HomeMy WebLinkAboutItem 09 Umpqua Dairy Enterprise Zone Extension AGENDA ITEM SUMMARY Meeting Date: 11/5/2018
Meeting Type: Regular Meeting Staff Contact/Dept.: Courtney Griesel/CMO
Staff Phone No: 541-736-7132
Estimated Time: 20 Minutes S P R I N G F I E L D C I T Y C O U N C I L Council Goals: Community and Economic
Development and
Revitalization
ITEM TITLE: UMPQUA DAIRY PRODUCTS COMPANY REQUEST REGARDING ENTERPRISE ZONE EXTENSION IN SPRINGFIELD
ACTION REQUESTED:
Approve/Not approve:
RESOLUTION AUTHORIZING THE CITY MANAGER TO SIGN AGREEMENTS WITH
LANE COUNTY AND RUSH CREEK HOLDINGS, LLC D/B/A UMPQUA DAIRY PRODUCTS CO TO APPROVE A THREE-YEAR ENTERPRISE ZONE PROPERTY TAX EXEMPTION
AND TO EXTEND THE ENTERPRISE ZONE PROPERTY TAX EXEMPTION AN ADDITIONAL TWO YEARS FOR A TOTAL OF FIVE YEARS FOR AN INVESTMENT IN ITS
NEW SPRINGFIELD OREGON SITE AND FACILITY.
ISSUE STATEMENT:
As co-sponsor of the Springfield Community Enterprise Zone with Lane County, consider
approving the resolution to extend property tax abatement to Rush Creek Holdings, LLC
dba Umpqua Dairy Products Co. (Umpqua) under the State Enterprise Zone Program, with a request for an additional two (2) year exemption over the state statutory three (3) year-
program, totaling five years. Umpqua is proposing approximately $1.8 million in property investment at a new site in mid-Springfield. This site was previously undeveloped and no taxable value is anticipated for removal as part of this project. Umpqua has requested both
sponsors of the Springfield Community Enterprise Zone (City of Springfield and Lane County) approve two-years of extended enterprise zone benefits in addition to the program
standard three years. In addition to the $1.8 million estimated capital investment, Umpqua
is also planning to meet the required program job growth, resulting in a total of 21 full-time jobs, an increase of two new jobs from their current 19 fte. At this time, Umpqua employs 19 full-time employees within 30 miles of the Springfield Zone. Current
employees earn over 150% ($62,285) of the average wage in Lane County. These positions and employees will remain, transitioning to the Springfield site, meeting the extended
abatement program requirements. The two additional full-time positions to be added as
part of this retention project will be included in the requirement for average wages on the site to maintain or exceed 150% of the Lane County average wage. The capital investment
will include the construction of a nearly 6,500 sf cold storage and distribution facility and
will serve as a regional retention effort to support Umpqua’s ability to maintain service and distribution in the Springfield-Eugene Region to surrounding communities. The investment
is anticipated to enable the company to continue to grow distribution networks throughout the greater region while retaining existing jobs within the Lane County region (areas including Cottage Grove, north to Corvallis and east to Sweet Home, McKenzie River and
Oakridge and providing increased employment and job stability within the local community.
ATTACHMENTS: 1. October 22nd Council Briefing Memo
2. Enterprise Zone Letter Request from Umpqua Dairy Products
3. Enterprise Zone Application 4. Resolution
DISCUSSION/ FINANCIAL IMPACT:
See Attachment 1. October 22nd Council Briefing Memo.
Attachment 1, Page 1 of 4
M E M O R A N D U M City of Springfield
Date: 10/22/2018
To: Gino Grimaldi COUNCIL
From: Courtney Griesel, Economic Development Mgr BRIEFING
Subject: Umpqua Dairy Products, Co. d/b/a Rush Creek Holdings, LLC Request Regarding Enterprise
Zone Extension in Springfield.
MEMORANDUM
ISSUE: As co-sponsor of the Springfield Community Enterprise Zone with Lane County, the City is
asked to approve the request to extend property tax abatement to Umpqua Dairy Products Co./Rush Creek
Holdings, LLC (Umpqua) under the State Enterprise Zone Program, with a request for an additional two (2) year exemption over the state statutory three (3) year-program, totaling five years. Umpqua is
proposing approximately $1.8 million in property investment at a new site in mid-Springfield. This site was previously undeveloped and no taxable value is anticipated for removal as part of this project.
The capital investment will include the construction of a nearly 6,500 sf cold storage and distribution
facility and will serve as a regional retention effort to support Umpqua’s ability to maintain service and distribution in the Springfield-Eugene Region to surrounding communities. The investment is anticipated to enable the company to continue to grow distribution networks throughout the greater region (areas
including Cottage Grove, north to Corvallis and east to Sweet Home, McKenzie River and Oakridge), providing increased employment and job stability within the local community.
In addition to the $1.8 million estimated capital investment, Umpqua is also planning to meet the required
program job growth, resulting in a total of 21 full-time jobs, an increase of two new jobs from their current 19 fte. At this time, Umpqua employs 19 full-time employees within 30 miles of the Springfield
Zone. Current employees earn over 150% ($62,285) of the average wage in Lane County. These positions
and employees will remain, transitioning to the Springfield site, meeting the extended abatement program requirements. The two additional full-time positions to be added as part of this retention project will be
included in the requirement for average wages on the site to maintain or exceed 150% of the Lane County
average wage.
