2011-3115-Ordinance No. 2011-017 Recorded 12/6/2011REVIEWED
LEGAL COUNSEL
DESCHUTES COUNTY OFFICIAL RECORDS
NANCY BLANKENSHIP, COUNTY CLERK w 1011.3115
COMMISSIONERS' JOURNAL
111111111 loll 111111111111111111611 12/06/201108:09:13 AM
2013-3115
BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON
An Ordinance Amending Title 23, of the Deschutes
County Comprehensive Plan, and Amending Certain
Sections of the Deschutes County Comprehensive
Plan Adopted in Deschutes County Code Title 23 to
Adopt a Regional Economic Opportunity Analysis
and Regional Large-Lot Industrial Land Policies for
Central Oregon
* ORDINANCE NO. 2011-017
*
WHEREAS, in 2010 the Deschutes County, in collaboration with Crook and Jefferson counties and
their respective cities, initiated a process for conducting a Regional Economic Opportunity Analysis ("REOA")
for Central Oregon, and
WHEREAS, the REOA was completed in May 31, 2011; and
WHEREAS, Statewide Planning Goal 2, Land Use Planning, OAR 660-009-0030, and 1000 Friends of
Oregon v. City of Dundee, 203 Or App 207 (2005) require Deschutes County to locally adopt the REOA as part
of the county's comprehensive plan in order for local governments in the county to base land use decisions upon
it; and
WHEREAS, the Deschutes County Planning Commission held a public hearing on August 25, 2011, to
review the REOA and corresponding regional large-lot industrial land policies, and recommended adoption of
the proposed Comprehensive Plan amendments; and
WHEREAS, the Board of County Commissioners ("Board") held a duly noticed public hearing on
month September 26 and October 31, 2011; and
WHEREAS, the Board finds it in the public interest to adopt the REOA and corresponding regional
large-lot industrial land policies into the Comprehensive Plan; now, therefore,
THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, ORDAINS
as follows:
Section 1. AMENDMENT. DCC 23.48, Urbanization, is amended to read as described in Exhibit
"A," attached hereto and by this reference incorporated herein, with new language underlined and language to
be deleted in st ~nr-eugh.
Section 2. AMENDMENT. DCC 23.52, Economy, is amended to read as described in Exhibit "B,"
attached hereto and by this reference incorporated herein, with new language underlined and language to be
deleted in hfo> .
PAGE 1 OF 2 - ORDINANCE NO. 2011-017
Section 3. AMENDING. Section 4.2 of the Deschutes County Comprehensive Plan, adopted in
Deschutes County Code 23.01.010, is amended to read as described in Exhibit "C," attached and incorporated
by reference herein, with new language underlined and deleted language set forth in str kethfough;
Section 4. FINDINGS. The Board adopts as its findings Exhibit "D," attached and incorporated by
reference herein.
Section 5. AMENDING. DCC 23.01.010, COMPREHENSIVE PLAN, is amended to read as described
in Exhibit "E," attached hereto and by this reference incorporated herein, with new language underlined and
language to be deleted in stf ~ ; .
Dated this of , 2011
ATTEST:
(&hAx~ 6-9-r
Recording Secretary
BOARD OF COUNTY COMMISSIONERS
OF DESCHUTES COUNTY, OREGON
TAMMY B Y, Chair
ANTHONY De BONE, Vice Chair
6j, 6-m-
ALAN UNGER, Commissioner
Date of 1 sc Reading: day of n6jk4*A,,-20I 1.
Date of 2"d Reading:- day of4) , 011.
Record of Adoption Vote:
Commissioner Yes No Abstained Excused
Tammy Baney li - -
Anthony DeBone -Lf~-
Alan Unger
Effective date: day of Y r , 2Q+r
PAGE 2 OF 2 - ORDINANCE NO. 2011-017
Chapter 23.48. URBANIZATION
23.48.010. Urbanization.
23.48.020. Goals.
23.48.030. Urban Growth Boundary Policies.
23.48.040. Urban Reserve Area Policies
23.48.050. Regional Economic Onnortunity Policies
23.48.010. Urbanization.
A major emphasis in Oregon's land use planning is locating the majority of new development in urban areas.
The rural areas are primarily to be protected for natural resource utilization. Between the urban areas
(incorporated cities) and the rural areas lies what is referred to as the urbanizing area. Usually under the
jurisdiction of the County, this is the area where the future population will be located and where the city's
services must be extended.
In Deschutes County the incorporated cities of Bend, Redmond and Sisters have been given the authority,
by the County, to prepare plans for their respective urban areas. These plans are coordinated with the
County's planning effort and will eventually be adopted as part of the County's comprehensive plan. In
addition to a plan each city also prepares an urban area zoning ordinance and a cooperative agreement for
mutually administering the urbanizing area.
All three incorporated cities were growing at rapid rates by the time the Deschutes County Year 2000
Comprehensive Plan was adopted in 1979. At that time, the County estimated Bend's urban area contained
a population of 33,000 people, Redmond's was approximately 7,500, and Sisters' approximately 900. All of
the cities were expected to continue their growth to the year 2000. The 2000 Census results for Bend,
Redmond, and Sisters were 52,029, 13,481, and 959, respectively. In 2000, 58 percent of the County's
population lived in urban areas.
The fourth city in Deschutes County is the City of La Pine. Incorporated on November 7, 2006, the City of
La Pine's 2006 population estimate of 1,590 was certified by Portland State University, Population and
Research Center on December 15, 2007. As of January 1, 2009, La Pine is coordinating with the Oregon
Department of Land Conservation and Development to develop its first comprehensive plan, which when
acknowledged, will officially recognize an urban growth boundary.
The Deschutes County Coordinated Population Forecast, adopted in August 2004 estimated that by the year
2025, the County's population will reach 240,811 people. The 2004 forecast estimated 109,389 people in
Bend, 45,724 people in Redmond, 3,747 people in Sisters, and 81,951 in non-urban, unincorporated areas.
If population growth occurs as forecasted in 2004, 66 percent of the County's population will reside in
urban areas by 2025.
PAGE 1 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
As a result of the La Pine incorporation, Deschutes County updated its Coordinated Population Forecast
with Ordinance 2009-006. The purpose of this modification was to adopt a conservative twenty-year
population forecast for the City of La Pine that can be used by city officials and the Oregon Department of
Land Conservation and Development to estimate future land need and an urban growth boundary.
Deschutes County's 2004 Coordinated Population Forecast applied a conservative 2.2% annual average
growth rate to estimate the county's unincorporated population from 2000 to 2025. This method applied the
growth rate as a compounding rate throughout the entire forecast. Recognizing that incorporation occurred
on November 7, 2006, it is reasonable to apply a 2.2% annual average growth rate to La Pine's estimated
population, starting in July 1, 2007, the first time Portland State University's Population Research Center
officially certified the City of La Pine in an Annual Population Report. By extending the growth rate to the
Year 2025, La Pine's population will be 2,352. The non-urban unincorporated population decreases by
2,352 from its original projection of 81,951 to 79,599. Extending the growth rate to the Year 2029 results in
a twenty year population estimate of 2,566 for La Pine.
Such growth will undoubtedly create severe problems for the provision of public services and adequate
amounts of residential, commercial and industrial lands. Other problems are the protection of important
aesthetic values, needed improvements in appearance and function of existing developments, safety and
aesthetic problems, as well as energy and service costs, created by strip development; and problems with
coordination and cooperation between the various agencies serving the public in urban areas, a problem
which already exists.
PAGE 2 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
Some opportunities also exist. Cities in Deschutes County are located in one of the most beautiful and
livable environments in the State. All of the communities have within their authority the power to guide
their community's growth for the public's benefit. Cooperation and mutual effort between the cities, special
districts and the County could mean urban environments that not only function efficiently but are attractive
and desirable places to live.
Deschutes, Crook and Jefferson counties and their respective cities in 2010 and 2011, undertook an
unprecedented regional evaluation of the economic opportunities and constraints associated with users of
large industrial parcels in the Central Oregon region. During the 1990s, the Central Oregon Region
undertook a dramatic transformation from an economy concentrated largely in wood products into a service
based economy serving a .growing and diverse tourism and household base Accelerated in migration and
tourism growth gave wa to rapid economic expansion escalation in home prices and a systematic shift in
the local economy from goods producing activities to service oriented industries While initially
representing a diversification of the local economy, this shift led to an over-reliance upon these types of
industries. During the recent recession the regional economy's vulnerabilities became apparent
Suitable land for today's industrial development forms emerged as one of Oregon's most severe
development challenges As a region Central Oregon specifically targeted basic industries with large lot
industrial needs to support the region's economic development objectives Through Oregon's statewide
planning framework a Regional Economic Opportunity Analysis (REOA) evaluated Central Oregon's
opportunities, competitiveness ability, and willingness to recruited and organically grown firms requiring
new large scale development models That REOA dated May 3l 2011 is attached to the findings in
Exhibit C to Ordinance 2011-017
The Central Oregon region needs a critical mass of competitive and diverse vacant developable industrial
sites in order for site selectors representing potential industrial recruitment opportunities to consider the
region. A regional consensus has been agreed upon to establish and pro-activelymanage a regional land
supply of large-lot industrial sites to enable the region to become competitive in industrial recruitment This
regional strategy includes individual site infrastructure improvement assessment and implementation
programs and requirements Regional planningmanagement and governance of a sustainable large-lo
t
industrial vacant land supply will involve Central Oregon city and county governments including advice
and guidance from Central Oregon Planning Directors Association Economic Development in Central
Oregon and Oregon Business Development Department to assure an adequate self-renewing regional
supply of developable and competitive vacant industrial sites
The purposes of DCC 23.48 are to provide the link between the urban and rural areas, and to provide some
basic parameters within which the urban areas of Deschutes County shall develop, although the specific
urban area plan for each community shall be the prevailing document for guiding growth in its respective
area. These policies will permit the County to review each urban area plan against common criteria and
assure consistency County-wide.
(Ord. 2010-017 § 1, 2011; 2009-006 §3, 2009; Ord. 2004-012 §4, 2004; Ord. 2002-005 § 1, 2002; Ord. 2000-
017 §1, 2000; Ord. 92-051, 1992; PL-20, 1979)
23.48.020. Goals.
1. To provide for an orderly and efficient transition from rural to urban lands.
2. To assure that planning and implementation of plans in the urban areas are consistent with the best
interest of both urban and urbanizing area residents.
3. To retain and enhance the character and quality of the urban areas as growth occurs. To recognize
and respect the unusual natural beauty and character of the area.
PAGE 3 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
4. To provide a sound basis for urbanization by establishing proper relationships between residential,
commercial, industrial and open land uses; fostering intergovernmental cooperation; and providing
an efficient transportation system.
5. To retain and enhance desirable existing areas and to revitalize, rehabilitate and redevelop less
desirable existing areas; to encourage and promote innovations in development techniques in order
to obtain maximum livability and excellence in planning and design for development.
6. To recognize the City of Redmond Comprehensive Plan as the policy document that provides the
basis for implementing land use plans and ordinances in Redmond's Urban Growth Boundary. The
general purpose is to provide for one principal means of implementing the Redmond
Comprehensive Plan.
7. To build a strong and thriving regional economy by establishing and actively maintaining a
competitive portfolio of large lot employment sites and coordinating public investments policies
and regulations to support regional and state economic development objectives in Central Oregon
(Ord. 2010-017 1, 2011; 2006-018 § 1, 2006; Ord. 2002-005 § 1, 2002; Ord. 2000-017 § 1, 2000; Ord. 92-
051, 1992; PL-20,1979)
23.48.030. Urban Growth Boundary Policies.
1. Urbanization. Urbanization policies refer to an unincorporated urban growth areas within an urban
growth boundary but outside the boundaries of a city, and are intended to assist in the decision
making about the conversion of rural to urban uses, and to help in the development of consistent
urban area plan. More detailed policies for the urban areas of Bend, Redmond and Sisters are
specified in the urban area plans and they shall be the primary documents for coordination and land
use decisions in their respective areas.
a. Urban growth boundaries identify and separate urbanizable land from rural land. Conversion of
urbanizable land to urban uses shall be based on consideration of.
1. Orderly and economic provision for public facilities and services;
2. Availability of sufficient land for the various uses to insure choices in the marketplace; and
3. Encouragement of development within urban areas before conversion of urbanizable areas.
b. Urban growth boundaries shall be established or expanded based upon the following:
1. Demonstrated need to accommodate long-range urban population growth requirements
consistent with LCDC goals;
2. Need for housing, employment opportunities and livability;
3. Orderly and economic provision for public facilities and services;
4. Maximum efficiency of land uses within and on the fringe of the existing urban area;
5. Environmental, energy, economic and social consequences;
6. Retention of agricultural land as defined, with Class I being the highest priority for
retention and Class VI the lowest priority; and,
7. Compatibility of the proposed urban uses with nearby agricultural activities.
2. Coordination.
a. Within an urban growth boundary City and County land use regulations and standards shall be
mutually supportive, jointly proposed and adopted, administered and enforced, and plans to
integrate the type, timing and location of development of public facilities and services in a
manner to accommodate demand as urbanizable lands become more urbanized, and to guide the
community's growth.
b. Urban development shall be permitted in areas where services are available or can be provided
in a manner which will minimize costs related to necessary urban services such as schools,
parks, highways, police, garbage disposal, fire protection, libraries and other facilities and
services.
PAGE 4 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
c. Deschutes County adopts by reference the goals, policies, programs, elements, and statements
of intent of the Redmond Comprehensive Plan, the officially adopted comprehensive plan for
the City of Redmond and its surrounding Urban Growth Boundary.
3. Residential development.
a. Residential developments should be located so that they are convenient to places of
employment and shopping facilities, and they should be developed in ways which are consistent
with the character of the topography and soils on the site. Residential areas should offer a wide
variety of housing densities in locations best suited to each.
b. Residential densities indicated on general plans should be respected and reflected in City and
County codes, ordinances and development policies.
c. In residential areas, development should be encouraged which have side yards or rear yards
along arterial streets as a means of reducing congestion through turning movements in and out
of driveways.
d. Higher density residential areas should be concentrated near commercial services and public
open space.
4. Commercial.
a. Commercial facilities should be allocated in a reasonable amount and in a planned relationship
to the people they will serve. Any future expansion of commercial uses should be developed as
centers rather than strips and very carefully considered so that they do not cause unnecessary
traffic congestion and do not detract from the appearance of the community.
b. Neighborhood commercial shopping areas, parks, school and public uses may be located within
residential districts and should have development standards which recognize the residential
area. Development standards should be established for those commercial uses which will
provide off-street parking, landscaping, access control, sign regulations and design review.
c. Strip commercial developments along highways should not be extended. Commercial uses
along major streets and highways shall be subject to special development standards relating to
landscaping, setbacks, signs and median strips. No further commercial development outside
urban growth boundaries, rural service centers, planned developments, or destination resorts
shall be permitted.
d. All commercial shopping centers shall be subject to special development standards relating to
setbacks, landscaping, physical buffers, screening, access, signs, building heights and design
review. Care shall be taken to control the size of any new commercial developments that may
be required as growth occurs. Sites shall not be oversized to a point where additional uses
which would generate traffic from outside the intended service area are necessary to make the
development an economic success.
5. Industrial.
a. Community efforts should be directed toward preserving prime industrial lands for industrial
purposes. Industrial areas shall be protected from incompatible commercial and residential
uses.
b. Industrial areas of the community shall be located where necessary services can be provided
and with good access to transportation facilities.
c. Community efforts should be directed toward improving the general appearance of commercial
and industrial areas so that they make a positive contribution to the environment of the
community.
d. Industrial areas shall provide for new industry in a park-like setting.
e. All industrial centers shall be subject to special development standards relating to setbacks,
landscaping physical buffers, screening, access, signs, building heights and design review.
6. Community appearance.
a. Because of slow natural growth and their effective use as a visual and noise buffer, and their
relationship to air quality, trees or stands of trees shall be protected whenever feasible in
industrial, commercial, residential and other urban developments.
PAGE 5 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
8.
9
b. Community appearance shall continue to be a major concern. Landscaping, sign regulations
and building design review shall contribute to an improved environment. Major natural
features such as rock outcrops, stream banks, canyons, or stands of trees should be preserved as
a community asset as the area develops.
c. Attempts by each community to identify those characteristics which give the community its
individual identity and to preserve and expand those characteristics as growth occurs shall be
encouraged by the County.
d. Sign regulations shall be adopted which limit the size, location and number of signs in
commercial and industrial areas and have amortization provisions to remove existing signs
which do not conform with the regulations within a reasonable period of time.
Urban transportation.
a. Expressways and arterial streets should have landscaped median strips wherever possible
together with left-turn refuge lanes. Public transportation routes should be encouraged
throughout the area and, if necessary, special provisions made in street design to accommodate
ways.
b. Streets and highways should be located and constructed in a manner which will accommodate
both current and future traffic needs. Implementation of arterial and collector road systems
should be joint County and City effort with strict time schedules and priorities.
c. Interurban transportation facilities should be located in or near the central business district or
main highway. Special consideration will be needed to evaluate public transportation needs and
possibilities within the urban area.
d. Except for major arterial and collector streets, street patterns in residential areas should be
designed to provide convenient access to each living unit but not encourage through-traffic.
Major and collector streets should be secured and developed under a strict time frame so that a
reasonable circulation pattern will result.
e. Provisions should be considered which will permit mass transit vehicles on arterial and
collector streets within residential areas in the future.
Facilities and services.
a. Efforts should be made over a sustained period of time to place utility lines underground in
existing and new residential areas.
b. Parks should be located within walking distance of every dwelling unit in the community.
Parks should be centrally located and easily accessible to the areas they are intended to serve
(see Recreation).
c. Certain private recreational uses such as golf courses or riding stables can be successfully
integrated into residential areas provided the location, design and operation are compatible with
surrounding residential developments.
d. Fire protection in the planning area should be considered as a common problem by the City,
County, water district and the fire protection district, and equipment should reflect the character
of land uses in the community.
e. Efforts should be made to encourage Federal and State agencies to locate in urban areas.
f. Efforts should be made to group public offices in a more or less common location as a
convenience to the public.
Other.
a. In many cases, home occupations are a legitimate use within residential areas and should be
permitted provided that the use displays no outward manifestations of business other an a small
business sign attached to the wall of the house.
b. Recreation vehicle storage should be permitted in planned residential areas and these facilities
shall be landscaped and otherwise screened from adjacent residential uses.
c. Consistent with policies in the Historic and Cultural chapter rehabilitation and/or
redevelopment of older residential areas shall be encouraged.
PAGE 6 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
d. All development in Deschutes County shall comply with all applicable state and federal rules,
regulations and standards.
(Ord. 2006-018 § 1, 2006; Ord. 2005-023 § 1, 2005; Ord. 2002-005 § 1, 2002; Ord. 2000-017 § 1, 2000; Ord.
92-051, 1992; PL-20, 1979)
23.48.040. Urban Reserve Area Policies.
1. Redmond Urban Reserve Area. The following policies apply to the division and development of
land in the area designated Redmond Urban Reserve on the County Comprehensive Plan map.
a. The Redmond Urban Reserve Area (RURA) shall be designated with an urban reserve
boundary located on the County's Comprehensive Plan Map.
b. The County shall implement the Urban Reserve Area designation through the application of a
RURA Combining Zone. The text of this combining zone shall be added and maintained in
Title 18, County Zoning, of the Deschutes County Code.
c. Until included in the Redmond Urban Growth Boundary, lands zoned Multiple Use
Agricultural, Surface Mining, Rural Residential, or EFU in the RURA shall continue to be
planned and zoned for rural uses, but in a manner that ensures a range of opportunities for the
orderly, economic and efficient provision of urban services when these lands are included in
the urban growth boundary.
d. The County, by designating a RURA, shall adopt and implement land use regulations that
ensure development and division of land in the Multiple Use Agricultural, Surface Mining or
Rural Residential zoning districts, will not hinder the efficient transition to urban land uses
and the orderly and efficient provision of urban services.
These land use regulations shall include:
1. Prohibition on the creation of new parcels less than ten acres;
2. Regulations that prohibit zone changes or plan amendments allowing more intensive
uses, including higher residential density, than permitted by the acknowledged zoning in
effect as of the date of establishment of the urban reserve area. Such regulations shall
remain in effect until such time as the land is included in the Redmond Urban Growth
Boundary.
e. Partitions of land zoned Exclusive Farm Use shall be allowed according to state law and the
County Zoning Ordinance.
f. The City of Redmond and Deschutes County shall adopt a RURA Agreement consistent with
their respective comprehensive plans and the requirements of OAR 660-021-0050.
g. New arterial and collector right-of-way established in the RURA shall meet the right-of-way
standards of Deschutes County or the City of Redmond, whichever is greater.
h. The siting of new development shall be regulated along existing and future arterial and
collector right-of-way, designated on the County's Transportation System Plan, for the
purpose of ensuring the opportunity for future urban development and public facilities.
i. The siting of a single family dwelling on a legal parcel is permissible if the single family
dwelling would otherwise have been allowed under law, existing prior to the designation of
the parcel as part of the Redmond Urban Reserve Area.
j. City of Redmond shall collaborate with Deschutes County to assure that the County owned
1800 acres in the RURA is master planned before it is incorporated into Redmond's urban
growth boundary.
(Ord. 2002-005 §1, 2002; Ord. 2000-017 §1, 2000; Ord. 92-051, 1992; PL-20, 1979; Ord. 2005-023 §1,
2005)
PAGE 7 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
23.48.050. Regional Economic Opportunity Policies.
1. Deschutes County supports a multi jurisdictional cooperative effort to pursue a regional approach
to establish a competitive supply of sites particularly designed to address out-of-region industries
that may locate in Central Oregon.
2. Deschutes Coun recognizes the importance for maintaining an appropriate available large-lot
industrial land supply that is readily developable in Central Oregon.
3. The Central Oregon Large Lot Industrial Regional Economic Opportunity Analysis (REOA)
dated May 31, 2011 and the City of La Pine Strengths and Weaknesses outlined on Pages 61 and
62 of Exhibit C to Ordinance 2011-017 are incorporated and adopted by reference herein
Findings from the REOA recognize:
a. The Central Oregon region comprised of Jefferson Crook and Deschutes counties and its
respective cities recognize the market reality that the region currently serves as an integrated
cohesive economic unit, sharing work force and commercial amenities and should be
marketed as such to increase its perceived scale in the market.
b. The Central Oregon region needs a critical mass of competitive and diverse vacant
developable large lot industrial sites in order for site selectors representing potential industrial
recruitment to consider the region along with all of the other needed support factors
including adequately skilled workforce workforce training programs worker housing,
supportive local government utility services transportation and quali of life
c. Developing and maintaining a supply of large readily available industrial sites is not currently
part of regional economic development efforts, therefore the region's jurisdictions have
developed Goal 9 compliance based on proiec ted growth and the attraction of a large
industrial user that is recognized as an exogenous impact to these projections.
d. The unmet short-term need for large-lot industrial sites in Central Oregon is an additional
component of a city's twenty-year land supply.
e. Competing as a cohesive region allows Central Oregon to market a larger available work
force, the size of which is often a key locational criterion for firms.
f. The need for large lot industrial sites is a regional need with the economic development
benefits widely distributed regardless of the specific firm location.
g_ Large-lot industrial lands supply initiative exceeds the capaci of angle jurisdiction.
h. A large-lot industrial site is 50 acres or larger with specific site attributes and amenities.
i. Short term supply is a readily available inventory of 6 large sites in at least three separate
iurisdictions that provide for an adequate supply of sites to prospective industries or site
selectors. Two of the 6 sites are to be 100 to 200 acres and one site would be 200+ acres.
1 At least one of the 6 short term (readily available/developable in 6 months) sites would
consist of a major, centrally located large-scale development property near the region's
geographic and workforce center, and where key infrastructure is in place and has excess
capacity, either the north end of Bend or the southern end of Redmond east of Highway 97.
