Makeup of UCEDC Board to change

The Union County Economic Development Corp. recently made a bylaw change that will significantly affect the makeup of the board of directors — and maybe help to smooth over a long-running argument with members of the La Grande City Council.

Currently, the UCEDC board includes four appointees from the City of La Grande, four from Union County, and four from the La Grande Industrial Development Corp., also known as the "ID Board."

But on Nov. 15, the UCEDC voted to replace the ID board appointees with private-sector business people elected by the UCEDC membership.

"There were two reasons for it," said UCEDC Executive Director Craig Thompson. "The board felt it would help us increase our membership. Also, we've heard it's a concern for the city council and we decided to respond to it."

The UCEDC is a private, non-profit group that involves itself in local economic development projects, including development of business and industrial lands.

The LGIDC, a for-profit corporation, is the forerunner of the UCEDC. In the summer of 2006, Mayor Colleen Johnson began saying the city would not fund the UCEDC for 2006-2007 until questions concerning the LGIDC were answered.

The questions had to do with history, corporate bylaws, corporate taxes, membership rolls and the process by which the LGIDC makes its UCEDC appointments. Johnson insisted the city had a right to that information.

In a letter to the council and at an August 2006 council meeting, LGIDC president Steve Joseph gave the history of the LGIDC, and listed the board members — himself, Larry Cribbs as secretary, and Bill Whittemore as treasurer.

He also named Don Waldrop, Bill Hermann, Mike Becker and Jack Schut as members.

Joseph said the LGIDC was originally incorporated as La Grande Industrial Promotions Inc., in 1956, and later re-named the La Grande Industrial Development Corp. Its mission was to foster local economic development.

According to Joseph's explanation, the La Grande Industrial Development Corp. "was a for-profit corporation together with the Industrial Development Corp. of La Grande, Oregon, a not for profit corporation."

"This was subsequently amended into the Union County Economic Development Corp.," Joseph said.

But that amendment, dated 1983, apparently did not do away with or replace the LGIDC. The LGIDC continued to function as its own private, for-profit entity.

According to the Oregon Secretary of State's Office, the LGIDC was a corporation until 1995, when it was dissolved because of non-payment of fees. It re-incorporated in 2002.

Johnson and City Councilors Todd Richmond and Steve Clements weren't satisfied with the level of disclosure, and they continued to raise objections to the makeup of the UCEDC board.

In October 2006, the UCEDC considered a proposal that board positions filled by LGIDC members be filled instead by people elected by the UCEDC membership. The proposed change in bylaws was voted down at that time by a 7-2 vote.

Contacted Tuesday, Johnson said she was happy to hear that the board had changed its mind.

"It has been a sticking point for some councilors, including me," she said. "I'm pleased to hear it. I think it's a real triumph for transparency. It's critical people know what's going on."

Still, the issue of city funding for the non-profit UCEDC remains up in the air.

The City of La Grande and Union County annually give the UCEDC money for operating expenses. Membership dues also go toward those expenses.

This year, the county contributed $50,000. In February 2007, the city gave UCEDC $35,000. The UCEDC recently submitted a request to the city for $35,000 for the coming year.

The city and the UCEDC are trying to hash out a memorandum of understanding and work plan that will govern future relationships, especially as they pertain to development of the

La Grande Business and Technology Park. A council vote on funding likely won't be taken until the memorandum and work plan are complete.

The city and UCEDC are partners in the park, a 77-acre tract on Gekeler Lane near Highway 30. The corporation owns about 65 acres, the city the rest.

The job of filling the park with tenants has gone to the UCEDC; the city has incurred more than $2.5 million in debt for park infrastructure.

Johnson, for one, has suggested that development of business park infrastructure is contribution enough to the city-UCEDC partnership.

Recently she proposed hiring a full-time city economic development director, using all the funds that are allocated to UCEDC and part of the funds that go to Union County Tourism to pay for it.

While she welcomes the change in UCEDC bylaws, she said she has not changed her mind about the need to hire a city economic development director. She said she plans to pursue the matter further.

"It doesn't change my feeling that we need someone devoted to downtown and other elements of economic development," she said.