Harry & David will get a two-year reprieve to improve its declining employment numbers so it can remain in an enterprise zone and regain a tax break.

County gives Harry & David time

Harry & David will get a two-year reprieve to improve its declining employment numbers so it can remain in an enterprise zone and regain a tax break.

"Let's give those employers like Harry & David a breather period," said Ron Fox, of Southern Oregon Regional Economic Development, Inc.

The Medford City Council agreed Thursday, voting unanimously to give the mail order retailer two years to improve its employment numbers.

Under conditions of the Medford Urban Enterprise Zone it joined in 2006, Harry & David is supposed to employ at least 970 workers but currently has only 865.

Fox stressed the importance of the company to the city and the region, noting it has an average annual salary for its employees of $49,301, compared with the countywide average of $32,867.

The enterprise zone is within the urban growth boundary for the city and was created 12 years ago, Fox said.

Fox said Harry & David has invested more than $11 million since it became a part of the economic zone. The state requirement to belong to the zone is at least an $8 million investment.

The money was invested in new buildings and other improvements. Because Harry & David is part of the economic zone, it saves about $185,000 a year on property taxes based on the value of the improvements, Fox said.

However, for the next two years, Harry & David will be required to pay the full taxes. Once the corporation gets its employment numbers back up it will receive the tax break, Fox said.

In its January special session, the Legislature passed House Bill 3609 that granted extensions for enterprise zones that had at least $8 million in investment in communities that have been hardest hit by the recession.

The main qualifications for the extension include being located an area that has an unemployment rate 2 percentage points greater than the state average and two or more quarters where there has been a decline in non-farm employment.

"Obviously, the last couple of years have been very difficult for all our businesses," Fox said.

— By Damian Mann

Reach reporter Damian Mann at 776-4476, or e-mail dmann@mailtribune.com.