARC CEO

Despite WESTMARC CEO Change, WESTMARC Keeps Its Focus

WESTMARC CEO Change – When WESTMARC entered its 21st year this past January, an announcement was made that few members expected. Jack Lunsford, WESTMARC CEO for the past seven years, announced he would be stepping down for health reasons.

In addition to leading WESTMARC in its goals for 2011, the incoming chair, Candace Wiest, suddenly had a daunting task ahead of her — finding Lunsford’s replacement.

“Losing someone like Jack is always very difficult,” Wiest says. “He’s been a known commodity for a number of years and has accomplished a lot in the West Valley, and so you kind of look around and go, ‘Wow, what are we going to do now, especially when it’s so unexpected like this.’ ”

Wiest and her team didn’t have to look far for an interim CEO. John Bradley, who had served on WESTMARC’s board for a number of years, stepped up to the plate and has helped guide the organization as it continues its efforts in advocacy and public policy for the West Valley, all the while searching a permanent leader. Wiest says they have narrowed that list down to six candidates and hope to make an announcement soon.

“As you can imagine, people get very nervous in a dues-paying organization when you lose your CEO,” Wiest says. “John stepped into that role literally the day Jack left and he has helped grow membership and really stabilized the organization. He’s just done a great job.”

WESTMARC is committed to several key issues that impact the 15 communities it represents, including education, economic development, transportation, tourism, health care, Luke Air Force Base, and quality of life.

One aspect of WESTMARC that makes it unique, Wiest adds, is its 250 employer members that represent 70,000 jobs. This cross spectrum of industries involved in WESTMARC makes the group qualified, she says, to understand and respond appropriately to economic development in the West Valley.

“Every single focus is on economic development and a responsible method of public policy,” Wiest says. She explains that the organization will be identifying and focusing its efforts on four projects each year that affect economic development in the West Valley. One such project it will work on this year is the recent impact fees legislation. The law will cause Arizona cities to give up some of their powers in assessing fees on new developments.

“The fact of the matter is that cities that are built out, like Tempe and Scottsdale, will not be as impacted as West Valley cities that haven’t yet matured,” she says. “It’s going to really change the way we can be developed and our desirability, so (the West Valley) is going to be the most impacted.”

One of the challenges Wiest says the organization has encountered in recent years, especially in the down economy, is retaining its membership numbers. She says WESTMARC not only has met that challenge, but has surpassed it with a growth in membership this year. The key to overcoming this challenge, she says, is ensuring the membership is reaping rewarding benefits.

She points to a health care forum held in May as one of the most recent benefits for members.

Christine Clouse and Sharon Grambow, co-chairs of the health care committee for WESTMARC, recommended holding the forum. Health care’s status as one of the leading economic drivers in the state also was a key factor in planning the event. The forum benefited not only health care industry members, Wiest says, but also other industry members who may have been overwhelmed by recent legislation.

Wiest says the health care forum most likely will be among this year’s greatest achievements for the organization, as will be the continued success of the Greater Maricopa Foreign Trade Zone, which she explains will be a great economic development tool for the region for many years to come.

WESTMARC also was among the first organizations to issue a statement in support of keeping the NHL’s Phoenix Coyotes hockey team in Glendale, which Wiest explains was a valuable move for its membership. She adds that the possibility of the team leaving the state would have had a negative impact on regional economic development.

“I think what we do is very unique,” Wiest says. “Our mission is really driven by the needs of our members.”

 

Greater Maricopa Foreign Trade Zone - AZ Business Magazine Jul/Aug 2010

The Greater Maricopa Foreign Trade Zone Opens Up Business Possibilities In The West Valley

At a time when the West Valley could use an economic boost, officials have put the finishing touches on the proposed Greater Maricopa Foreign Trade Zone. Under the administration of WESTMARC, an acronym for Western Maricopa Coalition, this new Foreign Trade Zone (FTZ) is seen as a welcome economic development tool that will spawn jobs and millions of dollars in new investment.

