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HomeMy WebLinkAboutResolution - 2006-R0061 - Foreign Trade Zone Management Agreement - Market Lubbock - Airport FTZ - 01/31/2006Resolution No. 200646661 February 9, 2006 Item No. 5.13 RESOLUTION BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF LUBBOCK: THAT the Mayor of the City of Lubbock BE and is hereby authorized and directed to execute for and on behalf of the City of Lubbock a Foreign Trade Zone Management Agreement, by and between the City of Lubbock and Market Lubbock Economic Development Corporation, d/b/a Market Lubbock, Inc, d/b/a Vist Lubbock for Foreign Trade Zone 260 located at Lubbock Preston Smith International Airport, and all related documents. Said Agreement is attached hereto and incorporated in this Resolution as if fully set forth herein and shall be included in the minutes of the Council. Passed by the City Council this 9th day of February- , 2006. MARC M DOUGAL, MAYOR ATTEST: cam. ebe ca Garza, City Secretary APPROVE AS TO CONTENT: Rob Allison, i Director of Development Services APPROVED AS TO FORM: Linda L. Chamales, Senior Attorney Office Practice Section As/ccdocs/Res-FTZ Mgmt. Agmt January 30, 2006 CONTRACT NO. Resolution No. 2006-R0061 6731 AGREEMENT BETWEEN THE CITY OF LUBBOCK AND MARKET LUBBOCK ECONOMIC DEVELOPMENT CORPORATION, d/b/a MARKET LUBBOCK, INC., d/b/a VISIT LUBBOCK FOR MANAGEMENT OF FOREIGN TRADE ZONE 260 STATE OF TEXAS § COUNTY OF LUBBOCK § This agreement is between the City of Lubbock (hereinafter called "City") and Market Lubbock Economic Development Corporation, d/b/a Market Lubbock, Inc., d/b/a Visit Lubbock (hereinafter called "MLI"). WHEREAS, pursuant to 15 CFR Section 400 and Texas Civil Statutes Article 1446.22, the City of Lubbock, as a port of entry, applied for and was appointed the grantee to establish a Foreign Trade Zone in 2003 to promote international trade and to encourage new businesses to relocate operations in Lubbock; and WHEREAS, Foreign Trade Zone 260 (FTZ-260) was designated in January 2004 and the Northport 273 acres location at Lubbock Preston Smith International Airport was activated in January 2005; and WHEREAS, the City, as grantee, determined that it would require management services for operation of the newly created Foreign Trade Zone 260 (FTZ-260); and WHEREAS, MLI created for the purpose of promoting assisting and enhancing economic development in and around the City of Lubbock; and WHEREAS, MLI has hired a Director with experience in the operation of foreign trade zones and MLI desires to operate FTZ-260 on behalf of the City; NOW, THEREFORE, the City and MLI enter into a management agreement for FTZ-260 as follows: I. Section One. Recitals and Exhibits Part of Agreement. 1.1 The representations, covenants and recitations set forth in the foregoing recitals are material to this management agreement and are hereby incorporated into and made a part of this agreement as though they were fully set forth in this Article I. II. Section Two. MLI Responsibilities 2.1 MLI agrees to manage and operate FTZ-260 in compliance with all applicable state and federal laws and regulations, including the FTZ 260 Zone Procedures Manual reviewed by United States Customs; and 2.2 MLI agrees to hire and retain a Director with experience in foreign trade zones to assist in the management and operation of FTZ-260; and 2.3 MLI agrees to provide inventory control systems, customs documentation management, facility or lease management, logistics support, security and direct interface with U. S. Customs, Treasury, IRS, and zone tenants as required in operation of FTZ-260. Section Three. City Responsibilities. 3.1 City, upon development of a tariff schedule and recommendation from MLI, shall approve, as necessary, a published tariff schedule that serves as the basis of the zone's operation; and 3.2 City hereby approves and ratifies the tariff schedule entitled "Schedule of Rates, Fees and Charges," approved by the MLI Board of Directors, marked Exhibit A which is attached hereto and incorporated as if fully set forth herein. IV. Section Four. Fees. 4.1 All fees collected in connection with FTZ-260 shall be retained by MLI for use in operation of the foreign trade zone. 4.2 Any unused fees shall be used by MLI for economic development purposes, as defined in Texas Government Code 5190.6, Sec. 4A. V. Section Five. Term. 5.1 Unless otherwise mutually extended in writing by the City and MLI, the term of this management agreement shall begin upon activation of the Northport 273 acre portion of FTZ-260 and end December 31, 2007. VI. Section Six. Assignment 6.1 This management agreement shall not be assigned or transferred by MLI without the prior written consent of the City. VII. Section Seven. Accounting. 7.1 MLI shall maintain detailed financial records of FTZ-260 funds in the manner required by federal regulations for all (1) funds collected, either by tariff or other fees; (2) administrative expenses` in operating the zone; and (3) economic development expenditures. MLI shall, upon request and during normal business hours provide access to its FTZ-260 books and records to the City. The cost of all audits deemed necessary by City shall be the responsibility of MLI (which may be paid from FTZ-260 funds). VIII. Section Eight. Indemnification. 