Springfield gives break to Symantec.

Byline: SHERRI BURI McDONALD The Register-Guard

SPRINGFIELD - The Springfield City Council on Monday handed Symantec Corp. an early Christmas present: a four-year property tax break worth an estimated $1.8 million that the city was under no legal obligation to give.

By cutting staff at its technical service center in the Gateway area earlier this year, Symantec became ineligible for enterprise zone tax waivers under an agreement approved last year by the city and Lane County, joint sponsors of Springfield's enterprise zone. But the council decided Monday to award the company most of the tax breaks anyway and lowered the jobs tally that Symantec must meet.

Councilors approved the new arrangement on a 4-to-1 vote with no debate. Councilor Dave Ralston cast the sole dissenting vote, also without comment. Councilor Anne Ballew was absent.

The move will allow the California-based security software maker to qualify for tax waivers in each of the next four years by having an average of 525 full-time employees at its Springfield center, instead of the previously agreed 617 workers.

The matter now will go to the Lane County Board of Commissioners, who have yet to schedule a date to consider the request.

Symantec's Springfield site currently employs 514 full-time workers and 30 to 35 temporaries. The temporary workers may count toward the employment minimum if the temporaries work more than 32 hours a week and have worked at Symantec for a year, said John Tamulonis, Springfield's economic development manager.

Symantec is continuing to hire information technology workers as vacancies occur and consolidate that department in Springfield. Chris Monnette, head of Symantec's local operation, said the company is confident it can meet the 525-employee minimum.

"We built the building for 1,000 (workers), so when we have it at half occupancy, we're not maximizing that investment," he said.

Monnette said the tax waiver will help the company continue to grow in Springfield.

In October 2001, Symantec applied for and was granted five years of enterprise zone property tax waivers, worth an estimated $2.7 million.

But Symantec made some strategic decisions that changed its Springfield head count, throwing its enterprise zone eligibility into question. In late July, Symantec contracted out the work of 270 retail customer service employees and laid off those employees, reducing the head count at the Springfield facility to 460 full-time workers.

Figuring that its employment level would be too low to qualify for an enterprise zone waiver under the initial agreement for the tax year that ends next June, Symantec didn't file earlier this year for the tax break with the county assessor's office, Monnette said. As a result, the company paid about $500,000 in property taxes on its $36 million facility and the 14 acres it sits on.

Later, Symantec's real estate specialists asked the city whether the company could qualify for future waivers, which led to discussions resulting in the revised agreement that the council approved Monday, Monnette and Tamulonis said.

The council's actions are legal. State law allows enterprise zone sponsors to lower the employment minimum and negotiate other terms if a company's building and equipment cost more than $25 million. Symantec's 190,000-square-foot facility cost $36 million to build.

This is the second time this year that local enterprise zone sponsors have made tax waiver concessions to employers unable to meet minimum employment levels. In March, the Eugene City Council narrowly approved a request by Hynix to keep its tax break on its west Eugene computer chip plant while lowering the employment level there.

Under the new agreement, if Symantec maintains the job levels it promises, then it will be waived from $1.8 million in property taxes over the next four years. However, the company would pay almost $800,000 through payments in lieu of taxes to local governments.

Springfield councilors cast their votes with little discussion and no debate. In response to a question from Councilor Christine Lundberg, Tamulonis explained that the new arrangement will channel more money to Springfield in each of the next four years than if Symantec wasn't granted the tax break. That's because Symantec wouldn't be paying property taxes shared by other taxing districts, such as the Eugene School District, whose boundaries include Symantec's property. Instead, Symantec will make direct in-lieu-of-tax payments just to Springfield and to Lane County.

Symantec will become ineligible for tax waivers if its average monthly full-time employment in Springfield slips below 460 at any time before Dec. 31, 2007.

Under the deal, Symantec will still make some payments in lieu of taxes in the 2003-04 and 2004-05 tax years to Springfield and Lane County. The amount varies depending on whether Symantec attains an annual average of 525 full-time employees. If it meets that requirement, Symantec will pay $131,250 to the city of Springfield and $32,812 to Lane County in each of the two tax years.

If Symantec fails to meet the 525-worker minimum, the company will make an in-lieu-of-taxes payment equal to the entire amount of the property tax waiver for that year.

Symantec would be subject to the same conditions in tax years 2005-6 and 2006-7 that the zone sponsors approved a year ago. Symantec must pay Springfield $175,000 a year and Lane County $43,750 a year to offset the costs of police, fire, safety and other services for Symantec's Springfield site. Symantec also must pay $25,000 to the Willamalane Parks District by next July to help fund a skate park.

In addition, Symantec agrees during the exemption period to pay average salary and benefits to new employees of at least $40,832, which is 150 percent of Lane County's prevailing annual wage at the time Symantec first applied for the enterprise zone.

Symantec posted a loss of $28 million on sales of $1.07 billion in the fiscal year that ended March 29.

The loss for the year reflects one-time charges related to acquiring several other companies, the company said.

The loss shouldn't be viewed negatively, Monnette said. "Our business is doing great."