CCMinutes - 09/29/04 WS - Laserfiche WebLink

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· Eligibility criteria o Manufacturing, processing, distribution, warehouse (examples of ineligible businesses: re- tail, professional services, health care) o Increase employment by ten percent; permanent, full-time jobs; maintain ten percent in- crease over the life of the exemption o New investment in building and machinery/equipment both qualify for tax exemption · Tax exemption o Three-year, 100 percent property tax exemption only on new investment within the zone; land, existing buildings and equipment already on the tax roles were not eligible o Five-year extended investment available under certain conditions such as higher wages and required special local approval o Disqualification for exemption if a business ceased operations, curtailed employment, or moved equipment Mr. Braud cited statistical information related to the expired West Eugene Enterprise Zone, noting that 57 companies participated in the zone and 47 companies were still operating in Eugene. He reported on the average new investment and three-year tax exemption, excluding Hynix and HMT, and said that most of the companies involved in the zone were small- to medium-sized local companies that were already existing in Eugene. He used the example of Custom Craflworks, which was generating over $26,000 in new property taxes annually following the three-year tax exemption period. He also cited statistics for Hynix, which had a $1.56 million tax exemption in 2004 and paid $6.3 million in taxes. Mr. Braud reported that the committee's recommendations included establishing an enterprise zone based on the boundaries of the previous zone with the inclusion of a small amount of adjacent industrial property and possible additional local conditions for greenfield development. He said that the committee expressed an interest in requiring businesses to satisfy other conditions, including: · 100 percent tax exemption for redevelopment, infill, brownfield development · 67 percent tax exemption for greenfield development, which could be increased under certain job quality standards Mr. Braud said the committee had struggled with the question of whether all tax exemptions should be conditioned on paying higher than average wages because of the bias against small businesses that could create. He said the next steps included further definition of local criteria, seeking Lane County support as a portion of the proposed zone was outside of City limits and within the urban growth boundary, draft an application to the State, obtain resolutions in support of the application from the council and Lane County, and submit the application in spring 2005. He said the goal was to have a zone in place by July 2005. Ms. Taylor commented that the agenda item summary statement that the committee's report was accepted by a vote of 7:0 was misleading because it suggested that the council was in support of an enterprise zone. She felt that sustainability was misused as a reason because it did not equal growth. She asked how much HMT paid in taxes. Mr. Braud replied that HMT had been disqualified and were subject to repayment of the three-year tax exemption of approximately $500,000. Ms. Taylor asked if the City already had the authority to grant a tax exemption ifa business wanted to develop a brownfield, using downtown businesses as an example. City Manager Taylor responded that there was no tax exemption for brownfield development and the downtown businesses had been provided incentives through urban renewal tax increment financing or multi-unit property tax exemption (MUPTE). MINUTES--Eugene City Council September 29, 2004 Page 5 Work Session