City of Coolidge
Arizona

Resolution
2859

18-22; a Resolution of the Mayor and City Council of the City of Coolidge Arizona, Supporting Nikola Corporation's Application for Foreign Trade Zone (FTZ) Status Within Phoenix, Arizona Foreign Trade Zone #75 and Authorizing Staff to Take Any Further Action Necessary Including Execution of Application Documents in Relation to This FTZ Within the Greater Phoenix Area Foreign Trade Zone.

Information

Department:City Manager DepartmentSponsors:
Category:Resolution

Attachments

  1. Printout
  2. 18-22 Supporting Nikola's Application for FTZ status (00039149xEC0B8) (This file has not yet been converted to a viewable format)
  3. Resolution No. 18-18 with Exihibit

Body

RECOMMENDATION

It is recommended that the Mayor and City Council approve the Resolution supporting the application of Nikola Corporation for Foreign Trade Zone Designation within Phoenix, Arizona FTZ #75.

 

DISCUSSION

The City's Economic Development Agreement with Nikola Motors provides that the City will support and assist with the designation of Nikola Corporation's manufacturing facility as a Foreign Trade Zone under FTZ #75 (Phoenix, AZ Foreign Trade Zone). This designation allows for a change in the property tax assessment ratio from 18% to 5%, thus reducing the real and personal property tax rates by about 72.2%.  Other benefits of the Foreign Trade Zone are:

 

-duty deferral until merchandise enters U.S. territory;

-duty elimination on exports;

-duty elimination on scrap and defective merchandise;

-duty reduction on foreign components which carry a higher duty rate than the finished article;

-no time constraints on storage;

-shorter transit time - direct delivery; and

-weekly entries

 

FISCAL IMPACT

The Project would pay $90,125,779.00 without the FTZ as compared to the $25,035,361.00 with the FTZ.  This is one of the many reasons the company decided to locate their headquarters and manufacturing operations in Arizona. 

Meeting History

Sep 10, 2018 7:00 PM  City Council Regular Meeting

D.S. Director Lopez advised Council of Resolution No. 18-22; which supports the application by Nikola Corporation to apply for a Foreign Trade Zone (FTZ) #75 designation within the Greater Phoenix Area Foreign Trade Zone (FTZ) for their manufacturing facility. There was discussion.

RESULT:APPROVED [UNANIMOUS]
MOVER:Jimmy Walker, Councilmember
SECONDER:Jacque Hendrie-Henry, Vice-Mayor
AYES:Jon Thompson, Jacque Hendrie-Henry, Jimmy Walker, Steve Hudson, Rob Hudelson, Tatiana Murrieta, Joseph Marsh