Title
Foreign-Trade Zone Application for Kuehne+Nagel, Inc. (Resolution 21864)
Description
Request to authorize the City Manager, or his designee, to submit a Minor Boundary Modification application to the Foreign-Trade Zones Board of the U.S. Department of Commerce. Also, request authorization to enter into a Foreign-Trade Zone (FTZ) Operations Agreement and any other necessary documentation with Kuehne+Nagel, Inc. (K+N), or City-approved nominee. Further request authorization for the City Treasurer to accept funds related to this item.
Report
Summary
The City of Phoenix, as Grantee of Foreign-Trade Zone No. 75, has the right and authority to apply for FTZ site designations. Over the last 130 years, K+N has evolved from a traditional shipping company to a global logistics partner that offers highly specialized solutions for major industries worldwide. K+N is headquartered in Switzerland, with a presence all over the world. The company has requested a FTZ designation for the property it leases at 7210 W. Van Buren St., where it plans to warehouse and distribute finished goods for a single client. The proposed FTZ site consists of approximately 12 acres. Consistent with City of Phoenix policy, K+N does not intend to seek property tax reclassification for existing property within the City of Phoenix pursuant to Arizona law (A.R.S. 42-12006).
City staff will prepare a FTZ Operations Agreement with K+N requiring the company to:
- Comply with U.S. Department of Commerce Foreign-Trade Zones Board standards.
- Maintain record keeping satisfactory to the U.S. Customs and Border Protection.
- Obtain business bonding and insurance satisfactory to the City and the U.S. Customs and Border Protection.
- Indemnify the City against claims arising from their FTZ operations.
- Pay to the City all fees pursuant to the current zone fee schedule.
The Agreement will contain other terms and conditions deemed necessary or appropriate.
Contract Term
The term of the agreement, if approved, will be for 20 years unless the FTZ designation terminates sooner. Provisions of the contract may include an option to extend for as long as the FTZ designation exists which may be exercised by the City Manager or designee.
Financial Impact
The City will incur no costs associated with K+N’s application.
Location
7210 W. Van Buren St.
Council District: 7
Department
Responsible Department
This item is submitted by Deputy City Manager Jeff Barton and the Community and Economic Development Department.