COOS BAY — If the Jordan Cove Energy Project backs out of the Community Enhancement Plan, its property tax dollars could flow in a few different directions.
On Monday, the Community Enhancement Plan work group discussed a draft agreement outlining when Jordan Cove would pay its annual community service fee, how much that fee would be and who would get the check.
One clause changed substantially: The company has an out after the plan turns 7 years old. At that point, Jordan Cove could choose to not renew its long-term rural enterprise zone tax exemption, halting all future community service fee payments and essentially tossing out the CEP.
"We didn't participate in any conversations regarding that paragraph," said Jordan Cove public affairs director Michael Hinrichs. "In fact, we don't have a role in the actual crafting process at all and haven't seen any iterations of it. I'm not sure how it came about, but we're leaving it to the working group and the enterprise zone entities to figure everything out."
Chris Claflin, Business Oregon's business development officer for Coos, Curry and Douglas Counties, said Jordan Cove has the right not to take the incentive.
"The sponsors want you to use the incentive longer than maybe you want to," he said. "It's not something that's anticipated in statute or rule."
Seven years into the plan, the taxing entities and proposed South Coast Community Foundation and Waterfront Development Partnership would already have seven rounds of community service fee revenues and, if things go as planned, thriving endowments.
But without this exemption, Jordan Cove would resume paying property taxes as usual and since it would sit in the North Bay Urban Renewal District, 99 percent of property tax dollars would go into its urban renewal agency — if it still exists.
Voters put the district in place in 1985 as a way to cure blight, directing some property tax revenues to improvements — mostly infrastructure — within the district.
"It’s certainly done some good work: Southport Lumber out there is a good example of that," said Coos County Urban Renewal Agency board chair Todd Goergen. "The agency participated in getting the rail spurs out there — that was pretty critical. We were very instrumental in getting the realignment of Transpacific Parkway and the new rail crossing for safety purposes. There was high concern with new activities developing out there and what's been proposed with Jordan Cove."
Now that infrastructure is in place, nixing the need for the urban renewal agency to continue, Coos County Commissioner Bob Main said last fall.
Coos County alone has the power to disband the URA, which will sunset in 2018, but can't do so until all indebtedness has been paid, according to ORS 457.075. At the end of this fiscal year, Goergen said the URA had about $360,000 in debt.
If an urban renewal agency doesn't have debt, it's not supposed to exist, Main said.
But these URAs often "stay in debt intentionally" to continue existing, said county assessor Steve Jansen.
If Jordan Cove were to opt out of the property tax exemption and if the county were to disband the urban renewal district after that 120-day notice, about 55 percent of the property taxes would go to the Coos Bay School District, South Coast Education Service District, and Southwestern Oregon Community College, all of which would be subject to clawback through the school funding equalization formula.
In this case, 15.82 percent of the pie would go to the county; the rest would go to the North Spit taxing entities.
Editor's note: This story has been updated with additional information about the North Bay Urban Renewal District from URA board chair Todd Goergen.