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This action will recommend that Portland City Council (City) add key areas to the Portland Enterprise Zone (E-Zone) in the downtown Portland Central City core and NW Industrial Area with the goal of incenting 1) employer retention in Portland’s Central City, and 2) key investments by companies considering location into Portland or relocating away from Portland. 

Currently Portland’s SW Waterfront, Old Town/Chinatown, and much of NW Industrial areas are in the Portland E-Zone program, as is the entire Central Eastside as part of the East Portland E-Zone, which received re-designation July 1, 2023. As the Central City works to revitalize, the E-Zone program has potential to incentivize investment in downtown Portland in areas not currently in the E-Zone. 

If approved, this action will allow Prosper Portland to promote E-Zone tax incentives as an economic development tool in downtown Central City more wholistically. The Business Advancement Team at Prosper Portland, who is leading employer retention for the city, is in conversations with companies making active decisions about their future in Portland and have identified the Portland E-Zone as a key tool in their decision-making process to remain in the Central City. 

In 2019, the Portland E-Zone was re-authorized for a fourth time since 1986; the current re-authorization expires in 2029. Any additions to the E-Zone will receive the remaining benefits from the program until the Portland E-Zone’s designation expiration. At that time, the City will have the opportunity to reevaluate the cost/benefit of including the Central City in the E-Zone program beyond 2029. Essentially, this action has a sunset of six years from today. 

The Portland E-Zone boundary change action will advance objectives of the Prosper Portland 2015-2020 Strategic Plan and the newly authorized 2023 Advance Portland Strategy, which emphasize making investments that create quality jobs and collaboration between community-based organizations, the private sector and public entities to support equitable outcomes for residents facing economic disadvantages. 

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 and 2023 (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.  

Over the past ten years, Prosper Portland has managed 97 different E-Zone projects, with seven currently pursuing enrollment in the program. These active projects have to potential to invest $100,000,000 and create approximately 350 new jobs in Portland. 

Since the Great Recession in 2010, the program has seen significant increases in enrollment; currently, there are 45 active E-Zone participants. Since 2015, companies have:   

• Invested in capital or procured goods and services totaling $1,813,000,000 in the city of Portland; 

• Created 3,600 new jobs in a 2021 snapshot (with 49% of employees coming from underserved communities); and 

• Paid $30.16 per hour average wages and offered total compensation of $36.34 per hour. 

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.