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About The daily Astorian. (Astoria, Or.) 1961-current | View Entire Issue (Feb. 19, 2015)
10A THE DAILY ASTORIAN • THURSDAY, FEBRUARY 19, 2015 Enterprise: Program could cost state more than $75 million Continued from Page 1A Businesses must maintain employment levels and com- ply with other conditions in UHWXUQIRUWKHWD[H[HPSWLRQV “This isn’t just recruit- ment,” said Warrenton City Commissioner Henry Bal- ensifer. “This is encouraging people to buy new, to build up, to renovate.” 7KH WD[ EUHDNV FRXOG KHOS 3DFL¿F6HDIRRG*URXSUHEXLOG D ¿VK SURFHVVLQJ SODQW WKDW burned down two years ago in Warrenton, or lure inves- tors to distressed areas such as North Tongue Point. “I think we’re looking at it as kind of a strategic tool to enhance business devel- opment opportunities in our county and on Port proper- ty,” said Michael Weston, the Port’s director of business de- velopment and operations. Astoria Mayor Arline LaMear and City Councilor Cindy Price, who was initially critical of an enterprise zone, both said this week that the city might look more positive- ly toward a collaboration. “So it could be very help- ful and it might be a good tool IRU RXU WRROER[´ 3ULFH VDLG after doing more research on A portion of the proposed Clatsop Enterprise Zone. the concept. Policy tools Enterprise zones have long been policy tools of the fed- eral and state governments to attract business investment WKURXJK WD[ LQFHQWLYHV SDU ticularly in economically dis- tressed regions of the country. In Oregon, there are 66 enterprise zones, according to the Oregon Business De- velopment Department, 53 in rural areas and 13 in urban centers. The enterprise zone pro- JUDP LV H[SHFWHG WR FRVW WKH state more than $75 million from 2013 to 2015, accord- ing to Oregon Department of Revenue projections. 6WXGLHVKDYHVKRZQPL[HG results for enterprise zones DQG GLI¿FXOW\ LQ WUDFNLQJ ZKHWKHU WD[ EUHDNV WUDQVODWH into measurable economic gains and job growth. A 2009 report by the State /HJLVODWLYH 5HYHQXH 2I¿FH Courtesy Clatsop County GIS Specialist Alejandro Bancke Other researchers have also documented the relative- ly high cost per job created in enterprise zones, questioned whether businesses would not RWKHUZLVHH[SDQGZLWKRXWWD[ breaks, and criticized the lack of data to accurately measure WKH¿QDQFLDOUHWXUQWRJRYHUQ ments. Uneven record $QHFGRWDO H[DPSOHV RI businesses that appear to have KDQGVRPHO\ EHQH¿WHG IURP The North Coast Business Park is in the foreground of WKH WD[ LQFHQWLYHV KDYH DOVR this photo taken soon after Costco was finished. blemished the enterprise zone program. found that, in a short-term and other metrics did not The Oregonian reported DQDO\VLV ¿UPV UHFHLYLQJ show similar positive trends. this week, for instance, that SURSHUW\ WD[ H[HPSWLRQV LQ Governments, the report several out-of-state compa- enterprise zones had larger found, have to wait seven nies with data centers in Hill- employment and payroll gains years on average to recov- VERURKDYHHQMR\HGWD[EUHDNV than in comparison areas. er the undiscounted value of but have had an uneven record Over the long term, pov- WKH SURSHUW\ WD[ H[HPSWLRQV of job creation. The newspa- erty and unemployment rates The report also found that the SHU IRXQG WKDW D IHZ ¿UPV declined more in enterprise FRVWRISURSHUW\WD[EUHDNVIRU accounted for most of the zones than in comparison ar- every new full-time job was QHZ MREV 2QH ¿UP UHFHLYHG eas, but household income about $11,200 on average. DSURSHUW\WD[EUHDN IRU WKH WD[ \HDU EXW listed just one full-time job. Some in Clatsop County have a sour impression of en- terprise zones because of the history with the Georgia-Pa- FL¿F :DXQD 0LOO 7KH PLOO UHFHLYHG SURSHUW\ WD[ EUHDNV for a new paper machine through the Lower Columbia Maritime Enterprise Zone, ZDVODWHUGLVTXDOL¿HGIRUQRW meeting minimum employ- ment requirements, and then contested the mill’s proper- W\ WD[ DVVHVVPHQWV 7KH PLOO reached a $2.5 million set- tlement with Clatsop County