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This action will request that the Portland City Council (City) reauthorize the East Portland Enterprise Zone (E-Zone) for 10 years and direct staff to submit a reauthorization application to the State of Oregon.  If approved, this action will allow Prosper Portland, which administers the E-Zone program on behalf of the City, to continue to manage an economic development program that since 1986 has encouraged commercial investment, created and retained quality jobs, and created a resource stream to invest in critical community economic development objectives across the city. 

Over the past ten years, Prosper Portland has managed 97 different E-Zone projects. Since the Great Recession in 2010, the program has seen significant increases in enrollment; currently, there are 45 active E-Zone participants, including 18 in the East Portland E-Zone (29 percent and 33 percent of which were small businesses, respectively). Since 2015, companies have: 

• Invested in capital or procured goods and services totaling $1,813,000,000 in the city of Portland ($940,000,000 in Portland E-Zone, $873,000,000 in East Portland E-Zone) 

• Created 3,600 new jobs in a 2021 snapshot (1,955 in Portland E-Zone, 1,645 in East Portland E-Zone) with 49% of employees identifying as people of color, a higher percentage than the 31% demographic in the general population in Portland;  

• Paid $30.16 per hour average wages and offered total compensation of $36.34 per hour ($31.98 per hour in Portland E-Zone, $28.00 per hour in East Portland E-Zone, in 2021 dollars); and 

• Collectively in both E-Zones provided $8,000,000 for local non-profits, businesses, and workers through Prosper Portland programs such as the Inclusive Business Resource Network, Economic Opportunity Program, NextGen, and supports Oregon Manufacturing Extension Partnership to lead continuous improvement workshops with Portland manufacturers. 

In 1985, the Oregon State Legislature established a statutory structure for the E-Zone program that permits cities to establish zones where businesses that invest in economic expansion and the creation and retention of jobs can claim property tax abatements for a limited period (up to five years). In 1986, Portland City Council established the Portland E-Zone and designated Prosper Portland as the City’s Zone Manager.  

Since then, in 1996, 2008, and 2019 (Portland E-Zone) and 2012 (East Portland E-Zone), Prosper Portland has requested, and City Council has approved submitting successful reauthorizations to the State to continue managing the two E-Zones in Portland.  

In 2003, the Oregon State Legislature added provisions permitting local governments to establish local policies and written agreements imposing obligations on E-Zone companies to provide designated community benefits. Most recently, on September 13, 2017, the Prosper Portland Board through Resolution No. 7253 requested (and City Council ultimately adopted through Resolution No. 37321) amendments to the E-Zone policy that would increase requirements for wages/compensation, procurement plans, and institutionalizing additional public benefits through formal agreements between participating businesses and Prosper Portland. As such, the current E-Zone policy provides numerous community benefits through its innovative partnership and business practices, including: 

• Institutionalization of public benefits agreements as more companies agree to invest in business culture change activities that create opportunities for a diverse, locally grown workforce; 

• Job seekers from across the socioeconomic and demographic spectrum access quality employment opportunities; 

• Direct funding for programs such as the Inclusive Business Resource Network and Mercatus and a direct connection between businesses using the E-Zone program and businesses and entrepreneurs from historically disadvantaged communities; and 

• Infrastructure for new initiatives such as Portland Means Progress, which is mirroring efforts in the E-Zone to create new partnerships and pipelines for businesses owned by members of historically disadvantaged communities and business culture change with the end goal of creating more equitable and inclusive businesses in Portland.