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HomeMy WebLinkAboutItem 7 - Enterprise Zone App.EUGENE CITY COUNCIL AGENDA ITEM SUMMARY Action: Resolution 4832 Authorizing the City Manager to Make Application to the State of Oregon for Designation of a West Eugene Enterprise Zone Meeting Date: April 11, 2005 Agenda Item Number: 7 Department: Planning and Development Staff Contact: Denny Braud www. cl. eugene, or. us Contact Telephone Number: 682-5536 ISSUE STATEMENT Consistent with the direction provided in the March 7, 2005, work session, the council is being asked to approve a resolution authorizing submittal of an application to the State of Oregon in 2005, for establishment of an enterprise zone in Eugene. The council is also being asked to consider options for adoption of job quality standards that would apply to the enterprise zone tax exemption. BACKGROUND On March 7, 2005, the council directed the City Manager to bring back a resolution authorizing submittal of an application to the State of Oregon for designation of an enterprise zone in 2005, jointly sponsored with and supported by Lane County. The application will be submitted on or before April 25, 2005. If the application is successful, the proposed West Eugene Enterprise Zone would be in place on July 1, 2005. The Lane County Board of Commissioners is scheduled to review the joint sponsorship issue on April 6, 2005, with formal action expected following the council's adoption of the proposed Resolution. At the March 7, 2005, meeting, the council also directed the City Manager to bring back a recommendation for establishing job quality standards applicable to the proposed enterprise zone. Because the local standards are not required to be included in the State of Oregon application, such standards can be created and amended at any time prior to the designation of the zone, or any time during the life of the zone. In accordance with State statutes, additional criteria must be "reasonably related to the public purpose of providing opportunities for groups of persons to obtain employment." The Mayor's Committee on Economic Development did not recommend specific job quality standards. However, they suggested that job quality be considered based on attractive wages, employee benefits, job training, advancement opportunities, job retention, and utilization of programs that assist disadvantaged workers. RELATED CITY POLICIES The enterprise zone tax exemption addresses the following related City policies: · Sustainable Community Development. The council's Sustainable Community Development goal addresses high quality of life and a healthy economy. The availability of quality jobs is a basic L:\CMO\2005 Council Agendas\M050411\S0504117.doc quality of life issue. With a local unemployment rate that exceeds the national average, and local income levels below state and national averages, the creation of new production sector jobs is fundamental to the health of the local labor market. The creation of an enterprise zone will also provide an incentive for redevelopment, infill development, and brownfield redevelopment, which are primary sustainability goals. · Growth Management. The enterprise zone advances the City's Growth Management goals by encouraging more intensive industrial development in a defined area that has been zoned accordingly, and where existing public infrastructure investments have already occurred. · Fair, Stable, and Adequate Financial Resources. The long-term property tax revenues that result from new investments that are encouraged by the short-term tax exemption address the council's goal for financial resources adequate to maintain and deliver municipal services. COUNCIL OPTIONS Regarding the establishment of job quality standards, the following three options have been identified: 1. Establish standards prior to July 1, 2005. Under this option, staff is proposing that the enterprise zone subcommittee of the Mayor's Committee on Economic Development be utilized and expanded for the purpose of developing a recommendation on job quality standards. The subcommittee participants included Rusty Rexius, Cathy Smith, Steve Korth, Tom Bowerman, and Jana Rygas. The expansion of the subcommittee would include a representative from the Eugene Springfield Solidarity Network and a representative from the University of Oregon's Economic Forum. The Oregon Employment Department would also be utilized to provide relevant local employment and wage data. The expanded subcommittee group would gather public input, draft a recommendation on job quality standards, and present the recommendation to the public for input prior to City Council adoption. Pros. - Utilizes subcommittee participants who are familiar with the enterprise zone issues, and previously initiated some work on local standards. - Expands the subcommittee to include additional special interest and local expertise. - If application is successful this year, standards would be in place prior to designation of the zone. Cons. - Requires dedication of resources, and time commitment from the public, with no assurance that Eugene's application will be successful this year. - Timeline for thorough analysis, public input, and recommendation is compressed. 