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Boeing: We'll Bring The Jobs, You Bring The Tax Breaks

Proposed Expansion Would Mean A 10 Percent Staffing Increase

As part of its proposed $80 to $100 million expansion of its Gresham, OR manufacturing plant, Boeing is asking for tax breaks over the next five years.

The plant is already the town's largest employer, employing 1,320 workers... and the proposed expansion would mean an increase of at least 140 more jobs by the end of 2009, fuelled by demand for products such as the Dreamliner, according to the Oregonian.

The requested 100 percent tax exemption would only apply to new equipment and facility improvements as well as a proposed small-building expansion. It would not apply to any existing facilities or land that is taxed at the normal rate.

According to Multnomah County tax records, the 65-acre site is assessed at $171.3 million. Boeing paid $2.7 million in property tax in 2006-07.

At least 75 percent of the new jobs would pay at least $15.60 an hour under the proposal which works out to be twice the state's minimum wage. 

Business incentive coordinator for the Oregon Economic and Community Development Department, Art Fish, said the actual wages would likely be higher.  "In our little spot of the world, it's really quite remarkable," he said.

The tax break proposal comes under the city's Enterprise Zone that offers tax breaks to businesses that create jobs in low income areas. Gresham is one such zone having received state approval in 2006.

"The whole point of enterprise zones," Fish said, is to give companies an incentive "to do it now, do it here."

"Just the numbers are an indication of the significance," said Gresham's interim director of planning services Janet Young. "Keeping this company, in this area, and keeping it competitive and growing has huge advantages."

On the downside, if the request  is approved, the city would see a tax loss to its general fund of about $800,000, according to a city report. Officials say the money would be recouped after the expiration of the break period, but then only if the higher-value equipment installed by the company stayed on the city's tax rolls.

To make it a bit sweeter, any losses would  be offset by a "community service fee" the planemaker would be required to pay in the fourth and fifth years of 25 percent of the abated taxes, roughly $366,000.

If the company fails to create 140 of its anticipated 173 new jobs by December 2009, then the city would be able to shave a full two years off the abatement period.

The Gresham plant makes complex parts, such as titanium brackets used on the Dreamliner's wings.

FMI: www.boeing.com

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