A6
THE ASTORIAN • SATURDAY, APRIL 3, 2021
Station: Appraisal should be fi nished in April
Continued from Page A1
Rezoning, an urban
growth boundary, annexation
and other legal issues could
complicate the process.
“That isn’t to say it isn’t
going to be the location, but
it is a complicated path to get
there,” Watts said.
Gearhart’s fi re station,
constructed in 1958, is con-
sidered at risk for fl ooding
or collapse during an earth-
quake and tsunami.
In 2018, after considering
nine locations, a fi re station
committee
recommended
three concepts and loca-
tions to help guide the deci-
sion-making process. More
than 50% supported the High
Point site, with an elevation
between 62 feet and 65 feet,
as their No. 1 choice, fol-
lowed by 38.4% who pre-
ferred the fi re department’s
location on Pacifi c Way. The
Gearhart Park site was elimi-
nated from consideration.
A new survey should
indicate if there is enough
R.J. Marx/The Astorian
The fi re station in Gearhart off of Pacifi c Way.
support to put a bond vote
before the public in Novem-
ber, Sweet said .
The two-story High Point
station would cover a 11,000-
to 13,000-square-foot space.
According to draft plans,
the ground fl oor would
include fi ve bays, lockers,
turnout washes, emergency
medical service area, com-
pressors and bathroom. The
fi re department side would
include the chief’s and other
offi ces, workroom, kitchen
and training area.
Cubicles for police and
storage are also indicated in
the draft plans.
The second fl oor, above
the bays, includes a small
living area, potential dorms
for an intern program, and
a full men’s and women’s
shower system.
Site preparation adds just
under $3.1 million to the cost
to make sure the building is
up to standards, with piers or
columns to mitigate lique-
faction concerns, Sweet said.
The cost would be sim-
ilar or less to costs for geo-
technical work at any of the
locations, according to the
report.
Construction costs, deliv-
ered by ACC Construction
in Tigard, are estimated at
about $3.9 million. Earth-
work, exterior improve-
ments and utilities come to
$1.9 million. Building costs
are estimated at $5.2 million.
Other direct construction
costs bring the total building
cost to $8.6 million.
Furnishings and equip-
ment, architect and engineer
design fees are estimated at
$1.6 million.
While the sales price for
the High Point property is
“not solid,” land acquisition
is estimated about $3 mil-
lion, Sweet said. The fi nal
purchase contract has yet to
be signed. A full appraisal
of the property has been
ordered and should be fi n-
ished in April.
The bond’s levy rate
is estimated at $1.02 per
$1,000 of assessed value,
Sweet said. A $300,000
home would see an increase
of $306 per year; a $1 mil-
lion home would pay an
additional $1,200 for the
bond.
Marijuana: ‘It’s an onerous tax burden’
Continued from Page A1
BY THE NUMBERS
Another proposal authored by
Rep. Lily Morgan, R-Grants
Pass, would create an inter-
nal wholesale tax on any
marijuana transported across
county lines.
The temptation to back-
fi ll shrinking local budgets
with cannabis dollars is wor-
risome, according to industry
boosters.
“If you look at it holisti-
cally,” cannabis economist
Beau Whitney said, “I think
the Oregon market is under
duress.”
$1,109,959,000
Tax fi ght
The new tax fi ght is largely
in response to Measure 110,
the voter-approved initia-
tive from last year that reallo-
cates a large share of pot rev-
enue away from schools, state
troopers and local govern-
ments in order to fund drug
treatment services.
In the next two-year bud-
get cycle, which begins in
July , cities and counties will
have only $18 million in mar-
ijuana money to split amongst
themselves, an almost 72%
drop compared with the $63.7
million they expected under
the old funding formula,
according to the League of
Oregon Cities.
City h alls eager to bump
up their cannabis tax include
Gresham, Hillsboro, Bea-
verton, Tualatin, Sherwood,
St. Helens, Happy Valley,
Eugene and Bend, staff for
the league said in testimony
to a revenue committee hear-
ing of the Legislature in early
March .
League of Oregon Cit-
ies lobbyist Mark Gharst told
lawmakers the COVID-19
pandemic prompted a decline
in lodging and gas taxes, park
and development fees — and
the worst crunch for city bud-
gets may be yet to come, if
property tax revenues fall due
to commercial vacancies.
“I don’t think that the vot-
ers were saying that they
wanted local governments to
cut services in order to fund
that recovery,” Gharst said.
“We can have our cake and
eat it, too.”
Marijuana insiders see it
diff erently. They say cannabis
retailers can’t just pass the tax
increase on to users, many of
whom could dial up their old
dealer from the years before
legalization.
Whitney, the economist,
estimates that most consum-
ers will pay a premium of just
10% to 15% to acquire their
marijuana legally. Go above
that, and they might just get
their products on the black
market.
“Consumers are very price
conscious,” agreed Casey
Houlihan, the executive direc-
tor of the Oregon Retailers of
Cannabis Association. He
calls the proposed 10% tax a
“disaster” in the making, say-
ing the lure of the illicit mar-
ket could lead governments to
collect less in the future than
they do now.