2. Adopt interim standards. Given the uncertainty regarding the State's approval of an application this year, the council could adopt interim standards that would be in place until new standards can be fully processed and adopted. The new standards would be processed immediately following a successful State zone designation. Staff is proposing that a slightly amended version of the enterprise zone "Public Benefit Criteria," adopted by the council in 1997 (Attachment B), could be used for any investments that qualify prior to adoption of new standards. As an interim policy, the Public Benefit Criteria (minimum 85% tax exemption benefit), originally adopted through an extensive public process, could be amended to reflect the minimum 75% tax exemption benefit intended for the proposed enterprise zone. The proposed amendment to the Public Benefit Criteria scoring formula is included in Attachment C. These interim standards would be adopted by resolution prior to July 1, immediately following notification from the State of Oregon that Eugene' s application is successful. L:\CMO\2005 Council Agendas\M050411\S0504117.doc Pros. - City would know whether or not its zone designation application was successful prior to expending resources on development and adoption of new standards. - Allows additional time for analysis of new standards and public input. - Public Benefit Criteria can be easily amended in the interim to reflect the minimum 75% tax exemption benefit intended in the proposed enterprise zone. Cons. - New job quality standards would not be in place on July 1, 2005, if the City's zone designation application is successful this year. 3. Defer process for adoption of standards until zone application is approved. Under this option, the process to create job quality standards would not begin until there were assurances that Eugene's zone designation application was successful. Pros. - City would know whether or not its zone designation application was successful prior to expending resources on development and adoption of new standards. - Allows additional time for analysis of new standards and public input. Cons. - If zone designation application is successful in 2005, it is possible that a new investment would qualify for an exemption prior to adoption of standards. CITY MANAGER'S RECOMMENDATION The City Manager recommends adoption of the resolution authorizing the submittal of an application for designation of an enterprise zone in 2005. The City Manager further recommends that the Public Benefit Criteria, as amended in Attachment C, be adopted as interim standards in the event that Eugene's application is successful this year. The interim standards would be adopted by resolution prior to July 1, following notification from the State that Eugene's application is successful. New job quality standards would be created in a timely manner thereafter, in accordance with the process outlined in Option 1 above. SUGGESTED MOTION Move to approve Resolution 4832 authorizing the City Manager to make application to the State of Oregon for designation of a West Eugene Enterprise Zone. Move to direct the City Manager, in the event that Eugene's enterprise zone designation application is approved by the State of Oregon this year, to bring back a resolution prior to July 1, 2005, for adoption of interim local criteria consistent with the Public Benefit Criteria included in Attachment B and amended in Attachment C, with the understanding that new job quality standards would be adopted as soon as practical following notification of a successful designation application, in accordance with the process outlined in Option 1 of this agenda item. L:\CMO\2005 Council Agendas\M050411\S0504117.doc ATTACHMENTS A. Resolution (legal description to follow) B. Public Benefit Criteria (1997) C. Proposed Amendment to Public Benefit Criteria D. Comments from Service Districts FOR MORE INFORMATION Staff Contact: Denny Braud Telephone: 682-5536 Staff E-Mail: denny.braud~ci, eugene, or.us L:\CMO\2005 Council Agendas\M050411\S0504117.doc ATTACHMENT A RESOLUTION NO. A RESOLUTION AUTHORIZING THE CITY MANAGER TO MAKE APPLICATION TO THE STATE OF OREGON FOR DESIGNATION OF A WEST EUGENE ENTERPRISE ZONE. The City Council of the City of Eugene finds that: A. The City of Eugene and Lane County are jointly sponsoring an application for designation of an enterprise zone. B. The City of Eugene is interested in an enterprise zone to encourage new business investment, job creation, higher incomes for local residents, and greater diversity of economic activity. C. The proposed enterprise zone, as depicted on the drawn-to scale map attached as Exhibit A, and described in Exhibit B, has a total area of 7.67 square miles and meets other statutory limitations on size and configuration. D. The proposed enterprise zone contains significant land that is designated for industrial use as indicated by the land use map(s) from Comprehensive Plan(s) acknowledged by the Land Conservation and Development Commission, and included in the application, and such industrial sites are accessible, serviced or serviceable, and otherwise ready for use and further development. E. The designation of an enterprise zone does not grant or imply permission to develop land within the enterprise zone without complying with prevailing zoning, regulatory and permitting processes and restrictions for applicable jurisdictions; nor does it indicate any intent to modify those processes or restrictions, except possibly as otherwise in accordance with Comprehensive Plans. F. The City of Eugene