Port authority makes inroads to FTZ status

Jul 23, 2010 — The Hawk Eye

Rex L. Troute

Jul. 23, 2010 (McClatchy-Tribune Regional News delivered by Newstex) -- FORT MADISON -- The Southeast Iowa Regional Economic and Port Authority cleared one hurdle since its March meeting -- money. The process for clearing its largest hurdle -- Foreign Trade Zone status -- may have started at Thursday's board meeting.

The money aspect was achieved in April when SIREPA received $50,000 from the Rebuild Iowa Infrastructure Fund.

For four years, SIREPA has been trying to establish FTZ status to get the port authority concept truly off the ground, but has been consistently turned down by Moline -- the closest FTZ.Another option on attaining status was presented to the board via telephone Thursday by Lowell Junkins, the former executive director of the Lee County Economic Development Group.

The U.S. Department of Commerce has created a hybrid option, where an entity such as SIREPA can be a subzone of a general purpose zone, which already has FTZ status.

"It is a new option of bringing trade zones to areas," Junkins said. "The Department of Commerce is interested in seeing ideas like this progress."

The idea is for the Southeast Iowa Regional Economic and Port Authority to become a subzone by partnering with a general purpose zone. SIREPA had to meet certain criteria to become a foreign trade zone, such as be within a required driving time from another FTZ such as the Quad Cities. That criteria does not apply to being a subzone. Thus, SIREPA can partner with FTZs in Des Moines, Cedar Rapids, the Quad Cities, and Peoria or Granite City, Ill.

"Discussions have taken place with general purpose zones, and they are interested in forming partnerships," said David Gudgel, SIREPA chairman.

Junkins and Gudgel have been making contacts in recent weeks. A general purpose zone would be interested in partnering with a subzone to reduce administrative costs, which can be substantial, Gudgel said.

If SIREPA were to reach subzone status, it would retain its independence, have to raise its own funding, create its own revenue streams, and make its own decisions concerning economic development. But the most important part is it would have full FTZ status, which it can promote to area businesses and anyone interested in building an industry in Lee County.

"The ultimate goal is to provide our existing industries the capability of having FTZ status and telling prospects that if they come to southeast Iowa, we will assist them on getting FTZ status,"Gudgel said. "Also to increase commerce that can create jobs for Lee County and be a stream of income for the port authority."

Junkins and Gudgel plan to contact the FTZ parties interested in partnering with SIREPA and report back at the next meeting on Aug. 18.

"We can be established within the next 60 days," Gudgel said of becoming a subzone. "We get that off the table, and we can get onto other things."

If FTZ status is attained as a subzone, then SIREPA can get on with trying to develop land for commercial use in Lee County as an industrial park.

Along the lines of partnering, SIREPA also broached the idea of forming an alliance with the Lee County Board of Supervisors to help with infrastructure and land acquisition for a proposed industrial park.

"I think we should partner with the county and show them what the opportunities are," said SIREPA board member Pat Breen via telephone.

Rick Larkin, a Lee County supervisor, agreed the board should hear from SIREPA. Larkin agreed to put the port authority on the work session agenda for at 10 a.m. Aug. 3.

While SIREPA was reaching out to other entities, Gudgel also proposed approaching Roquette America Inc. again about a promise made by the Keokuk company.

"They wish to partner and make a port of entry a reality down there," Gudgel said. He added he would take it upon himself to meet with the company to see if a Keokuk port was still a goal of Roquette's.

The SIREPA board also approved establishing an advisory committee, whose members could provide various forms of expertise to the mission. A list of possible members would go beyond Lee County and include people from Des Moines, Henry and Louisa counties. The board proposed contacting leaders in Burlington, Mount Pleasant and Wapello for suggestions for interested parties for the advisory committee.

"I think we need to fill out the complement of the board first," Breen said.

Board member Al Zastrow offered his resignation from the board, which opened up a spot.

"Al was valuable in the start of the port authority," said Steve Ireland, mayor of Fort Madison and the board's secretary.

Newstex ID: KRTB-1064-47227302