Council mulls: Should Local incentives be offered to developing businesses?
During a La Grande City Council work session Monday at City Hall,
everybody agreed an enterprise zone is a good way to support developing
businesses. But a big question remained.
Should local incentives, above and beyond state-mandated tax breaks, be continued?
“The big issue is local incentives,” Community and Economic Development Director Charlie Mitchell told the council. “The staff recommendation is to take them out, and that raises some philosophical and political issues.”In state-designated enterprise zones, new or expanding businesses making major capital investments can qualify for tax property tax abatement for three to five years. The zones may offer local incentives as well.
The Grande Ronde Enterprise Zone was established in the 1980s and is sponsored by Union County, La Grande, Union, Elgin and Island City. North Powder has expressed an interest in joining.
Currently, La Grande, Island City and Union County offer a broad range of incentives, including waivers for building inspection permits and utility hookups.
But the enterprise zone is due for renewal with the state this year, and La Grande is using the occasion to consider possible changes in policy.
Among other things, Mitchell’s department is recommending the city no longer offer those incentives; other enterprise zone sponsors, notably Union County, want to continue with the zone as is.
Union County Commissioner Mark Davidson told the council he thinks the incentives are important in the effort to attract business and industry.
“We’re at a competitive disadvantage when it comes to the availability of land, transportation, good climate,” he said. “I’m not trying to tell the city what to do, but we need every advantage we can get.”
La Grande’s building department provides inspections and other building services for all the other jurisdictions. That department absorbs costs when building fees are waived.
City Manager Robert Strope said it is easy enough for other jurisdictions to waive building fees, since it won’t cost them anything.
Though there was lengthy debate on the proposed elimination of local incentives, the council did not reach a consensus. Discussion will continue tonight when the body considers a resolution supporting continuation of the zone.
Strope said he doesn’t have a problem so much with the city donating staff time for enterprise zone projects, as he does with paying the bill when outside consultants or engineers become involved in a project.
“Maybe the right thing to do is say the city and the county will waive fees to the extent the cost is covered by staff — but those hard-dollar fees would not be waived,” he said.
The deadline for enterprise zone renewal this year is April 3. Because of time constraints, the council needs to vote on the issue during its regular meeting tonight.
The vote will be on a model resolution provided by the state. The council has the option of changing language having to do with local incentives.
The Union County Board of Commissioners doesn’t have a meeting scheduled until March 18. Davidson said the board could not make make any formal decisions on policy changes until that time.
He said he would take the discussion on incentives, including the question of consultant costs, under advisement.
Enterprise zone renewal was one of two economic development issues mulled by the council during the work session.
Also discussed was a memorandum of understanding governing the partnership between the city and Union County Economic Development Corp.
Tonight, the council is slated to vote on approval of the MOU. The document was recently reviewed and approved by the UCEDC board.
Lists of goals and tasks accompany the MOU. Strope said the UCEDC board is satisfied with the goals and tasks, though it would like revisions in language concerning signage at the La Grande Business and Technology Park.
The UCEDC is charged with formulating an economic strategy for Union County, in partnership with the city, county and other stakeholders.
For that task, the UCEDC proposes using a computer model designed by Brian Cole of Baker City-based Orbis Group.