Genentech (RHHBY) Tax Appeal Hurts Oregon Town
2/22/2013 7:34:22 AM
One of Hillsboro's most valuable properties is no longer as valuable after an unexpected and significant property tax revision, and the city's general fund will take a hit because of it. Genentech, the South San Francisco-based biotechnology company with a Hillsboro facility, successfully appealed its property taxes. The decision between the company and the Oregon Department of Revenue last August resulted in a $162.6 million reduction in assessed value, according to Hillsboro Finance Director Suzanne Linneen. "This is why we have reserves," Linneen said. "This is exactly why, so we don't overreact and we don't do anything in haste." The city tries to keep 15 percent of its budget in reserves, but that's unlikely this coming year. Hillsboro has roughly $10.2 million set aside, according to a budget snapshot, which is about 11 percent. The revision bumped Genentech from the second highest property taxpayer in the city to fifth, behind Intel, Verizon Northwest, Pacific Realty Associates and Portland General Electric. Genentech opened its Northwest Evergreen Road and Brookwood Parkway facility in April 2010. At the city's first Budget Committee meeting of the year on Wednesday, Linneen said staff first learned of the revised value and its estimated $850,000 hit to the city's general fund in late September or early October. Genentech's plunge in property taxes wasn't the only bad news the city got Wednesday.
GS.61GENE122-02.jpg View full size Hillsboro budgeted for a four percent growth in assessed value for the 2012-2013 fiscal year. In reality, the growth was 0.3 percent, an "unheard of" number for Hillsboro, Linneen said. The city already anticipated a $300,000 shortfall last May, but the Genentech decision and decreases in value for other major Washington County businesses -- Frontier Communications, Intel, and SolarWorld USA --adds another $2 million in differences. "We didn't hit it," Linneen said of the assessed value estimate on Wednesday. "We didn't hit it by a lot."