Tribal money fuels Perpetua expansion

2011-05-10T05:30:00Z Tribal money fuels Perpetua expansionBy BENNETT HALL, Corvallis Gazette-Times Corvallis Gazette Times

Corvallis tech firm sells controlling stake to Coquille Indians, plans North Bend plant

A Corvallis high-tech company has cut a deal it says will allow it to expand its local operations while building a new plant near Coos Bay on Oregon's south coast.

On Monday, Perpetua Power Source Technologies announced a partnership with the Coquille Indian Tribe that will pay for a new assembly and test facility on tribal land in North Bend as well as expanded manufacturing capacity at the company's Corvallis plant.

In exchange, the tribe will get an anchor tenant for its waterfront industrial park, some much-needed local jobs and what both parties describe as "a controlling interest" in Perpetua.

The plant will be built at Ko-Kwel Wharf, a 50-acre industrial park the tribe has been trying to develop adjacent to The Mill, its successful casino and hotel complex. The former lumber mill site was once designated as a foreign trade zone, and the partners are hoping to reactivate that status.

Many details of the arrangement remained shrouded in secrecy Monday. Neither party would reveal the amount of the tribe's investment, the size of the new plant or the estimated cost to build it.

But Perpetua CEO Nick Fowler said partnering with the tribe could give his company access to government loans and procurement contracts set aside for minorities. In addition, the location has ready access to rail and ocean transportation, while the trade zone would eliminate import tariffs on raw materials and could provide some tax advantages.

"This will enable us to create a manufacturing strategy that keeps production here in Oregon," Fowler said.

"We'll do our final assembly in North Bend in that foreign trade zone, but we'll do all of our semiconductor manufacturing in Corvallis. It's a marriage of the best of both worlds."

Perpetua makes a line of energy-harvesting devices that use exotic alloys to generate electrical current from minor temperature fluctuations. Applications range from remote sensors and industrial process control units to medical monitors and wearable locator beacons.

Fowler, who sits on the city's Economic Development Commission, testified during last year's successful push to expand Corvallis' enterprise zone to include the Sunset Research Park, where Perpetua is located. At the time, he said the zone's property tax deferments might enable the firm to expand in place rather than outsource production overseas to lower costs. (The Economic Development Commission, which was launched earlier this year, had no role in the votes to expand the zone; those decisions were made by the City Council and Board of County Commissioners.)

With the tribe's investment, Fowler said, Perpetua will be able to purchase high-tech tooling and manufacturing equipment to expand production capacity in Corvallis. He said the company would be adding jobs to handle the additional work, but declined to say how many for competitive reasons.

"Our headquarters will remain in Corvallis, and we'll continue to grow our research and development functions, our semiconductor production and our sales and marketing functions," Fowler said.

"It really is using the best of what the valley has and the best of what the coast has."

Corvallis Mayor Julie Manning said she expects Perpetua will maintain "an important presence" locally and declined to second-guess the company's decision to build a plant elsewhere.

"Every business leader has to make decisions they believe are in the best interests of their company," Manning said.

"Corvallis as a city has to continue to be as competitive and responsive as we can to business and concerns about the local business climate."

Tribal leaders are hoping Perpetua's arrival will attract more tenants to the industrial park at Ko-Kwel Wharf. The tribe purchased the former Weyerhaeuser mill site in 2004 and began cleaning it up, but the project has been slow to get off the ground.

"We started some development work in 2005, but the recession slowed us down," said Ray Doering, the tribe's communications manager. "Now we're ready to get going again."

Even more important, perhaps, they expect the North Bend plant to create about 30 family-wage assembly and testing jobs in a community that's been hard-hit by declining employment in the timber and fishing industries.

"We need some manufacturing jobs to create some value down here," said Calvin Mukumoto, chairman and CEO of the Mith-ih-kwuh Economic Development Corp., the tribal entity that now owns a controlling stake in Perpetua.

That said, he added that the tribe has no plans to move the whole operation to the south coast.

"I don't think Corvallis should be worried that we're going to suck all the jobs down here," Mukumoto said. "The great thing is that Perpetua continues to be a corporation in Oregon."

Contact Bennett Hall at 541-758-9529 or bennett.hall@gazettetimes.com.

 

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