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Broadcom tax breaks come with conditions on wages, youth job training

Broadcom (also known as Avago Technologies) already secured a 3-year tax exemption under the enterprise zone. The Council voted Monday to extend that tax break by 2 years. Lane County has to sign off to make the exemption official. (SBG)

EUGENE, Ore. - The City Council voted to extend a property tax waiver to 5 years for the buyer of the shutter Hynix plant.

Broadcom (also known as Avago Technologies) already secured a 3-year tax exemption under the enterprise zone.

The Council voted Monday to extend that tax break by 2 years. Lane County has to sign off to make the exemption official.

Over 5 years, the company will avoid paying $21 million in taxes - about what the company paid for the property and factory in West Eugene.

However, to transform the former semiconductor plant for use manufacturing mobile phone component, the company stands to invest hundreds of millions more.

The tax breaks exempt the company from property taxes on the anticipated $400 million upgrade to the plant. That includes a $100 million remodel and $300 million in equipment.

Once up and running, the plant will employ about 230 people.

"As part of getting this 2 year extension, the company's agreeing to pay 150 percent of the average Lane County compensation, so these are quality job opportunities," said David Hauser with the Eugene Chamber of Commerce. "The Broadcom team has talked to recruiters in their industry, and they feel as though they'll have no difficulty staffing their operation here."

How large that workforce might become over the years remains to be seen. Hauser points to Broadcom's operations in Fort Collins, Colorado, where the company employs 1,300 people.

"To me that is the upside potential, long term, for our relationship with Broadcom here in our region," he said.

Broadcom also has agreed to pony up $100,000 per year for 5 years to contribute to youth employment readiness programs run by the Lane Workforce Partnership program in Eugene.

"This is a story that hasn't really been heard by many," said Kristina Payne, director of the Lane Workforce Partnership. "This will be the first time that we will be able to bring funds into the community that will be invested in work experience for youth."

That's a welcome opportunity: while Lane County's overall unemployment rate is 5.5 percent, unemployment runs 24 percent for youth ages 16 to 24, Payne said.

Hauser said the facility is in design work now, with construction likely to begin later this year. The plant could open for production in early 2018, he said.

As for folks troubled by the thought of a 5-year tax break, Hauser offered this prediction.

"Once that exemption is complete, they'll be - that facility will be probably be the top tax paying entity in our community," he said.

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