>La Grande Observer | Union and Wallowa Counties' News Leader

Crowning achievement: One of Union County Economic Development Corporation's major accomplishments came in 1989, with the purchase of the Baum Industrial Park, home today of Fleetwood Travel Trailers, Eagle Carriage and Machine, Eagle Cap Steel and others. The UCEDC retired its Baum Industrial Park debt in 1995. Today, it derives part of its income from park land sales. (The Observer/PHIL BULLOCK).

- Bill Rautenstrauch

- The Observer

At least one positive thing has emerged from the recent wrangling over City of Grande funding for the Union County Economic Development Corporation: a history lesson.

During a sometimes-contentious work session last week, the city council made public two documents outlining the past achievements of the Union County Economic Development Corp. and its parent organization, the La Grande Industrial Development Corp.

Those who didn't know before know now that a private group of local business people backs — in fact, has always backed — the UCEDC in its economic development efforts.

One of the documents, prepared by UCEDC Treasurer Janet Hume Schwarz, contains detailed information about the LGIDC, from its beginnings to the present day.

City Councilors John Bozarth and Dan Pokorney are on record as saying that's sufficient information for the council to go ahead with UCEDC's 2006-2007 funding request.

But another contingent, headed by Mayor Colleen Johnson, isn't satisfied and still questions the status quo.

According to Hume Schwarz's paper, the history of the La Grande Industrial Development Corp. and its so-called ID Board begins in 1955, the year several of La Grande's leading businessmen formed La Grande Industrial Promotions Inc.

The organization's purpose, according the Articles of Incorporation, was to "foster, encourage, promote and improve the industrial, commercial and physical development" of La Grande.

David C. Baum was the president, Fred Otten vice president, John J. Sullivan treasurer, and William S. Thomas secretary.

In 1966, the name of the group was changed to the La Grande Industrial Development Corp., with Baum still the president and Willard Carey secretary.

The evolution continued, until in 1983 the ID board created the UCEDC, a three-way partnership consisting of the ID board, Union County and the City of La Grande.

The thinking at the time was that the UCEDC and the LGIDC would complement each other in local economic development efforts.

With its non-profit status, the UCEDC could leverage funds not available to a private, for-profit group.

And the LGIDC, which continued as a legally registered corporation, would be able to accomplish things a non-profit could not.

"The ID board could do things related to recruiting and lobbying that the UCEDC would not be allowed to do," Jack Schut, a longtime LGIDC shareholder and current ID Board member, said this week.

The LGIDC appointees also could contribute business know-how, said Steve Anderson, a former LGIDC member who was active at the time the UCEDC was formed.

"We did not think it wise to turn all the decision-making over to city or county people who might not have the necessary expertise," said Anderson.

The make-up of the UCEDC board of directors underwent several changes until it became what it is today, a board with four appointees each from Union County, the City of La Grande and the LGIDC.

According to Schut, the ID Board has a formal process for making its appointments.

"We meet collectively as a board and discuss people who would make good appointees. Then we call and ask them if they are interested and have the time," he said.

Between the time of its formation and the present day, the UCEDC has taken part in several key projects, and claims credit for attracting numerous businesses to the county.

The projects, detailed in the other report submitted to the city by the UCEDC, include the purchase of the Geothermal Light Industrial Park on Highway 203 near Hot Lake.

The property was acquired in 1988; Barreto Manufacturing, a maker of rototillers, later set up its fabricating plant there.

Development of the Elgin Business Park, marketing of the Union County Airport Industrial park, and many other activities are cited as examples of the UCEDC's work.

But a crowning achievement came in 1989 with the purchase of the Baum Industrial Park, home today of Fleetwood Travel Trailers, Eagle Carriage and Machine, Eagle Cap Steel and others.

According to Hume Schwarz's report, some $80,000 came from the state Regional Strategies Fund and the governor's Strategic Reserve Fund. Most of the public money was for park infrastructure.

The UCEDC also borrowed $120,000 from Western Bank for property acquisition, development, marketing and other expenses.

The LGIDC, in turn, loaned money to the UCEDC. That loan, for $214 a month, carried no interest and had no maturity date. UCEDC was to pay it back as it was able.

The UCEDC retired its Baum Industrial Park debt in 1995. Today, it derives part of its income from park land sales. The rest of the budget comes from contributions from the City of La Grande, Union County and individual memberships.

The UCEDC report also points up current development of the La Grande Business and Technology Park, a joint city-UCEDC effort.

In November 1995, the LGIDC failed to renew its corporate registry.

At the end of five years, the state corporation division dissolved the LGIDC. The organization, however, continued to make appointments to the UCEDC.

Six-and-a-half years later, a new corporation was formed, under the same name, with Steven J. Joseph listed as registered agent and president, and Larry Cribbs secretary.

In 2000, the LGIDC paid a five-year membership in the UCEDC, at $1,000 per year. The group has not paid membership since June 2004.

Some individuals identified as ID board members have paid UCEDC dues between 2000-2006, including A&B Enterprises, Becker Construction, William Hermann,and William Whittemore.

This year, when it came time to consider the UCEDC's $35,000 funding request, the

La Grande City Council began raising questions about the LGIDC.

The questions have stirred resentment, but Johnson maintains the city is obligated to ask them.

The city has expressed concern that the ID Board makes appointments, but does not contribute financially as does the city and the county.

It also has said it wants information on LGIDC bylaws, Articles of Incorporation, membership rolls, and corporate tax returns.

The request for the tax information spurred controversy, prompting Joseph to say the ID Board would provide the returns when each and every member of the council provided copies of theirs.

The tax issue, however, did not come up during the work session last week.

"Some people say we have a right to ask for it, others think we don't," Johnson said later.

Since the original issues were raised, discussion has taken another course.

During the work session, Johnson and Councilors Todd Richmond and Steve Clements expressed support for a change in UCEDC bylaws.

That change would replace the LGIDC appointees with appointees drawn from the UCEDC membership.

Tim Seydel, UCEDC president, said the board is willing to discuss all options. But at the same time, others expressed dissatisfaction with the way talks are going.

Dale Case, UCEDC past president, said the city shouldn't be trying to fix something that isn't broken. Joseph said he wasn't happy with the city telling the UCEDC it must reconstitute.

Joseph also said he is worried the city's demands could damage a valuable economic development partnership.

"Be careful you don't throw the baby out with the bath water," he said.