MRBKatArlingtonPrgrass

FOREIGN TRADE

FOR IMMEDIATE RELEASE
December 12, 2005
Contact: Sharyn Wisniewski (608) 661-6485 or 608 246-3380 x 378

Dane County Executive Kathleen Falk announced today that the Foreign Trade Zones Board of the U.S. Department of Commerce has granted authority for Dane County to establish a Foreign Trade Zone (FTZ), a move that could bring business development and jobs to Dane county.

“This is just what some businesses are looking for to expand operations here,” said Dane County Executive Kathleen Falk. “I want to thank Airport Director Brad Livingston and the Airport Commission for providing another tool to keep our economy strong in a global market.”

Bill White, chair of the DCRA Airport Commission, said, “The FTZ emphasizes one more time the unique value of the airport to southcentral Wisconsin’s economy.”

A Foreign Trade Zone is a specific area within the United States, located in or near a port of entry, where certain types of merchandise can be imported without going through formal customs entry procedures or paying import duties. Companies located in such zones are typically not charged tariffs on their product inventory until it is sold, which improves a company’s cash flow and saves substantial dollars.

The Dane County Regional Airport compiled the lengthy application to apply for FTZ status and two parcels of airport-owned land are included in the initial FTZ. The owners of property included in the FTZ will pay a fee to the airport to administer the FTZ.

The five sites approved in the initial application are:

  • Two properties, totaling 123 acres, owned by the Dane County Regional Airport in proximity of the airport
  • Five parcels, totaling 47 acres, owned by Capitol Warehousing Corporation, in the Village of DeForest, about three miles north of the airport
  • Arlington Prairie Industrial Park, containing 213 acres in Columbia County [marketed by MR-BK, LLC]
  • Six parcels in the Center for Industry and Commerce, in an area east of Hwy. 51 and west of I-39, north of Hanson Road and south of Hoepker Road, near the airport, marketed by T. Wall Properties, with a total of 139 acres
  • Two parcels, totaling 126 acres, owned by MadCap1 and CapWin19 in the Village of DeForest.
  • More parcels can be added later within the eight counties included in the new South Central Wisconsin FTZ, including Dane, Sauk, Columbia, Dodge, Iowa, Jefferson, Green and Rock.

Dane County Board Supervisor Dennis O’Loughlin, who chairs the airport commission’s FTZ subcommittee, said, “This is an exciting opportunity for our airport to provide global economy services for businesses in our area through the FTZ.” 

U.S. Senators Herb Kohl and Russ Feingold, and U.S. Representative Tammy Baldwin supported Dane County’s application to establish an FTZ, as did Governor Jim Doyle and Madison Mayor Dave Cieslewicz. 

"Establishing a Dane County Foreign Trade Zone will help promote economic growth and retain good paying jobs," said Senator Kohl. "I am proud of the collaborative efforts of all the participants who made the Dane County Foreign Trade Zone a reality." 

“This is great news that will bring tangible benefits to the region by promoting the creation and retention of well-paying jobs here in Wisconsin, as well as offering local businesses access to larger markets,” said Congresswoman Baldwin. “Realizing a Dane County Foreign Trade Zone was a collaborative effort between business, labor, and county government which bodes well for its future success,” Baldwin said. 

There are currently two other Foreign Trade Zones operating in Wisconsin, in Brown County/Green Bay and in Milwaukee.

 

Foreign Trade Zone Sites

  • Arlington Prairie Indusrial Park, owned by MR-BK, LLC and Roswell T. and Patricia A Mair, 213 Acres
  • Capitol Warehousing and Tessmer
    Investments, 47 acres in DeForest and 740,000 square feet of warehousing
  • MadCAP1 and CapWin 19, 126 acres in
    Windsor, 3 parcels.
  • Dane County Regional Airport, two parcels,
    123 acres total.
  • Madison parcel, 139 acres, 86 acres are
    owned by the city and the rest owned by
    T. Wall. Properties.

Article from the Wisconsin State Journal, Deborah Hirsch, March 12, 2005.

Southern Wisconsin could see an increase in foreign business if the federal government approves the county airport’s proposal to create a foreign-trade zone.

Designating “foreign-trade zone” property gives businesses special customs procedures to either defer or avoid duties on imported goods.

“The purpose is to enable small business to better compete in the global market,” said Michael Gay, business development coordinator for the City of Madison. “It’s a way for local businesses to get involved in foreign trade without getting taxed to the nth degree.”

Normally, businesses must pay duties on any raw materials that come into the country, even if they end up sitting in storage, but the zone allows the payments to be deferred until final products are assembled and put into the U.S. economy for consumption.

Aside from improving cash flow, this could save businesses money since the final tax might end up being lower than the cumulative amount of duties on separate, raw materials.

A company could also avoid the duties entirely by importing foreign parts, manufacturing products within the zone and then re-exporting them for sale.
The county decided to begin investigating the creation of foreign trade zones about two years ago because it seemed like something that could bring new companies, and possibly jobs, to the area, said County Executive Kathleen Falk.
“This is one of those steps that we can take and we hope will make a difference for some of our companies,” Falk said. “We just want to do whatever we can to be helpful.”

After research and surveys costing about $261,000, Dane County Regional Airport officials submitted an application to the federal Foreign Trade Zone Board in November.

The proposed South Central Foreign Trade Zone would be overseen by the airport and include five sites within Dane and Columbia County in Arlington, DeForest, the town of Windsor and Madison.

County airport property constitutes the fifth site.

“Conceptually we become the port of entry right here,” said Paul Tessmer, president of Capitol Warehousing Corp., which would serve as part of the 47-acre foreign trade zone site in DeForest.

Tessmer already has about five businesses that do international trading through his warehouse.

“The benefit to the importer is the cash flow because he doesn’t have to write that check for months or potentially years later,” he said.

A south-central Wisconsin trade zone also would benefit the area in general because the duty savings could attract future businesses to develop here.
“This zone will place the Dane County area on the map in terms of international logistics trade and we are going to market this as a location that’s an alternative to Chicago,” where many foreign imports currently must be screened, Tessmer said.
Once the zone is established, sub zones can be created to allow existing businesses to take advantage of the duty deferrals.

Each participating business, however, would have to pay a fee to be determined on a case-by-case basis.

The federal government has up to 10 months to review the airport application, although many times it makes decisions earlier than that, according to officials involved with the project.

Wisconsin now is home to two foreign trade zones, one in Milwaukee and one in Green Bay.

Although statutes allowing the zones have been around since 1934, there were only eight until about 30 years ago.

Today, there are 240 general-purpose zones and over 450 sub zones throughout the country.

“It’s just the changing economy in the last 10 years alone,” Gay said. “The amount of businesses that do international commerce has grown exponentially.”

 

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