City officials have decided to take a new direction in an attempt to bring new jobs to town. The city council approved making application for an Enterprise Zone designation for the local area.
>Receiving the designation from the state would mean jobs and economic growth by offering property tax incentives to new businesses or existing companies with expansion plans
City Planning Director Dick Brown explained that it is hard for Prineville to compete with Redmond and Madras, and one main reason for that is both already have that designation. We can't compete for commercial industrial development, Brown told the city council, when they can offer "a significant incentive by being designated as an Enterprise Zone."
Enterprise zones were enacted by the state Legislature in 1985 to "encourage development and growth through the expansion of employment, business, industry and commerce in all regions of the state. The areas especially targeted were those communities at the center of or outside major metropolitan areas for which geography may act as an economic hindrance."
In an enterprise zone, in exchange for locating or expanding, an eligible business receives total exemption from the property taxes normally assessed on new plant and equipment for three to five years. This doesn't mean the city has to give it, Brown added, but it would make a great incentive.
As an example of how it could benefit the local economy, Brown cited possible future expansion at the Les Schwab Tire Company. "When Les Schwab builds the next new warehouse, it could give them the incentive to build here. I hear the next one is being planned for the Sacramento area."
Another benefit of having an enterprise zone designation is the availability of federal grants, Brown said.
At the present time, he explained, there are 44 enterprise zones in Oregon. All but five are in rural areas. Seventy-four cities in 31 counties currently use enterprise zones to create better economic opportunities. The requirements for a company to qualify includes a commitment to increase full-time, permanent employment inside the zone, with no concurrent job losses more than 30 miles from the zone. The company must also maintain mandatory employment levels during the exemption period and provide local job training.
Prineville appears to qualify for being designated an enterprise zone. The statute specifies two threshold criteria for economic hardship: Either the household median income is 80 percent or less of the state median income, or the unemployment rate is 2.0 percentage points or more above the comparable state unemployment rate. As Brown spelled out, "the unemployment level in this area has consistently been the highest in the region for most of the past five years.
"We need as many incentives as we can have to effectively compete with the other communities in the region," Brown said, "to attract and encourage additional economic development and to help repay the debts incurred in the extension of city water, sewer and natural gas to the airport area."
The Oregon Economic and Community Development Department is responsible for the designation of enterprise zones, and has approved the creation of three or four new designations. Application can't be submitted to the department until after the Legislature goes out of session. However, Brown added, there is considerable preparation to be completed prior to actually making an application.