[quote style=”2″]City Applying for Coveted E-Commerce Zone Designation[/quote]
Agriculture has long been the backbone of Hermiston’s economy, but efforts are under way to diversify its economic base and attract high-tech industry into the area.
Hermiston is home to one of the state’s more than 60 enterprise zones which provide limited-duration property tax exemptions to qualifying businesses that invest in the city. It’s considered one of Hermiston’s most effective economic development tools. The city is now looking to enhance that tool by requesting that an electronic commerce or “E-commerce” designation be added to its enterprise zone.
Just what is an E-commerce designation? Like an enterprise zone, an E-commerce zone provides temporary tax relief for businesses that invest and locate in a designated city. The difference is an E-commerce zone provides temporary state income tax relief.
But what is E-commerce? It’s defined as engaging predominantly in transactions via the Internet. Obvious examples of businesses that are E-commerce based are Amazon and eBay. It’s an ever-growing segment of the world economy, and Hermiston wants to get a piece of the action. Hermiston Assistant City Manager Mark Morgan said one of the top priorities of the Hermiston Futures Task Force was to attract more high-tech jobs. Having an E-commerce zone, he said, would give the city a “tangible advantage” in attracting those types of jobs to Hermiston.
There are currently 10 existing E-commerce zones in the state of Oregon and none are located in Eastern Oregon. The state is now taking applications for another five. On Monday night, the Hermiston City Council passed a resolution to formally request that Hermiston by one of those five.
Among the attributes the city can point to in its effort to claim one of the five new E-commerce zones is its existing and planned broadband deployment. Local telecommunications carriers such as Eastern Oregon Telecom and Inland Communications are a key component of the city’s application because of their robust telecommunications infrastructure in the Hermiston area. And, it’s that infrastructure that is critical to attracting E-commerce businesses.
The city also has the Cook Industrial site certified by the state as “Project Ready,” as well as the largest available labor force in all of Eastern Oregon. The city has also demonstrated success in attracting jobs through its enterprise zone. According to Morgan, through 2013, there was $76.9 million worth of investment actively claiming enterprise zone property tax exemption, which created 243 new jobs since 2009. Morgan added that there are $24.6 million in investments scheduled to go into service this year.
The E-commerce zone would give Hermiston a distinct edge over cities without such a zone. A qualifying company could receive a state income tax credit equal to 25 percent of the cost of capital investments with the annual maximum credit amount at $2 million per year.
And while Morgan wouldn’t say that Hermiston was a sure bet to receive the E-commerce designation, it stands a fairly good chance. Morgan recently spoke with Art Fisher of the Oregon Business Development Department who told him that Hermiston was one of only seven cities applying for the five designations and none of the other six cities are in Eastern Oregon.
Morgan said a decision on the five new E-commerce zones will likely be made within the next few months.
