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Genentech reaches tax relief pact with county, Hillsboro

Governor, county commissioners praise tentative agreement with biotech firm as a boost to region's economy

Washington County's top public official said Wednesday that the county and the city of Hillsboro have agreed to a tax relief agreement for Genentech Inc., a pioneer biotechnology firm that will begin building a packaging facility in Hillsboro this year.

Details of the 15-year agreement, negotiated under the state Strategic Investment Program, were not released to the public.

(County officials were due to release the information Friday, but it could be delayed until early next week.)

Tom Brian, chairman of the board of county commissioners, said he believed the county got a good deal in the agreement.

'It's another good day in Washington County,' Brian said.

A draft of the agreement is expected to be released Friday, and public hearings are scheduled for Aug. 22 in Hillsboro during a joint meeting between the Hillsboro City Council and the board of county commissioners.

'I don't think it's possible to exaggerate the impact this will have for the region,' said Hillsboro Mayor Tom Hughes, who compared the presence of Genentech to that of the Intel Corp. for the local economy.

San Francisco's Genentech (www.gene.com) is known not only for its discoveries of cancer-treating pharmaceuticals, but also as the No. 1 business on Fortune Magazine's list of the 100 best companies to work for.

In March, the company announced that it was purchasing 100 acres of vacant land near the intersection of Shute and Evergreen roads in Hillsboro.

The new packaging facility is expected to be constructed by 2008. It'll be licensed and operating by 2010, offering potentially 300 new jobs to the area by 2015. In the meantime, about 2,000 people are expected to be employed in the construction of the facility, officials said Wednesday.

Gov. Ted Kulongoski said he expects Genentech to pump $200 million a year into the local economy, and $3 billion total during the life of the Strategic Investment Program agreement.

'By anyone's measure, that's a huge plus for Oregon,' Kulongoski said.

The governor, as well as other officials, also said they expect Genentech to be the first of a cluster of biotechnology firms locating in Oregon.

'I'm confident that the numbers will grow,' Kulongoski said. 'There will be an influx of companies that will find niches in Genentech's orbit.'

The Strategic Investment Program is a tax relief program local governments can offer to exceptionally large industrial projects. Under the program, property taxes are assessed only on the first $25 million of the company's investment.

Brian declined to discuss specifics of the agreement before the draft language was approved by the county's legal counsel and allowed for release to the public. But he did say that under the agreement Genentech would pay full property taxes on its building and land - consistent with other agreements the county has negotiated with Intel Corp.

Brian also said Genentech guaranteed a $500,000 community service fee for each year of the agreement, the maximum annual fee the company can be required to pay under state law. That money will be distributed to county agencies at the county and city's discretion.

In response to questions about what made Oregon, and particularly Hillsboro, the place for Genentech to expand, company representatives said there was nothing magical about its choice, nothing intangible that couldn't be repeated. They simply added up the numbers. And liked what they saw.

'It was a very objective look at what were our musts and what were our wants,' said Barry Starkman, director of the new Hillsboro operations. 'There were a lot of very positive vibes that came to us from how Oregon handled the situation.'