Hope for Portland’s industrial land shortage

West Hayden Island: We can achieve balance for residents, our regional economy and the environment
By Brian M. Owendoff
Senior VP Capacity Commercial Group LLC

As of the July 2011 Bureau of Labor Statistics rankings, Portland had an unemployment rate of 9% and Oregon at 9.5%. The more comprehensive gauge of labor underutilization, known as the “U-6″, accounts for people who have stopped looking for work or who can’t find full-time jobs. Oregon’s U-6 is nearing 20%, which is fourth highest in the country, behind Nevada, California and Michigan. It’s far above the national 16.5 percent U-6 level.

When the Brookings Institution recently published Export Nation, greater Portland-Vancouver made a big showing: number two exporter among all U.S. metro regions, second-greatest five-year growth in exports, and number one in computer and electronics exports to China. Much of this distribution runs through the Port of Portland. The problem is that Greater Portland is rapidly running out of shovel ready industrial land. The City of Portland has a unique opportunity to expand our industrial and marine distribution land supply by annexing 800 acres on West Hayden Island to respond to market demand as we exit the Great Recession.

Unfortunately many in the conservation community would prefer to export living wage jobs out of our region to other parts of the country. Unemployment is a weapon of mass destruction. Employed Portlanders are becoming an endangered species.

West Hayden Island (“WHI”) was brought into the Urban Growth Boundary for the Portland metropolitan region in 1983 to serve marine industrial needs. The west side of Hayden Island is not currently included in the City of Portland boundaries. Annexation by the city is a requirement in order for urban services to be provided to the site.

The City of Portland is conducting a public process to explore annexation and creation of a long-range land use plan for West Hayden Island. West Hayden Island is an undeveloped 800+ acre site, located west of the BNSF Railroad.

In February 2009, Portland Mayor Adams convened a Community Working Group (“CWG”) to advise Portland City Council on the best mix of uses for West Hayden Island.

Over the past 18 months, the CWG reviewed consultant work and discussed their charge, which is to “advise City Council on how marine industrial, habitat and recreational uses might be reconciled on WHI; and if the CWG determines that a mix of uses is possible on WHI, to recommend a preferred concept plan.” This Collaborative planning is a good way to coordinate with efforts currently underway to plan for the Columbia River Crossing project and the east side of Hayden Island. It is also the best way to ensure that the island can be improved for open space and natural resource enhancement, while also providing a designated area for future marine related development. Reaching regional agreement on a balanced approach will allow planning, management and enhancement efforts to proceed.

This process will address annexation and zoning. It will not cover the full scope of a permitting process that would be necessary to prepare this land for an actual development.

If the City determines that multiple uses for this piece of land – making good use of both environmental and economic possibilities – are feasible, the plan district and annexation process would provide appropriate zoning and planning mechanisms for future marine, recreation and natural resource use.

The City of Portland’s economic opportunities analysis demonstrates that the city does not have an adequate supply of industrial land over the next 20 years. West Hayden Island development offers the opportunity for the City of Portland to capture living wage waterfront jobs and the revenue associated with them. Local waterfront industrial land is needed. There is an identified scarcity of waterfront industrial lands within the City of Portland per the city’s industrial land inventory and the City’s Draft Economic Opportunity Analysis. Additionally, the city’s “Portland Plan,” a required land use planning process that is currently being conducted, identifies the need for over 600 acres of industrial land within city limits. In my opinion the shortfall is in excess of 1,500 acres and we have less than a five-year supply of land.

A mix of uses on WHI is an environmentally and economically sound choice. The marine industrial development that could take place on the island could indeed, be part of the “green” businesses economic development strategy—a wind turbine transport facility, a location for the manufacture of streetcars, an import facility for electric cars. Hayden Island will most likely have a mix of uses including the development of habitat and green space.

Our local maritime multimodal freight network—especially barging—provides the most efficient and cleanest means of freight distribution. Trade, transportation and utility jobs combined account for 33 percent of Portland’s employment base. Maritime jobs are quality jobs. Average pay in the maritime industry is $46,000 per year. Moving freight by water and rail reduces the pressure to build costly new roads and helps cut the cost of maintaining the roads we already have.

The marine development of West Hayden Island will maximize the value of the new 43-foot channel navigation channel and is one of the few places left on the Columbia River that can develop new facilities specifically designed to take advantage of the new channel depth.

Overall the region’s maritime and aviation activities support 81,000 jobs, provide $3.5 billion in personal income for those workers, and generates $355 million in property taxes. One out of twelve jobs in our region is directly attributable to the Port of Portland. The business and industrial parks the Port has developed contribute to the region’s economic vitality as well. The activity of the more than 300 firms in the Port’s business parks generates 35,000 jobs and contributes more than $180 million in property taxes across the region.

The Port of Portland has a vital public mission to connect the region to the national and global marketplace. The Port generates 97 percent of its revenues from business transactions (only 3 percent of revenue comes from taxes), the success of its marine, aviation and real estate business lines depends on its ability to attract and retain customers locally, nationally and internationally. For every $1 collected in property taxes by the Port, generates $7.10 in property taxes through business transactions.

On a regular basis, I work with large office and industrial users on site searches from a local, regional and national basis. Many times Greater Portland is eliminated early from consideration due to lack of immediately available office and warehouse space and immediately buildable land. Land is the raw material needed for construction of built environment to accommodate job creation. Portland needs to grow its supply of industrial land, not reduce it.

The environmentalists don’t want to expand the urban growth boundary and won with minimal expansion (while our local economy loses). Now they want to restrict land already in UGB designated for jobs.

If a choice has to be made between relocating a pileated woodpecker or mitigating a cottonwood tree vs. creation of living wage jobs so that Portlanders can support their families, I choose human beings so they can support themselves through a job! 98% of Oregon is off limits for development, so millions of untouched areas are available for various plant and animal species. I am tired of Portland’s high unemployment rates. Employed Portlanders are becoming the endangered species.

The environmentalists are proposing that Oregon outsource good paying industrial jobs to Vancouver or worse yet, completely out of our region. How does exporting jobs out of Portland help Oregon when all tax revenue would go to Olympia or other states? WHI is one of the few locations that provides deep water for ships, access to rail and is in close proximity to existing infrastructure investments and homes for workers.

Our region needs a strong, balanced and prosperous economy that is sustainable. Our culture is to be one of the most sustainable regions in the world. Unfortunately our economic reality is not sustainable. Quality of life begins with a job. Unemployment is a weapon of mass destruction, and is a condition inconsistent with the sustainable life many Oregonians want to achieve.

If the City elects to restrict industrial marine development on WHI the result will be continued high unemployment for Portland, and will send a message loud and clear to potential employers that “Portland is NOT open for business”. Sensible sustainability, social equity and job creation are not mutually exclusive. With more taxpayers, there will be more taxes to fund social equity, arts and sustainability initiatives within the City.

I believe we can achieve a balance of uses on West Hayden Island for job creation and it can be done in such a way as to minimize impact to residents and the environment.

Brian M. Owendoff
NW Portland

Brian Owendoff has been involved in commercial real estate leasing, development and construction for approximately 20 years, and has lead teams with three of the largest full service national real estate companies in the United States. Brian is Senior Vice President of Capacity Commercial Real Estate LLC a firm that provides an array of advisory services to help owners, occupiers, developers and financial institutions make better real estate decisions. Brian is also a member of the West Hayden Island Advisory Committee and he can be reached at 503.201.9590 or [email protected].

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