This investment would be Umpqua’s first enterprise zone application within the Springfield Community
Enterprise Zone. Included as Attachment 1 is the Umpqua Dairy Products Co. letter requesting
consideration of Springfield Community Enterprise Zone Extended Abatement approval.
COUNCIL GOALS/
MANDATE:
Encourage Economic Development and Revitalization through Community Partnerships
Attachment 1, Page 2 of 4
BACKGROUND: Umpqua Dairy Products currently operates in the Eugene-Springfield region with 19
full time employees on an existing Eugene area site. Umpqua has outgrown the Eugene facility but desires to maintain operation and employment levels in the region and has identified an undeveloped
industrial site in mid-Springfield. As part of this project and enterprise zone application, Umpqua is
committing to invest and estimated $1.7 to $1.8 M in a new facility and equipment while increasing their existing employment of 19 to 21 full-time employees.
ELIGIBILITY OVERVIEW: The enterprise zone application indicates the firm’s full-time employment on their current site, which is within 30 miles of the Springfield Zone, averaged 19 employees over the
previous 12 months. Umpqua fully anticipates its full-time employment would increase by 2 additional new full-time positions, bringing the total onsite employment to 21 fte. These employees will receive average compensation which exceeds the extended enterprise zone requirement of 150% or greater of the
Lane County average annual wage. Because employment will not be curtailed within the Springfield Zone, or within 30 miles of the Zone, Umpqua meets the standard enterprise zone eligibility requirements
pertaining to employment. Because average wages for employment at the site will be at or above 150% of
the Lane County average annual wage, Umpqua may be eligible for the extended enterprise zone program.
Currently, Umpqua’s proposed project of $1.8 million in capital investment in a cold storage and
distribution facility meets business activity eligibility, by Oregon State statute, for 3-year Enterprise Zone benefits. The project may also be eligible for additional extended 2-year Enterprise Zone benefits at the
discretion of the local zone sponsors.
FINANCIAL IMPACTS OF ENTERPRISE ZONE EXTENDED TAX ABATEMENT: The existing project site is currently unimproved with a taxable value of approximately $268,000, per the FY17 tax
roll. Property tax paid in the same fiscal year totaled approximately $4,700 to all public taxing districts.
The financial impacts of extending the property tax abatement to Umpqua from the statutory 3 years to 5 years on the City are estimated acknowledging depreciation of equipment over time and appreciation of
property values over the same amount of time. After depreciation of equipment and appreciation of land over the five-year abatement, the project is estimated to add an additional $2 million in taxable value to the existing site (valued currently at approximately $268,000) in the first year the investment is placed
back on the tax rolls. A total property tax exemption for the statutory 3 year enterprise zone exemption is estimated at just over $98,000 with the requested 2 year extension adding approximately $70,000 in tax
abatement. The total tax abatement on this project forecasted for a full five years is estimated at $168,000
with the first year following the abatement adding approximately $36,000 to the annual taxes received on the site.
STATUTORY Enterprise Zone
Estimated Tax Abatement
Y1 – Y3
REQUESTED Enterprise Zone Estimated
Extended Tax Abatement
Y4 – Y5
Estimated Total Impact of 5 Year
Enterprise Zone Abatement
Y1 – Y5
Year 6 Estimated Additional Taxes
Received from Project
Y6 – Post Abatement
$98,000.00 $70,000.00 $168,000.00 $36,000.00
COMMUNITY BENEFIT: The proposed Umpqua Dairy project includes several categories of community benefit; Value of retained and new wages during the enterprise zone abatement period, those
wages in the first year following the abatement and thereafter, and the value from property taxes to be
realized in the first year following the enterprise zone abatement sunset. The below table provides a high
Attachment 1, Page 3 of 4
level estimate of the direct value to the community for the retention and expansion project with Umpqua
Dairy.
UMPQUA DAIRY POTENTIAL PROJECT VALUE OVER 5-YEAR ENTERPRISE ZONE EXEMPTION
$ 7,335,000 Estimated Value of Retained Wages for Existing Lane County Wages (years 1 to 5)
$ 640,000 Estimated Value of New Wages (years 1 to 5)
$ 1,412,000 Estimated Value of All Wages in Year 6
$ 36,000 Estimated Value of New Realized Property Tax Value in Year 6
$ 9,423,000 TOTAL ENTERPRISE ZONE DIRECT COMMUNITY VALUE
$ 168,000 Total Property Tax Abatement Estimate
$ 9,255,000 TOTAL ENTERPRISE ZONE COMMUNITY VALUE INCLUDING
DEDUCTION FOR ESTIMATED TAX ABATMENT
It is estimated that the total value of the requested 5 year enterprise zone abatement ($168,000 in total tax abatement) will retain $7.3 million in existing, retained, wages during that timeframe, which might
otherwise have been relocated to other communities or sites along Interstate-5 and not necessarily within
Lane County. Additionally, the requirements included within the enterprise zone program will leverage the tax abatement to generate $640k in new wages over the 5 years. It should be noted, in addition to the
total wages anticipated in year 6 of $1.4 million, it is also estimated the property will generate $36,000 in
property taxes back to local taxing entities that same year, bringing the estimated total direct value of the to the community to $9,423,000 over the next 6 years. It is important to acknowledge the estimated value
of the property abatement ($168,000) which is deducted, resulting in the total estimated net enterprise
zone direct community project benefit of $9,255,000. This does not include additional benefits of payroll taxes to the State from the new wages.
