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Intel bows to growth concerns in Oregon

The Washington County Board of Commissioners OKs a $200 million tax-break package for Intel, now that the chip giant has agreed to limit jobs or pay fines if it hires too many.

Most locales are elated when a high-tech company like Intel beds down in their backyard.

But at least one community, Washington County, Oregon, wants to control the development and traffic big businesses can bring while supporting the benefits Silicon Valley transplants can provide.

Tonight the Washington County Board of Commissioners unanimously approved a $200 million tax-break package for Intel. The chipmaker, in return, has agreed to pay a fine of $1,000 for every manufacturing worker it brings in over a cap of 5,000.

The population of Hillsboro, where Intel is located in Washington County, has increased from 45,000 to 68,000 in the past three years. The cap is part of the county's Strategic Investment Program, which as a trade-off also includes a state tax break to lower the property tax for companies.

Although Intel will have to limit manufacturing jobs, the company views the as "a win-win" situation for both sides, said Intel spokesman Bill Calder. Intel helped negotiate the plan, he added, which will allow the company to invest $12.5 billion over the next 15 years.

"It allows us to continue our investment and upgrade our factories," Calder said, adding that the growth agreement is only "one small piece of an overall negotiated package."

Nonetheless, Intel will only be able to hire 1,000 more manufacturing workers for Washington County. The company is building plants in other areas such as Utah and overseas.

"Certainly the additional job growth creates some impacts locally that they, in turn, have to support," Calder said.

But Washington County's cap does not limit nonmanufacturing jobs, and the county can waive the cap in the future, Calder noted.

"This is not an effort on the part of the county to limit Intel, but rather we have sized their tax bill assuming certain impacts into infrastructure," said Washington County spokesman Walter Peck, prior to the 4-0 vote. "This is basically a retooling and retention proposal."

LSI Logic, another major chip manufacturer, also has a location in the state, in Gresham, Oregon. One of LSI's main draws to Gresham was the Strategic Improvement Program, said LSI spokeswoman Tara Yingst, but she was unaware of the manufacturing cap proposal.

"In exchange for getting tax breaks, LSI reinvested in the community in terms of road work, water irrigation, hiring from within the community, and developing a microelectronics program at the community college," she said.