Enterprise Zones (EZones) are an economic development tool, allowed by State law, to induce additional investment and employment by non-retail businesses across the state.  EZones allow local governments to negotiate a set amount of time for property tax relief.  The basic EZone exemption allows for three years of property tax exemption for developments which meet the investment and job creation minimum criteria.  At the end of three years, the value of the investment is taxed as normal.  

Since 2009, the GHEZ is responsible for attracting more than $379 million in new and planned capital investment to the area. Now, as several exemptions have expired, $87 million has been added to the tax rolls benefitting the City of Hermiston, Umatilla County, the Hermiston School District, and Umatilla County Fire District #1, among others, to the tune of $1.5 million in new annual property tax revenues. Additionally, those investments have created 509 new full-time jobs to-date resulting in more than $19 million of new direct annual payroll circulating through the economy of Hermiston and western Umatilla County as of 2020.

The Hermiston Enterprise Zone was originally applied for by the City in 1986, and was subsequently renewed throughout the years.  In 2009, Shearer's Foods (Snack Alliance) sought EZone exemption for a $25 million expansion of their site just south of City Limits; at which time, the City and Umatilla County agreed to expand the Hermiston Enterprise Zone to include the area of Shearer's.  That expansion required the addition of Umatilla County as a co-sponsor of the zone, and a name change to the Greater Hermiston Enterprise Zone.

In 2017, Lamb Weston, Inc. sought EZone exemptions related to it's $297 million plant expansion near the I-84/82 interchange.  Although the area is also outside of the City of Hermiston City Limits, it was determined to be best practice to expand the GHEZ to cover this area because all of the primary government service providers and taxing districts covering that area are primarily based in Hermiston, and impact Hermiston residents (i.e. Hermiston School District, Umatilla County Fire District #1, etc.).

In going through the zone expansion process, it was determined that, in the interest of preparing for long-range investment, rather than doing a "spot expansion," to accommodate only Lamb Weston, it made sense to include all of the property in the I84/82 interchange area currently zoned for Industrial uses.  Although there is a significant amount of real estate west of I82 also zoned Industrial, and also within the boundaries of the Hermiston School District and UCFD1, it was determined that the area zoned as "Depot Industrial," was still too far off from being realistically developable in the short-term (3-5 years).  So only the area east of I82 was included at the time.

In conducting long-range analysis of future industrial development, relative to the existing GHEZ boundaries, it was determined that it is appropriate to expand the GHEZ to be prepared in the event of future industrial development requests.  There is not a current EZone application requesting this expansion.

The enclosed map proposes adding this specific 1.34 square miles of area to the GHEZ for several reasons:

1. Zoning Consistency:  The 2017 expansion included the area by the freeway interchange which was already zoned industrial.  This 2022 expansion will connect that area to the main GHEZ area by including most of the land in that vicinity which is either currently zoned industrial, or also carries a "Future Industrial" designation.

2.  Local Taxing District Clarity:  This expansion proposes using Hermiston-Hinkle Road as it's eastern boundary because that is the dividing line between the Hermiston School District and the Stanfield School District.  It simply makes logical sense for EZones covering school districts to be managed by the communities they serve.

3.  Future Developability:  The Feedville Road corridor along this proposed expansion includes significant power and water infrastructure from the Port of Umatilla/City of Hermiston Regional Water System, and is likely to garner significant interest from industrial developments in the future.

4.  Replacing Capacity:  Since 2017, there have been three large industrial developments/land sales within the GHEZ totaling a combined 260 acres of prime industrial land.  Future industrial developments will therefore need new potential sites.

5.  Depot Industrial Future:  The question of whether to add real estate on the former Umatilla Army Depot to the GHEZ remains, but it is left out of this 2022 expansion for the same reasons as before- namely that due to utility availability and land ownership, actual large scale development is still realistically 3-5 years away.  If, and when, it comes time to consider EZone designation for the Depot property, it only makes sense to expand the GHEZ on to the Depot.  Any developments within the Depot site will be within the Hermiston School District, and UCFD1's taxing and service areas.  Therefore, it would not make any sense to expand either the Greater Umatilla EZone, or the Stanfield/Echo Ezone to the Depot site.  Furthermore, it would not make any sense to create a new stand-alone EZone for the Depot property when it is within less than 7 miles of three existing zones managed by local government service providers.

Notice of the proposed expansion was mailed to all underlying taxing entities on January 27, 2022, with a request for written comments, and notice of the Council's meeting on February 28, 2022.  The Umatilla County Commissioners, as co-sponsors, must also approve the zone expansion, and they are scheduled to take up the issue on March 2, 2022.  Finally, the Port of Umatilla must consent to the zone expansion at their March meeting.

1. Approve the Resolution

2. Reject the Resolution