Gresham City Council mulls more requirements, backs bill in Salem that would delay employment levels during pandemic recovery

PMG FILE PHOTO - Subaru of America Inc. used a five-year enterprise zone exemption during its expansion into Gresham. Last October, the city of Gresham pulled off an economic development coup — enticing the largest industrial lease across the region in the past year thanks to a state tax abatement program.

Hawthorne Hydroponics, a subsidiary of ScottsMiracle-Gro, leased a 378,800-square-foot building at Blue Lake Corporate Park. The company should open its doors later this year, and will offer a wide array of gardening products.

The company was attracted to Gresham because the city has embraced Oregon's enterprise zone program, which offers property tax abatements on major investments/expansions. Gresham adopted the program in 2006 and has since brought in more than $1 billion in new buildings, tenant improvements and improved equipment.

"This program is great, its creating more jobs here in Gresham," said Council President Eddy Morales.

Gresham City Council discussed the enterprise zone during a recent meeting, including potential additions to the requirements and a bill being kicked around in Salem to account for pandemic complications.

Gresham's enterprise zone requires adding new jobs, creating career pathways with a focus on local residents, and paying a community service fee in the final two years of a five-year abatement. The companies are expected to increase employment by 10% and the average wage must be 200% of minimum wage with strong benefits.

Right now, 18 companies are currently participating in the program: 11 manufacturers and 7 warehouse/distributers. In addition to the investment dollars, those participants have led to more than 1,300 new jobs with an average wage of $33 an hour.

Some success stories include Teeny Foods, which has had two applications approved in 2008 and 2015; and Organically Grown Company, which was drawn to Gresham in 2012 by the program. Teeny Foods has invested $30.7 million in the city and created 193 new jobs. Organically Grown Company has invested $27 million with more than 200 jobs created.

Participants in the five-year abatement also pay a community service fee — $6 million so far collected — that goes toward further employment opportunities in Gresham. In the past, those dollars have bolstered the Mt. Hood Community College Mechatronics program, Small Business Recovery Grants and more.

During the meeting, City Council mulled other projects those service dollars could go toward, including programs at Rockwood Rising, new grants for community groups, or scholarships for underserved youth.

Council also discussed potentially adding requirements for enterprise zone participants. That could include youth work experiences, community engagement, K-12 partnerships, sponsorships, and equitable workplace training. Some of those programs could be used to offset fees.

"I'm excited we are updating these programs," said Councilor Janine Gladfelter.

Gresham City Hall is also following House Bill 2343, which is making its way through the Oregon Legislature. That bill would allow the city of Gresham to waive employment requirements due to the pandemic. If companies demonstrate negative impacts from COVID-19, and commit to restoring employment levels within 1-2 years, the bill would allow them to remain within the tax abatement and not be punished for tightening the belt during the past difficult year.

The city of Gresham and council both support this bill.

"I'm looking forward to all the opportunities to work with diverse populations," said Councilor Dina DiNucci. "Thank you to the businesses — I know they have been going through a lot and it's great to hear they are being part of the solution."

The potential changes to enterprise zone requirements will be discussed further by council in June.

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