SUMMARY: Umpqua’s proposed project of $1.8 million and 21 full-time employees is eligible, by Oregon State statute, for 3-year enterprise zone benefits. The project may also be eligible for additional
extended 2-year enterprise zone benefits (totaling up to five years) provided both enterprise zone sponsors (the City and Lane County) agree to terms and the firm signs an agreement that:
1. The firm agrees to compensate during the entire enterprise zone tax exemption period all new employees at an average rate of not less than 150 percent ($62,285) of Lane County’s prevailing
average annual wage ($41,523) at the time of applying for authorization;
2. The firm signs a First Source Hiring Agreement with the Oregon Employment Division; 3. The firm maintains a mandatory minimum employment level of 21 full time jobs throughout the
five-year exemption period; and
4. The firm agrees to and complies with other reasonable conditions the sponsors request at the time authorization.
5. The firm and Zone co-sponsors agree to additional terms as identified by the Zone co-sponsors.
Past additional terms have included financial contributions as a reasonable offset to general government agencies to support ongoing administration of economic development efforts. Past
precedence has shown offsets totaling 0.5% of the estimated total investment. For this proposed
investment, such precedence would calculate as a contribution totaling approximately $8,500.
With the proposed investment and wage level meeting two of the minimum qualifying requirements for
the enterprise zone exemption and the firm working on the First-Source Agreement, the enterprise zone sponsors – the City and Lane County – will be asked to decide if they are willing
(a) To agree on the requested additional two years of exemption and (b) Sign an acceptable agreement with the firm that acknowledges the minimum employment level and meets reasonable additional requirements from the sponsors.
Attachment 1, Page 4 of 4
FUTURE ACTIONS:
Approve the resolution
a. Approving and extending the property tax exemption period an additional two years beyond
the initial three years for a total of five-years for Umpqua Dairy’s estimated $1.8 million
investment in the Springfield site and facility; b. Set the guaranteed minimum level of employment at 21 full-time jobs throughout the five-
year exemption period; c. Authorize the City Manager to sign agreements, including any additional terms as identified by the Zone co-sponsors which may include financial contributions as a reasonable offset to
general government agencies to support ongoing administration of economic development efforts; and d. Forward the request and application to Lane County Commissioners.
Not approve the resolution
a. Not approving the extended property tax exemption period an additional two years will
result in Umpqua Dairy filing for the standard enterprise zone exemption.
b. The standard exemption does not carry requirements for wages or ability to negotiate a financial contribution to cosponsors of the zone.
uM?0uâ DAIRY PRODUCTS GO.
333SESykes/P0Box1306,Roseburg,0R97470-(541)672-2638-(541)673-0256-fax
www.umpquadairy.com * info@umpquadairy.com-email
July 3, 20L8
Ms. Courtney Griesel
Economic Development and Springfield Community Enterprise Zone Mgr
City of Springfield
225 5th St.
Springfield, OR97477
RE: Enterprise Zone
Dear Courtney:
Umpqua Dairy is in the process of developing a new distribution center in the Springfield area.
This development is necessitated due to the growth we've experienced over the last 19 years in servicing
the greater Eugene/Springfield areas. We've been servicing our customers in this community from our
current warehouse located aI29448 Airport Road in Eugene. We started distributing dairy products from
this warehouse in July of 1999 with two employees. We currently employ L9 full-time employees and
service our customer base out of this facility from Cottage Grove north to Corvallis east to Sweet Home,
the McKenzie River and Oakridge. The investment Umpqua Dairy will be making through a related third
party entity will enable us to continue to grow our distribution network providing increased employment
and job stability in this market area. Having never laid off an employee, we believe in long-term
employment and steady growth. Of the L9 employees we have, six are in the management support team
of the operation while L3 are employed as route sales and distribution personnel. Service by our company
to this market area started many, many years before we moved to Airport Road, with service of the Drive-
N-Save and Richard's Markets in the 70's along with Dairy Queen Franchises in the early 80's.
As a long-term community member, Umpqua Dairy has developed numerous ongoing
partnerships with many local businesses, engaging their services for our day-to-day operation needs such
as: truck maintenance, tire service, refrigeration maintenance, fuel, and cleaning services. We've also
selected Hyland Construction of Springfield to construct our new distribution center teaming up with
additional businesses in the community for the development of this project. Umpqua also has ongoing
partnerships with a number of organizations in the area including: the University of Oregon, Chambers'
of Commerce, local Business Expos, Eugene Marathon, Butte to Butte Run, Parenting Now Winetasia,
Children's Miracle Network, Oregon Trail Council (Boy Scouts of America), Leukemia & Lymphoma
Society, and the PearlSt. Block Party. We are proud of our long-term relationships within this community
and look forward to the opportunities in creating additional partnerships in the future.
