According to the Daily Journal of Commerce, construction giant Skanska is "looking for subcontractors to work on FedEx's new $102 million distribution center in Troutdale."
Read about the history of FedEx and Troutdale here.
Showing posts with label Enterprise Zone. Show all posts
Showing posts with label Enterprise Zone. Show all posts
Oct 13, 2007
Jul 31, 2007
Troutdale Enterprise Zone Work Session
I just got back from our city council work session regarding the joint Troutdale/Fairview Enterprise Zone (EZ). First, we decided that Fairview and Troutdale would each have their own criteria within the joint EZ.
Next, we covered four basic points:
1)Areas zoned industrial to be included in the two city Enterprise Zone:
In Troutdale, we're going to limit the EZ to just the old Reynolds Metals area. Which means no EZ for the pig farm property across the street from McMenamins Edgefield, and No EZ for the industrial land adjacent to Mt. Hood Community College (click here to see a map of the original proposed industrial lands considered for the EZ in Troutdale and Fairview).
2)Hotel/motel option inclusion or exclusion:
We decided to include this option.
3) Name for the two city joint application e.g. Troutdale-Fairview EZ:
We decided on a neutral name such as Cascade-Columbia EZ, or something along those lines.
4)EZ Manager:
There will be co-managers, one each for Fairview and Troutdale. The first year, we will probably contract with the city of Gresham to manage the new EZ
Next, we discussed Enterprise Zone Criteria that companies must meet in order to be eligible for tax abatement, as follows:
Minimum Investment:
We were all over the board here. There wasn't any agreement, except that we didn't have enough information to make a decision. Some wanted a $1 million minimum investment with a $75/SF minimum. Others wanted $100/sf minimum. City staff pointed out that the FEDEX's pure construction cost will come in at $53-57/sf, so a higher minimum than $50 is problematic if FEDEX is to meet this requirement. So city staff will be coming back to us with more information next time. I predict a battle with this item in the future.
First Source Agreement:
We'll probably go with the state-required minimums, but again, we wanted more information.
Procurement Plan:
Of course, we all want to see preference given to Troutdale or east county vendors. But we were undecided on details. Again, we wanted more specifics on what we could or could not require.
Job Quality:
Quite a bit of disagreement here. Some wanted a requirement of 75% of full time employees at 200% of minimum wage, plus benefits. Some wanted an average of all employees at 150% of minimum wage. According to the Port of Portland representative at the work session, FEDEX indicated that had a concern with e 200% minimum wage level for 75% of full time employees. No decision was made tonight. This will be a tough call. But personally, I would rather have a lot of jobs at 150% of minimum wage than no jobs at all.
Application Fee:
Surprise: We were unanimous on a .1% of the value of the investment.
Maximum Length of Tax Abatement:
The consensus (Actually, I counted a 5-2 split on this) was for only three years of tax abatement.
And that was that. Earlier tonight,we also had an executive session regarding negotiations for the road through the Chelsea property. I hope to have news on these negotiations within a month or two.(In a nutshell, Troutdale's urban renewal area is landlocked. We need to demolish a small section of the outlet mall in order to build a road through the existing Columbia Gorge Premium Outlet Mall. After the Troutdale city council voted last year to approve condemnation proceedings against Chelsea for the land needed for this road, the city and Chelsea began negotiating the terms and conditions for a "friendly" condemnation).
Next, we covered four basic points:
1)Areas zoned industrial to be included in the two city Enterprise Zone:
In Troutdale, we're going to limit the EZ to just the old Reynolds Metals area. Which means no EZ for the pig farm property across the street from McMenamins Edgefield, and No EZ for the industrial land adjacent to Mt. Hood Community College (click here to see a map of the original proposed industrial lands considered for the EZ in Troutdale and Fairview).
2)Hotel/motel option inclusion or exclusion:
We decided to include this option.
