News Article | 12/15/2005

Signs point to county’s Foreign Trade Zone area

For most people making the daily commute along Interstate 55, there’s probably nothing remotely foreign about the land along the west side of the highway that encompasses the 219-acre DeSoto Trade Center.

But if you happen to be a company that does international business, the area just south of the Civic Center between I-55 and U.S. 51 is foreign — at least in the eyes of the U.S. Department of Commerce — and developers want you to know it.

That would explain the signs recently erected along the I-55 corridor by the Mississippi Department of Transportation, touting the Trade Center’s Foreign Trade Zone status.

The signs were requested by the park’s developer, Dallas-based Hillwood Properties.

“It’s not uncommon for trade zones to be identified on highway signs in other parts of the country,” said Colliers Wilkinson and Snowden chairman Dan Wilkinson, who has represented Hillwood in a number of Trade Center deals. “Hillwood just wanted to do that here.”

The Trade Center was granted the FTZ status in September 2004 after a two-year drive by Hillwood, the DeSoto County Economic Development Council and the City of Southaven.

FTZs are designated, secured areas within the United States that are considered outside the customs territory of the United States.

Foreign shipments destined for locations within foreign trade zones are allowed to enter the country and travel to their destinations without passing through customs. Customs officials become involved only when the products leave the warehouse for a domestic location.

Locating within an FTZ reduces duties and taxes and eliminates disruption in the supply chain.

Officials expect the FTZ designation to help lure companies that do business internationally.

“As companies look to control costs and expenses, some find that being able to store goods without a duty is an advantage,” said Jim Flanagan, executive director of the Economic Council.

Having the FTZ status has been a critical factor for a number of tenants who have located here that would not have otherwise, Wilkinson said.

Earlier this year Hillwood leased almost 117,000 square feet in Trade Center Building 1 to Kenco Logistics Services, a provider of logistics services for several Fortune 100 companies.

The Chattanooga-based company is using the site to distribute products for Audiovox that are imported from overseas. By operating from an FTZ, Kenco and other companies at the Trade Center gain a strategic advantage.

“It substantially cuts down on paperwork and ultimately can save a company substantial sums of money (annually),” Wilkinson said.

In November 2001, Hillwood bought 93 acres for the first phase of the Trade Center with an option for an additional 125 acres.

The developer eventually plans to build 2.2 million square feet of additional warehouse space in the park.