Klamath County Commissioners and Klamath Falls City Council reached an agreement with Wilsonart on a Long-term Rural Enterprise Zone, in which the company will pay $1.2 million in community service fees in exchange for tax abatement over the course of 15 years.
The latest proposal came before the board and city council in their Tuesday meetings. Both local governments expressed support. The agreement will likely come before the board and council again as a formal resolution in early March.
Negotiations between the city, county and company began with misunderstandings over the total investment of the project and how much of the company’s taxes would be abated. The city and county’s initial proposal of $175,000 per year for 15 years was met with a letter from Wilsonart stating they were expecting to pay $50,000 per year in fees in lieu of taxes.
The parties met in the middle this week with the approved offer calling for a $75,000 annual fee for the first five years, after which it would increase incrementally to $90,900 by year 15. This amounts to $1,210,200 in total fees paid by the company, which would be split evenly between the city and county.
In a Tuesday public meeting, Commissioner Donnie Boyd called this latest proposal “fair” and said he feels this has been a good educational experience for the board as they work to recruit more investment in the area.
“I think Wilsonart is being extremely good community partners with this. I’m glad they’re here,” Boyd said. “I wish that we hadn’t had the confusion upfront, to be real honest. I’ve said in the past that education is costly, it’s a learning experience. And this was an indication we need to have better tax dollars figured out before we negotiate these in the future.”
Commissioner Derrick DeGroot negotiated the agreement on behalf of the county, but said there is still work to be done before everything in finalized.
Klamath Falls City Manager Nathan Chepeski negotiated on behalf of the city and told the Herald and News that once they had the correct tax numbers to go off of, talks went smoothly.
Wilsonart Vice President of Product Management and Pricing Ron Ubertini said in a Tuesday press release, “I’m glad we could come to an agreement which mutually suits all stakeholders. Our Wilsonart leadership continues to see a promising future for Klamath County, with this operation, and potentially others in the long-term.”
Cherpeski briefed Councilors Tuesday night on negotiations with Wilsonart, confirming that the city agreed to a community fee starting at $75,000 for the first five years and gradually increasing up to $90,000 per year over the course of 15 years.
“We felt this was fair given the information we’d received from Wilsonart and from the state,” Cherpeski said.
Councilors weighed in as well with their thoughts on the process taken to reach an agreement proposal.
“I hope that the government entities along with KCEDA plan better the next go-around that … everyone’s on the same page walking into meeting for negotiations,” said Matt Dodson, Council president. “I don’t necessarily feel that the city itself was out of step at any point in time – we just kind of were passive in the results.”
“In order for us to be Team Klamath, all of us need to be onboard early in the process,” Dodson added. “I hope that all of us work together better when it comes up again.”
Dodson also emphasized the importance of the city offering an incentive to Wilsonart and not necessarily to a small business opening on Main Street or a self-employed individual. The incentive stems from the impact the company can have and their ability to bring in numerous family-wage jobs to the community
Councilor Mika Blain noted the importance of getting on the same page with incoming companies as well as local economic development organizations.
“Some of this should’ve been hammered out and written down prior and that’s not just on the government agencies or KCEDA,” Blain said.
Councilor Todd Andres recommended that after an agreement is formally approved, the city, county, and KCEDA should discuss the way forward.
“We need to pull the entire group together and review the good, the bad, and the ugly ... and make sure the bad and ugly does not get repeated,” he said. “We need as a community to kind of have a heart-to-heart of what Team Klamath really is.”
The facility, which is expected to create at least 50 family wage jobs, is expected to be up and running by July 1.
— Holly Dillemuth contributed to this report.