SUBJECT: AMENDMENT
TO FOREIGN ZONE TRADE OPERATING AGREEMENT
COUNCIL DISTRICT: 7
SNI AREA: Spartan Keyes
Approval of an amendment to the Foreign Trade Zone Operating Agreement with San Jose Distribution Services to move the Foreign Trade Zone General Purpose Zone to 2055 South Seventh Street.
BACKGROUND
On February 18, 1997, the Council approved the Foreign Trade Zone operating agreement with San Jose Distribution Services. The company has contracted with the City since 1982 to operate the General Purpose Foreign Trade Zone in San Jose. On May 22, 2000, the Council approved an amendment to the agreement relocating the Foreign Trade Zone to 410 North Autumn Street, the current location of the Zone.
The City received Foreign Trade Zone designation in 1974 from the U.S. Department of Commerce. The Foreign Trade Zone is a designated territory within the U.S. that is considered outside the jurisdiction of the U.S. Customs Service. Merchandise stored, manufactured or assembled in the Foreign Trade Zone is considered to be in international commerce. Thus, companies importing products into the Foreign Trade Zone are able to delay, reduce or eliminate Customs duty payments and can access other benefits that enable businesses to compete more effectively in the global marketplace.
The U.S. Customs Service has approved a request by San Jose Distribution Services to relocate the Foreign Trade Zone. The City’s request for a minor boundary modification will be submitted to the U.S. Foreign Trade Zones Board of the U.S. Department of Commerce.
The proposed Foreign Trade Zone will be located to 2055 South Seventh Street, a recently renovated 330,000 square foot warehouse building, of which 805 square feet would be activated for the Foreign Trade Zone at this time. The new site will provide increased security and enhanced fire protection for businesses utilizing the Foreign Trade Zone.
Amending the Agreement with the Foreign Trade Zone operator will allow San Jose Distribution Services to continue to operate the Foreign Trade Zone and facilitate international trade and commerce in the San Jose area.
The Office of Economic Development has held discussions with San Jose Distribution Services, the operator of the City’s General Purpose Foreign Trade Zone.
The Amendment to the Foreign Trade Zone Operating Agreement has been prepared in consultation with the Office of the City Attorney.
Joseph Hedges
Acting Assistant Director
Office of Economic Development