“One only needs to look
around on Instagram to see
cheap ounces or pounds being
sold,” Houlihan said.
the dollar amount of marijuana sales in Oregon in 2020
17,981
the number of Oregon jobs in the cannabis industry
687
the number of cannabis jobs added in 2020
7.66 MILLION
the number of ‘wet pounds’ of cannabis harvested in Oregon in 2020
$112,000
the mean monthly sales fi gure for recreational dispensaries in
February 2020
$168,500
the mean monthly sales per retailer in July 2020 as Oregonians
adjusted to life in quarantine
1,182
the number of licensed cannabis growers in Oregon at the end
of 2020
100
the number of pending cannabis production licenses the Oregon
Liquor Control Commission expects to approve in early 2021,
given a historical 78.8% approval rate
11%
the percent increase in square footage of cannabis under pro-
duction, if those licensees are approved
Stata data confi rms that
customers haven’t noticed
much diff erence at the cash
register so far.
Despite the billion-dollar
consumer market in 2020, the
average retail price for con-
sumers has remained at or
below $5.50 per gram nearly
every month since July 2018,
the Oregon Liquor Control
Commission said in its Feb.
1 supply-and-demand report.
The price of wholesale
fl ower, the smokeable part of
the cannabis plant, hit $1,499
per pound in December 2020,
levels not seen since late
2017.
That’s good news for
growers, who for years have
complained that Oregon’s
cannabis market is oversup-
plied. Demand is now devour-
ing 65% of annual supply, up
from just 50% two years ago,
per the report. That happened
because purchasing outpaces
crops; overall production
leapt 78%, while the amount
of cannabis sold rose 150%.
The sea of upward arrows
likely explains the new push
to raise marijuana taxes,
though the Oregon Liquor
Control Commission predicts
there’s no way the market
can sustain the 38% annual
growth rate seen during the
outbreak.
“If not for COVID, growth
in demand in 2020 would
have almost certainly been
fl atter,” the commission con-
cluded in its report to law-
makers. “If consumers return
to the patterns of consumption
they exhibited pre-COVID,
demand will almost certainly
decline or fl atten in 2021.”
Whitney also predicts the
growth rate will slow, though
he thinks the odds of sustain-
ing a billion-dollar industry
in the years ahead are fairly
high, given that the market
would have expanded by at
least 10% during a normal
year.
The economist wants to
dispel the notion that the
bump in sales can be traced
to slackers or out-of-work
millennials from the service
industry. Instead, his money
is on the white-collar types
earning more than $50,000
while logging onto work in
their pajamas .
“Once people got used to
‘working from stoned,’” he
said , “they just kept doing it.”
Plenty of problems
Regardless of how the tax
increase proposal shakes out,
the Oregon recreational mari-
juana industry is facing a pas-
sel of other hurdles.
Lundin, the trade group
director, said several dispen-
saries burned to the ground
in Medford and Talent during
the 2020 wildfi res. Other
farmers also lost crops. And
as Willamette Week recently
reported, more than 100 dis-
pensaries in Portland have
been robbed or burglarized
since March 2020, likely
because pot shops largely
deal in cash. Those charged in
the crime spree are predomi-
nantly teenagers.
“Historically, (the police)
have not demonstrated the
willingness we would like to
see at taking these types of
crimes seriously,” Houlihan
said.
Another longtime thorn
in the side of legal cannabis
business owners is the section
of the federal tax code, known
as 280e, that essentially pro-
hibits pot enterprises from
deducting any expenses from
their gross earnings.
“It’s an onerous tax bur-
den,” said Jeff Yapp, the CEO
of Golden Leaf Holdings.
“You can’t deduct any of your
business operating expenses
that every other business
enjoys.”
Listed on the Canadian
Stock Exchange but based in
Portland, the vertical integra-
tion of Golden Leaf stretches
from a grow facility near
Bald Peak to a string of Chal-
ice Farms dispensaries in
Portland.
Flower and pre-roll sales
make up more than 50% of
their sales, but Yapp said the
company saw edibles — food
products that contain canna-
bis — fl ying off the shelves
during the pandemic, as new-
bies sought an unimposing
way to get high. Yapp said he
believes the lack of nightlife
and travel in 2020 triggered
the booming sales, and sees
potential in the three-quar-
ters of the populace who may
sooner smoke weed than try
pharmaceutical products.
“You look at the scale of
opportunity in plant-based
medicine — that’s 75% of the
marketplace — who all suff er
the same issues: ‘I can’t sleep,
I’m in pain, I’ve got anxi-
ety,’” he said. “As they con-
tinue to be open to the alterna-
tives, I think that’s a massive
opportunity.”
Oregon’s best hope for
reforming the federal tax code
— or achieving the larger goal
of removing marijuana from
the same classifi cation as her-
oin — may lie with U.S. Rep.
Earl Blumenauer.
The Democrat from Port-
land helped shepherd passage
of the MORE Act — the Mar-
ijuana Opportunity Reinvest-
ment and Expungement Act
of 2019 — through the House
in December, which would
have decriminalized mari-
juana at the federal level, but
the bill stopped in its tracks
when it hit the Senate, which
then was controlled by the
GOP.
