HomeMy WebLinkAboutDoc 133 - Enterprise Zone - Extend AbatementDeschutes 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 March 11, 2015
DATE: 11.26.15
FROM: Jon Stark Local Zone Manager, REDIlEDCO 541-610-2118
TITLE OF AGENDA ITEM:
Consideration of Extended Abatement Agreement between Enterprise Zone Local Zone Sponsor and
Ammunition Development Corporation
PUBLIC HEARING ON THIS DATE? No
BACKGROUND AND POLICY IMPLICATIONS:
Report in Brief:
This action considers an Enterprise Zone Extended Abatement Agreement for Ammunition
Development Corporation, 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 company has
aggregated average compensation is 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. Deschutes County's policy is that the Board of County
Commissioners approves all extended enterprise zone agreements. The Redmond City Council
approved and signed the Extended Abatement Agreement on February 24,2015.
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 ofjobs created and compensation
leveL
The three-year abatement does not have an average wage requirement; however, the Extended and
Super programs require compensation that are certified at 150% of Deschutes County average annual
compensation.
The Deschutes County's average annual compensation (as relevant to 2015 approvals) is $37,751 per
year (2013 data). 150 percent of that is $56,627. Compensation under the criteria includes not only
CITY OF REDMOND 716 SW Evergreen Awnue
Community Development Department Redmond, OR 97756
(541) 923-7721
Fax: (541) 548-0706
www.ci.redmond.or.us
STAFF REPORT
DATE: February 24. 2015
TO: flllayor and Councill\t1embers
THROUGH: Keith Witcosky, City flllanager
THROUGH: Heather Richards. Community Development Director
FROM: Jon Stark. Redmond Economic Development flllanager
SUBJECT: Extended Enterprise Zone Abatement Agreement
Ammunition Development Corporation
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 Ammunition Development
Corporation, 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 wClges.
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.
Attachment: Greater Redmond Area Enterprise Zone Abatement Agreement 'With Ammunition Development Corporation.
The Deschutes County's average annual compensation (as relevant to 2015 approvals) is $37,751 per
year (2013 data). 150 percent of that is $56,627. 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.
Additionally, the City of Redmond waives or reduces, depending upon specific set criteria, land-use,
building and permitting fees.
Discussion:
Ammunition Development Corporation is a new Redmond business development for Nosier Inc., a
Bend-based bullet and ammunition manufacturer. Nosier will relocate some of its machinery from its
Bend location and combine it with machinery recently acquired through a purchase of Silver State
Armory from Packwood, Washington, to create a manufacturing plant focused on brass casings and
ammunition. Ammunition Development Corp. plans to build a 35,000 sf facility to house its operations in
Redmond, with an estimated value of $3,500,000. The machinery's estimate value is $3,000,000, for a
total investment of $6,500,000 associated with the abatement that are Enterprise zone eligible. The
facility is scheduled to open by early 2016.
The firm has committed to creating 20 new jobs in Redmond by the first year of exemption as stated on
the application.
The company's average annual compensation for its new employees will be greater than 150% of the
Deschutes County averClge 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 Ammunition
Development Corporation.
2. Do not approve the Agreement for Oregon Enterprise Zone Extended Abatement for
Ammunition Development Corporation. 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 Ammunition
Development Corporation."
Jon Stark,
rvlanager, Redmond Economic Development, Inc.
Attachment: Greater Redmond Area Enterprise Zone Abatement Agreement v.ith Ammunition Development Corporation.
"
REVIEWED
oo,r}'V
'-"'iIIIj~l:':'~...:l:C~O:.:L:.....J~~::'.-. J I
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 AMMUNITION DEVELOPMENT,
CORPORATION.
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 Ammunition
Development Corporation., (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 2013 Deschutes County average annual payroll rate of
$37,751 for which 150 percent (includes total compensation package) equals $56,627;
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 2015-133
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: ________
Anthony DeBone, Board Chair,
Deschutes County
Signature: ______________ Date: ________
Chris Frye, Mayor,
City of Sisters
ACCEPTING FOR AMMUNITION DEVELOPMENT CORPORATION:
Signature: _----,.===.,."....,..==______ Date: ________
Representaftve Signature
Printed Name / Title
Address
City. State. Zip
Phone / Fax
Email