As the designated Enterprise Zone Manager, since the establishment of enterprise zones by the Oregon Legislature, Southern Oregon Regional Economic Development, Inc. (SOREDI) processed Enterprise Zone Applications for 11 local companies in 2016. These 11 companies will have invested a total over $32.3 million in their business expansion or relocation plans in Jackson or Josephine Counties, creating close to 50 new jobs and supported nearly 250 existing jobs.
Southern Oregon is home to three Enterprise Zones, the Medford Urban Renewal Zone, the Rogue Zone, covering all of Josephine County, and the Jackson County Rural Zone. Enterprise Zones are one method that states use to provide tax incentives to businesses in order to support job creation. States designate certain regions as Enterprise Zones for the express purpose of sparking job growth and capital investment. To qualify for Enterprise Zone benefits, a business is required to hire new workers totaling at least 10% of their existing workforce.
Eligible companies include traded-sector manufacturers, headquarters or lodging development and eligible projects must be on commercial or industrial property. Incentives include property tax abatement for 3–5 years. The standard exemption is for 3 years; however companies adding jobs whose compensation package exceeds 150% of the county average compensation package may receive 5 years of property tax exemption on the new capital investment. E-commerce companies are also eligible for additional income tax credits.
SOREDI has operated as the agent for Enterprise Zone application processing since the program was established by the Oregon Legislature in the late 1980’s. In 2015, SOREDI processed 9 applications distributed over the three zones, representing nearly $33,000,000 in business investment. In other locations, the zone sponsors may charge an application fee, calculated as a percentage of the tax abatement savings that the company would receive. This fee could easily range from $10,000 – $20,000 per transaction. All three local zone sponsors – Jackson County, Josephine County and the City of Medford – waive these fees to promote a business-friendly environment.
Colleen Padilla, Executive Director of SOREDI, says, “This program is one of very few incentives offered by the State of Oregon. It has a high value for companies making significant capital investments, helping with their cash flow for the first 3-5 years, which can be critical for young or rapidly growing companies.” Padilla continues, “Unlike other jurisdictions, Southern Oregon zone sponsors offer this incentive as a complimentary service through SOREDI. We exist to help business move forward with growth plans in our region. Added fees would likely be a deal-breaker for some of the companies we assist.”
In 2016, the types of companies that benefitted from Enterprise Zone assistance ranged from manufacturing to software to E-commerce to headquarter expansions. Of particular interest this year, each zone had a lodging application processed. This new lodging capital investment represents nearly $21.5 million of the total expected investment.
Companies with expansion plans in the region or new companies seeking to relocate to Southern Oregon should SOREDI for assistance before breaking ground or purchasing equipment, as the incentive is not retroactive.
About SOREDI: SOREDI is a private, membership-based, non-profit organization, governed by a 28-member board of directors. Its six-person staff is charged with local business expansion and new business recruitment efforts, financial assistance to start-up companies through its business loan fund, and management of Enterprise Zones in Jackson and Josephine Counties. The agency was formed as a regional economic development agency in 1987.