4. The short term supply of 6 sites is a community development objective of Central Oregon for
establishing large-lot industrial uses.
5. The supply of up to 6 sites, located in existing or amended Urban. Growth Boundaries (UGBs)
addresses the short-term large lot industrial regional land need in Central Oregon and can be
incorporated as an additional component of a city's twenty year land supply.
6. The supply of up to 17 long-term sites, which includes the 6 short term sites represents the
currently projected (total) 20-year regional land supply of this special industrial land
classification.
7. Replenishing the short term inventory shall be initiated when large lot employers demonstrate a
commitment to short term sites by completing land use entitlements and executing site-
development permits, including building permits subject to the following replenishment
mechanism:
PAGE 8 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
a. To maintain a competitive short teen ready supply of large-lot employment sites with the
characteristics specified in the REOA only a total of six vacant and developable sites shall
ever be made available at one time.
8. Central Oregon cities and counties shall within 6 months of the adoption of this policy, execute
Memorandums of Understanding (MOUs that specify
a. Cities after conducting alternative lands and public facility analyses but prior to any
entitlement process, receive formal support from Economic Development for Central Oregon
(EDCO) that potential sites contain necessary site characteristics and standards as defined in
the REOA to attract large-lot industrial recruiters.
b. Establishment of a regional authority, responsible for fonnally supporting regional large lot
industrial sites after cities identify potential candidates through alternative lands and public
facili analyses, but prior to any entitlement process.
c. A Regional Advisory Committee (RAC) will be convened (at least annually with each city
and county providing activi reports relating to the short term land supply. Facilitating the
RAC will be the responsibility of the counties (ORS 195.025) and will rotate each year,
starting alphabetically with Crook County.
9. Cities are required to comply with state land use program requirements when changing land
designations or amending a UGB, including conducting a local inventory to determine whether a
local deficit exists.
10. Cities are directed to not conduct regional inventories where and because the counties have
established plan policies under their statutory coordinating authority to limit and disperse the
number of sites that can be included in the various UGBs as well as a program to manage the
supply.
11. To meet the requirements of Division 024 when amending a UGB to include a site in compliance
with the regional plan, cities will be required to provide an estimated employment projection for
the site at frill build out within the planning period by applying the REOA analysis and plan to the
particulars of the site.
12. When a city investigates and concludes that a potential qualifying large lot industrial site exists or
can be assembled inside of its UGB (and the existing site zoning will be amended with the large
lot overlay zoning assignment), that city must replace that original [future] buildable land supply
or evaluate and conclude that the previously identified future land supply is no longer needed.
13. Participating cities, when examining candidate sites, shall conduct their alternative land and
public facilities analyses and inventor oy f employment lands by first examining if the short-term
regional need can be met inside the implementing city's UGB before assessing lands adjacent to
it as required by state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site dispersal as noted in the
REOA.
14. Participating cities, after conducting alternative lands and public facility analyses but prior to any
entitlement process, shall receive formal support from EDCO that candidate site(s) contain
necessary site characteristics and attributes, as defined in the REOA, to attract large-lot industrial
recruiters
16. Deschutes County, fulfilling coordination duties specified in ORS 195.025 shall approve and
update its comprehensive plan when participating cities within their jurisdiction legislatively or
through a quasi-judicial process designate regionally significant sites.
16. Participating cities in Deschutes County (and in the 3-County REOA region shall adopt a large-
lot industrial overlav zone that establishes and maintains the region's large lot industrial site
inventory and manages usage of such lands.
17. Deschutes County supports EDCO, a non-profit organization facilitating new job creation and
capital investment to monitor and advocate for the region's efforts of maintaining an inventory of
appropriate sized and located industrial lots available to the market
PAGE 9 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
18. Deschutes County, in collaboration with other Central Oregon's counties and cities and EDCO
will coordinate and seek assistance from state agencies to continually support a regional
economic development replenishment strategy.
19. Deschutes Countv will strengthen long-term confidence in the economy by building innovative
public to private sector partnerships.
20. Deschutes County will collaborate with regional public and private representatives to engage the
Oregon Legislature and state agencies and their commissions to address public facility,
transportation and urbanization issues that can stymie economic development opportunities in
Central Oregon.
21. Participating cities in Deschutes County will support the existing economic base by providing
adequate land and infrastructure to make city sites attractive to businesses willing to invest in
high job density and industrial activity.
22. Cities in Deschutes County will continue to provide high quality physical infrastructure to serve
the needs of business.
(Ord. 2010-017 § 1, 2011)
PAGE 10 OF 10 - EXHIBIT "A" TO ORDINANCE 2011-017
Denotes portions of the code not amended by Ordinance 2011-017.
Chapter 23.52. ECONOMY
23.52.020. Goals.
23.52.020. Goals.
1. To diversify and improve the economy of the area.
2. To enhance and maintain the existing natural resource, commercial and industrial segments of the
local economy.
3. To build a strong and thriving regional economy by establishing and actively maintaining a
competitive portfolio of large lot employment sites and coordinating public investments policies
and regulations to support regional and state economic development objectives in Central Oregon.
(2010-017 §2, 2011; Ord. 2002-005 §1, 2002; Ord. 2000-017 §1, 2000; Ord. 80-203, 1980; PL-20, 1979)
PAGE I OF I - EXHIBIT "B" TO ORDINANCE 2011-017
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Background
This section describes the coordination between the County and the cities of Bend, La Pine,
Redmond and Sisters on Urban Growth Boundaries (UGBs) and Urban Reserve Areas (URAs).
Statewide Planning Goal 2 recognizes the importance of coordinating land use plans.
"City, county, state and federal agency and special district plans and actions
related to land use shall be consistent with the comprehensive plans of cities and
counties and regional plans adopted under ORS Chapter 268."
Oregon Revised Statute 197.015(5) goes further to define comprehensive plan coordination.
"A plan is "coordinated" when the needs of all levels of governments, semipublic
and private agencies and the citizens of Oregon have been considered and
accommodated as much as possible."
Population
An important basis for coordinating with cities is adopted population projections. Having an
estimate of anticipated population is the first step to planning for future growth and
conservation. ORS 195.025(1) requires counties to coordinate local plans and population
forecasts. The County oversees the preparation of a population forecast in close collaboration
with cities. This is important because the population of the County has increased significantly in
recent decades and a coordinated approach allows cities to ensure managed growth over time.
Sources
1980
1990
2000
2010
Population Research Center July I estimates
62,500
75,600
116,600
172,050
US Census Bureau April I counts
62,142
74,958
115,367
157,733
Source: As noted above
In 1996 Bend, Redmond, Sisters and the County reviewed recent population forecasts from the
Portland State University Center Population and Research Center (PRC) and U.S. Census
Bureau, Department of Transportation, Woods and Poole, Bonneville Power Administration
and Department of Administrative Services Office of Economic Analysis. After reviewing these
projections, all local governments adopted a coordinated population forecast. It was adopted by
Deschutes County in 1998 by Ordinance 98-084.
The results of the 2000 decennial census and subsequent population estimates prepared by the
PRC revealed that the respective populations of the County and its incorporated cities were
growing faster than anticipated under the 1998 coordinated forecast. The cites and the County
re-engaged in a coordination process between 2002 and 2004 that culminated with the County
adopting a revised population forecast that projected population to the year 2025. It was
adopted by Ordinance 2004-012 and upheld by the Land Use Board of Appeals on March 28,
2005.
The following table displays the 2004 coordinated population forecast for Deschutes County
and the UGBs of the cities of Bend, Redmond, and Sisters.
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE I OF 10 - EXHIBIT "C" TO ORDINANCE 201 1-017
Year
Bend UGB
Redmond UGB
Sisters UGB
Unincorporated
County
Total County
2000
52,800
15,505
975
47,320
116,600
2005
69,004
19,249
1,768
53,032
143,053
2010
81,242
23,897
2,306
59,127
166,572
2015
91,158
29,667
2,694
65,924
189,443
2020
100,646
36,831
3,166
73,502
214,145
2025
109,389
45,724
3,747
81,951
240,811
Source: 2004 Coordinated Population Forecast for Deschutes County
The process through which the County and the cities coordinated to develop the 2000-2025
coordinated forecast is outlined in the report titled "Deschutes County Coordinated
Population Forecast 2000-2025: Findings in Support of Forecast."
The fourth city in Deschutes County is the City of La Pine. Incorporated on November 7,
2006, the City of La Pine's 2006 population estimate of 1,590 was certified by PRC on
December 15, 2007. As a result of La Pine's incorporation, Deschutes County updated its
Coordinated Population Forecast with Ordinance 2009-006.
The purpose of this modification was to adopt a conservative 20 year population forecast for
the City of La Pine that could be used by city officials and the Oregon Department of Land
Conservation and Development to estimate its future land need and a UGB.
The following table displays the coordinated population forecast for Deschutes County, the
UGBs of the cities of Bend, Redmond, and Sisters, and La Pine from 2000 to 2025. By extending
the growth rate to the year 2025, La Pine's population will be 2,352. The non-urban
unincorporated population decreases by 2,352 from its original projection of 81,951, to 79,599.
Year
Bend
UGB
Redmond
UGB
Sisters
UGB
La Pine
UGB
Unincorporated
County
Total County
2000
52,800
15,505
975
-
47,320
116,600
2005
69,004
19,249
1,768
-
53,032
143,053
2010
81,242
23,897
2,306
1,697
57,430
166,572
2015
91,158
29,667
2,694
1,892
64,032
189,443
2020
100,646
36,831
3,166
2,110
71,392
214,145
2025
109,389
45,724
3,747
2,352
79,599
240,811
Source: 2004 Coordinated Population Forecast for Deschutes County - updated 2009
2030 Population Estimate
This Comprehensive Plan is intended to manage growth and conservation in the
unincorporated areas of the County until 2030. Because the official population forecast extends
only to 2025, County staff used conservative average annual growth rates from the adopted
population forecast to estimate population out to 2030. The following table estimates
Deschutes County population by extending the adopted numbers out an additional five years.
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE 2OF 10-EXHIBIT "C" TO ORDINANCE 2011-017
Year
Bend
Redmond
Sisters
La Pine
Unincorporated
UGB
UGB
UGB
UGB
County
Total County
2030
119,009
51,733
4,426
2,632
88,748
266,538
Source- C
rn,nrv estimates
based on the 2004
d D
C d'
- I '
h b I
e
oor mat pu anon Forecast ass own a ow
Bend's average annual growth rate from 2025 to 2030 is 1.70%
Redmond's average annual growth rate from 2025 to 2030 is 2.50%
Sisters' based their population on forecasted rates of building growth, residential housing units, and persons per dwelling unit
La Pine's average annual growth rate from 2025 to 2030 is 2.20%
Deschutes County's unincorporated area average annual growth rate from 2025 to 2030 is 2.20%
As the pie chart below indicates, if population occurs as forecasted, 67% of the County's
population will reside in urban areas by 2030.
In 2030
Unincorporated
Area Bend
33% 4;6
%te€s
2°h
l
Such growth will undoubtedly require strategically managing the provision of public services and
maintaining adequate amounts of residential, commercial and industrial lands. Growth pressures
will also require programmatic approaches to maintain open spaces, natural resources, and
functional ecosystems that help define the qualities of Deschutes County.
Urban Growth Boundary Amendments
Bend
The City of Bend legislatively amended its UGB as part of a periodic review acknowledgment in
December 2004. The Bend City Council and the Board of County Commissioners adopted
concurrent ordinances that expanded the Bend UGB by 500 acres and satisfied a 20 year
demand for industrial land.
In July 2007, the Bend-La Pine School District received approvals to expand the City of Bend
UGB to include two properties for the location of two elementary schools, one at the Pine
Nursery, the other on Skyliner Road.
Sisters
The City of Sisters legislatively amended its UGB in September 2005 when its City Council and
the Board of County Commissioners adopted respective ordinances. The Sisters UGB
expansion covered 53 acres and satisfied a 20 year demand for residential, commercial, light
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE 3 OF 10 - EXHIBIT "C" TO ORDINANCE 201 1-017
1
La Fine _ Redn-ond
1% 19%
industrial, and public facility land. In March 2009, Sisters amended their UGB to facilitate the
establishment of a 4-acre fire training facility for the Sisters/Camp Sherman Fire District.
Redmond
The City of Redmond legislatively amended its UGB in August 2006 when its City Council and
the Board of County Commissioners adopted respective ordinances. The Redmond UGB
expansion covered 2,299 acres and satisfied a 20 year demand for residential and neighborhood
commercial land.
La Pine
In 2010 La Pine adopted its first Comprehensive Plan. La Pine established a UGB that matches
the city limits, because the City contains sufficient undeveloped land for future housing,
commercial and industrial needs over a 20-year period. The Plan map includes land use
designations intended to provide an arrangement of uses to ensure adequate and efficient
provision of public infrastructure for all portions of the City and UGB.
Urban Reserve Area
Redmond
In December 2005, Redmond City Council and the Board of County Commissioners adopted a
5,661 acre URA for the City. It is the first URA in Central Oregon because most cities find
planning farther into the future than the 20-year UGB timeframe, challenging.
Coordination
As noted above, Statewide Goal 2 and ORS promote land use planning coordination. The
purposes of the urbanization goals and policies in this section are to provide the link between
urban and rural areas, and to provide some basic parameters within which the urban areas of
Deschutes County can develop, although the specific comprehensive plan for each community
remains the prevailing document for guiding growth in its respective area. These policies
permit the County to review each city's comprehensive plan to ensure effective coordination.
The Redmond and Deschutes County Community Development Departments received the Oregon
Chapter of American Planning Association's (OAPA) Professional Achievement in Planning Award in
2006 for the "Redmond Urban Reserve Area / Urban Growth Boundary
Expansion Project."
The following quote taken from the Oregon Chapter of the American
Planning Association's 2006 Awards Program shows why the Redmond
Community Development Department was chosen for this award.
"An outstanding effort to address Redmond's rapid population growth,
including the successful designation of an Urban Reserve and the
imminent designation of an Urban Growth Boundary, a "Framework
Plan" with a requirement for master planning, and the establishment of
"Great Neighborhood Principles."
Regional Economic Opportunity Analysis
h
1}.H.MKY l.JV~4hn w.q
P4 n -J A- J
Nam o,..aAr~ o.Qrnr.u
K:r . ter. .
Deschutes Crook and Jefferson counties and their respective cities, in 2010 and 2011,
undertook an unprecedented regional evaluation of the economic opportunities and constraints
associated with users of large industrial parcels in the Central Oregon region. During the
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE 4OF 10-EXHIBIT "C" TO ORDINANCE 2011-017
1990s, the Central Oregon Region undertook a dramatic transformation from an economy
concentrated largely in wood products into a service based economy serving a growing and
diverse tourism and household base. Accelerated in-migration and tourism growth gave way to
rapid economic expansion, escalation in home prices, and a systematic shift in the local
economy from goods producing activities to service oriented industries. While initially
representing a diversification of the local economy, this shift led to an over-reliance upon these
types of industries. During the recent recession, the regional economy's vulnerabilities became
apparent.
Suitable land for today's industrial development forms emerged as one of Oregon's most severe
development challenges. As a region, Central Oregon specifically targeted basic industries with
large lot industrial needs to support the region's economic development objectives. Through
Oregon's statewide planning framework, a Regional Economic Opportunity Analysis (REOA)
evaluated Central Oregon's opportunities, competitiveness, ability, and willingness to recruited
and organically grown firms requiring new large scale development models. That REOA, dated
May 31, 2011 is attached to the findings in Exhibit C to Ordinance 2011-017.
The Central Oregon region needs a critical mass of competitive and diverse vacant, developable
industrial sites in order for site selectors representing potential industrial recruitment
opportunities to consider the region. A regional consensus has been agreed upon to establish
and pro-actively manage a regional land supply of large-lot industrial sites to enable the region
to become competitive in industrial recruitment. This regional strategy includes individual site
infrastructure improvement assessment and implementation programs and requirements.
Regional planning, management, and governance of a sustainable large-lot industrial vacant land
supply will involve Central Oregon city and county governments, including advice and guidance
from Central Oregon Planning Directors Association, Economic Development in Central
Oregon and Oregon Business Development Department to assure an adequate, self-renewing
regional supply of developable and competitive vacant industrial sites.
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE 5 OF 10- EXHIBIT "C" TO ORDINANCE 201 1-017
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Goals and Policies
Goal I Coordinate with cities, special districts and stakeholders to support
urban growth boundaries and urban reserve areas that provide an
orderly and efficient transition between urban and rural lands.
Policy 4.2.1 Participate in the processes initiated by cities in Deschutes County to create
and/or amend their urban growth boundaries.
Policy 4.2.2 Promote and coordinate the use of urban reserve areas.
Policy 4.2.3 Review the idea of using rural reserves.
Goal 2 Coordinate with cities, special districts and stakeholders on urban
growth area zoning for lands inside urban growth boundaries but
outside city boundaries.
Policy 4.2.4 Use urban growth area zoning to coordinate land use decisions inside urban
growth boundaries but outside the incorporated cities.
Policy 4.2.5 Negotiate intergovernmental agreements to coordinate with cities on land use
inside urban growth boundaries and outside the incorporated cities.
Policy 4.2.6 Develop urban growth area zoning with consideration of the type, timing and
location of public facilities and services provision consistent with city plans.
Policy 4.2.7 Adopt by reference the comprehensive plans of Bend, La Pine, Redmond and
Sisters, as the policy basis for implementing land use plans and ordinances in
each city's urban growth boundary.
Goal 3 Coordinate with cities, special districts and stakeholders on policies
and zoning for lands outside urban growth boundaries but inside
urban reserve areas.
Policy 4.2.8 Designate the Redmond Urban Reserve Area on the County Comprehensive
Plan Map and regulate it through a Redmond Urban Reserve Area (RURA)
Combining Zone in Deschutes County Code, Title 18.
Policy 4.2.9 In cooperation with the City of Redmond adopt a RURA Agreement consistent
with their respective comprehensive plans and the requirements of Oregon
Administrative Rule 660-021-0050 or its successor.
Policy 4.2.10 The following land use policies guide zoning in the RURA.
a. Plan and zone RURA lands for rural uses, in a manner that ensures the
orderly, economic and efficient provision of urban services as these lands are
brought into the urban growth boundary.
b. New parcels shall be a minimum of ten acres.
c. Until lands in the RURA are brought into the urban growth boundary, zone
changes or plan amendments shall not allow more intensive uses or uses that
6 DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE 6 OF 10 - EXHIBIT "C" TO ORDINANCE 201 1-017
generate more traffic, than were allowed prior to the establishment of the
RU RA.
d. For Exclusive Farm Use zones, partitions shall be allowed based on state law
and the County Zoning Ordinance.
e. New arterial and collector rights-of-way in the RURA shall meet the right-of-
way standards of Deschutes County or the City of Redmond, whichever is
greater, but be physically constructed to Deschutes County standards.
f. Protect from development existing and future arterial and collector rights-of-
way, as designated on the County's Transportation System Plan.
g. A single family dwelling on a legal parcel is permitted if that use was permitted
before the RURA designation.
Policy 4.2.1 1 Collaborate with the City of Redmond to assure that the County-owned 1,800
acres in the RURA is master planned before it is incorporated into Redmond's
urban growth boundary.
Goal 4 To build a strong and thriving regional economy by establishing and
actively maintaining a competitive portfolio of large lot employment
sites and coordinating public investments,` policies and regulations to
support regional and state economic development objectives in
Central Oregon.
Policy 4.2.12 Deschutes County supports a multi-jurisdictional cooperative effort to pursue a
regional approach to establish a competitive supply of sites particularly designed
to address out-of-region industries that may locate in Central Oregon.
Policy 4.2.13 Deschutes County recognizes the importance for maintaining an appropriate
available large-lot industrial land supply that is readily developable in Central
Oregon.
Policy 4.2.14 The Central Oregon Large Lot Industrial Regional Economic Opportunity
Analysis (REOA) dated May 31, 2011 and the City of La Pine Strengths and
Weaknesses outlined on Pages 61 and 62 of Exhibit C to Ordinance 201 1-017
are incorporated and adopted by reference herein. Findings from the REOA
recognize:
a. The Central Oregon region, comprised of Jefferson, Crook and Deschutes
counties and its respective cities recognize the market reality that the region
currently serves as an integrated, cohesive economic unit, sharing work force
and commercial amenities, and should be marketed as such to increase its
perceived scale in the market.
b. The Central Oregon region needs a critical mass of competitive and diverse
vacant, developable large lot industrial sites in order for site selectors
representing potential industrial recruitment to consider the region, along
with all of the other needed support factors including adequately skilled
workforce, workforce training programs, worker housing, supportive local
government, utility services, transportation, and quality of life.
c. Developing and maintaining a supply of large readily available industrial sites is
not currently part of regional economic development efforts, therefore the
region's jurisdictions have developed Goal 9 compliance based on projected
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011 7
CHAPTER 4 URBAN GROWTH MANAGEMENT REFERENCES
PAGE 7 OF 10 - EXHIBIT "C" TO ORDINANCE 201 1-017
growth, and the attraction of a large industrial user that is recognized as an
exogenous impact to these projections
d. The unmet short-term need for large-lot industrial sites in Central Oregon is
an additional component of a city's twenty-year land supply
e. Competing as a cohesive region allows Central Oregon to market a larger
available work force, the size of which is often a key locational criterion for
firms.
f. The need for large lot industrial sites is a regional need with the economic
development benefits widely distributed regardless of the specific firm
location.
g. Large-lot industrial lands supply initiative exceeds the capacity of any single
jurisdiction.
h. A large-lot industrial site is 50 acres or larger with specific site attributes and
amenities.
i. Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where key
infrastructure is in place and has excess capacity, either the north end of Bend
or the southern end of Redmond east of Highway 97
Policy 4.2.15 The short term supply of 6 sites is a community development obiective of
Central Oregon for establishing large-lot industrial uses
Policy 4.2.16 The supply of up to 6 sites, located in existing or amended Urban Growth
Boundaries (UGBs), addresses the short-term large lot industrial regional land
need in Central Oregon and can be incorporated as an additional component of
a city's twenty year land supply.
Policy 4.2.17 The supply of up to 17 long-term sites which includes the 6 short term sites
represents the currently projected (total) 20-year regional land supply of this
special industrial land classification.
Policy 4.2.18 Replenishing the short term inventory shall be initiated when large lot employers
demonstrate a commitment to short term sites by completing land use
entitlements and executing site-development permits including building permits
subject to the following replenishment mechanism::
a. To maintain a competitive short term ready supply of large lot employment
sites with the characteristics specified in the REOA only a total of six vacant
and developable sites shall ever be made available at one time
Policy 4.2.19 Central Oregon cities and counties shall within _6 months of the adoption of this
policy, execute Memorandums of Understanding_(MOUs) that specify-
a. Cities, after conducting alternative lands and public facility analyses but prior
to any entitlement process, receive formal support from Economic
Development for Central Oregon (EDCO) that potential sites contain
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE 8 OF 10- EXHIBIT "C" TO ORDINANCE 201 1-017
necessary site characteristics and standards as defined in the REOA to attract
large-lot industrial recruiters.
b. Establishment of a regional authority, responsible for formally supporting
regional large lot industrial sites after cities identify potential candidates
through alternative lands and public facility analyses but prior to any
entitlement process.
c. A Regional Advisory Committee (RAC) will be convened (at least) annually
with each city and county providing activity reports relating to the short term
land supply. Facilitating the RAC will be the responsibility of the counties
(ORS 195.025) and will rotate each year, starting alphabetically with Crook
Coun
Policy 4.2.20 Cities are required to comply with state land use program requirements when
changing land designations or amending a UGB, including conducting a local
inventory to determine whether a local deficit exists.
Policy 4.2.21 Cities are directed to not conduct regional inventories where and because the
counties have established plan policies under their statutory coordinating
authority to limit and disperse the number of sites that can be included in the
various UGBs as well as a program to manage the supply.