As most are aware, Umpqua Dairy is a family owned business that was started in 1931 and has
steadily grown over the past years under its third generation of leadership. ln today's big corporate
competiveness, Umpqua Dairy contributes the success of its business to its employees for providing the
best quality products and service available in the marketplace. By continually reinvesting in our
equipment and employees we can provide the best quality and service possible. We currently provide a
family wage, health insurance and retirement benefits for our employees. ln fact, our current minimu
distributioncenfers
CENTRAL POINT
(541)664-9174
(541)664-4128fax
coos BA v
(541)267-3708
(54 1 ) 267 -3899 fax
EU CENE
(54 1 ) 607 -07 84
(54 1 ) 607 -9089 fax
GRÁ
'VTS
PA SS
(541 ) 479-6832
(541)479-3319fax
KLAMATH F ALLS
(541)882-5434
(541 ) 882-1 534fax
PORTLAND
(503) 289-1 924
(503)240-1909tax
SALEM
(s03) 480"8747
(503) 485-9203rax QI]ALITYCHEKD
Attachment 2, Page 1 of 2
M* Courtney GrÍesel
Economic Development
July 3,2078
Pdge - 2
average annual compensation (including benefits) for our employees exceeds the 150% compensation
standard as measured by the Special Enterprise Zone. lt's also important to Umpqua Dairy to have a
positive impact on all communities, so we work hard at being a sustainable and responsible business
partner by implementing new equipment, procedure, and programs to help reduce our carbon footpr¡nt
and improve the safety and quality of life for all.
As a small Oregon family business we sincerely appreciate all the support available to us from the City of
Springfield and Lane County for our new distribution project. Your welcoming and full backing will enable
us a better opportunity to build on and strengthen our current partnerships allowing us to have a more
secure start with our new facility. Not only will your partnership help guarantee our success in the
community, it will also prove to be a beneficially rewarding investment to everyone working at our
company in Springfield. Umpqua Dairy's reputation, award winning products, job compensation and
benefits will complement Springfield, building on its character in becoming an iconic community. With the
excitement of all the possibilities that our future partnership holds, we are respectfully requesting that,
you, our community members (City and County), grant Umpqua Dairy the five-year Enterprise Zone
Agreement providing us the fullest opportunity to be successful in this new location.
Sincerely,
-4,^4:,kç
President
DBF/pb
Attachment 2, Page 2 of 2
Form OR-EZ-AUTH Oregon Enterprise Zone Authorization Application.
Comolete form and submit to lhe local enlêrorise zone manaoer before oround or beoinnino work at the site. . Please tvoe or Drint neallv.
of
APPL¡CANT
Development Zone (where business firm and property w¡ll be
Springfield Community Enterprise Zone
Name of Business F¡rm
Umpqua Dairy Products Co. / Rush Creek Holdings, LLC
dougf@umpquadairy.com
Telephone( s¿r ) azz-zaza
Mailing Address
P.O. Box 1306 97470
Location of Properly (street address if differenl
North 30th Street 97477
Counly, TRS Map lD#, and Tax Lot Number of Site
17-02-31-00 Tax Lots #4200 & $4300 President
My firm expects to first claim standard property tax exemption in the following (up to three) yea(s):2019
I Check here if your firm has or has had another exemption in this enterprise zone.
I Check here that your firm commits to renew this authorization application. Renew this application on or before April 1 every two calendar years,
until the tax exempt¡on on qualified property is claimed.
I Check here if you are requesting an extended abatement of one or two additional years of exemption. This is subject to minimum average
annual "compensation" for employees and wri$en agreement with local zone sponsor. Sponsor may request additional requirements.
Zone Manager Uce Only (after wrltten agteement but bcforc authorlzlng flrm):
County Average Annual Wage: $Total Exemptlon Perlod: fl¿ or E5 Consecutive Years (check one)
BUSINESS ELIGIBILITY
Eligible Activity-Check all activities that apply to proposed investment within the enterprise zone:
f] Manufacturing n Fabrication ! Bulk Printing I Shipping ! Agricutturat Production ! Energy Generation
f, Assembly ! Processing ! Software Publishing ffi Storage ! Back-otfice Systems
! Other-describe the activities that provide goods, products, or services to other businesses (or to other operations of your firm):
f] Check here if your business firm does or will engage in fneligible act¡vities within the enterprise zone (such as retail sales, health care, profes-
sional services, or construction). Describe below (or in an attachment) these activities and their physical separation from "eligible activities" :
Special Cases-Check all that apply;
! Check here if a hotel, motel, or destination resort in an applicable enterprise zone.
! Check here if a retall/financlal call center. lndicate expected percent of customers in local calling area:
! Check here if a "headquarters" faclllty. (Zone sponsor must find that operations are statewide or regional in scope and locally significant.)
! Check here if an electron¡c commerce investment in an e-commerce enterprise zone. (This also provides for an income tax credit.)
City
Roseburg OR
State
C¡ty
Springfield
Stale
OR
Contact Person
Doug Feldkamp
THE ENTERPRISE ZONE lsee worksheets on last
Do not count FTES, temporary seasonal, construction, part-time jobs (32 hours or less per week), or employees working at ineligible operations.
Existing Employment-My business firm's average number of full-time employee in the zone over the past 12 months is 0 (19 within 30 miles)
New Employees- . Hiring is expected to begin on (date or month and year): Julv 20lg
. Hiring is expected to be completed by (month and year):
. Estimated total number of new employees to be hired with this investment ¡s:
Commitments-By checking all boxes below, you agree to the following commitments as required by law for authorization:
ffi ey April 1 of the first year of exemption on the proposed investment in qualified property, I will have increased existing employment within the
zone by one new employee or by 10 percent, whichever is greater.
