Bend applying for enterprise zone

Published 5:00 am Wednesday, March 31, 2010

The city of Bend will ask the state to create an enterprise zone within city limits to help expand existing businesses and attract new ones, according to a resolution passed Monday night by the Bend City Council.

The resolution authorizes the city to apply for one of 12 enterprise zones to be designated this year by the state.

City Manager Eric King said the city has wanted to apply for an enterprise zone for several years but never qualified.

“We had (per capita) income that was too high, but the downturn and high unemployment have us in a much better position to be successful in applying,” King said. “It’s one of reasons motivating us now.”

Fifty-nine enterprise zones exist in the state, which allow certain benefits for eligible businesses, mainly a property tax deduction on new or improved plants and equipment for between three and five years.

The zones expire after 10 years, though rural zones expire after 15 years. The Bend zone would be a 10-year urban zone.

Facebook cited the Crook County enterprise zone spread between portions of Prineville and the county as one reason it chose to locate its data center on enterprise zone land near the Prineville Airport.

Three other enterprise zones exist in Central Oregon that cover portions of Madras, Redmond and La Pine. The La Pine enterprise zone also includes the Bend Municipal Airport, which is owned by the city of Bend but located on land owned by the county.

Roger Lee, executive director of Economic Development for Central Oregon, said an enterprise zone would help level the playing field for Bend’s economic development aspirations and has been a sought-after business development tool for some time.

“These are very successful (in attracting business development),” Lee said. “I think these are one of the most useful programs that we have in economic development.”

Lee noted that while new businesses are often thought of as the biggest beneficiaries of an enterprise zone, existing businesses also can take advantage of the zones to grow with the same tax benefits.

The proposed Bend enterprise zone would encompass much of the city’s industrial land along the Bend Parkway, including the Brinson Industrial Park. The zone also would include land around Bend High School, Ninth Street and American Loop.

Juniper Ridge is not included in the proposed zone because it is part of an urban renewal district that needs property tax income to fund improvements.

The city also is requesting the state grant the proposed zone a special electronic commerce designation, which provides additional state income tax benefits to qualified e-commerce businesses that invest in the zone.

The benefit is a tax credit equaling up to 25 percent of a business’s annual investment costs that can be applied toward state income or corporate excise tax liability.

Oregon’s enterprise zones are administered by Business Oregon, a state business development agency overseen by the Oregon Business Development Commission.

Art Fish, business incentives director for Business Oregon, said Bend has a good chance to land an enterprise zone.

“We are looking forward to that application,” Fish said.

State enterprise zone applications are due Friday and are announced shortly before taking effect July 1, Fish said.

King said the city has been working on the enterprise zone application since early January and expects to file it today.

The resolution was approved by the council 5-0. Councilors Mark Capell and Oran Teater were absent.