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City Council Report Date: September 14, 2026 To: City Council Through: Scott Butler, City Manager Brent Stoddard, Assistant City Manager From: Jaye O’Donnell, Economic Development Director Chris Molnar, Economic Development Administrator Subject: Operator Agreement between the City of Mesa and JX Advanced Metals USA, Inc. within U.S. Foreign-Trade Zone No. 221 Council District 6 Purpose and Recommendation The purpose of this request is to present an Operator Agreement between the City of Mesa and JX Advanced Metals USA, Inc. (JXAM) for a foreign-trade zone (FTZ) usage-driven site consisting of approximately 279,000 SF at 10036 E Germann Rd. Upon execution, this agreement will allow JX Advanced Metals USA, Inc. to undertake foreign-trade activities at the Premises in accordance with the standards of operations required by the United States of America, U.S. Customs and Border Protection, the Foreign-Trade Zones Board, and all other applicable laws, regulations, executive orders, and proclamations. Staff recommend that Council approve the signing of an Operator Agreement with JX Advanced Metals USA, Inc. Background JX Advanced Metals USA, Inc. is a high-quality metals manufacturer supporting the semiconductor industry. They have been operational in Chandler, AZ since the early 1990s, however, this Mesa location will gradually more than double the production capacity of the Chandler plant, allowing them to serve an expanding customer base in the U.S. and Europe. JXAM will be manufacturing, storing, distributing, recycling scrap, and exporting with the proposed site. City of Mesa believes that this expansion to Mesa and subsequent FTZ designation will have an overall positive economic impact on Maricopa County. We strive to provide area businesses with programs that will enable them to be as competitive as possible and encourage Zone participation to qualifying Users. The increase in business investment and activity resulting from this new FTZ site will benefit by creating jobs, generating additional tax revenue, and facilitating new growth opportunities. JXAM intends to submit a production notification for approval by U.S. Customs and Border Protection. 2 JXAM Advanced Metals USA, Inc. received FTZ site status approval from the United States Department of Commerce Foreign-Trade Zones Board on May 12, 2026. An Operator Agreement with the City of Mesa as Grantee of FTZ No. 221 is the next step toward FTZ site activation. Discussion The FTZ program promotes domestic economic activity by helping U.S.-based operations remain competitive with foreign alternatives. The main purpose of the FTZ program is to encourage companies to manufacture, assemble, and invest in the U.S. instead of moving those operations overseas. Many products today are made from parts and materials that come from multiple countries. Without an FTZ, companies may pay customs duties multiple times as products move through different stages of manufacturing and distribution. The FTZ program helps simplify that process and prevents unnecessary expense on imported components used in U.S.-based production and manufacturing. Benefits may include deferred, reduced, or eliminated duties on imported goods, as well as other cost savings. By reducing those costs, FTZs help make it more competitive for companies to keep manufacturing, logistics, and technology operations and jobs in American communities like Mesa rather than relocating them internationally. Companies operating within an FTZ still pay local property taxes, utility costs, development fees, and other applicable taxes and obligations. The City’s role is to support economic development opportunities that bring investment, jobs, and long- term economic activity to Mesa while administering the program in accordance with federal law. Foreign-Trade Zones are secure, restricted-access sites located in or near U.S. ports of entry and authorized by the Foreign-Trade Zones Board. They operate under the supervision of U.S. Customs and Border Protection (CBP). For customs purposes, merchandise within an FTZ is treated as outside U.S. customs territory for formal entry procedures. Alternatives If Council does not approve the Operator Agreement with JX Advanced Metals USA, Inc., they would not be in compliance with requirements of the FTZ program and be able to proceed with activation of the zone. In addition, the company’s operations in Mesa and ability to efficiently and cost-effectively operate its facility could be adversely affected. Fiscal Impact JX Advanced Metals USA, Inc. will pay to the City of Mesa a one-time activation fee of $1,000, as well as an annual Operator fee of $5,000. These fees are subject to adjustment in accordance with the Zone Schedule. 3 Coordinated With This agreement has been coordinated with the City Attorney's office.