CONAIR FTZ SUPPORT.PDF

nfl PHONE 602-230-0600
FAX 602-212-1787
WITHEY MORRIS 2525 E. Arizona Biltmore Circle, Suite A-212, Phoenix, AZ 85016
GMEERENICUIT2221
January 23, 2017
Shelby L. Scharbach,
Assistant County Manager and Chief Financial Officer
Maricopa County
301 W Jefferson St. Tenth Floor
Phoenix, AZ 85003
Re: Conair Corporation / Request to Expand Foreign Trade Subzone No. 75A
7101 N Glen Harbor Blvd, Glendale, AZ 85307
Dear Shelby:
We represent Conair Corporation regarding its property located at the northeast corner of
Glendale Avenue and Glen Harbor Blvd. in Glendale, AZ (the "Property") as shown on the aerial map
attached to Tab 1. Conair is one of the largest and most diversified consumer products companies in
the world. They are a global company that manufactures, distributes and sells professional salon
products, personal care products, consumer and commercial kitchen appliances, and cookware under
more than twenty-five brand names in over one-hundred and twenty countries around the world.
Conair is a significant contributor to the region's economy and specializes in the manufacture and
distribution of consumer products. They are a major employer in Glendale and a Fortune 200 company
that supports other economic development in the County.
The good news is Conair plans to expand onto vacant land which is adjacent to its existing
facilities. The proposed expansion includes a new 815,000 plus square foot building. This expansion
will result in a capital investment of $51 million in land, building and equipment, plus 300 new jobs at an
average wage of $31,973. The expansion area will occur on land that has been vacant for many years
and is the ideal use given its size and proximity to Conair's existing facilities.
Since 1992, Conair has operated a distribution center in the Glen Harbor Business Park in
Glendale, Arizona under Foreign Trade Subzone status. In 2009, the Foreign Trade Zone Board
approved an application to modify the boundaries of the Subzone to incorporate additional distribution
buildings. Similar Foreign Trade Subzone status is being sought for this new expansion area. The
existing Conair Foreign Trade Zone area covers approximately 100 acres. This new application simply
requests that the Foreign Trade Zone acres be expanded by approximately 17 acres. This minimal
request is necessary for the entire Conair campus to operate in a cohesive, reasonable fashion. For
this purpose, this application includes the requisite materials, narrative, exhibits, and letters as required
by the Maricopa County. We respectfully request the Maricopa County Board of Supervisors
recommend no objection of the subzone expansion for Foreign Trade Subzone 75A as described in this
submittal.
By
Adam Baugh

Conair Corporation
Request to Expand Foreign Trade Subzone No. 75A
7101 N GLEN HARBOR BLVD GLENDALE 85307
Property Owner/Applicant: Legal Representative:
Conair Corporation Withey Morris, PLC
7475 N Glen Harbor Blvd Attorney: Mike Withey/Adam Baugh
Glendale AZ 85307 2525 E. Arizona Biltmore Circle #A-212
Phoenix, Arizona 85016
Phone: (602)212-1787
Email: adam@witheymorris.com

Conair Corporation
Foreign Trade Subzone 75A — Expansion Application
Application Requirements
1. Name of Applicant
Conair Corporation
2. Name, Address, and Telephone of Contact Person
Withey Morris, PLC
Mike Withey/Adam Baugh
2525 E. Arizona Biltmore Circle #A-212, Phoenix, Arizona 85016
Phone: (602)212-1787
Email: adam@witheymorris.com
3. Address of proposed FTZ location and designation
Conair Corporation, 7475 N Glen Harbor Blvd, Glendale, Arizona 85307
Subzone 75A
4. Company Information
a. Detailed Company Overview
Conair is a significant contributor to the region's economy and specializes in the manufacture
and distribution of consumer products. The company currently employs about 450 people in
Glendale. Their original distribution center opened in 1992 and was expanded in 2009. This
second expansion will bring their total employment in Glendale to 750 people in 2.3 million
square feet. See map of existing and proposed expansion area at Tab 1.
The 300 new jobs associated with the company's expansion in the FTZ bring new wealth into
the local economy. Through local vendor purchases and spending by employees, the Conair
expansion also supports jobs and payroll at related local supplier and consumer businesses
throughout the region. Conair is a major employer in Glendale and a nameplate company
that supports other economic development in the city.
b. Description of Business Activity
Conair is one of the largest and most diversified consumer products companies in the world.
Conair is a global company that manufactures, distributes and sells professional salon
products, personal care products, consumer and commercial kitchen appliances, and
cookware under more than twenty-five brand names in over one-hundred and twenty
countries around the world. The expansion will allow new distribution and e-commerce
operations at this location.
c. Project Scope
(Operational Use, Capital Investment, Total Jobs Created, Average Wage)
Conair plans to expand their existing distribution facilities in the Glen Harbor Business Park
by constructing a new building with more than 815,000 square feet. The new distribution
Wage

