Oregon’s Development Efforts Yield Positive Business Climate

Oregon Gov. Ted Kulongoski recently unveiled a new $6 million workforce development plan. The state’s workforce training fund will receive the initial funding from Oregon’s share of the federal Workforce Investment Act.

Business Expansion Journal

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The workforce funds are available to existing firms to meet their workforce training requirements, says Ron Fox, manager of the business development division, Oregon Economic and Community Development Department.

Fox notes that the governor also recently announced a workers’ compensation reduction. The workers’ compensation pure premium rate will remain flat this year, marking two years of stable rates after 12 consecutive years of rate reductions — a national record worth billions in cumulative cost savings to Oregon employers. Two state business fees used to pay for workers’ compensation and workplace-safety programs will also be reduced.

“Our rates are five times lower than comparable rates for a company in California, for instance,” Fox says.

Oregon officials are also set to launch the Oregon Certified Sites program in the first part of this year. Because of expansion activity in the state during the 1990s, “We lack an inventory of ready industrial sites and we want to re-establish a good inventory,” Fox says.

Recently, an assessment of available land was conducted in the Eugene and Springfield areas. “During the years we have fallen behind our goal of having a 20-year inventory of available land,” says Jack Roberts, executive director, Lane Metro Partnership, which markets the cities of Eugene and Springfield. “We are working with our local jurisdictions to move ahead.”

Roberts says that one of things that helped fuel Oregon’s economic expansion in the 1990s was the land-use system, which gave the state a higher degree of certainty about what could be done with the land. “That requires keeping your inventory up to date,” he says. “We want to be well-positioned in the economic recovery with plenty of land.”

In Gresham, the city was allowed to expand its urban growth boundary by 1,100 acres for new industrial development, which will include a 400-acre village center. “The urban growth boundary was put in place by the Portland metro government as a means to use every piece of land within the boundary to the best use, thus preventing urban sprawl and destruction of farming land,” says Shelly Parini, business and industry affairs manager, City of Gresham. “The reason we were able to expand our urban growth boundary was to increase our employment numbers. We will have enough land to do what we need to do and remain economic healthy.”

Parini says Oregon supports and develops incentives for these types of projects, and is big on sustainability. “The American Honda Motor Company’s northwest regional distribution and training facility, located in our Columbia Gorge Corporate Center, is an award winning “green” building,” she says.

Targets

Fox says that his department is currently identifying clusters of industries it believes are strong and successful in the state. He says officials are looking at the make up Oregon’s traded sector, which are companies with goods and services that compete in the global or domestic market that have an above-average concentration in the state. This is different from local retail or service sector businesses.

“We also looked at whether the wages were above average for that category across the country,” Fox says.

With that stated, Oregon’s strengths are in forest products, high tech and software, ag and food processing, apparel and sportswear and a small but fast-growing bioscience sector.

The Lane Metro Partnership’s traditional strengths are in forest products. “We are looking at the next level, the secondary wood products, as well as niche markets for ag and food processing,” Roberts says.

“We see food processing as an area of significant growth in high, value-added food processing,” Fox adds. A growing cluster in Gresham is food and beverage specialty companies. The area is home to Boyd Coffee Company, a Frito-Lay distribution center, WinCo Foods, and Teeny Foods, among others.

Another important industry cluster in the Eugene and Springfield areas is RV manufacturing, which features the second-largest concentration of manufacturers in the country. Roberts says the area also has a recreational and sporting-goods cluster. “We have an active outdoors population and a lot of things are a natural fit for us,” he says.

An emerging industry in Eugene and Springfield is life sciences, which is home to two large hospitals, both of which are expanding to offer much larger and sophisticated medical services. “We want to leverage this with other medical suppliers and services,” Roberts says.

Roberts also notes that Molecular Probes, a producer of dyes used in medical research to trace genes is located in the area. What’s more, the University of Oregon in Eugene is also conducting work in biotech and nanotech.

Workforce and Education

The Oregon Performance Center offers a statewide system of total quality training through partnering with the Oregon University System, Portland State University and Oregon State University.

Lane Community College was invaluable to the Eugene and Springfield area when it attracted a Sony CD manufacturing facility a decade ago. Recently, the college worked with Hynix Semiconductor, a microchip manufacturer, to train its workforce.

Sony was a source of support when the area was siting Hynix. “Sony told Hynix it would find a great workforce and the people they needed rather than having to ship them in,” Roberts says.

Parini says that Gresham recently built the Center for Advanced Learning, which is a charter school for its four area high schools, to give youth a jump start at manufacturing, engineering, allied health and technology courses. She says the center will prepare students for associate’s and bachelor’s degree programs, or to directly enter the workforce.

Parini says that while Gresham has attracted traditional manufacturing, the city is committed to growing a foundation around education principles and is developing a science and technology corridor to invest in the future. “We are doing this not only through our new Center for Advanced Learning and with our workforce training, but also developing a new university center so companies and their employees can earn advanced degrees,” she says.

Business Climate

Fox says his department is the infrastructure funding and support agency for the state. “The Oregon Legislature uses proceeds from the state’s lottery program to provide funds that are directed to provide the bonding for significant infrastructure improvements in communities to be competitive,” Fox says.

Fox notes that when it comes to taxes, companies in Oregon do not pay sales taxes, inventory taxes, worldwide unitary taxes, motor vehicle excise taxes, and no business and occupation taxes.

Fox says the last legislative session raised the state’s car registration fees by $30, to a total of $60 every two years for each vehicle. “We don’t have a sales tax so your only cost of ownership in the state is to register,” Fox says. “Using those fees, through a bonding mechanism, the state will be able to make about a $2 billion investment in road and bridge improvements in Oregon in the next 10 years. It will provide us with the capacity to meet businesses’ needs.”

Last year, Oregon Legislature also voted to extend its Enterprise Zone program, which features 51 zones. The zones provide a tax exemption for new plant and equipment from ad valorem taxes during construction and then for three to five years (decided at the local level). Longer term and other incentives are available as well.

Oregon is also home to four E-Commerce Zones, which are tax benefits for companies whose essential operations are via the Internet, or where telecom is important.

Oregon also offers full or partial tax exemptions for property associated with alternative energy systems and ethanol production facilities.

In terms of transportation access, Gresham is bisected by Interstate 84. “Most of our industrial property, except our high-tech campuses, are located along the major transportation corridor,” Parini says. “The majority of our users continue to site along the corridor because they depend on quality shipping options.”

There are seven Oregon airports that offer scheduled passenger service. The Eugene Airport offers seven flights to western state destinations. Oregon features more than 400 airports, heliports and other landing areas, 98 of which are publicly owned.

There are 23 Oregon port districts, some of which offer nearly 14,000 acres of land for industrial development and more than 800 acres for commercial purposes.

For complete details visit http://www.econ.state.or.us, http://www.lanemetro.com and http://www.ci.gresham.or.us/departments/cedd/bap/index.htm.