Two reports say region needs many more industrial sites
Two new reports say there is a shortage of available industrial land in Portland and the region to attract large new employers or support major expansions.
The findings highlight the limits of state, regional and local economic development strategies that point to those types of employers who create high-paying jobs and bring new revenue into the region.
One report, by the consulting firm Group Mackenzie, identified only five industrial sites of 25 or more acres that could be developed for industrial uses within 180 days. Only one of the sites had 100 acres.
"Land is critical for attracting companies and creating the jobs that pay wages and generate taxes for public services, and right now we have a limited supply of market-ready industrial land," says Mark Clemons, Group Mackenzie's director of project development.
The report, "Land Availability Limited Options: An analysis of industrial land ready for future employers," was produced for a coalition that includes the Portland Business Alliance, the Oregon chapter of the Commercial Real Estate Development Association, the Port of Portland, Metro and Business Oregon, the state's economic development agency.
It was presented Wednesday morning at the alliance's monthly breakfast forum.
Another report is the latest draft of the economic opportunities analysis being prepared for Portland by the ECONorthwest consulting firm. It found a 790-acre shortage of land within the city to accommodate projected industrial growth during the next two decades.
Most of the projected shortage is in the Portland Harbor area.
The shortage is almost 200 acres more than reported in an earlier version of the draft of the economic opportunities analysis. The increase is the result of high employment projections and less land availability estimates in the Portland Harbor. The new version says that 580 acres of the 790-acre shortfall will be needed for airport facilities, rail yards and marine terminals to support exports.
The analysis is being prepared as part of the city's state-mandated effort to update its comprehensive land-use plan, commonly called the comp plan. There cannot be a shortfall in the final version, meaning the city must identify 790 more acres of available industrial land before the comp plan is completed.
A hearing is planned May 8 on the draft economic opportunities analysis by the Portland Planning and Sustainability Commission. The analysis must be approved by the City Council before it can be incorporated into the comp plan, which is expected to be adopted by the council within the next 18 months or so.
The 'traded sector'
Although most jobs in the region are created by small businesses, government economic development strategies emphasize the need to recruit large employers -- especially industrial manufacturers -- because they typically pay well and export their products, which brings new money into the region.
"This study starts from the assumption, embedded in the economic development policies of all local governments in the region, that the retention, expansion and relocation to the region of industrial sectors is something that the region desires," according to the draft analysis. "Industrial activity and employment is classified as export oriented ('traded sector') and is likely to have jobs at higher than average wages."
Despite the longstanding priority, government agencies and development interests have frequently disagreed on how much land is actually available for new and expanding industries.
State land-use laws require that Metro maintain a 20-year supply of buildable land -- including industrial land -- within the Portland-area urban growth boundary, which includes 25 cities within Metro's jurisdiction. But many business boosters have long argued that not all of the land classified as available for development isn't available for sale, at least not within the relatively short deadlines frequently set by large employers.
The Group Mackenzie study was the first comprehensive effort to physically assess the region's available industrial land. It started with two assumptions culled from economic development professionals. First, that large industrial employers need a minimum of 25 acres for new development or significantly expanded operations. And second, that the employers must be able to break ground within 180 days.
The study initially identified nine Portland-area sites that met both of those requirements. Four of them were eliminated for various reasons after closer examination, however, including ownership and location issues. That left just five sites, a relatively low number to offer a prospective large employer.
"Given our region's lagging wages and incomes, it should be our goal to increase our opportunities for success by ensuring that we have a variety of development ready sites," according to the Group Mackenzie report.
The report identified 47 other sites that could be ready after the 180-day minimum. Sixteen could be ready within seven to 30 months, while 31 could be ready within more than 30 months.
However, the report noted that many, if not most, of the sites face challenges, including contamination that must be cleaned up or a lack of infrastructure, such as roads and sewer service. Without both public and private funds to overcome such challenges, these sites might never be developed, the report says.
Economic benefit to Vancouver?
The report noted that most of the 72 sites with potential for large industrial development are in only two areas within the region: the Columbia Corridor of Multnomah County and around Hillsboro in Washington County.
One of the largest sites is the former Alcoa-Reynolds aluminum plant in Troutdale, home to a new Fed-Ex regional distribution center.
This distribution "limits the potential to more broadly distribute job opportunities with the Portland-metropolitan region," according to the consultant's report.
That conclusion is consistent with the draft economic opportunities analysis' finding that Portland faces a 790-acre industrial land shortfall. Most of Portland is already developed. Growing residential and commercial development along the Willamette River downtown has already displaced much of the earlier industrial businesses that were previously located there.
As a result, most industrial properties are in what is called the North Reach of the Portland Harbor, according to the analysis. Few of them are vacant, and most of those face development challenges, including pollution that must first be cleaned up or restricted access because of surrounding developments.
Mayor Sam Adams has proposed that 300 acres on West Hayden Island owned by the Port of Portland be developed for industrial purposes. For that to occur, the City Council would have to annex the site and agree to provide municipal-level services.
Although the idea is supported by the port, it is opposed by environmentalists, who want to preserve the site for wildlife.
The draft analysis notes that about 750 acres of vacant land is available for industrial development at the Port of Vancouver, Wash., on the north side of the Columbia River. Although the report says Portland and Vancouver are both part of the same regional economy, it notes there are winners and losers in such a shift.
"At a local level, if demand for public marine terminals is shifted from Portland to Vancouver, the city of Portland would lose out on high-paying industrial jobs (and some of the residents that fill those jobs), which would have a detrimental effect on the Portland economy and a positive impact on Vancouver's," according to the analysis.