A new direction?

Development partnership: The City of La Grande and the Union County Economic Development Corporation are partners in the La Grande Business and Industrial park on Gekeler Lane. Recently completed infrastructure including streets and sidewalks (above) was paid for by the city; the UCEDC is marketing the land. (The Observer/CHRIS BAXTER).

- Bill Rautenstrauch

The Observer

With some members of the La Grande City Council wondering if local economic development needs a jolt, two non-profit organizations funded in part by city taxpayers are teetering over an abyss of fiscal uncertainty.

As detailed last week, the council has debated whether some portion of city transient room tax money given Union County Tourism for marketing and development might be better spent on other things.

And, as Mayor Colleen Johnson calls for the hiring of a full-time economic and community development director, the Union County Economic Development Corporation could also be looking at a cut in city funding.

Johnson, ever an outspoken critic of the UCEDC, leads a contingent that believes the time has come for the city to consider some changes.

"We have been doing economic development the same way for well over 20 years," the mayor said in an e-mail to all councilors last week. "We have little coordination between any of the entities that represent economic development."

Johnson said in her e-mail the cost of hiring a director and launching a new economic development program would be about $150,000.

To fund it, she is proposing that Union County Tourism's annual funding be reduced from $100,000 to $70,000, and that funding for the UCEDC be done away with entirely. The remainder of the money needed would come from the city's general fund.

Like Union County Tourism, the UCEDC relies heavily on money from the city and from Union County for operating expenses.

But relations between the city and the private, non-profit economic development concern have been rocky of late. Last year's $35,000 funding request was granted only after months of bitter wrangling; this year's request, also for $35,000, likely will be contested, too.

The money is all-important to the UCEDC, a volunteer organization that works to foster economic growth and development throughout Union County.

"The city and county provide us with roughly equal baseline funding, and it establishes us as partners," UCEDC President Tim Seydel said this week. "If we lost the city funding, we'd definitely have to do things differently. We'd have to think through what to do next."

Relations between the city and the UCEDC have been strained at least since the early summer of 2006, when the city demanded that the La Grande Industrial Development Corporation, a non-contributing partner in the UCEDC, reveal information about itself.

Approval of the year's funding request was tied up as the city, the UCEDC and the LGIDC argued over what the city had the need or right to know.

In January 2007, the UCEDC funding was finally granted, though Johnson and Councilors Todd Richmond and Steve Clements remained unhappy with the level of disclosure about the LGIDC.

In the meantime, the city and the UCEDC forged ahead with development of the La Grande Business and Technology Park. They have not been able to reach complete accord in that endeavor.

As partners, the two entities hope to fill the 74-acre parcel with businesses providing family-wage jobs.

The UCEDC owns 63 acres of the new park, the city 14. The city has incurred $2.5 million of debt for infrastructure; the UCEDC has charge of attracting tenants.

Johnson, along with Councilor Todd Richmond and Steve Clements, think the partnerships an unequal one. The three say the city has done enough for the UCEDC without granting annual funding.

"They own 90 percent of the business park and we put in 100 percent of the infrastructure," Johnson said during a Sept. 19 Urban Renewal Agency meeting. "That's a good payment to carry on with the agreements we have."

Through 2007, the city and the UCEDC have been trying to hammer out a memorandum of understanding regarding park development and marketing.

On Sept. 19, a study group made up of three city councilors and three members of the UCEDC turned in a draft to the city Urban Renewal Agency, which is also the city council.

During the highly contentious session, Johnson and Councilors Todd Richmond and Steve Clements stood opposed to the document, saying it was too vague and contained goals and objectives that should have already been met.

Clements, along with Mary Ann Miesner and Gary Lillard, represented the city on the MOU study group.

During the URA meeting, Lillard expressed unhappiness that the MOU didn't pass muster.

"A majority of the council did support the MOU process," he said. "We're backpedaling and I'm not ready to do business like that."

Lillard, Meisner and Dan Pokorney have in the past supported the partnership between the city and UCEDC, and so too did John Bozarth, a councilor who resigned earlier this summer.

Meisner was absent from the Sept. 19 meeting, but Lillard and Pokorney, and councilor Di Lynn Larsen-Hill, Bozarth's replacement, said they favored further talks.

Talks may take a different turn now, with Johnson proposing the hiring of an economic development director and a redirection of economic development dollars.

She has called for a workshop to discuss the proposal Oct. 8. She said this week that the session will be the first step in a long process.

"Nothing's imminent," she told The Observer. "It's not something that's going to happen overnight. I just want to start a conversation where we're asking, ‘What's best for the city?'"

Seydel and the UCEDC, meantime, hope that differences can be overcome, and the partnership with La Grande — along with funding — can be preserved.

"A lot of this goes way back. There's a lot of old animosities," said Seydel. "But disagreements are a part of the partnership process. You don't just throw up your arms and give up."