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C. WORK SESSION: Economic Development Committee Recommendation on an Enterprise Zone City Manager Taylor stated that the issue before the council was whether to submit an application for an enterprise zone before the April 25, 2005, submission deadline and if an application was submitted, what was the direction of the application. He introduced Denny Braud, staff with the Community Development Division. Ms. Taylor declared that based on the City's previous experience with an enterprise zone, it was wrong to act and more time should be allowed for public input as the community became aware of the concept. Ms. Taylor moved to postpone the item and conduct a public hearing. The motion died for lack of a second. Mr. Kelly pointed out that the question before the council was whether an application for an enterprise zone should be made; the State might or might not approve the application. He asked if the enterprise zone would have a "claw back" provision to require a business to pay back the tax from which it was exempted if it was out of compliance. Mr. Braud said state statutes include a "claw back" provision that require a business that failed to meet its job creation obligations during the three-year period to repay the taxes from which it was exempted. As an example, he said that HMT Technology Corporation was required to repay a portion of its tax exemption under the City's previous enterprise zone. Mr. Kelly noted that Union Pacific Industrial Development was considering leasing property to tenants for rail-related uses such as a container facility and asked if that use would be eligible for enterprise tax exemption. Mr. Braud replied that it would, as the basic test was whether an operation served other businesses and a container facility would meet that test. Mr. Kelly acknowledged Ms. Ortiz's concerns regarding the inclusion of the railyard property within the enterprise zone until master planning around the railyard had occurred and noted that enterprise zone boundaries could be expanded at a later date to include that property and related eligible uses like a container facility, once a master plan was completed. Ms. Taylor asked if HMT had repaid taxes and reimbursed the City for infrastructure and staff time. Mr. Braud said that the statutes only addressed the enterprise zone tax exemption and HMT had repaid approximately $471,000 for the period in which the default occurred. Ms. Bettman asked if the "claw back" provision in State statutes enabled the local jurisdiction to request payback of taxes if the business defaulted. Mr. Braud replied that the provision enabled the tax assessor to collect taxes based on non-performance and payback was automatically required. In response to questions from Ms. Bettman, Mr. Braud said that the City's application would be competing with applications from Madras and Harrisburg. He said that job quality standards should be in place before the enterprise zone was created and if the City's application was successful, that date would be July 1, 2005. Ms. Bettman cited the proposed motion and noted that the Mayor's Committee on Economic Develop- ment's recommendation on community standards was very general. She commented that the standards MINUTES--Eugene City Council March 7, 2005 Page 5 Work Session