DQG RWKHU WD[LQJ GLVWULFWV LQ 2012. Others counter it is un- fair to judge enterprise zones EDVHG RQ D IHZ H[DPSOHV RU solely through the prism of job creation, which does not UHÀHFWWKHPXOWLSOLHUHIIHFWRI EXVLQHVVH[SDQVLRQ &KXFN'DXJKWU\WKHH[HF utive director of the Colum- bia County Economic Team, who oversees the county’s enterprise zones, believes the program has helped the coun- ty compete with Washing- ton state and other rivals for business development. “I guess there could be ar- guments as to whether or not the incentive actually is the thing that tips the business to make the investment, but it certainly makes us very com- petitive,” he said. If a new Clatsop Enter- prise Zone is approved by the state, Balensifer said Warrenton and the other jurisdictions involved will have to creatively market the region and seek business opportunities beyond simply DGYHUWLVLQJ WKH SRWHQWLDO WD[ incentives. “Mark my words on this: if we say, ‘Here’s an enter- prise zone, now come and visit us.’ This will fail,” he warned. “It will be a waste.” Smithart: Inn had recently been listed for sale at $1.2 million Continued from Page 1A in July, did not make himself available for an interview. He has leased the Astoria Riverwalk Inn, a former Red Lion Inn, from the Port since March 2012. He pays the Port $10,000 a month in rent May through October; $5,000 in monthly rent November through April; and 10 percent of his gross revenues. “There’s also no valid rea- son why he hasn’t supplied the revenue reports like he’s supposed to each month,” Grey said, adding that Smi- thart had owed the Port his revenue reports dating back to March or April, before bringing them in Friday. The Port is now poring over them WR ¿JXUH RXW H[DFWO\ KRZ much he owes. Grey and Knight said Smithart has provided vague reasons for falling behind, VXFKDVWLJKWFDVKÀRZDQGD lack of time. “We’re hoping to come to an amicable solution real- ly fast, to protect the Port’s interest,” said Knight, add- LQJ WKDW WKH ¿UVW FKRLFH LV WR ¿QG DQRWKHU RSHUDWRU IRU WKH hotel. Interest in hotel Smithart had recently list- ed the Astoria Riverwalk Inn for sale at $1.2 million. After comments from former Port Commissioner Jack Bland that Smithart was looking to sell the hotel, Smithart said he was looking for investors in the hotel and had no inten- tion of leaving. Ganesh Sonpatki, who owns several budget hotels in the Portland area, told the Port in October he was in- terested in buying Smithart out of the hotel, developing it into a budget lodging and possibly restarting the for- mer Seafare Restaurant & Lounge, located between the hotel and the Chinook Building above the West End Mooring Basin. Knight said the Port has KHDUG LQWHUHVW EXW FDQ¶W ¿HOG offers to operate the hotel while Smithart still has an active lease. A representative from the Astoria Riverwalk ,QQDVNHGWKH3RUWIRUH[WHQ sions to avoid eviction, he said. But the Port denied his request, Knight said, because of Smithart’s history of fall- LQJ WKURXJK RQ KLV ¿QDQFLDO obligations. History The Port Commission in March 2012 sided with Smi- thart and partner Seth Davis’ proposal to reopen the hotel over a competing proposal by WKH VLJQL¿FDQWO\ PRUH ZHOO off Williams/Dame & Asso- ciates, which wanted the Port to tear the Red Lion down before it would build a new hotel. It gave Smithart and 'DYLV D ¿YH\HDU OHDVH UXQ ning through most of 2017. In October 2012, it voted to give Hospitality Masters DQ RSWLRQ WR H[WHQG DQRWKHU ¿YH\HDUV$WWKHWLPH6PL thart stated that his and Da- vis’ intent was to be around at least 30 to 40 years. In August 2013, Smithart, by that point alone in Hos- pitality Masters, received an eviction notice from the Port. He narrowly avoided it after falling behind on rent and revenue-sharing, in addition to being behind on transient URRPWD[HVZLWKWKHFLW\ In November 2013, the Port Commission vot- ed 3-2 to give Smithart a $30,000-a-year break on Port:µ:HDUHLQWKHEODFNIRUWKH¿UVWVL[PRQWKV¶ Continued from Page 1A ¿UHG&ROOHHQ%URZQHSUHVHQW