WEDNESDAY, MAY 9, 2018
HERMISTONHERALD.COM • A3
NEWS
City, county disagree over splitting $4 million
Each will benefit
from SIP payments,
data centers
SIP development sites
A Strategic Investment Program agreement negotiated between
Vadata and Umatilla County covers three development sites, two
of which are in the city of Umatilla.
730
Vadata sites
Highwa
City limits
N
1 mile
R i v er
Source: City of Umatilla
y 395
Scott Johnson, a phy-
sician assistant, rejoined
Hermiston Family Med-
icine and Urgent Health
Care clinic this winter.
“I jumped at the oppor-
tunity to come back to work
here and to come back to
the area,” he said.
Johnson first worked
at the clinic in the early
2000s, then leaving to work
in Salem and to serve in
Afghanistan and Iraq as
a member of the National
Guard. His first job out of
school was working as a
provider at the old demili-
tarization site at the Uma-
tilla Army Depot.
Johnson will be a full-
time provider at the facility,
which is located at 236 E.
Newport Ave., Hermiston.
• • •
The Hermiston Farm-
er’s Market won’t start
until June, but when it does,
it will be at a brand-new
location on a new day of the
week.
The market, featuring
local growers and crafts,
has had several homes,
including McKenzie Park
and downtown. But starting
June 7 the market will be
at the currently-under-con-
struction Maxwell Pavil-
ion, 255 S First Place across
from Bi-Mart.
The market — which
will be adding features like
craft beer and live music
— will run every Thurs-
day from June 7 to Oct. 4
treet
Drive
730 Southshore
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Jade McDowell
and Alan Kenaga/
EO Media Group
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Umatilla County and the
city of Umatilla are at odds
over how payments from
new Amazon data centers
should be divided.
The county wants to give
the city about one fourth of a
$4 million-per-year payment
in lieu of property taxes,
but City Manager Russ Pel-
leberg wants half.
“The city has spent mil-
lions on these develop-
ments,” he said. “The county
has done nothing.”
In August, the county
signed a Strategic Invest-
ment Program (SIP) agree-
ment with Vadata, a data
center development subsid-
iary of Amazon, allowing
the company to forgo paying
some property taxes for 15
years on three new develop-
ments in exchange for other
types of payments to the
county and local taxing dis-
tricts. One provision of the
agreement gives the county
a $4 million per year “addi-
tional annual improvement
payment” — which Pel-
leberg says the city deserves
half of based on what he
estimates is about $6 million
the city has spent recruiting
and supporting two of the
developments covered in the
agreements.
The SIP agreement cov-
ers a total of three devel-
opments: one off Westland
Road currently under con-
struction south of Herm-
iston, one building added
to the campus off Beach
Access Road in Umatilla
and one new development
between Lind Road and
Old River Road that Uma-
tilla annexed into the city
last year. According to Pel-
leberg, that means “two-
thirds” of the deal is located
in city limits, meaning the
city is being generous by
offering to take only half of
the $4 million.
The county doesn’t see it
that way.
Based on the fact that
all three developments are
h.
Was .
Ore
82
By JADE MCDOWELL
STAFF WRITER
395
207
U matilla
84
River
30
STAFF PHOTO BY KATHY ANEY
Jesse Soto (hammering) and Mario Sanchez of C & C Construction work on a building that is
part of Vadata’s data center campus near Two Rivers Correctional Institution.
“The city has spent
millions on these
developments.
The county has
done nothing.”
Russ Pelleberg,
Umatilla city manager
not expected to be of equal
size or value, the county has
offered a formula based on
the percentage of the three
developments’
assessed
value that falls within Uma-
tilla’s city limits. That per-
centage of the $4 million
would then be split evenly
between city and county.
Umatilla County counsel
Doug Olsen said Umatilla
would likely receive about
$1 million of the $4 million
per year under that arrange-
ment, in addition to other
from 4-8 p.m. with a special
kick-off event on Saturday,
June 2.
Look for more informa-
tion about the new Maxwell
Pavilion and area farm-
ers’ markets in an upcom-
ing edition of the Hermis-
ton Herald.
• • •
Kathleen Gamble of the
Umatilla Police Depart-
ment will graduate from
the Oregon Public Safety
Academy during a Fri-
day ceremony at 10 a.m. in
Salem.
Gamble and her class-
mates in the Basic Police
Class 377 participated in
a 16-week course through
the Oregon Department of
Public Safety Standards and
Training. Chief Jon Sassa-
man of the Corvallis Police
Department is the guest
speaker. A reception will
follow the ceremony.
The Oregon DPSST pro-
vides training to more than
25,000 students each year
throughout Oregon and at
the academy campus in
Salem. For more informa-
tion, visit www.oregon.gov/
dpsst.
