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Wednesday, September 3, 2014

Gillibrand Urges Feds to Boost Suffolk County's Exports

Standing at International Warehouse Group, U.S. Senator Kirsten Gillibrand, a member of President Obama''s Export Council, and Suffolk County Executive Steve Bellone today urged the U.S. Commerce Department to approve Suffolk County''s request to expand its Foreign Trade Zone (FTZ) program, which would encourage more companies with import and export operations across the county to take advantage of associated tax breaks and incentives. 

Currently, Suffolk County and the Town of Islip manage a 52-acre FTZ site adjacent to MacArthur Airport. In an effort to expand the region''s exports, the County''s application to the Department of Commerce seeks to reorganize and allow more businesses across the county not currently located at that site to apply for the same benefits in an expedited and streamlined manner.  With Long Island''s exports growing, Senator Gillibrand is backing the county''s recently submitted application and is urging feds to quickly review and approve its request.

 "Suffolk County is well positioned to grow its exports and spark innovative ideas to jumpstart new businesses here where we need them the most,"  Senator Gillibrand said. "This new designation would encourage and equip more Suffolk businesses to better compete in the global economy. I will use my seat on the President''s Export Council to work with Commerce Under SecretarySánchez, to ensure that Long Island businesses have the tools they need to succeed and thrive." 

"I thank Senator Gillibrand for advocating on behalf of Suffolk County's FTZ expansion application which will afford Suffolk County businesses more opportunities and serve as an attraction for new businesses," said County Executive Steve Bellone. "For the past 30 years, Suffolk County and the Town of Islip have administered this program with limited success due to its structure.  We agree with the FTZ Board in that attracting businesses to a specific site in order to utilize the benefits of the FTZ is challenging, especially in these tough economic times.  The Alternative Site Framework with its expedited review process and flexibility, offers Suffolk County an opportunity to maximize the potential of the FTZ program, enhancing the diversity and viability of our local economy."

"I proudly join Senator Gillibrand and County Executive Bellone on continuing to expand on this key tool to Economic Development on Long Island," said Islip Town Supervisor Tom Croci. "We have aggressively made use of our FTZ at Islip's Long Island MacArthur Airport and understand that in order to keep businesses in New York State it is vital that our elected officials have this key tool at their disposal."

Jeffrey Heydt, CEO of International Warehouse Group said, "I would like to thank Senator Gillibrand and Suffolk County Executive Steven Ballone for their push for Suffolk County''s restructuring. This restricting will allow Suffolk businesses, including my own, to access this program in an expedited way and bring with it quicker savings. International Warehouse Group would be able to grow, hire additional employees, and expand to future locations on Long Island. Saving money with hopes of bringing manufacturing back to Long Island is a win win." 

"As Long Island businesses continue exporting more goods, we welcome Senator Gillibrand''s support of Suffolk County's request to expand its Foreign Trade Zone, which will reduce the cost of doing business here and attract new companies and jobs to the region," said Kevin Law, President of the Long Island Association.

In her letter to Under Secretary for International Trade Francisco Sánchez, Senator Gillibrand wrote, "Expanding into an ASF (Alternative Site Framework) will enable Suffolk County to attract new and diverse businesses into the FTZ program that will result in strengthening  the local economy. The Alternative Site Framework designation, with its expedited review and simplified application process, will enable Suffolk County to grow existing industries while also attracting new businesses to take advantage of the associated tax breaks and incentives that an FTZ offers. In particular, this new designation will drastically cut the amount of time for establishing FTZ Usage Driven Sites for newly participating businesses." 

Suffolk was granted a foreign-trade zone status in 1980, where the Town of Islip currently manages a 52-acre General Purpose Zone in Ronkonkoma, helping to encourage U.S. activity and allow reduced duty payments on foreign merchandise and other savings for companies that setup within the site. Over the years, Long Island has been expanding its exports, generating $8.6 billion of overseas business in 2007 to nearly $11 billion in 2011, with Suffolk County accounting for an estimated 8.4 percent of New York State''s exports value.

