The three newspaper articles below clearly report that, although generous incentives were major selling points, other key reasons for Sanyo Solar of Oregon to build their plant near Salem were “relatively cheap power and a good, affordable work force”.  Bend / Central Oregon can claim the same advantages.

Sanyo chose about 20 acres of vacant city-owned property at 5475 Gaffin Road SE for its new plant. Salem wants to turn 79 acres along Gaffin Road into a renewable energy and technology park.

City and economic development officials hope the solar cell plant will encourage other energy companies and their suppliers to locate here.  At a special meeting of Salem City Council , councilors approved a ground lease and purchase agreement with Sanyo for the Gaffin Road location. Sanyo will pay about $1.74 million for the 19.77 acres.

Councilors also signed off on enterprise zone tax breaks for Sanyo, which provide tax abatement on new construction and equipment. They agreed to extend the standard three-year enterprise zone tax break to five years.

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City aims to become hub in green jobs
By Michael Rose – Statesman Journal – September 26, 2008
With the help of taxpayers, Salem has landed an important new employer.

Tax breaks and other economic incentives helped expedite Sanyo Solar of Oregon’s $80 million solar-cell manufacturing plant. On Thursday, the company’s plans to build a factory on 5475 Gaffin Road SE became public. The company is part of Sanyo Electric Co., a Japan-based corporation.

Those involved with recruiting Sanyo say providing incentives is a good trade-off for what Salem is getting: an internationally known company that could attract similar high-tech employers.

“This is the kind of thing that grows more jobs,” Salem Mayor Janet Taylor said.

Through tax breaks, land write-downs, grants and other methods, the city, county and state are spending at least $2 million to help Sanyo locate in Salem.

It’s worth it, officials said, because the factory will return much more to the area: an estimated $7.8 million in annual payroll.

The 19.77-acre Sanyo site is a portion of a 79-acre city-owned property. City leaders are attempting to turn the Gaffin Road location into a renewable energy and technology park. Since 1992, the area has been in Salem’s enterprise zone, which provides tax abatement on new construction and equipment.

Phase one of Sanyo’s two-phase project could be done by fall 2009; the second phase is expected to be completed in 2010.

The mayor views it as good news for Salem’s city budget.

“Good jobs mean people buy houses; they spend money in stores,” Taylor said. “All of that keeps property taxes not only stable but growing.”

To qualify for the enterprise zone tax break and several other incentives, Sanyo pledged to maintain an average salary and benefit package of $50,000 per worker and employ a minimum of 200 people for five years, a city report stated. Another condition for the enterprise zone tax break: Sanyo must consider hiring qualified employees from the local area.

“They are required to at least consider them. They are not required to hire anyone,” said Ray Burstedt, president of the the Strategic Economic Development Corp., better known as SEDCOR.

SEDCOR and city officials negotiated with Sanyo for more than a year in confidential meetings. Sanyo’s interest in Salem was publically disclosed at Thursday’s special city council meeting.

Lottery dollars sweetened the deal for Sanyo.

Marion County provided a $300,000 grant over three years from its allocation of state lottery funds. Sanyo can use the money to defray costs of transporting equipment to Salem, Burstedt said.

Meanwhile, the Mid-Valley Council of Governments provided $25,000 from lottery funds for workforce training.

In addition, state funds from the governor’s office will pay up to $1,427 per Sanyo employee for training provided by Chemeketa Community College, Burstedt said.

Salem and the state teamed up to provide more incentives, said Salem Urban Development Director Rick Scott.

The city applied for a $540,000 state grant for infrastructure to support development at the Gaffin Road site, Scott said. City coffers will contribute an additional $500,000 for water and sewer improvements on Gaffin Road, he said.

Salem agreed to reduce the land price by $500,000 — another incentive tied to Sanyo’s pledge to employ at least 200 people for five years. And the city waived a $180,000 sewer and water connection fee for the factory.

“These are very good paying jobs. It’s a Fortune 100 company, and we think there is nothing really bad that could come of this,” Scott said.

Sanyo officials declined to comment on the project after Thursday’s council meeting but later e-mailed a response.

The company’s California factory is operating at full capacity, and the company needed a new location to expand its production, said Akihiko Oiwa, a Sanyo spokesman, in the e-mail.

