Title
Foreign-Trade Zone Application for Avnet, Inc. (Resolution 21678)
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 Avnet, Inc. (Avnet), or City-approved nominee, and to enter into an Intergovernmental Agreement with the City of Chandler. The City will incur no costs associated with Avnet’s application.
Report
Summary
The City of Phoenix, as Grantee of Foreign-Trade Zone No. 75, has the right and authority to apply for foreign-trade zone site designations. Avnet is one of the world’s largest distributors of electronic components and embedded solutions, and is headquartered in Phoenix. The company has requested an FTZ designation for the property it owns at 60 S. McKemy Ave., in Chandler, Ariz. The proposed FTZ site consists of approximately 22 acres. Consistent with City of Phoenix policy, Avnet does not intend to seek property tax reclassification for existing property within the City of Chandler pursuant to Arizona law (A.R.S. 42-12006).
The City of Chandler will provide to the City of Phoenix a Resolution indicating their support of Avnet’s FTZ application for the site in Chandler. With Council authorization, the City of Phoenix will enter into an Intergovernmental Agreement with the City of Chandler to evidence conditions of Chandler’s support of the FTZ application and outline the cities’ responsibilities to one another.
City staff will prepare an FTZ Operations Agreement with Avnet 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 such 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 Avnet’s application.
Location
The proposed FTZ site is located at 60 S. McKemy Ave., Chandler, Ariz.
Council District: Out of City
Department
Responsible Department
This item is submitted by Deputy City Manager Deanna Jonovich and the Community and Economic Development Department.