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Eugene Board of Commissioners discuss tax break plans for Avago

Under the company name “Broadcom,” Avago plans to manufacture transmission chips at the facility. SBG photo

EUGENE, Ore. - The City of Eugene and Lane County Commissioners are preparing to make big decisions regarding the West Eugene Enterprise Zone - a program offering property tax exemptions to qualifying businesses.

The Board of Commissioners heard from county and city officials today to learn more about the situation.

First, the Eugene City Council and County Commissioners need to decide whether they'll approve a 2-year extension of the tax exemption for Avago Technologies.

In November, Avago purchased the former Hynix building, which has been vacant for seven years.

Now, they're proposing a $400 million investment into the site.

"We're looking at redeveloping existing properties that we would like to see back on the tax rolls and back in operation," community and economic development director Sarah Means said.

Under the company name "Broadcom," Avago plans to manufacture transmission chips at the facility.

Initial employment is expected to be 229 jobs; but rather than the standard 3-year tax exemption allowed under the West Eugene Enterprise Zone, the tech company has requested a 2-year extension.

"I can best characterize where the company is today is they've purchased the facility. They started design renovations to the facility, but I can't say that they've gotten the green light to move forward," said Denny Braud with the City of Eugene. "So we're still trying to put our best foot forward for this company, to make sure we land them here."

According to the county, Avago has indicated renovations would occur in 2017, equipment would go in in 2018, and production would begin in early 2019.

Several commissioners spoke in favor of the 2-year extension.

"I'm hoping the City of Eugene will move forward on this," Commissioner Sid Leiken said. "I think this is a really golden opportunity."

The tax exemption would only apply to future development, meaning Avago would continue to pay their current property tax-- estimated at nearly $600,000 per year.

Second, the commissioners and city council need to determine the future of the West Eugene Enterprise Zone, which is set to expire June 30.

The program is intended to encourage industrial investments that create jobs and long term tax revenue.

County officials say the program doesn't only benefit large companies.

"What we haven't really talked about is the fact that the majority of applications coming in using this tool are small local businesses that have been in this community for a very long time," Means said.

33 companies have used the program since it was established 10 years ago.

In both of these matters, the City of Eugene will have to take action first, followed by the county.

They're expected to take action before July.

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