Conair Corporation
Foreign Trade Subzone 75A — Expansion Application
and e-commerce center is expected to be completed in 2017. This expansion will result in a
capital investment of $51 million in land, building and equipment, plus 300 new jobs with an
annual payroll of $9.6 million, or an estimated average salary of $31,973. Through the
multiplier effect, approximately 169 additional jobs (including supply chain jobs plus jobs
related to employee spending) and $7.5 million in annual payroll are supported at other local
businesses in Maricopa County. The existing Conair Foreign Trade Zone area covers
approximately 100 acres. This application only requests that the Foreign Trade Zone acres be
expanded by approximately 17 acres. This minimal request is necessary for the entire Conair
campus to operate in a cohesive, reasonable fashion.
5. Public Benefit
The proposed minor expansion of Subzone 75A will provide a number of benefits to Glendale
and the surrounding area. First, the land has been vacant for some time despite being zoned for
industrial land uses since 1984. Conair's new construction (1.06 million sf) will be a significant
addition to the existing industrial business park and will improve an otherwise vacant property.
Second, the expansion is expected to generate approximately 300 new jobs. Third, the proposed
expansion will provide significant economic and revenue benefits as outlined below. (See Tab 2
- ECONOMIC AND REVENUE IMPACTS OF THE CONAIR EXPANSION IN FTZ 277, EXECUTIVE
SUMMARY)
Economic Benefits
The planned expansion of the Conair Corporation operations will have a positive impact on
Maricopa County and the City of Glendale in terms of direct and indirect growth in employment,
population, income, and consumption. In total, the Conair expansion will create an annual
economic impact of $43.0 million in Maricopa County, or $408.9 million over the next 10 years.
The company's expanded operations could directly and indirectly support approximately 469
jobs (including 300 direct jobs) and generate $17.1 million in new payroll or personal income in
the county each year. The 300 direct jobs and 169 indirect jobs associated with Conair's
expansion in Glendale could support a population (including families) of about 1,050 people in
Maricopa County, creating demand for retail, housing and other commerce.
Additionally, about 261 direct construction jobs and 188 additional indirect jobs will be created
in Glendale through the $39.0 million in new construction activity associated with the new
distribution facility. This would result in a one-time economic impact of $69.8 million
countywide. A total of about $2.1 million in one-time construction sales tax will also be
generated during the construction phase. These construction impacts are in addition to the
operations impacts detailed above.
Revenue Impacts
With $47.0 million in capital investment planned, Conair's expansion will generate new tax
revenues to the City of Glendale, Maricopa County and local schools, in addition to the
economic impacts described above. Over the next ten years, the company could generate $1.1
million in local sales and franchise taxes (city and county) and $1.5 million in state sales tax,
2IPage

