Foreign Trade Zone Secures CEDA Award For Hillsboro EDC, Frontier Supply Logistics
November 20, 2023
The Texas Economic Development Council (TEDC) presented its annual Community Economic Development Awards (CEDA) for 2023 at its annual conference in Houston last week.
The CEDA program recognizes exceptional contributions of TEDC member cities toward the economic vitality of their communities and the state of Texas through creativity, leadership, and partnership in the achievement of business retention, business recruitment and community improvement.
The CEDA committee received 24 applications this year. Nominees were judged on innovativeness, transferability, community commitment and leverage, measured objectives and secondary benefits.
Hillsboro Economic Development Corporation’s (HEDC) Administrator Art Mann submitted Frontier Supply Logistics (FSL) transload facility added to the industrial park this past year and its Foreign Trade Zone (FTZ) to the review committee.
While Lorena won the CEDA for Population 10,000 and Under category with a $300 million greenhouse project, Hillsboro’s submission was recognized for Secondary Benefits with the FTZ.
FSL owners Finn Jensen and Rick Cook, who were on hand for the award ceremony, secured the FTZ earlier this year with its application to U.S. Department of Commerce in Washington, D.C.
That was after letters of support were secured from the Hillsboro City Council. Hillsboro ISD Board of Trustees and Hill County Commissioners’ Court. Consultant William Menthenitis with Ernst and Young in Dallas then took the application to the DFW Airport Board last fall for regional approval before it was sent to Washington for consideration.
One of the major selling points in the FTZ process was the application applied to all of Hill County.
Methenitis pointed out, “FSL’s project by itself is an innovative use of the new rail spur and the Hillsboro EDC resources, but the way the FTZ part was put together, it gives all of Hill County immediate access to an FTZ, which is a significant on-going benefit.
“FSL could have applied for the FTZ for its project only. Instead, the company funded an application to add the entire county to the D-FW FTZ Service Area as the vehicle to allow FTZ designation for FSL.”
Should a future business locate anywhere in the county that can utilize the FTZ, it will only have to go through a relatively inexpensive 30-day application process in Washington before gaining approval.
Trade zones, which were established under the Foreign-Trade Zone Act of 1934, allow foreign and domestic merchandise to be moved into a zone. Rather than declaring items and paying tariffs when they arrive in ports, they can be relocated directly to a trade zone.
Under zone procedures, payment of duties are not required on foreign merchandise unless and until it enters U.S. Customs and Boarder Protection (CBP) territory for domestic consumption. At that point, the importer generally has the choice of paying duties at the rate of the original foreign materials or the finished product.
Domestic goods moved into a zone for export may be considered exported upon admission to the zone for purposes of excise tax rebates and drawbacks.
CBP will have a port director on site in Hillsboro to monitor the transfer of merchandise in and out of the zone. Federal officials were recently in Hillsboro to conduct its initial inspection of FSL’s operations. The trade zone is expected to be operational in the coming weeks.
The company now controls over 200 acres in Hillsboro’s original industrial park, including a 70-acre tract recently purchased at the corner of Spur 579 and Morrow Drive. It will become home of a 500,000-square-foot warehouse that is expected to house FTZ and other products.
FSL started in 2018 in Cook’s back yard east of Hillsboro with four employees. The payroll now includes over 100 employees with an additional 50 to be added with the completion of the warehouse.
Other communities submitting CEDA nominations in the Population 10,000 and Under included Brookshire, Kaufman and Lamesa.
Other award winners were Population 10,001 to 20,000—Mount Pleasant Economic Development Corporation; Population 20,001 to 50,000—Sherman Economic Development Corporation; Population 50,001 to 100,000—Orange County Economic Development Corporation; Population 100,001 to 250,000—Development Corporation of Abilene; Population 250,001 and Above—Lubbock Economic Development Alliance; Innovativeness—Allen Economic Development Corporation; Transferability—Seguin Economic Development Corporation; Community Commitment and Leverage—Calhoun County; and Measured Objectives—City of Waco and McLennan County
“Our Community Economic Development Award is one of the ways in which our organization honors the excellent work done by our communities, their leaders, and their economic development professionals,” noted Ray Dunlap, 2023 Board Chair of TEDC. “Each community nominated achieved excellence in economic development and substantially improved the economic base of their respective regions. The recipient communities in each population category were recognized for extraordinary accomplishments in meeting the criteria set forth in the nomination process.”
The TEDC provides information, education and legislative services to its members to foster the expansion of existing businesses, the location of new firms and the development of strategies that promote a positive business climate in Texas.
With 1,000 members, the TEDC is the largest state economic development association in the nation.