Ontario City Council votes to rezone land

By Andy Gates — Argus Observer
Tuesday, August 7, 2007 9:57 AM PDT

ONTARIO — A large piece of public property, hailed as a potentially rich site for industrial development in Ontario influenced the birth of a business-friendly zoning change Monday, even though mystery shrouds stake-holders who may have a possible interest in the land.

The Ontario City Council Monday night voted unanimously in favor of a resolution to annex 80 acres of city-owned earth — commonly known as the Stellings property — into an enterprise zone. The property, previously zoned city heavy industrial, is situated along the northwest corner of Yturri Beltline and Northwest Fourth Avenue.

The property was designated Nov. 6 as surplus with a value of $20,000 per acre.

The land has already sparked some interest. According to a Nov. 6 resolution, “from time to time, the city receives inquiries from developers interested in purchasing the parcel.”

By annexing the property into an enterprise zone, the Stellings property could be acquired by an eligible business with an enticing commercial incentive — three to five years of property tax waivers relating to improvements on the land.

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“This enterprise zone and the tax exemption that it offers for new investments in plant and equipment by eligible business firms are critical elements of local efforts to increase employment opportunities, to raise local incomes, to attract investments by new and existing businesses and to secure and diversify the local economic base,” according to Monday’s enterprise zone resolution.

Creating enterprise zones before land is acquired by a business is apparently not abnormal.

Rather, it is a good way to spur economic development, Malheur County Economic Development Department Director Jim Jensen said Monday.

“I’m a believer in setting the table ahead of time ... If the incentive isn’t there, it’s harder to attract large or small business to that location. I’m a believer that if a city wants to make property available, let’s make the enterprise zone package available and see what comes along,” Jensen said.

If incentives, like the enterprise zone, are in place for businesses, then when they come to town they do not have to handle time-consuming zoning processes, Jensen said.

Another theory regarding enterprise zones, though, draws the opposite conclusion.

Research from Portland State’s Center for Urban Studies concluded enterprise zones do not actually promote economic development.

“While this analysis is certainly not definitive, it does not support the contention that enterprise zones are a significant spur to economic activity, and there appears to be no overall effect on economic growth,” according to a research paper titled, Oregon Enterprise Zone Tax Abatement Economic Development Study and Urban Renewal Study.

Ontario officials concede that the property tax waiver is substantial — but they said the move would probably pan out for the city.

“While this waiver may be substantial, local governments support this concept because many times the property improvement would not occur were it not for the incentive,” according to Monday’s Ontario City Council report from Ontario City Manager Scott Trainor.

Ontario, Vale, Nyssa and Malheur County entered into an enterprise zone agreement in 1999.

Under the mandates of the agreement, all entities would have to sign off on the designation for the Stellings property.

Two employment development initiatives that recently garnered enterprise zone status are apparently at different stages — with one progressing and the other in limbo.

A proposed $77 million bio-refinery was offered enterprise zone incentives by Malheur County, but the endeavor has yet to evolve from dry ground just outside of Ontario.

The bio-refinery, called Treasure Valley Renewable Resources, or TVRR — garnered five years of property tax abatement through the Malheur County Enterprise Zone.

Construction of the TVRR project was expected to begin in April 2006 with a projected completion date in August, according to a Connect/Oregon program application submitted to the state in February 2006 by TVRR.

However, as of Monday, TVRR officials have yet to pull a building permit, an Inspections Inc. representative said.

A crucial piece of TVRR’s enterprise zone, was its employees would need to be hired through the Oregon Employment Department.

But, that does not mean employees would live in Oregon, TVRR officials conceded in the 2006 Connect/Oregon program application.

“Per stipulations of the enterprise zone, TVRR has agreed to hire employees through the Oregon Department of Employment.

However, TVRR does not anticipate that all its employees will live in the Ontario area, as being a border town, approximately 40 percent of Ontario’s workforce reside in Idaho. TVRR has no reason to expect that ratio to change as it hires employees for the bio-refinery,” according to the 2006 Connect/Oregon program application.

Another venture, Fry Foods, slated for Nyssa, also garnered enterprise zone status, Jensen confirmed.

Fry Foods, a national chain based out of Ohio, moved into the former Jon-Lin Frozen Food facility in Weiser in October 2006 as a temporary operation, at least until a permanent building could be built in Nyssa. Status of the Nyssa venture — which had been rather elusive — is now apparently moving forward.

Jensen said he touched base with the company’s owner within the last two weeks and learned the venture, which could employ 300 to 400 people, is moving forward in Nyssa.

“It’s his (owner of Fry Foods) intent to utilize the facility in Weiser, as well as to build a new facility in Nyssa, and utilize both properties to meet customers’ needs,” Jensen said Monday. A new subdivision is being erected in Nyssa, and some lots have already been committed to buyers, Jensen said.

“It all ties together,” he said.