That proposal, as well as
the SAFE Banking Act, could
be reinvigorated under the
Biden administration, though
Blumenauer admits the new
president has sent some mixed
signals so far. Other observers
note that any reduction in IRS
revenue likely would need to
be paired with a federal can-
nabis tax to pass muster.
“There’s a lot of compe-
tition just to get this on the
fl oor of the House, but I think
we’re in the strongest position
that we’ve ever been in,” Blu-
menauer said. “It’s basically
Congress that needs to do its
job and I think Congress can
and will do it.”
The Oregon Capital
Bureau is a collaboration
between EO Media Group
and Pamplin Media Group.
County reports two
new virus cases
The Astorian
Clatsop County on Thursday reported two new
coronavirus cases.
The cases involve a man in his 30s living in the
northern part of the county. A female under 10 also
tested positive for the virus.
Both were recovering at home.
The county has recorded 840 cases since the
start of the pandemic. According to the county, 19
were hospitalized and seven have died.
Motels: Republicans
split on the legislation
Continued from Page A1
State Rep. Pam Marsh,
D-Ashland, said some proj-
ects have proceeded, but
others have stalled despite
community support.
“The need to pur-
sue zoning changes often
stands in the way of great
projects,” Marsh, the bill’s
sponsor, said. “That is a
problem when we are expe-
riencing a crisis in home-
lessness and low-income
housing.
“It will allow us to repur-
pose hotels and motels that
have served tourists and
will become facilities that
will house the most vulner-
able among us. As a build-
ing intended to take care of
people, it should not mat-
ter whose head rests on that
pillow.”
Marsh represents a dis-
trict that lost 2,500 homes
from the Almeda fi re, which
swept north from Ashland
through Talent and Phoe-
nix. It was one of the Labor
Day wildfi res across Ore-
gon. Many of the displaced
residents were low-income
families who were left with
few aff ordable alternatives
for housing.
in other areas. The board
rejected the latter amount ,
but reversed itself and
approved it in November .
Drazan acknowledged
the pressing need for pro-
viding shelter for people
who have lost their homes
for whatever reason. But
she objected to the prospec-
tive purchase of the Red
Fox Motel in Estacada as a
shelter, saying it was better
suited long-term for tour-
ism. Clackamas County
commissioners voted 3-2
in January to suspend fur-
ther consideration of the
purchase.
Drazan also said law-
makers were creating an
exception to Oregon’s land
use laws, instead of easing
restrictions to allow con-
struction of more housing.
“Instead of fi xing our
land use system and the
things that are broken, we
are giving a pass, we are
doing a carve-out,” she
said. “We are creating a
back way because it’s not
working.”
Republicans split on the
bill, eight voting for it and
12 against it; the other three
were excused. All Demo-
crats present voted for it.
HOUSING IS DEFINED AS
‘AFFORDABLE’ IF QUALIFYING
RESIDENTS EARN LESS THAN 60%
OF THE AREA MEDIAN INCOME.
The bill applies to build-
ings within urban growth
boundaries, and outside
areas zoned for heavy
industrial use. They must
have access to transporta-
tion, and be outside fl ood
plains or other designated
hazard areas.
Local governments can
still apply other restric-
tions, such as building
codes, occupancy lim-
its and reasonable site and
design standards.
Housing is defi ned as
“aff ordable” if qualify-
ing residents earn less than
60% of the area median
income.
“Some of these facil-
ities will remain shel-
ters or transitional hous-
ing. But in other cases,
the long-term use most
needed by a community
will be low-income hous-
ing,” Marsh said. “Hotels
and motels that may not
fi t the bill for today’s trav-
elers are the perfect place
to provide people in crisis
with stability and the sup-
port they need in order to
move toward permanent
housing.”
House
Republican
Leader Christine Drazan,
of Canby, spoke against the
bill.
As a member of the
Legislature’s Emergency
Board, she voted in Octo-
ber for $30 million for
Project Turnkey in wild-
fi re-aff ected areas and $35
million for Project Turnkey
Rep. Jack Zika, R-Red-
mond, said the bill would
ease the way for the pro-
posed purchase of a hotel
for housing in his district.
The bill, slightly more
than a page long, was read
aloud by a clerk because
minority Republicans have
declined to waive the con-
stitutional
requirement
for bills to be read in their
entirety prior to a fi nal vote.
Dozens of bills await action
on the House agenda.
But this bill jumped
to the top of the agenda
because a substitute version
had been proposed by Rep.
Lily Morgan, R-Grants
Pass, who then decided
against advancing it.
Marsh said a private
investor has purchased
three hotels or motels
within Medford for con-
version to housing. Though
House Bill 3261 would
not apply to these projects,
she said, “it validates this
model.”
“At a time when our
community has lost 2,500
homes to wildfi re, it may
be the actions of this pri-
vate entity that actually
save our bacon,” Marsh
added. “It is doing the one
signifi cant, tangible eff ort
to create new housing very
quickly in a community
that has been devastated.”
The Oregon Capi-
tal Bureau is a collabo-
ration between EO Media
Group and Pamplin Media
Group.
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