Sisters ponders joining enterprise zone

The Sisters City Council is contemplating joining Redmond's enterprise zone as a way to attract new businesses, new business investment, and encourage job creation within the city of Sisters.

The council discussed the possibility in its February 12 workshop.

The Redmond enterprise zone was established in 1988. Through 2008, 115 businesses have participated, creating 1,722 new employees and over $124 million in new business investment.

This is not the first time the council has considered such a joint venture. Back in 2005 the staff at the State Office of Economic and Community Development (OECD) recommended that Sisters establish an enterprise zone by merging with Redmond's existing zone.

Following several conversations it became evident to Sisters city staff that Redmond's city staff did not support such a merger and the discussions ended.

The Oregon Enterprise Zone Program (OEZP) has 57 "zones" throughout the state, the maximum allowed by state law. Five of these zones expire in 2009, opening up slots for new or renewing zones. Redmond's zone expires on June 30.

With the recession deepening, acquiring an OEZP designation this year is expected to be very competitive. Sisters is well-positioned to apply for one of the zones, having received a "severely distressed community" designation last March from the Oregon Economic & Community Development Department.

Sisters was given the designation based on several key indicators: A low percentage of the population with a bachelor's degree (age 25 or higher), a high unemployment rate, and a high percentage of the population with below poverty level per-capita income.

To qualify for the OEZP program a "jurisdiction" must be in an economically disadvantaged area. It must also be supported by all of the local public agencies in which the zone is delineated and it can't exceed 12 square miles in size.

A potential OEZP jurisdiction must also possess undeveloped industrial land appropriately zoned and served by city infrastructure. Lastly, it must demonstrate the likelihood of success with potential immediate investment prospects.

Last month Sisters city staff officially requested that the Redmond City Council consider adding Sisters to the Redmond Enterprise Zone as part of their re-application process. This time around it appears that Redmond is willing to consider a three-jurisdictional application consisting of Redmond, Sisters, and Deschutes County.

Eric Porter, Community Development Director, sees benefits in being part of a joint application.

"The State Office of Economic and Community Development (OECD) is actively encouraging collaborative enterprise zones amongst jurisdictions and, due to our small population and physical size, a stand-alone Sisters enterprise zone application may not be competitive in the state process," said Porter.

Sisters city staff is recommending that the enterprise zone boundary contain the entirety of Sisters' industrial-zoned land, the 48-acre Forest Service administrative property, some residential area, and the commercially zoned land located north of Adams Avenue.

Additionally, city staff also recommended that the potential new hotel sites in Sisters be considered as part of the enterprise zone.

Enterprise zones typically offer incentives to new businesses as a means to entice them to the community. Sisters city staff's recommendations for incentives include: Waiving the $200 enterprise zone application fee; expediting the permit process; waiving half of the land use fees; waiving water and sewer hook-up fees; a 25 percent reduction in water and sewer user charges for three years; discounting building permits by two percent per FTE (full-time employee) created, up to a maximum discount to be determined.

The council has also begun weighing the fiscal impact of "incentives." On one hand incentives encourage business investment and job creation; on the other they impact both the general fund and the sewer and water funds in the short term through abatements, waivers, and discounts.

Councilor Pat Thompson is in favor of an enterprise zone.

"My feeling is that the City of Sisters must take advantage of any and all opportunities that could potentially assist existing business here in town or potential business that could locate in our community," he said.

Patty Vandiver, real estate Broker and chamber of commerce president, attended the council workshop and agrees with Thompson.

"The proposal to bring Sisters into Redmond's enterprise zone is a unique opportunity for Sisters that needs to be pursued," she said. "With the cost of land, construction, permits, SDCs, etc., small businesses lack the deep pockets required to construct buildings that fit their needs. Without the incentives that EDCO can provide by bringing Sisters into the enterprise zone, Sisters will never get on the map as a live/work sustainable community."

Councilor Sharlene Weed has not seen the benefits of an enterprise zone in Sisters.

"I am opposed to forming an enterprise zone in Sisters," she said. "After studying the issue it looks largely like Sisters would be doling out taxpayer dollars to subsidize business that may or may not create living wage jobs, that may or may not have come to town anyway, that may or may not stay in the community after the subsidy is finished, and that may provide unfair competition to existing businesses."

The council will continue to study and debate the issue over the coming weeks. A public meeting is scheduled for February 26 at 5:30 p.m. in the council's chambers. The council's resolution process concludes on March 26, and applications for new or renewal enterprise zones must be submitted to the state on April 3.