Mesa approves foreign-trade subzone deal with electronics company

An electronics supply chain company has entered into an agreement with Mesa to operate in a foreign-trade subzone at three locations.

The Mesa City Council approved the agreement during its Monday meeting on a 5-0 vote. Mayor Mark Freeman and Councilmember Alicia Goforth were absent from the meeting.

The agreement was on the council’s consent agenda in which all matters are approved with one motion and vote.

The agreement will allow Arrow Global Supply Chain Services Inc. to operate a foreign-trade subzone at 7449 E. Pecos Road, 7453 E. Pecos Road and 7250 S. Sossaman Road.

Under the deal, Arrow Global Supply Chain Services will pay the city a one-time activation fee of $1,000, as well as an annual operator fee of $5,000.

Arrow Global Supply Chain Services, a wholly owned subsidiary of Arrow Electronics, provides services to customers around the world, according to a staff report.

“Their warehouse logistics center along Pecos and Sossaman Roads is a key part of Arrow’s global supply chain infrastructure, enabling faster, more resilient distribution for its electronics supply chain clients,” the report continued.

Operations at the three sites will include importing, exporting, receiving, repackaging, quality control inspections and distribution.

“At this time, no production activity is proposed or anticipated,” the report stated.

As a subzone within Mesa’s Foreign Trade Zone, the company can take advantage of deferred, reduced or even eliminated import-export duties on foreign materials and components used for manufacturing and assembling.

“Without an FTZ, companies may pay customs duties multiple times as products move through different stages of manufacturing and distribution,” the staff report stated.

In April, Arrow Global Supply Chain Services received FTZ site status approval from the U.S. Department of Commerce Foreign-Trade Zones Board. The operator agreement with Mesa is the next step toward FTZ site activation.

Companies operating within an FTZ must still pay local property taxes, utility costs, development fees and other taxes and obligations.

The Mesa FTZ originated at Mesa Gateway Airport but was reorganized to include the entire city.

Janet Perez can be reached at jperez@iniusa.org. Please send your comments about this article to AzOpinions@iniusa.org. We are committed to publishing a wide variety of reader opinions, as long as they meet our Civility Guidelines.