Nike Eyeing Investment in Portland After Special Session

Multiple sources familiar with the deal Gov. John Kitzhaber and Nike announced earlier this week have indicated there may be a significant, undisclosed subplot to the deal—that Nike is considering a major investment in Portland.  

Two sites mentioned as possible locations for expansion are South Waterfront, where big tracts of land exist adjacent to glitzy condos and downtown; and, the sprawling Con-way campus in Northwest Portland.

At least one tangible piece of information adds credence to the premise that Nike may soon be a major employer in the city.

Tomorrow, the Portland city council will consider a 29.2-acre boundary expansion of the East Portland Enterprise Zone. That land, which straddles the west end of the Ross Island bridge, includes Zidell Marine, a barge-building business, and a swath of open land north of the bridge.

Enterprise zones offer five-year property tax abatements in exchange for job creation and investment and are a widely-used economic development tool in Oregon. The enterprise zone expansion is one reason sources believe Nike is investigating the waterfront site.

On Monday, Kitzhaber called for a special legislative session for lawmakers to consider a deal he'd sketched out with the sporting-goods company. That deal would lock in Oregon's current approach to taxing multi-state corporations such as Nike for a period of between five and 40 years. 

Any enterprise zone incentives the company might seek in Portland would be separate and unrelated to the state income tax issues Kitzhaber is addressing.

A lot about the Nike deal with the state and its related new investment remains unknown. But the draft legislation circulating tells us this much: if Nike agrees to make an investment of $150 million or more and add 500 new jobs, the state will continue to tax the company based on what's called the single-sales-factor approach. 

Nike does only limited manufacturing in Beaverton and so any capital investment it makes as a result of the deal is likely to take the form of new office space.

But where?

The easiest place to expand is inside the berm that surrounds Nike's world headquarters and that may ultimately be what happens.

Any deal involving Nike establishing a significant beachhead in Portland would involve talks with Mayor Sam Adams, and the Portland Development Commission, the agency that is responsible for recruiting employers and often, providing them economic incentives such as enterprise zones.

City officials were mum when WW asked whether they'd had any communication with Nike or its representatives since Nov. 1, a span that  encompasses the period when Kitzhaber said he and NIke worked out a deal.

"I'm not a position to respond to a question like that," PDC executive director Patrick Quinton told WW before declining any further comment.

Peter Parisot, Mayor Sam Adams' economic development adviser, was equally tight-lipped.

WWeek 2015