Greg Broderick, Broker
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Bend, Oregon 97702
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Bend Oregon Real Estate / Homes
Job growth or tough times ahead?
By David Fisher / The Bulletin
Published: April 29. 2007 5:00AM PST
What will Bend's economic future look like?
It'll be bigger, with more than half again as many workers as it holds now, according to a study commissioned by city planners to determine how much land the city needs to annex over the next 20 years to accommodate current and future businesses.
It will grow more white-collar than blue-collar jobs.
More high-tech than low.
And it will be busier - a lot busier - in the tourism, retail, restaurant, hotel, professional service and medical fields.
The report, written by the Portland-based Leland Consulting Group and released on the city's Web site last week, quickly gets down to the bottom line - the city will need at least 510 new acres of commercially zoned space and nearly all of the projected 494 acres of industrial land on the city-owned Juniper Ridge site to make room for its potential job growth over the next 20 years.
The city commissioned the report to help it draw its new urban growth boundary, which is expected to expand by several thousand acres.
Bend has already built out to the edge of its current boundaries, which were last expanded more than 25 years ago. But in order to expand, the state requires a series of studies to establish the need for new urban land to accommodate housing and businesses.
The Leland report, also known as an Economic Opportunities Analysis, is the study that state planning rules require to help the city figure out how much land it will need over the next 20 years for expected growth in commerce and industry.
Among other things, the Leland study concludes that the city will need:
* Office space for nearly 13,000 new professional and service workers.
* Storefront space for 5,400 new retail employees.
* Hotels, restaurants and accommodation spaces for nearly 6,000 new leisure and hospitality employees.
* Industrial space for 3,350 new blue-collar and white-collar workers.
On top of that, the city could need 2,100 more construction workers than it has now to build enough commercial space and housing to hold all that growth.
If, that is, the city grows the way its consultants and their sources think it will.
One of the region's business recruiters has his doubts.
Why?
Bend already has waited so long to create new, usable industrial land that soaring land prices - fueled by the shortage - and physical constraints are putting a crimp on growth, Roger Lee, executive director of Economic Development for Central Oregon, said Thursday.
The problem has reached the point where a significant number of existing industrial businesses - everything from cabinetmakers to tarp manufacturers - either are looking to other cities in Central Oregon for expansion or they are moving out of the area altogether, Lee said.
The city has said it wants to attract a collection of clean, high-paying industries, according to the Leland report, including more information technology companies, aerospace and aviation manufacturers, renewable energy companies, higher education and health care.
But if current trends in the city's existing industrial base continue to slide long enough, Lee said, it could give recruiters another potential handicap to go along with the city's relatively high land prices and high housing prices - a shortage of basic suppliers to do everything from industrial-grade recycling to cleaning uniforms to keeping the pop machines filled.
In other words, the city, from Lee's perspective, is "at a crossroads."
"I wouldn't say we are looking at a mass migration," Lee said, "but I would say you are going to see more and more of that in the making - a growing wave of companies that physically can't find a place to be. And, cost-wise, it doesn't really make sense to them to stay."
The Leland report, meanwhile, makes it clear that it's not trying to determine for the city where or how fast it should grow. It's just trying to help the city's planners comply with state law.
According to the state's planning rules, cities have to produce an analysis of their expected economic growth, including job growth and the growth of businesses in certain sectors, before they can expand their boundaries. The intent is to make sure every city has space available to hold commercial and industrial growth as well as space to build more housing. Ideally, the three factors are supposed to balance out, with enough businesses in every town to employ and service its residential neighborhoods, and vice versa.
It hasn't worked out that way so far in Central Oregon.
Historically, Bend has been the center of the region's economy, providing more jobs than its own population needs, according to the study.
The evidence, traditionally, has been on the highways. According to data from the U.S. Census Bureau and the Oregon Employment Department, about 24.4 percent of Jefferson County's population commuted to another county to work in 2000, compared with 19.6 percent in Crook County and only 5.8 percent in Deschutes County, where Bend was the biggest draw.
The Leland study assumes that economic trends will continue to favor Bend as the region's "Central City."
It notes that Bend is the region's medical center, with St. Charles Medical Center at its core. It's also a hub for federal and state government offices and the seat of Deschutes County government. It has the largest newspaper and several of the "largest and most influential" companies, including Microsemi Corp., Idatech, Jeld-Wen Windows and Doors, Columbia Aircraft Manufacturing Corp., Nosler Inc. and TRG iSKY.
Along with its business base, the city is the region's "social and cultural center," the report says, noting that its concerts, festivals, restaurants, galleries and natural surroundings can "prove especially important in some industry sectors, such as IT (information technology), in which well-paid managers and their employees can choose between communities, and land and building costs play a less significant factor in business success."
Relying on Oregon Employment Department figures and projections for much of its data, the Leland study assumes that Bend's job growth pattern will roughly follow Central Oregon's in most economic sectors. But it adjusted most of the state's growth rate projections upward by a factor of 40 percent to account for Bend's higher population growth and tweaked growth projections in some job categories, including tourism and the professional services, upward by 10 percent to account for the idea that the city's leaders actively want to recruit businesses in those fields.
Ups and downs / Bend, Oregon
The result: a report that shows some job categories, such as information technology, graphic arts, professional services, medical services and hospitality rising rapidly through 2027, while jobs in wood mills and other basic manufacturing plants decline or grow much more slowly.
Some business observers, though, doubt the city is in for any major shift away from basic industries. Unless, of course, it becomes too difficult for them to operate here.
Even though large chunks of industrial land have been transformed, like the Old Mill District, into commercial or retail zones over the past 15 years, the city's mix of usable industrial and commercial space has remained remarkably constant, said Erich Schultz, Compass Commercial Real Estate Services broker and partner.
According to Compass' tracking numbers, about 64 percent of the city's 3.15 million square feet of leased or leasable building space was industrial at the end of 2000, Schultz said. The city's total business space grew rapidly by the end of 2006, to 4.91 million square feet, Schultz noted, but 64.2 percent remained industrial.
Meanwhile, there are few, if any, large parcels available for business development, outside of Juniper Ridge. And since the city has lost most, if not all, of the pricing advantages it used to have on industrial and commercial lands, as well as on work force housing prices, most of the lease deals that have been made recently have involved businesses that are already in the area, Schultz noted.
"I think people will continue to come to Central Oregon, simply because the quality of life is so good," Schultz said. "The question is, Are we going to see the big companies like the ones the city wants to attract to Juniper Ridge? What the answer to that is, I don't know."
Whether it will be able to hang on to the businesses it already has is another question, EDCO's Lee said. But the city, and its planners, likely won't get much warning before they decide to pull the plug on Bend as a business location, if that's the direction they decide to go.
"It's not like these companies are going to say it's a crisis," Lee said. "They're not going to show up at a public meeting to announce it; they're simply going to do it. So it's the kind of thing that just quietly happens, and one day you wake up and say, 'How did we get here?'"
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