Policy 4.2.22 To meet the requirements of Division 024 when amending a UGB to include a
site in compliance with the regional plan, cities will be required to provide an
estimated employment projection for the site at full build out within the planning
period by applying the REOA analysis and plan to the particulars of the site.
Policy 4.2.23 When a city investigates and concludes that a potential qualifying large lot
industrial site exists or can be assembled inside of its UGB (and the existing site
zoning will be amended with the large lot overlay zoning assignment), that city
must replace that original [future] buildable land supply or evaluate and conclude
that the previously identified future land supply is no longer needed.
Policy 4.2.24 Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment lands
by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site dispersal as
noted in the REOA.
Policy 4.2.25 Participating cities, after conducting alternative lands and public facility analyses,
but prior to any entitlement process, shall receive formal support from EDCO
that candidate site(s) contain necessary site characteristics and attributes, as
defined in the REOA, to attract large-lot industrial recruiters
Policy 4.2.26 Deschutes County, fulfilling coordination duties specified in ORS 195.025 shall
approve and update its comprehensive plan when participating cities within their
jurisdiction legislatively or through a quasi-judicial process designate regionally
significant sites.
DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT REFERENCES
PAGE 9 OF 10 - EXHIBIT "C" TO ORDINANCE 201 1-017
Policy 4.2.27 Participating cities in Deschutes County (and in the 3-County REOA region
shall adopt a large-lot industrial overlay zone that establishes and maintains the
region's large lot industrial site inventory and manages usage of such lands
Policy 4.2.28 Deschutes County supports EDCO, a non-profit organization facilitating new job
creation and capital investment to monitor and advocate for the region's efforts
of maintaining an inventory of appropriate sized and located industrial lots
available to the market
Policy 4.2.29 Deschutes County, in collaboration with other Central Oregon's counties and
cities and EDCO, will coordinate and seek assistance from state agencies to
continually support a regional economic development replenishment strategy.
Policy 4.2.30 Deschutes County will strengthen long-term confidence in the economy bX
building innovative public to private sector partnerships.
Policy 4.2.31 Deschutes County will collaborate with regional public and private
representatives to engage the Oregon Legislature and state agencies and their
commissions to address public facility, transportation and urbanization issues
that can stymie economic development opportunities in Central Oregon.
Policy 4.2.32 Participating cities in Deschutes County will support the existing economic base
by providing adequate land and infrastructure to make city sites attractive to
businesses willing to invest in high job density and industrial activity.
Policy 4.2.33 Cities in Deschutes County will continue to provide high quality physical
infrastructure to serve the needs of business.
10 DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011
CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION
PAGE 10 OF 10- EXHIBIT "C" TO ORDINANCE 201 1-017
FINDINGS
PROPOSED PLAN AMENDMENT
The proposed amendments to Deschutes County's Comprehensive Plan are described
in Ordinance 2011-017, Exhibits A, B, and C. Added language is underlined and
deleted shown as str-ikethmugh.
REVIEW CRITERIA
Ordinance 2011-017 formally adopts the 2011 Central Oregon Regional Economic
Opportunity Analysis (REOA) and several regional large-lot industrial land policies into
its comprehensive plan. Deschutes County lacks specific criteria in Deschutes County
Code (DCC) Titles 18, 22, or 23 for reviewing a legislative plan amendment.
Nonetheless, since Deschutes County is initiating one, the County bears the
responsibility for justifying that the amendments are consistent with Oregon Revised
Statutes (ORS), Statewide Planning Goals, Oregon Administrative Rules (OARs), and
its existing Comprehensive Plan.
The findings are organized as follows:
• Section (1)
- ORS 195.025
• Section (2)
- Statewide Planning Goal 1, Citizen Involvement
• Section (3)
- Other ORS
• Section (4)
- OAR Division 9, Economic Development
• Section (5)
- Other Statewide Planning Goals
• Section (6)
- Deschutes County Comprehensive Plan
• Section (7)
- Deschutes County Comprehensive Plan Update
• Section (8)
- Planning Commission Recommendation
Section (1), ORS 195.025
* ORS 195.025: (1) In addition to the responsibilities stated in ORS 197.175, each
county, through its governing body, shall be responsible for coordinating all planning
activities affecting land uses within the county, including planning activities of the
county, cities, special districts and state agencies, to assure an integrated
comprehensive plan for the entire area of the county.
Finding: Deschutes County, through its governing body, is exercising its statutory
coordinating authority to address an unmet regional need for large-lot industrial sites.
This authority will assure there is an integrated comprehensive plan between Deschutes
County and its respective cities by encouraging Bend, La Pine, Redmond, and Sisters
to address a short-term specialized employment land need of six industrial sites, 50
acres or larger in three different jurisdictions. Deschutes County is specifically fulfilling
its regional coordination responsibilities by formalizing, through policies, a regional
governance and land use planning framework that describe the roles and
PAGE 1 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
responsibilities of a regional entity, such as Central Oregon Intergovernmental Council
(COIC).1 COIC serves as the Economic Development District representing Crook,
Deschutes and Jefferson counties as designated by the Economic Development
Administration.2 Deschutes County is applying its coordination authority to cities as
well, for those willing to fulfill this regional employment need, consistent with Oregon's
Statewide Planning Program. Deschutes County is now leading and encouraging the tri-
county region to coordinate as a single entity promoting large-lot industrial employments
sites that best serve the region as a whole to create family wage jobs, region economic
diversification and place Central Oregon on the map for regional, national and
international industrial recruitment.
In exercising its coordination authority, Deschutes County recognizes its responsibility
to explain how a regional approach to large-lot employment sites complies with
Oregon's land use system. To address testimony about this regional approach,
Deschutes County is explaining the reasons for its choices, citing supporting evidence
in the record, and making appropriate findings of compliance against applicable state
statutes, statewide planning goals, and administrative rules.
* ORS 195.025: (2) For the purposes of carrying out ORS chapters 195, 196 and 197,
counties may voluntarily join together with adjacent counties as authorized in ORS
190.003 to 190.620.
Finding: Deschutes County is voluntarily coordinating with Crook and Jefferson counties
and the cities of Prineville, Madras, Bend, Redmond Sisters and La Pine as authorized
in ORS 190.003- 190.620. Deschutes County wants to assure that Crook and Jefferson
counties also exercise their coordination authority with parallel plan amendments so
there is a collective and regional response to an unprecedented opportunity to establish
and maintain a supply of large-lot industrial sites in Central Oregon. These efforts will
result in the joint adoption of a REOA, produced by Johnson-Reid LLC, with technical
support from Business Oregon and Economic Development for Central Oregon, draft
policies, and findings.
Section (2) - Statewide Planning Goal 1, Citizen Involvement
Goal: To develop a citizen involvement program that insures the opportunity for citizens
to be involved in all phases of the planning process.
The citizen involvement program shall incorporate the following components:
1. Citizen Involvement To provide for widespread citizen involvement.
' COIC is a Council of Governments organized under ORS 190 by the three counties and seven cities of Central
Oregon. COIC is governed by a 15-member board made up of elected officials appointed by each of the member
governments and appointed representatives of key economic sectors.
Central Oregon Comprehensive Economic Development Strategy, Approved by the Central Oregon Community
Investment Board, November 29, 2007, 5. One function of the Economic Development District is developing and
maintaining and updating the Comprehensive and Economic Development Strategy (CEDS). The CEDS is the result
of a local planning effort, and serves as a guide for regional growth.
PAGE 2 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
2. Communication To assure effective two-way communication.
3. Citizen Influence To provide the opportunity for citizens to be involved in all phases
of the planning process.
4. Technical Information To assure that technical information is available in an
understandable form.
5. Feedback Mechanisms - To assure that citizens will receive a response from policy-
makers.
Finding: Deschutes County has undertaken an extensive process to satisfy the
components of Goal 1. As demonstrated below, Deschutes County has been
transparent and diligent in its commitment to allow ample opportunities for citizens and
stakeholders to participate in this process, raise important questions, offer opinion about
the REOA, and to receive answers about why local policy makers have chosen to adopt
the policies and actions included in this comprehensive plan amendment.
Deschutes County received a Technical Assistance (TA) Grant from the Department of
Land Conservation and Development in 2010 to evaluate Central Oregon's
opportunities, competitiveness, and ability to recruit new and locally grown firms
requiring new large scale development models. Johnson-Reid LLC, was selected from a
pool of consultants to develop a REOA. The TA Grant enabled Deschutes County to
kick-off this project by convening an industrial land forum on June 28, 2010 in
Redmond. Representatives from Johnson-Reid LLC, Business Oregon, IronWolf
Community Resources, Economic Development for Central Oregon, and Deschutes
County spoke at the event. The purpose was to engage business leaders and listen to
their perspective about large-lot industrial sites and regional competitiveness.
Over the course of eleven months, the REOA then went through several iterations with
the assistance of a Regional Advisory Committee (RAC). The RAC consisted of Central
Oregon cities, counties, Johnson-Reid LLC, Business Oregon, Department of Land
Conservation and Development, Department of State Lands, COIC, 1,000 Friends of
Oregon, Economic Development for Central Oregon, Central Oregon Association of
Realtors and private area developers. The RAC met officially six times and reviewed
several iterations of the REOA before it was finalized in May 2011, one month prior to
the completion of the TA Grant. The culmination of the project was a Regional Forum
held in Bend at the Deschutes Service Center on May 24, 2011 to share the results of
the REOA and answer audience questions.
Deschutes County formally initiated a post acknowledgment plan amendment on June
23, 2011. The Deschutes County Planning Commission held two hearings on August 11
and 25 respectively and received two sets of testimony from 1,000 Friends of Oregon
criticizing certain elements of the REOA. After receiving all the testimony, including
Business Oregon and Economic Development for Central Oregon's written and oral
statements, the Planning Commission closed the hearing on August 25, deliberated and
recommended the Board of County Commissioners (Board) adopt the plan amendment.
The Board held two hearings, one on September 25, the other on October 31. In
PAGE 3 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
recognition of the technical questions raised by 1,000 Friends of Oregon, the Board on
October 3 directed staff to:
• Retain the services of Jerry Johnson with Johnson-Reid LLC, the firm hired to
produce the REOA to respond in writing.
• Coordinate with Business Oregon and Economic Development for Central
Oregon to revisit 1,000 Friends' arguments, respond in writing or testify on the
• Coordinate with the Department of Land Conservation and Development to
revisit 1,000 Friends arguments, respond in writing, and testify on the 31St
• Reconvene the RAC prior to the public hearing on the 31st to update everyone
on the County's efforts to coordinate expert testimony and provide substantial
evidence in the record.
In response to the following questions and argument raised by 1,000 Friends of Oregon,
the county finds that 1,000 Friends of Oregon largely has not cited review criteria or
standards against which the county's legislative decision must be reviewed against, nor
has it asserted factual errors in the county's analysis or interpretation of information
before it. Lacking specific allegations of error in its legislative decision, the county finds
that it can do little more than reiterate information from the record to better explain its
decision. The county finds that clearer explanation of its decision furthers the obligations
to provide effective and meaningful citizen involvement as required by Statewide
Planning Goal 1, but that the county is not obligated to defend its decision against
criticism or challenge that is not sufficiently detailed to enable the county to understand
the concern and offer a full response.
The county finds that in this legislative action it must demonstrate compliance with state
statutes, the statewide planning goals and associated administrative rules in a manner
that weighs and balances its interpretation of information with that of other participants
in this planning process. Deschutes County is basing its decision on an adequate
factual base supported by substantial evidence in the record and is choosing to rely on
the REOA and expert testimony provided by Johnson-Reid LLC, Business Oregon and
Economic Development for Central Oregon.3 The County recognizes that when a
reasonable person could reach the decision made by the local government, in view of
all the evidence in the record, the choice between conflicting evidence belongs to the
local government.4
What trends, activities, and success nationally indicate an opportunity exists to
attract large-lot industrial users in Central Oregon? How do national trends
translate or apply to Central Oregon?
3 DLCD v. Douglas County, 37 Or LUBA 129, 132 (1999) (citing 1000 Friends of Oregon v. City of North Plains, 27 Or
LUBA 372, 377-78, aff'd 130 Or App 406, 882 P2d 1130 (1994). Substantial evidence is evidence a reasonable
person would rely on in reaching a decision.
a Younger v. City of Portland, 305 Or 346, 360, 752 P2d 262 (1988).
PAGE 4 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Deschutes County finds that to have a fully-developed program that serves the
broadest range of area citizens and businesses, it is critical to be competitive in
the segment of economic development that depends on the availability of readily-
served, large-lot employment sties. As such, as a matter of policy, the county
chooses to identify and implement a program to create a large-lot land supply
that enables Central Oregon to be a competitive region for industrial recruitment.
Central Oregon's traditional industrial base remains active in the local economy,
and the region would like to increase its emphasis on industrial employment to
strengthen that base.5 The region's supply of affordable land, low cost utilities,
quality of life, and organized economic development landscape makes it an
attractive option for growth in many traded sector industries.6 While many locally
based service-sector businesses are an essential part of a region's business mix
and quality of life, they are not as effective in creating new living wage jobs.'
Central Oregon economic development efforts have been negatively impacted by
a lack of readily available large-lot industrial sites. Major employers in traded
sector industries (export industries) are the primary drivers of economic growth,
providing the impetus for net growth in the regional economy and supporting a
wide range of support industries. At the state and local level, policy makers
understand the importance that large-scale employers can have on the local
economy. In 2007 Central Oregon was home to three firms with 1,000 or more
employees and an additional five with at least 500.8
In a structural sense, globalization has changed the way manufacturers conduct
business. Cost and efficiency are the central tenants of an increasingly
competitive market. Firms are increasingly pressured to develop more capital
intense production models, placing a greater emphasis on economies of scale,
as well as production efficiency and flexibility. Time-to-market for firms has
become an even more crucial factor as they make decisions to locate new plants
and facilities. The result has been the emergence of a clear real estate trend,
creating a global demand for large development ready industrial sites, with the
immediacy of utility services (both public and private sector) of critical
importance.9
Deschutes County's choice to pursue a regional approach to large-lot industrial
employment sites is also consistent with Central Oregon's Comprehensive
Economic Development Strategy (CEDS). According to this report, two of Central
Oregon's Long-Term Priority Goals are:
Goal XIII: Sufficient supply of land affordable for commercial, industrial
and residential development.
° Johnson-Reid LLC, Central Oregon Large Lot Industrial Regional Economic Opportunity Analysis, May 31, 2011, 1.
6 Ibid.
7 Ibid., 4.
8 Ibid.
9 Ibid., 2.
PAGE 5 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* Goal XVI: Ongoing regional planning is in place to preserve and enhance
the region's economic appeal and effect orderly economic development.
One of Central Oregon Community Investment Board's short-term priorities
promotes:
* Structures and processes of public and private organizations to effectively
create, adapt, foster and sustain economic development in Central
Oregon.10
Through the CEDS planning process, past regional needs and issues processes,
the 2007 infrastructure needs inventory, and through other methods of economic
analysis, the following projects, programs and activities have been identified for
focus over the next six years:
* Support of industry clusters.
* Assist in the retention, expansion and recruitment of secondary wood
products, aerospace production and parts, targeted sectors including
apparel and sporting goods, aerospace including information technology,
renewable energy, light industrial and manufacturing, and research and
development."
As noted in the CEDS, new traded sector and investment is critical for building a
strong regional economy. A strategy that increases prosperity for all Central
Oregon residents in rural and urban communities by balancing, diversifying and
developing the region's economy has been promoted by economic development
theorists and practitioners as a critical underpinning of a health community or
regional economy. Three objectives promote:
1. Facilitating new job creation and economic diversification through
recruitment of diverse new traded-sector companies across all industries
that offer family-wage employment;
2. Facilitating new job creation through expansion of existing traded-sector
companies across all industries that offer family-wage employment; and
3. Supporting retention of existing traded-sector companies across all
industries that offer family-wage employment. 12
Local trends documenting large lot recruiters visiting Central Oregon are also
quite noteworthy. The following list cites this evidence:
* According to Business Oregon, Central Oregon experienced four active
recruitments in the past six months looking at industrial lots 50 acres and
greater. One firm was looking for a site in the 100 to 150 range, while
10 See note 2 above (Central Oregon Comprehensive Economic Development Strategy), 4 and 17.
11 Ibid.
12 Ibid., 14.
PAGE 6 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
three have been looking for sites in the 150 to 200 acre range. One firm
was lost due to the uncertainty of and land use actions that were required,
and the properties proposed were eliminated from consideration and it is
not known if the company has reached a final location decision. That
search started in the 50-100 lot size and then expanded to the 150-200 lot
size. The other three are still in the active stage and no additional details
can be furnished because of nondisclosure agreements that are in place.
13
The La Pine Industrial Group has had several companies look at our
certified 77-acre site in La Pine but the most active prospect was the
Ferguson Corporation out of Virginia. They were looking for a site for a
Northwest distribution center for their product line of bathroom and other
plumbing fixtures. They wanted a site that would accommodate an initial
500,000 sq. ft. of buildings and would be expandable to 1,000,000 sq. ft.
Initial employment was to be 200 workers, expanding to 400 in the second
phase. There was also a requirement for a rail spur with extensive on-site
trackage to move products in and out. They were not sure our site was
large enough so Mid-State Electric Cooperative developed a site plan to
show that it could meet their specifications. 14
Jon Stark, Redmond Economic Development Manager for Economic
Development for Central Oregon described a recruiter recently visiting
Redmond. 15
Michael Williams, Oregon Business Development, Industrial Lands
Specialist, described recruiters visiting Central Oregon, as well as the
heightened interest expressed by companies once Facebook committed to
a site in Prineville. 16
• What is it about competing regions and their industrial land supply that has
enabled their success?
Successful local and regional industrial recruitment in the 21St Century must
consider global competition factors. Communities, regions and states that focus
primarily or exclusively on outdated governance paradigms are ill suited for
keeping up with fast paced global economic and industrial marketplace changes.
Industries must be nimble to be successful in the competitive global marketplace.
Manufacturers must be able to quickly produce new products at expanded,
renovated or new production facilities in "just-in-time" fashion. Often
accomplished through on-site expansion on areas reserved for that purpose,
industrial site selectors must choose sites large enough to build-in future
expansion capacity. Government must be responsive to align its regulatory and
13 Jerald Johnson, Johnson-Reid LLC, Response to REOA Critiques and Questions Submitted by 1000 Friends of
Oregon, October 21, 2011, 5
14 Lee Smith, General Manager La Pine Industrial Group, October 27, 2011, email.
15 Oral Testimony, Board of County Commissioners public hearing, October 31, 2011.
16 Ibid.
PAGE 7 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
process requirements to meet market demands if it wishes to capture the
considerable benefits of high value industrial development."
Appendix B of the REOA provides examples in the Pacific Northwest and the
Western United States of local governments proactively planning for industrial
development.18 Communities like Quincy, Washington for example, examined
their community assets, in this case large capacities of electricity resulting from
the closure of several foundries and invested in large-lot industrial sites that
today accommodate six large acreage industrial users. '9
Deschutes County chooses to initiate a similar program to compete for large-lot
industrial employers. The REOA documents the strengths and weaknesses of
Central Oregon's economy. Deschutes County, by exercising its statutory
coordination authority, wants to leverage its strengths and employ new economic
development tools to create a dynamic and competitive large-lot industrial land
supply portfolio and inventory that appeal to industrial site selectors. According to
the REOA and testimony by Business Oregon and Economic Development for
Central Oregon, Central Oregon needs a critical mass of competitive and diverse
vacant, developable industrial sites in order for site selectors representing
potential industrial recruitment to consider the region.20
• Does a competitive portfolio of large-lot employment site create a strong and
thriving economy?
The county finds that maintaining a competitive portfolio of employment sites is
not a guarantee of a strong and thriving economy, but examples abound of the
benefits of having such a supply. The county finds that as a matter of policy
providing the opportunity for businesses that need such a portfolio of sites is
better for the community than not providing the opportunity. For example, citing
Economic Development for Central Oregon's written testimony, the Facebook
industrial site in Prineville already has 52 full-time employees involved in the
operation of the facility and expects an additional 12-15 jobs next year. The
majority of these jobs are highly technical and well-paid. Additionally, more than
1,200 workers helped construct the facility over the past 20 months, with an
average of 300 on the site on any given day.21 Local leaders in Prineville and
Crook County have been very vocal and public in their support of attracting data
centers because they have seen the positive economic impact of multiple
hundreds of millions of dollars being spent in their community. These facilities
17 See note 5 above, (Johnson-Reid LLC, May 31, 2011, REOA), 2.
18 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 8. As outlined in the experience of the
areas summarized in Appendix B of the REOA, areas with less unique site qualifications must stress low barriers to
entry.
19 See note 5 above, (Johnson-Reid LLC, May 31, 2011, REOA), 60-69. Hillsboro, OR, Austin, TX, Hermiston, OR,
Morrow County, OR, Reno, NV, and Salt Lake City, UT are also profiled.
20 Ibid., 1.
21 Roger Lee, Economic Development of Central Oregon Technical Response to 1,000 Friends of Oregon Objections
to Central Oregon REOA and Deschutes County Plan Amendment, August 17, 2011. 2
PAGE 8 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
require extensive investments in infrastructure and they require the large
industrial-zoned land with access to municipal infrastructure that the REOA
seeks to identify.22
• Why should Central Oregon as a region invest limited resources to provide for
large-lot industrial sites (50 acres>)?
In 2008, the Oregon Economic and Community Development Department (now
Business Oregon) recognized that large, ready to go industrial sites have been
the state's most significant development challenge and one of the most
noticeable changes in real estate trends in the last few years. This change in
demand and the changing nature of OECDD's account base clearly document
that global business trends have emerge as key elements of Oregon's
economy.23 Global accounts have tended to be very attractive to the state and
community bringing leading edge technology, large capital investments, labor
intensive and high wage rate employment opportunities. The shortage and even
lack of large sites is now resulting in opportunity loss to our communities and
state.24
Deschutes County finds that as a matter of policy, it may choose how to structure
its community and economic development activities, provided those activities are
consistent with applicable local, state and federal laws and policies, including
those for land use planning. Central Oregon chooses to invest in large-lot
industrial sites because it is an additional tool to broaden the region's economic
attractiveness. While trade sector industries are primary drivers of job creation,
the REOA does not assume that large employers are those drivers. Instead,
large-lot industrial demand recognizes that accommodating these types of users
reflects a reasonable component of an economic development strategy.25
Furthermore, Economic Development for Central Oregon recognizes that the
recruitment of companies in new and existing industries is an important
component of any successful economic development program and diversification
strategy. New companies bring a different mix of professional and technical talent
to communities that can spawn other businesses and technologies.26
Business Oregon is mandated by ORS 197.717(2) to "provide a local
government with state and national trend" information to assist in compliance
with ORS 197.712 (2)(a)." The department reviewed the Central Oregon area,
and made the following recommendations:
22 Ibid., 3.
23 Bev Thacker, Rail Served & Large Industrial Sites Memorandum, March 11, 2008, 1.
24 Ibid., 2 and 3. The chart on page 3, while not a comprehensive record, shows that the demand for large sites has
increased in the measurement period and that employment has moved to higher employment densities.
25 Jerry Johnson, Johnson-Reid LLC, Response to May 17th Letter from 1,000 Friends, May 31, 2011, REOA,
Appendix C, 2.
26 Roger Lee, Economic Development for Central Oregon Letter, June 3, 2011, REOA. Appendix C, 3.
PAGE 9 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Given its current size and expected growth, it is not unreasonable to
assume that the region being examined as part of the current Central
Oregon Large Lot Economic Opportunity Analysis should have a mix of
large-lot sizes for potential employers and site selectors to choose
from. Such a mix would have at least multiple ready sites in the 200,
100 and 50-acre plus acreage ranges in order to meet expected 20
year land supply needs.27
According to Business Oregon, Central Oregon experienced four active
recruitments in the past six months looking at industrial lots 50 acres and
greater. One firm was looking for a site in the 100 to 150 range, while three
have been looking for sites in the 150 to 200 acre range. One firm was lost
due to the uncertainty of and land use actions that were required, and the
properties proposed were eliminated from consideration and it is not known if
the company has reached a final location decision. That search started in the
50-100 lot size and then expanded to the 150-200 lot size. The other three
are still in the active stage and no additional details can be furnished because
of nondisclosure agreements that are in place.28
• There is no evidence that large industrial lots mean many jobs.
