Tax breaks are essentially a handout from the public coffers to specific interests, presumably for the greater public good. By socializing a company’s risk, for example, the handout is justified legislatively with an expectation for a return of ‘equal’ value, like jobs or a future increase in tax rolls. The problem is, no one really tallies the score, measures the investment against the return on the investment, or even knows how to go about doing it.
The enterprise zone tax abatement to ORC, for example, will cost the taxing districts in the county $2.5M over five years. Presently, there is no way to measure whether the taxing districts and the citizens they serve and even the economy wouldn’t just have been better off getting the taxes. Presently, there is no empirical data to support continuing enterprise zones as a positive factor in job or economic growth. Nevertheless, they prevail.
In 2004, Southport Lumber Co moved less than thirty miles from its location south of Coos Bay to the North Spit and availed itself of an enterprise zone tax abatement in return for an investment of $15M and 65 jobs. In addition to the tax exemption, Southport benefited from a $5.5M rail spur operated by the International Port of Coos Bay.
Wood products fell on hard times and by December, 2006 Southport employees were receiving layoff notices and by 2009 the company had laid off more than half its workforce. Southport isn’t to blame for the economy but this investment of tax dollars, betting on a single company, doesn’t appear to have paid off.
The $51M, 12″ gas pipeline paid for in part by a $27M bond measure passed by Coos County voters was sold with the promise of 3,000 jobs. People like the late Ron Opitz, then executive director of SCDC (South Coast Development Corporation) assured the public they had plenty of companies, (never named), just itching to setup in Coos County as soon as there was natural gas. Southport owners claimed they moved to the North Spit, in part because of the availability of natural gas. Sources tell me Southport are not connected to the line.
NW Natural maintains the pipeline for the county and provides service to approximately 1,200 customers discovered in 2007 they may have to pay ad valorem tax on the use of the county line. The company with the cooperation of, at least, one commissioner, Nikki Whitty successful pushed a bill through the legislature to exempt the utility from paying tax on the pipeline.
Four months later, Jordan Cove, LLC submitted its application to FERC for a proposed LNG terminal. Five days later, Jordan Cove struck a deal with the County.
…prepay for future use of the county-owned, 12-inch diameter main transmission natural gas pipeline.
Upon execution of the agreement on Sept. 5, the county received $200,000 from Jordan Cove, received an additional $25,000 for the month of September, and will receive the same amount each month until termination of the prepay period.
January, 2009, Fort Chicago, 90% owner of Jordan Cove, LLC, applied to BPA for an interconnect at the Hauser Tap on BPA’s Reedsport-Fairview 115 kV Transmission line to sell power produced from a gas fueled 50MW power plant proposed for property adjacent to Jordan Cove. The fuel source could be supplied by the County pipeline.
Assuming a power plant obtained its permits and used the County pipeline for a fuel source the 2007 legislation prevents the County from ever receiving any tax revenue. Tying the generation output to a main BPA transmission line means the power is probably going elsewhere. This would put Coos County taxpayers in the distasteful position of paying $27M for a pipeline that makes virtually no money so that a Canadian owned firm can sell electricity to Californians at a profit. On top of that Jordan Cove is located in an urban renewal district. The county will wait a long time to see any payoff from this transaction.
The request to BPA for the interconnect was withdrawn April, 2010 and no local planning officials I have spoken with know anything about the proposed plan to install a power plant on the North Spit.
While it seems millions and millions of dollars flow through Coos County, mostly in the form of federal and state dollars, it seems like very little of it lands here. Legislation like that enacted in 2007 appears to reduce any good the pipeline might bring.
I know some are asking these questions of Nikki, has she responded to any one on this?
I know they read this blog, so obviously they are choosing not to answer.
They are probably in shock at a citizen doing the work a newspaper should be doing but refuses, has them all flustered.
Good question. Probably, considering the environmental cleanup from the pipeline has not been completed, the money is being used there…
“Upon execution of the agreement on Sept. 5, the county received $200,000 from Jordan Cove, received an additional $25,000 for the month of September, and will receive the same amount each month until termination of the prepay period”
Here is money that can be used to pay off the tax payer debt for the pipe line construction bond. But, guess what, what was the money used for? Is being used for? Not more County law enforcement officers on the road, for sure.
Anyone know where that money is going?
While looking for something else, I stumbled upon some of this information. Normally, I would be a total fan of publicly owned infrastructure, especially around energy but somehow, despite the best of intentions, this model went horribly wrong.
The pipeline may earn some minimal revenue via a transfer tax per therm but it seems the best way for the property owners paying this off to receive any benefit is to just sell the pipeline to a non governmental agency. Or, perhaps, repeal the 2007 bill.
It isn’t that the idea of a pipeline was necessarily bad, (ignoring the obvious environmental flaws), it is in the execution of the project where it has failed.
“I wonder how many times you have to be hit on the head before you find out who’s hitting you?” Harry Truman – 1948
Something we have NEVER read in The World. WE THE PEOPLE deserve to know the truth about what these ‘business’ leaders of this county are really doing. What a damn shame a private citizen has to take her own time and energy to do what a damn paper is PAID to do. Well let me restate that, I guess The World is doing EXACTLY what it is paid to do, which seems now to be the stenographer and water carrier for SDCDC, FONZI and all the other ‘banksters’ as I’ve heard them called.
Like I’ve said many times, I hope Jon Barton lights Clarks’ cigaret after Clark satisfies him.
This seems beyond understanding, even for a corporate pimp. I would think ethics might be important to a newsman who doesn’t give a damn if the public is fleeced time after time after time.
The poor people of this county. The poor people who have lived here their entire lives and love this place because it was once a vibrant, flourishing piece of the world blame the “outsiders” for bringing this to their attention. They had better start paying attention, because this mind-set runs right through Coos County, top to bottom.
I swear MGX this repeated behavior by local government is preventing any real chance at recovery.
I’ve been here for seven years, and ALL I’ve heard from SCDC from Opitz to Barton is they have ‘tire-kickers’ and others very interested in relocating here, veritibly lining up at the county line, IF ONLY YOU WILL GIVE US MORE MORE MORE MORE OF YOUR MONEY.
I ask my neighbors in Coos County,WHERE THE HELL ARE THE JOBS YOU WERE PROMISED? WE HELD OUR END OF THE STICK AND YOU SEEM INTENT ON STICKING IT RIGHT BACK WHERE OUR SUN WON’T SHINE – EVER !!!!