3) Name for the two city joint application e.g. Troutdale-Fairview EZ:
We decided on a neutral name such as Cascade-Columbia EZ, or something along those lines.
4)EZ Manager:
There will be co-managers, one each for Fairview and Troutdale. The first year, we will probably contract with the city of Gresham to manage the new EZ
Next, we discussed Enterprise Zone Criteria that companies must meet in order to be eligible for tax abatement, as follows:
Minimum Investment:
We were all over the board here. There wasn't any agreement, except that we didn't have enough information to make a decision. Some wanted a $1 million minimum investment with a $75/SF minimum. Others wanted $100/sf minimum. City staff pointed out that the FEDEX's pure construction cost will come in at $53-57/sf, so a higher minimum than $50 is problematic if FEDEX is to meet this requirement. So city staff will be coming back to us with more information next time. I predict a battle with this item in the future.
First Source Agreement:
We'll probably go with the state-required minimums, but again, we wanted more information.
Procurement Plan:
Of course, we all want to see preference given to Troutdale or east county vendors. But we were undecided on details. Again, we wanted more specifics on what we could or could not require.
Job Quality:
Quite a bit of disagreement here. Some wanted a requirement of 75% of full time employees at 200% of minimum wage, plus benefits. Some wanted an average of all employees at 150% of minimum wage. According to the Port of Portland representative at the work session, FEDEX indicated that had a concern with e 200% minimum wage level for 75% of full time employees. No decision was made tonight. This will be a tough call. But personally, I would rather have a lot of jobs at 150% of minimum wage than no jobs at all.
Application Fee:
Surprise: We were unanimous on a .1% of the value of the investment.
Maximum Length of Tax Abatement:
The consensus (Actually, I counted a 5-2 split on this) was for only three years of tax abatement.
And that was that. Earlier tonight,we also had an executive session regarding negotiations for the road through the Chelsea property. I hope to have news on these negotiations within a month or two.(In a nutshell, Troutdale's urban renewal area is landlocked. We need to demolish a small section of the outlet mall in order to build a road through the existing Columbia Gorge Premium Outlet Mall. After the Troutdale city council voted last year to approve condemnation proceedings against Chelsea for the land needed for this road, the city and Chelsea began negotiating the terms and conditions for a "friendly" condemnation).
Tonight's Agenda: How Large An Enterprise Zone?
At tonight's Troutdale City Council work session, we will be discussing the size of the proposed Troutdale/Fairview Enterprise Zone (EZ), along with the terms and conditions we'll require for EZ eligibility.
Within Troutdale city limits, should The EZ include not only the old Reynolds Metals Property (Marked as Zone 1 on the map), but also the "Pig Farm" property across the street from McMenamins Edgefield (Zone 4), and the Mt. Hood Community College's "shovel ready" site (Zone 5 on the map)?
My intent when voting to approve the pursuit of an EZ was to include only the old Reynolds Metals property in a new EZ. I don't have time to go into details in now (gotta eat dinner before the meeting!. But if you're interested in the entire subject, click here to download tonight's agenda packet.
Within Troutdale city limits, should The EZ include not only the old Reynolds Metals Property (Marked as Zone 1 on the map), but also the "Pig Farm" property across the street from McMenamins Edgefield (Zone 4), and the Mt. Hood Community College's "shovel ready" site (Zone 5 on the map)?
My intent when voting to approve the pursuit of an EZ was to include only the old Reynolds Metals property in a new EZ. I don't have time to go into details in now (gotta eat dinner before the meeting!. But if you're interested in the entire subject, click here to download tonight's agenda packet.
Jul 11, 2007
Troutdale City Council: Yes to Enterprise Zone
After a long and sometimes contentious city council public hearing last night, we voted to go ahead with the steps needed to create an enterprise zone at the old Reynolds metals site. The final vote was 5-2, with councilors Ripma and Kight voting no.