I li,ty tirm will maintain at least the above minimum level as an annual average employment during the exemption period.
I Wnen the exemption claim is filed by April 1 following each calendar year of exemption, total employment in the zone will also not have
shrunk by 85 percent at one time or by 50 percent twice in a row, compared to any previous year's figure.
I tvly tirm will comply with local additional requirements as contained in: (1) a wr¡tlen agreement for an extended agreement, (21 zone sponsor
resolution(s) waiving required employment increase,* or (3) an urban enterprise zone's adopted policy, if applicable.
X t¿y t¡rm will verify compliance with these commitments, as requested by the local zone sponsor, the county assessor or their representative,
or as directed by state forms or administrative rules.
xl tvty tirm will enter into a flrst-source hlrlng agreement before hiring new eligible employees. (This mandatory agreement entails an obliga-
tion to consider referrals from local job training providers for eligible ¡ob openings within the zone during at least the exemption period.)
*Also for Rural Renewable Enerqy Development Zones.
Seotember 2019
150-303-029 Form OR.EZ-AUTH (Reu 10-1 6)
Attachment 3, Page 1 of 4
OREGON EMPLOYMENT OUTSIDE THE ENTERPRISE ZONE
Check only those that apply:
! Check here if yours or a commonly controlled firm is or will curtail operations in the state beyond 30 mlles of the zone's boundary and
move them into the zone. lndicate timing, locat¡on, number of any job losses, and relationship to the proposed enterprise zone investment:
I Check here if you are transferring any operations into the zone from site(s) in the state within 30 miles of the zone boundary: My firm's
average employment at the site(s) over the past 12 months is 19 jobs
I Check here, if applicable, that your firm commits to increase the combined employment at the site(s) (within 30 miles) and in the zone to 110
percent of the existing combined level by April 1 and on average during the first year of exemption.
PROPOSED INVESTMENT IN QUALIFIED PROPERTY
Act¡on
Site and Building & Structures
Preparat¡on I Construction* letaced in Servlce **
Machinery and Equipment
Procurement*** | lnstallat¡on I etaceO in Service
To commence
or begin on November 2018 December 201 I July 2019 February 2019 April2019 June 201 9
To be com-
pleted on December 201 I June 2019 July 2019 March 2019 May 201 9 July 2019
Antic¡pated Tim¡ng-Enter dates or months/years (non-binding)
. lncluding new reconstruction, additions to, or modifications of existing building(s) or structure(s).*- This is in the year directly before the very first year of exemption.*** May precede application by up to three months (includes personal property).
Special lssues:
! Check here for building/structure acquired/leased for which construction, reconstruction, additions, or modifications began prior to this applica-
tion (attach executed lease or closing documents), and do not take up occupancy until this application is approved.
! Check here if anticipating using Construct¡on in Process tax exemption for qualified property that is still being constructed/installed and is
not yet placed in service and is located on site as of January 'l . lf so, file Application for Construction-in-Process Enterprise Zone Exemption
(150-31 0-021 ) by April 1 with the county assessor's otf ice.
Quallfylng Property: Estimates of cost and details about property are not binding, but in order for any property to qualify, its basic type needs to
be at least below.
ln addition to what is indicated above, please describe below (or in an attachment) the overall nature and potential extent of your investment,
including preliminary building plans and lists of property items, as appropriate or if recommended by the local zone manager or county assessor(which mav be kept confidential).
The new construct¡on w¡ll be a distribution center for Umpqua Dairy's products manufactured in Roseburg,
Oregon and distributed throughout the Eugene, Springfield, Greswell, Cottage Grove, Corvallis, Lebanon &
Sweethome areas. There will be 11 - 12 delivery trucks stationed here as well as an off¡ce and sales staff,
DECLARATION
I declare under penalties of false swearing [ORS 305.990(4)] that I have examined this document and attachments, and to the best of my knowledge,
they are true, correct, and complete. lf any information changes, I will notify the zone manager and the county assessor and submit appropriate
wtitten amendments. I understand that my business firm will rece¡ve the tax exemption for property in the enterprise zone, only if my firm satisfies
statutory requirements (ORS Chapter 285C) and complies with all local, Oregon, and federal laws that are applicable to my business.
MUST BE SIGNED BYAN COMPANY ON AUTHORIZED REPRESENTATIVE OF THE BUSINESS FIRM
Date
X mber 10,2018
Title (if not an or attach letler appropriate
Local enterprise zone manager and counly assessor must approve this applicat¡on (wlth Enteryùse Zone Authorlzation Approvat, form 150-303.082)
150.303.029 Form OB-EZ-AUTH (Rôv 10-16)
Type of Property Number of
EacMtem
Expected
Estimated Value
Check lf any
Item w¡ll be
Leased
Building or structure to be newly constructed 1 $ 1,600,000 n
New addition to or modification of an existing building/structure $nReal Property
Heavy or affixed machinery and equipment Cooler & Freezer $70,000 n
$50,000 or more $nPersonal Property
Item(s) Costing:$1,000 or more (E-commerce zone or used exclusively for tangible produclion)14,000$n
I AA¿ ñNNe
Attachment 3, Page 2 of 4
Oregon Enterprise Zone Authorization Application lnstructions
For More lnformation
Visit www.oregon4biz.com.