The county finds that its policy decision to promote a portfolio of large-lot
employment sites is not merely an empirical exercise relying on the experiences
of other regions or jurisdictions. The county further finds that regulations
governing land use planning do not establish legal standards or thresholds by
which to judge the efficacy of public policy of economic development. Lacking
such standards, the county finds that evidence in the record supports the
decision to proceed with the plan amendment. For example, Economic
Development for Central Oregon's written testimony notes that, in Bend, the
largest technology company, Bend Research, has had more than a dozen
companies spun out of its operations as such that employment counts of these
"new" businesses now greatly exceeds its own employment. It is highly doubtful
that these companies would be in Central Oregon if not for the parent company.29
• Are jobs from large-lot employers better than small lot employers?
Deschutes County finds that the current proposal is not one where a particular
class of employers is better or more valuable than another, and that participation
in this regional approach enhances rather than detracts from employment
opportunities and quality of life in the region. The county is choosing targeted
basic industries with large-lot industrial needs to support the region's economic
development objectives. While many locally based service-sector businesses
are an essential part of a region's business mix and quality of life, they are not as
27 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 46.
28 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 5.
29 See note 21 above (Roger Lee, August 17, 2011), 3.
PAGE 10 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
effective in creating new living wage jobs.30 Since 2002, wage levels in Central
Oregon have averaged a 3.2% annual rate of growth, comparatively better than a
2.8% annual growth rate at the State level. However, Deschutes County's
average 2009 wage level of $35,295 was well below the statewide average.
Lower relative wage rates coupled with housing affordability concerns can limit
the region's ability to attract a high quality workforce to the region.31
The county finds that analysis in the REOA does not diminish the importance of
small, start-up firms. What it does do is note that these firms represent only a
portion of the spectrum of firms, and a balanced economic development program
would provide for these types of firms as well as larger industrial firms. The two
categories are complimentary, not competitive.32 Efforts to help existing
companies (large and small) to grow or sustain their employment have been in
place for more than a decade. Efforts to help start-ups and early stage
companies are also solidly established. Economic Development for Central
Oregon understands that most jobs come from existing companies, which is why
it dedicates more than 50% of its efforts to fostering entrepreneurship and the
retention/expansion of existing traded-sector companies.33
• Evidence provided in the REOA, page 43, Figure 25, indicates that large
industrial lots would result in a net job loss in the region. It seems that
businesses with 20 or more employees are firing more people than they are
hiring. If this economic sector is shrinking in the western US generally, why
should we expect to see growth in Central Oregon in particular?
Johnson-Reid LLC, responded to this question by stating that the contention here
is that since larger firms have been losing jobs in aggregate, the Region will be
unable to capture new larger firms in the future. To understand the relationship
between these numbers you need to differentiate between net and gross activity.
While contractions in aggregate have exceeded expansions for larger firm sizes,
the cited table also shows that the number of firms has increased significantly.
As shown on the table, the birth and death of firms is an ongoing phenomenon,
and a very substantial number of new firms are formed annually through births or
expansions. The ratio of births relative to deaths is most positive in the over 20
employee range cited in 1000 Friends critique. The relevant metric for projecting
the prospective capture for Central Oregon is the birth and expansion number,
not the aggregate employment number. As noted in the REOA, firms primarily
become prospective recruitment targets when they are formed or find their
existing facilities or business environment inadequate. As a result, the number of
births (which can include new firms as well as firms expanding into a new
classification) is a key indicator of the depth of potential market demand. As the
30 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 4.
31 Ibid., 20.
32 See note 25 above (Jerry Johnson, Johnson-Reid LLC, May 31, 2011, REOA, Appendix C), 3.
33 See note 26 above (Roger Lee, June 3, 2011) , 2.
PAGE 11 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
primary target of the REOA is firms exogenous to the current economy, the firm
death estimates are not relevant to the forecast.sa
The county finds that while trends identified in the REOA may lead one to a
particular opinion about the future, there is no guarantee that the trend will
continue into the future or if the issue is relevant to the broader effort to craft an
economic development strategy for the future of Central Oregon.35 Deschutes
County acknowledges that while larger firms in aggregate did lose jobs, it is
important to recognize that many large firms expanded considerably during the
period outlined in the 1,000 Friends May 17 letter.36 Deschutes County and
Central Oregon are choosing to invest in large-lot industrial sites because the
industries targeted in the REOA have been deemed as the most likely to locate in
the region by both Business Oregon, Economic Development for Central Oregon,
and a finding reinforced by the subsequent research done by Johnson-Reid LLC.
Industries requiring large acreages that hold promise for the Central Oregon
region include: data centers, warehouse/distribution centers, and select high
technology/biosciences operations. According to global data center site selector
David Aaroe, (co-founder and principal, Fortis Construction), Central Oregon has
all the elements to rival Central Washington as a top location for the data center
industry in North America.37
As noted in the REOA, currently Central Oregon has a shortage of large vacant
industrial sites and is rarely a serious competitor for industrial recruitment due to
this scarcity. Again, Deschutes County chooses to adopt a REOA and implement
a large-lot industrial siting program because it is identified by established experts
as a roadmap to resolve this land supply shortage and improve the regional
economy and employment opportunities.
REOA does not show that large companies would set up shop in a community
like ours.
The county finds that the REOA does not show that large companies would not
set up shop in the region. It is not the responsibility of the REOA to provide a
definitive, purely factual answer to policy and planning issues before decision
makers. The REOA provides relevant information and analysis to inform elected
officials acting in their legislative capacity.
Should each prospective industry identified in the REOA, pages 40-45 be
reviewed individually for warranting a site requirement between 50 to 200+ acres
based on its own site characteristic needs?
34 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011).
35 See note 4 above (Younger v. City of Portland). The county is engaged in a legislative action for which it can make
its own interpretations of information before it, provided a reasonable person could reach a similar conclusion when
provided with potentially conflicting or competing interpretations.
s See note 25 above (Jerry Johnson, Johnson-Reid LLC, May 31, 2011, REOA, Appendix C), 3.
37 See note 21 above (Roger Lee, August 17, 2011), 3.
PAGE 12 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The Department of Land Conservation and Development does not believe these
steps are necessary.38 Deschutes County finds that it is reasonable to conclude
that prospective industries identified in the REOA should not be narrowly or
individually reviewed against site characteristics. There is a common
misperception that an industry such as distribution, manufacturing or food
processing has a single consistent set of site requirements that make planning
easy. Another related source of confusion is the inconsistent use and
understanding of the term "site." Sometimes it means a single tax lot and a single
user. Sometimes it means a location where raw land is developed into an
industrial park that might include multiple related or unrelated end users or even
a mix of use types.39 According to the REOA, several factors contribute to lot-
size demanded by industrial users:
Requirements for setbacks, access, parking and environmental mitigation and
avoidance;
Industries want buffering for security, storage and noise;
Many industries require land for expansion for their long-term business plan;
Large parcels are also a good way to build a cluster of industries around a
high profile anchor business; and
Efficiencies can be obtained by clustering industrial users into large master-
planned business parks.ao
• The REOA's recommended competitive large-lot industry inventory, page 46, is
difficult to discern given the short term and long term totals. Are the short term
needs in addition to the long term needs, or do the long term needs incorporate
the short term needs?
As noted by Johnson-Reid LLC, the long-term needs number is inclusive of the
short term needs figure.41 Deschutes County finds that the REOA provides
reasonable information and analysis pointing to an unmet land need for large-lot
employment sites, currently not part of regional economic development efforts.42
Deschutes County, by exercising its statutory coordination authority, is choosing
to focus on a short-term inventory that identifies six, 50 acre or greater sites, in
three different jurisdictions, with two of those sites being between 100 to 200
acres, and one over 200 acres.43 Oregon's prescriptive land use planning system
nonetheless requires, that Deschutes County and (given its regional emphasis)
Central Oregon identify the employment land supply for a twenty year planning
38 Karen Swirsky and Tom Hogue, Department of Land Conservation and Development October 18, 2011 Letter, 2.
39 Ibid.
40 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 3.
41 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 9.
See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 5.
43 Ibid., 46-47.
PAGE 13 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
period.44 Therefore, in this case, a total of seventeen sites represent the twenty
year regional land supply of large-lot employment sites.as
The county finds that a twenty year land supply from an economic development
standpoint is inconsequential. Business Oregon recognizes that Central Oregon's
first priority should be establishing a readily available inventory of six large sites
in at least three separate jurisdictions.46 Economic development professionals
such as Business Oregon advise the county to emphasize a short-term supply
with mechanisms to insure consistent replenishment because of the uncertainty
of trying to forecast long-term needs in a period of rapidly changing conditions.
Johnson-Reid LLC, concurs. Recognizing the inherent uncertainty in producing a
20-year forecast, the REOA recommends that the County focus on maintaining a
readily developable short-term supply, with a mechanism for maintaining that
supply. In addition, we would strongly recommend that periodic review of what
an appropriate site inventory would be, incorporating input from industry
specialists. From an economic development perspective, short-term availability
of a range of appropriate sites is what is critical. The supply for the longer
planning period has limited immediate impact on economic development
prospects, although it can be useful in anticipating likely areas for replacement of
inventory if consumed.47
Viewed from this perspective, the long-term (20 year) supply's value is in
identifying sites that can replace the short term inventory if absorbed or if market
conditions and needs shift. Deschutes County is proposing the following policies
that concentrate this program's efforts on the short-term supply, including
safeguards that ensure replenishment sites are not exploited in violation of
Oregon's land use planning program:
The unmet short-term need for large-lot industrial sites in Central Oregon is an
additional component of a city's twenty-year land supply.
Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where key
infrastructure is in place and has excess capacity, either the north end of
Bend or the southern end of Redmond, east of Highway 97.48
44 See OAR 660-009-0025(2). http://arcweb.sos.state.or.us/pages/rules/oars 600/oar 660/660 009 html
45 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 46.
46 Michael J. Williams, Business Oregon Letter, May 19, 2011, REOA, Appendix C, 3.
47 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 2.
48 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 47. In the professional opinion of the economic
development professionals contributing to this analysis, a competitive portfolio of industrial sites would include a
collection of large industrial parcels in some selected communities, and a major, centrally located large-scale
PAGE 14 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The supply of up to 6 sites, located in existing or amended Urban Growth
Boundaries (UGBs), addresses the short-term large-lot industrial regional
land need in Central Oregon and can be incorporated as an additional
component of a city's twenty year land supply.
The supply of up to 17 long-term sites, which includes the 6 short term sites,
represents the currently projected (total) 20-year regional land supply of this
special industrial land classification.
Replenishing the short term inventory shall be initiated when large lot
employers demonstrate a commitment to short term sites by completing land
use entitlements and executing site-development permits, including building
permits, subject to the following replenishment mechanism:
a. To maintain a competitive short term ready supply of large-lot
employment sites with the characteristics specified in the REOA, only a
total of six vacant and developable sites shall ever be made available at
one time.
The policies above recognize that projecting the demand for industrial land in the
50 acre or greater size range is inherently highly speculative, as it is a thinly
traded and highly competitive sector. With fewer transactions and multiple areas
competing for these transactions, there is an unusually high degree of
uncertainty in any forecast. The degree of uncertainty however, is offset by
Central Oregon emphasizing a short term ready supply, with a mechanism to
replace supply in a timely manner when needed. The notion of replenishment is
always to maintain an adequate short-term supply of sites. It can be triggered
when a site is committed to development. Deschutes County is choosing to
define a large-lot employer's commitment to a site when it completes the land
use entitlement process and executes site development permits (ex. grading),
including building permits.
• What is the 20-year employment land supply for the REOA?
Deschutes County, by exercising its statutory coordination authority, is choosing
to focus on a short-term inventory that identifies six, 50 acre or greater sites, in
three different jurisdictions, with two of those sites being between 100 to 200
acres, and one over 200 acres. Oregon's prescriptive land use planning system
nonetheless requires, that Deschutes County and (given its regional emphasis)
Central Oregon identify the employment land supply for a twenty year planning
period. Therefore, in this case, a total of seventeen sites represent the twenty
year regional land supply of large-lot employment sites. As noted by Johnson-
Reid LLC, the recommended inventory is intended to reflect a regionally and
development near the region's geographic and workforce center, and where key infrastructure is in place and has
excess capacity. This would be optimally located on the north end of Bend, but infrastructure challenges will make
this choice problematic for at least the short-term. The next most optimal location is on the southern end of
Redmond, east of Highway 97. The area has few neighbors, possible secondary transport access and most of the
municipal and franchise utilities with excess capacity.
PAGE 15 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
nationally competitive portfolio of large industrial lots. The longer term inventory's
value would be in identifying sites that can replace the short term inventory if
absorbed or if market conditions and needs shift. The REOA does not
recommend accommodation of the indicated long term need, but only the
maintenance of a short-term inventory.49
• How does the REOA conclude that Central Oregon needs lots substantially
larger than those in and around Portland?
The county finds that the REOA has been appropriately and reasonably tailored
to address conditions and policies unique to the Central Oregon region. The
county finds that comparisons to other regions are useful and instructive, but not
determinative, of plans and policies for the region. The county finds that in this
legislative effort, no comparison of employment needs to the Portland
metropolitan area, or other region, is required or necessarily persuasive.
The REOA is an economic development driven effort, with extensive input from
Economic Development for Central Oregon and Business Oregon. The
recommended inventory is intended to reflect a regionally and nationally
competitive portfolio of large industrial lots. The REOA recommends adoption of
the short term inventory, not the long term. Oregon's land use planning system
nonetheless requires the identification of a twenty-year land need. As discussed
above, the longer term inventory's value is in identifying sites that can replace the
short term inventory if absorbed or if market conditions and needs shift.
Deschutes County therefore is choosing through policies to identify the logical
steps to maintain a competitive short-term inventory while still complying with
OAR 660-009 through the adoption of land use policies.
• The REOA claims a land need that far exceeds the land need identified by any
other Oregon jurisdiction when viewed in light of expected employment growth.
Why is Central Oregon's land need so disproportionate to any other jurisdiction in
the state?
The county finds that its interpretation of information and analysis in the REOA
supports adoption of the legislative proposal before it. The county further finds
that estimates of land need are based on best available information and should
not be held to an unreasonably high level of precision. Accordingly, comparison
to other jurisdictions in Oregon is dependent on different information and
analysis, and may not be relevant to conditions in Central Oregon.
• Has the REOA fulfilled the requirement of OAR 660-009-0015(2) and the
requirement to identify the number of sites based on site characteristics typical of
expected uses?
49 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 4.
PAGE 16 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The county finds that that the REOA provides a reasonable and sufficient factual
and analytical basis for the Board to conclude in this legislative action that
requirements of Statewide Planning Goal 9 are met. Both Goal 9 and Division
009 require that employment land planning be based on comparative location
advantages and an articulation of opportunities based on national, state, regional
and local trends. The REOA cites large-lot employment trends and dynamics of
the global market place, the strengths and challenges of Central Oregon's
economy and the opportunities for the region to compete for large-lot employers
in the data center, high technology and warehouse and distribution industries.50
Deschutes County is proposing the following policies that identify the specific
economic development opportunities being pursued:
Deschutes County supports a multi-jurisdictional cooperative effort to pursue
a regional approach to establish a competitive supply of sites particularly
designed to address out-of-region industries that may locate in Central
Oregon.
The Central Oregon region, comprised of Jefferson, Crook and Deschutes
counties and its respective cities recognize the market reality that the region
currently serves as an integrated, cohesive economic unit, sharing work force
and commercial amenities, and should be marketed as such to increase its
perceived scale in the market
The Central Oregon region needs a critical mass of competitive and diverse
vacant, developable large-lot industrial sites in order for site selectors
representing potential industrial recruitment to consider the region, along with
all of the other needed support factors including adequately skilled workforce,
workforce training programs, worker housing, supportive local government,
utility services, transportation, and quality of life.
The unmet short-term need for large-lot industrial sites in Central Oregon is
an additional component of a city's twenty-year land supply.
Competing as a cohesive region allows Central Oregon to market a larger
available work force, the size of which is often a key locational criterion for
firms.
Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where key
infrastructure is in place and has excess capacity, either the north end of
Bend or the southern end of Redmond, east of Highway 97.51
50 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 7-11; 21-29; 30-34.
51 See note 48 above (Johnson-Reid LLC, May 31, 2011, REOA), 47.
PAGE 17 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
• Has the REOA satisfied the requirements of Goal 9 by providing an employment
forecast that justifies the amount of land it concludes is required for large-lots
within the 20-year planning period
Goal 9 and Division 009 do not require an employment forecast or planning
based on an initial employment forecast.52 The county finds that traditional
industrial land need determination is based on a formulaic approach, utilizing
population and employment projections applied to a square footage per
employee ratio to arrive at a total acreage number. 53 Deschutes County is
choosing a different course, one that adopts a REOA that recognizes global
competition factors. Oregon's land use program as expressed in OAR 660-009,
while laudable does not structurally account for the recent demand of large-lot
employers and rapidly growing industries that are building production and
research capabilities to establish global scale. Additional demand comes from
industries looking for regional production or as a result of specific logistical
concerns. Facebook for an example chose an available and ready-to-develop
site in Prineville based upon an affordable and adequate water supply, affordable
energy prices, year round cool nights to reduce cooling costs, and various local
incentives, not a population or employment forecast produced by the city as
many as 19 years prior.54 Deschutes County acknowledges that unlike office
demand, the need for most types of industrial space is difficult to determine using
employment projections. Most industrial uses generate comparatively few jobs
per square foot of leasable area, and space needs have little to do with changes
in the numbers of jobs in production or distribution business.55
Deschutes County has drafted the following policy to comply with Oregon's land
use planning program, requiring an employment projection be prepared as an
input to a UGB amendment under Division 024 when changing land designations
or amending a UGB:
To meet the requirements of Division 024 when amending a UGB to include a
site in compliance with the regional plan, cities will be required to provide an
estimated employment projection for the site at full build out within the
planning period by applying the REOA analysis and plan to the particulars of
the site.
• Does the REOA and Deschutes County's plan amendment require that the
inventory for large-lot employment sites, OAR 660-009-0015(3) (immediate & 20
year) be completed as part of this legislative process?
52 See note 38 above (Department of Land Conservation and Development October 18, 2011 Letter), 3.
53 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 3-4.
54 Ibid., 4.
55 See note 46 above (Michael J. Williams, May 19, 2011), 2. The Urban Land Institute, a well-respected
organization in real estate, sustainable development and land use, has specifically deemphasized employment
growth as a determinant of the demand for industrial space in its leading publication on real estate market analysis.
PAGE 18 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The county finds that no requirement in state law requires it to at this time
complete an inventory or other analysis of how to meet identified need. The
necessary OAR 660-009 analysis will have to be in place at the time land
designations are changed or a UGB amended to comply with OAR 660-024.
Central Oregon's innovative approach proposed in the REOA splits the
determination of site need, the assignment of site dispersal and a site supply
management program legislated by Deschutes County's statutory coordination
authority from subsequent city actions that determine site deficit and location to
comply with Goal 14.6 Deschutes County is recommending the following plan
policies to comply with OAR 660-009-0015(3):
Cities are required to comply with state land use program requirements when
changing land designations or amending a UGB, including conducting a local
inventory to determine whether a local deficit exists.
Cities are directed to not conduct regional inventories where and because the
counties have established plan policies under their statutory coordinating
authority to limit and disperse the number of sites that can be included in the
various UGBs as well as a program to manage the supply.
• Is it accurate that once a 20-year need is identified that the jurisdictions that
adopt this plan are under an obligation to bring in the entire amount under OAR
660-009-0025(2) and OAR 660-024-0050(4)
According to the REOA, large-lot employment sites are an unmet land need,
currently not part of regional economic development efforts. Deschutes County,
by exercising its statutory coordination authority, is choosing to focus on a short-
term inventory that identifies six, 50 acre or greater sites, in three different
jurisdictions, with two of those sites being between 100 to 200 acres, and one
over 200 acres. Oregon's prescriptive land use planning system nonetheless
requires that Deschutes County and (given its regional emphasis) Central
Oregon also identify the employment land supply for a twenty year planning
period (total land supply). A total land supply of seventeen sites represents the
twenty year regional land supply of large-lot employment sites.
It is important to acknowledge that a twenty year land supply from an economic
development standpoint is inconsequential. Business Oregon recognizes that
Central Oregon's first priority should be establishing a readily available and
developable inventory of six large sites in at least three separate jurisdictions.
Economic development, viewed outside the context of Oregon's land use
planning system would focus entirely on a short-term supply with mechanisms to
insure consistent replenishment. Viewed from this perspective, the long-term (20
year) supply's value is in identifying sites that can replace the short term
inventory if absorbed or if market conditions and needs shift. As noted above,
Deschutes County is proposing policies that concentrate this program's efforts on
ss See note 38 above (Department of Land Conservation and Development October 18, 2011 Letter), 3.
PAGE 19 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
the short-term supply, including safeguards that ensure replenishment sites are
not exploited. The following policies satisfy OAR 660-009-025(2) and 660-024-
0050(4):
The supply of up to 17 long-term sites, which includes the 6 short term sites,
represents the (currently projected) total 20-year land supply of this special
industrial land classification.
Cities are directed to not conduct regional inventories where and because the
counties have established plan policies under their statutory coordinating
authority to limit and disperse the number of sites that can be included in the
various UGBs as well as a program to manage the supply.
• Does the number of sites required rely on "market choice?"
Johnson-Reid LLC, responded, stating the REOA does not have a finding relying
upon "market choice," but does note the reality that the competitive position of
the Region is reliant upon the availability of multiple viable and readily available
sites. A finding of the REOA is that six readily available large industrial sites
constitutes the adequate supply necessary to meet public policy objectives.57
The county finds that the Oregon Court of Appeals recently opined that "market
choice is an infinitely pliable and elastic term" in the context urban growth
boundary planning.58 The commenter has not offered a workable definition of
"market choice" upon which Deschutes County can conclude whether or not this
legislative decision may turn. Therefore, Deschutes County declines to engage
in making a definitive conclusion about undefined terms. Economic recruitment
benefits from some degree of market choice. Firms evaluating prospective
locations are a more likely to consider Central Oregon if multiple appropriate
sites can be seen in a single trip. The region is hoping to establish and maintain
a "competitive portfolio" of large-lot industrial sites. This would include an
inventory of readily available and appropriate sites consistent with baseline
criteria, allowing the region to clear the initial site selection screening. To the
extent that multiple prospective sites are available in the region, Central Oregon's
competitive position would be enhanced as site selectors prefer to have multiple
options before physically visiting an area such as Central Oregon.59
As stated earlier, Deschutes County, by exercising its statutory coordination
authority, is choosing to focus on a short-term inventory that identifies six, 50
acre or greater sites, in three different jurisdictions, with two of those sites being
between 100 to 200 acres, and one over 200 acres. Prioritizing short term sites
is substantiated in the REOA and by Business Oregon's written testimony
referenced in Appendix C. Oregon's land use planning system still requires that
Deschutes County and (given its regional emphasis) Central Oregon identify the
57 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 9.
58 1000 FRIENDS OF OREGON v. LCDC. 239 P.3d 272 (2010) http://www.publications.oid.state.or.us/Al 35375htm
59 See note 5 (Johnson-Reid LLC, May 31, 2011, REOA), 46.
PAGE 20 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
employment land supply for a twenty year planning period. As noted above, a
total of seventeen sites represent the twenty year regional land supply of large-lot
employment sites. This is strictly a land use planning requirement.
• What facts and assertions presented in the REOA justify the number of large-lot
industrial sites is needed?