RQ WKH 3RUW¶V SUR¿WDQGORVV statements, comparing the DFWXDO ¿QDQFLDO SHUIRUPDQFH with what was adopted in the Port’s 2014-15 budget at the end of June. “We are in the black for the ¿UVWVL[PRQWKVHYHQZLWKHY erything that’s been going on,” said Grey, referencing a net income of $41,900 between -XO\ ZKHQ WKH ¿V cal year started, and the end of 2014. Commissioners praised the work of Grey and other ac- countants brought in to help. Each month, Grey said, the 3RUW ZLOO WLJKWHQ LWV ¿QDQFLDOV more and more, eventually adding a cash position. Jim Grey Jim Knight The reason the Port is in its current situation, Kimball said, is a worst-case scenario in transitioning between accoun- tants Browne and Grey with no sharing of knowledge. There were inadequate policies and procedures in place, he added, and a new accountant, Grey, coming into a high-volume at- mosphere with a high learning curve. He said CFO Selections Auditing advice is performing three tasks: re- The Port is still trying to put viewing and adjusting the together an audit for its 2013- Port’s accounting records ¿VFDO\HDUZKLFKZDVGXH between July 2013 and June by Dec. 31, using accounting 2014 to ensure their accuracy; ¿UP0RVV$GDPV developing best practices and On Tuesday, accountant policies through an upgraded Todd Kimball of CFO Se- accounting system and pos- lections detailed the Port’s sibly a property management LVVXHV DQG ZKDW KLV ¿UP LV system; and helping the Port doing to prepare them for implement changes. their audit. Commissioners praised the Mike Weston work of Grey, Kimball and Barbara Blue of Bussert Law $VVRFLDWHV WR KHOS ¿[ WKH 3RUW¶V¿QDQFHV In other news: • The Port Commission unanimously agreed to amend the lease of the Marine Spill Response Corporation, which LVYDFDWLQJRI¿FHVSDFHLQWKH 3LHUZDUHKRXVHLQH[FKDQJH for space at the Walter E. Nel- son building on Gateway Ave- nue, across from the Port’s old RI¿FHV • Clatsop County Manager Scott Somers presented about the Clatsop Enterprise Zone, an effort to designate areas where new business develop- PHQWV FRXOG EH H[HPSW IURP WD[HV IRU WKUHH WR ¿YH \HDUV Several Port properties pro- posed for inclusion are the central waterfront, East End Mooring Basin, North Tongue Point and the Astoria Regional Airport. The Port will be giv- en a resolution relating to the enterprise zone at its March 3 meeting. Somers said the application for the zone, for which he’s been seeking sup- port from the Port, Astoria and Warrenton, is due April 10. • Mike Weston, director of business development and op- erations, reported that the Port H[SHFWVPRUHWKDQSHR ple arriving on 18 cruise ships this year, including eight in the spring and 10 in the fall. The ¿UVWVKLSWKH&URZQ3ULQFHVV is scheduled to arrive April 30. Find the full 2015 schedule at http://bit.ly/1vk1EiF • Weston reported that the Port is now engineering por- tion of a project to repave Run- way 1131. The Port recently received a $480,000 Connect Oregon V grant to cover the 10 percent local match of a $4.5 million Federal Aviation Ad- ministration grant the Port al- ready received to pave 75,000 square feet. Engineering will be complete by mid-April, said Weston, followed by soliciting bids for the project, which would start June 30. rent, lowering it to $5,000 a month in the winter months, provided he in- vest the saved rent into the Port’s building and provide it an accounting of the im- provements. Grey said the Port’s been shown evidence of improvements, but not of how much. At the time of the lease amendment, Smithart had recently caught up after falling as much as $40,000 behind on payments with the Port in 2013. That same month, he worked out a 30- day repayment plan with the city of Astoria, to which he still owed about $48,000 in WUDQVLHQW URRP WD[HV DW WKH time. Visit us online at www.DailyAstorian.com The February edition available at a newsstand near you al ssjourn erbusine e 2 /coastriv • Issu k.com e 10 faceboo com • olum al. 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