Conair Corporation
Foreign Trade Subzone 75A — Expansion Application
including construction sales tax and on-going taxes on utilities. In addition, Conair would
generate $1.9 million in new property tax revenues to the city, county, schools and other special
districts over the next ten years. These property tax revenues on new buildings and equipment
reflect the FTZ reclassification.
In addition to revenues generated by the company, Conair employees will also generate property
and sales tax revenues in Maricopa County. Employee-based revenues from new direct jobs are
estimated at $613,000 per year, including $73,000 in revenues to the county and other special
districts, $63,000 to the City of Glendale, $105,000 in revenues to local schools and $372,000 to
the state.
6. Estimated Start Date of Operations
Conair has operated within the existing Subzone 75A since 1992. Conair anticipates
commencing operations within the expanded area in 2017.
7. Estimated or actual assessed valuations for zone's real property and total personal
property
Conair's tax consultant analyzed the tax valuations of the expansion parcel to identify its benefit.
Presumably, Conair will not expand its operations without the FTZ approval. Thus, the tax
consultant looked at the 2017 LPV of the vacant land without FTZ approval and compared it to
the new 2017 LPV with FTZ and the new building. The comparison shows that even with the
tax reclassification, the site will generate significantly more taxes with a structure with FTZ
approval, then no structure and no FTZ status. See 2017 Tax Comparison for APN 142-59-002C
at Tab 3.
8. Environmental or Displacement Issues
The applicant is not aware of any environmental or displacement issues. The site has always
been intended, planned, and zoned for industrial buildings and land uses like the type proposed
by Conair.
9. Concurrence Letters (Tab 4)
3IPage

Tab 1

FTZ Area
Existing Expansion FTZ
Ell 1WEIN
75A
Subzone

ab 2

pi APPLIED ECONOMICS
ECONOMIC AND REVENUE IMPACTS
OF THE CONAIR EXPANSION IN FTZ 277
EXECUTIVE SUMMARY
OCTOBER 2016
PREPARED BY
APPLIED ECONOMICS
11209 N. TATUM BLVD, SUITE 225
PHOENIX, AZ 85028

EXECUTIVE SUMMARY
Applied Economics has been contracted by Conair Corporation (Conair) to perform a third party
economic and revenue analysis of their expansion within Foreign Trade Zone (FTZ) 277. Conair
plans to expand their existing distribution facilities in the Glen Harbor Business Park by
constructing a new 1.06 million square foot building. The new distribution and e-commerce
center is expected to be completed by July 2017. This expansion will result in a capital
investment of $51 million in land, building and equipment, plus 300 new jobs at an average
wage of $31,973.
The company currently employs about 450 people in Glendale. Their original distribution
center opened in 1992 and was expanded in 2009. This second expansion will bring their total
employment in Glendale to 750 people in 2.3 million square feet. The purpose of this report is
to show the economic impacts of the Conair expansion and the benefits to local jurisdictions, as
well as the impact of their new capital investment and how the FTZ property tax reclassification
will affect local taxing jurisdictions. The report details the impacts of the expansion over a ten
year period.
FIGURE 1
CONAIR JOBS, PAYROLL AND CAPITAL INVESTMENT
Jobs & Payroll Capital Investment
Annual Utility Alarm
Year Jobs Payroll Land Building Equipment Expenditures Monitoring
2017 150 $4,830,300 $4,000,000 $39,000,000 $8,000,000 $192,500 $10,000
2018 300 $9,591,800 $0 $0 $0 $385,000 $20,000
2019 300 $9,591,800 $0 $0 $0 $385,000 $20,000
2020 300 $9,591,800 $0 $0 $0 $385,000 $20,000
2021 and beyond 300 $9,591,800 $0 $0 $0 $385,000 $20,000
Conair's expanded operations in the FTZ provide a wide range of economic benefits to the area.
As an export industry, Conair serves customers outside the local market and brings new wealth
into the region. The economic impacts in this analysis measure the effects of economic stimuli,
or expenditures, in the local economy. These impacts include direct and indirect jobs, personal
income and economic activity, or output that is generated by Conair's expansion. Indirect and
induced impacts are the result of the multiplier effect and capture supported supplier and
consumer businesses and their employees that benefit from the company's operations.
Revenue impacts, which are in addition to the economic impacts, are defined as tax revenues to
cities, school districts, special districts and the county that flow directly and indirectly from
expenditures made by the company in Maricopa County.
Economic Impacts
• On -Going Operations Impacts. In total, the Conair expansion will create an annual
economic impact of $43.0 million in Maricopa County, or $408.9 million over the next 10
years. The company's expanded operations could directly and indirectly support an
2

