HomeMy WebLinkAboutDoc 625 - Utility Trailers of Oregon- Enterprise Zone Abatement AgrmtDeschutes 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 15,2014
DATE: December 15,2014
FROM: Jon Stark REDI 541-923-5223
TITLE OF AGENDA ITEM:
Consideration of Board Signature of Document No. 2014-625, an Enterprise Zone Extended
Abatement Agreement for Utility Trailer Sales of Central Oregon, LLC.
PUBLIC HEARING ON THIS DATE? NO.
BACKGROUND AND POLICY IMPLICATIONS:
This action considers an Enterprise Zone Extended Abatement Agreement for Utility Trailer Sales
of Central Oregon, LLC, for one additional year of qualifying property tax abatement based on
capital investment, new job creation and wages. Extended abatements are a local agreement of
the enterprise zone sponsor(s) to extend the property tax abatement of a qualifying enterprise zone
project for an either one or two years more than the standard three-year abatement, if the
qualifying wages are 150% of the county's median wages.
Extended abatements need to be approved by the sponsor(s) of the Enterprise Zone. It is the
prerogative of the sponsor agency whether or not the approval is made by the governing body or
administratively. The Greater Redmond Area Enterprise Zone (E-Zone) has three co-sponsors: the
City of Redmond; Deschutes County; and the City of Sisters. The Board of County Commissioners
has asked to approve all extended abatement agreements for the enterprise zone along with the
other sponsors.
All employment lands in the City of Redmond are part of the (E-Zone). This program allows
qualifying businesses and investments to receive 100% abatement of property taxes associated
with the assessed value of new qualifying capital improvements. Companies continue to pay taxes
on the value of the land and any capital investments that are not qualifying for the Enterprise Zone
program. Depending upon the nature of the State program being used E-Zone abatements can
range from three (3) years; to five (5) years (known as the Extended program), to as many as
(fifteen) 15 years (known as the Super program). The duration of the abatement is connected to
the number of jobs created 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 compensation.
The Deschutes County's average annual compensation (as relevant to 2014 approvals) is $36,782
per year (2012 data). 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.
Utility Trailer Sales of Central Oregon, LLC is a new business locating in Redmond on the corner of
NW 9th and Hemlock. The company repairs and sells refrigerated semi-trailers, dry vans, flatbeds,
curtain side and truck body kits, as well as aftermarket trailer parts.
Manager Pat Hilsinger shared, ""I have been analyzing and planning the Redmond project for
nearly 10 years. Redmond is strategically located on the major trucking route of Highway 97, as
well as in close proximity to other regional fleets that are sourcing their trailer purchases, parts and
repairs from outside of Central Oregon. This expansion helps us complete the footprint of the state
of Oregon. We can service our new and existing customer base that we could not effectively reach
from our Clackamas location. We are excited about moving to Redmond and the opportunities to
come." The facility is scheduled to open by mid-2015.
The firm has committed to creating 16 new jobs in Redmond by the first year of exemption as
stated on the application. The estimated value of the investment associated with the abatement is
$2,650,000, including constructing a new building of 25,000 square feet on 7 acres with 8 drive
thru trailer repair bays (including overhead cranes), a 65' paint booth for trucks and trailers, parts
warehouse and showroom, trailers sales office and administrative offices. Not all of the
improvements qualify for the Enterprise Zone program as some are associated with retail
operations. The $2,650,000 represents the proportion of improvements that are Enterprise Zone
eligible.
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 2016-2019, one additional year to the three-year abatement
program.
FISCAL IMPLICATIONS:
This action will extend the property tax abatement from three years to four years.
RECOMMENDATION & ACTION REOUESTED:
Approve Document No. 2014-625, the Agreement for Oregon Enterprise Zone Extended Abatement
for Utility Trailer Sales of Central Oregon, LLC.
ATTENDANCE:
Jon Stark, Redmond Economic Development, Inc.
DISTRIBUTION OF DOCUMENTS
Jon Stark
Redmond Economic Development, Inc.
446SWth
Redmond, OR 97756
CITY OF REDMOND 716 SW Evergreen Avenue
Community Development Department Redmond, OR 97756
(541) 923-7721
Fax: (541) 548-0706
www.ci.redmond.or.us
STAFF REPORT
DATE: November 18, 2014
TO: Mayor and Council Members
THROUGH: Keith Witcosky, City Manager
THROUGH: Heather Richards, Community Development Director
FROM: Jon Stark, Redmond Economic Development Manager
SUBJECT: Extended Enterprise Zone Abatement Agreement
Utility Trailer Sales of Central Oregon LLC
Addresses Council Goal:
4. ECONOMIC DEVELOPMENT
Develop and maintain an environment that promotes and supports a strong, healthy and diverse
economic base.
