HomeMy WebLinkAboutDoc 669 - Enterprise Zone Extension - BasXDeschutes County Board of Commissioners
1300 NW Wall St., Suite 200, Bend, OR 97701-1960
(541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org
AGENDA REQUEST & STAFF REPORT
For Board Business Meeting of December 16,2013
DATE: December 10,2013
FROM: Jon Stark REDI 541-923-5223
TITLE OF AGENDA ITEM:
Consideration of Board approval of Document No. 2013-669, an Extended Enterprise Zone Abatement
Agreement for BasX LLC in Redmond, Oregon.
PUBLIC HEARING ON THIS DATE? NO.
BACKGROUND AND POLICY IMPLICATIONS:
BasX LLC (BasX) has submitted an application for the Oregon Enterprise Zone Extended
Abatement (E-Zone). This program allows qualifying businesses and investments to receive 100%
pbatement of property taxes associated with the assessed value of new capital improvements.
Companies continue to pay taxes on the value of the land.
Depending upon the nature of the State program being used E-Zone abatements can range from
three (3) years (Standard program); to five (5) years (known as the Extended program); to as many
as (fifteen) 15 years (known as the Super program). Programs have increasing requirements,
memorialized through E-Zone agreements, associated with job creation and wage level.
The three-year abatement does not have an average wage requirement. However, the Extended
and Super programs require wages that are certified at 150% of Deschutes County average annual
wage. The Deschutes County's average annual compensation (as relevant to 2013 approvals) is
$36,134 per year -150 percent of that is $54,201. Compensation under the criteria includes not
only salary, but overtime, medical and retirement benefits as well. Not all jobs created need to
exceed the 150 percent average annual compensation criteria, but rather an average of the overall
compensation for all jobs needs to exceed the 150 percent average annual compensation criteria.
Extended abatements require approval from each E-Zone sponsor(s). It is the prerogative of the
sponsor agency(ies) whether or not the approvals are granted by the governing body or
administratively. The Greater Redmond Area E-Zone has three co-sponsors: the City of Redmond;
Deschutes County; and the City of Sisters. The City of Redmond's policy is that the Redmond City
Council approves all Extended and Super enterprise zone agreements. The Deschutes County
Board of Commissioners will consider the agreement at a meeting December 16, 2013, the
Redmond City Council December 17, 2013, and the Sisters City Council will consider the
agreement December 19, 2013.
BasX recently purchased the former Wal-Mart facility at 3500 SW 21 st Place in Redmond. David
Benson and Matthew Tobolski manage BasX. David Benson is leaving his firm in Tualatin, Oregon
where he was President and founder of a 750 person manufacturing company. Matthew Tobolski,
PE PhD, is a founding partner of Tobolski Watkins, a structural engineering firm based in San
Diego, which also has a presence in Bend, Oregon.
The firm has committed to creating 60 new jobs in Redmond by the first year of exemption as
stated on the application. The value of the investment associated with the abatement is
$3,200,000. However, BasX estimates the hiring to be closer to 150 people by the end of its
second year of operation.
BasX will manufacture a wide range of modular (containerized) products that will be serving areas
such as:
• Modular Hospital Units
• Modular Power Storage Units
• Modular Cooling Solutions
• Structural Solutions
The company's average annual compensation for its new employees will be greater than 150% of
the Deschutes County average annual compensation, qualifying it for the Enterprise Zone
Extended Abatement program 2015-2019, two additional years to the three-year abatement
program.
FISCAL IMPLICATIONS:
This action will extend the property tax abatement from three years (Standard Program) to five
years (Extended Program). The combined value of the five-year abatement is $257,520 for all of
the overlapping taxing districts (not including appreciation/depreciation). Beginning in year six (6)
the improvements are estimated to yield a collective $52,000 in property taxes, which had been
formerly abated.
RECOMMENDATION & ACTION REQUESTED:
Approve the Agreement for Oregon Enterprise Zone Extended Abatement for BasX LLC.
ATTENDANCE: Jon Stark from Redmond Economic Development Inc.; Keith Witcosky, City of
Redmond
DISTRIBUTION OF DOCUMENTS:
Heather Richards
City of Redmond
716 SW Evergreen
Redmond, OR 97756
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Agreement for Oregon Enterprise Zone Extended Abatement
Greater Redmond Area Enterprise Zone
WRITTEN AGREEMENT WITH THE GREATER REDMOND AREA ENTERPRISE ZONE
SPONSORS TO EXTEND PROPERTY TAX EXEMPTION TO FIVE (5) CONSECUTIVE
YEARS IN TOTAL FOR CAPITAL INVESTMENT BY BasX LLC.
The City of Redmond. Deschutes County and the City of Sisters. co-sponsors of the Greater
Redmond Area Enterprise Zone (hereinafter "The Zone Sponsor") and BasX LLC. (hereinafter
"The Firm") do hereby enter into an agreement for extending the period of time in which The
Firm shall receive an exemption on its proposed investment in qualified property in the Greater
Redmond Area Enterprise Zone contingent on certain special requirements. under ORS
285C.160 (2003).
The Zone Sponsor and The Firm jointly acknowledge, that subject to timely submission and
approval of an application for authorization and the satisfaction of other requirements under
ORS 285C.050 to 285C.250. The Firm is eligible for three years of complete exemption on its
qualified property; that nothing in this agreement shall modify or infringe on this three-year
exemption or the requirements thereof, and that this agreement becomes null and void if The
Firm does not qualify for these three years of the exemption.
The Zone Sponsor extends The Firm's property tax exemption two additional years on all
property that initially qualifies in the Greater Redmond Area Enterprise Zone after the
assessment year beginning on January 1, 2015 and, thus, sets a total period of exemption of
five consecutive years during which statutory requirements for the standard three-year
enterprise zone exemption must also be satisfied and maintained.
CONFIRMATION OF STATUTORY PROVISIONS
In order to receive the additional (2) two-years of enterprise zone exemption granted herein,
The Firm agrees herewith under 285C.160(3)(a)(A) that for each year of the entire exemption
period, The Firm's average annual compensation for all new employees is equal to or greater
than 150 percent of the county average annual wage, in accordance with the specific definitions
and guidelines in Oregon Administrative Rules (OAR 123-065-4100 -4140) which provides that:
1. Such compensation may include non-mandatory benefits that can be monetized;
2. The county average annual wage is set at the time of authorization, except as pursuant to
ORS 285C.160(4), according to the 2011 Deschutes County average annual payroll rate of
$36.134 for which 150 percent (includes total compensation package) equals $54,201;
3. Only employees working at jobs filled for the first time after the application for authorization
but by December 31 of the first full year of the initial exemption and performed within the current
boundaries of the Greater Redmond Area Enterprise Zone are counted; and
DC 2013-669
4. Only full~time, year~round and non~temporary employees engaged a majority of their time in
The Firm's eligible operations consistent with ORS 285C.135 & 285C.200(3} are counted,
regardless if such employees are leased, contracted for or otherwise obtained through an
external agency or are employed directly by The Firm.
ACCEPTING FOR THE CO~SPONSORS OF THE GREATER REDMOND AREA ENTERPRISE
ZONE:
Signature: _____________ Date: ________
George Endicott, Mayor,
City of Redmond
Signature: ______________ Date: ________
Alan Unger, Board Chair,
Deschutes County
Signature: ______________ Date: ________
Brad Boyd, Mayor,
City of Sisters
ACCEPTING FOR BasX LLC:
Date: ________Signature: ----,.=:-:-:-=--:--l'<~=-----Representative Signature
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