What we actually voted on was to authorize the mayor to request a new State Enterprise Zone(EZ) authorization round, and direct city staff to begin work on the final language for a Troutdale/Fairview Resolution Authorizing Application to Establish and Enterprise Zone.
Why did I vote yes? Even within an EZ, new construction or development is never a sure thing. I was not convinced that EZ's are a valuable economic tool except for the fact that we can require a minimum criteria in order for a company to be eligible for tax abatement within the EZ.
As an example of what other cities have required in their EZ criteria, Gresham requires a minimum investment of $1 million. For projects involving construction, a minimum of $75/sf is required. Gresham requires a procurement plan to increase purchasing from Gresham companies. Gresham's EZ criteria also require that at least 75% of all full-time employees must be paid at least 200% of minimum wage after one year of employment, and must provide benefits to full time employees that meet or exceed the national average. Troutdale's criteria may be different. We're working on them now.
The Reynolds site is a unique area as far as taxation is concerned. Troutdale has never received property tax income from this site because it wasn't within the city limits until a few months ago. Troutdale only recently annexed this property in February of this year. And when the Port of Portland takes title to this property in September or October of this year, the property taxes generated will again be ZERO. Why? Because the Port of Portland, as a governmental agency, pays no property tax. So if no development occurs, and if the Port doesn't sell the land to a private entity such as FEDEX, there will be no property taxes for this site.
Some people think we're giving away property taxes by creating this EZ. . We're not writing a check to FEDEX or any other company that might locate within the EZ. We are delaying when the property taxes begin for these companies by three years. Troutdale's share of the abated property taxes over three years will be approximately $1 million total. In return for that $1 million, if FEDEX comes to this site, FEDEX will be constructing an $80-100 million facility with estimated employment of 1000 jobs at the end of three to five years. That's a good trade-off.
In the past as well as right now, there will be NO tax dollars coming from the Reynolds site. But but with an EZ, after the tax abatement period ends, an estimated $1.3 million in tax revenue will be generated for all taxing districts. Troutdale's share of this: $383,000 per year. ZERO tax revenue in the past, now and for three to five more years. With an EZ: at the end of the tax abatement period, $383k per year for Troutdale as long as FEDEX remains.
Without an EZ, the Reynolds site could be filled with warehouses, with only 3-4 jobs per acre at low wages.(look at Airport Way, Marine Drive). With an EZ and minimum criteria: 1000 jobs (about 14 per acre), jobs which will be 150-200% of minimum wage and with good benefits.
Are there any guarantees? No. But lets face it, whether or not we like property tax abatement, it's a fact that Troutdale is dealing with an extremely competitive economic development environment. Other cities in the Metro area have EZ's. East Multnomah County has not been competitive in job creation. This EZ gets us on a level playing field.
Some people have said companies might come to the Reynolds site without an EZ. Maybe that's true, maybe it's not true. But FEDEX has expressed interest. They've already had a pre-application conference with the city. This deal is on the table now. I'll take real interest and good chances of success versus pie in the sky any day.
I've gone from being for and against the creation of this EZ on a daily basis for the last two weeks. But when I narrow it down to what's best for Troutdale, and after looking at all the issues from both the positive and negative side, I made the judgement that the EZ is what's best for Troutdale. So did a wide majority of the rest of the city council by a 5-2 vote. A majority of the citizens that came to the pubic hearing last night agreed with us. 1000 new jobs is worth the effort.
What we actually voted on was to authorize the mayor to request a new State Enterprise Zone(EZ) authorization round, and direct city staff to begin work on the final language for a Troutdale/Fairview Resolution Authorizing Application to Establish and Enterprise Zone.
Why did I vote yes? Even within an EZ, new construction or development is never a sure thing. I was not convinced that EZ's are a valuable economic tool except for the fact that we can require a minimum criteria in order for a company to be eligible for tax abatement within the EZ.