The state’s workforce was a plus, the company spokesman said. Workers with past experience in Oregon’s semiconductor industry have skills Sanyo needs for its solar cell plant, which will produce silicon ingots and slice them into wafers.

Oregon’s Business Energy Tax Credit was another positive for the state, Oiwa noted.

Part of the state’s emphasis on attracting renewable energy industries, the incentive provides a tax credit that is up to half of the energy facility’s cost. If issued, the tax credit is claimed over five years.

The tax credit has made Oregon known internationally in the solar industry as a place to do business.

“The state has seen solar energy companies as a fast-growing industry, and they have been doing a lot of recruiting,” said Salem City Manager Linda Norris. “I think that is how Oregon and Salem became noticed.”

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Tax incentives, other goodies help lure Sanyo to Oregon
by Richard Read, The Oregonian – September 26, 2008

State officials welcomed a Japanese company’s announcement Friday that it will build a solar factory in Salem, while acknowledging that Oregon taxpayers could end up paying half the plant’s $80 million cost.

Sanyo Electric Co.’s solar plant could tap up to $40 million of renewable-energy tax credits in two years under an incentive expanded during the Legislature’s special session this year. State and local governments have promised a basket of other goodies for the factory, which is expected to employ 200 people. Together the subsidies could total more than $200,000 per job.

Sanyo is well worth the public investment, said Mike Grainey, Oregon Energy Department director.
“We see this as a shot in the arm for the entire mid-Willamette Valley,” Grainey said. “We’re expecting, based on conversations we’ve had with them, they will expand this facility over time.”

Grainey said officials are in serious discussions with at least a half-dozen more solar companies considering Oregon. One company, Grainey said, could make its decision within a month or so.

Oregon officials led by Gov. Ted Kulongoski aim to make the state a solar-manufacturing hub, in stiff competition with other states. During this year’s legislative session, lawmakers doubled the amount of project costs, to $40 million, that are eligible for 50 percent tax credits on renewable-energy plants.

Under the Business Energy Tax Credit program — known as BETC, familiarly pronounced “Betsy” — a manufacturer such as Sanyo can apply during one calendar year to receive a $20 million credit over five years. The next year, Sanyo managers could apply for an additional $20 million credit toward a second phase, if the project met eligibility tests.

“They have talked to us about multiple phases,” Grainey said.

Sanyo will break ground next week for the factory, which will make ingots and wafers for solar cells. As currently conceived, Grainey said, the plant could possibly qualify for two $20 million credits. The Legislature added a list of conditions for the credits, which companies can resell for one-third face value to receive cash up front.

Salem officials said Friday that Sanyo planned a first phase employing 118 to begin manufacturing next fall. They expect a second phase to go on line in 2010. The company, which will build on a 20-acre site, also has first rights for additional city-owned land in its anchor role at the Salem Renewable Energy and Technology Park.

Incentives, as well as relatively cheap power and a good, affordable work force, certainly helped attract Sanyo, said Akihiko Oiwa, a spokesman for the company’s North American division. “Public incentives are good support for the company,” Oiwa said.

In addition to the potential tax credits, Sanyo will get discounted land, road improvements worth $1 million, worker training, a Marion County grant for equipment and a five-year exemption on property taxes for its plant and machinery. The company can also apply for federal tax credits, which Congress appears poised to renew.

The city and the state got a great deal, said Ray Burstedt, president of Sedcor, an economic-development organization for Marion and Polk counties. Salem will break even on the property-tax exemption after the factory’s seventh year, he said, not even counting the economic boost of wages paid workers.

Incentives come with so-called clawback provisions that require companies to pay back subsidies if they fail to employ promised numbers of workers at higher-than-average wages for an agreed period.

“Every single grant, loan or incentive that is coming from us or the city, it all has clawback provisions,” said Nathan Buehler, spokesman for the Oregon Economic and Community Development Department. The agency led months of secret negotiations to land the Sanyo plant, code-named Project Ark.

Oregon has already attracted several solar manufacturers including Germany’s SolarWorld, which will open its Hillsboro factory next month. Sanyo ranks behind SolarWorld as the world’s eighth-largest solar-cell producer, according to Photon International magazine.

