Just days before Oregon Gov. John Kitzhaber announced Nike wanted to expand its operations in Oregon, a lawyer for the sporting goods giant made clear just how high the stakes were, according to one of several emails the state released this week.
“If we cannot complete the Agreement and the legislation consistent with the company’s immediate need for facilities, NIKE will continue to consider options outside of Oregon,” attorney William F. Gary, of the law firm Harrang, Long, Gary, Rudnick, wrote in a Dec. 6 email to Keith Kutler, a state Department of Justice attorney.
The series of emails between attorneys for the Department of Justice and Nike reflected the detail and haste that unfolded before Kitzhaber held a news conference Dec. 10, summoning legislators to Salem for a special session. The session was needed to provide tax certainty for the company in exchange for its promise of a capital project valued at $150 million or more and the addition of at least 500 jobs.
The governor and Nike chief executive Mark Parker signed the agreement in late December.
The Justice Department released the emails in response to a public records request from The Oregonian and other media for communication between the state Department of Justice and Nike regarding “Project Impact,” the code word for the company’s project site selection.
Gary’s Dec. 6 email also emphasizes the immediate desire to expand Nike’s footprint because it needs more space for workers.
“The company’s existing facilities are currently operating at 102% of capacity,” he wrote.
While nearly all of Nike’s footwear, apparel and other products are manufactured outside the United States, its headquarters near Beaverton is the site for several administrative functions: management, research, design, development, marketing, and finance, among others.
In the email, Gary also says the company is willing to increase the minimum investment amount from $100 million to $150 million. There did not appear to be any other email in the several exchanged between late November and early December providing explanation for upping the ante.
But Gary notes Nike’s construction record to date in Oregon.
“NIKE, Inc. already has spent well over $500,000,000 on capital investments in Oregon and it is proposing to add at least $150 million more,” he writes in the email. In addition to 22 buildings on its 213-acre campus, Nike also owns or leases buildings in Beaverton office parks near the campus.
Gary’s note to the justice department attorney also was sent to a fellow attorney, Sharon Rudnick, and to Dave Frohnmayer, the former University of Oregon president and long-time friend of Nike co-founder and board president Phil Knight. Frohnmayer, also an attorney, and Rudnick are partners in Harrang, Long, Gary, Rudnick.
Nike spokeswoman Mary Remuzzi said Gary’s remarks about Nike’s tight quarters and capital spending level are accurate, declining further comment.
She also declined to comment about what other locations the company was considering besides those in Washington and Multnomah counties. A Vancouver city official’s email has indicated the company was looking there as well as Austin, Texas.