As an example of what other cities have required in their EZ criteria, Gresham requires a minimum investment of $1 million. For projects involving construction, a minimum of $75/sf is required. Gresham requires a procurement plan to increase purchasing from Gresham companies. Gresham's EZ criteria also require that at least 75% of all full-time employees must be paid at least 200% of minimum wage after one year of employment, and must provide benefits to full time employees that meet or exceed the national average. Troutdale's criteria may be different. We're working on them now.
The Reynolds site is a unique area as far as taxation is concerned. Troutdale has never received property tax income from this site because it wasn't within the city limits until a few months ago. Troutdale only recently annexed this property in February of this year. And when the Port of Portland takes title to this property in September or October of this year, the property taxes generated will again be ZERO. Why? Because the Port of Portland, as a governmental agency, pays no property tax. So if no development occurs, and if the Port doesn't sell the land to a private entity such as FEDEX, there will be no property taxes for this site.
Some people think we're giving away property taxes by creating this EZ. . We're not writing a check to FEDEX or any other company that might locate within the EZ. We are delaying when the property taxes begin for these companies by three years. Troutdale's share of the abated property taxes over three years will be approximately $1 million total. In return for that $1 million, if FEDEX comes to this site, FEDEX will be constructing an $80-100 million facility with estimated employment of 1000 jobs at the end of three to five years. That's a good trade-off.
In the past as well as right now, there will be NO tax dollars coming from the Reynolds site. But but with an EZ, after the tax abatement period ends, an estimated $1.3 million in tax revenue will be generated for all taxing districts. Troutdale's share of this: $383,000 per year. ZERO tax revenue in the past, now and for three to five more years. With an EZ: at the end of the tax abatement period, $383k per year for Troutdale as long as FEDEX remains.
Without an EZ, the Reynolds site could be filled with warehouses, with only 3-4 jobs per acre at low wages.(look at Airport Way, Marine Drive). With an EZ and minimum criteria: 1000 jobs (about 14 per acre), jobs which will be 150-200% of minimum wage and with good benefits.
Are there any guarantees? No. But lets face it, whether or not we like property tax abatement, it's a fact that Troutdale is dealing with an extremely competitive economic development environment. Other cities in the Metro area have EZ's. East Multnomah County has not been competitive in job creation. This EZ gets us on a level playing field.
Some people have said companies might come to the Reynolds site without an EZ. Maybe that's true, maybe it's not true. But FEDEX has expressed interest. They've already had a pre-application conference with the city. This deal is on the table now. I'll take real interest and good chances of success versus pie in the sky any day.
I've gone from being for and against the creation of this EZ on a daily basis for the last two weeks. But when I narrow it down to what's best for Troutdale, and after looking at all the issues from both the positive and negative side, I made the judgement that the EZ is what's best for Troutdale. So did a wide majority of the rest of the city council by a 5-2 vote. A majority of the citizens that came to the pubic hearing last night agreed with us. 1000 new jobs is worth the effort.
Jul 10, 2007
Public Hearing Tonight re: FEDEX Tax Break
Tonight the Troutdale city council is holding a public hearing regarding the creation of an Enterprise Zone at the old Reynolds Metals site.The reason we're considering this? FEDEX asked the city for tax breaks of approx. $4 million for a proposed new distribution facility.
I'm going into the meeting in an undecided frame of mind. Although two weeks ago I was leaning in favor of the tax break, now I'm not so sure. There is a lack of evidence one way or another showing that tax abatements in the form of Enterprise Zones are worth it in the long run. Balance that lack of evidence with a proposal by FEDEX to bring 500-1000 jobs into the area.
Download a copy of tonight's agenda packet here. Come to the meeting and tell us your opinion of this proposed tax break. 7pm. Troutdale City Hall, 104 SE Kibling. Here's a map of the location.
