Trade and customs consultant Tommy Berry, owner of PointTrade Services tells GlobeSt.com that being an FTZ means jewelry makers can import raw goods into to the building and then add value in cooperation with other tenants in the building without paying duties. After that, the product may be exported back out of the US without paying any duties at all or may enter US commerce at a reduced duty rate.
"We have been counting on approval of the FTZ…," says WJC managing director Bill Boyajian, a former president of the Gemological Institute of America.
Berry adds that the FTZ also will allow companies to save on the administrative costs of importing by not having to pay merchandise processing fees or user fees and not having to pay a broker per shipment. Finally, due to the tremendous amount of intermodal freight that goes in and out of Las Vegas, the industry also will be able to save on freight rates.
"With the building, housing, manufacturing and processing facilities, the Foreign Trade Zone opens up all kinds of legal opportunities for having lower duty rates," says Berry, who has been acting as a consultant to the WJC. "There are hundreds of saving ideas in general as an FTZ, but this will be a pretty neat application for it."
The Foreign Trade Zone will be operated by the Nevada International Trade Corp. on behalf of the WJC.
The developer of World Jewelry Center is Robert Zarnegin, president of Heritage-Nevada and Probity International Corp., a Beverly Hills, CA-based development firm. His exclusive negotiating agreement with the city called for the project to have accumulated letters of intent to acquire 25% of the planned 800,000 sf of commercial condominium space in a 60-story tower that would anchor the development.
As of last month, approximately 100 jewelry-related companies from 15 different countries have signed LOIs for approximately 32% of the tower. The city and the developer are now negotiating a disposition and development agreement that is expected to go before the city council for approval at the start of 2008.
"We had very aggressive pricing for the first 10 companies and then we have obviously created a lot of publicity and have ratcheted up the price slowly and consistently such that the price is now $800 per sf and will stay that way for a while," Boyajian told GlobeSt.com in August. "The phone is not ringing off the hook, but interest has been very consistent."
The development site is located near South Grand Central Parkway, W. Charleston Boulevard and Interstate 15. Current plans call for the commercial condominium space in the 60-story tower to be topped by approximately 80 luxury residential condominiums. Adjacent to the base of the tower would be a three-level, 125,000-sf public retail center filled with retail jewelry shops, a gem museum and a café.
Per the negotiating agreement, Boyajian says Zarnegin has submitted a draft disposition and development agreement that the city is now reviewing. The city council is scheduled to vote on the final DDA on Jan. 2. The tentative development timeline calls for site work to begin in 2008. Project completion is slated for mid-2010.
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