Salt and Straw expands in the Central Eastside
Iconic Portland-based ice cream artisan Salt & Straw has plans to build out a new manufacturing kitchen in the Central Eastside Industrial District, with $2 million in help from the Portland Development Commission.
Kim Malek, co-founder of Salt & Straw, told the Business Tribune being involved with the PDC is one of her favorite parts of the expansion.
"When I was very first starting Salt & Straw back in 2011, we were $40,000 short to be able to open on Alberta Street," Malek said. "This whole thing is coming full circle with the PDC because at that time, I applied for a loan from the PDC and they gave me a loan to get that store open."
She said the PDC spent time with her as a new entrepreneur going through her business plan and getting everything in order, even though nobody was loaning any money in 2011.
"Now, here we are at the next phase of our growth, and here they are partnering with us," Malek said. "It's really great to work with them again in this second phase. You don't get to say very often the City has been there to invest in you, and they've been there time and time again."
The City Council unanimously approved the PDC's funding for Salt & Straw's facility to become part of Portland's eastside Enterprise Zone (E Zone), a statewide economy development program that partners with the PDC.
Salt & Straw is investing about $2 million total into the building, mainly for "kitchen stuff, to make the best ice cream and create a lovely working environment for our team," she said.
The new facility will be in the CEID (Central Eastside Industrial District) along Southeast Second Avenue. The building is 28,000 square feet, but it's so large that Malek plans to sublease about 9,000 square feet out — "Hopefully to someone exciting," she said.
Salt & Straw's current kitchen is 3,500 square feet, making ice cream for the four Portland shops.
"We've been looking and looking and wanted to stay within the city of Portland, hoping to stay in Southeast because that's where we are currently with our kitchen," Malek said. "It took a little more than two years to find something and we were able to secure a lease on this space, which is bigger than we needed but we're excited we're going to be able to make it work."
The E Zone
"We initially heard through a couple other entrepreneur food manufacturing brethren who were part of the E Zone," Malek said. "Olympic Provisions was part of the E Zone and we'd heard there are tax credits available if you're looking for innovative ways to invest in the city. We thought, what a great way to partner with the City to get funding for these programs."
The E Zone provides a tax abatement for companies who manufacture in the inner city, so as part of qualifying for the tax program with the PDC Salt & Straw is putting together two programs. The tax credits are worth about $150,000.
"One is a food entrepreneur program where we'll be working with two or three new, artisan manufacturers in the City of Portland every year to help them get off the ground," Malek said. "We will not only become one of their biggest customers by buying their products — let's say if a honey maker or chocolate maker or tea blender, we'll commit to buying a certain amount of product from them so they can have a good first customer."
The entrepreneur program also includes a specially developed curriculum to help the startups get going including resources, food safety, HR, marketing and branding.
"We had so many people help us and we've been able to work with so many new companies that are coming up," Malek said.
Because Salt & Straw grew to such a big company, its other artisan suppliers were able to get bank backing by showing their largest customer, orders and need for new equipment or a larger space or more employees.
"Through this partnership with artisans that we currently work with, we've already organically seen this happen and we thought we could, in a more organized way, support companies we're working with," Malek said. "It's going to be a great way to use our growing company to benefit the community of Portland."
The second program is a progressive hiring program.
"Last year we put everyone in our company through about 40 hours of training including anything from food safety, hospitality, leadership, marketing and events," Malek said. "We have a pretty extensive training program."
They're hiring through SE Works, a community based workforce development organization.
"Our dream was to start to work with different community organizations who are trying to bring different populations back to work, and basically giving them our training program so we could invest in helping them get people ready for work," Malek said. "The City just so happened to be working on some programs we were able to qualify to be a part of — the E Zone, by executing this program. It's been a long-time goal."
Why Portland's CEID
"This little core area of Southeast Portland is something interesting," Malek said. "Directly across the street from us is Olympia Provisions head office and manufacturing facility; about two blocks away is the New Seasons Central Kitchen; and three or four blocks away is the new Stumptown Roasting facility. It's kind of becoming this great little manufacturing hub in the inner city."
With the new facility, Salt & Straw intends to add several dozen new positions, as part of the E Zone requirement.
"We're going to be paying a minimum of $15 an hour. We also offer health insurance to anybody who works over 20 hours a week and employees pay $30 a pay period: the company subsidizes it quite substantially," Malek said. "We offer paid maternity and paternity leave for three months, disability insurance and employee assistance programs."
Don't worry — Salt & Straw will still be made in small batches.
"We are moving our exact ice cream makers over to this new facility," Malek said. "We make our ice cream five gallons at a time and we hand pack every single pipe — in fact, if you turn it over, they sign the bottom and you can see who put each brownie and handmade caramel in."
Salt & Straw is not changing the way it manufactures, but will be able to make more ice cream.
"We're really excited to stay to have this opportunity to stay within the inner core of Portland," Malek said. "I move back to Portland to open this company. We feel very grateful for the investment the community of Portland has made in our success. We're grateful to make this investment back and hope to be a really sustainable company to the city."
SALT & STRAW'S SWEET COMMITMENTS