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Updated Feb 15, 2017, 1:40 pm Originally posted Feb 15, 2017, 12:24 pm
Dodging a potential thorn in the side of a federal Foreign Trade Zone application for a planned Marana greenhouse, controversial agi-biz giant Monsanto has withdrawn a proposal to pay Pima County less in property taxes while backing the FTZ bid.
The company informed county officials Wednesday of their move, and told reporters that Monsanto is still "dedicated" to building the greenhouse.
In effect, Monsanto has eliminated a potential stumbling block and stymied opponents of the company who have attempted to rally public opinion against Pima County issuing a "letter of no objection" to the FTZ.
The company also avoided the portion of the agreement that would've given the Pima County Agricultural Science Advisory Commission access for close oversight of the project.
Foreign Trade Zone status is granted by the U.S. Commerce Department, but under Arizona law allows for a property tax reduction from 15 percent to a 5 percent rate. Federal officials ask affected jurisdictions to either support or oppose granting FTZ status to projects.
Under a proposed Payment In Lieu Of Taxes agreement with the county, Monsanto had committed to hiring at least 50 workers at an average salary of $44,000 per year, and invest $90 million in the facility.
Opponents of the company's work on genetically modified organisms (GMO) and its restrictive business practices have attempted to block the county's approval of the PILOT deal. Anti-GMO activists have blasted Monsanto at county meetings.
Local officials have said that if Pima County's tax collections aren't affected by the FTZ, then federal regulators won't look to them for approval or objection to Monsano's application.
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Dropping the PILOT agreement and simply paying the regular property tax rate would allow the company to sidestep the controversy over the county's participation. Monsanto has already established a PILOT plan with the Marana school district.
"I am writing to inform you that after much thought, the Monsanto Company has decided to withdraw our Foreign Trade Zone Payment In Lieu of Taxes Agreement proposal scheduled for consideration by the Pima County Board of Supervisors at their February 21, 2017 meeting," the company wrote in a letter Wednesday.
"Monsanto Company remains committed to partnering with the community in Pima County and we look forward to working with you in the future," the letter said.
In a statement to reporters, company officials said, "We are now dedicated, more than ever, to investing in this community, regardless" of the fate of the tax proposal.
Under the PILOT, Monsanto would've saved about $370,000 annually on property taxes paid to the county. The seven-acre greenhouse would be used to develop and grow corn in an effort to cultivate new types of corn seeds, in part with genetically modified plants.
Also under the agreement with the county, the newly established Agricultural Science Advisory Commission would've had the ability to closely monitor operations at the greenhouse.
Instead, Monsanto will "create a community advisory panel (CAP) comprising members of the area to advise us on opportunities to engage with the community," said Amanda McClerren, a "project strategy lead" with the company. Monsanto also has a "plan to voluntary (sic) report restricted use pesticide (RUP) usage at the greenhouse," her statement said.
Tuesday, Pima County Administrator Chuck Huckelberry sent a memo to the Board of Supervisors, saying that "if the County were to not issue a Letter of No Objection, not enter into a payment in-lieu of taxes (PILOT) agreement or even issue a Letter of Objection, the net result wouldbe the County would receive property taxes from the property in question at an assessment rate of 15 percent raher than the FTZ rate of 5 percent."
"The County cannot 'veto' the FTZ application or process, nor can we veto the Letters of No Objection or PILOT agreements of other taxing jurisdictions," Huckelberry said.
Huckelberry asked that items regarding the PILOT be pulled from the agenda for a Board meeting scheduled for next week.
Huckleberry has previously said state law prohibits the county from controlling agricultural property and that it essentially can’t stop the greenhouse. The company bought 155 acres at Twin Peaks and Sanders Roads in an unincorporated area of Pima County, completing the purchase in October.
Now, the unused property generates about $1,950 a year in property taxes for Pima County, Marana Unified School District, the Pima County Community College district and other entities. But even with a full tax break due to FTZ status, the greenhouse would generate up to $650,000 per year in property taxes. Monsanto is expected to spend $95-$105 million building the large climate-controlled greenhouse.
The greenhouse is expected to create 20-30 full-time jobs and 30-50 part-time positions. Salaries would be modest, averaging $35,000 for part-time workers and $44,000 for full-time employees.
Officials with the Commerce Department of the incoming Trump administration will make the final determination. Trump met with Monsanto corporate leaders during his transition.
Monsanto has had a cotton seed research and development site in Casa Grande since 2010.
The company is a Fortune 500 firm based in St. Louis, Mo., with 404 facilities in 66 countries around the world. Last year it was purchased for $66 billion by the Bayer company of Germany, creating a massive conglomerate offering pharmaceuticals, health products and pesticides. Federal regulators still have to approve the takeover.