LANCASTER SPLITS FROM PALMDALE ON FOREIGN TRADE.

Byline: Jim Skeen Daily News Staff Writer

Saying discussions to join Palmdale's foreign trade zone are fruitless, Lancaster officials are seeking a decision from federal officials on an application for their own zone.

Disagreeing with Palmdale on how to ensure confidentiality during negotiations with prospective businesses, Lancaster officials notified the Foreign Trade Zones Board of the U.S. Commerce Department that they want a decision on their application for a separate zone. Consideration of Lancaster's application had been on hold while the two cities discussed potential for joint operation of Palmdale's foreign trade zone.

``It looks like we're on our own,'' Lancaster Mayor Frank Roberts said Monday.

Palmdale officials, however, say the issue is still open for discussion. The Palmdale City Council will consider a joint operating agreement at its meeting Wednesday and forward a copy to Lancaster for consideration.

Under the proposed agreement, Marshall Miller, foreign trade zone counsel for Palmdale, would act as a neutral third party in handling zone activation and expansion requests. He would be bound by the principles of attorney-client privilege from disclosing confidential information to another city.

``We believe we've addressed all the issues for the city of Lancaster,'' Palmdale Mayor Jim Ledford said.

Lancaster officials disagree, saying Miller is too closely tied to Palmdale officials.

``He is hired by them, works for them, and he works under their charter,'' Roberts said. ``We thought there should be a third organization in charge of it.''

Dennis Puccinelli, executive director of the Foreign Trade Zones Board, was traveling Monday and could not be reached for comment.

Custom duties on imported foreign parts may be reduced or eliminated for businesses in foreign trade zones, so cities use them to try to attract businesses.

The two cities have been at odds over Lancaster's application for a separate foreign trade zone designation. Palmdale officials say the neighboring cities should jointly use and expand the zone they already have created.

The extent of the disagreement became apparent at a public hearing Aug. 4, when Lancaster officials said they had no confidence in Palmdale's handling of the foreign trade zone and compared the other city to a parent abusing a child.

Lancaster applied to have 3,200 acres designated as a foreign trade zone, including about 160 acres for the Lancaster Business Park and the rest on and south of Edwards Air Force Base. Lancaster is pitching that area as the launch site for VentureStar, a reusable spaceship Lockheed Martin Skunk Works is developing.

In Palmdale, 1,315 acres at nine sites already have been designated as a foreign trade zone.