approximately 469 jobs (including 300 direct jobs) and generate $17.1 million in new
payroll or personal income in the county each year.
• Jobs and Income. Conair would create 300 new jobs as a result of the expansion with
an annual payroll of $9.6 million, or an estimated average salary of $31,973. Through
the multiplier effect, approximately 169 additional jobs (including supply chain jobs plus
jobs related to employee spending) and $7.5 million in annual payroll are supported at
other local businesses in Maricopa County.
• Supported Population. The 300 direct jobs and 149 indirect jobs associated with
Conair's expansion in Glendale could support a population (including families) of about
1,050 people in Maricopa County, creating demand for retail, housing and other
commerce.
• Construction Impacts. About 261 direct construction jobs and 188 additional indirect
jobs will be created in Glendale through the $39.0 million in new construction activity
associated with the new distribution facility. This would result in a one-time economic
impact of $69.8 million countywide. A total of about $2.1 million in one-time
construction sales tax will also be generated during the construction phase. These
construction impacts are in addition to the operations impacts detailed above.
Revenue Impacts
• Local Revenue Impacts. With $47.0 million in capital investment planned, Conair's
expansion will generate new tax revenues to the City of Glendale, Maricopa County and
local schools, in addition to the economic impacts described above. Over the next ten
years, the company could generate $1.1 million in local sales and franchise taxes (city
and county) and $1.5 million in state sales tax, including construction sales tax and on-
going taxes on utilities. In addition, Conair would generate $1.9 million in new property
tax revenues to the city, county, schools and other special districts over the next ten
years. These property tax revenues on new buildings and equipment reflect the FTZ
reclassification.
• Employee Revenue Impacts. In addition to revenues generated by the company, Conair
employees will also generate property and sales tax revenues in Maricopa County.
Employee-based revenues from new direct jobs are estimated at $613,000 per year,
including $73,000 in revenues to the county and other special districts, $63,000 to the
City of Glendale, $105,000 in revenues to local schools and $372,000 to the state.
Conair is a significant contributor to the region's economy. The 300 new jobs associated with
the company's expansion in the FTZ bring new wealth into the local economy. Through local
vendor purchases and spending by employees, the Conair expansion also supports jobs and
payroll at related local supplier and consumer businesses throughout the region. Conair is also
a major employer in Glendale and a nameplate company that supports other economic
development in the city.
3

CONAIR CORPORATION EXPANSION
SUMMARY OF KEY FINDINGS
Jobs and Income Created Jobs Annual Payroll
Direct 300 $9.6 M
Indirect 169 $7.5 M
Total 469 $17.1 M
Economic Impact Stabilized Annual 10 Year
Direct $21.6 M $205.1 M
Indirect $21.4 M $203.8 M
Total $43.0 M $408.9 M
Construction Impact Total
Direct Jobs 261
Indirect Jobs 488
Total 748
One-Time Economic Impact $69.8 M
Capital Investment Total
Direct Construction $39.0 M
Equipment $8.0 M
Land $4.0 M
Total $51.0 M
4

Tab 3

Tax New New 2017
LPV LPV
Difference
without with
if FTZ 142-59-002C
FTZ
Structures (1,547,888
(280,523
are
Not Assessed Assessed
Built
Value) Value)
$ $ $ State
Equaliztion
6.288 1478 7,766
[ I
%
3.50% 150% of
Total
I $ $
County Mancopa
F-ci 4 ....._ ...6. 21,678
125
I
%
of
9.77% 9.77% Total
I I $ $ $ City
Glendale of
26,931 6,329 33,260
I
%
of
14.99% 14.99% Total
I I $ $ $
School Peona
100,788 23.687 124,475 District Untr
I ied
%
of
56.10% 56.10% Total
$ $ $ District College
Community
18,362 4.314 22,676
I I
%
of
10.22% 10.22% Total
g $ $
Districts Special
13,133 3,086 16,219
%
of
731% 7.31% Total
$ $ $
179,658 42,222 221,880 TOTAL