Applicant
This application form serves to authorize your business firm to receive a
standard three-year exemption on qualified property that you will own
or lease at the specified location in the enterprise zone or rural renew-
able energy development zone. The loca1 zone manager and the county
assessor's office authorize your firm (not the proposed property) using
an Oregon Enterpríse Zone Authorizøtion Approaal lorm (150-303-082).
Mandatory Tlming in Being Authorized:
. Complete and submit this form to the local zone manager before begin-
ning physical project work (constructiorL installations, etc.) or hiring
new employees. Work may then proceed even before approval.. See "Proposed Investment in Qualified Property" for exceptions-
work that might precede application.r No exemption is allowed on property for which work began prior to
the effective date of the zone's designation or amendment to include
site, or for any property already assessed in the county by that date.
o After submitting this application but before being authorized, you
and the zone manager will hold a pre-authorization conference, at
which the assessor's office might participate, to formally address
special issues or contingencies for qualification.r If seeking an extended abatement of four or five years in total, a
written agreement with the local zone sponsor must be executed
before your firm is approved for authorization. This agreement may
set additional reasonable requirements, and in most zones, the law
requires new employees to receive compensation (including benefits)
in all four or five years that is onavenge1,50/o or more of the county
average annual wage at authorization.
First Year Glaiming Exemption from Property Taxes:
. The first year of exemption is the year following the year in which
the qualified property is "placed in service." This means when the
property is first used or occupied, or is physically ready for use or
occupancy, for specifically intended commercial purposes.
o To claim the exemption, you must file with the county assessor after
|anuary 1, but on or before April 1, of that first year. Attach a schedule
of the property to be exempted.. Submit the exemption claim (without property schedule) after each
An eligible call center may receive customer requests and orders by
various means, but at least 90 percent must originate from areas that
would entail a long-distance charge if performed by telephone.
E-commerce investments receive special treatment in certain enter-
prise zones and in the city of North Plains.
Central facilities for managemen! marketing design, etc., are eligible
if serving statewide or wider operations of a company. (Investment
needs to conform to authorized description.)
More than 60 percent of the enterprise zones have elected to make
hotels, motels, and destination resorts eligible. The choice may differ
among a zone's sponsoring city/county jurisdictions.
a
a
a
a
Employment in the Enterprise Zone
To be authorized, the eligible business firm must commit to satisfy
job-creation requirements:
r The number of full-time jobs in the zone must rise and be maintained
during the exemption at a minimum of 110 percent of the average
level from the time of the authorization application.
e Failure to reach this level precludes the exemption.¡ Failure to maintain this 1evel represents "substantial curtailment,"
as would a big drop in total employment.. Your firm must enter into a first-source hiring agreement before
hiring new employees. The local zone manager will direct you to
the contact agency.. Your firm and the zone sponsor are solely responsible for compliance/
verification of local additional requirements.. Also see "Special Issues Worksheet" on the last page.
Employment Outside the Enterprise Zone
The business firm is disqualified if:
o The transfer of operations into the enterprise zone results in Oregon
job losses more than 30 miles from the zone boundary.. The movement of employees into the zone from within 30 miles of its
boundary results in less than a 10 percent inoease of the combined
employment level in the zone and from where they are transferred.
Proposed lnvestment in Qualified Property
To assist eligible business firms in understanding the property tax
benefit they may receive for investing in an enterprise zone, the
authorization application asks for the best available information on
Keeping Authorization Active:
. This application needs to be renewed after two full years between
January 1 and April 1, if your firm is not ready to claim an exemption.
Submit a letter with the zone manager and assessor stating your
continuing interest and intent.¡ Failure to submit such a statement every two years (while the zone
exists) classifies your authorization as "inactive." A fee is then re-
quired in order to claim the exemption.
Business Eligibility
A key function of authorization is to ascertain and assure a business
firm's eligibility for exemption.
. The program is primarily directed at for-profit organizations that
provide goods or services to other business operations.. Ineligible operations include: tourism, retail food service, enter-
tainment, childcare, financial serviceÐ property management, hous-
ing or constructiory retail sales or goods or services, health care, or
professional services.
communication among the firm, the local zone manager, and the
county assessor.
Pre,application Actlvity at Site:
In general, physical investment including site preparation must begin
after this application is submitted. Exceptions include, but are not
limited to, the following:
. A project started and abandoned at least six months earlier.. Demolition, hazard removaf or environmental cleanup.. Property acquired from another authorized business firm.r Purchase or lease from a third party of a newly constructed or newly
improved building or structure. In this case, work may already be
underway or completed, but approval of this application must in-
clude a copy of the sale/lease agreement and must happen before
use or occupancy of the building or structure.
Construction in Process: Property on-site as ofJanuary L may be exempt
for up to two years before being placed in service. Once authorized,
file the Application for Construction-in-Process Enterprise Zone Exemptíon
(150-310-021) with the county assessor on or before each April 1, for
any qualified property for which work is still underway on January L.
