Local groups and Metro are studying the availability of large industrial sites in the Portland region. The Metro Council won't be looking at urban growth boundary expansions more frequently than its current 5-year cycle, after a concept called industrial replenishment proved unworkable.
The concept, introduced in 2010, called for the Metro Council to expand the urban growth boundary within a year if a large lot industrial site had been taken off the market, so that major employers would have an inventory of land to look at for factories and warehouses.
But the logistics of putting the plan into place, along with a thorough look at the inventory of the region's industrial land, showed that the system wouldn't have a tremendous benefit, said acting Metro planning director John Williams.
"When we started talking about what the mechanism (for replenishment) might be, it got really complicated, really fast," he said. That was particularly true in terms of site specifics – would a large lot in Gresham have to be replaced by another one in Gresham, or could you replace it with one in Troutdale or Tualatin or Hillsboro? If a marine terminal was sold, Williams said, would Metro have to make another marine terminal available within the growth boundary?
That was a concern of Hillsboro planning director Pat Ribellia, who emphasized in an interview that different employment sectors have different kinds of needs.
With the next urban growth boundary review only a few years away, he said, it's a good time to see if the region can successfully get industrial sites already in the boundary closer to shovel-readiness.
"Let's give it a try – we'd like to see that outcome," Ribellia said. "Can we get these shovel-ready, and will new companies, based on getting them shovel-ready, want to locate there? If that's true, great. If not, when we go back to the next UGB round, perhaps the focus should be on and driven by a replenishment system."
The replenishment concept had other problems besides sub-market analysis. What would happen, Williams said, if a landowner temporarily took a site off the market? Would that force Metro to expand the urban growth boundary to make up for it?
"There were a lot of mechanism things that made people think this could be a lot of effort spent for not very much reward, when what we should be talking about is taking advantage of those sites that exist and solving the problems on them," Williams said.
Council gets industrial lands report
The scope of the region's industrial lands inventory became clear in late November, when the Metro Council was briefed on a project to make an inventory of the region's employment sites. The inventory was developed with the Port of Portland, the Portland Business Alliance, the National Association of Industrial and Office Properties and Business Oregon, the state's economic development agency, and it was produced in partnership with the Group Mackenzie consulting firm.
The Portland region has 56 lots that are 25 acres or larger and planned for industrial use. Click to enlarge.
Bernie Bottomly, the Portland Business Alliance's vice president for economic development, said the first phase of the inventory study found there were 56 industrial sites in the region that were on parcels 25 acres or larger. Of those, nine would be shovel-ready within six months.
"That's not 180 days to construction on the mitigation the site will need," Bottomly told the Metro Council, "that's 180 days to break ground on the project the company would want to start."
Five of the sites were in western Washington County; there was one site each near the port's Terminal 5 and east of Portland Airport, and one site each in Gresham and Wilsonville.
The preliminary analysis said there were another 16 sites that were seven to 30 months from being shovel-ready; 31 sites were 30 or more months from turning dirt. The sites were relatively evenly split between Multnomah and Washington counties; Clackamas County has just three sites, all near Happy Valley, in the mid- and long-range timeframe.
"I look at that map and I think, 'Ouch!'" said Councilor Carlotta Collette, who represents much of Clackamas County. "That's deeply bad news, not just on the surface."
What's the magic number?
While it was fairly clear that urban Clackamas County was behind compared to the other two Portland-area counties, it was less clear where the region was compared to others hoping to attract new industry.
"There is no bright line about how many sites is the right number of sites," Bottomly said. But, he said, "the smaller you draw the target, the harder it is to hit."
Keith Leavitt, a business development manager for the port, said the vacancy rate in the industrial market in the Portland region is between 6 and 9 percent. He said the Portland region's urban planning and limited outward expansion buffered the market from having the bubble characteristics of other West Coast markets.
But, that's got a trade-off, he said, citing the recent decision by Solopower to come to set up shop in Portland.
"SoloPower, when they went into Rivergate, they were down to a couple of sites," Leavitt said. "Where's the next one if you had another SoloPower come to this market?"
He said there are strong opinions that the Portland region has missed out on opportunities for new businesses because of a lack of available sites.
"We're going to quickly run out of anything to show someone who has interest," Leavitt said.
Councilor Rex Burkholder wondered whether there was a demand for the large sites that the Portland region was unable to meet, and whether companies that were, as he put it, kicking the tires on the region's land supply, should be counted as "lost" if they decide to set up shop elsewhere.
"Is it real demand, or is it we're curious and what have you got – and we're not really moving and we're going to China anyway?" Burkholder said.
Bottomly offered a metaphor to explain that he thinks the opposite is true – the Portland region isn't even hearing from potential employers because company representatives know the land isn't available for them.
"If I go to a store to buy a tie, I don't go to a store with just one tie – and that would be a poor strategy, as a retailer, to try to match the market to one option," Bottomly said. "We're getting pretty close to that point, where we basically have one tie, and we're hoping the whole world will beat a path to our door to buy that one tie. The fact is they won't, and we'll miss those opportunities, and we'll never know."
The next phase of the project is to get more details on the specific things that cities, counties and landowners can do to get sites closer to being shovel-ready. That's expected in February.