Mesa dusting off foreign trade zone at Gateway - East Valley Tribune: Mesa

Mesa dusting off foreign trade zone at Gateway

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Posted: Sunday, May 29, 2011 9:00 am | Updated: 1:12 am, Mon Jun 20, 2011.

Mesa is ramping up efforts to bring life to its foreign trade zone, which has yet to lure a single user since its establishment in 1997.

The zone has the potential to provide a large number of jobs and attract major exporters and manufacturers, including Tempe-based First Solar. The area encompasses 2,000 acres at the Phoenix-Mesa Gateway Airport and is the only foreign trade zone in the East Valley.

The trade zone’s lack of success so far is understandable given its location, said Vice Mayor Scott Somers. During most of its existence, the trade zone didn’t have good freeway access, infrastructure or much activity at the airport.

That’s all changed.

“I think we should be paying more attention to the foreign trade zone,” said Somers, who also chairs the city’s economic development committee.

Mesa has been doing more to promote the tax benefits of locating in the zone, said Jennifer Graves, an economic development specialist for Mesa. It takes effort to educate businesses about the benefits and the complex federal rules involved, she said.

“It is the biggest program that I have ever seen in my life in terms of moving parts,” Graves said.

One perk for businesses is their property tax rate is cut from 20 percent to 5 percent. Also, they can reduce or eliminate duty.

Mesa is talking with two businesses about getting in the zone, including First Solar. That company is building a $300 million manufacturing facility near the airport that will employ 600. It’s not in the zone now but Mesa could alter the borders to include First Solar.

The trade zone was a factor in the solar firm choosing Mesa during its nationwide search, said Bill Jabjiniak, the city’s economic development director.

Councilman Dennis Kavanaugh suggested reaching out to Mesa’s Sister Cities, which include communities in Canada, Mexico and China. The city could benefit from China’s interest in alternative technology, said Kavanaugh, a member of the economic development committee.

“There is a huge export potential that we should be looking at,” he said.

The city is also looking at the airport to house a business accelerator.

Mesa is studying the potential for a 40,000-square-foot facility that would teach sound business practices to emerging companies. A study by the National Business Incubation Association found companies that graduated from an incubator had a 87 percent survival rate after five years, said Shea Joachim, a Mesa economic development manager. New-business survival rate can be as low as 40 percent, which Nevada suffered recently, Joachim said.

Mesa is looking at the cost of a facility with the goal of making it self-sustaining once its operational. The city is exploring whether a federal grant could fund its construction.

• Contact writer: (480) 898-6548 or ggroff@evtrib.com

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