appreciates the impacts that a designated enterprise zone would have and the property tax exemptions that eligible business firms might receive therein, as governed by ORS 285C.050 to 285C.250. G. All of the municipal corporations and special service districts, other than the sponsoring governments, that receive operating revenue through the levying of ad valorem taxes on real and personal property in any area of the proposed enterprise zone have been informed and asked to comment on this proposal. Resolution- 1 C:'~Documents and Settings\ceebjdbhMy Documents'~EZONEhNew EZ 2005LResolution2005.DOC NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF EUGENE, a Municipal Corporation of the State of Oregon, as follows: Section 1. The City of Eugene proposes and applies for designation of an Oregon enterprise zone to be named the West Eugene Enterprise Zone, comprised of the area described in Exhibits A and B attached hereto. Section 2. The City Manager is authorized to submit the application for the City of Eugene and to make any and all substantive or technical changes to the application materials, as necessary, after adoption of this resolution. Section 3. The City of Eugene will give priority to the use in the proposed enterprise zone, if designated, of any economic development or job training funds received from the federal government. Section 4. The City of Eugene commits, upon designation, to jointly appoint with Lane County, a local enterprise zone manager or co-managers. Section 5. The City of Eugene will jointly comply with Lane County with the requirements and provisions of ORS 285C. 105. Section 6. The City of Eugene commits to prepare, within six months of designation, a list or map of local lands and buildings owned by the state or by municipal corporations within the enterprise zone that are not being used or designated for a public purpose and that have appropriate land use zoning, and to strive in making such real property available for lease or purchase by authorized business firms pursuant to ORS 285C. 110. Section 7. The City of Eugene makes a binding commitment to undertake any and all actions necessary to implement the specific enhancements in the level, efficiency or availability of local public services within the proposed zone, as described in the application. Section 8. This Resolution shall become effective immediately upon its adoption. The foregoing Resolution adopted the ~ day of ,2005. City Recorder Resolution - 2 CSDocuments and Settings\ceebjdbhMy DocumentsXEZONE\New EZ 2005LResolution2005.DOC Exhibit A West Eugene Enterprise Zone (~t. 2oos) :~ Eugene Urban Growth Boundary ~ ~ Miles D Enterprise Zone Boundary 0 0.25 0.5 i z.5 2 Acreage: 4907.82 C/tyofE~.,gene Sq. Miles: 7.67 R/ann/ng ~d Development ~orch Z~, 2oos ~' ATTACHMENT B PUBLIC BENEFIT CRITERIA (1997) 1. The extent to which the average wage of new jobs is equal to or greater than the average county wage. Points The average wage for all new jobs is: > 100% and < 110% of average county wage 25 > 110% and < 115% of average county wage 35 > 115% of average county wage 40 2. The extent to which the company hires from local training/referral agencies.* Points >10%- < 35% of all new jobs 5 >35% - < 50% of all new jobs 15 >50% of all new jobs 25 3. The extent to which the company hires persons with barriers to employment.** Points > 5% - < 10% of all new jobs 5 > 10% - < 20% of all new jobs 10 > 20% of all new jobs 15 4. The extent to which the company dedicates funds for non-mandated training and benefits.*** Points > 1% - < 5% of entire company payroll is dedicated 5 to non-mandated training & benefits > 5% - < 10% of entire company payroll is dedicated 10 to non-mandated training & benefits > 10% of entire company payroll is dedicated to 15 non-mandated training & benefits 5. Whether the company is a small business. Points < 50 employees at time of precertification 10 6. Whether the company is utilizing a previously developed site, including expansion at an existing site (i.e., the investment will take place at the same physical location as the existing facility), or redevelopment of an industrial or brownfield site. Points Expansion at existing site 1 Redevelop preexisting industrial site 2 or brownfield site 7. The extent to which the assessed value of new investment exceeds $500,000 per acre. Points Investment > $500,000 per acre 1 CRITERIA NOTES: Examples of qualified local training or referral agencies: Lane Workforce Partnership Oregon Employment Department Lane Community College Adult/Family Services Vocational Rehabilitation Private Rehabilitation Agencies Goodwill Industries Catholic Community Services St. Vincent de Paul Salvation Army Examples of persons with employment barriers: Low/moderate income Disabled Injured Veteran Welfare recipient Displaced worker Teens/youth Ex-felon Older workers Short-term jobs history Displaced homemaker Drug/alcohol abuse history Protected classes (Female head of household, Hispanic, Black, Asian or Pacific Islander, American Indian or Alaskan Native) Qualifying non-government mandated benefits include: health/life/disability insurance, retirement, profit-sharing, paid vacation/holiday, child care, transportation, sick leave, tuition assistance, career development/training. Based on the number of public benefit criteria points earned in each Enterprise Zone tax exempt year, each company shall make a