Monsanto Withdraws FTZ – PILOT Agreement in Pima County

Monsanto still dedicated to project, sidesteps any controversy of Planned Greenhouse

PIMA COUNTY, Arizona — The Monsanto Company has officially withdrawn its Foreign Trade Zone (FTZ) Payment In Lieu of Taxes (PILOT) Agreement application to Pima County for a planned greenhouse in Avra Valley, near Marana project. The company informed county officials Wednesday of its decision, stating Monsanto is still “dedicated” to building the greenhouse.

Monsanto, in an email, stated that it was going to continue with the project to build and operate a seven-acre climate-controlled greenhouse in an effort to cultivate new types of corn seeds, in part with genetically modified plants. Monsanto purchased 155.65-acres at the southwest corner of Twin Peaks and Sanders Road Extension for this purpose last October.

The project is to be similar to Monsanto’s cotton seed research and development site in Casa Grande, that has operated since 2010.

By withdrawing the application, Monsanto eliminates all potential stumbling blocks and prevents opposition that was attempting to rally public support against a “letter of no objection” to the PILOT being issued by Pima County.

After delaying the Monsanto vote for several months, while the county held a series of five public meetings to hear from the public and discuss the issue, Monsanto withdrew the application. Most of those in attendance at these meetings spoke out in opposition to Monsanto, with invited experts going unheard several times.

The public’s apprehension includes potential health impacts of Roundup, a Monsanto product; impacts of genetically modified organisms (GMOs) developed by Monsanto; Monsanto’s pending merger with German company Bayer for $66 Billion and what they saw as Monsanto’s general incompatibility with the county’s organic farming.

By withdrawing its application, the company also avoids that portion of the agreement that would have given a Pima County Agricultural Science Advisory Commission access and closer oversight of the project.

A FTZ status is granted by the U.S. Commerce Department, but Arizona law also allows for a property tax reduction from a 15 to 5 percent tax rate. For this reason, Federal officials ask those jurisdictions affected to either support or oppose the granting of FTZ status to such projects. The PILOT would have substantially reduced Monsanto’s property tax burden over the next 10 years, saving about $370,000 annually on property taxes. In exchange for receiving that support, the company was committing to spend at least $90 million on the development project and create 20-30 full-time jobs and 30-50 part-time positions. Salaries would average $35,000 for part-time workers and $44,000 for full-time employees.

The county was to decide next week on the PILOT. Monsanto had already established a PILOT plan with the Marana school district. Dropping the PILOT agreement and simply paying the regular county property tax rate allows the company to sidestep any controversy.

“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 an email statement, company officials said, “We are now dedicated, more than ever, to investing in this community, regardless of the fate of the tax proposal.”

Tuesday, Pima County Administrator Chuck Huckelberry sent a memo to the Board of Supervisors, clarifying 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 would be the County would receive property taxes from the property in question at an assessment rate of 15 percent rather than the FTZ rate of 5 percent.”

Monsanto only needed a ‘Letter of No Objection’ from tax jurisdictions ‘affected’ by the reduced property tax assessment ratio.

Based on this new information, the County Administrator has asked that agenda items regarding the PILOT be pulled from the Board of Supervisors’ meeting February 21st.