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Foreign Trade Zone to Spur International Economic Development for Western Colorado

A foreign trade zone could serve as a long awaited economic development catalyst that promotes economic growth in Western Colorado.

A Foreign Trade Zone is a geographic area that falls under the supervision of US Customs and Border Protection, but remains out of its jurisdiction in allowing the movement of foreign goods through the Foreign Trade Zone without paying duties or taxes until they reach their final destination.

Foreign Trade Zones also let manufacturers avoid tariffs on materials that they import but use to manufacture products they export. Companies on the Western Slope involved in everything from manufacturing and distribution to chemical and pharmaceutical development could stand to benefit from decreased costs on imported parts for the thriving outdoor industry from bicycles, skis, ski lifts.

Given comparatively high labor costs and duties, it’s not feasible for some manufacturers to operate factories in the United States. Foreign Trade Zones make it possible for many US companies to compete. It also encourages companies from Denver and all over the US to consider relocating their operations to the Western Slope creating hundreds of new jobs.

The City of Grand Junction is spearheading the process of establishing an Foreign Trade Zone. That process includes setting up a US Customs and Border Protection office at the Grand Junction Regional Airport. A US Customs and Border Protection office also would enable the airport to accommodate international flights. The application to establish a Foreign Trade Zone is essentially complete and local officials expect that application to be submitted by the end of the year. The application process could take 12 to 18 months. The success of that application largely hinges on whether the US Customs and Border Protection will allow a customs house to operate out of a 1,500 square foot facility. That’s smaller than the 2,800-square-foot facilities that are typically required. A smaller customs house was recently allowed in Scottsdale, Arizona, and supporters of the Grand Junction effort point to that as part of their proposal.

The Grand Junction Regional Airport, however, will be the official applicant for the Foreign Trade Zone, and one of its most immediate beneficiaries could be international customers of West Star Aviation. About eight international aircraft arrive each month for work at West Star Aviation, that have to be cleared in customs elsewhere according to the application. While the airport would host the customs house, most of the work would take place on the grounds of companies using the Foreign Trade Zone.

Efforts to establish a Foreign Trade Zone in Grand Junction will last well into 2019, but officials who met recently in Denver with federal trade officials said they were encouraged. Officials with the Grand Junction Area Chamber of Commerce and Grand Junction Economic Partnership met with the director and assistant director of the port at Denver International Airport. At the same time, the Grand Junction delegation sketched out how a customs office might be arranged at the airport and discussed how a customs office might fit into the terminal when it’s ultimately rebuilt.

“They said they were very impressed with the work we’ve put into this,” said Robin Brown, executive director of the economic-development partnership. A customs agent can serve companies within 60 miles or 90 minutes drive time, which could extend the reach of the office beyond Mesa County. Backers of the zone have begun preliminary talks with Delta, Garfield and Montrose counties, as well as cities within those counties.

Garfield County Xommissioners have agreed to draft a letter in support of securing a federal customs agent at Grand Junction Regional Airport and the facility becoming a Foreign Trade Zone.

They agreed to get behind the Foreign Trade Zone effort after hearing a presentation from Diane Schwenke, President and CEO of the Grand Junction Area Chamber of Commerce and Robin Brown, Executive director of the Grand Junction Economic Partnership. Both are involved in trying to build a regional collaboration in support of a Foreign Trade Zone, which would have regional benefits in Western Colorado. Garfield commissioners welcomed the idea and the potential benefit they said it might have for industries in the region like sodium bicarbonate production and distribution.

Such a facility could be constructed with about $1 million, which would be shared by several western Colorado governments, including the municipalities of Fruita, Grand Junction, Parachute, Rifle and Montrose, as well as Garfield, Mesa and Montrose counties. Ongoing costs including salaries and overhead for a customs house will require about $350,000 a year. $160,000 – $170,000 of that amount would come from in-kind support from the Grand Junction Regional Airport for things like rent and utilities. These same local governments also have pledged to support operations costs until user fees cover the costs.

Moving ahead with a self-funded customs house will also require a letter from the Governor of Colorado to US Customs and Border Enforcement, which will formally begin the process of applying for a customs office.

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Rocky Mountain Commercial Brokers

Rocky Mountain Commercial Brokers is a group of independent professionals who specialize in the sale and lease of office, retail, healthcare, industrial, investment properties, land and ranches in the Rocky Mountain region. Our commercial real estate broker members have met high standards and recognition in their field and have years of experience with all aspects of commercial real estate.