HomeMy WebLinkAboutDoc 029 - Enterprise Zone Amendment
Deschutes 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 January 29, 2014
_____________________________
DATE: January 13, 2014
FROM: Jon Stark REDI 541-923-5223
TITLE OF AGENDA ITEM:
Consideration of Board approval for Enterprise Zone Extended Abatement Agreement for PCC
Schlosser Redmond, Oregon.
PUBLIC HEARING ON THIS DATE? NO.
BACKGROUND AND POLICY IMPLICATIONS:
PCC Structurals dba PCC Schlosser (PCC Schlosser) has submitted an application for the Oregon
Enterprise Zone Extended Abatement (E-Zone). Extended Abatements last for four or five-years.
This program allows qualifying businesses and investments to receive 100% abatement of property
taxes associated with the assessed value of new capital improvements. Companies continue to
pay taxes on the value of the land during the term of the abatement.
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 2014 approvals) is
$36,782 per year - 150 percent of that is $55,173. 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 has discretionary authority for all Extended and Super enterprise zone agreements. The
Redmond City Council will consider the agreement at a meeting on January 14, 2014, followed by
the Sisters City Council on January 23, 2014.
PCC Schlosser is a manufacturer of titanium investment castings – with applications in jet aircraft
engines, airframes, military armament, medical prosthesis, and many other industrial markets.
PCC Schlosser is one of Redmond’s most successful manufacturing companies, continually
expanding their capital investment and workforce in Redmond. They have successfully
participated in four Enterprise Zone programs, starting in 1990. Since, companies can only apply
for the Enterprise Zone Abatement during times of growth and expansion, PCC Schlosser’s past
history of Enterprise Zone Abatement applications is indicative of the steady growth that the
company has enjoyed in Redmond.
Schlosser Casting Company first applied for an Enterprise Zone Abatement in 1990. In 1997, after
PCC Structurals acquired the business, the company applied for a second Enterprise Zone
Abatement in 1998 during their expansion. This occurred again in both 2005, as well as 2008.
Now, as PCC Schlosser is anticipating yet another expansion at their facility in Redmond, they are
applying for a fifth Enterprise Zone Abatement for five-year duration.
PCC Schlosser currently employs approximately 246 people, and they have committed increasing
their workforce by 25 employees through this expansion. Capital investment for this expansion
project is estimated to be $2,000,000.
The company’s average annual compensation for its new employees will be greater than 150 percent
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 to five years. The combined
value of the five-year abatement for all of the overlapping taxing jurisdictions is $160,950 (not
including appreciation/depreciation). Beginning in year six (6), the improvements are estimated to
yield a collective $32,190 in property taxes, which had been formerly abated.
RECOMMENDATION & ACTION REQUESTED:
Approve the Agreement for Oregon Enterprise Zone Extended Abatement for PCC Schlosser.
ATTENDANCE:
Jon Stark, Redmond Economic Development, Inc.
DISTRIBUTION OF DOCUMENTS:
Heather Richards
City of Redmond
716 SW Evergreen
Redmond, OR 97756
Jon Stark
Redmond Economic Development, Inc.
446 SW 7th
Redmond, OR 97756
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 PCC STRUCTURALS DBA PCC
SCHLOSSER.
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 PCC Structurals dba
. PCC Schlosser, (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 2012 Deschutes County average annual payroll rate of
$36,782 for which 150 percent (includes total compensation package) equals $55,173;
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
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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: ________
Tammy Baney, Board Chair,
Deschutes County
Signature: ______________ Date: ________
Brad Boyd, Mayor,
City of Sisters
ACCEPTING FOR PCC Schlosser:
Date: ________Signature: ----r===o.::<==::------Representaitve Signature
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