Report in Brief:
This action considers an Enterprise Zone Extended Abatement Agreement for Utility Trailer Sales of
Central Oregon, LLC, for one additional year of qualifying property tax abatement based on capital
investment, new job creation and wages. Extended abatements are a local agreement of the
enterprise zone sponsor(s) to extend the property tax abatement of a qualifying enterprise zone project
for an either one or two years more than the standard three-year abatement, if the qualifying wages
are 150% of the county's median wages.
Extended abatements need to be approved by the sponsor(s) of the Enterprise Zone. It is the
prerogative of the sponsor agency whether or not the approval is made by the governing body or
administratively. The Greater Redmond Area Enterprise Zone (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 enterprise zone agreements.
Background:
All employment lands in the City of Redmond are part of the (E-Zone). This program allows qualifying
businesses and investments to receive 100% abatement of property taxes associated with the
assessed value of new qualifying capital improvements. Companies continue to pay taxes on the value
of the land and any capital investments that are not qualifying for the Enterprise Zone program.
Depending upon the nature of the State program being used E-Zone abatements can range from three
(3) years; to five (5) years (known as the Extended program), to as many as (fifteen) 15 years (known
as the Super program). The duration of the abatement is connected to the number of jobs created 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 compensation.
The Deschutes County's average annual compensation (as relevant to 2014 approvals) is $36,782 per
year (2012 data). 150 percent of that is $55,173. Compensation under the criteria includes not only
Attachment: Greater Redmond Area Enterprise Zone Abatement Agreement with Utility Trailers of Central Oregon, LLC.
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.
Additionally, the City of Redmond waives or reduces, depending upon specific set criteria, land-use,
building and permitting fees.
Discussion:
Utility Trailer Sales of Central Oregon, LLC is a new business locating in Redmond on the corner of
NW 9th and Hemlock. The company repairs and sells refrigerated semi-trailers, dry vans, flatbeds,
curtain side and truck body kits, as well as aftermarket trailer parts. Manager Pat Hilsinger shared, ''''I
have been analyzing and planning the Redmond project for nearly 10 years. Redmond is strategically
located on the major trucking route of Highway 97, as well as in close proximity to other regional fleets
that are sourcing their trailer purchases, parts and repairs from outside of Central Oregon. This
expansion helps us complete the footprint of the state of Oregon. We can service our new and existing
customer base that we could not effectively reach from our Clackamas location. We are excited about
moving to Redmond and the opportunities to come." The facility is scheduled to open by mid-2015.
The firm has committed to creating 16 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 $2,650,000, including
constructing a new building of 25,000 square feet on 7 acres with 8 drive-thru trailer repair bays
(including overhead cranes), a 65' paint booth for trucks and trailers, parts warehouse and showroom,
trailers sales office and administrative offices. Not all of the improvements qualify for the Enterprise
Zone program as some are associated with retail operations. The $2,650,000 represents the
proportion of improvements that are Enterprise Zone eligible.
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 2016-2019, one additional year to the three-year abatement program.
Fiscal Impact:
This action will extend the property tax abatement from three years to four years.
Alternative Courses of Action:
1. Approve the Agreement for Oregon Enterprise Zone Extended Abatement for Utility Trailer
Sales of Central Oregon, LLC.
2. Do not approve the Agreement for Oregon Enterprise Zone Extended Abatement for Utility
Trailer Sales of Central Oregon, LLC., in which the firm would still be eligible for the
"Standard" abatement of three (3) years.
Recommendation/Suggested Motion:
"I move to approve the Agreement for Oregon Enterprise Zone Extended Abatement for Utility Trailer
Sales of Central Oregon, LLC."
Jon Stark,
Manager, Redmond Economic Development, Inc.
Attachment: Greater Redmond Area Enterprise Zone Abatement Agreement with Utility Trailers of Central Oregon, LLC
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 FOUR (4) CONSECUTIVE
YEARS IN TOTAL FOR CAPITAL INVESTMENT BY UTILITY TRAILER SALES OF CENTRAL
OREGON, 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 Utility Trailer Sales of
Central Oregon, 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 one additional year on all
property that initially qualifies in the Greater Redmond Area Enterprise Zone after the
assessment year beginning on January 1, 2016 and, thus, sets a total period of exemption of
four 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 (1) one-year 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
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 Utility Trailer Sales of Central Oregon, LLC:
Signature: Date:
Representative Signature
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