Council Report

City Council Report 
 
 
Date:  
May 18, 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 Apple Inc. for a 
subzone within 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 Apple Inc. for a foreign trade zone (FTZ) subzone operation at 3740 S. 
Signal Butte Rd. 
 
If approved, this agreement will allow Apple Inc. to transition their existing FTZ 
subzone to the Alternative Site Framework and to expand FTZ operations at the site. 
The agreement authorizes manufacturing and/or storage of FTZ goods and related 
activities that do not require additional production notifications unless prior approval 
is received by the FTZ Board.  
 
Staff recommends that Council approve the Operator Agreement with Apple Inc. 
 
Background 
 
FTZ No. 221 was granted to the City of Mesa by the Foreign-Trade Zones Board on 
April 25, 1997, and reorganized under the Alternative Site Framework (ASF) with a 
service area of the City of Mesa boundaries on July 15, 2022. FTZ designation is one 
incentive used to attract export-oriented manufacturers, offering businesses duty 
deferral, duty reduction, operational flexibility, and cost savings, enhancing 
competitiveness and cash flow. 
 
Apple Inc. has established a significant, multi-phase operational presence in Mesa, 
anchored by its global command center and data center campus within the Elliot 
Road Technology Corridor. To date, they have invested approximately $3 billion in 
capital and developed more than 1.3 million square feet of facilities in Mesa, 
supported in part by Foreign-Trade Zone designation. 
 
Apple Inc. acquired the property in 2013 and converted it into a global command 
center in 2014. They received subzone approval under the Traditional Site

2
Framework from the Foreign-Trade Zones Board on March 19, 2014, and 
subsequently entered into an Operator Agreement with the City of Mesa, as Grantee 
of FTZ No. 221, in late 2015. Transitioning to the ASF dramatically simplifies and 
accelerates the application process allowing for quicker access to benefits, and more 
flexibility and predictability in operations.  
 
Maintaining subzone status within FTZ No. 221 is a critical component of Apple’s 
operations, enabling them to benefit from duty savings on imports and other tax 
efficiencies.  
 
Apple’s presence in Mesa reflects continued investment in advanced technology 
infrastructure, a strong commitment to the local community, and transformation of 
the site into a key operations hub within the Elliot Road Technology Corridor. 
 
This request will maintain the required active Operator Agreement and incorporate a 
minor boundary modification to the existing premises, approved by the FTZ Board on 
April 9, 2026. Apple intends to utilize the additional acreage for manufacturing and/or 
storage of FTZ goods. 
 
Discussion 
 
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. For customs purposes, 
merchandise within an FTZ is treated as outside U.S. customs territory for formal 
entry procedures. 
 
The FTZ program promotes domestic economic activity by helping U.S.-based 
operations remain competitive with foreign alternatives. Benefits may include 
deferred, reduced, or eliminated duties on imported goods, as well as other cost 
savings. 
 
Alternatives 
 
If the City Council does not approve the Operator Agreement with Apple Inc., the City 
of Mesa as Grantee and Apple Inc. as Operator would not comply with requirements 
of the FTZ program. In addition, the company’s ability to efficiently and cost-
effectively operate its Mesa facility could be adversely affected. 
 
Fiscal Impact 
 
Apple Inc. will pay a one-time activation fee of $1,000 and an annual Operator fee of 
$5,000 to the City of Mesa. These fees are subject to adjustment in accordance with 
the Zone Schedule. 
 
Coordinated With 
 
This agreement has been coordinated with the City Attorney’s Office.