In a matter of seconds, the city of Glendale greenlit a $675 million Nestlé industrial facility Tuesday night.
The City Council at its evening voting session unanimously, and routinely, approved Nestlé USA’s zoning application with no discussion. The world’s largest food company is expected now to build a 142-acre manufacturing facility that, according to one analysis, could create an economic impact of $2.1 billion for Glendale during the next 10 years.
At the Tuesday night meeting, Glendale Economic Development Officer Randy Huggins advised council of revised project estimates from the “original conservative project specs.” The initial $400 million Nestlé investment is now estimated to be $675 million, according to Huggins, and the original estimate of jobs expected to be created in Glendale increased from 200 by the fourth year of operations at an average wage of $60,775 to 350 jobs.
What had originally been estimated to be a 625,000-square-foot manufacturing facility increased to 630,000 square feet.
The future site is between Northern Avenue and Northern Parkway, a half mile east of Reems Road.
Phoenix-based economic consulting firm Applied Economics issued the initial 10-year impact forecast.
“The location of this company in Glendale would not only create new high-wage jobs in the community, but also support a significant amount of additional economic activity at related local supplier and consumer businesses, as well as generating new tax revenues,” Applied Economics wrote in its January analysis.
The estimated economic impacts to the local construction industry are equally eye-popping.
Applied Economics reports about 1,900 direct construction jobs and 700 additional indirect jobs could be created in Glendale during a four-year period through the $226 million in estimated new construction activity. This would result, the report noted, in a one-time economic impact of $342.7 million to the city. An estimated total of $6 million in one-time city construction sales taxes and permit and planning fees could also be generated during the construction phase.
The Tuesday night vote centered on adopting a resolution supporting the Nestlé application for foreign trade zone status on the site. An FTZ is an area within the U.S. where foreign and domestic merchandise is considered to be outside the country, or at least, outside the U.S. Customs territory. Furthermore, the FTZ offers qualifying companies federal tariff and tax relief, and in Arizona it can provide for a property tax reduction.
U.S. foreign trade zones are considered outside of U.S. commerce for customs purposes.
Nestlé manufactures goods such as baby food, medical food, bottled water, breakfast cereals, coffee and tea, confectionery, dairy products, ice cream, frozen food, pet foods and snacks. The multinational food and drink processing conglomerate’s corporation has its headquarters in Switzerland.
The FTZ site would provide for a 71% reduction in property taxes for Nestlé USA, the city’s economic development department notes. However, the economic impact of the initial capital investment in an FTZ, even with the property tax reduction, would still be substantial considering the investment, Applied Economics figures.
“The project could also generate revenue impacts, defined here as tax revenues to the city, including property, sales and utility franchise taxes from the company’s operations, as well as taxes generated by direct employees living in Glendale,” Applied Economics reports.
The western end of Glendale is no stranger to big corporate manufacturing interest. As recently as this past October, Walmart made plans in that area for a $186 million facility in a deal that Real Estate Daily News called the highest single-building industrial sale price in Arizona history.
“Glendale’s economic boom (our New Frontier) continues to lead the industrial development charge within the Valley,” Glendale Mayor Jerry Weiers stated at the time.
Other corporate neighbors in the Loop 303 corridor include Boeing, Microsoft, White Claw, Red Bull, and Ball Corp., plus hundreds of new residential homes.