As noted above, the county finds that the REOA provides adequate and
reasonable information and analysis upon which to base a decision in this
legislative action. The county finds that it is not the role of the REOA to provide
an absolute or definitive answer, without discussion and policy input from local
decision-makers, about a long-term need for employment land to advance
community livability in Central Oregon.
Deschutes County is choosing to rely on a methodology for gross land demand in
the large-lot segment. The REOA cites firms with more than 500 employees as a
general proxy for large-lot demand. According to Business Oregon, this is a very
conservative assumption.60 Using the current profile of firms by size in the
Western United States and Central Oregon, combined with birth and expansion
patterns, Johnson-Reid LLC, generated a model of annual large firm location
activity in the region.61 What is modeled is a prospective demand, assuming that
a competitive inventory is available and maintained, allowing the region to
capture a "fair share" of market activity.
• Figure 28 only uses the births and expansions of large businesses to determine
how many more businesses central Oregon should see in the next 20 years. For
land need purposes, shouldn't the net expansion rate be used?
As explained by Johnson-Reid LLC, 1,000 Friends of Oregon contends that the
analysis is flawed due to our use of the firm birth rate as opposed to net growth
(less deaths). This approach does not reflect a flaw in the analysis, and they
appear to have misunderstood the nature of the forecast. The model was
designed to identify the pool of prospective deals as opposed to net growth. As
Central Oregon doesn't have these firms and is looking to compete for them
when they are seeking locations, the death rate isn't relevant locally. The model
is designed to predict the number of prospective location decision that the
Region has the potential to compete for. The level of decisions anticipated is
consistent with the experience of the recruitment specialists consulted as part of
this analysis, as well as the current level of recruitment activity in the region.62
• Exactly what is the evidence that this need is "exogenous" or above and beyond
the needs already accounted for by the OED forecasts?
60 See note 46 above (Michael J. Williams, May 19, 2011), 2.
61 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 43-46.
62 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 6-7.
PAGE 21 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The OED forecast included in the REOA is assumed to be contextual as opposed
to a reference forecast. The forecasts do reflect an extension of historic trends,
and were never intended to be used in either this type of work or to be extended
over a twenty year forecast. The REOA does not include or incorporate an
employment forecast for the twenty year period. 63
Johnson-Reid LLC, found that traditional approaches to project employment land
needs evaluate the land market in a simple algebraic relationship, converting
projected employment growth into associated space and land needs necessary
to accommodate that growth. Our approach in the Central Oregon REOA was to
look at the potential for the region to compete for firms making locations
decisions that are exogenous to the employment trends in traditional forecasts.
These are typically national or international firms making location decisions that
consider locales in the broader Northwest or Western United States. Recruiting
these industries is not a "zero sum game", for Central Oregon or the State of
Oregon. If for example a firm is attracted that would have otherwise located in
Spokane, it is a net gain for the Region as well as the State. Maintaining a
competitive inventory of sites is a sound economic development strategy. Being
"competitive" does not always translate into being successful, but it does
increase the likelihood of success. The focus of the findings of the REOA is that
establishing and maintaining a competitive portfolio of large industrial sites
enhances economic development prospects in Central Oregon. The growth
targeted by this supply is exogenous to the underlying employment forecasts of
the region, and if not accommodated would not be expected to be realized. This
is prospective or potential growth, and not growth inherent to the underlying
trends in the region.sa
As discussed above, there are a substantial number of large firms regularly
seeking sites that are not currently available within the region, precluding
economic development organizations such as Business Oregon and Economic
Development for Central Oregon from marketing the area to these prospects .65
Traditional formulaic approaches to Goal 9, relying on population and
employment projections do not account for global competition and market trends
associated with large-lot employers. The REOA documents national and state
economic trends that provide the basis for Deschutes County to pursue this
unmet land need.
Oregon's economic growth is expected to outpace growth at the national level.
By 2018, the State's employment is expected to grow by over 14% with Oregon's
population growing by 9% over the same interval. Additionally, Global Insight, a
national leader in economic forecasting, project's Oregon's Growth State Product
to have the second highest growth rate in the nation in the coming years.
Through 2017, the OEA forecasts 223,000 new jobs in the Oregon economy.
63 Ibid., 9.
64 Ibid., 2.
65 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 5.
PAGE 22 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Mirroring national forecasts, a significant share (41%) are expected to fall in
Professional & Business Services and Health Services. The state is expected to
add over 25,000 new manufacturing jobs based on the 2010 base, roughly 8,000
of which are expected to be high wage High Tech Manufacturing jobs .6
Changes in global business patterns have pressured firms to develop more
capital intense production models, placing a greater emphasis on economies of
scale, as well as production efficiency and flexibility. The result has been the
emergence of a clear real estate trend, creating a global demand for large
development ready industrial sites. Shifting global market factors have increased
the need for large-lot industrial sites over the last several decades. Warehouse
properties have substantially increased in size as distribution reflects increasing
returns to scale as well as the concentration of production in larger production
facilities. Production facilities are also increasingly scaled for global as opposed
to regional or national needs. The following are examples of recent warehouse
projects that have located to the State of Oregon, as compiled by Business
Oregon:
Jurisdiction
Tenant
Site Size
Square Footage
Alban
Target
175 acres
1.3 million
Hermiston
Wal Mart
200 acres
1.3 million
Lebanon
Lowes
204 acres
+1.3 million
Salem
Home Depot
50 acres
500,000
As shown in the preceding table, the emerging module for distribution facilities
now regularly tops 1.0 million square feet of building area, with site sizes in
excess of 200 acres. Over 55 projects have shopped the State of Oregon over
the last ten years with site demand over 50 acres, averaging over 5 new projects
per year. Business Oregon currently has 10 estimated outstanding leads in this
size category. Business Oregon estimates that they see approximately 15
serious inquiries a year for large scale manufacturing sites. Combined with
warehouse/distribution inquiries, Business Oregon sees over 20 annual inquiries
a year statewide for large-lot industrial sites. As not all leads are picked up by
Business Oregon, one would expect the overall activity to be significantly higher.
67
Section (3) - Other ORS
* ORS 195.025: (1) In addition to the responsibilities stated in ORS 197.175, each
county, through its governing body, shall be responsible for coordinating all planning
activities affecting land uses within the county, including planning activities of the
county, cities, special districts and state agencies, to assure an integrated
comprehensive plan for the entire area of the county.
66 ibid., 16.
67 Ibid., 21-22.
PAGE 23 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Finding: See Section 1, page 1.
* ORS 195.025: (2) For the purposes of carrying out ORS chapters 195, 196 and 197,
counties may voluntarily join together with adjacent counties as authorized in ORS
190.003 to 190.620.
Finding: See Section 1, page 2.
* ORS 197.712: (1) In addition to the findings and policies set forth in ORS 197.005,
197.010 and 215.243, the Legislative Assembly finds and declares that, in carrying out
statewide comprehensive land use planning, the provision of adequate opportunities for
a variety of economic activities throughout the state is vital to the health, welfare and
prosperity of all the people of the state.
(2) By the adoption of new goals or rules, or the application, interpretation or
amendment of existing goals or rules, the Land Conservation and Development
Commission shall implement all of the following:
(a) Comprehensive plans shall include an analysis of the community's economic
patterns, potentialities, strengths and deficiencies as they relate to state and national
trends.
Finding: Deschutes County is proposing comprehensive plan amendments to comply
with the requirement to include an analysis of Central Oregon strengths and
weaknesses by adopting a REOA and several regional economic development policies
that recognize Central Oregon's potential for establishing and maintaining large-lot
industrial sites as it relates to state and national trends. The REOA identifies the
strengths and challenges of the Central Oregon economy and concludes that the
competitive characteristics of Central Oregon can be strengthened through taking a
regional approach to large-lot industrial siting.68 Even though some individual
jurisdictions in the region are too small to be considered viable candidates for many
targeted industries, it is imperative that Central Oregon act as a cohesive unit, sharing
work force and commercial amenities so it can be marketed as such to increase its
perceived scale and competitiveness in the global marketplace.
* ORS 197.712: (2)(b) Comprehensive plans shall contain policies concerning the
economic development opportunities in the community.
Finding: Deschutes County is exerting its statutory coordination authority by
collaborating with the cities of Bend, La Pine, Redmond, and Sisters, as well as
Jefferson and Crook counties to respond to a specific employment need identified in a
REOA for large-lot industrial sites. Deschutes County is choosing to adopt a REOA and
several regional industrial land policies to comply with ORS 197.712 (2)(b) that
recognizes Central Oregon's economic development opportunities for establishing and
68 Ibid., 25; 31-34.
PAGE 24 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
maintaining large-lot industrial sites. These policy choices, cited below, are supported
by findings with evidence cited in the REOA.69
* Deschutes County supports a multi-jurisdictional cooperative effort to pursue
a regional approach to establish a competitive supply of sites particularly
designed to address out-of-region industries that may locate in Central
Oregon.
* The Central Oregon region, comprised of Jefferson, Crook and Deschutes
counties and its respective cities recognize the market reality that the region
currently serves as an integrated, cohesive economic unit, sharing work force
and commercial amenities, and should be marketed as such to increase its
perceived scale in the market
* The Central Oregon region needs a critical mass of competitive and diverse
vacant, developable large-lot industrial sites in order for site selectors
representing potential industrial recruitment to consider the region, along with
all of the other needed support factors including adequately skilled workforce,
workforce training programs, worker housing, supportive local government,
utility services, transportation, and quality of life.
* The unmet short-term need for large-lot industrial sites in Central Oregon is
an additional component of a city's twenty-year land supply.
* Competing as a cohesive region allows Central Oregon to market a larger
available work force, the size of which is often a key locational criterion for
firms.
* ORS 197.712: (2)(c) Comprehensive plans and land use regulations shall provide for
at least an adequate supply of sites of suitable sizes, types, locations and service levels
for industrial and commercial uses consistent with plan policies.
Finding: As noted above, Deschutes County is exerting its statutory coordination
authority to encourage cities to address an unmet large-lot industrial land need by
adopting a REOA and several regional industrial land policies to comply with
requirements to provide for an adequate supply of sites of suitable sizes, types,
locations and service levels for industrial uses. Deschutes County is choosing to focus
on a short-term inventory that identifies six, 50 acre or greater sites, in three different
jurisdictions, with two of those sites being between 100 to 200 acres, and one over 200
acres. Regulations and comprehensive plan policies that provide an adequate supply of
sites of suitable sizes, types, locations and service levels for industrial uses will occur
when participating cities implement OAR 660 Division 9 and Division 24. The REOA
identifies site need characteristics for large-lot industrial sites and recommends a
69 Ibid., 31 and 45. The REOA describes target industries with large lot needs that have a demonstrated track record
for creating enormous exogenous absorption of properly zoned industrial sites. Furthermore, the REOA identifies a
model of prospective demand based on annual large firm location activity. The model assumes that if a competitive
inventory is available and maintained in Central Oregon, the region can capture a "fair share" of market activity.
PAGE 25 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
competitive large-lot industrial inventory.70 Deschutes County complies with ORS
197.712(2)(c) by adopting the following policies:
A large-lot industrial site is 50 acres or larger with specific site attributes and
amenities.
Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where key
infrastructure is in place and has excess capacity, either the north end of
Bend or the southern end of Redmond, east of Highway 97.
The supply of up to 17 long-term sites, which includes the 6 short term sites,
represents the currently projected (total) 20-year regional land supply of this
special industrial land classification.
Replenishing the short term inventory shall be initiated when large lot
employers demonstrate a commitment to short term sites by completing land
use entitlements and executing site-development permits, including building
permits, subject to the following replenishment mechanism:
a. To maintain a competitive short term ready supply of large-lot employment
sites with the characteristics specified in the REOA, only a total of six
vacant and developable sites shall ever be made available at one time.
Central Oregon cities and counties shall, within 6 months of the adoption of
this policy, execute Memorandums of Understanding (MOUs) that specify:
1. Cities, after conducting alternative lands and public facility analyses, but
prior to any entitlement process, receive formal support from Economic
Development of Central Oregon that potential sites contain necessary site
characteristics and standards as defined in the REOA to attract large-lot
industrial recruiters.
Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the regional EOA.
70 Ibid., 39 and 46.
PAGE 26 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* ORS 197,712: (2)(d) Comprehensive plans and land use regulations shall provide for
compatible uses on or near sites zoned for specific industrial and commercial uses.
Findinq: Deschutes County is exerting its statutory coordination authority to encourage
cities to address an unmet large-lot industrial land need by adopting a REOA and
several regional industrial land policies to comply with the requirement for providing
compatible uses on or near sites zoned for specific industrial purposes. Regulations and
comprehensive plan policies that provide for compatible uses on or near sites zoned for
large-lot industrial uses will occur when participating cities implement OAR 660 Division
9 and Division 24. To fulfill its coordination role, Deschutes County complies with ORS
197.712(2)(d) by adopting the following policy:
Participating cities in Deschutes County (and in the 3-County REOA region)
shall adopt a large-lot industrial overlay zone that establishes and maintains
the region's large-lot industrial site inventory.
* ORS 197.712: (2) (g) Local governments shall provide:
(A) Reasonable opportunities to satisfy local and rural needs for residential and
industrial development and other economic activities on appropriate lands outside urban
growth boundaries, in a manner consistent with conservation of the state's agricultural
and forest land base; and
(8) Reasonable opportunities for urban residential, commercial and industrial needs
overtime through changes to urban growth boundaries.
Finding: Deschutes County is exerting its statutory coordination authority to encourage
cities to address an unmet large-lot industrial land need by adopting a REOA and
several regional industrial land policies to comply with responsibilities to provide
reasonable opportunities for industrial lands to be accommodated through changes to
UGBs. Regulations and comprehensive plan policies that provide these opportunities to
satisfy industrial development on appropriate lands outside UGBs and overtime through
changes to UGBs will occur when participating cities implement OAR 660 Division 9 and
Division 24. Deschutes County complies with ORS 197.712(2)(g) by adopting the
following policies:
Cities are required to comply with state land use program requirements when
changing land designations or amending a UGB, including conducting a local
inventory to determine whether a local deficit exists.
Cities are directed to not conduct regional inventories where and because the
counties have established plan policies under their statutory coordinating
authority to limit and disperse the number of sites that can be included in the
various UGBs as well as a program to manage the supply.
Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
PAGE 27 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the regional EOA.
Section (4) - OAR Division 9, Economic Development
* OAR 660-009-0010 - Application
(1) This division applies to comprehensive plans for areas within urban growth
boundaries. This division does not require or restrict planning for industrial and other
employment uses outside urban growth boundaries. Cities and counties subject to this
division must adopt plan and ordinance amendments necessary to comply with this
division.
Finding: Deschutes County is fulfilling its statutory coordination responsibilities by
collaborating with the cities of Bend, La Pine, Redmond, and Sisters, as well as
Jefferson and Crook counties to respond to a specific employment need identified in a
REOA for large-lot industrial sites in Central Oregon. As noted above, Deschutes
County is adopting Ordinance 2011-017, which includes a REOA and several regional
industrial land policies to comply with OAR 660-0090-0010.
* OAR 660-009-0010: (2) Comprehensive plans and land use regulations must be
reviewed and amended as necessary to comply with this division as amended at the
time of each periodic review of the plan pursuant to ORS 197.712(3). Jurisdictions that
have received a periodic review notice from the Department (pursuant to OAR 660-025-
0050) prior to the effective date of amendments to this division must comply with such
amendments at their next periodic review unless otherwise directed by the Commission.
Finding: Deschutes County started its periodic review in 1988 and completed it on
January 23, 2003. In 2003, the Oregon Legislature amended ORS 197.629(3)
exempting counties from periodic review, excluding portions of its population within the
UGB of a city.
* OAR 660-009-0010: (3) Cities and counties may rely on their existing plans to meet
the requirements of this division if they conclude:
(a) There are not significant changes in economic development opportunities (e.g., a
need for sites not presently provided for in the plan) based on a review of new
information about national, state, regional, county and local trends; and
(b) That existing inventories, policies, and implementing measures meet the
requirements in OAR 660-009-0015 to 660-009-0030.
Finding: Existing economic development plans do not address a specific land need for
large-lot industrial sites. Deschutes County is amending its comprehensive plan under
its regional coordination responsibilities (ORS 195.025) to address global competition
factors for large-lot industrial sites. For a region to be attractive enough to motivate
industrial site selectors to visit, investigate and recommend the region, it must offer a
diversity of large-lot industrial sites (that are either served or serviceable) along with all
PAGE 28 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
of the other needed support factors including: adequate size and skill level of the
workforce, workforce training programs, worker housing, supportive local government,
utility services and transportation, and quality of life. Industries know that to attract and
keep valuable employees, they need to locate in areas with desirable living
environments offering quality of life amenities such as recreation, quality education
systems, shopping diversity, health care, and affordable and attractive housing. The
Central Oregon region is recognized as being endowed with an abundant supply of
such amenities.
The Central Oregon region needs a critical mass of competitive and diverse vacant,
developable industrial sites in order for site selectors representing potential industrial
recruitment opportunities to consider the region. One or two sites in one or two
jurisdictions will not be adequate to generate regional interest or a visit according to
industrial recruitment specialists from the Business Oregon. Deschutes County is
choosing to pursue a regional approach to establish a competitive supply of sites
particularly designed to address those (unaccounted for) out-of-region (and state)
industries that can locate in Central Oregon after shopping the globe for the best large-
lot industrial development site they can find. This type of land need (or demand) is
systematically missed and unaccounted for in conventional industrial land needs
assessments in Oregon communities, which often rely solely upon recent local trends to
establish forecasts.
* OAR 660-009-0010: (4) For a post-acknowledgement plan amendment under OAR
chapter 660, division 18, that changes the plan designation of land in excess of two
acres within an existing urban growth boundary from an industrial use designation to a
non-industrial use designation, or an other employment use designation to any other
use designation, a city or county must address all applicable planning requirements,
and:
(a) Demonstrate that the proposed amendment is consistent with its most recent
economic opportunities analysis and the parts of its acknowledged comprehensive plan
which address the requirements of this division; or
(b) Amend its comprehensive plan to incorporate the proposed amendment, consistent
with the requirements of this division, or
(c) Adopt a combination of the above, consistent with the requirements of this division.
Finding: Deschutes County is exerting its statutory coordination authority to encourage
cities to address an unmet large-lot industrial land need by adopting a REOA and
several regional industrial land policies to comply with OAR 660-009-0010(4).
Deschutes County is not amending land within a UGB. Participating cities will need to
address this criterion when they conduct their alternative land and public facilities
analyses and inventory of employment lands when examining if the short-term regional
need can be met inside their respective UGBs. Deschutes County complies with this
subsection by adopting the following policies:
PAGE 29 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* Cities are required to comply with state land use program requirements when
changing land designations or amending a UGB, including conducting a local
inventory to determine whether a local deficit exists.
* Cities are directed to not conduct regional inventories where and because the
counties have established plan policies under their statutory coordinating
authority to limit and disperse the number of sites that can be included in the
various UGBs as well as a program to manage the supply.
* When a city investigates and concludes that a potential qualifying large-lot
industrial site exists or can be assembled inside of its UGB (and the existing
site zoning will be amended with the large-lot overlay zoning assignment),
that city must replace that original [future] buildable land supply or evaluate
and conclude that the previously identified future land supply is no longer
needed.
* Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the regional EOA.
* OAR 660-009-0010: (5) The effort necessary to comply with OAR 660-009-0015
through 660-009-0030 will vary depending upon the size of the jurisdiction, the detail of
previous economic development planning efforts, and the extent of new information on
national, state, regional, county, and local economic trends. A jurisdiction's planning
effort is adequate if it uses the best available or readily collectable information to
respond to the requirements of this division.
Finding: Deschutes County is choosing to implement a REOA that recognizes global
competition factors and economic trends that provide the basis to pursue an unmet land
need. Traditional formulaic approaches to Goal 9 rely on population and employment
projections. However, this methodology does not account for global competition and
market trends associated with large-lot employers. Oregon's land use program as
expressed in OAR 660-009 does not structurally account for the recent demand of
large-lot employers and rapidly growing industries that are building production and
research capabilities to establish global scale. As documented in the REOA, additional
demand comes from industries looking for regional production or as a result of specific
logistical concerns." Deschutes County complies with OAR 660-009-0010(5) by
adopting a 2011 REOA into its comprehensive plan. As noted by Business Oregon:
The completion of this study and the implementation of its findings by the
communities of Central Oregon should prove to be a major step forward in the
71 Ibid., 4.
PAGE 30 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
provision of large-lot sites for potential employers, as well as family-wage jobs to
its citizens. Our recommendation for adoption is based on the following:
The methodology of the Regional Economic Opportunity Analysis (REOA) is
correct in its targeted approach to current industry trends, site selection
considerations, and land entitlement issues.
2. The REOA is correct in its recognition and analysis of the regional context in
which all high-value industrial recruitments take place.
3. The REOA is correct in the narrowness and the economy of its mission and
findings: the identification of a limited number of high-value locations to serve
the large-lot needs of a region over a short and long term planning horizon.
Methodology. The methodology of the study follows best practices in economic
development with its focus on a specific cross-section of industry and a specific
land need. This process is consistent with Oregon Business Development's Key
Industry strategy, which identifies industries that are considered to be globally
competitive in Oregon. Further, industry identifications are made in a number of
exhibits and summaries that cite recent large-lot placements across the state and
the nation.72
* OAR 660-009-0010: (6) The amendments to this division are effective January 1,
2007. A city or county may voluntarily follow adopted amendments to this division prior
the effective date of the adopted amendments.
Finding: Deschutes County initiated the plan amend in 2011, therefore this division
applies.
* OAR 660-009-0015 - Economic Opportunities Analysis
Cities and counties must review and, as necessary, amend their comprehensive plans
to provide economic opportunities analyses containing the information described in
sections (1) to (4) of this rule. This analysis will compare the demand for land for
industrial and other employment uses to the existing supply of such land.
(1) Review of National, State, Regional, County and Local Trends. economic
opportunities analysis must identify the major categories of industrial or other
employment uses that could reasonably be expected to locate or expand in the planning
area based on information about national, state, regional, county or local trends. This
review of trends is the principal basis for estimating future industrial and other
employment uses as described in section (4) of this rule. A use or category of use could
reasonably be expected to expand or locate in the planning area if the area possesses
the appropriate locational factors for the use or category of use. Cities and counties are
strongly encouraged to analyze trends and establish employment projections in a
geographic area larger than the planning area and to determine the percentage of
employment growth reasonably expected to be captured for the planning area based on
'z See note 46 above (Michael J. Williams, May 19, 2011), 1.
PAGE 31 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
the assessment of community economic development potential pursuant to section (4)
of this rule.
Finding: Deschutes County, by adopting the REOA into its comprehensive plan,
recognizes a trend analysis that shows successful local and regional industrial
recruitment in the 21St century must consider global competition factors. 3 Noteworthy
trends are noted below:
Communities, regions and states that focus primarily or exclusively on outdated
governance paradigms are ill suited for keeping up with fast paced global
economic and industrial marketplace changes. Industries must be nimble to be
successful in the competitive global marketplace. Manufacturers must be able to
quickly produce new products at expanded, renovated or new production
facilities in "just-in-time" fashion. Often accomplished through on-site expansion
on areas reserved for that purpose, industrial site selectors must choose sites
large enough to build-in future expansion capacity. Government must adapt and
align its regulatory and process requirements to meet market demands if it
wishes to capture the considerable benefits of high value industrial development.
Site selectors shopping the international marketplace of large-lot industrial sites
determine the type of land supply product they will consider. For an individual
vacant industrial site to be competitive, it must be large enough to offer future
expansion on-site. It must be proximate to other competitive sites and governed
by a regulatory structure that is responsive to the needs of industry.
Manufacturing employment opportunities in particular are needed to establish a
diversified and thereby more stable and balanced regional employment outlook.