I'm going into the meeting in an undecided frame of mind. Although two weeks ago I was leaning in favor of the tax break, now I'm not so sure. There is a lack of evidence one way or another showing that tax abatements in the form of Enterprise Zones are worth it in the long run. Balance that lack of evidence with a proposal by FEDEX to bring 500-1000 jobs into the area.
Download a copy of tonight's agenda packet here. Come to the meeting and tell us your opinion of this proposed tax break. 7pm. Troutdale City Hall, 104 SE Kibling. Here's a map of the location.
Jul 6, 2007
Jimmy Hoffa's "I Hate FEDEX" blog
Check it out at fedexwatch.com.
For an opposing viewpoint about the Teamsters and UPS, see "The Future of the Union Movement: Clues From the UPS Strike" at fee.org.
Also: See " FedEx Ground vs. UPS: Two Worldviews" from braunconsulting.com.
For an opposing viewpoint about the Teamsters and UPS, see "The Future of the Union Movement: Clues From the UPS Strike" at fee.org.
Also: See " FedEx Ground vs. UPS: Two Worldviews" from braunconsulting.com.
Jul 5, 2007
Enterprise Zone Study: Slower Growth Than Non-EZ Zones
Comparison of growth rates between cities with and without enterprise zones shows that cities with enterprise zones grew at a slower rate than cities without enterprise zones, according to a recent study by the Center for Urban Studies at Portland State University. Data in the study shows that cities without enterprise zones grew by 41 percent, compared to 22.5 percent for cities with enterprise zones.
The study, Oregon Enterprise Zone Tax Abatement Economic Development Study and Urban Renewal Study (Hall, Rufolo, Dong), also asserts the following:
FedEx is looking to construct a $100 million distribution center in Troutdale, a development that could hinge on whether the city gives the company a multimillion-dollar tax abatement via what's known as an enterprise zone. I've discussed this proposed enterprise zone previously.
To read about the estimated amount of tax abated, click here.
To read about happened at the joint City of Troutdale/City of Fairview city council work session, click here.
Be sure to read Fairview city councilor Quinby's comment about that joint work session here.
Click here for a Google search with keywords TROUTDALE and FEDEX.
Click here for a Google NEWS search with keywords TROUTDALE and FEDEX.
FEDEX or no FEDEX, the most important factor to consider remains: What's best for Troutdale?
The study, Oregon Enterprise Zone Tax Abatement Economic Development Study and Urban Renewal Study (Hall, Rufolo, Dong), also asserts the following:
- Within Enterprise Zones, the impact of the tax abatement on employment seems to be very limited. "The cost per job created appears to be relatively high, and this cost comparison is based on the questionable assumption that none of the employment growth would have taken place without the abatements."
- Surveys show that tax abatement has limited influence on employer location decisions. ,". . .In fact, Dowall(1996) found that only 23 percent of firms participating in the California Enterprise Zone Program reported that program incentives influenced their location decisions. "
- "With the passage and implementation of Ballot Measures 5 and 50, tax abatements result in a direct revenue loss for local taxing entities."
- "There are existing local economic conditions relating to land costs, transportation infrastructure, labor, financing, and regulatory practices that tax incentives cannot overcome"
- "For local taxing districts, after providing services without corresponding increases in revenues during the (tax) exemption period, the ability to generate revenues is substantially lower than what is suggested by initial investment values."
FedEx is looking to construct a $100 million distribution center in Troutdale, a development that could hinge on whether the city gives the company a multimillion-dollar tax abatement via what's known as an enterprise zone. I've discussed this proposed enterprise zone previously.
To read about the estimated amount of tax abated, click here.
To read about happened at the joint City of Troutdale/City of Fairview city council work session, click here.
Be sure to read Fairview city councilor Quinby's comment about that joint work session here.
Click here for a Google search with keywords TROUTDALE and FEDEX.
Click here for a Google NEWS search with keywords TROUTDALE and FEDEX.
FEDEX or no FEDEX, the most important factor to consider remains: What's best for Troutdale?
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