Forest Grove council opts to let enterprise zone lapse to refine policy and explore Cornelius partnership

Forest Grove, Ore. — At a June 8 work session, the Forest Grove City Council signaled support for allowing the current Forest Grove–Cornelius enterprise zone to lapse on June 30, 2026, rather than renewing it under the present rules. Councilors said they want time to refine local policy questions on eligibility, job and wage requirements, and fee structures before considering reapplication or amending the zone.

City staff described the state enterprise-zone framework — a state-administered property-tax abatement designed to encourage industrial investment and living-wage jobs — and explained local policy options. Staff noted the state program permits three- and five-year property-tax abatements with distinct statutory requirements, and recently imposed a temporary moratorium on data-center eligibility pending legislative review.

Staff proposed several local refinements that council could adopt if it renews or re-applies: increase the minimum investment above the statutory $50,000 floor (Forest Grove’s current local minimum is $50,000), remove the city’s $50,000 cap on the statutorily permitted application fee, and maintain or modify Forest Grove’s higher wage standards (currently Forest Grove requires average pay at 150% of minimum wage in years 1–3 and 150% of county average in later years). Staff also described a community support fee set at 25% of abated taxes for years four and five and a school-support fee that state statute sets at a minimum of 15% in years four and five.

On the question of area coverage, staff noted Cornelius has not yet formally considered participation; council can pursue reapplication alone, attempt to coordinate with Cornelius and amend the map later, or let the zone lapse and reapply with a revised policy package. Councilors repeatedly requested more mapping analysis that overlays existing industrial and commercial zoning and parcel characteristics to ensure zones capture appropriate properties.

Councilors emphasized two priorities: (1) designing the program to attract living-wage industrial jobs that align with Forest Grove’s 2040 economic goals, and (2) protecting the city’s tax base so the program does not simply abate property taxes without producing lasting tax revenue or jobs. Several members said they prefer letting the current designation lapse to provide staff time to assemble data, consult stakeholders (including the school district) and, if desired, pursue a reapplication with clearer local requirements.

Next steps: staff will return with additional analysis and recommended policy options — including alternatives on minimum investment, job-density or job-count requirements, wage thresholds, fee structure and map overlays — and will engage with Cornelius and other stakeholders if council so directs.

(Reporting based on the Forest Grove City Council enterprise zone work session, June 8, 2026.)