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Port may buy former LSI site

Former chipmaker's land to be marketed for industry
by: File photo Gresham Mayor Shane Bemis discusses the potential of the LSI site in 2008.

The Port of Portland wants to do for Gresham what it has previously accomplished for Troutdale by purchasing a large tract of land, getting it ready for new industries and creating as many as 2,700 new jobs.

The port's commission on Wednesday, Oct. 12, will consider a proposal to purchase 222 acres in Gresham for $26.5 million with plans to create a business park.

Those acres surround the ON Semiconductor plant off Northeast Glisan Street and would be purchased from LSI Logic, which formerly operated the plant now occupied by ON Semiconductor.

'I think it's probably one of the most significant things in terms of economic development to happen to East County in a long time,' said Gresham Mayor Shane Bemis. 'It will be nice to see it in the hands of an agency that shares the city's economic development interests. It should yield a high return in terms of jobs.'

In addition to buying the land, the port would enter into a 10-year agreement with the city of Gresham to jointly market the property, recruit industries and get it ready for potential industrial clients.

The port entered into a similar arrangement in Troutdale in 2004 when it purchased the 700-acre site of the former Reynolds aluminum plant. That property now is home to an 800-employee FedEx transportation hub and is preparing to accommodate additional industries.

According to a memo from the port's staff to the commission, the Gresham land acquisition fits with the port's long-term goals, which include bolstering the port's real estate portfolio while providing more industrial land to support traded sector business investment and job creation - particularly in manufacturing, warehouse, distribution and logistics.

'The port has developed a master plan for the business park and will develop lots of various sizes, with an emphasis on large industrial lots, to meet future market demand,' it reads.

Such lots would then be sold to trade sector companies that Gresham and the port want to attract.

Keith Leavitt, the port's general manager of business development and properties, said the Gresham site would be suitable for high-tech manufacturers or clean-tech companies. Already, the city of Gresham has aggressively marketed the property to solar manufacturers.

'Part of what is a great opportunity for us is to really collaborate with the city,' Leavitt said. 'They have such a sophisticated approach to economic development.'

Leavitt said the Gresham property is rare in the metropolitan area because it offers sizable tracts of land with good roads and other infrastructure.

'We are kind of at a point in the metro area where there are very few sites like this,' he said.

Located between Northeast Glisan Street to the north, Southeast Stark Street to the south, and between 223rd Avenue and 242nd Drive to the west and east, the property is close to the Troutdale and Portland International airports as well as Interstate 84.

Plus the land is mostly flat and its infrastructure is already in place, said Janet Young, Gresham's economic development director. 'It's essentially ready to go, ready to build on immediately,' she said.

That's because when LSI bought it in the mid-1990s, the chipmaker built a 500,000-square-foot plant with plans for more fabrication plants on its 300-acre campus.

Instead, in 2006 it sold the initial plant and 83 acres to ON Semiconductor, leaving vacant more than 200 acres of undeveloped land zoned for general industrial use.

Sester Farms Inc. leases about 178 acres of the land for its family-run ornamental tree farm. A one-year lease for 77 acres will be terminated when the sale is final, but another lease for the other 101 acres doesn't expire until January 2013.

Young said LSI tried to sell the property for years but wanted one buyer to purchase the entire acreage. That made it difficult for Gresham to attract the high-value industrial users - those in the solar-energy field, manufacturers and industrial professional services - it hoped to woo: Few buyers needed that much land, Bemis said.

Travis Stovall, executive director of the East Metro Economic Alliance, said between the port's investment in Troutdale and the pending Gresham land acquisition, 'That's a tremendous amount of their money that they've focused on East County.'

And that creates 'peripheral benefits' in terms of education, regional investments and even boosts to the local tax base to fund public safety and other city services.

'Economic development happens, and it raises the wealth of the community,' Stovall said.

According to the port's economic impact model, up to 2,700 direct jobs could be created at full site build-out - plus the number of indirect jobs that would be created in the surrounding community. Altogether, full development of the property would mean nearly 5,000 new jobs in Gresham, according to the model.

Publisher Mark Garber contributed to this story.