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Port deal with
Google to create jobs
Internet firm expects to buy industrial parcel
By KATHY GRAY
of The Chronicle
Port of The Dalles commissioners
today approved a potential major land sale expected to bring 50 to
100 new jobs and millions of dollars in new investment to The Dalles.
Google, the California-based company
that helps people find information on the Internet (identified in
the agreement as Design LLC) agreed to pay a total of $1.87 million
for 30.19 acres of land that comprise the state-certified industrial
site within the port’s Chenoweth Creek Industrial Subdivision.
Also within the sale agreement as exhibits
are separate purchase options on three additional tracts comprising
the North Chenoweth area formerly occupied by Mountain Fir Chip Mill,
as well as right of first refusal for some other lands on which the
port considers offers.
If initial development plans go forward,
the project would create between 50 and 100 jobs over a matter of
time, earning an estimated average of $60,000 annually in wages and
benefits - twice the county average income, according to terms in
the agreements.
“We are pleased to be in this
area,” a Google spokesperson said. “We appreciate the
efforts of everyone involved.”
Scott Hege, port executive director,
offered the following statement: “We are happy to have them
here.”
City Manager Nolan Young spoke to the
effect such jobs could have on the community.
“Any time you create jobs within
the community - particularly well-paying jobs - there is a turnover
of dollars,” Young said. “It will have a definite impact
on the community.”
“I think it’s going to help
the economy,” said Dan Ericksen, Wasco County Judge. “I
think it’s going to help the attitude and the general feeling
in the area that things are picking up and we’re on the right
track.”
The sale fits within a broader framework
of local economic development, Ericksen said, including the location
of Home Depot and development at Columbia Gorge Community College.
“This is just one piece in a great
big wheel,” Ericksen said. “Other developers seem to be
looking here and a number of builders are starting to look at building
houses in the area. It’s a piece of the economic upturn and
I think we’re leading the state.
‘‘For two years, being judge
has been a pretty difficult job, trying to figure out how to keep
from cutting services on a fixed amount of money. All of a sudden,
being judge is getting exciting.”
Community partners
The land transaction culminates a community-wide
recruitment effort that has included key roles not only for the port
and the city, but for Wasco County, the college, chamber, Northern
Wasco County PUD and Q-Life broadband fiberoptics provider.
The original lead for the business came
through the Oregon Economic and Community Development Department,
Young said.
“One, they knew we had a site,”
Young said. “Two, they knew we had [fiber-optics] close to the
site. And, three, they knew we met the general demographics of the
type of community [the company] wants to locate in. From
that point, the community began identifying their needs and ways to
address those needs.
“The biggest challenge had to
do with power,” Young said. Other issues were a matter of negotiating
arrangements that were desirable to the company, but did not have
negative impacts on the community, he added. “The benefits need
to always outweigh the impacts.”
U.S. Rep. Greg Walden (R-Ore.) played
a key role in recruitment.
Walden said he had been able to aid
the project, but that it was as much a matter of lucky timing as anything.
Walden was able to set up a conference
call between himself, Google and Bonneville Power Administration chief
Stephen Wright, which Walden said greatly facilitated negotiations.
Young says he has confidence in the
organization.
“Our dealings with them have only
increased my confidence that they will be a good community partner,”
he said. “Should we be successful in reaching a final deal,
I think the community will be pleased with what they bring into the
community.”
In evaluating any company, a well-known
company, honesty and the money to do what they plan to do are key
considerations, added Ericksen.
“For any company coming in, those
are three things that really weigh heavily,” he said, “and
this company ranks pretty high on all three of those. If this company
does come, I believe they will be a good community partner and continue
to do things for the community.”
The facility will contain the technology
infrastructure used by Google, a company that specializes in helping
Internet users find information on the World Wide Web.
Building and associated costs are estimated
at $5 million to $20 million over time, with investment in equipment
expected to be significantly higher.
A Google spokesperson declined to provide
additional project details, citing concerns over industry confidentiality.
The spokesperson said Google does not
yet have a specific project completion date, but said the company
hopes to start construction soon.
Addressing the confidentiality issue,
Young said, “The state of Oregon has very well-developed public
record and public meeting laws. In that framework, they have recognized
the needs of private industries, because of competitive advantage
and competition, that negotiations for locations in communities to
be kept in a confidential setting.”
Competition is also an issue for the
communities themselves, he noted, because aggressive competition occurs
in trying to recruit new employers.
Young said he was not aware of any negative
impacts on the environment from the planned development. However,
the company will be a heavy user of power, water and wastewater services.
