APPLICATION FOR THE ESTABLISHMENT OF A FOREIGN-TRADE ZONE FOR TOWN OF LIMON, COLORADO Submitted By: Board of Trustees Town of Limon, Colorado July 23, 2014 Grantee Structure and Legal Authority 2. Legal Authority for Application Please see Collective Attachment I, which is comprised of A--copy of the State’s enabling legislation; B—charter or organization papers showing the powers granted to Boards of Trustees and sections that are pertinent to FTZs; and C—certified copy of the Board of Trustees Resolution 3. Discuss the nature of the grantee organization (public or private; non-profit or for-profit). The proposed Grantee is a municipal corporation that has the legal status of a “town” under the laws of Title 31 of the Revised Statutes of the State of Colorado. This governmental entity is a body politic. The Grantee is governed by a mayor and a six member Board of Trustees (the mayor and each Trustee are elected for four year terms) with elections being held every two years by the qualified voters of the Town of Limon. 4. Summarize what you foresee as the operating structure of the zone and discuss the financing plan (as applicable). A summary of the operating structure of the zone and financing plan is: Zone status is being sought under an Alternative Site Framework (ASF) format for some 2,000 acres to be activated in the aggregate. As indicated above, this initial application has identified two sites totaling approximately +- 421.46 acres. The proposed Grantee believes that the flexibility offered by ASF is consistent with the flexibility which it intends to pursue in its development efforts. The first two sites have been identified. The proposed Grantee intends to offer FTZ status to qualified companies interested in benefiting from the program. Each prospective user that meets the qualifications of the zone schedule, upon the establishment of the zone and the development and promulgation of the schedule, will operate independently. The proposed Grantee is committed to this zone project on the basis of each individually activated site being operated by its owner/operator. Each individual user will bear its own financial obligations required to effectively operate its FTZ project. Economic Justification 5. State the community’s1 overall economic and trade-related goals and strategies in relation to those of the region and state, including a reference to the plan or plans on which the goals are based and how they relate to the proposed zone. If you have letters of support from local organizations, please include those letters as an attachment (Attachment II). Limon is known as the “Hub City.” Limon, Colorado is located in the eastern section of Colorado, approximately 70 miles due east of Denver. Limon is located in Lincoln County which, along with the Counties of Cheyenne, Elbert and Kit Carson, is included within the four-county area referred to as the East Central Colorado Region (the Region). For many decades, agriculture has been the main economic activity in Limon, the surrounding East Central Colorado region and eastern Colorado in general. While agriculture continues to be a major economic driver in Limon and Lincoln County, the transportation network is once again a growing economic force in the community. The Town of Limon is currently highly reliant upon the transportation system for its primary source of revenue and jobs. The Town of Limon is home to two (2) major truck stops and twenty (20) hotels and restaurants. Over 1.2 million trucks pass through Limon annually. This translates to average per capita retail sales of $70,000. 1 Note that the economic data that are presented in this and other sections are derived from varying levels—the Town of Limon, Lincoln County, the East Central Region or other designations of the eastern half of Colorado (Eastern High Plains), and the state as a whole. Also note that no data is compiled or available for the geographic area that corresponds exactly to the proposed Service Area. Location Quotients associated with this transportation system include Accommodations and Food Services (2.5), Gas Stations (24.3) and Retail Trade (2.0) also show the economic draw created by the transportation system. Recently the Limon Retail Leakage Study, completed in January 2013 by Colorado State University, Regional Economics Institute made this statement regarding the implications of the current economy: Clearly, Limon’s tax base is largely based on gas station related sales, with the community able to fund much of their government activities through taxes imposed on non-residents. Although this is a popular and effective strategy, it is important to recognize that this ability may be influenced by recent national policy developments. In particular, increased vehicle fuel efficiency standards will likely eventually significantly reduce the overall demand for gasoline. This is especially true