The building blocks of north Marion County’s economic development are being laid as several communities are partnering to establish enterprise zones in the region.

Gervais and Woodburn, Mount Angel and Silverton, and Donald, Aurora and Hubbard each have joined forced this year or are in the process of forming joint enterprise zones, a state-approved designation that gives existing and relocating businesses tax breaks on capital improvements in exchange for meeting minimum investment and job requirements.

The Gervais City Council gave its approval Thursday to become a partner with Woodburn to form the Woodburn-Gervais Enterprise Zone. The zone still needs Woodburn City Council and state approval to move forward.

“The big push is being able to expand locally and offer jobs,” said Shanti Platt, mayor of Gervais. “For companies that are growing, they need to be able to expand and this will open doors.”

Platt cited one company, shower and tub manufacturer Fiber-Fab LLC, as the kind of business that could take advantage of tax breaks on capital investment.

“They are booming,” she said. “But they need to be able to expand. This will open doors.”

Woodburn’s zone waives taxes associated with capital improvements for three to five years based on a 10 percent increase in employment and minimum investment of $50,000. Businesses that pay wages and benefits exceeding 150 percent of the county’s average can extend their zone designation from three years to five years, said Jim Hendryx, economic and development services director for the city of Woodburn.

“The important thing for all is that this is an expansion of the employment base in all of our communities,” Hendryx said. “It keeps us competitive.”

For businesses, the zones provide a future growth model in the area. For cities, they are a business retention and recruitment tool.

“If we can help existing businesses expand, that’s great,” he said. “If a new business comes to the community, we can help them locate here.”

The enterprise zone partnerships are a sign that businesses are starting to expand again and communities want to take advantage, said Chad Freeman, president of Strategic Economic Development Corporation, or SEDCOR, which promotes growth in Marion and Polk counties.

Business investment in Marion and Polk counties has increased from $16 million in 2011-12 to $64 million in the 2012-13 fiscal year, which ended June 30, Freeman said.

“Right now, industry is starting to come back a bit and communities are realizing there is an advantage to helping local businesses,” Freeman said.

Communities that got hurt by job losses during the last recession are trying to position themselves for opportunities ahead, he said.

“These smaller communities see it,” he said. “When they lose an employer, they feel it almost immediately. The more nimble communities are looking for ways to invest that will help them in the next year.”

The North Marion Enterprise Zone, which encompasses Hubbard, Donald and Aurora, garnered acclaim, receiving the 2013 Oregon Economic Development Association’s Collaboration of the Year Award, Freeman said.

GK Machine, a Donald-based agricultural equipment manufacturer which initially fueled the North Marion Enterprise Zone partnership, has expansion plans to add 113,500 square feet of space over the next five years.

The company also has indicated it would like to add 50 employees and invest $15 million over the next eight years.

“When you drive around the valley, you see companies making these investments and it’s starting to come back,” Freeman said.

Last week, Silverton’s city council agreed to expand its already-existing enterprise zone to include 35 acres in the Mount Angel Industrial Park.

Pending approval by the Oregon Business Development Department, the Silverton-Mount Angel Enterprise Zone would be jointly managed, said Eileen Stein, city administrator for Mount Angel.

Stein pointed out the significance of the zone for both communities.

As resources continue to be tight, the combined enterprise zone is an example of communities working together, Stein said.

“First, this will position our industrial park for further economic development,” she said. “I am also pleased that we are able to go down this road of collaborating to a greater degree with Silverton.”

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