California-based solar component company XsunX is awaiting approval of state Business Energy Tax Credits before it launches production at the former Merix Corp. facility in Wood Village.
The state Department of Economic Development is reviewing the company’s financial viability as part of a required pre-certification process before tax credits can be issued. Oregon offers a tax credit of up to 50 percent or $20 million, whichever is less, through a five-year period for qualified solar and other renewable energy projects.
“It’s still being reviewed,” said Mark Zolton, spokesman for the Oregon Department of Economic Development. “We review applications under state statute, working with the Department of Energy. We consider and look at (things such as) the level of increased employment, the company’s financial viability” and other factors. “It’s just under a normal review.”
A startup green technology company based in Orange County, Calif., XsunX signed a sublease agreement in April 2008 with Forest Grove-based Merix for the 90,000-square-foot building on Northeast Halsey Street. The Wood Village City Council subsequently established an enterprise zone with the state to provide the company a three-year property tax abatement.
Tom Djokovich, XsunX chief executive officer, said then the company planned to start up in January 2009 with approximately 22 employees, with the potential to grow to as many as 160.
The global economic crisis, however, and a longer-than-expected process on the business tax credits put the brakes on that projection. Meanwhile, the company has vendors waiting and plans to get production moving as soon as possible – provided the credits are approved, said Chief Operating Officer Joe Grimes.
“From XsunX’s perspective, we’re optimistic the (tax credits) process will finally come to fruition with a positive resolution soon,” he said.
Wood Village Mayor Dave Fuller expressed frustration over the time it’s taking to process the tax credit application. The financial jolt the company could potentially provide in dark economic times makes it important to encourage a company that’s ready to move forward, he noted.
“They don’t meet their time commitments,” Fuller said of state agencies behind the tax credit process. “It’s very difficult for us to get through to them. I think (the company’s) made progress, but it’s very tough to meet a business plan when you can’t get other things going as you need to.”
Lou Torres, state Department of Energy spokesman, said it makes sense for the tax credit approval process to be deliberate. The economic growth tool has become increasingly popular as the state – driven by Gov. Ted Kulongoski and the Legislature – expanded credits beyond conservation to include renewable energy-based companies.
“The governor and Legislature are trying to promote renewable energy,” Torres said, noting that expanded 50 percent credits for solar and other renewable companies are attractive to many investors. “That really stimulated a significant amount of activity.
“If you’re going to give these large tax credits,” he continued. “What we need to have is more commitment from the businesses. If they said they’re going to hire 200 people, we want to make sure they do what they say, make sure they can meet payroll. We have to make sure the taxpayers’ end is held up.”
Grimes of XsunX praised Wood Village city officials for going out of their way to welcome the fledgling company to its business community.
“They’re outstanding,” he said, singling out Fuller and City Administrator Sheila Ritz and their work toward the enterprise zone. “We want to be a community business. That’s what we’re doing.”
By Shannon Wells, The Gresham Outlook – http://www.theoutlookonline.com/news/story.php?story_id=123552735024368400