Hebron Free Trade Zone Buildings Change Hands
HEBRON Dividend Capital Trust (DCT) of Denver, Colo., Wednesday announced the acquisition of three structures in Hebron's free-trade zone development, Park West, from New York-based American Real Estate Holdings. Total space in the structures is 1.2 million square feet.
"With our second purchase in Park West, DCT is now one of the top three owners in this important submarket of Cincinnati. The purchase positions DCT to better serve its customers given our critical mass of distribution space," said Teresa Corral, vice president of due diligence for DCT.
Industrial Development International (IDI), a leading national developer, constructed the buildings in 1997 and 1998. The newly acquired buildings, positioned six minutes from the airport off route 237 in Hebron, are 96 percent leased. Tenants include Cummins Engine, The Gap, and United Parcel Service.
The Greater Cincinnati Chamber of Commerce serves as the Grantee for the FTZ program in this region with FTZ No. 46 in Southwestern Ohio and FTZ No. 47 in Northern Kentucky. For Northern Kentucky the FTZ designated property for development as well as warehouse space for lease/sale is in Boone County's Park West International which covers 190 acres in Hebron.
According to the Kentucky Cabinet for Economic Development, the primary advantages associated with a foreign-trade zone or sub-zone is the following (Source: 19 U.S.C. § (e)):
• No duty is paid on re-exported merchandise.
• If the merchandise is sold domestically, no duty is paid until it leaves the zone or zones.
• Generally, no duty is paid on waste or yield loss.
• Duty on scrap is eliminated or reduced.
• Generally, if foreign merchandise is manufactured into a product with a lower duty rate, then the lower duty rate applies on the foreign content when duty is paid.
• Merchandise in a foreign-trade zone may be stored, repackaged, manipulated, manufactured, destroyed or otherwise altered or changed.
• Foreign good and domestic good held for export are exempt from state and local property taxes.
Greg Jones, former president of the National Association of Foreign Trade Zones and presently a foreign-trade zone consultant for Foreign-Trade Zone Corporation in Mobile, Ala., stated, "FTZ's do tend to attract real estate developers. But the plain fact is that FTZ status does not confer any real value to a piece of property. [W]hen I think of the term ‘Foreign-Trade Zone,' I tend to think of ‘Foreign Trade' rather than ‘Zone.' To me, ‘Foreign-Trade Zone' refers to a federal trade program that is designed to enhance the competitiveness of U.S.-based business, and thereby enhance the quality of life for people living and working here in the United States. The designation of pieces of property as ‘Zones' is incidental in my view."
In a press release on Nov. 20, U.S. Sen. Jim Bunning (R-Southgate) commented that FTZ's will fuel the economic engine in Kentucky and create jobs.
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