Space company seeks foreign trade zone in Gilbert

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Associated Press

Posted on October 13, 2012 at 1:30 PM

Updated Saturday, Oct 13 at 1:30 PM

PHOENIX (AP) — A Virginia-based company that makes satellites and other space equipment is asking the federal government to designate its Phoenix-area plant a foreign trade zone after the town of Gilbert signed off on its plans.

Space-systems manufacturer Orbital Sciences Corp. says the designation would help the company keep up with overseas competitors.

The company operates a Gilbert manufacturing facility that it touts as one of the largest spacecraft assembly, integration and test facilities in the nation.

The Arizona Republic (http://bit.ly/P0GUHO) reports that the Gilbert Town Council approved the company's plans earlier this month. The proposed trade-zone adjustment now goes before the federal Foreign-Trade Zones Board.

Foreign-trade zones allow industrial plants to operate outside standard U.S. customs rules and helps companies avoid duties on imported goods. The provision is "especially useful" to firms that import smaller components before exporting a finished product, according to the federal government's Trade Information Center.

If it wins approval, Orbital Sciences would join Chandler's Intel Corp. and Glendale's Conair Corp. as some of the Phoenix-area plants benefiting from the special designation.

Orbital is seeking trade-zone status because it has a contract to build more than 70 satellites at its Gilbert facility, town Economic Development Director Dan Henderson said. The satellites are intended for France-based aerospace firm Thales Alenia, according to a company fact sheet.

Orbital is headquartered in Virginia but has major operations in Gilbert, Chandler, California and Maryland. The Gilbert site is part of the company's advanced programs and space-systems groups.

The Gilbert facility has produced and seen the successful launch of six spacecraft in support of commercial imaging, space science and military-technology demonstrations since 2005, according to Orbital.

In addition to the satellites for Thales Alenia, the facility is currently working on three new satellites for NASA.

While Henderson said the foreign-trade zone would give Orbital more "flexibility to grow and expand the business base" in Gilbert, the designation would come at a small cost to the town and local school districts, according to a town staff report.

Orbital currently pays property taxes at a rate of about 20 percent of assessed value, according to the report. When reclassified as part of a foreign-trade zone, the tax rate could drop to about 5 percent.

Based on 2011 tax data, the reclassification could allow Orbital to pay about $27,000 less in annual property taxes to the town, Gilbert Public Schools and the community college district, according to the report.

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Information from: The Arizona Republic, http://www.azcentral.com

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