opus:interactive | If These Servers Could Talk

Friday, January 05, 2007 at 4:56 pm by opus:interactive

Portland Business Journal - opus:interactive An Enterprising Marketing Effort

When the Portland Development Commission stepped up efforts to inform businesses about a program that rewards job creation with tax breaks, the businesses listened.

Before the push to educate the industrial community about the merits of investing in an enterprise zone covering much of North/Northeast Portland, the PDC had typically granted breaks to three of four new or expanding businesses per year in the 10 years since the zone was created.

This year, on the heels of an aggressive outreach effort with an assist from a strong economy, the enterprise zone program has added 10 companies and expects to add 12 more by the end of the year, said PDC’s Seth Hudson, senior economic development manager and manager of the North/Northeast Enterprise Zone.

Among the new participants to sign on this year: Advanced American Construction, Oregon Steel Mills and Oregon Transfer Co.

The zone currently has 20 active participants who together intend to invest $222.4 million in new buildings and equipment. They will generate 2,100 new jobs and receive an estimated $12.4 million break on property taxes that would have been assessed on the new value of their businesses. The tax breaks last for five years.

The zone hit another milestone this year with the addition of a special “e-commerce zone” overlay, which rewards Internet-oriented companies with income tax breaks for investing in computers, software and related gear.

It gained its first customer, Opus Interactive, which has spent $662,000 on new facilities and a data center in recent months.

Portland’s enterprise zone isn’t the only one to prosper in the past year. There are 55 such enterprise zones scattered across the state and activity is on the rise in most of them, said Art Fish, business incentives coordinator for the Oregon Economic and Community Development Department.

Enterprise zones are a legal construct created by the state to spur business investment. They are implemented locally by cities and counties.

In essence, the enterprise zone program gives manufacturers a temporary property tax break for investing in new buildings and equipment if the investment results in new, well-paying jobs.

The zones typically are situated in economically distressed areas with an industrial bent. The e-commerce zone gives income tax breaks to Internet-oriented companies like Opus Interactive that invest in software, computers and network gear.

According to an annual report on the program issued this week, enterprise zones have generated 5,884 new jobs, 53 percent more than a year ago. Fish expects the numbers to climb in the next few years as projects in development are completed and business operations begin.

“We’re looking at on the order of a 50 percent jump,” he said.

In Portland, the North/Northeast zone covers an area bordered by Interstate 205 and Forest Park to the east and west, and by the Columbia River and I-84 to the north and south. It was amended this year to include Opus Interactive, which is in Northwest Portland.

The biggest new investment in Portland is Oregon Steel Mills, which plans to spend $72 million on new facilities and to add 390 people to its payroll. In exchange, it will get a $3.69 million break on its property taxes.

Not every newcomer is as large as Oregon Steel. The class of 2006 includes Triad Mechanical, which will invest $500,000 and add 29 employees, for a tax break worth a little less than $28,000.

Actual Article (must have Biz Journal Subscription to read full article online): Biz Journal

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