• • •
For a royal time,
stop by the SAGE Cen-
ter this weekend to meet
Oregon Dairy princess
ambassadors.
The SAGE Saturday
event, which runs from 10
a.m. to 1 p.m., offers free
admission and activities
for children and their par-
ents. Kids can make a spe-
cial “My Plate” placemat,
which highlights the impor-
tance of including dairy,
Visit us online at
www.HermistonHerald.com
revenue generated from dif-
ferent parts of the deal with
the developer (non-disclo-
sure agreements prevent
Pelleberg and Olsen from
naming the developer but
various publicly available
records tie the projects to
Amazon).
The Strategic Investment
Program allows counties
to offer a 15-year property
tax break to companies as
an incentive to build there.
Under state statute, the first
$25 million in real market
value of the project is taxed
at the usual rate and distrib-
uted to taxing districts such
as cities, school districts and
fire districts. A flat commu-
nity service fee of $500,000
per year is also assessed, to
be divided between the dis-
tricts. Additional “annual
improvement
payments”
from the company can also
be negotiated as desired,
which is where the $4 mil-
lion comes from.
“The terms of the stat-
ute are fairly broad (on the
fruits, vegetables, pro-
tein and grains for proper
nutrition. The SAGE Cen-
ter is located at 101 Olson
Road, Boardman. The prin-
cess ambassadors will be on
hand from 11 a.m. to 1 p.m.
to share about Oregon’s
dairy industry.
For more information,
call 541-481-7243 or visit
www.visitsage.com.
• • •
Looking for a good way
to celebrate Mother’s Day?
The annual Elks Mother’s
Day Service at the Herm-
iston Elks Lodge features
music by the Coffey family.
The public is invited to
the free event Sunday at 10
a.m. at 480 E. Main St. Peo-
ple are encouraged to lin-
ger afterwards and enjoy
a champagne brunch at 11
a.m. The meal costs $8 per
person. For more informa-
tion, call Jim Voss at 541-
571-5116 or the lodge at
541-567-6923.
• • •
———
You can submit items
for our weekly By The Way
column by emailing your
tips to editor@hermiston-
annual improvement pay-
ments),” Olsen said.
He said the county’s
offer was according to pre-
vious arrangements on SIP
and enterprise zones, which
offer property tax breaks to
companies building in cer-
tain pre-approved zones.
However,
Pelleberg
pointed to a recent enter-
prise zone deal with Lamb
Weston, where the county
and city of Hermiston will
evenly split annual $1 mil-
lion payments by Lamb
Weston in lieu of property
taxes, even though Lamb
Weston’s new $250 million
expansion is outside Herm-
iston city limits. While laws
governing SIP agreements
and enterprise zones are dif-
ferent, Pelleberg says the
basic principal should be the
same: a 50/50 split.
He estimates the city
has spent roughly $6 mil-
lion accommodating Vadata,
including new water and
sewer infrastructure built or
in the works, roads, mainte-
nance, attorney fees, studies
and staff time in departments
such as the planning depart-
ment. One recent expen-
diture he pointed to was
$300,000 for engineering
studies for a planned exten-
sion of water to the Lind
Road area. A 50 percent split
on the $4 million could help
reimburse the city for expen-
ditures like that.
“$2 million a year for the
next 15 years is a pretty big
deal to this community,” he
said.
Olsen said the SIP agree-
ment with the developer was
negotiated using a team of
county staff. Pelleberg con-
tends the city should have
had a seat at the table for the
original negotiations. Olsen
said the reason the city was
not initially included is it did
not annex in the Lind Road
property until after the SIP
agreement was submitted
and that the county was not
immediately aware of the
annexation.
The city signed off on the
SIP agreement with Ama-
zon and the county, but the
agreement states that “Dis-
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tribution of the proceeds
shall be governed by a sep-
arate agreement between
the county and the city.”
That agreement has not yet
been signed, and the city
recently submitted a public
records request for a vari-
ety of documents pertaining
to the drafting of that agree-
ment after Pelleberg said the
county has not been forth-
coming about its reasoning
behind the agreement (Olsen
contends the county has had
multiple meetings with Pel-
leberg on the subject).
In this particular SIP
agreement, according to a
report to the Oregon Busi-
ness Development Com-
mission by business incen-
tives coordinator Art Fish,
the three new data center
projects in Umatilla County
could potentially reach a
total value of $2.75 billion
at full build-out. The pack-
age negotiated between the
county and Amazon, Fish
reported in a “very rough,
general estimate,” could
save Vadata about $176 mil-
lion in taxes over the course
of the agreement.
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