From: Dan Huff
Sent: Tue Dec 18 14:59:34 2018
To: Gerald Fisher
Subject: FW: Update on Molalla Project
Importance: Normal
FYI
From: Mark Shuholm <mshuholm@nwpoly.com>
Sent: Tuesday, December 18, 2018 11:44 AM
To: Legarza, Jon <JLegarza@co.clackamas.or.us>; Lindsay Forristall <llforristall@gmail.com>; 'Gabriela Frask' <GFrask@mcknze.com>; Moore, Cindy <CMoore@co.clackamas.or.us>; smoore@mcknze.com; Dan Huff <dhuff@cityofmolalla.com>
Cc: Mark Shuholm <mshuholm@nwpoly.com>
Subject: Update on Molalla Project
Hi All,
I wanted to provide an update on the Molalla development project. In summary, I am now placing the project on hold.
Why?: Since we started the evaluation on this project earlier this year, a few key factors have changed. Interesting, it has nothing to do with the property, the seller, or our local area of Molalla officials.
Factor #1: Opportunity Zone designations have left Molalla out. Opportunity Zones are a nationwide program that offer very significant tax incentives for business investment. Here is a map showing designations made by Governor Brown for Oregon.
https://geo.maps.arcgis.com/apps/webappviewer/index.html?id=b0c1911ad4874692be4651d7ba71e77e
How Molalla was left out is an interesting question. I hear that Molalla was on the suggested list that went to the Governor but didn’t make the cut. Please notice on the map the large acreage designations that Woodburn has. When a neighboring community like Woodburn has added this competitive element for business investment, it makes Molalla less competitive. Why would companies come to Molalla over Woodburn? It is a given that this will make it significantly more difficult to attract businesses to an industrial area in Molalla.
Factor #2: Elections have consequences. The November election resulted in a re-elected Democratic Governor and a super majority for the Oregon House and Oregon Senate. The details are to be determined, but the direction that the State’s leadership is taking is clear – and it is not business development/investment friendly. Here is an OregonLive article from last week outlining possible new taxes on business in Oregon.
I don’t think all of these proposals will go through – but some will. Many/all of these proposals mentioned in this article will have a direct affect on my existing business viability - and would then also have a direct effect on the viability of any business expansion for Northwest Polymers. In addition, many/all of these proposals would also have a negative for any other non-Northwest Polymers business that might locate in a built out Molalla industrial park and do not help validate the type of investment we have been discussing.
So what’s next?: At one point, this entire project looked viable. Molalla not being included in the Opportunity Zone designations hurts that viability. Now, any significant additional burden placed on business by the State’s political leadership will make this project un-viable. So it is time to put the project on hold through the coming months and “wait and see” what the politicians in Salem come up with.
Thanks for everyone’s time on this.
Mark Shuholm
Northwest Polymers
Cell: 503-799-9609