Hermiston City Council Votes to Expand City’s Enterprise Zone

Hermiston Assistant City Manager Mark Morgan talks to the council Monday night about a proposal to expand Hermiston's enterprise zone. (Photo: Michael Kane)

The Hermiston City Council voted Monday night to expand its enterprise zone, a move that could attract companies to invest in the Hermiston area.

The council voted to add about .86 square miles to the current enterprise zone, increasing the size of the zone by about 10 percent. The property added to the zone includes all of the industrially-zoned land near the Interstate-84/82 interchange north of I-84 and east of I-82 in the area of Westland Road.

Enterprise zones allow employers who make large investments inside of a zone to receive property tax exemptions for a number of years if the investment results in a net increase to their workforce of at least 10 percent.4

The Hermiston Enterprise Zone was created in 2004, with the city of Hermiston as the sponsor. At the time, it only covered the Hermiston city limits. The zone was expanded in 2007 to include several tax lots south of the city on Highway 207 to accommodate an expansion by Snack Alliance (predecessor to Shearer’s Foods). Umatilla County became a co-sponsor of the zone when the zone was expanded outside of the city limits, as required by law. The county is expected to vote to approve the expansion in December.

Hermiston Assistant City Manager Mark Morgan said the enterprise zone has created $83 million of new capital investment, 362 new jobs, and total new annual cash payroll of $9.65 million from 2008 through the end of 2016. Of that $83 million in investment, about $63 million has since come on the tax rolls.

The issue drew some concern from Umatilla County Fire District No. 1. Fire Chief Scott Stanton told the council Monday night that the district is concerned about the loss of potential tax revenue.

“We definitely encourage economic growth, but that brings more demand for services,” Stanton said. “We need enough tax revenue to support our services.”

Hermiston Mayor Dave Drotzmann said the property tax deferment is for a fixed period of time and that eventually those companies do pay property taxes. He added that the Hermiston “has more to gain than lose on this.”

The property tax deferments would only apply to new investment.