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Forest Grove leaders mull transportation-tax rebate

A company that would bring 225 jobs to Forest Grove and invest $30 million to $35 million in building and equipment purchases might be lured to the city through a tax incentive program if Forest Grove leaders can design and approve one.

That was one of several big items raised at Monday night’s city council meeting, including the possibility paying off the purchase of the Times-Litho building.

Project Squeeze, the code name for the city’s effort to bring a large applesauce company to Forest Grove, faltered recently when the owners of the French company got a look at the $925,000 they would have to pay in transportation-development taxes (TDTs).

Before that, Forest Grove was one of the company’s top four sites, partly because of the educated and available workforce, the city’s low water and electricity rates, low land costs and close proximity of Henningsen Cold Storage Company to the potential site at 24th Avenue and U Street.

But the one-time TDT amount sent Forest Grove to the back of the line, said Jeff King, the city’s economic development manager.

“We were just sick about losing a company because of a TDT tax, which we all have grumbled about around this table,” City Manager Michael Sykes said at a Monday work session.

King suggested councilors consider rebating the TDT money back to the company.

In the process, councilors could establish rebate-triggering criteria for future projects, said Finance Director Paul Downey.

“We’re buying jobs again,” said Councilor Victoria Lowe, who was leery of the idea and its possible impact on the city’s infrastructure.

Councilor Tom Johnston suggested the new company’s impact might simply offset the departure of other Forest Grove companies such as Matsushita or Gray and Company.

Washington County requires cities to collect TDTs from new development, but all the money goes back to the city.

King said he’ll talk to the company to see if such a refund would make Forest Grove a top contender again. If so, he’d draw up a specific proposal for councilors to consider.

“Everybody else is dealing with incentives,” said Mayor Pete Truax. “We’ve got to be in that game.”

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