Report predicts short-lived Port Westward loan shortfall

By Darryl Swan

The South County Spotlight, Nov 25, 2009

ADVERTISEMENTS

A July report commissioned by Columbia County gives three possibilities – some good, some not so good – regarding the county’s future ability to pay off loans for infrastructure at the Port Westward urban renewal district.

Regardless of the scenario, each presents an immediate, short-term risk that the county will have insufficient tax revenue from urban renewal development to cover loan repayments at Port Westward in the years 2011 and 2012, the result of enterprise zone tax benefits and older property depreciating below the frozen urban renewal base.

Revenue will peak in 2013 and 2014, when enterprise zone benefits for existing developments expire, according to the report.

Columbia County Commissioner Tony Hyde has raised the tax shortage topic with the county’s urban renewal loan lending agency, the Oregon Business Development Department – formerly the Oregon Economic and Community Development Department, an agency for which Hyde has served as a board member since 1996 – to discuss a renegotiation of loan conditions.

Other options outlined in the report include negotiating a transfer of a portion of the debt to some other agency, such as the Port of St. Helens, to make up the shortfall, or pulling dollars out of the county’s general fund.

In the best scenario outlined in the report, a new solar-powered plant will come online at the Summit Westward site by 2010; Portland General Electric will follow through on its plans to build a 200-megawatt natural gas fired plant in 2012; and the now-defunct Cascade Grain ethanol plant will be resurrected and resume operation.

At worst, no new industry will develop at Port Westward and Cascade Grain will remain a bust.

Little is known about the solar panel manufacturing plant. Information requested from the Port of St. Helens, the agency involved in talks with the supposed solar company, was not immediately available.

Even in that case, the county appears likely to be able to pay off most of its long-term debt assuming no new loans are taken out to fund new projects, such as the construction of Hermo Road, which is envisioned as a second access road to the industrial site.

Hyde said the $3.5 million Hermo Road remains likely to proceed as a project, though federal stimulus dollars — not urban renewal tax dollars — will likely be the driver.

Subtracting the Hermo Road loan, which was anticipated to be secured in 2010, the county urban renewal agency has taken out $17.5 million in water, road and rail improvements at Port Westward payable out to 2030.

There are still some loan repayment risks. If, for instance, no new industry builds at Port Westward between 2024 and 2029, the county’s ability to cover rail and water system debt at Port Westward would be compromised.

That’s unlikely, however, considering that PGE records filed with the Oregon Department of Energy as recent as September show the utility actively pursuing the new plant.

Hyde also said PGE has been at the table on discussions regarding Port Westward, and that the county is working with the utility to balance its needs with the need to recruit new businesses to Port Westward. A 99-year lease granted to PGE for much of the land owned by the Port of St. Helens at Port Westward essentially gives PGE veto power over incoming industry.

“We need to always be understanding of [PGE’s] needs and issues long-term,” Hyde said.

1 | 2 Next Page >>