New manufacturing and other high value employment opportunities require an
attractive supply of vacant industrial sites to be competitive in global industrial
recruitment pursuits. New land supply methods are needed, too.
This large-lot industrial lands supply initiative exceeds the capacity of any single
jurisdiction. It is an industrial recruitment reality that in order to be competitive,
regional clout and appeal, along with a critical mass of diverse attractive sites,
are needed. The 21st century site selection factors in the global marketplace of
industrial recruitment and site development prioritize:
• Expedited site development with certainty and minimal time delay;
• Opportunities to expand and/or diversify manufacturing activity on-site, taking
advantage of existing infrastructure and facilities investment; and
• Availability of a high quality work force and training programs.74
Local trends documenting large lot recruiters visiting Central Oregon are also
quite noteworthy. The following list cites this evidence:
73 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 7, 13, 18.
74 Ibid., 1, 2, 6.
PAGE 32 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
According to Business Oregon, Central Oregon experienced four active
recruitments in the past six months looking at industrial lots 50 acres and
greater. One firm was looking for a site in the 100 to 150 range, while
three have been looking for sites in the 150 to 200 acre range. One firm
was lost due to the uncertainty of and land use actions that were required,
and the properties proposed were eliminated from consideration and it is
not known if the company has reached a final location decision. That
search started in the 50-100 lot size and then expanded to the 150-200 lot
size. The other three are still in the active stage and no additional details
can be furnished because of nondisclosure agreements that are in place.
75
* The La Pine Industrial Group has had several companies look at our
certified 77-acre site in La Pine but the most active prospect was the
Ferguson Corporation out of Virginia. They were looking for a site for a
Northwest distribution center for their product line of bathroom and other
plumbing fixtures. They wanted a site that would accommodate an initial
500,000 sq. ft. of buildings and would be expandable to 1,000,000 sq. ft.
Initial employment was to be 200 workers, expanding to 400 in the second
phase. There was also a requirement for a rail spur with extensive on-site
trackage to move products in and out. They were not sure our site was
large enough so Mid-State Electric Cooperative developed a site plan to
show that it could meet their specifications.76
* Jon Stark, Redmond Economic Development Manager for Economic
Development for Central Oregon described a recruiter recently visiting
Redmond."
Michael Williams, Oregon Business Development, Industrial Lands
Specialist, described recruiters visiting Central Oregon, as well as the
heightened interest expressed by recruiters once Facebook committed to
a site in Prineville.'a
* OAR 660-009-0015: (2) Identification of Required Site Types. The economic
opportunities analysis must identify the number of sites by type reasonably expected to
be needed to accommodate the expected employment growth based on the site
characteristics typical of expected uses. Cities and counties are encouraged to examine
existing firms in the planning area to identify the types of sites that may be needed for
expansion. Industrial or other employment uses with compatible site characteristics may
be grouped together into common site categories.
Finding: Deschutes County is choosing to rely on a methodology for gross land demand
in the large-lot segment. The REOA cites firms with more than 500 employees as a
general proxy for large-lot demand. According to Business Oregon, this is a very
75 See note 13 above (Jerald Johnson, Johnson-Reid LLC, October 21, 2011), 5
76 See note 14 above (Lee Smith, October 27, 2011).
77 See note 15 above (Oral Testimony, Board of County Commissioners public hearing, October 31, 2011.
78 Ibid.
PAGE 33 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
conservative assumption.79 Using the current profile of firms by size in the Western
United States and Central Oregon, combined with birth and expansion patterns,
Johnson-Reid LLC, generated a model of annual large firm location activity in the
region.80 What is modeled is a prospective demand, assuming that a competitive
inventory is available and maintained, allowing the region to capture a "fair share" of
market activity.
A large-lot industrial site is defined to be 50 acres or larger with specific attributes and
amenities that are typical and related to that industry and support its activities.81 As
noted below, the REOA documents the number of sites by type reasonably expected to
be needed to accommodate the expected employment growth based on the site
characteristics typical of expected uses:
The goal of this regional effort is not to generate an acreage calculation of
needed vacant industrial land supply but rather to identify the variety and size
range of vacant industrial sites needed to make the region attractive to site
selectors and competitive in the global marketplace - a qualitative rather than
quantitative outcome. This effort is the first step in providing an adequate supply
of large industrial sites to support stable, family-wage jobs in traded sectors in
the short-term and to build future job creation capacity in the long-term (through
land banking and a renewing large-lot industrial land supply) so that established
employers do not have to move out of the region to be quick, efficient,
competitive and successful.
Sites designated to meet the regional demand for large-lot industrial uses should
be able to meet most of these criteria (identified in Table 1) where practical.
While physical and workforce issues cannot be addressed by actions by an
individual jurisdiction, the remaining locational criteria largely involve
infrastructure investments, which can be actively targeted to enhance the supply
of competitive sites. Additionally, jurisdictions actively engaging property owners
in discussions about land price, lot configuration, and investments necessary to
make sites usable, can provide a context for owners' readiness to sell their
property.
Table 1 - Site Need Characteristics for LLI Uses in Central Oregon
Physical
Size - Large-lot demand is defined in the context of this analysis as sites 50-acres or above.
Sites of significantly larger size provide for greater flexibility, as they can meet large site needs
as well as providing the ability to be subdivided. Size reflects contiguous usable area, as
opposed to any net usable area.
Slope - Industrial development has a very limited capacity to deal with slopes. This is
particularly true in areas such as Central Oregon, in which the geology makes grading costly.
79 See note 46 above (Michael J. Williams, May 19, 2011), 2.
80 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 43-46.
81 Ibid., 2.
PAGE 34 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Table 1 - Site Need Characteristics for LLI Uses in Central Oregon
Confi
guration - Rectangular` sites provide for the most ;efficient layouts. Sites with irregular
configurations need to be larger to accommodate similar levels of development.
Infrastructure
Transportation
o
AutofTruck
o
Rail
o
Airport
■ ` General Aviation
• Commercial'
■ International
Utilities
o
Water
o
Sewer
o
Natural Gas
o
Electricity
o
Telecommunications
■ Major communications capacity
• Route diversity
■ Fiber optics
Location
Workforce
o
Locations within acceptable distance of appropriately scaled and skilled labor market
o
Appropriate housing options for workforce and executives
Special Considerations
_o
Availability - Owner willing to sell at market consistent price
o
Ownership - Willingness to hold, front infrastructure investments
o
Flexibility -Ability to meet a variety of demands
o
Site Certification - Not necessary, but criteria should be at least inclusive of the
certification criteria
o
Funding - Viability of funding necessary infrastructure to support development
Economic recruitment benefits from some degree of market choice. Firms
evaluating prospective locations are more likely to consider Central Oregon if
multiple appropriate sites can be seen in a single trip. The region wants to
establish and maintain a "competitive portfolio" of large-lot industrial sites. This
would include an inventory of readily available and appropriate sites consistent
with baseline criteria, allowing the region to clear the initial site selection
screening. To the extent that multiple prospective sites are available in the
region, Central Oregon's competitive position would be enhanced as site
selectors prefer to have multiple options before physically visiting. Testimony
from economic development specialists from Economic Development for Central
Oregon and Business Oregon substantiated the importance of having multiple
options in the region.82
82 See note 15 above (Oral Testimony, Board hearing, October 31, 2011). Roger Lee, Jon Stark and Michael
Williams spoke to the importance of establishing multiple vacant and developable sites to attract recruiters to Central
Oregon.
PAGE 35 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The following matrix identifies large-lot site locational needs:
Table 2 - Recommended Competitive Large Lot Industrial Inventory
50-100 Acres 100-200 Acres 200+ Acres
Short Term
#o f Sites 3
2
1
Jurisdictions 3
2
1
Long Term
# of Sites 10
5
2
Jurisdictions 5
3
2
A readily available and developable inventory of six large sites in at least three
separate jurisdictions will provide for an adequate supply to prospective
industries or site selectors. While Table 2 presents both a short term and long
term inventory, the short term inventory is what is relevant from an economic
development perspective. The longer term inventory's value would be in
identifying sites that can replace the short term inventory if absorbed or if market
conditions and needs shift. Based on the projected level of demand for these
sites, replenishment of the inventory will likely be needed on a regular basis.
What is important from an economic development perspective is maintaining an
inventory of appropriately sized and located lots available to the market in any
given period. From a market perspective, sites need to be readily developable
with infrastructure in lace or readily available, controlled by a willing seller and
appropriately priced.$
* OAR 660-009-0015: (3) Inventory of Industrial and Other Employment Lands.
Comprehensive plans for all areas within urban growth boundaries must include an
inventory of vacant and developed lands within the planning area designated for
industrial or other employment use.
(a) For sites inventoried under this section, plans must provide the following information:
(A) The description, including site characteristics, of vacant or developed sites within
each plan or zoning district;
(8) A description of any development constraints or infrastructure needs that affect
the buildable area of sites in the inventory; and
(C) For cities and counties within a Metropolitan Planning Organization, the
inventory must also include the approximate total acreage and percentage of sites
within each plan or zoning district that comprise the short-term supply of land.
(b) When comparing current land supply to the projected demand, cities and counties
may inventory contiguous lots or parcels together that are within a discrete plan or
zoning district.
(c) Cities and counties that adopt objectives or policies providing for prime industrial
land pursuant to OAR 660-009-0020(6) and 660-009-0025(8) must identify and
inventory any vacant or developed prime industrial land according to section 3(a) of this
rule.
83 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 6, 41, 46-47.
PAGE 36 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Finding: Deschutes County, by exercising its statutory coordination authority, is
choosing to focus on a short-term regional inventory that identifies six, 50 acre or
greater sites, in three different jurisdictions, with two of those sites being between 100 to
200 acres, and one over 200 acres. Oregon's prescriptive land use planning system
requires that Deschutes County and (given its regional emphasis) Central Oregon
perform an inventory of industrial lands. This requirement at this particular point in time
is premature because Deschutes County, through its statutory authority, must first
provide the legal foundation to encourage Bend, La Pine, Redmond, and Sisters to
address a short-term specialized employment land need. Deschutes County is
specifically fulfilling its regional coordination responsibilities by formalizing, through
policies, a regional governance and land use planning framework that describe the roles
and responsibilities of a regional entity, such as COIC. Deschutes County is applying its
coordination authority to cities as well, for those willing to fulfill this regional employment
need, consistent with Oregon's Statewide Planning Program. Deschutes County
nonetheless recognizes the importance of addressing OAR 660-009-0015(3) and the
requirement of an inventory. It is complying with the requirement that specifies city and
counties to inventory industrial and other employment lands by adopting the following
policies:
Cities are required to comply with state land use program requirements when
changing land designations or amending a UGB, including conducting a local
inventory to determine whether a local deficit exists.
Cities are directed to not conduct regional inventories where and because the
counties have established plan policies under their statutory coordinating
authority to limit and disperse the number of sites that can be included in the
various UGBs as well as a program to manage the supply.
To meet the requirements of Division 024 when amending a UGB to include a
site in compliance with the regional plan, cities will be required to provide an
estimated employment projection for the site at full build out within the
planning period by applying the REOA analysis and plan to the particulars of
the site.
When a city investigates and concludes that a potential qualifying large-lot
industrial site exists or can be assembled inside of its UGB (and the existing
site zoning will be amended with the large-lot overlay zoning assignment),
that city must replace that original [future] buildable land supply or evaluate
and conclude that the previously identified future land supply is no longer
needed.
Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the REOA.
PAGE 37 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* Participating cities, after conducting alternative lands and public facility
analyses, but prior to any entitlement process, shall receive formal support
from EDCO that candidate site(s) contain necessary site characteristics and
attributes, as defined in the REOA, to attract large-lot industrial recruiters.
* OAR 660-009-0015: (4) Assessment of Community Economic Development Potential.
The economic opportunities analysis must estimate the types and amounts of industrial
and other employment uses likely to occur in the planning area. The estimate must be
based on information generated in response to sections (1) to (3) of this rule and must
consider the planning area's economic advantages and disadvantages. Relevant
economic advantages and disadvantages to be considered may include but are not
limited to:
(a) Location, size and buying power of markets;
(b) Availability of transportation facilities for access and freight mobility,
(c) Public facilities and public services;
(d) Labor market factors;
(e) Access to suppliers and utilities,
(f) Necessary support services;
(g) Limits on development due to federal and state environmental protection laws, and
(h) Educational and technical training programs.
Finding: Led by Economic Development for Central Oregon in participation with local
leaders, the Central Oregon region has gone through the lengthy process of identifying
specific industry sectors for business recruitment, retention, and entrepreneurial
support .84 Several of these industries have had successful results to-date, while others
are relatively young in Central Oregon. The amount, recognized as short-term supply is
described above in an earlier finding. In the summaries below, the REOA draws largely
from Economic Development for Central Oregon's evaluation of industries in Central
Oregon as well as extensive research and evaluation produced as a part of the Oregon
Business Plan.
Renewable Energy Development - Renewable or clean energy development is a
global industry on the rise. In 2008, Global Insight forecasted U.S. employment
growth related to "green industries" would reach 2.5 million over the next ten
years. In Oregon, solar manufacturing has been an early entrant, taking
advantage of Oregon's existing and highly related semiconductor industry and
proximity to large U.S. West Coast markets. Central Oregon currently has a small
but diverse cluster of renewable energy related industries ranging from solar
power and fuel cells to wind power and biomass production.
Aviation/Aerospace- There is an existing concentration relating to Redmond's
airport and Bend's metro area. Specifically, Lancair has been operating in
Redmond since 1992. Oregon's aviation industry includes 200 firms providing
manufacturing, first and second supply chain services, and product distribution.
84 See note 2 above (Central Oregon Comprehensive Economic Development Strategy), 20. Industry sectors cited in
the REOA are also referenced in this report.
PAGE 38 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Oregon's kit plane manufacturers also provide over 70 percent of all of the kit
planes sold within the U.S. each year to global customers.
Software - Oregon is home to more than 1,500 software companies, and is
particularly strong in the areas of: electronic design automation, financial
solutions, open source, educational and training software, embedded software
and healthcare applications. Central Oregon itself is home to over two dozen
established software engineering firms. Software development firms are typically
smaller in scale, where quality of life and telecom infrastructure is important.
However, the Central Oregon region and the State of Oregon face both human
and financial capital challenges to further development of the Software/IT cluster.
Biosciences - Oregon's bioscience industry has over 600 companies and
research institutions. Biosciences include research and development, medical
devices, medical diagnostics, human and animal therapeutics, pharmaceuticals,
reagents, research services, bio-agriculture, bio-fuels, and medical software
operations. Bioscience is a $2.5 billion traded sector industry in Oregon. While
Oregon is not seen as a bioscience hub nationally, Central Oregon is home to a
segment of Oregon's promising bioscience future, specializing in pharmaceutical
research and development. However, biosciences are highly workforce
dependent and are often related to large-scale, higher education resources,
which are currently absent in the region.
Data Centers - Data centers are an emerging economic development engine in
Oregon bringing significant capital investment to regional communities. The
Central Oregon region offers key critical components in the recruitment of data
center projects, specifically affordable electric power, municipal water and sewer
capacity, robust telecom infrastructure, ability to attract technical talent to operate
data center facilities, and a climate that can significantly lower power usage.
These factors were instrumental in EDCO's recruitment of both Bend
Broadband's Vault project and Facebook's $188 million investment in Prineville.
Recreation Equipment - Oregon is home to some of the world's most recognized
brands in footwear and sports apparel. Locally headquartered firms include Nike,
Columbia Sportswear and the North American headquarters of Adidas.
Additionally, hotbed recreational regions such as Hood River and Central Oregon
have long seen start-up recreational equipment firms flourish into significant
contributors to local economies. Central Oregon specifically is home to diverse
range of mountain, river, and recreational vehicle and equipment manufacturers.
Higher Education - Central Oregon is just beginning the process of establishing
planning efforts in the establishment of a higher education facility in the region.
Local policy market and economic development professionals realize the broader
importance of higher education on workforce quality, culture, and business
development. Higher education facilities are typically campus style development
PAGE 39 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
requiring large affordable sites with good telecom and transportation
infrastructure. Sites need to be proximate to population centers.
Regional Distribution Centers - Central Oregon can play a role in distribution,
with Highway 97 representing an option to the 1-5 Corridor. Option planning is
taking a larger role in logistics and is expected to play a bigger role in diversifying
risk away from a single supply route.
Wood Products - The Wood Products cluster is a long standing economic driver
in Central Oregon. The cluster includes primary and secondary wood products,
machinery manufacturing, paper & pulp manufacturing, wholesaling, and
business management. Where Central Oregon was once a primary wood
products region, secondary wood products manufacturing now accounts for 25%
of all manufacturing employment in the region. While wood products have largely
been a low growth industry over the last decade, the Central Oregon region is
targeting additional value-added firms. Moreover, innovated new-age primary
lumber production models have emerged in recent years of which Central
Oregon would have a distinct competitive advantage.
While it is unlikely that several industries being targeted by communities within
Central Oregon will generate significant demand for large-lot industrial land,
some sectors have a demonstrated track record for creating enormous
exogenous absorption of properly-zoned industrial sites. For example, software,
recreational equipment and aviation/aerospace all have precedent for large
corporate campuses: respectively Microsoft in Redmond, Washington; Thor
Industries in Elkhart, Indiana; Cessna in Wichita, Kansas. Typical companies,
however, require building footprints well under the 40-50 acre threshold we have
defined as a large-lot industrial site. These needs are generally met by the
existing land use process in Oregon. Industries requiring large acreages that hold
promise for the Central Oregon region include:
• Data centers
• Warehouse/distribution centers
• Select high technology/biosciences operations85
* OAR 660-009-0015: (5) Cities and counties are strongly encouraged to assess
community economic development potential through a visioning or some other public
input based process in conjunction with state agencies. Cities and counties are strongly
encouraged to use the assessment of community economic development potential to
form the community economic development objectives pursuant to OAR 660-009-
0020(1)(a).
Finding: Deschutes County chose to form a RAC to help guide the development of the
REOA. Besides representatives of local government, members included Economic
85 See note 5 above (Johnson-Reid LLC, May 31, 2011, REOA), 28-30, 31-34. The REOA also cites targeted
industries with large land needs in Appendix B, starting on page 60.
PAGE 40 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Development for Central Oregon, Department of Land Conservation and Development,
Business Oregon, Department of State Lands, 1,000 Friends of Oregon, COIC, Central
Oregon Association of Realtors and Johnson-Reid LLC. The RAC developed a
community vision, which summarizes what the region's economic development goals
are as they particularly relate to large-lot industrial demand.
To build a strong and thriving regional economy by establishing and actively
maintaining a competitive portfolio of large-lot employment sites and coordinating
public investments, policies and regulations to support regional and state
economic development objectives.86
* OAR 660-009-0020 - Industrial and Other Employment Development Policies
(1) Comprehensive plans subject to this division must include policies stating the
economic development objectives for the planning area. These policies must be based
on the community economic opportunities analysis prepared pursuant to OAR 660-009-
0015 and must provide the following:
(a) Community Economic Development Objectives. The plan must state the overall
objectives for economic development in the planning area and identify categories or
particular types of industrial and other employment uses desired by the community.
Policy objectives may identify the level of short-term supply of land the planning area
needs. Cities and counties are strongly encouraged to select a competitive short-term
supply of land as a policy objective.
Finding: Deschutes County chooses to identify and implement a program to create a
regional large-lot land supply that enables Central Oregon to be a competitive region for
industrial recruitment. Central Oregon's traditional industrial base remains active in the
local economy, and the region would like to increase its emphasis on industrial
employment to strengthen that base. While many locally based service-sector
businesses are an essential part of a region's business mix and quality of life, they are
not as effective in creating new living wage jobs.87 Deschutes County, by exerting is
statutory coordination authority, wants to leverage its strengths and employ new
economic development tools to create a dynamic and competitive large-lot industrial
land supply portfolio and inventory that appeal to industrial site selectors. As noted in
the REOA, Central Oregon wants to implement a program that assures a regional
industrial land inventory is adequate to support the specific needs of large-lot industrial
users. 88
Deschutes County is adopting a REOA in conjunction with several regional industrial
land policies to comply with OAR 660-009-0020(1)(a). These policies clearly recognize
an economic development objective. The last two policies in particular underscore a
competitive short-term supply of land as a policy objective.
86 Ibid., 7.
87 Ibid., 4.
88 Ibid., 5. The primary economic development objective of this analysis is to ensure that the regional industrial land
inventory is adequate to support the specific needs of large lot industrial users
PAGE 41 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The Central Oregon region, comprised of Jefferson, Crook and Deschutes
counties and its respective cities recognizes the market reality that the region
currently serves as an integrated, cohesive economic unit, sharing work force
and commercial amenities, and should be marketed as such to increase its
perceived scale in the market.
• The Central Oregon region needs a critical mass of competitive and diverse
vacant, developable large-lot industrial sites in order for site selectors
representing potential industrial recruitment to consider the region, along with
all of the other needed support factors including adequately skilled workforce,
workforce training programs, worker housing, supportive local government,
utility services, transportation, and quality of life.
* Developing and maintaining a supply of large readily available industrial sites
is not currently part of regional economic development efforts, therefore the
region's jurisdictions have developed Goal 9 compliance based on projected
growth, and the attraction of a large industrial user that is recognized as an
exogenous impact to these projections.
* A large-lot industrial site is 50 acres or larger with specific site attributes and
amenities.
* The short term supply of 6 sites is a community development objective of
Central Oregon for establishing large-lot industrial uses.
* Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
* OAR 660-009-0020: (1)(b) Commitment to Provide a Competitive Short-Term Supply.
Cities and counties within a Metropolitan Planning Organization must adopt a policy
stating that a competitive short-term supply of land as a community economic
development objective for the industrial and other employment uses selected through
the economic opportunities analysis pursuant to OAR 660-009-0015.
Finding: As noted in the previous finding, Deschutes County satisfies OAR 660-009-
0020(1)(b) by adopting the following policy:
The short term supply of 6 sites is a community development objective of
Central Oregon for establishing large-lot industrial uses.
* OAR 660-009-0020: (1)(c) Commitment to Provide Adequate Sites and Facilities. The
plan must include policies committing the city or county to designate an adequate
number of sites of suitable sizes, types and locations. The plan must also include
policies, through public facilities planning and transportation system planning, to provide
necessary public facilities and transportation facilities for the planning area.
PAGE 42 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Finding: Deschutes County is exercising its statutory coordination authority to
encourage cities to address an unmet large-lot industrial land need by adopting a REOA
and several regional industrial land policies to comply with OAR 660-009-0020(1)(c). As
noted above, Deschutes County must first provide the legal foundation to encourage
Bend, La Pine, Redmond, and Sisters to address a short-term specialized employment
land need. Deschutes County is specifically fulfilling its regional coordination
responsibilities by formalizing, through policies, a regional governance and land use
planning framework that describe the roles and responsibilities of a regional entity, such
as COIC. Deschutes County is applying its coordination authority to cities as well, for
those willing to fulfill this regional employment need, consistent with Oregon's Statewide
Planning Program.
The timing for committing cities to designate suitable sizes, types and locations of large-
lot employment sites, consistent with public facility and transportation system plans
however, will occur when cities choose to implement this program. As mentioned above,
Deschutes County, by adopting the REOA into its Comprehensive Plan is identifying the
short-term and twenty year need. Through policies, Deschutes County is also
establishing the legal framework for regional governance. Cities in Central Oregon will
be responsible for addressing unmet short-term need for large-lot industrial sites and
conducting buildable lands inventories consistent with the statewide planning program.
OAR 660-009-0020(1)(c) admittedly does not fit neatly with a regional approach to
large-lot industrial siting. Deschutes County nonetheless recognizes the importance of
addressing this administrative rule to assure cities comply with it. The commitment to
establish and maintain a supply of large-lot industrial sites ultimately rests with all the
local governments in the tri-county region. Deschutes County satisfies this
administrative rule by adopting the following policies:
Deschutes County recognizes the importance for maintaining an appropriate
available large-lot industrial land supply that is readily developable in Central
Oregon.
