USA – Nestlé, the world’s largest food company, is plotting a comeback to Glendale, California, a city that was once home to its USA headquarters.
The owner of the Nescafe coffee brand is said to be planning a US$400 million investment that, according to one analysis, could create an economic impact of US$2.1 billion in the city of Glendale over the next 10 years.
According to a report by Phoenix Business Journal, the city council is scheduled to vote whether or not to adopt 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.
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 US$400 million capital investment in an FTZ, even with the property tax reduction, would still be substantial
Phoenix-based economic consulting firm Applied Economics in a 10-year impact forecast estimates Nestlé could create 200 jobs by the fourth year of operations in addition to an estimated 1,900 indirect jobs.
“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 analysis.
If approved, the plan will see Nestle return to Glendale more than three years after it closed it moved its headquarters from the city to Arlington, Virginia.
A year later, Nestlé further severed ties with the city by closing a frozen food distribution facility which housed products such as Dreyer’s ice cream and DiGiorno pizza for direct-to-store delivery.
The facility was one of eight company-owned centers that were shut down across the U.S. as Nestlé shifts to a third-party warehouse distribution model.
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