Harbor growth stalls

BACK STORY • Waterfront firms ache to expand, but the obstacles multiply

By Lee Van Der Voo

The Portland Tribune, Aug 28, 2007, Updated Oct 30, 2009 (16 Reader comments)

L.E. BASKOW / TRIBUNE PHOTOS

Sorted steel is hauled away for eventual loading onto a nearby cargo ship at Schnitzer Steel Industries’ operation on the waterfront. The metal scrap yard in St. Johns employs 160 people but without investment in future harbor development, that number’s likely to stagnate.

For 18 1/2 years, Schnitzer Steel Industries has been good to Tire Shop Dave. The work is steady, everybody leaves you alone and you’re left to make your own decisions.

“It’s like being good neighbors,” Dave said.

Such good neighbors, in fact, that last names are for outsiders.

So instead of being Dave Roub, on the job he is Tire Shop Dave. There also are Truck Shop Dave, Yard Dave and Driver Dave – just to keep the Daves straight.

These Daves hold down four of the 160 jobs at Schnitzer’s metal scrap yard in St. Johns, where old farm equipment, cars, trains, appliances and derelict barges are chopped into bits and sent overseas on cargo ships to be recycled into new products.

With wages between $11 and $21 an hour, benefits and an education stipend, recycling metals is a good living. Metal-related industries account for a significant chunk of the 40,000 jobs in the Portland Harbor.

They are some of the best-paying jobs for the two-thirds of the Portland-area work force that doesn’t have a college degree.

Without millions of dollars in public investment in the Portland Harbor, jobs like these will see little growth in the future, even as other economic sectors surge ahead.

A recent study by the Portland Business Alliance and state agencies shows the number of goods passing through Oregon needs to double by 2030 to keep pace with population growth, globalization and expanding markets. Yet harbor development lags.

While some say harbor business is better than ever – Ann Gardner, Schnitzer’s government relations manager, says the area is as busy as it’s been in 30 years – growth is hampered by crowded roads and rail lines, a lack of land and the uncertainty of the Superfund cleanup, a costly undertaking still years away and one that clouds prospects for new business.

“We’re trying to break the deadlock on a lot of those things,” said Steve Dotterrer, principal planner in Portland’s Planning Bureau, who oversees economics for the Working Harbor Reinvestment Strategy.

Through the strategy, slated for approval by the City Council by the end of the year, the city of Portland, the Portland Development Commission and the Port of Portland will coordinate 10 years of public investment in the harbor to keep industry thriving and related businesses in step with regional growth.

At the same time, environmental groups also are asking for new programs to rebuild habitat and make business greener. The policies, expected to be implemented through new zoning in the harbor, potentially could increase costs for businesses, though no estimates have been made.

So far, the Working Harbor Reinvestment Strategy has no exclusive funding but aims to tie existing funds from the three agencies in a way that maximizes value.

Without funding, the program would be unable to facilitate needed growth opportunities for businesses in the harbor.

No one is comfortable putting a firm figure on what a failure to further develop the Portland Harbor might cost in terms of dollars or unrealized commerce.

But figures produced by the Portland Business Alliance and state groups show road and rail congestion alone, absent a public fix, could reduce business growth in the Metro region by $1 billion a year and 6,500 jobs by 2025.

Brownfields need attention

To break the planning deadlock in the Portland Harbor, economists first must find its cause. Through a series of interviews that local planners have conducted with business leaders as part of early work in the Working Harbor Reinvestment Strategy, several key issues have emerged:

• Companies on 30 sites invested an estimated $450 million in capital projects between 2004 and the end of 2006, including new and upgraded buildings and equipment, and rail and dock facilities.

Another $70 million in projects are planned, considered a low estimate, yet there is no comparable public investment in infrastructure to support growth.

• A lack of federal investment in railroads and roads is keenly felt in the harbor, where congestion has slowed production schedules, raised costs for businesses and lowered efficiency.

• Much of the harbor’s vacant land is brownfields – contaminated dry land – and Portland lags behind other cities in its ability to clean them and get them back online for business.

• There is no identified public funding source for harbor improvements. The listing of the area’s section of the Willamette River as a Superfund site in 2000 – it is contaminated with PCBs, agrochemicals, DDT and other material – lowered property values to a degree that has sapped tax money earmarked for investment in the area.

• Superfund liability is a cloud over the working harbor, where legal warfare between polluters is so likely that even new businesses appear unable to protect themselves from future litigation.

Yet in spite of its problems, the Portland Harbor remains Oregon’s gateway for international and domestic trade, the state’s link to the global market. The Columbia and Willamette rivers intersect here, along with railroads, highways and the Olympic Pipeline carrying several kinds of fuel, making the harbor a key part of the regional economy.

Some of the region’s largest industries form a cluster here, including metal industries, distribution businesses and equipment manufacturers.

Their operations span industrial districts along the rivers: Northwest, which is located along U.S. Highway 30; Swan Island/Lower Albina, lining the northeast side of the Willamette River near the University of Portland; and Rivergate, on the peninsula at the convergence of the Willamette and Columbia rivers.

Megan Doern, spokeswoman for the Portland Business Alliance, puts the area’s position in Oregon’s marketplace in this context: “Everything that somebody purchases … at some point it’s freight that has to make its way into this system.”

Cleanup guidelines could help

According to a report produced from the interviews with business leaders, Portland officials predicted in 2004 that the harbor would need 1,900 additional acres for industry growth by 2025. Much of the vacant industrial land in the harbor today is unusable.

Roughly 920 acres are potential brownfields and 1,100 acres are in the flood plain or habitat lands, considered only partly buildable. Only 143 acres of industrial land have no identified constraints.

Last week, according to Dotterrer, representatives from the National Brownfield Association toured Portland in search of ways to speed brownfield cleanup.

Dotterrer said that while brownfields are a citywide issue, industrial brownfields provide a different challenge because the land often is put to a new use after cleanup.

“Part of the struggle here is to find solutions that solve the brownfield problems but keep the industry, because the industry is vital to our economic role,” he said.

In upcoming work, the Portland Planning Bureau intends to publish a harborwide portfolio of vacant and redevelopable sites, along with suggested designs for them.

It’s likely that public funds also will help push redevelopment forward.

Dee Burch, president of Advanced American Construction Inc., said that while public funding to spur brownfield redevelopment would be welcome, it is guidance and direction that prospective buyers need most.

Advanced American provides marine construction, diving and other industrial services to businesses in the harbor. The company recently redeveloped a brownfield site under the St. Johns Bridge but struggled with the lack of process offered throughout that accompanied buying contaminated land.

“What happens is you come in and there just aren’t a lot of examples or a road map of what needs to be done to get through it,” Burch said.

He said the two-year cleanup of mostly petroleum took only six months longer than a project on clean land. But Burch said buying contaminated property was a rough game.

Unlike other real estate ventures, in which a buyer can look to recent sale prices on similar properties, brownfield redevelopment is an open – and confusing – field.

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