| ITEM #: 6. DATE: 11/17/2025 AI #:2926 |
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CITY COUNCIL ACTION REPORT
| SUBJECT: | RESOLUTION AUTHORIZING THE AMENDED AND RESTATED FOREIGN TRADE ZONE (FTZ) AGREEMENT FOR SUB-ZERO GROUP, INC. |
| STAFF PRESENTER(S): | Darah Mann, Deputy Director of Economic Development |
SUMMARY
Sub-Zero Group, Inc. has requested to combine their two Goodyear sites, the currently activated site and their future activated site, into a single Sub zone to achieve operational efficiencies and is seeking Council approval to amend and restate their Foreign Trade Zone Agreement.
STRATEGIC PLAN ALIGNMENT
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RECOMMENDATION
ADOPT RESOLUTION NO. 2025-2943 AUTHORIZING AND SUPPORTING SUB-ZERO GROUP, INC.’S APPLICATION FOR THE CREATION OF A USER DRIVEN SUBZONE ENCOMPASSING BOTH SUB-ZERO’S COTTON LANE AND CAMELBACK LOCATIONS WITHIN THE GREATER MARICOPA FOREIGN TRADE ZONE (GMFTZ); AUTHORIZING THE CITY MANAGER, OR DESIGNEE, TO EXECUTE THE AMENDED AND RESTATED FOREIGN TRADE ZONE AGREEMENT (PAYMENT IN LIEU OF TAX FEE) AND ALL RELATED DOCUMENTS NECESSARY FOR THE ESTABLISHMENT AND ACTIVATION OF THE SUBZONE UNDER APPLICABLE FEDERAL AND STATE LAWS, SUBJECT TO CONDITIONS. (Darah Mann, Deputy Director of Economic Development)
FISCAL IMPACT
An activated Foreign Trade Zone (FTZ) site provides a property tax benefit to qualified companies, reducing the real and personal property tax assessment ratio from 16.5% to 5%. Property tax savings to companies are only realized after they are activated FTZ sites, and after the company has made significant investments, increasing the property tax base of the property. The reduction in property taxes will only apply if Sub-Zero meets the requirements for a high-wage manufacturer as set forth in the Foreign Trade Zone Policy of the City of Goodyear dated August 28, 2023, adopted by Resolution 2023-2339 (the “2023 Goodyear FTZ Policy”). If Sub-Zero fails to meet the requirements for a high wage manufacturer, Sub-Zero will make payments so that the taxing jurisdictions receive 16.5% of the assessed valuation.
BACKGROUND AND PREVIOUS ACTIONS
In 2011, Sub-Zero opened its initial 440,000 square foot facility at its Goodyear facility at 4295 No. Cotton Lane.
On February 17, 2011, Council approved a Payment In Lieu of Tax (PILOT) Agreement, which was needed to support the activation of this site. The PILOT Agreement outlined an annual payment in the amount of the difference between the tax rates, which the city would distribute to the various taxing jurisdictions. The FTZ Board approved the activation of this site, which resulted in the reclassification of the existing tax rate to a lower, class 6 rate.
On May 22, 2012, Council approved a First Amendment to the PILOT Agreement, amending the amount of the PILOT fee following a successful challenge to the 2010 Maricopa County Assessor, resulting in a revised assessed value.
On June 11, 2015, Council approved a Second Amendment to the PILOT Agreement, amending the amount of the PILOT fee following a successful challenge to the 2011 Maricopa County Assessor, resulting in a revised assessed value.
On August 26, 2024, Council adopted Resolution No. 2024-2421 committing support for the future application for the activation and inclusion within the boundaries of FTZ No. 277 for the newly built second location totaling 599,700 square feet located at 17255 W. Camelback Road as a single-user, User Driven Foreign Trade Zone Site for the operation of a manufacturing facility by Sub-Zero Group, Inc.
On February 17, 2011, Council approved a Payment In Lieu of Tax (PILOT) Agreement, which was needed to support the activation of this site. The PILOT Agreement outlined an annual payment in the amount of the difference between the tax rates, which the city would distribute to the various taxing jurisdictions. The FTZ Board approved the activation of this site, which resulted in the reclassification of the existing tax rate to a lower, class 6 rate.
On May 22, 2012, Council approved a First Amendment to the PILOT Agreement, amending the amount of the PILOT fee following a successful challenge to the 2010 Maricopa County Assessor, resulting in a revised assessed value.
On June 11, 2015, Council approved a Second Amendment to the PILOT Agreement, amending the amount of the PILOT fee following a successful challenge to the 2011 Maricopa County Assessor, resulting in a revised assessed value.
On August 26, 2024, Council adopted Resolution No. 2024-2421 committing support for the future application for the activation and inclusion within the boundaries of FTZ No. 277 for the newly built second location totaling 599,700 square feet located at 17255 W. Camelback Road as a single-user, User Driven Foreign Trade Zone Site for the operation of a manufacturing facility by Sub-Zero Group, Inc.
STAFF ANALYSIS
Sub-Zero first established a 440,000 SF facility in Goodyear in 2011 and expanded it by 240,000 SF in 2015, investing a total of $102 million and creating 488 net-new jobs. This facility is located within FTZ No. 277 (Greater Maricopa Foreign Trade Zone) and operates under a Payment in Lieu of Taxes agreement.
Following a national site selection, Sub-Zero chose Goodyear for a second facility at 17255 W. Camelback Road, a 599,700 SF manufacturing facility representing a $117.8 million investment and projected to create 143 new high-wage jobs. Economic analysis estimates $5.6 million in direct tax benefits and $594 million in total economic impact over ten years.
Sub-Zero has requested to combine both of their Goodyear sites into a single Foreign Trade Zone sub-zone to provide operational and zone efficiencies by having a single Foreign Trade Zone operator manage both locations. Staff supports including and activating the second facility as a user-driven FTZ site under FTZ No. 277, consistent with the 2023 Goodyear FTZ policy, provided Sub-Zero executes the Foreign Trade Zone Agreement with Payment in Lieu of Taxes terms. The development is expected to provide significant public benefit through job creation, capital investment, economic activity, and the catalytic effect on further city development.
Staff recommends adopting Resolution No. 2025-2943, included as Attachment A.
Following a national site selection, Sub-Zero chose Goodyear for a second facility at 17255 W. Camelback Road, a 599,700 SF manufacturing facility representing a $117.8 million investment and projected to create 143 new high-wage jobs. Economic analysis estimates $5.6 million in direct tax benefits and $594 million in total economic impact over ten years.
Sub-Zero has requested to combine both of their Goodyear sites into a single Foreign Trade Zone sub-zone to provide operational and zone efficiencies by having a single Foreign Trade Zone operator manage both locations. Staff supports including and activating the second facility as a user-driven FTZ site under FTZ No. 277, consistent with the 2023 Goodyear FTZ policy, provided Sub-Zero executes the Foreign Trade Zone Agreement with Payment in Lieu of Taxes terms. The development is expected to provide significant public benefit through job creation, capital investment, economic activity, and the catalytic effect on further city development.
Staff recommends adopting Resolution No. 2025-2943, included as Attachment A.