Birmingham City Council

Birmingham to Request Expansion of Foreign-Trade Subzone to Include BNSF Railway

John Hilliard

The City of Birmingham will apply to expand its foreign-trade subzone to include a property owned by BNSF Railway, a move proponents argued would extend the Mercedes-Benz brand within the city.

Foreign-trade subzones are areas within the United States in which a certain company’s commercial merchandise is not subject to import tariffs and taxes, which is intended to lower costs for companies engaged in international trade. The city will apply to the Department of Commerce for the expansion.

At the council’s Aug. 28 economic development committee meeting, representatives for BNSF Railway said that the 261-acre area they hoped to add to Birmingham’s foreign-trade subzone — located near Finley Boulevard — would make the city more “business-friendly” to Mercedes-Benz, one of BNSF’s clients.

BNSF representative Ian Johnson said that the company moves “roughly 86,000 to 90,000 cars either in or out of the state of Alabama in a given year,” and that the expansion of the foreign-trade zone would allow Mercedes-Benz to defer paying necessary taxes and tariffs on its cars until closer to their sale. The company will have to eventually pay the fees, but the delay allows time for that money to accrue interest, representatives said.

Though Mercedes-Benz and BNSF would benefit most from the expansion, Johnson told councilors that the city would benefit as well. “It allows (Mercedes-Benz) to grow here as opposed to growing in other markets,” he said. “This was the first place we thought we could get it done.”

The move, he said, could add up to 10 or 12 jobs in the area, “with the possibility of further growth.”

Councilor John Hilliard, who chairs the economic development committee and represents the district in which the property is located, was enthusiastic about the expansion.

“I’m just really blown away that District 9 can be touching the global world,” he said. “Personally, I look for a long-lasting relationship with each of you. We can continue to make Birmingham grow.”

Last week, the council voted to approve ceding right-of-way along Finley Boulevard to BNSF — though any development on that property would require approval before it can become part of the foreign-trade subzone. In that council meeting, which took place before the economic development committee meeting, District 8 Councilor Steven Hoyt suggested that the company had “friends” in city government due to campaign contributions.

“I know some folk receive campaign contributions and what have you from these folk,” he said. “But I’m not inclined to give them anything.” A search of records from councilors’ 2017 campaigns did not reveal any direct donations from BNSF, and Hoyt did not respond to an email requesting clarification.