TIF zones offer tax incentives for businesses to relocate in Wilsonville

by: JOSH KULLA - The former Nike distribution center in Wilsonville now hosts wholesaler Pacific Natural Foods. But the 500,000-square-foot facility still has plenty of space to refurbish for manufacturing or other uses.The city of Wilsonville is getting closer to officially rolling out the new tax increment financing, or TIF, zones approved by voters in March.

The product of a city economic development task force that convened late last year, the TIF zones offer property tax rebates, among other incentives, for manufacturing businesses looking to relocate to one of six selected properties in Wilsonville. To qualify, a business must contribute significant sums into refurbishing the vacant warehouses on each of those properties, as well as create higher-than-average-wage jobs.

“The task force looked at a broad spectrum of incentives,” said Kristin Retherford, the city’s new economic development director. “But in focusing on incentives for large businesses, the task force came up with the proposal to create six single-property urban renewal areas. They would create investment in different areas of the city and put us on an even keel with other cities that have enterprise zones, which Wilsonville doesn’t qualify for.”

To qualify for the program, businesses would be required to invest at least $25 million into one of the six sites, as well as create at least 75 new jobs paying at least 125 percent of the average Clackamas County wage. The average wage in Clackamas County for 2012 was $63,230 annually.

Things can change quickly, however; one of the sites identified in the March ballot measure — the former headquarters of Hollywood Video on Southwest Peyton Lane — already has been occupied by Stream Global, a call center for business process outsourcing, technical support and more.

At the same time, it may not matter.

Retherford told the Wilsonville City Council on Aug. 5 that a real estate broker representing Xerox recently approached the city. The broker, she said, informed the city that the company may wish to apply to have TIF zone incentives applied to its 200,000-square-foot Building 83 on its north Wilsonville campus.

“We might be adding them into the program in the next couple of weeks,” she said.

Other properties that are currently included in the TIF zone program include the former corporate headquarters of Joe’s on Southwest Boeckman Road, the former Nike distribution center off Southwest 95th Avenue, the former Ikon distribution center, also off Southwest 95th, the 250,000-square-foot Wilsonville Distribution Center on Boones Ferry Road and a former Hollywood Video distribution center just off Elligsen Road near Argyle Square in north Wilsonville.

In addition to Stream Global, Pacific Natural Foods has leased part of the 500,000-square-foot former Nike distribution hub, leaving the rest of the building still vacant.

“We do have other sites that were part of the ballot measure that do have tenants,” Retherford said. “But things could change; they’re the types of businesses where they have that potential. But a call center isn’t going to change to manufacturing.”

At the end of the year, the city hopes to have a frozen tax base in place that applies to TIF zone properties. After that, Retherford explained, businesses utilizing the program would receive up to a 75 percent rebate on property taxes provided they abide by the program’s requirements.

A greater effort to market the program to eligible businesses will likely be made in 2014 by Business Oregon, the state’s economic development agency, according to Retherford.

“They see a lot of potential in this,” she said.

For now, Retherford plans to return to the planning commission in September for a public hearing to determine whether TIF zones comply with the city’s comprehensive plan.

A public open house would likely follow in October to publicize the final parameters and properties involved, after which the final TIF zone ordinance would go the city council for approval, probably no later than November.

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