New lodging business could be nixed from enterprise benefits

Lodging businesses are already motivated to locate in Hood River and don’t need extra incentives, which are costly, members of the council agreed. Staff recommendations, however, warned against removing lodgings from the zone, as the businesses are large employers and they also generate local lodging taxes. If the council approves the resolution June 14, it can reconsider its designations in the next six months.

In the past five years, the city has given up potential tax revenues in the enterprise zone, adding six new or expanded projects, and 61 full-time jobs. One of the latest developments in the zone includes the new Hampton Inn on the waterfront, according to staff reports.

The proposal to remove lodgings was made as part of the council’s proposal to retain some existing enterprise zone features in the city. Hood River’s enterprise zone, one of 74 in the state of Oregon, was due to sunset June 30, after being in place for 20 years.

Enterprise zones allow cities to offer developers property tax exemptions for up to five years, if the zone meets state guidelines for economic hardship. The potential development also must fit increasingly narrow guidelines as the area’s hardships are reduced. Currently, the city’s focus is to attract new manufacturing businesses or expanding current businesses with new construction or machinery that would increase employment. Retail, financial or construction businesses or land purchases, for example, do not qualify. Most of Hood River’s commercial and industrial-zoned properties are in the enterprise zone.

Although the zone is shrinking as the area’s economy improves, the staff and city council agreed that economic zones are still essential to remain competitive with other cities.