Participating cities are Avondale, Buckeye, El Mirage, Gila Bend, Goodyear, Peoria and Surprise. Initially, four sites in three of the cities have applied for FTZ status: two in Goodyear at Interstate 10 and Loop 303, one in Surprise near Bell Road, and one west of Buckeye in an unincorporated area. The Greater Maricopa Foreign Trade Zone is actually a series of trade zones, with each city acting independently but represented by WESTMARC.

Federal approval of WESTMARC’s application of the overall trade zone by the U.S. Department of Commerce and the Department of Homeland Security is expected before the end of the year. Launched in 1934, the federal Foreign Trade Zone program provides for reduced or eliminated federal taxes and fees in connection with imports and exports. For customs purposes, an FTZ is considered outside the United States.

Consultant Curtis Spencer, president of Houston-based IMS Worldwide, says there has been quite a bit of interest in West Valley sites from brokers looking for build-to-suit opportunities, particularly for solar and other manufacturers.

Spencer says developers generally pay the initial fee of about $50,000 to be in the FTZ depending on proposed use. Companies locating in an FTZ also pay an annual fee, but Spencer estimates the savings to a company can range from $300,000 to $1 million a year.

A typical business in an FTZ pays wages 7 percent to 8 percent more than a similar company not involved in exporting and importing, and employs 10 percent to 20 percent more workers, Spencer says.

“Foreign Trade Zone activities now exceed the statistical equivalent of imports and exports carried by truck into and out of Canada and Mexico,” Spencer says. “It’s a significant portion of our economy.”

A company in the West Valley area that decides to seek FTZ status puts in an application that will go through WESTMARC, which holds the federal permit, and on to the federal Foreign Trade Zone board. Zones are not limited to the four that have been selected. Likely candidate businesses for an FTZ range from high-tech manufacturers to distributors.

“It should give a major boost in investment and job creation,” Spencer says. “In the next 10 years we should have added hundreds of jobs and tens of millions of new investment.”

Basically, FTZs speed up the supply chain, reduce importing costs and provide better security, Spencer says.

“It’s faster, cheaper and better,” he adds.

Regarding security, companies that have been certified for FTZ status by federal authorities undergo extreme scrutiny, and therefore are not likely to be dealing with unfriendly countries or terrorist organizations. Concern over the importation of contraband has heightened since the attacks of 9/11.

Harry Paxton, economic development director for the city of Goodyear, says participating cities can use the FTZ as a marketing tool.

“It says that these communities are ready to accept businesses involved in international commerce,” he says.

Goodyear, which was among the first to express an interest in establishing an FTZ three years ago, hopes to fill some existing buildings by offering significant property tax breaks. Personal and real property taxes in an Arizona FTZ are cut by 75 percent.

But the perception that such tax reductions will have a negative impact on a city is incorrect, Paxton says. The assessed valuation of an activated FTZ reduces to 5 percent from 20 percent, but still generates additional revenue when compared to agricultural-use sites that collect $300 per 10 acres. What’s more, Paxton says, the FTZ becomes a catalyst for other development not requiring FTZ tax benefits, resulting in a full tax rate on those businesses.

“It’s a win-win,” he says. “It helps us become more competitive.”

Mitch Rosen, director of office and industrial development for SunCor Development Company, says his company owns 250 acres that will be part of the FTZ.

“The reason we’re interested is that we believe it to be an exceptional tool to stimulate the economic development of the West Valley,” he says. “It’s a good way to stimulate quality employment and it creates a competitive advantage for Arizona and the West Valley. It encourages businesses throughout the country to elect to locate in the West Valley.”

Jack Lunsford, president and CEO of WESTMARC, expects FTZs to spring up throughout the sprawling West Valley as cities become more aware of the benefits.

“We are thrilled,” he says, “to help bring this economic development tool to our West Valley communities that will assist them, especially at a time like this.”

www.imsw.com | www.suncoraz.com | www.ci.goodyear.az.us

Arizona Business Magazine Jul/Aug 2010