“There will be some increase in
water consumption and output of water that has to be treated, but
I would not classify this as a heavy polluter,” Young said.
To further explain, Young said the water output will not require pretreatment.
In contrast, Kerr McGee is one example of a plant required to pretreate
its effluent.
The city has adequate capacity in both
its water and wastewater facilities to meet the needs of the company,
Young added. However, to provide for the company’s water needs
will most likely require the city to expand its water main and make
improvements to the pumping station that serves the port.
“It’s in the master plan
to expand that,” Young said, “but this would just kick
it up about two or three years.”
Enterprise
Zone
Young noted that an application for
a tax exemption under city and county enterprise zone incentives is
pending for a property on Geiger Way in the Port Industrial Park.
“We’re working on currently
looking at the maximum property tax exemption of 15 years,”
he said.
Maximum enterprise zone credits are
rarely used. The only one currently in effect is for Roseburg Forest
Products in Douglas County, according to Arthur Fish of the Oregon
Economic and Community Development Department.
Most enterprise exemptions are from
three to five years.
Long-term Rural Enterprise Zone tax
credits are available in limited circumstances to businesses locating
within one of 40 “nonurban” enterprise zones. These zones
are for counties with longstanding annual unemployment rates high
enough or per capita incomes low enough to meet specific criteria,
according to a state fact sheet on these zones.
To qualify for the credits:
• a company’s investment
costs must be greater than 0.5 or 1 percent of the county’s
total assessed value by the end of the year when operations begin.
The floor amount varies from $1 million to $25 million depending on
location. Wasco County’s 2004-05 assessed value was more than
$1.3 billion, making the required investment at least $6.5 million.
• certain minimum job levels must
be maintained during the tax abatement period.
• average annual compensation
across all workers at the facility must stay at or above 150 percent
of the county average annual wage, as first met and established within
five years of starting operations.
The business and the enterprise zone’s
local government sponsors (City of The Dalles and Wasco County) enter
into a written agreement, which determines the exemption period and
may specify other requirements to be met by the firm.
Also available from the state under
this special incentive program is a credit equal to 62.5 percent of
gross payroll to be used against state corporate exise/income tax
liability relating to the facility over and above an annual minimum
payment of state taxes.
To grant this credit, the governor must
issue a one-time approval and set the length of time the business
will receive the credit.
The governor’s incentive, if granted,
also includes a 30 percent rebate to local taxing districts of corporate
taxes collected by the state from the business.
If the governor declines to approve
this credit, it will not affect other credits available through local
governments.
In addition to property tax abatement,
those other credits include: a 50 percent reduction of all city permit
feels, expedited permit processing and aid with local, state and federal
permits, help with grant and loan applications.
While the city and county will not receive
property taxes on any plant constructed or its equipment during the
abatement period, it will receive taxes on the land itself.
At present, that property is not taxed
because it is owned by an exempt government entity, the Port of The
Dalles.
Other resulting revenues
However, city government will realize
some financial benefits should the business go forward. Increases
in water revenues from the business, for example, are expected to
pay for any capital improvements needed - and more.
“On the volume of water we’re
talking about, the revenue is greater than the cost of the expansion
project,” Young said.
The city will also receive revenues
from the 3 percent franchise fee charged on sale of electricity within
the city limits.
Technology provisions
The Q-Life fiberoptic network also plans
to extend its services into the port area.
“Q-Life is not in the industrial
area yet,” Young said. The intergovernmental agency’s
plans include extension of lines into that area only if a business
requires them.
Q-Life expects to proceed with construction
of an extension project as soon as engineering is complete and Northern
Wasco County PUD “make ready” is complete - estimated
some time this month, and anticipates the jobs will be created by
December of this year.
Typically, a large Q-Life customer must
sign preconstruction documents agreeing to pay fees identified in
the agreement and lease fiber for a period of five years. Mid-Columbia
Medical Center, then-The Dalles School District, Columbia River Bank,
the city and the county all signed customer agreements, Young noted.
A new agreement of this type was approved
Jan. 4 to provide a redundant loop from existing Q-Life fiber.
In addition to the new loop, the agreement
also provides for a new redundant route from the Q-Life/NoaNet-Oregon
vault at the Big Eddy Substation into the NoaNet-Net Washington hut
at the same location. Cost of engineering and construction of the
work will be paid by the customer.
Tom Peterson, Rodger Nichols and Dan
Spatz of The Chronicle also contributed to this story.
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