8.1 To the extent allowed by law, MLI shall indemnify and save harmless the City and its officers, agents, and employees from all suits, actions, losses, damages, claims, or liability of any character, type or description, including, without limiting the generality of the foregoing all expenses of litigation, court costs, and attorney's fees for injury or death to any person, or injury to any property, received or sustained by any person or persons or property, arising out of, or occasioned by the acts of MLI, its agents or employees, in the execution or performance, or omissions of performance, of or under this management agreement. EXECUTED in duplicate this 9th day of February, 2006. CITY OF LUBBOCK MARC McDOxJGAL, MAYOR ATTEST: Re ecca Garza, City Secretary APPROVED AS TO CONTENT: Rob Allison ctor of Development Services APPROVED AS TO FORM: Linda L. Chamales, Senior Attorney Office Practice Section LLC: City att/Linda/ MLl FTZ Management Agmt June 15, 2005 MARKET LUBBOCK ECONOMIC DEVELOPMENT CORPORATION, d/b/a MARKVT LUB OCK, INC., d/b/a VISIUBBK (� GARY LAWRENCE, CEO EXHIBIT "A" VI, SCHEDULE OF RATES, FEES AND CHARGES Introduction Any person or entity that uses the Foreign Trade Zone shall be assessed a fee as outlined below. The User of the Zone must first execute an agreement with the Operator. Within that agreement, the fee for services to use the Zone references this Tariff Agreement as the basis for any fee or charge, Zone User and Grantee may contract for services beyond the minimum fees for services outlined below, which may be due to the particular needs or requirements of the User. Nothing in this tariff shall restrict or prohibit the Operator and User from contracting for fees and services beyond what is listed in the Tariff. A. ZONE PROCESSING FEE FOR ENTRIES The Operator shall assess the User a fee of Eighty Five and no/100 ($85.00) for every entry (Bill of Lading) into the Zone. The Operator shall prepare a CF 214 and submit this document to Customs. The Operator shall open a Zone Lot file and open an inventory file for the User, as well as prepare a Tally In Reconciliation report. All of the above procedures are more fully described in the Zone Manual. In addition, the Operator shall asses the User a fee of Fifteen. and no/100 dollars ($15.00) for preparation of CF 216 which describes the activities to be performed in the Zone. The Operator will submit this document to Customs at the . time of entry. For routine, ongoing activity, Customs may approve a blanket CF 216 which would describe the Zone activities and cover all Zone entries for a Twelve (12) month period. The Operator may also assess a fee of Fifteen and no/100 dollars ($15.00) for every additional invoice entered with the CF 214. The Operator may also assess the User a fee of Five and no/100 ($5.00) per Customs Tariff classification line beyond three (3) for the CF 214. In summary, the fees for entry are as follows: $85.00 for entry preparation of the CF 214, the opening of a Zone Lot file and Tally in. $20.00 for preparation of the CF 2.6 $20.00 for every additional invoice entered with the CF 214. $ 7.50 for every three Custom Tariff classification over the three (3) on the CF 214. B. ZONE PROCESSING FEE FOR WITHDRAWAL FROM THE ZONE The Operator shall assess the User a fee of Seven and 50/100 dollars ($7.50) for every adjustment to the Zone Lot and prepare a Tally Out Withdrawal report. The Operator shall assess the User a fee of Sixty and no/100 dollars ($60.00) to close out a Zone Lot'and prepare reconciliation of the Zone Lot Inventory. The Operator shall assess the user a minimum fee of Sixty Five and no/100 dollars ($65.00) for preparation of the Customs entry documents into the ( United States (CF 3461 and CF 7501). The fee may be higher depending upon �- the length and complexity of the entry. User and Operator will agree upon the appropriate charge. The Operator shall assess the User a fee of Fifty Five and no/100 dollars ($55.00) for preparation of the Customs in -bond document CF 7512 associated with Zone withdrawals for export. In summary, the fees for withdrawal are as follows: $7.50 for every Zone Lot withdrawal and Tally Out. $60.00 for every Zone Lot closed and reconciled. $65.00 for every Customs entry. $55.00 for every export from the Zone (CF 7512). C. FEE FOR START-UP OF ZONE OPERATIONS The Operator will assess the User an initial fee to set up Foreign Trade Zone inventory files, Customs and operations procedures and activation application. The fee for start-up will be based upon a per hourly charge at a rate of one hundred fifty dollars ($150.00) per hour. The total number hours will be determined by the Operator based upon the facts associated with the User's start- D. FEE FOR USER'S DISCONTINUANCE OF ZONE OPERATIONS The Operator shall assess the User a fee of Seventeen Thousand and Five Hundred dollars ($17,500.00) to terminate a User's use of the Foreign Trade Zone. This fee will be to reconcile all Zone records and conduct an audit as appropriate. The Operator may assess this fee if a Zone User has activated and not used the Zone for a period of six (6) months. The Operator assessment for discontinuance may be waived for good cause as demonstrated by User. The operator shall be the sole determinant of "good cause". E. ZONE ANNUAL MANAGEMENT FEE TO TENANT $10,000.00 TO $75,000.00 depending on size of business and activity. VIII. APPLICABLE FORMS, BADGES REPORTS FORMS: CF — 214 CF — 3461 CF — 7501 CF — 6043 BADGES: Employee ID Visitor's Pass CF — 7501 CF — 7512 CF — 7525 FTZ Activity Permit r ZONE USERS' FTZ-260 APPLICATION, ACTIVATION AND ANNUAL FEES l 1. General Purpose Zones: a. application fee - US$ 7,500.00� V ao�t� b. activation fee - US$ 4,500.00 c. annual fee - US$ 8,000.00 ` •`S , '� 2. Sub Zones: a. application fee - US$ 7,500.00 b. activation fee - US$ 4,500.00 c. Annual fee - US$12,OOO.00