By the BF Staff
From the January/February 2023 Issue
Business Facilities: Why should companies consider Oregon for relocation or expansion? What are the target industries for the state?
Jill Miles, Recruitment Officer: Oregon is one of the few states on the West Coast that offers great transportation advantages for Pacific Rim access. It is home to 23 ports and three interstates, and is nestled between Washington and California which provides access to over 55 million people, not including our neighbor to the north, Canada.
One long-standing advantage for Oregon is that we have a property tax abatement which is available in most communities and provides anywhere from three to 15 years property tax abatement (determined on whether urban and rural). Also, Oregon has no sales taxes along with being a single sales factor state.
We are a large state geographically, but small in population but have grown from six to seven target industries. These include Metals and Machinery, Business Services, Outdoor Gear and Apparel, Food and Beverages, Forestry and Wood Products, High Technology, and (our most recent addition) Bioscience.
BF: What are recent notable relocations or expansions in the state?
Miles: By the end of the first quarter of 2023, biotech giant Genentech is getting ready to open a 130,000-square-foot expansion in Hillsboro, where it already has a major operation. Based in south San Francisco, Genentech’s Technical Operations facility in Hillsboro has played a key role in the filling, packaging, and distributing Genentech and Roche medicines worldwide since 2008.
The new facility will be dedicated to the commercialization of individualized medicines. The building represents a $175 million investment in new technologies and platforms that will allow them to scale our manufacturing capacity. It will also drive job creation, as they anticipate hiring more than 100 people.
Meanwhile, Dollar General is planning a 901,000-square-foot distribution center as part of the Mill Creek Corporate Center, a large transportation and warehouse hub in southeast Salem. The $168 million facility will provide regional dry goods and cold storage space for the discount retailer, which operates more than 80 stores in Oregon with 750 employees. The company first approached Oregon in early 2019 seeking land for a facility and visited Salem to inspect the area.
BF: Tell us about the status of economic development in Oregon. In recent reports, we see the state’s economy grew close to 6% in 2021, largely on rebounds in trade and tourism. What other factors are having an impact?
Damon Runberg, State Economist: During the initial COVID lockdowns, Oregon saw a larger share of job losses compared to the average state, losing 14.3% of total non-farm employment. Oregon ranked 30th for total job losses across the nation (i.e., 29 states posted a lower share of job losses than Oregon).
Despite these larger than average job losses, the state has recovered quickly. As of November 2022, employment levels in Oregon were fully recovered from the pandemic shock of early 2020 with total non-farm employment up 1% from the pre-COVID peak. Oregon posted its 17th highest job levels relative to the pre-COVID peak. This is a strong figure considering the state was harder hit by layoffs than the average state.
Oregon job gains over the past several years were largely concentrated on hard-hit industries recovering from the pandemic shock (leisure, hospitality, and retail trades). However, the past year has seen strong gains from manufacturing, professional and business services, construction, and wholesale trade.
“Despite these larger than average job losses [during COVID], the state has recovered quickly. As of November 2022, employment levels in Oregon were fully recovered from the pandemic shock of early 2020.”
The manufacturing growth was particularly impressive, growing by nearly 6% over the past year. These gains were largely concentrated in the well-known semiconductor and electronic component manufacturing sector (+3,100 jobs), but there was also strong growth in wood product manufacturing, machinery manufacturing, and non-durable goods (mostly beverage manufacturing recovering from the pandemic).
BF: Would you highlight an incentive or program that’s having impact on the Oregon business climate?
Ed Tabor, Program & Incentive Manager: One set of programs delivering outstanding mutual value to businesses and communities in Oregon are our tax abatement programs, Enterprise Zones, and the Strategic Investment Program (SIP). These programs result in tremendous tax savings for businesses—especially those that require heavy capital investments. Twenty companies used the Strategic Investment Program in 2022 with a cumulative amount of gross taxes saved on exempt property totaling to $270.6 million. Oregon had 287 companies participating in the Enterprise Zone program in 2022, totaling a cumulative of $63.6 million in property taxes abated, while adding jobs and economic output for communities across the state.
The Strategic Investment Program offers a 15-year property tax exemption on a portion of large capital investments for projects developed by “traded sector” businesses.
Oregon’s Enterprise Zones primarily incentivize new business investments by abating all local property tax for a certain number of years, depending on the location. Sponsored by city, port, county, or tribal governments, an enterprise zone typically serves as a focal point for local development efforts.