if people do not respond to better fuel efficiency by driving more. Thus, Limon’s gas stations may very well see fewer motorists stopping, meaning not only lower fuel sales, but also reduced taxable sales of food, drink and convenience goods. This statement played into the decision of the Town and Lincoln County to work together to diversify the economy by attracting other industry including manufacturing and distribution which will be discussed in Section 5 of this application. During the period 1970-2011, the Region has experienced a population growth of 78.8%. The region is projected to continue moderate growth through 2040 by the Colorado State Demographer, as shown below. x Area resources including port facilities and transportation networks The designation of “Hub City” describes the Town of Limon well. Throughout its history, the economy of Lincoln County has relied upon its transportation system to create and move its economy. Colorado’s Front Range lies along the east slope of the Rocky Mountains and includes the communities from Fort Collins on the north to Pueblo on the south. Colorado’s major population centers are located along the Front Range. Front Range cities such as Denver, Colorado Springs, Aurora, Lakewood, Thornton and Arvada are all within an hour and twenty minute drive from Limon and Lincoln County. The Town of Limon is approximately 60 minutes east of Denver on Interstate 70. Highways traversing Limon are Interstate 70 and U.S. Highways 40/287 and 24. Colorado State Highway 71 bisects Limon north to south connecting to Nebraska and New Mexico. Colorado Highway 86, seven minutes west of Limon connects Interstate 70 to Elizabeth, Franktown, Castle Rock and Interstate 25. Twenty minutes to the south of Limon on Highway 71 is the junction with Colorado State Highway 94, a route into Colorado Springs. U.S. Highway 24 is the major route to Colorado Springs and ultimately connects with the north and south Interstate 25. There are two railroads servicing Limon: Union Pacific and the KYLE Railroad which is part of the Genesee & Wyoming Railroad System. Limon is positioned in the center of the Ports-to-Plains Corridor. This is a federally designated High Priority Corridor on the National Highway System and the State of Colorado’s primary freight corridor. See the map which shows the Ports-to-Plains connections among the seaports and international border crossings served by the Corridor, as well as the locations of FTZs including the proposed site at Limon, Attachment VI. The corridor runs from the Port of Mazatlan in Mexico through Laredo, Eagle Pass or Del Rio, Texas to Canada through Alberta and Saskatchewan. The Colorado highways in the corridor, U.S. Highways 40/287 and I-70, and Colorado State Highway 71, are a direct route from Mexico to Canada creating an international trade corridor through North America’s Energy and Agricultural Heartland. The Limon Municipal Airport is rated a B-1 airport. The runway is 4,700 feet with 24 hour lighting and part-time FBO availability. Denver International Airport is 77 minutes west of Limon and Colorado Springs Airport is 80 minutes to the southwest. x Strengths and weaknesses of the local economy as well as economic imbalances and unemployment rates As indicated above, the Town of Limon is heavily economically dependent upon gas station retail sales. Lincoln County, as a whole, is seeing new economic growth in the area of natural resources. In the past five (5) years, new development of both wind resources and oil and gas development is bringing a new sector to the community. Currently ranking second in the state with installed production capacity of 652 mw, the wind capacity in Lincoln County is second to none. Three projects have been developed, permitted, constructed and producing in the past three years. Renewable Energy Systems developed the Cedar Point Wind Farm with 139 - 1.8 mw Vestas turbines, two onsite project substations, one operations and maintenance building and more than 40 miles of overhead transmission line. The Cedar Point Project is owned by the Canadian company Enbridge under a power agreement with Xcel Energy. The Cedar Point Wind Farm generates 252 megawatts of electricity. NextEra Energy Resources developed the Limon I and Limon II Wind Energy Center which came on line in late 2012. The 400 mw facility is comprised of twin 200-MW projects and 125 GE 1.6 MW wind turbines. Located on more than 55,000 acres, a 45- mile long, 345 kV transmission line connects the wind farms to the substation. Both these projects also operate under a power agreement with Xcel Energy. Limon III Wind Energy Center is currently being constructed with production scheduled to begin in 2014. This will add an additional 200 MW bringing Lincoln County to 852 MW of installed capacity. Since 2008, there has been more oil development than at anytime in Lincoln County’s history.