Tab 4

C MARICOPA Office of the Chancellor
COMMUNITY COLLEGES
2411 West 14th Street, Tempe, AZ. 85281 • T: 480.731.8000 • F: 480.731.8120 • www.maricopa.edu
January 13, 2017
Mr. Andrew McGilvray
Executive Secretary
Foreign-Trade Zones Board
U.S. Department of Commerce
1401 Constitution Avenue, NW, Room 2111
Washington, D.C. 20230
Re: Foreign-Trade Subzone 75A
Conair Corporation
Request for Boundary Modification
Glendale, Arizona
Dear Mr. McGilvray:
We understand Conair Corporation is applying for an expanded Foreign—Trade
Subzone No. 75A in Glendale, Arizona. We understand that activated foreign—
trade zones in the State of Arizona may affect real and personal property tax
classifications under Arizona State law. We have discussed this with
representatives of Conair. We do not object to the company requesting an
expanded Foreign-Trade Subzone. We understand that this letter will be
included as part of the application.
Sincerely,
Maria Harper-Marinick, Ph. D.
Chancellor
Maricopa County Community College District
Chandler-Gilbert I Estrella Mountain I GateWay I Glendale I Maricopa Corporate College I Mesa
Paradise Valley I Phoenix I Rio Salado I Scottsdale I South Mountain

Peoria (kaki &hoot bktriet
Every audettt, Evert/ Uty, Prepctrect to gtape TOIKOrrOlf
February 9, 2017
Mr. Andrew McGilvray
Executive Secretary
Foreign Trade Zones Board
U.S. Department of Commerce
1401 Constitution Avenue, NW
Room 2111
Washington, D.C. 20230
Dear Mr. McGilvray:
The Peoria Unified School District submits this letter to express "no-objection" to
the Conair Corporation request for an Extended Foreign Trade Zone and support the
Foreign Trade Zone Board to approve the requested boundary change.
The District believes that the proposed expansion will provide a number of benefits
to the community, including the economic benefits to the City of Glendale and the
State of Arizona.
Should you have any questions, please feel free to contact the District at 623-486-
6000.
Sincerely,
Dr. Darwin Stiffler Beverly Pingerelli
Superintendent Governing Board President
Peoria Unified School District No. 11 Peoria Unified School District No. 11

aka
Peoria Waled bktriet
FAN SU dee/ Every bay, Prepared to Shape Tommy
Summary of Foreign Trade Zone Recommendation
Background:
The City of Glendale and Conair Corporation are finalizing a resolution
supporting the Foreign Trade Zone Boundary Modification of subzone 75A. The City of
Glendale supports the Conair Corporation expansion plans to their Glendale campus and
the Conair Corporation has determined that the best method to do this is to have the
location designated as a Foreign Trade Zone. Conair Corporation has procured the
services of Withey Morris PLC to assist in this process. In addition, Conair has
contracted with Applied Economics to provide an economic and revenue analysis. The
City of Phoenix was granted the authorization for greater Phoenix area No. 75 and is
responsible for administering this Foreign Trade Zone.
Conair Corporation is a global organization that is headquartered in East Windsor,
New Jersey. They are a global leader in manufacturing and distribution of personal care,
grooming, health and beauty products. Their proposal is for their current operations in
Glendale to expand by constructing a new 1.06 million square foot facility. The facility
will be located in the Glen Harbor Business Park.
Impact:
The designation of a Foreign Trade Zone per Arizona Revised Statute 42-12006.2
will reclassify the property tax to a Class 6. This means that the property tax assessment
will change from 16% to 5%. This is vacant land and the value of the improved land
with a lower property tax assessment will generate more property taxes than the current
unimproved land. Therefore, this expanded Foreign Trade Zone is not expected to reduce
actual taxes paid.
Recommendation:
This expansion of property and operations will provide a positive
economic impact with in the area and region and that includes the Peoria Unified School
District. This will provide an opportunity to develop Conair as a potential partner and
therefore it is recommended to approve a letter of non-objection to the Foreign Trade
Zone expansion.