Posted
For Immediate Release: Tuesday, August 26, 2014
Washington County and the City of Hillsboro Approve $100 Billion Investment Agreement with Intel
The Washington County Board of Commissioners and the Hillsboro City Council approved an agreement with Intel Corporation allowing up to $100 billion in investment in Oregon. The action by the two local governments was taken after a joint public hearing as part of Oregon's Strategic Investment Program (SIP), a private-public partnership that has driven billions of dollars of investment in Oregon over the last two decades.
"Tonight's vote by the Hillsboro City Council and the Washington County Board is great news for all of Oregon," said Roy Rogers, who represented the county board during the negotiations. "By working together –as a city, a county, a state and Oregon's single-largest employer –we are continuing a successful approach that began with our first SIP agreements 20 years ago. Intel gains certainty and flexibility regarding its unprecedented level of investment. Our community benefits from continued economic development and support for public services through taxes and fees no less than full property taxes on Intel's land and buildings."
"This agreement allows Intel to increase its investment in Hillsboro, and strengthens our position as a global center for high-tech manufacturing jobs," said Hillsboro Mayor Jerry Willey. "This partnership is outstanding for our community, and for all Oregonians, as we attract and retain jobs in key industries, and pursue additional global investments in Hillsboro."
Investment under the agreement is likely to focus on the company's unique cycle of equipment replacement and on retaining the 17,500 employees currently working in Washington County. The multi-million-dollar machinery and equipment used in Intel's manufacturing process can become obsolete within a few years as the technology rapidly evolves. As with earlier SIP agreements, property taxes would be partially abated for investments in these leading-edge tools consistent with Oregon's SIP law.
The 2014 SIP agreement would require Intel to make payments under two categories, those called for by state law and those negotiated locally. The statutorily required payments would total to an estimated $122 million in property taxes and fees over the life of the agreement. Additional fees would total to an estimated $228 million over the same period. Actual amounts would vary depending on how much and over what timeline Intel invests.
The proposal would follow a precedent established with other Washington County SIP agreements of requiring fees no less than full property taxes on all land and buildings. These fees have consistently resulted in payments that were greater than the minimum required under Oregon's SIP law.
Approval of the agreement comes as the Oregon economy continues to experience unemployment rates greater than its pre-recession levels. A recent analysis by ECONorthwest, a private consulting firm, revealed that each of Intel's jobs in Hillsboro and Washington County created an additional three non-Intel jobs throughout the state. In 2012, this added up to nearly 68,000 jobs –about 4 percent of the State's workforce. Additionally in 2012, Intel's payroll amounted to $2.8 billion causing a ripple effect that led to a gross total of $327.7 million in state income taxes and local property taxes in support of public services statewide. According to the Brookings Institute, exports from computer and electronic products accounted for 57 percent of total exports and 63 percent of export growth in Greater Portland, underscoring the importance of Intel's role in the regional economy.
The 2014 agreement with a term of 30 years is the fifth Intel SIP agreement in Washington County. In 2005, Washington County and the City of Hillsboro negotiated an agreement with Intel that set the stage for up to $25 billion of investment beginning in 2010. In 1999, the county and city negotiated a SIP agreement allowing investment of up to $12.5 billion beginning in 2000. Finally, two additional Intel SIP agreements were put into effect in 1994 with a combined total of $3.4 billion of investment.
The Oregon Business Development Commission is scheduled to consider the 2014 agreement at its meeting on September 5.
The Strategic Investment Program was authorized by the 1993 Legislature to increase Oregon's ability to attract and retain capital-intensive industry and high-wage jobs. Projects approved for the SIP must pay full property taxes on the first $100 million invested in an urban area, or $25 million in a rural area. Under law, this investment amount is allowed to increase by 3 percent each year. An annual Community Service Fee equal to 25 percent of abated taxes, up to $2 million in an urban area or $500,000 in a rural area, must also be paid. The 2014 proposal includes additional negotiated fees.
Contacts:
Philip Bransford, Communications Officer, Washington County Administrative Office, 503-846-8685, [email protected]
Patrick Preston, Public Affairs Manager, City of Hillsboro, 503-681-6218, [email protected]
Chelsea Hossaini, Northwest Region Communications Manager, Intel Corporation, 503-264-1330, [email protected]