Home / World Business
Tue, Oct 03, 2006 - Page 10 News List

Nike looks to future after legal battle

AP , BEAVERTON, OREGON

Can Nike Inc and the growing suburb of Beaverton ever be good neighbors again? After the "smoking gun"? After running up a legal bill of about US$1.1 million over a file less than a couple of dozen pages thick? And, oh, how about the judge finding the city in contempt?

The only Fortune 500 company in the state of Oregon, which also happens to be the world's largest athletic shoe and clothing manufacturer, is an island in unincorporated Washington County.

After a two-year legal battle with the city and a helpful exemption from the Oregon Legislature, the Nike headquarters campus will likely remain an island for at least 30 years -- despite urban growth that has filled in nearly every nook and cranny around it.

Mayor Rob Drake and Nike spokesman Vada Manager say they're ready to put the whole bitter affair behind them.

"We want to move forward and continue to be both a progressive employer and a contributor to the economy," Manager said.

"We certainly don't foresee any repercussions from this litigation," Manager sid.

But the question remains: How did it get to the point that Goliath had to ask a judge to go looking for David's slingshot?

Nike's campus and some nearby parcels encompass about 71 hectares and house about 5,600 employees. Before the campus opened in October 1990, the company operated out of a collection of buildings in Beaverton and the surrounding area.

There have been some run-ins over zoning issues, but nothing that has risen to the level of the feud over Beaverton's alleged plan to annex the campus. The city, just outside Portland, has about 83,000 residents.

Drake contends it was all a misunderstanding. The city considered annexation for Nike, but it never got past the discussion stage -- nothing more than a 19-page issue paper that was never going to see the light of day, he says.

But Nike says that issue paper -- nicknamed the "smoking gun" -- laid out city plans to forcibly annex the headquarters campus and make it pay about US$700,000 in taxes annually, while getting practically nothing in return.

Drake says the issue paper was in plain view, and all Nike had to do was look. Nike says it was hidden away during a useless search of more than 2.9 million pages of computer files.

Washington County Circuit Judge Gayle Nachtigal says the city should have just made it easy and handed it over, avoiding all the fuss -- and her contempt ruling against Beaverton last month.

"This famous smoking gun memo they keep referring to was in the end a document that our planner devised," Drake said.

He compared it to shopping for a Rolls Royce Silver Cloud.

"OK, for the joy of it, I might have test driven that Silver Cloud -- but no way in the end would it have been practical to buy it," Drake said.

Jackie Byers, research director for the National Association of Counties, says it should not have come as much of a surprise to Nike that Beaverton considered annexation -- that is what growing cities do, after all. And state laws generally encourage them to avoid leaving any islands behind.

"Generally, you have to take everything in your path even if you don't want it," Byers said. "They don't like leaving islands of unincorporated areas in the middle of an annexed area because it makes it difficult for a county to service that area."

And it works both ways. Sometimes neighborhoods or business owners request annexation for services or other benefits. She cited a story of a golf resort in Georgia that asked a city to annex its parking lot from a county where liquor sales were prohibited so the golf course could open a bar allowed by the city.

This story has been viewed 2139 times.
TOP top