The Tribune Democrat, Johnstown, PA

Local News

October 16, 2012

Foreign trade zone considered for airport area

JOHNSTOWN — A foreign trade zone around Johnstown’s airport could allow Argentine vineyards to save money by sending barrels of wine here for bottling and distribution by local companies, Cambria County President Commissioner Douglas Lengenfelder said.

Lengenfelder has spearheaded an initiative with local business and government leaders to create a foreign trade zone with other tax incentives as an economic development tool for the region.

An Air Force Academy graduate and a retired Air Force colonel, Lengenfelder said he is using his contacts established as U.S. air attaché to Argentina to promote the concept and encourage employment here.

“I have been working on the foreign trade zone for a year and a half,” Lengenfelder said Tuesday at Johnstown-Cambria County Airport Authority’s regular meeting.

Dubbed “Operation Wagon Wheel,” the foreign trade zone would provide a hub for additional industries, he said.

The idea would be to establish an area around the airport as the primary foreign trade zone under federal laws that provide special customs procedures to U.S. plants engaged in international trade-related activities. International companies only pay tariffs on the work done abroad, Lengenfelder explained.

In the case of the Argentine vineyards, the companies would pay U.S. tariffs only on the raw wine. Bottling, corking and labeling at local manufactures would be duty free.

Glades Pike Winery and its subsidiary, Glades Pike Bottling, are ready for the opportunity, General Manager Liz Diesel said.

Lengenfelder will lead a local delegation on a trip to Argentina next month to meet with vineyard owners and reach out to other industries interested in expanding to the U.S. market.

A trip to New York in December will provide contacts through various foreign consulates that host holiday events.

Lengenfelder said he called Tuesday’s press conference to head off criticism of his travels.

“Just because you build it, they really don’t come,” Lengenfelder said. “You have to have the international connection. If you want a foreign trade zone to come into your area, you have to do these things.”

He will travel at his own expense, he added.

But the foreign trade zone won’t come cheap. Lengenfelder estimates the local group will have to come up with about $200,000 during the next couple of years to meet all federal requirements. About a dozen agencies are involved in the process, including Homeland Security, the FBI, the Commerce Department and Customs and Border Protection.

While the primary foreign trade zone would surround the airport, it can support special-purpose zones available to employers in other communities and neighboring counties. Participating businesses would have to meet requirements and pay a federal fee.

To make the primary zone even more attractive, Lengenfelder wants to create an associated Keystone Opportunity Zone where local property taxes are not collected for the first few years of operation.

He also is looking into the U.S. Citizenship and Immigration Service’s Immigrant Investor Program, also known as “EB-5.”  The program provides work visas for foreign investors who start new businesses or buy existing ones and employ local workers.

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