Hermiston city and county officials this week agreed to give Amazon a 15-year tax break on a planned new development, but they won’t be walking away empty-handed.
Amazon is expected to pay up to $40 million over 15 years directly to the Greater Hermiston Enterprise Zone, a partnership between the city and county, in lieu of property taxes.
“In the course of the history of the city, very rarely do opportunities like this come along,” said Hermiston City Councilor John Kirwan.
As part of the deal, Amazon has promised to invest at least $200 million into developments in the enterprise zone and pay workers there at least 130% of Umatilla County’s average wage, or about $52,00 a year.
Amazon also will pay $50,000 a year to Umatilla County Fire District No. 1 for fire safety and $50,000 a year to the Hermiston School District
Some area residents questioned why a company valued at $1 trillion shouldn’t be asked to pay the same property taxes as everyone else. Jackie Linton said she understood the company was bringing in jobs it would likely take elsewhere if it wasn’t offered the incentive, but it was still frustrating to see a deal offered to a company with so much money.
“I think they can do with one less yacht or mansion,” she said.
Kirwan said he didn’t see the deal as the city “giving up” anything to Amazon, because companies of that size don’t build in cities where they’re not given a tax incentive.
“We’re giving away zero, because if we don’t do this, Amazon will go somewhere else and some other city will embrace that $40 million and run with it,” he said.
Since Amazon doesn’t share details with the media on its data centers, it can be hard to pin down how many jobs it has provided Umatilla and Morrow counties so far with its data centers in Boardman, Umatilla and Hermiston.
A September 2017 memo by Business Oregon stated Amazon was directly employing 230 people in Oregon at the time, 130 of which were in Umatilla County, but it had an approximately 1,000-job year-round workforce in the state when contractors and other indirect employees were counted. The memo stated the company planned to hire another 100 full-time employees for a new five-building project planned for outside Hermiston and Umatilla.
That project used the Strategic Investment Program instead of an enterprise zone to gain a 15-year tax break. The company agreed to pay $4 million per year to Umatilla County in lieu of taxes.
The county elected to use a formula that allotted about $1 million to the city of Umatilla, resulting in a monthslong argument in which the city unsuccessfully tried to persuade the county it deserved half.
In this case, Umatilla County and the city of Hermiston are co-sponsors of the Greater Hermiston Enterprise Zone, meaning they will have to both agree on how to split the approximately $40 million in fees paid to the zone. The two governments are working on a memorandum of understanding, but it has not been finalized yet.