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Governor has U.S. Cellular on hold

Tax exemption would bring 400 jobs here

A U.S. Cellular operation that could bring 400 jobs to Medford apparentlyawaits a decision by Gov. John Kitzhaber.

The governor and various sources involved with the deal confirm thatthe company is Chicago-based U.S. Cellular.

The company would be the first to take advantage of Medford's new enterprisezone.

Economic development officials, who did not disclose the company's name,say the company favors Medford, but is daunted by the state's tax on intangibleproperty held by utilities.

The Oregon Legislature recently passed a bill exempting such property,such as computer software and stocks, from local property taxes. The exemptionwould include Federal Communications Commission licenses held by companiessuch as U.S. Cellular.

The bill was sent to Kitzhaber on Monday, and he has 30 working daysto sign it, veto it or let it become law without his signature.

We were trying to get a very narrow bill, said Gordon Safley,executive director of Southern Oregon Regional Economic Development Inc.That bill didn't get out of committee. The one before the governoreliminates franchise fees for utilities, airlines and railroads. We don'tknow what he will do with it.

The governor says he hasn't decided.

I don't have any predisposition to veto it, Kitzhaber saidin a meeting with Mail Tribune editors, but I want to be clear onwhat it does.

Kitzhaber said he was concerned that the bill left the definition ofintangible assets very broad and very vague.

I'm afraid we're going to end up in endless litigation with theutilities over the definition of intangibles, he said.

The governor said he would have preferred that a bill dealing specificallywith the potential Medford operation had been passed on to him, but thatbill was sidetracked and eventually rolled into the utilities bill. That,he said, gave the utilities leverage to seek additional tax breaks.

The utilities really had their foot on the air hose on this one,Kitzhaber said.

The decision on the Medford site is going to be made in the nextfew days, said Bruce Laird, regional representative for the OregonEconomic Development Department.

Businesses that build or expand within enterprise zones are eligiblefor a property tax exemption of three years or longer. Several businessesconsidering Jackson County sites have opted for enterprise zones elsewhere.

Medford was the only urban area in the state without an enterprise zoneuntil Friday, when the Oregon Economic Development Department awarded thecity the designation vacated after 10 years by West Eugene.

The zone includes three pieces of land near Rogue Valley International-MedfordAirport. One is on Biddle Road, one is behind Wal-Mart and the third isnorth of Costco Wholesale and west of Crater Lake Highway.

The zones are limited to 12 square miles and no more than 12 road milesend to end.