The Dalles City Council is seeking to loop outlying communities into an Enterprise Zone that will provide eligible businesses with startup tax breaks to promote economic development.
Primarily, the zones exempt growing or new businesses from local property taxes on new investments for a specific period of time.
The Dalles zone that has been in place 10 years sunsets June 30 with more than a dozen participating businesses. Officials want to re-designate the zone for another decade with expanded boundaries, which don’t have to be contiguous.
Matthew Klebes, zone manager and assistant to the city manager of The Dalles, has recommended including commercial or industrial areas of Mosier, Maupin and Dufur, as well as the unincorporated areas of Tygh Valley, Wamic and Pine Grove.
“I think many communities in Wasco County have seen the economic benefits the zone has brought to The Dalles,” he said.
Another change with the new zone is that the Port of The Dalles is expected to join The Dalles and Wasco County as an official sponsor, which means the agency will also engage in negotiations for abatement deals.
Sponsors can only be cities, counties and ports.
The county and communities added to the zone will have to agree on the new structure.
Once concurrence has taken place, the zone map will be submitted to Business Oregon, the state oversight agency that will approve or deny the designation.
Klebes told the city council May 14 that he was hopeful the new zone will be in place by July 1.
“We want a seamless transition from one zone to another,” he told the council.
Any agreements made under the old zone will stand, he said.
The state offers zones for areas with per capita income levels at 80 percent of the state average or below, a figure Klebes said was applicable with use of county-wide data.
The zones are intended to attract businesses that might otherwise not set up shop in that location.
Businesses that qualify for a property tax abatement are those engaged in manufacturing or e-commerce, as well as hotels, resorts or call centers.
There are 69 Enterprise Zones in Oregon, 54 in rural areas and 15 in urban. Money saved in taxes can be used to build a new facility, expand existing operations, invest in machinery and hire new employees at higher wages.
The standard time frame to provide tax breaks is three to five years, but abatements can extend to 15 years, as was the case with Google’s three zone agreements. Longer-term agreements are dependent upon varying levels of investment, job creation and employee compensation.
Klebes said Monday that administration of zone applications would be broken down by geographical area:
• The city of The Dalles would oversee developments that occurred within its jurisdiction;
• Management in other locations would be provided by the Mid-Columbia Economic Development District through the Wasco County Economic Development Commission.
In his report for the council, Klebes gave an example of that how oversight would work: He said an application for development in Maupin would require the approval of the local city council and the Wasco County Board of Commissioners.
Incentives to attract new businesses and/or encourage expansions could include planning fee reductions and expediting of the land-use permitting process.
Klebes said meetings had taken place with taxing districts and agency/organization officials throughout the proposed zone before its boundaries were finalized.
Mid-Columbia Fire & Rescue sent a letter to the city April 3 requesting that funding from existing long-term deals be distributed more equitably and asked to be exempted from further tax abatements with the new zone.
The city and county, as sponsors, have decided how funds paid by Google as part of its zone agreement have been spent.
Revenue is shared with other taxing districts, who have been mandated by the city and county to use it for specific purposes and not as they might wish.
“This loss of revenue (property taxes) impacts our ability to improve services to meet the increasing operational demands and requirements being placed upon us,” stated the letter from the fire agency board. “Additionally, under the current process there is no means with which to make up this exempted revenue.”
Klebes told the council that Business Oregon did not permit a taxing district to be excluded from a zone.
He said the feedback by MCF&R should be considered when future abatement agreements are being negotiated.
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