Feature

Salt Lake City Awaits U.S. Department of Commerce Approval for Foreign Trade Zone

By autumn, Salt Lake City will likely be home to a new Foreign Trade Zone (FTZ) located on 57 acres at 1105 S. 4800 West, near the Union Pacific intermodal facility. The location is also conveniently close to the Salt Lake International Airport and Interstate 80.

Foreign Trade Zones are areas within the United States where foreign and domestic merchandise is considered to be outside the reach of U.S. Customs. Companies operating within an FTZ can import products into the zone, store them, repackage them or use them in their own manufacturing activities without paying import duties on those products.

Salt Lake's FTZ will be developed by The Rockefeller Group, headquartered in New York City, into an industrial park with more than 1 million square feet of industrial and manufacturing space. Rockefeller is a real estate developer and investment manager with a specialty in business centers. The company began with the development of the Rockefeller Center in New York City, an urban business and entertainment complex. Rockefeller is the premier developer and operator of FTZs in the nation. FTZs offer significant benefits to importers and manufacturers that utilize imported goods.

Work on securing the FTZ site and obtaining FTZ designation from the federal government has been underway for three years, according to Brandi Hanback, managing director of Foreign Trade Zone Services for The Rockefeller Group. The application for FTZ status has been submitted to the U.S. Department of Commerce and a 60-day comment period is underway. Final approval and designation is expected in early fall.

Meanwhile, The Rockefeller Group is preparing the FTZ site for tenants and Tom McCormick, senior vice president of development, says a number of businesses are interested in the location.

Robert Farrington, Salt Lake City's new economic development director, and William D'Evelyn, principal broker with Commerce CRG, say the FTZ will enable the city to attract new types of manufacturers and other firms, including some of the world's best and largest companies.

Technically, Salt Lake City has had an FTZ since 1977, but no real development occurred there and the old site was recently sold as part of the airport's expansion.

In the complex world of import-export, a Foreign Trade Zone has many benefits. The circumstances may vary, but businesses located in an FTZ typically enjoy reduced duties, deferral of duties and in some cases elimination of duties. An FTZ-located business can reduce delivery times and expedite the flow of goods in and out of the country, facilitating just-in-time delivery. Paperwork and other regulatory costs can also be reduced, along with lower broker fees.

Lew Cramer, president and CEO of World Trade Center Utah, says the FTZ designation would fit nicely with Utah's economic development plans and will further solidify Utah's position in the global marketplace. “FTZ status will help Utah businesses better compete in the international arena by saving them hundreds of thousands as they bring foreign goods into the country for manufacturing and other uses,” he notes.

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