Title
Foreign-Trade Zone Application for Medline Industries, Inc. (Resolution 21527)
Description
Request a Resolution to authorize the City Manager, or his designee, to submit a Minor Boundary Modification application to the Foreign-Trade Zones (FTZ) Board of the U.S. Department of Commerce for Medline Industries, Inc., an Illinois corporation, and to support property tax reclassification for activated FTZs from property tax class 1 with a tax assessment ratio of 18%, to property tax class 6 with a tax assessment ratio of 5% pursuant to Arizona law (A.R.S. 42-12006). Also, request authorization to enter into all necessary and appropriate agreements and other documentation with Medline Industries, Inc., or City-approved nominee.
Report
Summary
The City of Phoenix, as Grantee of FTZ No. 75, has the right and authority to apply for FTZ site designations. Medline Industries, Inc. (Medline), manufactures and distributes healthcare supplies and provides more than 350,000 products that serve the entire continuum of care. Medline has requested designation of a Usage-Driven FTZ site for the property it owns and is currently constructing located at 8787 W. Buckeye Road, where it plans to warehouse and distribute medical devices for its import/export operations. The proposed Usage-Driven FTZ site consists of approximately 36 acres with one building of approximately 650,000 square feet.
If necessary and/or applicable, City staff will prepare a Development Agreement and Operations Agreement with Medline requiring them 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; and
- Pay to the City all fees pursuant to the current zone fee schedule.
The Agreements will contain such other terms and conditions deemed necessary or appropriate.
Financial Impact
The City will incur no costs associated with Medline's application; however, the property may be reclassified to a lower tax rate once Medline successfully activates the FTZ.
Location
The proposed FTZ site is located at 8787 W. Buckeye Road.
Department
Responsible Department
This item is submitted by Deputy City Manager Paul Blue and the Community and Economic Development Department.