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Gresham OKs tax break for Microchip


The Gresham City Council voted unanimously Tuesday night to give Microchip Technology a $2.04 million property tax break to help it with a nearly $40 million expansion at its semiconductor plant on Southeast Stark Street.

It’s the ninth company to get one and the 13th tax break approved by the council since Gresham created six enterprise zones in 2006 to encourage industrial expansion. Through 2014 the tax breaks have totaled more than $13 million.

The Arizona-based company is one of Gresham’s largest employers with more than 500 employees. Its plant sits on more than 137 acres and its buildings have more than 800,000 square feet of space. Microchip purchased the plant from Fujitsu Corp. in 2002.

Microchip plans to spend $39.6 million to increase its manufacturing capacity.

While its warehouse has sufficient space for growth, city officials said Microchip applied for a property tax break to help it invest in additional processing equipment and improve its facilities. More equipment is needed to expand capacity, to improve processes and to better support other products.

The agreement with Microchip does not require additional hiring. Enterprise zone rules allow a city to waive new jobs requirement if the company is investing more than $25 million, which Gresham did.

During the five-year abatement period, Microchip will pay Gresham a community service fee of 25 percent of what its property taxes would have been — an estimated $510,000. That’s $74,000 more than Gresham’s share of property taxes. Gresham uses that money for other economic development projects.

In 2015, Microchip paid $2.26 million in property taxes on buildings and equipment worth $180 million, according to Multnomah County.

In voting for the tax break, Councilor Karylinn Echols thanked Microchip “for being such good community citizens.”

“We really are fortunate and happy to have Microchip in our community,” she said.

Gresham started its enterprise zone program in 2006 as a tool to encourage higher wage jobs, particularly in manufacturing.

Microchip was the city’s first enterprise zone tax break approval of 2016. The council approved three enterprise zone tax breaks in 2015 — to Teeny Foods, Grocery Outlet and Subaru of America.