The supply of up to 6 sites, located in existing or amended Urban Growth
Boundaries (UGBs), addresses the short-term large-lot industrial regional
land need in Central Oregon and can be incorporated as an additional
component of a city's twenty year land supply.
Participating cities in Deschutes County will support the existing economic
base by providing adequate land and infrastructure to make city sites
attractive to businesses willing to invest in high job density and industrial
activity.
Cities in Deschutes County will continue to provide high quality physical
infrastructure to serve the needs of business.
Deschutes County, fulfilling its coordination duties specified in ORS 195.025,
shall approve and update its comprehensive plan when participating cities
within their jurisdiction legislatively or through a quasi-judicial process
designate regionally significant sites.
PAGE 43 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* Cities are required to comply with state land use program requirements when
changing land designations or amending a UGB, including conducting a local
inventory to determine whether a local deficit exists.
* To meet the requirements of Division 024 when amending a UGB to include a
site in compliance with the regional plan, cities will be required to provide an
estimated employment projection for the site at full build out within the
planning period by applying the REOA analysis and plan to the particulars of
the site.
* Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the REOA.
* OAR 660-009-0020: (2) Plans for cities and counties within a Metropolitan Planning
Organization or that adopt policies relating to the short-term supply of land, must include
detailed strategies for preparing the total land supply for development and for replacing
the short-term supply of land as it is developed. These policies must describe dates,
events or both, that trigger local review of the short-term supply of land.
Finding: According to the REOA, large-lot employment sites are an unmet land need,
currently not part of regional economic development efforts. Deschutes County, by
exercising its statutory coordination authority, is choosing to focus on a short-term
inventory that identifies six, 50 acre or greater sites, in three different jurisdictions, with
two of those sites being between 100 to 200 acres, and one over 200 acres. Oregon's
prescriptive land use planning system nonetheless requires that Deschutes County and
(given its regional emphasis) Central Oregon also identify the employment land supply
for a twenty year planning period (total land supply). A total land supply of seventeen
sites represents the twenty year regional land supply of large-lot employment sites.
It is important to acknowledge that a twenty year land supply from an economic
development standpoint is inconsequential. Business Oregon recognizes that Central
Oregon's first priority should be establishing a readily available and developable
inventory of six large sites in at least three separate jurisdictions. Economic
development, viewed outside the context of Oregon's land use planning system would
focus entirely on a short-term supply with mechanisms to insure consistent
replenishment. Viewed from this perspective, the long-term (20 year) supply's value is in
identifying sites that can replace the short term inventory if absorbed or if market
conditions and needs shift. Deschutes County is proposing the following policies,
consistent with OAR 660-009-0020(2) that concentrates this program's efforts on the
short-term supply, including safeguards that ensure replenishment sites are not
exploited:
PAGE 44 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The unmet short-term need for large-lot industrial sites in Central Oregon is
an additional component of a city's twenty-year land supply.
Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where key
infrastructure is in place and has excess capacity, either the north end of
Bend or the southern end of Redmond, east of Highway 97.
The supply of up to 6 sites, located in existing or amended Urban Growth
Boundaries (UGBs), addresses the short-term large-lot industrial regional
land need in Central Oregon and can be incorporated as an additional
component of a city's twenty year land supply.
The supply of up to 17 long-term sites, which includes the 6 short term sites,
represents the currently projected (total) 20-year regional land supply of this
special industrial land classification.
Replenishing the short term inventory shall be initiated when large lot
employers demonstrate a commitment to short term sites by completing land
use entitlements and executing site-development permits, including building
permits, subject to the following replenishment mechanism:
a. To maintain a competitive short term ready supply of large-lot employment
sites with the characteristics specified in the REOA, only a total of six
vacant and developable sites shall ever be made available at one time.
Central Oregon cities and counties shall, within 6 months of the adoption of
this policy, execute Memorandums of Understanding (MOUs) that specify:
a. Cities, after conducting alternative lands and public facility analyses, but
prior to any entitlement process, receive formal support from Economic
Development of Central Oregon that potential sites contain necessary site
characteristics and standards as defined in the REOA to attract large-lot
industrial recruiters.
b. Establishment of a regional authority, responsible for formally supporting
regional large-lot industrial sites after cities identify potential candidates
through alternative lands and public facility analyses, but prior to any
entitlement process.
c. A Regional Advisory Committee (RAC) will be convened (at least)
annually with each city and county providing activity reports relating to the
short term land supply. Facilitating the RAC will be the responsibility of the
counties (ORS 195.025) and will rotate each year, starting alphabetically
with Crook County.
PAGE 45 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* Deschutes County supports Economic Development of Central Oregon
(EDCO), a non-profit organization facilitating new job creation and capital
investment to monitor and advocate for the region's efforts of maintaining an
inventory of appropriate sized and located industrial lots available to the
market.
* Deschutes County, in collaboration with other Central Oregon's counties and
cities and EDCO, will coordinate and seek assistance from state agencies to
continually support a regional economic development replenishment strategy.
The policies above recognize that projecting the demand for industrial land in this size
range is inherently highly speculative, as it is a thinly traded and highly competitive
sector. With fewer transactions and multiple areas competing for these transactions,
there is an unusually high degree of uncertainty in any forecast. The degree of
uncertainty however, is offset by emphasizing a short term ready supply, with a
mechanism to replace supply in a timely manner when needed.
* OAR 660-009-0020: (3) Plans may include policies to maintain existing categories or
levels of industrial and other employment uses including maintaining downtowns or
central business districts.
(4) Plan policies may emphasize the expansion of and increased productivity from
existing industries and firms as a means to facilitate local economic development.
(5) Cities and counties are strongly encouraged to adopt plan policies that include
brownfield redevelopment strategies for retaining land in industrial use and for qualifying
them as part of the local short-term supply of land.
(6) Cities and counties are strongly encouraged to adopt plan policies pertaining to
prime industrial land pursuant to OAR 660-009-0025(8).
(7) Cities and counties are strongly encouraged to adopt plan policies that include
additional approaches to implement this division including
Finding: These specific administrative rules are not requirements; therefore Deschutes
County is not required to incorporate specific policies to address them.
* OAR 660-009-0025 - Designation of Lands for Industrial and Other Employment
Uses
Cities and counties must adopt measures adequate to implement policies adopted
pursuant to OAR 660-009-0020. Appropriate implementing measures include
amendments to plan and zone map designations, land use regulations, public facility
plans, and transportation system plans.
(1) Identification of Needed Sites. The plan must identify the approximate number,
acreage and site characteristics of sites needed to accommodate industrial and other
employment uses to implement plan policies. Plans do not need to provide a different
type of site for each industrial or other employment use. Compatible uses with similar
site characteristics may be combined into broad site categories. Several broad site
categories will provide for industrial and other employment uses likely to occur in most
PAGE 46 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
planning areas. Cities and counties may also designate mixed-use zones to meet
multiple needs in a given location
Finding: Deschutes County is exercising its statutory authority and choosing to
collaborate with the cities of Bend, La Pine, Redmond, and Sisters, as well as Jefferson
and Crook Counties by responding to a specific employment need identified in a REOA
for large-lot industrial sites in Central Oregon. Deschutes County is adopting a REOA
and several regional industrial land policies to comply with OAR 660-009-0025(1). As
described above, the REOA defines the short and long term need to accommodate
large-lot industrial sites. Regulations and comprehensive plan policies that provide an
adequate supply of sites of suitable sizes, types, locations and service levels for
industrial uses will occur when cities conduct their alternative land and public facilities
analyses and inventory of employment lands when examining if the short-term regional
need can be met inside their respective UGBs, consistent with OAR 660 Division 9 and
Division 24. Deschutes County satisfies OAR 660-009-0025(1)by adopting the following
draft policies:
The Central Oregon Large Lot Industrial Regional Economic Opportunity
Analysis (REOA) dated May 31, 2011 is incorporated and adopted by
reference herein. Findings from the REOA recognize:
o Large-lot industrial lands supply initiative exceeds the capacity of any
single jurisdiction.
o A large-lot industrial site is 50 acres or larger with specific site attributes
and amenities.
o Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
o At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where
key infrastructure is in place and has excess capacity, either the north end
of Bend or the southern end of Redmond, east of Highway 97.
The supply of up to 6 sites, located in existing or amended Urban Growth
Boundaries (UGBs), addresses the short-term large-lot industrial regional
land need in Central Oregon and can be incorporated as an additional
component of a city's twenty year land supply.
The short term supply of 6 sites is a community development objective of
Central Oregon for establishing large-lot industrial uses.
Deschutes County recognizes the importance for maintaining an appropriate
and available large-lot industrial land supply that is readily developable in
Central Oregon.
PAGE 47 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the regional EOA.
* The supply of up to 17 long-term sites, which includes the 6 short term sites,
represents the currently projected (total) 20-year regional land supply of this
special industrial land classification.
* When a city investigates and concludes that a potential qualifying large-lot
industrial site exists or can be assembled inside of its UGB (and the existing
site zoning will be amended with the large-lot overlay zoning assignment),
that city must replace that original [future] buildable land supply or evaluate
and conclude that the previously identified future land supply is no longer
needed.
* Replenishing the short term inventory shall be initiated when large lot
employers demonstrate a commitment to short term sites by completing land
use entitlements and executing site-development permits, including building
permits, subject to the following replenishment mechanism:
a. To maintain a competitive short term ready supply of large-lot employment
sites with the characteristics specified in the REOA, only a total of six
vacant and developable sites shall ever be made available at one time.
* OAR 660-009-0025: (2) Total Land Supply. Plans must designate serviceable land
suitable to meet the site needs identified in section (1) of this rule. Except as provided
for in section (5) of this rule, the total acreage of land designated must at least equal the
total projected land needs for each industrial or other employment use category
identified in the plan during the 20-year planning period.
Finding: According to the REOA, large-lot employment sites are an unmet land need,
currently not part of regional economic development efforts. Deschutes County, by
exercising its statutory coordination authority, is choosing to focus on a short-term
inventory that identifies six, 50 acre or greater sites, in three different jurisdictions, with
two of those sites being between 100 to 200 acres, and one over 200 acres. Oregon's
prescriptive land use planning system nonetheless requires that Deschutes County and
(given its regional emphasis) Central Oregon also identify the employment land supply
for a twenty year planning period (total land supply). A total land supply of seventeen
sites represents the twenty year regional land supply of large-lot employment sites.
It is important to acknowledge that a twenty year land supply from an economic
development standpoint is inconsequential. Business Oregon recognizes that Central
Oregon's first priority should be establishing a readily available and developable
inventory of six large sites in at least three separate jurisdictions. Economic
development, viewed outside the context of Oregon's land use planning system would
PAGE 48 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
focus entirely on a short-term supply with mechanisms to insure consistent
replenishment. Viewed from this perspective, the long-term (20 year) supply's value is in
identifying sites that can replace the short term inventory if absorbed or if market
conditions and needs shift. As noted above, Deschutes County is proposing policies
that concentrate this program's efforts on the short-term supply, including safeguards
that ensure replenishment sites are not exploited. The following policies satisfy OAR
660-009-025(2):
* The supply of up to 17 long-term sites, which includes the 6 short term sites,
represents the (currently projected) total 20-year land supply of this special
industrial land classification.
* Cities are directed to not conduct regional inventories where and because the
counties have established plan policies under their statutory coordinating
authority to limit and disperse the number of sites that can be included in the
various UGBs as well as a program to manage the supply.
* OAR 660-009-0025: (3) Short-Term Supply of Land. Plans for cities and counties
within a Metropolitan Planning Organization or cities and counties that adopt policies
relating to the short-term supply of land must designate suitable land to respond to
economic development opportunities as they arise. Cities and counties may maintain
the short-term supply of land according to the strategies adopted pursuant to OAR 660-
009-0020(2).
Finding: As described above, the REOA defines the region's short term need to
accommodate large-lot industrial sites. Deschutes County satisfies this oar 660-0090-
0025(3) by adopting the following draft policies:
* The supply of up to 6 sites, located in existing or amended Urban Growth
Boundaries (UGBs), addresses the short-term large-lot industrial regional
land need in Central Oregon and can be incorporated as an additional
component of a city's twenty year land supply.
* Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
* At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where key
infrastructure is in place and has excess capacity, either the north end of
Bend or the southern end of Redmond, east of Highway 97.
* Replenishing the short term inventory shall be initiated when large lot
employers demonstrate a commitment to short term sites by completing land
use entitlements and executing site-development permits, including building
permits, subject to the following replenishment mechanism:
PAGE 49 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
a. To maintain a competitive short term ready supply of large-lot employment
sites with the characteristics specified in the REOA, only a total of six
vacant and developable sites shall ever be made available at one time.
The notion of replenishment is always to maintain an adequate short-term supply
of sites. It can be triggered when a site is committed to development. Deschutes
County is choosing to define a large-lot employer's commitment to a site when it
completes the land use entitlement process and executes site development
permits (ex. grading), including building permits.
* OAR 660-009-0025: (3) (a) Except as provided for in subsections (b) and (c), cities and
counties subject to this section must provide at least 25 percent of the total land supply
within the urban growth boundary designated for industrial and other employment uses
as short-term supply.
(b) Affected cities and counties that are unable to achieve the target in subsection (a)
above may set an alternative target based on their economic opportunities analysis.
(c) A planning area with 10 percent or more of the total land supply enrolled in Oregon's
industrial site certification program pursuant to ORS 284.565 satisfies the requirements
of this section.
Finding: OAR 660-009-025(3)(a) requires cities and counties to provide at least 25
percent of the total land supply within the UGB designated for industrial and other
employment uses as short-term supply. Deschutes County, by exercising its statutory
coordination authority, is encouraging Bend, La Pine, Redmond, and Sisters to address
a short-term specialized employment land need of six industrial sites, 50 acres or larger
in three different jurisdictions. Seventeen sites, which include the 6 short term sites,
represent the currently projected (total) 20-year regional land supply of this specialized
industrial land classification. The short-term inventory therefore represents 35% of the
total supply. As noted earlier, Deschutes County is specifically fulfilling its regional
coordination responsibilities by formalizing, through policies, a regional governance and
land use planning framework that describe the roles and responsibilities of a regional
entity, such as COIC. Deschutes County is applying its coordination authority to cities
as well, for those willing to fulfill this regional employment need, consistent with
Oregon's Statewide Planning Program.
The policies below demonstrate that participating cities will satisfy the requirement of
accommodating 25% of the total land supply in UGBs when they conduct their
alternative land and public facilities analyses and inventory of employment lands,
consistent with OAR 660 Division 9 and Division 24:
* Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
PAGE 50 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
because the adopted county plan has limited supply and specified site
dispersal as noted in the regional EOA.
* Replenishing the short term inventory shall be initiated when large lot
employers demonstrate a commitment to short term sites by completing land
use entitlements and executing site-development permits, including building
permits, subject to the following replenishment mechanism:
a. To maintain a competitive short term ready supply of large-lot employment
sites with the characteristics specified in the REOA, only a total of six
vacant and developable sites shall ever be made available at one time.
* OAR 660-009-0025: (4) If cities and counties are required to prepare a public facility
plan or transportation system plan by OAR chapter 660, division 011 or division 012, the
city or county must complete subsections (a) to (c) of this section at the time of periodic
review. Requirements of this rule apply only to city and county decisions made at the
time of periodic review.
Finding: Deschutes County started its periodic review in 1988 and completed it on
January 23, 2003. In 2003, the Oregon Legislature amended ORS 197.629(3)
exempting counties from periodic review, excluding portions of its population within the
urban growth boundary (UGB) of a city.
* OAR 660-009-0025: (5) Institutional Uses. Cities and counties are not required to
designate institutional uses on privately owned land when implementing section (2) of
this rule. Cities and counties may designate land in an industrial or other employment
land category to compensate for any institutional land demand that is not designated
under this section.
Findin : This administrative rule does not apply since the REOA identifies opportunities
to establish and maintain large-lot industrial sites in Central Oregon.
* OAR 660-009-0025: (6) Compatibility. Cities and counties are strongly encouraged to
manage encroachment and intrusion of uses incompatible with industrial and other
employment uses. Strategies for managing encroachment and intrusion of incompatible
uses include, but are not limited to, transition areas around uses having negative
impacts on surrounding areas, design criteria, district designation, and limiting non-
essential uses within districts.
Finding: Deschutes County, by exercising its statutory coordination authority, is
encouraging Bend, La Pine, Redmond, and Sisters to address a short-term specialized
employment land need of six industrial sites, 50 acres or larger in three different
jurisdictions. Deschutes County complies with this administrative rule by adopting the
following policy:
* Participating cities in Deschutes County shall adopt a large-lot industrial
overlay zone that establishes and maintains the region's large-lot industrial
site inventory and manages usage of such lands.
PAGE 51 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
* OAR 660-009-0025: (7) Availability. Cities and counties may consider land availability
when designating the short-term supply of land.
Finding: The REOA acknowledges the difficult tasks of assembling multiple smaller
parcels into a cohesive "large-lot" product.89 Deschutes County recognizes that the key
to the site selection process is that it is essential for candidate sites to be truly
development-ready instead of simply "buildable." A general lack of development-ready
sites to choose from eliminates a city or region from contention early in the site selection
process. This is why Deschutes County is focusing on the short-term supply of a readily
available inventory of up to 6 sites in at least three separate jurisdictions in order to
provide an adequate supply of sites to prospective industries or site selectors. Two of
the 6 sites are to be 100 to 200 acres and one site would be 200+ acres. This is
consistent with the REOA's recognition that firms in the site selection process prefer to
have multiple options within a region that meet their criteria. Ideally this would include
multiple ownerships, as well as multiple jurisdictions. This allows for competitive
pricing, a wider range of options, as well as making the area more attractive for site
visitation.90
* OAR 660-009-0025: (8) Uses with Special Siting Characteristics. Cities and counties
that adopt objectives or policies providing for uses with special site needs must adopt
policies and land use regulations providing for those special site needs. Special site
needs include, but are not limited to large acreage sites, special site configurations,
direct access to transportation facilities, prime industrial lands, sensitivity to adjacent
land uses, or coastal shoreland sites designated as suited for water-dependent use
under Goal 17. Policies and land use regulations for these uses must.
(a) Identify sites suitable for the proposed use;
(b) Protect sites suitable for the proposed use by limiting land divisions and permissible
uses and activities that interfere with development of the site for the intended use; and
(c) Where necessary, protect a site for the intended use by including measures that
either prevent or appropriately restrict incompatible uses on adjacent and nearby lands.
Finding: Deschutes County, through its governing body, is exerting its statutory
coordinating authority to address an unmet regional need for large-lot industrial sites.
This authority will assure there is an integrated comprehensive plan between Deschutes
County and its respective cities by encouraging Bend, La Pine, Redmond, and Sisters
to address a short-term specialized employment land need of six industrial sites, 50
acres or larger in three different jurisdictions. Deschutes County is specifically fulfilling
its regional coordination responsibilities by formalizing, through policies, a regional
governance and land use planning framework that describe the roles and
responsibilities of a regional entity, such as COIC. Deschutes County is applying its
coordination authority to cities as well, for those willing to fulfill this regional employment
need, consistent with Oregon's Statewide Planning Program. Deschutes County's
process directs the tri-county region to coordinate as a single entity promoting large-lot
89 Ibid., 24.
90 Ibid.
PAGE 52 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
industrial employments sites that best serve the region as a whole to create family wage
jobs, region economic diversification and place Central Oregon on the map for regional,
national and international industrial recruitment.
Deschutes County complies with this administrative rule and its emphasis on special
siting characteristics by adopting the following policies:
The Central Oregon region, comprised of Jefferson, Crook and Deschutes
counties and its respective cities, recognizes the market reality that the region
currently serves as an integrated, cohesive economic unit, sharing work force
and commercial amenities, and should be marketed as such to increase its
perceived scale in the industrial recruitment marketplace.
The Central Oregon region needs a critical mass of competitive and diverse
vacant, developable industrial sites in order for site selectors representing
potential industrial recruitment to consider the region, along with all of the
other needed support factors including adequately skilled workforce,
workforce training programs, worker housing, supportive local government,
utility services, transportation, and quality of life.
Developing and maintaining a supply of large readily available industrial sites
is not currently part of regional economic development efforts, therefore the
region's jurisdictions have developed Goal 9 compliance based on projected
growth, and the attraction of a large industrial user that is recognized as an
exogenous impact to these projections.
The exogenous short-term need for large-lot industrial sites in Central Oregon
is an additional component of a city's twenty-year land supply.
Competing as a cohesive region allows Central Oregon to market a larger
available work force, the size of which is often a key locational criterion for
firms.
The need for large-lot industrial sites is a regional need, with the economic
development benefits widely distributed regardless of the specific firm
location.
Large-lot industrial lands supply initiative exceeds the capacity of any single
jurisdiction.
A large-lot industrial site is 50 acres or larger with specific site attributes and
amenities.
Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
At least one of the 6 short term (readily available/developable in 6 months)
sites would consist of a major, centrally located large-scale development
property near the region's geographic and workforce center, and where key
PAGE 53 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
infrastructure is in place and has excess capacity, either the north end of
Bend or the southern end of Redmond, east of Highway 97.91
* The supply of up to 6 sites, located in existing or amended Urban Growth
Boundaries (UGBs), addresses the short-term large-lot industrial regional
land need in Central Oregon and can be incorporated as an additional
component of a city's twenty year land supply.
* The supply of up to 17 long-term sites, which includes the 6 short term sites,
represents the currently projected (total) 20-year regional land supply of this
special industrial land classification.
* Replenishing the short term inventory shall be initiated when large lot
employers demonstrate a commitment to short term sites by completing land
use entitlements and executing site-development permits, including building
permits, subject to the following replenishment mechanism:
a. To maintain a competitive short term ready supply of large-lot employment
sites with the characteristics specified in the REOA, only a total of six
vacant and developable sites shall ever be made available at one time.
* Participating cities in Deschutes County (and in the 3-County REOA region)
shall adopt a large-lot industrial overlay zone that establishes and maintains
the region's large-lot industrial site inventory and manages usage of such
lands.
* OAR 660-009-0030 - Multi-Jurisdiction Coordination
(1) Cities and counties are strongly encouraged to coordinate when implementing OAR
660-009-0015 to 660-009-0025.
(2) Jurisdictions that coordinate under this rule may.
(a) Conduct a single coordinated economic opportunities analysis; and
(b) Designate lands among the coordinating jurisdictions in a mutually agreed
proportion.
Findin : The Land Conservation and Development Commission adopted amendments
to OAR chapter 660, division 9 on December 1, 2005. One of those amendments
enabled cities and counties to conduct a single, regional EOA. This specific
administrative rule allows cities and counties to coordinate EOAs and to designate lands
among the coordinating jurisdictions in a mutually agree proportion.92 Under this new
rule, regional coordination is strongly encouraged, but not required. During rule making,
no method was specified or mandated for REOAs, therefore counties are free to use a
sensible method. 3 As described in these findings, Deschutes County is exercising its
coordination authority by collaborating with the cities of Bend, La Pine, Redmond, and
Sisters, responding to a specific employment/land need identified in a REOA for large-
91 See note 48 above (Johnson-Reid LLC, May 31, 2011, REOA), 47.
92 http://www.oregon.gov/LCD/docs/economicdevelopment/g9 rule fact sheet.pdf
93 See note 38 above (Department of Land Conservation and Development October 18, 2011 Letter), 1.
PAGE 54 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
lot industrial sites in Central Oregon. Deschutes County is also coordinating with two
adjoining counties by voluntarily joining together with Crook and Jefferson and their
respective cities as authorized in ORS 190.003 to 190.620, to collaborate on an
unprecedented regional evaluation of the economic opportunities and constraints
associated with users of large industrial parcels in the Central Oregon region. The
REOA provides an extraordinary opportunity as demonstrated by the accompanying
draft policies to establish and maintain a regional supply of large-lot industrial sites.
