CCMinutes - 09/29/04 WS - Laserfiche WebLink

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Ms. Nathanson referred to the committee's concern that conditioning tax exemptions on paying higher than average wages could bias the program against small businesses. She said she was not convinced that most local businesses would be infill or redevelopment and qualify for the 100 percent exemption because of the lack of available sites in industrial areas. She noted that a number of businesses had left the community over the past few years and, while some of those had received assistance from the City, there was nothing that could be done to guarantee that every business would survive and thrive beyond due diligence to assure that an investment was sound. She felt that focusing on a business that left, such as HMT, was not sufficient to justify questioning the worthiness of an entire program. She agreed with Mr. Kelly's concerns about the hypothetical situations, but encouraged the council to continue to discuss the wage aspect of new jobs. Mr. Poling asked if enterprise zones were required to enter into a first source hiring agreement. Mr. Braud said that all businesses that applied for the tax exemption signed an agreement to use the Oregon Employ- ment Department as part of their job referral and hiring process, although they were not obligated to hire all employees through that program. Mr. Poling commented that HMT's departure did not appear to be a purposeful effort to avoid its obligations and should not be used as an example that an enterprise zone did not work. He said that a zone was one of many tools for economic development in the community and the council should not pass it up. He observed that growth would happen and hoped that the City would use available tools to shape and control it. Mr. Poling said the enterprise zone application process was highly competitive because communities recognized the value of a zone and it was important for Eugene to apply. Ms. Solomon stated that she fully supported the concept of an enterprise zone and would vote in favor of the motion. She asked if the two businesses in Mr. Kelly's hypothetical examples would still be paying the base property tax and only exempted for taxes on the increase in value of the property. Mr. Braud replied that was correct, and the businesses would be fully taxed in the fourth year following expiration of the exemption. Referring to the use of public funds, Ms. Solomon said that the City could not give away what it did not have if the land was currently vacant and not generating revenue. She said the zone would enable development that would generate more revenue in the long-term and that was a prudent decision for the City to make. She noted that there had been no complaints from business owners about enterprise zones and she hoped the committee's recommendation would move forward. Ms. Bettman responded to Ms. Solomon's comments about not giving away what the City did not have. She suggested the comment should be reconsidered the next time the council cut services in the budget process because any entity that located in Eugene required City services and the tax cap would not recover enough to cover those services and they were paid for by diminished services to the rest of the community. She expressed concern about the committee's discussion of the perception that the City was anti-business and did not have a unified vision for economic development that reflected divisions within the community. She said that the council had an opportunity to modify a strategy in a way that would allow different aspects of the community to agree, but that was not the recommendation that was before the council. She said that when the issues was returned to the council it had an opportunity to incorporate into the proposal standards the community was asking for and obtain almost unanimous support on the council. Mr. Poling, seconded by Mr. Pap~, moved to direct the city manager to proceed with application to establish an enterprise zone in Eugene, jointly sponsored with and supported by Lane County, based on the recommenda- MINUTES--Eugene City Council September 29, 2004 Page 7 Work Session