(Not available for centrally assessed / utility or hotel/ resort property)
150-303-029 Form OR.EZ.AUTH (Rev 10- 1 6)
Attachment 3, Page 3 of 4
Property Criteria:
o For a significant building or structure to be exempt, the authorization
must include some indication of it. In addition, for example, if no
machinery and equipment is indicated, then no such property quali-
fies, so that the applicant is advised to account for every basic type
of property that could possibly be part of the final, overall project.. All property needs to be new, meaning it was not used or occupied
in the zone more than one year before exemption begins.. Machinery and equipment also must be newly acquired or newly
transferred from outside of the county (except for major retrofit or
refurbishment of real property idle for 18 months).. Any or all property may be leased from any party, provided that your
firm (the lessee) is obligated to pay the property taxes.. All real property-buildings, structures, and heavy / affixed machin-
ery and equipment-listed on the exemption claim property schedule
must cost $50,000 or more in total.r Personal property machinery and equipment is readily movable and
qualifies subject to a per-item cost minimum. An integrated system
consisting of various components may be treated as a single item for
these purposes.. Land, vehicles, motorized/self-propelled devices, rolling stock, non-in-
ventory supplieg and idle or ineligibly used property do not qualify.
o The investment in property needs to be for the furtherance of income.
For example, it may not be for personal use.
Additional Property and Future Projects:
. With an ongoing investment, subsequent property that is not placed
in service until the first or second year of exemption on the initial
property may be exempted as we1l.
o In other words, property schedules may be filed with up to three
consecutive claims, pursuant to a single authorization.. Any major change of plans should be amended into the applicatiory
in writing to both the zone manager and the county assessor, before
January 1 of the first year of an initial exemptiory especially to account
for any unrepresented type of basic property..¡ Another authorization application is necessary for qualified property
at a different location in the same or another zone.
Applicable Property Tax Returns Must Still Be Filed Annually
Please complete the following worksheets e¡ther before or dur¡ng lhe pre-authorization consultat¡on with the local zone manager
Employment Worksheet
Use this worksheet to determine your business firm's annual average
employment over the 12 months preceding the date on which you sub-
mit the authorization applicatiory and as required during the period of
the enterprise zone exemption:
1. Identify those employees or positions within the zone that are: (a)
working a majority of their time in "eligible" activities or in sup-
port of those activities; (b) paid on average for more than 32 hours
per week; (c) not employed solely to construct property; (d) not
seasonal; and (e) not temporary-not hired, leased, or contracted
for less than one year or on an as-needed/ad hoc basis. Don't use
"full-time equivalents" (FTE).
2. Determine the number of the above employees at the end of each
pay period, calendar month, or quarter over the prior 12 months.
3. Total the number of employees from each period and divide this sum
by the number of periods. If not using months, include a suitable
attachment in place of the following with your application:
19 )+ 2O e)+ 20 (a)+ 19 (a)+
)+ 20 G)+ 20 (z¡+ 19 1a¡+
20 Ø + 18 1ro)+ 19 (11) + 19 (12)=
232 + 12: 19.33 *lverageAnnualExistingfobs
4. If your Average Annual Existing Jobs* (from number 3, above) is:
a) Five or more, multiply by L.1, as follows:. 19.33 x 1.1 = 21.26 ,ot
b) Less than five, add one, as follows:
*............................................................- - 1 -_
5. Round the total from 4a or 4b to the nearest whole number (for
example, 25.49 becomes 25 and 25.50 becomes 26). Your rounded
figure is the level of employment required by April 1 of the first
year of exemption.
For purposes of compliance, repeat steps 1-3 and 5 above for each
calendar year that qualified property is exempt.
19
ial lssues Worksheet
This worksheet is simply a checklist to guide you through certain issues
that may need to be addressed as soon as possible. Check if the answer
is "yes" or "maybe."
! Will the requisite increase of enterprise zone employment be difficult
to achieve, even with the new investment? Or could it be somewhat
unapparent? In any case, work out verification options with local
zone manager. Copies of unemployment insurance reports or other
records should be kept on file to assure manager and assessor.
n If the number of jobs will likely not grow by 10 percent, do you
want a local waiver by resolution(s) adopted by zone sponsor with
authorizatiory which may impose additional conditions.? Waiver
allowed if the overall investment costs $25 million or more, or with
a 10 percent rise in productivity combined with dedicated expenses
for workforce training . In a rural renewable energy development
zone, a waiver is allowed for $S-million investments but with no
additional local requirements.
! Are you interested in publicly owned and otherwise available real
estate that might exist in the zone and that an authorized business
firm generally has a right to buy or lease if promptly developed for
authorized use?
! Would you like to know about local incentives that some local spon-
soring governments offer to authorized businesses as part of the
enterprise zone package such as fee waiver, regulatory expeditiory
and so forth?
n Will a qualified building be partially occupied by another business /
tenant or used for ineligible operations? In such cases, work with the
local zone manager to determine the units or proportion of space
for the assessor to exempt.
! Would you like your enterprise zone employment to be combined
with the job figure for any (100 percent) commonly owned firm/
corporation(s)? If so, attach a statement with the name of the other
company(s). Without such electiory even subsidiaries of the same
parent corporation are treated as distinct business firms within an
enterprise zone.
! Is investment pending the site's inclusion in the zone? This applica-
tion may be approved under such conditions, but make arrange-
ments with the 1ocal zone manager to ensure that any construction
or installation work does not begin until on or after the effective
date of the boundary change. (Same applies to designation of a new
enterprise zone.)
