• A city once soundly mocked by its southern neighbor goes to market. Now who's smiling?

Vancouver, Wash., the next-door neighbor that Portlanders love to scorn, is getting a measure of sweet revenge these days ÑÊand the affront is fraying tempers at Portland's City Hall.

A half-dozen businesses with offices or significant operations in Portland have either relocated or expanded over the past year in the city whose downtown center Ñ its skyline dotted with construction cranes ÑÊis undergoing something of a renaissance.

'Vancouver is open for business,' crowed Royce Pollard, the city's mayor, in his 2003 state of the city address last month.

Shiny new high-rise residential and office buildings are springing up in the core of a once run-down retail district. A convention center is in the works.

The Port of Vancouver's Columbia Gateway area, with its 1,000 acres of industrially zoned land, is demonstrating the allure of available industrial sites ÑÊthe one commodity that is painfully scarce in the Portland area.

The latest transplant: Plastics Northwest Inc., which specializes in injection molding of thermoplastic materials for the electronics industry among others, announced Jan. 30 that it was relocating from Clackamas, where it had operated for 13 years, to a plant in Vancouver. The company employs 25 people and expects to add five to 10 more.

In November, Boise Cascade Corp., the forest products company, moved 100 of its employees from Portland to Vancouver, and the legal department of Safeco Insurance Corp. moved there from Lake Oswego.

Two other companies, Harry's Fresh Foods and Portland Hospital Service Corp., scoped out Vancouver, but opted to stay put in Portland.

Harry's Chief Financial Officer Greg Murphy said what settled it for his company was Portland Development Commission's quality jobs program, which offered help for tenant improvements, and the purchase of a Northeast Airport Way site.

Still, some Portland officials are steamed about the raiding of corporate Portland Ñ particularly of Boise Cascade Ñ and it reportedly led to heated words between Mayor Vera Katz and Ed Pietz, the Vancouver developer who persuaded the company to move people into his glass and marble Park Tower office complex.

'I know Vera Katz was not happy with this,' said Lynn Lunde, a longtime associate of Pietz. 'She was concerned about losing one of the biggest accounts. But we have never influenced them.'

Katz said in a statement there was no fight, and she is not worried about losing business to Vancouver or about Pietz.

'If people from Portland want to move, what do I care?' said Pietz, the octogenarian developer who sold the Red Lion Hotel chain in 1983. 'Some of them ought to be moving over. I'm tired of our people driving over from Vancouver and getting taxed.'

Gerald Baugh, Vancouver's business development manager, said the city hasn't been competing with Portland but is simply building on its attributes.

If Pietz's plush Park Tower development, with its inverted pyramid waterfall, bald eagle statues and spiral glass staircases, is any indication, Vancouver is edging away from its backwater image. The three towers, totaling 450,000 square feet, are spread over 80 acres on Northeast Park Plaza

Drive. Construction soon will begin on a fourth tower at a nearby site.

PacTrust's Columbia Tech Center, with Chase Manhattan and Wacom Technology as tenants, and the Columbia Gateway project are both pulling in tenants, partly because rents are cheaper.

Prime office space rents for $21 per square foot in Vancouver, compared to Portland's $23.68 per foot.

'We've had a lot of things happen citywide,' Baugh said. 'As a city we haven't actively tried to entice anyone from Portland here. But the phone is ringing off the hook. People like to be on the front end of something new and positive. '

Capitalizing on Vancouver's virtues

Oregonians, together with the businesses some of them run, are drawn to 'America's Vancouver' ÑÊas the city now calls itself to differentiate it from the Canadian city of the same name Ñ by a lower cost of living, somewhat lower property taxes and the absence of a state income tax.

Vancouver city Commissioner Dan Conkovich said the city wants to retain Vancouverites while stimulating growth. 'We're interested in jobs for the community; we're after family-wage jobs,' he said.

Vancouver's attraction may spell trouble for Portland's economic recovery and compounds the impact of a growing litany of embarrassments.

Vestas Wind Systems North America announced in spring 2002 that it planned to build a Portland production facility only to put those plans on hold when the market for its products turned anemic.

Portland's only remaining Fortune 500 company was lost when Willamette Industries Inc. was taken over last year in a hostile buyout by Weyerhaeuser Co., based in Federal Way, Wash. (Nike Inc. is a Fortune 500 company but is based in Beaverton.)

Columbia Sportswear Co. decamped for Beaverton last year when a slow-moving city bureaucracy frustrated its designs on a Portland headquarters.

But Portland officials say they're not worried. They work in partnership with Vancouver, Hillsboro and other regional centers to lure new businesses, said Don Mazziotti, executive director of the Portland Development Commission.

'It doesn't bother anyone if a business relocates to somewhere else in the region,' he said. 'I'm happy they are still part of the local economy.'

Little land up for grabs

Mazziotti is concerned about the scarcity of industrial sites in the Portland metro area.

Clark County, Wash., by comparison, has the largest inventory of industrial land in the region. There are 500 ready-to-develop acres and another 5,000 available with a little redevelopment work.

Bart Phillips, president of the Columbia River Economic Development Council, an economic development agency for Clark County and Southwest Washington, said Oregon companies are calling them to look at sites. The council, which stepped up its recruitment two years ago before the economic downturn, 'doesn't target Portland,' he said.

For some firms, it's more beneficial to be on the Portland side, said Paul Breuer, senior vice president at the real estate brokerage firm Colliers International.

A higher-volume and lower-profit company might want to stay in Oregon because they tax profit, he said. If a company is lower volume relative to profit, it's much better off in Washington because they have a transaction tax.

'When we're sitting here and talking about a global economy, other than specific jobs that are lost, how can you get provincial about the border between Oregon and Washington?' Breuer said. 'I don't see Oregon and Washington doing much to compete with each other, given that land prices are similar.'

Contact Kristina Brenneman at This email address is being protected from spambots. You need JavaScript enabled to view it..

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