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Not quite a year after implementing a new enterprise zone to spur industrial business growth, the city of Beaverton is looking to build upon that.

City officials say they have successfully expanded the enterprise zone from 1.5 square miles to 4.5 square miles. The expansion includes 0.64 square miles of unincorporated Washington County land that, under a consent agreement, enables companies slightly outside of city limits to take advantage of the zone.

Alma Flores, economic development manager for the city of Beaverton, said the increase was driven by demand.

“There were several inquiries made for the enterprise zone from companies, developers and property owners that were just outside the enterprise zone,” Flores said. “When we started it, it was mainly for the industrial areas. We had not looked at mixed-use areas.”

Beaverton’s original focus for the enterprise zone, Flores said, was on spurring expansions that would generate more manufacturing jobs. But as it turned out, software companies and office users were interested, too.

Enterprise zones are designed to encourage business investment through property tax relief. The tool provides 100 percent property tax abatement for three to five years to eligible businesses that commit to spending at least $1 million on new development.

Flores said the procedure for expanding an enterprise zone is intensive, so staffers are hoping that a large expansion will save them from having to revisit the process. The other benefit is that many of the areas brought into the zone also are in urban renewal areas.

“This incentive, if used, would actually (encourage) future investment,” Flores said. “So with that investment, after three to five years – which is about the time you start seeing some increment happening and money for infrastructure projects – the idea, the strategy is to use this tool to incent development and business growth, which would then provide greater tax increment for urban renewal down the road.”

Flores said the areas brought into the enterprise zone haven’t seen much construction activity in recent years. With the expansion, more than 1,300 companies could potentially benefit.

The city also approved its second application for enterprise zone benefits to Vanguard EMS, an electronic manufacturing services supplier that serves the medical, defense and industrial markets. Vanguard recently acquired a 76,000-square-foot building at 3725 S.W. Hocken Ave., where it plans to relocate after a $1.9 million renovation. The company, which has 144 people on its payroll, anticipates the move will enable it to hire 15 more.

“The purpose of enterprise zones is really to spark that investment, give it a little bit of a push,” Flores said, “and then at the end when it comes back into the coffers, it’s at a higher base.”