Celebration marks opening of Auburn port to international trade community.
AUBURN – It took 10 years of discussing, haggling, pleading and nudging, but on Wednesday an assembly of businesspeople, politicians and city staff shared in the satisfaction of closing one chapter of the city’s economic development and opening another.
They were on hand to celebrate the city’s intermodal transport facility’s designation as a port of entry and a Customs inspections station.
“This is a great day,” said Sen. Susan Collins as she surveyed the crowd and the St. Lawrence and Atlantic rail cars lined up behind her. “Without the presence of the Customs inspections here, growth would be stifled.”
The designation, which became effective a few days ago, allows rail containers that come through the freight facility to be cleared for Customs inspections in Auburn, rather than unloaded onto trucks and sent to Portland. Collins said the change will mean a savings of between $3 and $4 million a year to Maine businesses that will avoid delivery delays and the extra transportation costs.
But there are more profound changes in the offing. Roland Miller, the community and economic development director for the city who initiated the project 10 years ago, is already moving to capitalize on its potential. He has submitted paperwork to the federal government to have the facility designated a Foreign Trade Zone and is lobbying in Augusta for it to become a Pine Tree Zone as well.
If the FTZ application flies, it will mean any business within a 60-mile radius of the facility that takes an unfinished product and enhances it some way, can avoid paying duty on the product when it’s exported. Gov. John Baldacci’s Pine Tree Zone program is intended to spark economic development by offering state tax breaks to companies that locate within them.
The double-zone designation has the potential to attract all sorts of international and domestic manufacturers who operate in a global market, said Miller.
“Discussions have been under way for some time” with various businesses, said Miller. “We’ve gotten a very positive response.”
The benefit would work this way: If a company in the Philippines makes widgets and sells them throughout the world, it could manufacture unfinished widgets in the Philippines, ship them via cargo freighter to Vancouver where they are loaded onto St. Lawrence and Atlantic container trains that take the cargo to Auburn where it clears Customs. Then the cargo is sent to a local manufacturing facility that was built with the help of the tax credits offered through the Pine Tree Zone program. The widgets are finished and made ready for shipping to global customers. The company avoids paying duty taxes on the exported goods because they were finished within a Foreign Trade Zone.
About 1,400 international containers go through the intermodal facility annually, but there’s the potential to process more than 35,000. Ed Foley, vice president of sales and marketing for the St. Lawrence and Atlantic, said he expects to at least double the number of containers within the next 16 months.
“With the designation as a port of entry, it signals ‘we’re real’ and gives us more acceptance in the international community,” he said.
The intermodal facility was built in 1994 and expanded to 35 acres two years ago in anticipation of the Customs status. Robert Grossman, executive vice president of government and industry affairs for SL&A, applauded the efforts of the railway staff, city officials and the congressional delegation, for working together to clear many hurdles. It’s a great example of a private/public partnership that works.
“And now we’re on the same footing with Boston,” he said.
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