Suffolk County's request to reorganize its FTZ program, also known as the Alternative Site Framework designation, would enable the county to grow existing industries while attracting new businesses to take advantage of the associated tax breaks and incentives that an FTZ offers without relocating to the General Purpose Zone. 

FTZ benefits include waiving a portion of federal taxes for goods coming into an FTZ zone, reduced costs for assembling or manufacturing products in the region before shipping to foreign markets, and lower custom fees on products made with imported materials. This new designation would also drastically cut the amount of time it takes for companies to process their FTZ subzones requests from a typical two-year process to a year or less.

The International Warehouse Group, which provides storage and assembling services for some of the largest companies in the New York area, would see significant cost savings for its clients and would be able expand their business and create more jobs. 

In order to ensure that the County and the Town of Islip can still attract businesses to the FTZ-approved Ronkonkoma location for years to come, the county also requested that the feds grant the FTZ designation indefinitely for Ronkonkoma and permanently waive the required five-year sunset.

As a member of the President's Export Council since February, Gillibrand is working to ensure that small businesses and entrepreneurs are able to grow their businesses by accessing new markets for their products and services through expanding their exporting opportunities.  The President''s Export Council is the nation's primary advisory committee on international trade. The council makes recommendations to the President on matters relating to U.S. export trade by conducting surveys and evaluating the expansion practices of the communities represented by its members.

Full text of Senator Gillibrand's letter is below:

Dear Under Secretary Sánchez,

I am writing in support of the application submitted by Suffolk County requesting the expansion of the Foreign Trade Zone (FTZ) #52 from the Traditional Site Framework to the Alternative Site Framework (ASF) with an expedited review process through the U.S. Foreign-Trade Zones Board under the U.S. Department of Commerce''s International Trade Administration.  Expanding into an ASF will enable Suffolk County to attract new and diverse businesses into the FTZ program that will result in strengthening  the local economy.

Suffolk County's economic base has changed drastically since its original FTZ designation in 1980. Over recent years, the region has seen a spike in start-up aerospace, electronics, engineering and bio high-tech companies  as well as education and health service companies that have thrived in Suffolk County and have established strong regional industry clusters. Economic activity in the last decade, however, has not grown as quickly as expected, and from 2000 to 2011 employment growth was largely flat. The FTZ General Purpose Zone, which consists of a 52+ acre site that includes a multi-user commercial warehouse space and additional infrastructure that the Town of Islip has made significant investment into, has provided the region an addition resource to help grow its businesses by allowing Long Island companies to tap into the more than 95 percent of the world's consumers who live outside of the United States. There are currently 33 businesses occupying FTZ #52 with additional opportunities for growth.  In fact, Long Island has been expanding its exports, from $8.6 billion of overseas business by Long Island companies in 2007 to close to $11 billion in 2011, making up about 13.3 percent of the value of exports for all of New York State in 2011. The ASF would allow for this General Purpose Zone to continue, but also expand and expedite FTZ resources for those not physically located within its boundaries.

While Suffolk County has had success in the past 30 years with attracting new businesses, they remain focused on retaining and assisting their manufacturers as well as warehouse and logistic companies by offering programs, including financial assistance, to upgrade equipment and facilities and with a focus on increasing exports through an expanded customer base both domestically and internationally. The Alternative Site Framework designation, with its expedited review and simplified application process, will enable Suffolk County to grow existing industries while also attracting new businesses to take advantage of the associated tax breaks and incentives that an FTZ offers. In particular, this new designation will drastically cut the amount of time for establishing FTZ Usage Driven Sites for newly participating businesses to take advantage of the benefits from what is typically a two-year process to between nine months to a year, as well as lower the expense that is incurred. This new designation therefore will reduce burdens on participation within the County FTZ program, making it easier for Suffolk's business community to take advantage of FTZ benefits, including reduced costs of assembling or manufacturing of products in the United States before exporting to foreign markets and cost-savings from certain imports.

In addition, given the significant investments the County and the Town of Islip have made to develop the General Purpose Zone in Ronkonkoma, I request that you also approve the request to permanently waive the sunset period of five years, allowing for the County and Town to have certainty moving forward in marketing the site and its FTZ incentives as a place for business for interested companies for many years into the future.