Columbia Distributing Could Be in Line for Sizable Tax Break Through Strategic Investment Zone Program

Columbia Distributing could be receiving a sizable tax break on its new, 530,000-square-foot facility under construction in the Canby Pioneer Industrial Park.

It’s called the Strategic Investment Zone, or SIZ, and it allows for some property taxes to be abated on developments that spend more than $25 million on projects in Clackamas County.

Here’s how it works. Companies who qualify will be expected to pay the full amount of property taxes on the first $25 million of their investment. Beyond that, any further taxes due may be abated for up to 15 years.

In the case of Columbia Distributing’s new facility, these savings could be substantial. A budget for the project provided by the Oregon-based company estimated their investment for the new building and land to be in excess of $62.3 million — more than twice the SIZ’s cap of $25 mil — plus an additional $6 million for equipment.

To offset the impacts of the loss of these tax dollars, companies granted SIZ status are required to pay a “community service fee” each year equal to 25 percent of the tax savings. This amount itself is also capped at no more than $500,000.

This fee is intended to mitigate direct impacts of the development on the community that are needed over and above the systems development charges collected from the initial project. Once those needs are addressed, additional revenues can be directed toward high-priority projects in the community.

Businesses approved for the SIZ must also enter into a “First Source Hiring Agreement,” which favors the hiring of employees already residing in the proximate area or region of the approved project.

The incentive program was established in Clackamas County in August 2010 as part of Business Oregon’s Strategic Investment Program, but Columbia Distributing is the first company to take advantage.

The company’s application for the SIZ must be approved by the Canby City Council and Business Oregon, with the main purpose of their decision being determining whether Columbia has met the criteria necessary to qualify for the program. They are scheduled to hear the matter at their regular meeting on Wednesday night.

Columbia, which has been in the beverage business since 1935, services over 22,000 retail customers in Oregon, Washington and California. They had been searching for a new home to consolidate their Portland area operations since acquiring the Mt. Hood Beverage company in 2008.

They ultimately settled on Canby, and began advancing plans for their massive investment in the community under the codename “Project Shakespeare.”

Columbia expects to begin moving into the facility in late spring of 2020 and be fully operational by fall. The facility will serve the entire Portland Metro Area along with Salem, a substantial portion of the Columbia Gorge and the Northern Oregon Coast. The facility will also serve as a hub for Columbia branches in Medford, Springfield, Bend and Pendleton.

Once fully operational, Columbia expects to employ roughly 300 full-time employees out of the facility, which will operate around the clock. These employees will receive, pick and deliver an estimated 16 million cases of product per year.

The facility itself will be owned by Canby East LLC, a corporation whose ownership overlaps “substantially” with that of Columbia Distributing. Columbia will enter into a 15-year lease for the facility with Canby East LLC.

According to a project timeline provided by Columbia, the lease is expected to take effect on June 1. The facility is projected to begin receiving product Aug. 3, with inventory from existing facilities also being transferred that month.

The initial four to six delivery routes out of Canby will begin service in September, with full operations expected to be underway by the following month.

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