HomeMy WebLinkAboutIR 10317
INFORMAL REPORT TO CITY COUNCIL MEMBERS No. 10317
September 17, 2019
To the Mayor and Members of the City Council
Page 1 of 1
SUBJECT: AUTHORIZE SUBMISSION OF LETTER OF NO OBJECTION TO THE
U.S. FOREIGN-TRADE ZONES BOARD TO ALLOW FOR TRADE-
ZONE NO. 39 SITE DESIGNATED STATUS FOR ALLIED
ELECTRONICS INC., FACILITIES LOCATED AT 7151 JACK
NEWELL BLVD. (COUNCIL DISTRICT 4)
Allied Electronics, Inc., is a high-service level authorized distributor of industrial automation
products, electronic components, and electromechanical products with sales offices serving the
Americas. The Fort Worth operations include distribution at a 357,000 square foot facility located
at 7151 Jack Newell Blvd. South, Fort Worth, TX. This facility currently employs approximately
500 people.
Allied Electronics plans on expanding their Fort Worth facility by adding 207,000 square feet of
office and warehousing space, adding 200 more employees within the next two years. The
Company is seeking to have Foreign-Trade Zone No. 39 (FTZ) Zone Site Designation within
Foreign-Trade Zone No.39 at its Fort Worth facilities in order to receive an exemption on
merchandising duties paid to the State. An FTZ is a restricted-access site in or adjacent to a U.S.
Customs (Customs) port of entry and goods are considered outside the Customs Territory. FTZs
are a trade program established by the U.S. Congress to create jobs and facilitate international
trade in the U.S.
When an FTZ application involves areas where inventory is subject to personal property taxation,
federal regulations require that the applicant provide the U.S. Foreign-Trade Zones Board with a
statement regarding the views of the local taxing authorities with respect to the impact of the tax
exemption that would result from FTZ activity. As a result, the Company has requested that the
City provide the Board with a Letter of No Objection as to FTZ activation at its facilities at 7151
Jack Newell Blvd. Allied Electronics Inc., will serve as the FTZ operator over the this facility.
Allied Electronic currently receives a Freeport Exemption and the current non-tax inventory value
is roughly $133,000,000. The warehouse expansion would increase the non-tax inventory value
to approximately $172,000,000. After expanding, the current Freeport incentive would exempt
nearly $140,180,000 of non-tax inventory value leaving a remainder of $31,820,000 in taxable
value. Given FTZ approval, the tax exemption would exclude an additional $23,865,000 resulting
in an estimated annual taxable value of $7,955,000. Ultimately, layering the Freeport and FTZ for
the proposed expansion would yield a net tax benefit of approximately $209,869.75 annually to
the City from the additional ad valorem tax due to the expansion and the remaining non-
exempted inventory tax.
Staff will bring forward an M&C to City Council on September 24, 2019 to approve the submission
of a Letter of No Objection to allow Trade- Zone No.39 Site Designation for Allied Electronics, Inc.
If you have any questions concerning this information, please contact Robert Sturns, Economic
Development Director at 817-392-2663 or robert.sturns@fortworthtexas.gov.
David Cooke
City Manager
ISSUED BY THE CITY MANAGER FORT WORTH, TEXAS