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The city of Wilsonville is eager to lure San Jose, Calif.-based solar manufacturer 鈥� and as many as 500 jobs and investments worth as much as $340 million 鈥� to a vacant distribution warehouse. Creation of an enterprise zone, a typical incentive, is not an option, so Wilsonville is looking to create Oregon’s first one-building, single-property urban renewal area.

鈥淲e know the company likes the space, the area and the state incentives, but we need to have something to offer 鈥� in order to compete with Oregon towns that have enterprise zones and out-of-state towns with other incentives,鈥� said Mark Ottenad, a spokesman for the city of Wilsonville. 鈥淪o the council directed staff to get to 鈥榶es,’ and the urban renewal area is what they came up with.鈥�

SoloPower announced earlier this year that it intends to add approximately 400,000 square feet to the 508,277-square-foot Wilsonville distribution center formerly occupied by Nike. The company would convert it into a manufacturing plant that produces a number of different products, most notably a thin film used to collect solar energy. But SoloPower has not signed a lease for the property yet, and the city wants to make sure it does before another offer is made elsewhere.

City staffers first looked at the possibility of an enterprise zone, which typically gives businesses five-year property tax abatements on improvements that increase property value. But Oregon presently has 59 enterprise zones 鈥� 48 rural and 11 urban 鈥� the maximum allowed under state law. According to Marc Zolton, a spokesman for the state’s economic development agency, only re-designations and tribal-based designations would be allowed.

The city staffers then looked into possibly amending the boundaries of one of the city’s two present URAs to include the ex-Nike property. The issue with that, according to Ottenad, is that those two areas already have approved project lists and bonds sold to pay for them. Though the URA plans could be amended, the projects would be added to the bottom of the list, and wouldn’t fit the time frame needed to accommodate the company, he said.

鈥淭here was this sudden revelation between a few different people that we could create similar incentives to an enterprise zone by creating a new urban renewal area,鈥� Ottenad said.

The urban renewal area would consist of 26 acres 鈥� the parcel that encompasses the distribution center 鈥� and last 10 years. Property taxes on the building were assessed at $319,000 in 2010; the city expects that amount to reach $4 million annually if SoloPower were to follow through with its expansion plan.

In the city’s URA plan, once the property tax base were frozen at its current level, SoloPower would get back 75 percent of property tax increases associated with improvements it made to the building. These could be facade improvements, mechanical improvements or equipment additions.

The money could go to lease payments or tenant improvements 鈥� like adding gas lines or a new HVAC system 鈥� but could not be used to purchase equipment or other manufacturing products. SoloPower is planning to spend up to $40 million on tenant improvements, and at least $12 million on tenant improvements to get the first production line up and running.

With most URAs, the service districts funded through property taxes 鈥� like school, fire and drainage districts 鈥� get only their portion of the frozen property tax base throughout the entire life of the district and then get their full cut once the district expires. But in this case, the remaining portion of property tax increases above the frozen rate 鈥� the 25 percent that would not go back to the company 鈥� would be split among the service districts.

鈥淭he increment that SoloPower is expected to get is between $11 million and $13 million,鈥� Ottenad said. 鈥淏ut what we like about this is that it all depends on what they are willing to invest. If they want to put in more, the bigger the district gets and the more rebate they get back.鈥�

Alec Jensen, executive director of Tualatin Valley Fire & Rescue and an advocate for the proper use of urban renewal, said he was appreciative that the city sought concurrence from his district even though it didn’t have to.

鈥淚t’s not the poster child for urban renewal, but it fits in with our board policies for supporting urban renewal,鈥� he said.

The small amount of push-back the city has encountered is over a $4 million advance the city would give SoloPower to start tenant improvements. That money would come from the city’s general fund and be given to the company in two installments. The first one would come when the company received final approval on loans from state and federal governments, and the second would come a year later, after the first production line is operating. The money would be repaid with interest from urban renewal dollars.

If the URA were approved by City Council, it would be the first single-property urban renewal area created in Oregon. But they are not uncommon in other parts of the country.

Elaine Howard, an urban renewal consultant in the Portland-metro area, said that at an annual meeting for the Council of Development Finance Agencies last year, several people from the national level talked about such URAs.

鈥淣ational folks were astounded that Oregon’s URAs were district URAs and not single-building URAs,鈥� she said.

A lot of public testimony was given at the first reading of the proposed new URA, so the council is likely to reopen the topic for discussion before taking a final vote at its meeting on Monday.

SoloPower officials failed to return multiple inquiries before press time.