public benefit contribution which shall be a percentage of the total tax exemption in any given year, based on the following: Points Public Benefit Earned Contribution % 80+ 0% contribution 0-79 Apply formula: Contribution due = a percentage equal to 15 minus [(point total * 80) x 15] Example: If point total is 40 15 minus [40 * 80) x 15] = contribution of 7.5% Example: If point total is 10 15 minus [(10 ~ 80) x 15]= contribution of 13.125% ATTACHMENT C Proposed Amendment to Public Benefit Criteria Based on the number of public benefit criteria points earned in each Enterprise Zone tax exempt year, each company shall make a public benefit contribution which shall be a percentage of the total tax exemption in any given year, based on the following: Points Public Benefit Earned Contribution % 80+ 0% contribution 0-79 formula: Contribution due a ual to Example: If point total is 40 Example: If point total is 10 ATTACHMENT D Bethel School District #52 and inspire each student to excellence. March 29, 2005 Denny Braud City of Eugene Planning & Development Department 99 West 10th Avenu6 Eugene, OR 97401 Dear Denny, Thank you very much for the information about the City Council's consideration of a resolution requesting a designation of a West Eugene Enterprise Zone. From the materials you sent it is clear that it has been a practice of creating various zones throughout the state, including Lane County, for quite sometime. An enterprise zone, for example, previously existed in West Eugene from 1987 to 1997. In the past, our School Board and the district has taken a neutral stance in matters such as this and I intend to maintain that stance. Our primary concern is to ensure that the children of our school district receive an outstanding education. We, of course, need resources to provide such an education. The primary source of our funding is the state. Each year we are guaranteed a minimum amount of per pupil funding. We are concerned about any proposal that would reduce that level of funding. I understand the importance of economic development in ensuring a vibrant economy for our region and our state. Clearly, such an economy is a key to adequate funding for schools. I would be pleased to provide you further information if it would be helpful. Steven L. Hull, Ph.D. Superintendent c: Board of Directors RECr~'' APR 0 1 2005 4640 Barger Drive · Eugene, OR 97402 · Phone (54'1) 689-3280 · Fax (54'1) 689-07'19 · www.bethel.k'12.or.us HERSHNER HUNTER LLP STEVE CORNACCHIA scomacchia @hershnerhunter.com March 31, 2005 Denny Braud City of Eugcn¢. Planning & Development Department 99 W. 10th Avenue Eugene, OR 97401 RE: West Eugene Enterprise Zone Our File No. 10461.20102 Dear Mr. Braud: : ' ~ ' We represent Junction City Water Control District. The District has received your letter, dated March 16, 2005, regarding the proposal to re-deSignate the West Eugene Enterprise Zone. We provide the following comments on that proposal on behalf of our client. The District manages a system of flood control and irrigation canals across western Lane County and western Benton County. In addition to the cost of managing that system, the District must also repay federal loans that paid for the initial construction of that system. The District levies a modest property tax to cover the cost of managing and paying for the system Actions taken by the City of Eugene and Junction City can negatively affect the District's ability to provide its required service to its constituents. Each time either city withdraws property from the District following annexation or, as in subject proposal, limits the District's collection of resources, the District's financial condition is affected. The subject proposal is additionally troubling considering the fact that the City of Eugene charges a storm water fee within its borders and then collects that storm water and discharges it into the District's system without any financial participation with the District. The designation and operation of the West Eugene Enterprise Zone will reduce the District's tax collection and will continue the gradual erosion of its financial ability to provide services APR 0 4 2005 ATTORN[YS 180 East llth Avenue, Eugene, 0regon 97401 PO Box 1475~ Eugene, 0regon 97440 541-686-8511 fax 541-344-2025 Denny Braud March 31, 2005 Page 2 to its constituents. For that reason, coupled with the belief that the District will not benefit from the results of the zone, the District is not supportive of the proposal. Please include our comments in the record of proceeding of this matter. Please contact me if you have any questions regarding this matter. Best regards, STEVE CORNACCHIA PSC:ss Cc: Dis. trict Manager Board of Directors PENNY JORDAN BRUCE PILLING EMERALD PEOPLE'S UTILITY DISTRICT KATHERINE SCHACHT 33733 Seavey Loop Road R E C ~ ~ :! ~ ,r~ PATTI CHAPPEL Eugene, OR 97405-9614 BILL TANNER Phone(541)746-1583 NAR 3 ]. 2005 FAX (541) 746-0211 General Manager www.epud.org FRANK LAMBE March 24, 2005 Denny Braud ~ City of Eugene Planning & Development Department 99 W 10th Avenue Eugene, OR 97401 Dear Mr. Braud: While Emerald PUD is a taxing authority, we do not tax and we do not have any plans to in the future. All of our revenue comes from Energy Sales. However, we do not see any negative impacts by the proposal and appreciate your administration of this project. Sincerely, General Manager MAKING CONSERVATION COMFORTABLE