! Is the enterprise zone terminated? This normally precludes autho-
rization or qualificatiory but an already authorized/qualified firm
can "grandfather" and may be authorized up to L0 years after the
termination of the zone.
150-303-029 Form OB-EZ-AUTH (Rev 10.16)
Attachment 3, Page 4 of 4
CITY OF SPRINGFIELD, OREGON
RESOLUTION NO. ________
RESOLUTION AUTHORIZING THE CITY MANAGER TO SIGN AGREEMENTS
WITH LANE COUNTY AND RUSH CREEK HOLDINGS, LLC D/B/A UMPQUA
DAIRY PRODUCTS TO APPROVE A THREE-YEAR ENTERPRISE ZONE PROPERTY
TAX EXEMPTION AND TO EXTEND THE ENTERPRISE ZONE PROPERTY TAX
EXEMPTION AN ADDITTIONAL TWO YEARS FOR A TOTAL OF FIVE YEARS FOR
AN INVESTMENT IN ITS NEW SPRINGFIELD SITE AND FACILITY
WHEREAS, the City of Springfield would like to encourage investment in Springfield
manufacturing and high technology facilities and has identified the food and beverage
sector as a target sector;
WHEREAS, the City of Springfield and Lane County established and are the sponsors of
the Springfield Community Enterprise Zone;
WHEREAS, the Rush Creek Holdings, LLC d/b/a Umpqua Dairy Products Co. (Umpqua
Dairy) is locating in the Springfield Community Enterprise Zone and is an eligible
business under Oregon Enterprise Zone statutes;
WHEREAS, Umpqua Dairy plans to make a $1.8 million capital investment in a new
Springfield facility and anticipates it will complete construction of the project in 2019;
WHEREAS, Umpqua Dairy has applied for an Enterprise Zone property tax exemption
for a total of 5 years;
WHEREAS, as part of its application Umpqua Dairy agrees to execute an agreement
with the sponsors of the Springfield Community Enterprise Zone consistent with this
Resolution; to comply with all applicable requirements of Oregon’s Enterprise Zone
statutes and reasonable requests from the Springfield Community Enterprise Zone
sponsors;
WHEREAS, the agreement with the sponsors will include a commitment from Umpqua
Dairy to compensate during the entire enterprise zone tax exemption period all new
employees at an average rate of not less than 150 percent ($62,285) of Lane County’s
prevailing average annual wage ($41,523) at the time of applying for authorization;
WHEREAS, Umpqua Dairy will negotiate a First Source agreement with the Oregon
Employment Division for referring qualified candidates to Umpqua Dairy for new job
openings within the Springfield Community Enterprise Zone until the end of the five-year
exemption period;
WHEREAS, the Springfield City Council desires to increase both the number of family
wage jobs and the wages paid to its citizens in new and existing economic sectors,
assist in the diversification of manufacturing and high technology in the local economy,
ensure competitiveness of future Springfield businesses, and provide for the long-term
operation of existing employers like Umpqua Dairy;
Attachment 4, Page 1 of 3
NOW, THEREFORE, BE IT RESOLVED BY THE COMMON COUNCIL OF THE CITY OF
SPRINGFIELD:
Section 1: The Springfield City Council, as the governing body of one of the
sponsors of the Springfield Community Enterprise Zone, approves the three-year
Enterprise Zone abatement and extending the property tax benefits of the
Springfield Community Enterprise Zone for an additional two years to Umpqua
Dairy, as requested in Exhibit A and incorporated herein by reference, for a
proposed $1.8 million investment in its new Springfield facility, adding building
square footage and machinery and equipment;
Section 2: Umpqua Dairy through a signed agreement with the sponsors
must meet the terms outlined below:
a. Invest approximately $1.8 million in enterprise zone eligible
equipment and buildings in the Springfield plant;
b. Pay all its new employees, on average, compensation that will
exceed the 150% of the Lane County average annual wage where
the most recent data on prevailing Lane County average annual
wage at the time of applying for authorization was $41,523 and
150% of that figure is $62,285;
c. Enter into a first-source agreement with the Oregon Employment
Division effective with approval of the enterprise zone
authorization until the end of the five-year extended enterprise
zone abatement period; and
d. Maintain a mandatory minimum level of full-time employees equal
to or greater than 110% of its annual average full-time
employment of 19 at the time of authorization application at all
times during the time from the authorization application until the
end of the Enterprise Zone Exemption Period; and
e. Pay to the City of Springfield $8,500 in $1,700 annual installments
to be paid by July 1st in each year of the five-years of Enterprise
Zone Exemption as a reasonable offset to general government
agencies to support ongoing administration of economic
development efforts, including enterprise zone management.
Section 3: The City Manager is authorized to sign agreements with Lane
County and Umpqua Dairy including but not limited to the terms described herein
provided that Umpqua Diary meets the terms of ORS Chapter 285C;
Section 4: The City Manager is authorized to take appropriate action to
facilitate the extension of the Property Tax Exemption as described herein;
Attachment 4, Page 2 of 3
Section 5: This Resolution shall take effect upon adoption by the Council and
approval by the Mayor.
ADOPTED by the Common Council and approved by the Mayor of the City of
Springfield, this _____ day of __________, 2018.
Adopted by a vote of ____ for and ____ against.
_________________________________________
Mayor
ATTEST:
_________________________________________
City Recorder
Attachment 4, Page 3 of 3