Airport Enterprise Zone

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Bend Airport Aerospace/Aviation Leaders:

With the successful application for designation of the Bend Airport into Oregon's newest Enterprise Zone, we wanted to provide you all with some more details about how the program works and its benefits for your companies. Complete information can be found at the following link to the Oregon Economic & Community Development website http://www.oregon4biz.com/enterthezones/ (click on program information), however I have summarized some of the most critical points below.

Primary Benefit of the Zone

Enterprise zones offer three to five year, 100% property tax exemptions on qualified new investments. Currently this is the only benefit of the zone. Given the property tax millage rate the Bend Airport ($13.2826 per $1,000 of assessed valuation), an investment of $100,000 would yield a savings of $1,900 over a three year exemption and $3,300 over a five year exemption. Correspondingly, a $1 million investment would produce a $19,000 and $33,000 savings in property taxes respectively.

Eligibility Requirements

Eligible employers:
headquarter operations, manufacturing, warehouse & distribution, fabrication, R & D, manufacturing suppliers and other employers engaging in business-to-business commerce. New companies to the Central Oregon area that are eligible for the program must create at least one new job, while existing companies must expand employment by at least 10% in the first year to be eligible.

Ineligible employers: retail, commercial, most services, and other non-business-to-business operations (hangar development will almost aways be ineligible)

Total minimum investment required: $50,000

Eligible Investments: new real property improvements including new buildings, major site improvements, large or immobile equipment and tools.

Ineligible Investments: Land, existing buildings, existing equipment, most rolling stock (forklifts, delivery trucks, etc), most personal property

Limit for times a company may use the zone: none - unlimited. (Some companies in have six or more approved projects)

Additional eligibility requirements may apply for specific projects and are normally identified during the consultation meeting with the zone manager. Complete Oregon Administrative Rules for the program can be found at http://arcweb.sos.state.or.us/rules/OARS_100/OAR_123/123_065.html but this is pretty dry stuff. Usually your zone managers (Eric Strobel and I) can answer most questions or find an answer fairly quickly.

Approval Process

The process normally consists of a short consultation meeting with the zone manager, completion by the company of a two-page application (and necessary attachments) and approval by the zone Manager and County Assessor. Complete applications are usually processed within one to two days. Approval must be obtained before the investment is made! Following approval an investment can commence immediately. In general, must companies find the process quick, non-bureaucratic and easy to administer. Annual reports are required for employment and property exemption claims, which are one or two page forms.

Five year exemptions, which is simply an extension of the standard three-year exemption, must be approved by the zone sponsors, in this case both the City of La Pine and Deschutes County. To qualify, companies must pay an average of 150% of the average wage (covered employment payroll for all employers) in total compensation, which can include non-manditory benefits such as vacation pay, medical insurance, bonuses, overtime, profit sharing, and retirement contributions.

EDCO is looking forward to working with you on future expansions of your operations. If you are planning to make any capital investments that could qualify for the exemption, please contact me at your earliest convenience. The program was made effective as of two days ago, so everything is in place!

Last, but certainly not least, a big thank you those of you who helped with the application process by submitting letters of support. Clearly, it was an important part of the successful application.

Please feel free to email this to anyone you think may be interested or could utilize the program.

Roger J. Lee
Executive Director,
Economic Development for Central Oregon (EDCO)
(541) 388-3236
www.edcoinfo.com

"Excellence in Business Development"

For more information/sites on enterprise zones link to EDCO.