Hermiston council adopts new Hermiston Enterprise Zone, narrows boundaries and adds downtown hotel incentive

The Hermiston City Council on March 9 approved Resolution 24‑11 to form a new Hermiston Enterprise Zone that tightens the geographic boundary to industrially zoned and downtown‑core properties inside the city limits and adds a limited hotel designation for downtown sites.

Mark Morgan (presenter) told the council that enterprise zones are fundamentally a jobs program that provide property‑tax exemptions in tiers: a basic three‑year exemption; extended four‑ or five‑year abatements with wage and school‑support fee requirements; and long‑term rural (LTRS) abatements that can run seven to 15 years and are tied to larger investments. "The enterprise zone program is at its core a jobs program," Morgan said. He described wage thresholds and a school support fee that requires companies receiving extended or LTRS benefits to pay 15% of what their total tax liability would otherwise be; locally, Morgan said the school support fee is designed by the school districts and then remitted to the state school fund under existing state procedures.

Morgan recommended shrinking the zone to properties that are industrially zoned or in the downtown commercial core and said the city could expand the zone later if needed. He also noted that some long‑term agreements (for example, earlier deals like Lamb Weston’s) remain contracts and will continue to run for their agreed terms even if the zone’s boundary changes.

Councilors and residents raised concerns about how enterprise‑zone incentives interact with local services. A resident quoting a recent Oregon Capital Chronicle article said property‑tax abatements cost Oregon schools roughly $275 million statewide and reported a $16 million figure specific to the Hermiston district; Morgan disputed the interpretation and said many investments would not have taken place without the incentives, arguing the net local result has been increased revenue to jurisdictions that otherwise would not have had the investment.

The Umatilla County Fire District 1 chief, Scott Stan, and local firefighters urged the council to ensure future negotiations include provisions to support public‑safety demands tied to major developments. Stan, who identified himself as the fire chief, said the fire district responds to a high share of calls within Hermiston and asked for attention to infrastructure and operational funding as new companies locate in the area.

Council action and timing: after adding amended language to allow an enterprise‑zone hotel designation limited to the downtown core under ORS 285C.070, the council moved to adopt the resolution. The motion to approve the amended Resolution 24‑11 passed unanimously (roll call), with staff saying the zone would become effective July 1 and that any extended or long‑term abatement agreements still require separate council approval when developers request them.

Votes at a glance (selected items from the March 9 agenda): - Resolution 24‑11 (Hermiston Enterprise Zone, amended to include downtown hotel designation): adopted unanimously; will take effect July 1. (Mover: Councilor Roberts; Second: Councilor Meyer.) - Resolution 24‑12 (award contract for purchase and installation of backup power generators for the regional water system — low bid Newman Electric, $3,955,000): adopted unanimously. - Amended facilities agreement with the Harken Rider senior board (updates to roles, master schedule and a 70/30 rental revenue split): adopted unanimously. - Council goal‑setting report (2026): adopted unanimously. - Motion to schedule a future discussion on council compensation: approved 5–2 to include on a future agenda (administrative timing and legal constraints discussed by staff).

What it means: the newly adopted zone narrows the area eligible for enterprise‑zone benefits to city limits and targeted industrial/commercial parcels and creates a mechanism to offer a hotel exemption for downtown projects. Morgan and staff emphasized that approved long‑term agreements already under contract continue to operate, that the 15% school support fee redirects revenue through state school‑fund accounting, and that future abatement agreements beyond the basic three‑year exemption must return to council for negotiation and approval.

The council signaled interest in securing greater local contributions for public‑safety and special districts when negotiating future long‑term or extended abatements; several public commenters asked that fire‑district and emergency services needs be explicitly addressed in future contract terms.

The council also approved, by separate roll calls, a $3.955 million Newman Electric contract for backup generators and the amended senior‑center agreement. Staff will proceed with required next steps for the enterprise‑zone formation and the separate adoption and noticing processes for affected code and interagency steps.