Sanyo managers predicted the 861,000-square-foot Salem plant will be able to produce material each year capable of generating 70 megawatts of power once it reaches full operation in April 2010.

Sanyo also makes ingots and wafers in Carson, Calif., shipping them to Japan, where solar cells are made. The company uses the cells to make solar modules, or panels, in Japan, Mexico and Hungary.

Salem officials expressed excitement about landing the plant during economic hard times.

“It’s pretty amazing, particularly as you read the headlines of the day,” City Councilor Chuck Bennett said, “that we’re looking at adding jobs and this kind of economic expansion.”

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Oregon Welcomes Yet Another Solar Maker, Sanyo
by Celeste LeCompte – earth2tech – September 24, 2008

Oregon’s Business Energy Tax Credit (BETC) has done it again: SANYO North America said today that it will build a new $80-million, 70MW solar manufacturing facility in Salem, Oregon. Construction is slated to begin next month and the plant is expected to open in October 2009, ramping up to full capacity by April 2010.

Talk about a successful tax incentive. The BETC, whose provisions offer renewable energy companies, among other things, tax credits for up to 50 percent of capital investments of as much as $20 million, helped attract three other solar manufacturers to the state in 2007. German SolarWorld kicked off the trend in March of that year, moving its production a matter of miles from Vancouver, Washington, to Hillsboro, Ore., to take advantage of the tax perks. SolarWorld was joined by Santa Clara, California-based Solaicx in June 2007 and by Carlsbad, California-based Peak Sun Silicon the following November.

SANYO says that while the BETC did play a role in its decision, the state’s reputation as hub for a diverse range of semiconductor companies was a factor as well. With a developed industry, the company can expect to find a suitable, and often already trained, workforce for its new plant. SANYO says its new facility will bring 200 new permanent jobs to the state when operating at full capacity.

Job growth is a key reason that the state has poured it’s support behind the BETC and its sister program, that Residential Energy Tax Credit. In a study of credits allocated in 2006, ECONorthwest found that over the next 15 years projects would create nearly 2,100 new jobs, boost economic output by $178 million and cut energy costs by $60 million.

‘Enterprise zones’ may boost High Desert economy
By Tony Fuller – KTVZ.com – April 30, 2008

Property tax breaks can lure more business – and jobs

It’s something we all like to hear, two words: tax break!

For major manufacturers and trade sector employers, it could be exactly what they want to hear when they plan on bringing their company to Central Oregon.

Take companies like T-mobile for example, which qualified for an “enterprise zone” in Redmond, which gives them a break on property taxes. Now the company has become a major employer in the region.

So by designating three new areas throughout the region, as the state did this week, in five or 10 years, hundreds, even thousands of jobs could be on the way.

It’s one of the oldest and frequently used programs in the state.  A tax break that jumps starts economic development in rural areas like, in this case, La Pine, the Bend Airport and Crook County. 

According to Roger Lee, executive director of Economic Development for Central Oregon, the enterprise zone program will boost the economy.

“For example, if a company wants to come in and invest several millions of dollars in a new plant, we’re able to get them exempted for three years, sometimes five, but mostly three years” worth of property taxes, Lee said.

The program hopes to attract new manufacturers, high technology and other trade sector employers to central oregon. Those types of employers sell goods or services outside the local area, creating more jobs for trade workers.

“Jobs are certainly a portion of the program in order to qualify. They have to be in that sector and ship some sort of service or product out of the area, and the jobs are also a requirement statutorily for enterprise zones,” Lee said.

The enterprise zone label was designated in Redmond more than 18 years ago. Since then, over 1,600 jobs were created and $111 million in capital investments, the kind of boost the new local enterprise zones will seek.

“It’s proven to be very successful in the region on attracting new employers,” Lee said. “For example, T-Mobile in Redmond. I think if you asked the principals who put that together, they would say unequivically, they would not be in Redmond without the enterprise zone benefits that are offered.”

Crook County joins seven other Oregon counties that have been designated as a special type of renewable energy enterprise zone. 

The designation has become a meaningful incentive for renewable energy production, which includes a wind farm along the southern border of the county and two biomass power production plans near prineville.   The combined investment of these projects could attract capital investments exceeding $150 million.