COUNCIL COMMUNICATION

DATE:

 

8-19-02   

SUBJECT:  FINAL READING OF ORDINANCE NO. 2002-O-200

Approving a Foreign Trade Zone Operations Agreement with South Texas Traffic Co., as Zone Site Operator covering 97,032 square feet of activated space which includes 71,432 square feet of warehouse space and 25,600 square feet of trailer parking area and located at 8501 Killam Industrial Blvd., Foreign Trade Zone Site 3 and authorizing the City Manager to execute said agreement.  Providing Activation, Administrative and Transaction fees to the City and providing for an effective date.  

 

INITIATED BY:    Cynthia Collazo

                                 Assistant City Manager                            

STAFF SOURCE:    Jose L. Flores

                                    Airport Director

 

PREVIOUS ACTION:  On August 5, 2002, Ordinance was introduced by City Council, and Staff was instructed to proceed.

 

BACKGROUND:   A Foreign-Trade Zone is a secured specialized area, in or adjacent to the U. S. Port of Entry, which is considered to be outside the Customs Territory of the United States.  Both foreign and domestic merchandise may be admitted to a Zone with no duty paid on the foreign merchandise unless and until it leaves the Zone for domestic consumption.  If the merchandise is exported, no duties are paid to      U. S. Customs.

 

South Texas Traffic Co., owns an  approximate 413,160 square foot facility  located at  8501 Killiam Industrial Blvd., (Lot 4, Block 4, Unit IV) within the Killam Industrial Park.  Of this space, South Texas Traffic Co., requests FTZ activation for  370,207 square feet.

 

 South Texas Traffic Co., is a corporation involved in international trade of which approximately seventy per cent of their business consists of importing and exporting automotive part components; ten percent fabrics/garments; and the remaining twenty percent consists of electronic and miscellaneous items.

 

South Texas Traffic Co., will be required to post a FTZ Operators Bond with the U. S. Customs Service in the amount of $100,000, a Foreign-Trade Zone Indemnification Bond (Grantee/Operator) in the amount of $100,000 naming the City of Laredo, Grantee of FTZ No. 94, as Obligee, as well as provide Public Liability Insurance in the amount of One Million Dollars for the benefit of the City of Laredo, and naming the City of Laredo as additional insured.

 

FINANCIAL:  The Operators Agreement provides the following fees:

a) $1,940.64 Account No. 242-0000-361-1065 (Initial activation in the amount of two cents ($0.02) per square foot of activated space with a minimum of $500 and a Maximum of $5,000), and

b)  $2,910.96 per year Account No. 242-0000-361-1065 (Annual Administration Fee of three cents ($0.03) per square foot of activated space), and

c)  An Activity Fee of $2.00, Account No. 242-0000-361-1065, for the following U. S. Customs transactions (CF 214, CF 216 or their equivalent).

COMMITTEE RECOMMENDATION: The Airport Advisory Committee recommends approval of this Operators Agreement.

STAFF RECOMMENDATION:  Recommend that the City Manager be authorized to execute an FTZ Operator Agreement with South Texas Traffic Co.

 

 

 

ORDINANCE NO. 2002-O-200

 

APPROVING A FOREIGN TRADE ZONE OPERATIONS AGREEMENT WITH SOUTH TEXAS TRAFFIC CO., AS ZONE SITE OPERATOR COVERING 97,032 SQUARE FEET OF ACTIVATED SPACE WHICH INCLUDES 71,432 SQUARE FEET OF WAREHOUSE SPACE AND 25,600 SQUARE FEET OF TRAILER PARKING AREA AND LOCATED AT 8501 KILLAM INDUSTRIAL BLVD., FOREIGN TRADE ZONE SITE 3 AND AUTHORIZING THE CITY MANAGER TO EXECUTE SAID AGREEMENT. PROVIDING  ACTIVATION, ADMINISTRATIVE AND TRANSACTION FEES TO THE CITY AND PROVIDING FOR AN EFFECTIVE DATE.

 

 

 

                WHEREAS, the Airport Director  recommends that the City Council approve the proposed contract  between the City of Laredo, as LESSOR, and South Texas Traffic Co., as Grantee of Foreign-Trade Zone No. 94, for the approximate 97,032 square foot facility which includes 71,432 square feet of warehouse space and 25,600 square feet of trailer parking area within Foreign-Trade Zone No. 94-Site 3 located at the Killam Industrial Park  and in furtherance of the development of  Foreign-Trade Zone No. 94.

 

                WHEREAS, the Airport Advisory Committee finds that said contract is  in the best interest of the Airport and recommends that the City Council approve the proposed contract; and

 

                WHEREAS, the City Council of the City of Laredo having heard the recommendations of the Airport Director and of the Airport Advisory Committee agrees with same.

 

                NOW, THEREFORE, BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF LAREDO THAT:

 

Section 1:               The City Manager be and is hereby authorized to execute a contract with South Texas Traffic Co., for the approximate 97,032  square foot facility  which includes 71,432 square feet of warehouse space and 25,600 square feet of trailer parking area within Foreign-Trade Zone No. 94-Site 3 located at Killam Industrial Park for the operation of a portion of Foreign-Trade Zone Site No. 3 within Foreign Trade-Zone No. 94, granted by the Foreign-Trade Zones Board to the City of Laredo, a copy of which contract is attached hereto as Exhibit A, and incorporated herein as if set out at length.

 

Section 2:               This Ordinance shall become effective upon passage hereof.

 

 

 

 

 

AN ORDINANCE AUTHORIZING A CONTRACT BETWEEN THE CITY OF LAREDO AND  SOUTH TEXAS TRAFFIC CO.

 

 

 

 

 

                PASSED BY THE CITY COUNCIL AND APROVED BY THE MAYOR ON THIS THE ____ DAY OF ________________, 2002.

 

 

 

 

 

_________________________

ELIZABETH G. FLORES

MAYOR

 

ATTEST:

 

_________________________

GUSTAVO GUEVARA, JR.

CITY SECRETARY

 

APPROVED AS TO FORM:

JAIME L. FLORES

CITY ATTORNEY

 

 

BY:______________________

VALERIA M. ACEVEDO

ASSISTANT CITY ATTORNEY