03-08-2010 Presentation: Hendryx-Enterprize ZonesEnterprise Zones – Status & Local Incentives Discussion
City of Woodburn
March 8, 2010
City Council Actions
Council (February 8, 2010) supported proceeding with application to designate Woodburn an Enterprise Zone
Council approved Mid-Willamette Valley Council of Governments assisting with application
Enterprise Zone Application - Status
Mid-Willamette Valley Council of Governments is preparing the application
Consultation meeting scheduled – March 11, 2010 (4:00 – 6:00PM)
Seeking letters of support – Taxing Districts
Seeking letters of support – local businesses
Enterprise Zone - What Areas
City Limits
How does an Enterprise Zone work?
Eligible businesses:
Provide goods, products, or services to other business operations or organizations
Conventional manufacturing or industrial activities
Processing plants, distribution centers
Maintenance facilities, warehouses
Operations that handle clerical or post sale technical support
How does an Enterprise Zone work?
Eligible businesses must invest in new property or equipment not already on the county’s tax rolls
Property must be owned or leased by the business firm locating in the enterprise zone
Investment must cost $50,000 or more, in total for qualified “real property”
Newly constructed buildings
Additions or modifications
Heavy-affixed machinery or equipment
Property tax exemption unavailable for any property already on the tax rolls
How does an Enterprise Zone work?
Does not include;
Land, non-inventory supplies, rolling stock, vehicles, and motor-propelled devices
Office supplies, furniture
How does an Enterprise Zone work?
First Source Hiring Obligation
Statutorily, must have first-source hiring agreement throughout exemption period
Must use resources offered by the Employment Division (Worksource Oregon)
Worksource provides testing, referrals, interview coordination
Not required to hire referrals
How does an Enterprise Zone work?
Existing businesses must increase and maintain an employment increase
One person or 10% full time employees over 3 yrs
Full time employees (32+ hrs)
Permanent year-round jobs
Working within the Enterprise Zone
New businesses to the area must employ at least one employee
How does an Enterprise Zone work?
What happens if they fail to maintain employment?
Back taxes on exempt property paid without penalties nor interest
Must provide timely notice to County Assessor to avoid penalties (20%)
Subsequent failure – business disqualified from Enterprise Program
How does an Enterprise Zone work?
Ineligible businesses
Construction
Retail goods or services
General office activities
Health care
Entertainment
Finance
Professional service (legal, engineering, etc)
Childcare
Housing
Property Management
How does an Enterprise Zone work?
Relocation into the Enterprise Zone
If business is beyond 30 miles – can’t relocate employees – closing or curtailing operation at original site
If business is within 30 miles – must increase overall employment by 10% within the Enterprise Zone
Types of Enterprise Zones
Standard Enterprise Zone
3 year abatement based upon specific criteria
4th & 5th year extended abatement based upon specific criteria (wages 150% County average)
Hotels & motels
Electronic Commerce
Retail/Financial Call Centers (customer base outside calling area)
Types of Enterprise Zones
Enterprise Zones
Standard Enterprise Zone (3 yrs)
Extended Enterprise Zone (4th & 5th yrs) – local option
150% of Marion County average wage ($30,542*150%=$45,813)
Should the City offer businesses meeting 150% of the Marion County average wage receive an extended abatement for 4 or 5 years?
Types of Enterprise Zones
Enterprise Zones
Electronic Commerce Zone
Businesses engaged predominantly in transactions via the Internet or an Internet-based computer platform
Qualifying businesses receive credit against annual state income or corporate excise tax liability
Must have ready investment to qualify for Electronic Commerce zone
Hotels & motels eligible for deferral?
Should the City include hotels and motels in the Enterprise Zone?
Enterprise Zone - Local Incentives?
Should the City offer other incentives to qualifying businesses?
Many Enterprise Zones provide some level of local incentives
Reduced permit fees
Land use permits X%
Sign permits X%
Building permit X%
Revenue issues associated with building fees
Fast track permits
Planning permits
Building permits
Engineering permits
Staffing issues associated with fast tracking building permits
How does an Enterprise Zone work?
Should the City offer other incentives to qualifying businesses?
Reduced SDC fees
Based upon the number of employees
Water SDC X%
Sewer SDC X%
Transportation SDC X%
Parks SDC X%
Revenue issues associated with reducing SDC’s
How does an Enterprise Zone work?
Should the City offer other incentives to qualifying businesses?
Hook-up fees
Water
Sewer
Revenue issues associated with reducing hook-up fees
Reduction in monthly water and sewer user charges
Revenue issues associated with reducing monthly user charges
Where will the Enterprise Zone be located?
Where will this happen?
Industrial zones (Light Industrial & Industrial Park)
Commercial General
E-Commerce - citywide
Entire city or limited areas?
UGB added at later date
Next Steps
March 22, 2010 Council action – adopt resolution