Deschutes County complies with this subsection by adopting the following policies:
Deschutes County supports a multi jurisdictional cooperative effort to pursue
a regional approach to establish a competitive supply of large-lot industrial
sites particularly designed to address out-of-region industries that may locate
in Central Oregon.
Short term supply is a readily available inventory of 6 large sites in at least
three separate jurisdictions that provide for an adequate supply of sites to
prospective industries or site selectors. Two of the 6 sites are to be 100 to
200 acres and one site would be 200+ acres.
Participating Central Oregon cities and counties shall, within 6 months of their
adoption of this policy, execute Memorandums of Understanding (MOUs) that
specify:
1. Cities, after conducting alternative lands and public facility analyses, but
prior to any entitlement process, receive formal support from Economic
Development of Central Oregon that potential sites contain necessary
site characteristics and standards as defined in the REOA to attract
large-lot industrial recruiters.
2. Establishment of a regional authority, responsible for formally
supporting regional large-lot industrial sites after cities identify potential
candidates through alternative lands and public facility analyses, but
prior to any entitlement process.
3. A Regional Advisory Committee (RAC) will be convened (at least)
annually, with each city and county providing activity reports relating to
short term land supply. Facilitating the RAC will be the responsibility of
the counties (ORS 195.025) and will rotate each year, starting
alphabetically with Crook County.
Participating cities, after conducting alternative lands and public facility
analyses, but prior to any entitlement process, shall receive formal support
from Economic Development of Central Oregon that candidate site(s) contain
necessary site characteristics and attributes, as defined in the REOA, to
attract large-lot industrial recruiters.
PAGE 55 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Section (5) - Other Statewide Planning Goals
The parameters for evaluating these specific amendments are based on an adequate
factual base and supportive evidence demonstrating consistency with Statewide
Planning Goals.
Finding: The following findings demonstrate that Ordinance 2011-017 complies with
applicable statewide planning goals and state law.
• Goal 1, Citizen Involvement; see Section 2 starting on page 2
• Goal 2, Land Use Planning, is met because ORS 197.610 allows local
governments to initiate post acknowledgments plan amendments (PAPA). An
Oregon Land Conservation and Development Department 45-day notice was
initiated on June 23, 2011.94 This FINDINGS document provides the adequate
factual basis and documented analysis for this plan update. Furthermore, OAR 660-
009-0030 (Multi jurisdiction Coordination), and 1000 Friends of Oregon v. City of
Dundee, 203 Or App 207 (2005) require Deschutes County to locally adopt the
REOA as part of the comprehensive plan in order for local governments in the
county to base land use decisions upon it.
• Goal 3, Agricultural Lands and Goal 4, Forest Lands, is not applicable because
the County is adopting a technical document and several regional coordination and
large-lot industrial land policies into its Comprehensive Plan. No plan designation
changes, zoning map changes, development or land use changes are being
proposed on agricultural or forest lands.
• Goal 5, Natural Resources, Scenic and Historic Areas, and Open Spaces, is not
applicable because the County is adopting a technical document and several
regional coordination and large-lot industrial lands policies. No development or land
use changes are being proposed on or near inventoried Goal 5 resource lands.
• Goal 6, Air, Water and Land Resources Quality, is not applicable because the
County is adopting a technical document and several regional coordination and
large-lot industrial land policies into its Comprehensive Plan. No development or
land use changes are being proposed that impact air, water and land resource
qualities.
• Goal 7, Natural Hazards, is not applicable because the County is adopting a
technical document and several regional coordination and large-lot industrial land
policies into its Comprehensive Plan. No development or land use changes are
being proposed that impact natural hazards.
• Goal 8, Recreational Needs, is not applicable because the County is adopting a
technical document and several regional coordination and large-lot industrial land
sa Deschutes County completed period review on January 23, 2003.
PAGE 56 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
policies into its Comprehensive Plan. No development or land use changes are
being proposed on recreational resources.
Goal 9, Economic Development, is applicable because in coordination with its
regional partners, Deschutes County has prepared a regional evaluation of the
economic opportunities and constraints associated with users of large industrial
parcels in the Central Oregon. This approach recognizes the market reality that
Central Oregon currently serves as an integrated economic unit.
Goal 9 specifies that Comprehensive Plans for urban areas shall:
1. Include an analysis of the community's economic patterns, potentialities,
strengths, and deficiencies as they relate to state and national trends;
Findings: This requirement has already been addressed. See the findings
addressing ORS 197.712(1) above on page 24.
2. Contain policies concerning the economic development opportunities in the
community
Finding: This requirement has already been addressed. See the findings addressing
ORS 197.712(2)(b) above on page 24.
3. Provide for at least an adequate supply of sites of suitable sizes, types, locations,
and service levels for a variety of industrial and commercial uses consistent with
plan policies;
Finding: This requirement has already been addressed. See the findings addressing
ORS 197.712(2)(c) above on page 25.
4. Limit uses on or near sites zoned for specific industrial and commercial uses to
those which are compatible with proposed uses
Finding: This requirement has already been addressed. See the findings addressing
ORS 197.712(2)(d) above on page 27.
Goal 9 Planning Guidelines specify:
A principal determinant in planning for major industrial and commercial
developments should be the comparative advantage of the region within which
the developments would be located. Comparative advantage industries are those
economic activities which represent the most efficient use of resources, relative
to other geographic areas.
Finding: The REOA documents large-lot trends and dynamics, importance of large-
lot supply and market choice, and target industry opportunities in Central Oregon. As
discussed above, Economic Development for Central Oregon in participation with
PAGE 57 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
local leaders, has gone through the lengthy process of identifying specific industry
sectors for business recruitment, retention, and entrepreneurial support.
2. The economic development projections and the comprehensive plan which is
drawn from the projections should take into account the availability of the
necessary natural resources to support the expanded industrial development and
associated populations. The plan should also take into account the social,
environmental, energy, and economic impacts upon the resident population.
Finding: Deschutes County is fulfilling its coordination responsibilities by
collaborating with the Cities of Bend, La Pine, Redmond, and Sisters, as well as
Jefferson and Crook Counties by responding to a specific employment land need
identified in a REOA for large-lot industrial sites in Central Oregon. Participating
cities will need to address this guideline when they conduct their alternative land and
public facilities analyses and inventory of employment lands when examining if the
short-term regional need can be met inside their respective UGBs. Deschutes
County complies with this guideline that underscores the importance of available
natural resources to support expanded industrial development by adopting the
following policy:
Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the regional EOA.
3. Plans should designate the type and level of public facilities and services
appropriate to support the degree of economic development being proposed.
Findin : This requirement has already been addressed. See the findings addressing
OAR 660-009-0020(l)(c) above on page 43.
4. Plans should strongly emphasize the expansion of and increased productivity
from existing industries and firms as a means to strengthen local and regional
economic development.
Finding: Deschutes County is choosing targeted basic industries with large-lot
industrial needs to support the region's economic development objectives. While
many locally based service-sector businesses are an essential part of a region's
business mix and quality of life, they are not as effective in creating new living wage
jobs. Since 2002, wage levels in Central Oregon have averaged a 3.2% annual rate
of growth, comparatively better than a 2.8% annual growth rate at the State level.
However, Deschutes County's average 2009 wage level of $35,295 was well below
the statewide average. Lower relative wage rates coupled with housing affordability
concerns can limit the region's ability to attract a high quality workforce to the region.
PAGE 58 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
The REOA does not diminish the importance of small, start-up firms. What it does do
is note that these firms represent only a portion of the spectrum of firms, and a
balanced economic development program would provide for these types of firms as
well as larger industrial firms. The two categories are complimentary, not
competitive. Efforts to help existing companies (large and small) to grow or sustain
their employment have been in place for more than a decade. Efforts to help start-
ups and early stage companies are also solidly established. Economic Development
for Central Oregon understands that most jobs come from existing companies, which
is why it dedicates more than 50% of its efforts to fostering entrepreneurship and the
retention/expansion of existing traded-sector companies.
5. Plans directed toward diversification and improvement of the economy of the
planning area should consider as a major determinant, the carrying capacity of the
air, land and water resources of the planning area. The land conservation and
development actions provided for by such plans should not exceed the carrying
capacity of such resources.
Findin : This is a carrying capacity issue and not a coordination one. The air, land
and water resource carrying capacity of the region will be accounted for, managed
and maintained during the identification and development of regional large-lot
industrial sites. This will be achieved through individual jurisdictions applying their
Comprehensive Plan policies and development code regulations/standards to
evaluate and regulate large-lot development proposals and through application of
development regulations and guidance found in the (required to be adopted) large-
lot industrial overlay zone.
Deschutes County is fulfilling its coordination responsibilities by collaborating with
the cities of Bend, La Pine, Redmond, and Sisters, as well as Jefferson and Crook
Counties by responding to a specific employment need identified in a REOA for
large-lot industrial sites in Central Oregon. Participating cities will need to address
this guideline, which is also cited in Goal 6, when they conduct their alternative land
and public facilities analyses and inventory of employment lands when examining if
the short-term regional need can be met inside their respective UGBs.
• Goal 10, Housing is not applicable because, unlike municipalities, unincorporated
areas are not obligated to fulfill certain housing requirements.
• Goal 11, Public Facilities is not applicable because the County is adopting a
technical document and several regional coordination and large-lot industrial land
policies into its Comprehensive Plan. No development or land use changes are
being proposed that impact public facilities.
• Goal 12, Transportation, is not applicable because the County is adopting a
technical document and several regional coordination and large-lot industrial land
policies into its Comprehensive Plan. No development or land use changes are
being proposed that impact local or state transportation facilities.
PAGE 59 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
• Goal 13, Energy Conservation, is not applicable because the County is adopting a
technical document and several regional coordination and large-lot industrial land
policies into its Comprehensive Plan. No development or land use changes are
being proposed that warrant energy conservation.
• Goal 14, Urbanization, is met because developing and maintaining a supply of
large readily available industrial sites is not currently part of regional economic
development efforts, therefore the region's jurisdictions have developed Goal 9
compliance based on projected growth, and the attraction of a large industrial user
that is recognized as an exogenous impact to these projections. The exogenous
need for large-lot industrial sites in Central Oregon is an additional component of a
city's twenty-year land supply. No expansion of urban areas is proposed with these
amendments. As noted below, one of Deschutes County's draft policies specify the
obligations of participating cities to conduct alternative land and public facilities
analyses and inventories of employment land consistent with OAR Division 9 and
24:
* Cities are required to comply with state land use program requirements when
changing land designations or amending a UGB, including conducting a local
inventory to determine whether a local deficit exists.
* Participating cities, when examining candidate sites, shall conduct their
alternative land and public facilities analyses and inventory of employment
lands by first examining if the short-term regional need can be met inside the
implementing city's UGB, before assessing lands adjacent to it as required by
state law. Cites are not required to evaluate inventories throughout the region
because the adopted county plan has limited supply and specified site
dispersal as noted in the regional EOA.
• Goals 15 through 19 are not applicable to any amendments to the County's
comprehensive plan because the county has none of those types of lands.
Section (6) - Deschutes County Comprehensive Plan
* Urbanization Chapter
Finding: This plan amendment is consistent with the Comprehensive Plan, DCC 23.48,
Urbanization Goals and Policies as shown in Ordinance 2011-017, Exhibit A. This
amendment specifically fulfills the County's fourth urbanization goal, by providing a
factual basis for urbanizing large-lot industrial sites in Central Oregon and fostering
intergovernmental cooperation.
* Economy Chapter
Findin : This plan amendment is consistent with the Comprehensive Plan, DCC 23.52,
Economy Goals and Policies as shown in Ordinance 2011-017, Exhibit B. These
findings demonstrate that there is a deficiency of large-lot industrial sites in Central
Oregon. Providing for this specialized land need will diversify and improve the economy
PAGE 60 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
of the area and enhance industrial segments of the local economy, thereby satisfying
Goals 1 and 2. This effort will increase employment opportunities throughout the region
and help implement plans and programs in a tri-county region to develop industrial
lands consistent with Policies 3.a, 3.b and 3.g.
Section (7) - Deschutes County Comprehensive Plan Update
Deschutes County adopted an updated Comprehensive Plan on August 10, 2011. The
effective date of the updated Plan is November 9, 2011.
* Urbanization Chapter
Findin : This plan amendment is consistent with the Comprehensive Plan, Section 4.2,
Urbanization, Urbanization Goals and Policies as shown in Ordinance 2011-017, Exhibit
C. This amendment specifically fulfills the County's first and second urbanization goals,
by providing a factual basis for urbanizing large-lot industrial sites in Central Oregon
and fostering intergovernmental cooperation.
Section (8) - Planning Commission Recommendation
On August 25, 2011 the Planning Commission closed the public hearing and
recommended that the Board of County Commissioners adopt the REOA and large-lot
industrial land policies into Deschutes County's Comprehensive Plan. The Planning
Commission's also directed staff to determine how to incorporate a refinement to page
26 of the REOA. As background, the REOA cites strengths and weaknesses of each
municipality in the tri-county area. These profiles were derived from a June 2010
Central Oregon Industrial Lands Forum. There's a footnote acknowledging this point in
the REOA on page 25.
Stakeholders from La Pine wanted La Pine's strengths and weaknesses to reflect new
information as italicized below. The Board finds that the revised listing is appropriate
and should be incorporated as part of this plan amendment.
LA PINE (DESCHUTES COUNTY)
La Pine is Oregon's newest City, incorporated in December 2006. La Pine has a state
certified shovel ready site and is well-suited for the REOA short term plan. Past
challenges with the water and sewer districts have been resolved by mutual agreement
between the La Pine Water and Sewer Districts and the City of La Pine.
Strengths/Advantages Challenges/Disadvantages
• State of Oregon Certified Shovel-ready 50+ • Sewer and 'water districts - in transition
acre industrial site available and proximate to the city. To be absorbed by the City
to rail
Neighboring small and medium sites
available for a variety of options
early to mid-2012
Transportation challenges; TSP to be
completed by mid-2012
PAGE 61 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
• The most favorable electric rates in Central City codes, adopted and scheduled to be
Oregon implemented early 2012
• More than adequate water and sewer . Need large "keystone" employer
capacity for new industry
A new flexible land use code and supportive
city leaders
• The county is in control of some industrial
sites
• Enterprise Zone, for tax relief for new or
expanded industry
• La Pine is well connected to 3 major
economic hubs - Central Oregon, Eugene and
Klamath County. Conveniently located near
Highway 97 and Highway 31. Highway 58 is
27 miles to the south and is a direct route to
-5 and Eugene.
• BNSF rail mainline thru industrial park. Near
passenger rail line. "Best Rail Industrial site
in Central Oregon."
• Low housing costs. Riverfront homes,
ranches, and community neighborhoods are
available.
• La Pine has a large labor pool of skilled labor
and diverse population with extensive work
experience as indicated by large amount of
commuters traveling north.
• Hub of Central Oregon's year-round outdoor
recreation paradise. Gateway to Cascade
Lakes National Scenic Byway, Newberry
National Volcanic Monument and National
Oregon Outback Scenic Byway.
Staff updated Exhibit A, DCC 23.48.050. Regional Economic Opportunity Policies as
follows:
3. The Central Oregon Large Lot Industrial Regional Economic Opportunity Analysis
(REOA) dated May 31, 2011 and the City of La Pine Strengths and Weaknesses
outlined on Pages 61 and 62 of Exhibit C to Ordinance 2011-017 are incorporated
and adopted by reference herein.
Attachment:
Regional Economic Opportunity Analysis
PAGE 62 OF 62 - EXHIBIT "D" TO ORDINANCE 2011-017
Chapter 23.01. 010 COMPREHENSIVE PLAN
23.01.010. Introduction.
A. The Deschutes County Comprehensive Plan, adopted by the Board in Ordinance 2011-003
and found on the Deschutes County Community Development Department website, is
incorporated by reference herein.
B. The Deschutes County Comprehensive Plan amendments, adopted by the Board in Ordinance
2011-027, are incorporated by reference herein.
C The Deschutes County Comprehensive Plan amendments, adopted by the Board in Ordinance
2011-017 are incorporated by reference herein.
(Ord. 2011-017 §5, 2011; Ord. 2011-027 § 1 through 12, 2011; Ord.2011-003 §3, 2011)
PAGE I OF I - EXHIBIT "E" TO ORDINANCE 2011-017
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CENTRAL OREGON LARGE LOT INDUSTRIAL
REGIONAL ECONOMIC OPPORTUNITIES ANALYSIS
MAY 31, 2011
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA
ACKNOWLEDGEMENTS
This project was funded by a Department of Land Conservation and Development Technical Assistance Grant
and in-kind contributions of participating jurisdictions.
REGIONAL ADVISORY COMMITTEE (RAC)
RAC Members included:
Nick Lelack, Project Manager, Deschutes County
Peter Gutowsky, Deschutes County
Pam Hardy, 1000 Friends of Oregon
Tom Hogue, Department of Land Conservation and Development
Karen Swirsky, Department of Land Conservation and Development
Clark Jackson, Oregon Business Development Department
Roger Lee, Economic Development for Central Oregon (EDCO)
Brian Meece, Central Oregon Association of Realtors
Doug Parker, Department of State Lands
Wayne Pearson, Economic Development for Central Oregon (EDCO)/Jefferson County
Eric Porter, City of Sisters
Brian Rankin, City of Bend
Heather Richards, City of Redmond
John Russell, Department of State Lands
Jon Skidmore, Jefferson County
Lee Smith, La Pine Industrial Group
Nick Snead, City of Madras
Bill Zelenka, Crook County
Scott Edelman, City of Prineville
David Ditz, Project Executive -Juniper Ridge (DMA, Inc.)
CONSULTING STAFF
Johnson Reid LLC
Jerry Johnson, Principal
Chris Blakney, Project Manager
Angelo Planning Group
D.J. Heffernan, Senior Planner
Rebecca Dann, Planner
IronWolf Community Resources
Larry Pederson, Principal
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA
TABLE OF CONTENTS
1.
PROJECT INTRODUCTION .....................................................................................................................1
Problem Statement ......................................................................................................................................1
Framework for Regional Economic Opportunities Analysis
...5
II.
COMMUNITY VISION
5
A.
REGIONAL GOAL AND INTRODUCTION ...............................................................................................................5
Regional Approach .......................................................................................................................................5
B.
COMMUNITY VISION STATEMENT
..6
III.
TREND ANALYSIS
7
A.
NATIONAL ECONOMIC TRENDS
..7
Introduction
..7
Short-Term Outlook
..7
Long-Term Outlook
11
B. STATE ECONOMIC TRENDS
13
General Industry Trends
13
Risk Factors
17
C.
LOCAL TRENDS & CONDITIONS
18
Economic Factors
18
IV.
TARGET INDUSTRY ANALYSIS
21
A. LARGE-LOT TRENDS AND DYNAMICS
21
Large Lot Trends
21
Importance of Large-lot Supply and Market Choice
22
Competitive Inventories
24
B. STRENGTHS AND CHALLENGES IN THE CENTRAL OREGON ECONOMY
25
Madras (Jefferson County)
26
La Pine (Deschutes County)
26
Prineville (Crook County)
26
Bend (Deschutes County)
27
Redmond (Deschutes County)
28
Sisters (Deschutes County)
28
C. TARGET INDUSTRY OPPORTUNITIES IN CENTRAL OREGON
28
D. SITE/RESOURCE CHARACTERISTICS OF KEY DEVELOPMENT CLASSES 30
Targeted Industries with Large Lot Needs .................................................................................................31
Central Oregon Viability for the Data Center Industry ...............................................................................31
Central Oregon Viability for the High Technology Industry .......................................................................33
Central Oregon Viability for the Warehouse & Distribution Industry ........................................................33
E. REGIONAL LARGE-LOT DEMAND 35
Long Range Employment Forecast .............................................................................................................35
Industry Placement Velocity ......................................................................................................................36
V. ASSESSMENT OF POTENTIAL 39
A. SITE NEED CHARACTERISTICS ........................................................................................................................39
B. GROSS LAND DEMAND ................................................................................................................................43
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA
APPENDIX A: LETTERS FROM ECONOMIC DEVELOPMENT PROFESSIONALS 49
APPENDIX B: EXAMPLES OF LOCAL GOVERNMENTS PROACTIVELY PLANNING FOR INDUSTRIAL
DEVELOPMENT 59
APPENDIX C: CORRESPONDENCES RESPONDING TO REGIONAL ECONOMIC OPPORTUNITY ANALYSIS 70
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA
I. PROJECT INTRODUCTION
Deschutes County, in coordination with its regional partners, has prepared this regional evaluation of the
economic opportunities and constraints associated with users of large industrial parcels in the Central Oregon
region. This approach recognizes the market reality that Central Oregon currently serves as an integrated
economic unit.
A regional consensus has been agreed upon to establish and pro-actively manage a regional land supply of large-lot
industrial sites to enable the region to become competitive in industrial recruitment. This regional strategy will
include individual site infrastructure improvement assessment and implementation programs/requirements.
Regional planning, management, and governance of a perpetual large-lot industrial vacant land supply will involve
Central Oregon city and county governments (and staff) including advice and guidance from Central Oregon Cities
Organization (COCO, Economic Development in Central Oregon (EDCO) and Oregon Business Development
Department (OBDD) to assure an adequate, self-renewing regional supply of developable and competitive vacant
industrial sites.
An outcome of regional significance requires a collective regional effort. This project proposes to create and
manage a regional supply of vacant, developable large-lot industrial sites to accommodate stable, family-wage
employment opportunities of local and regional significance. Although site development will be fundamentally
implemented at the local jurisdictional level, the organization, coordination, promotion and governance of this
regional industrial lands strategy and inventory is proposed to be implemented at a coordinated, collaborative
regional level. The ultimate outcome of diversified and stable family-wage job creation will be advanced through
provision of an adequate and competitive industrial site land supply to engage the global, national and regional
industrial recruitment marketplace and successfully recruit major employers to the region.
The Central Oregon region needs a critical mass of competitive and diverse vacant, developable industrial sites in
order for site selectors representing potential industrial recruitment to consider the region. One or two sites in one
or two jurisdictions will not be adequate to generate regional interest or a visit according to industrial recruitment
specialists from OBDD. Consequently, a multi-jurisdictional cooperative effort has been initiated to pursue a
regional approach to establish a competitive supply of sites particularly designed to address those (unaccounted
for) out-of-region (and state) industries that can locate in Central Oregon after shopping the globe for the best
large-lot industrial development site they can find. This type of land need (or demand) is systematically missed and
unaccounted for in local, conventional industrial land needs assessments in Oregon communities.
PROBLEM STATEMENT
During the 1990s the Central Oregon region undertook a dramatic transformation from a goods producing
economy concentrated largely in wood products into a service based economy serving a growing and diverse
tourism and household base. Accelerated in-migration and tourism growth gave way to rapid economic expansion,
escalation in home prices, and a systematic shift in the local economy from goods producing activities to service
oriented industries. While initially representing a diversification of the local economy, this shift has led to an over-
reliance upon these types of industries. During the recent recession, the regional economy's vulnerabilities
became apparent.
Central Oregon's traditional industrial base remains active in the local economy, and the region would like to
increase its emphasis on industrial employment to strengthen that base. The region's supply of affordable land,
low cost utilities, quality of life, and organized economic development landscape makes it an attractive option for
growth in many traded sector industries. Central Oregon economic development efforts have been negatively
impacted by a lack of readily available large-lot industrial sites. Manufacturing employment opportunities in
particular are needed to establish a diversified and thereby more stable and balanced regional employment
outlook. New manufacturing and other high value employment opportunities require an attractive supply of
DESCHUTES COUNTY ) CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 1
vacant industrial sites to be competitive in global industrial recruitment pursuits. New land supply methods are
needed,too.
In a structural sense, globalization has changed the way manufacturers conduct business. Cost and efficiency are
the central tenets of an increasingly competitive market. Firms are increasingly pressured to develop more capital
intense production models, place a greater emphasis on economies of scale, as well as production efficiency and
flexibility. Time-to-market for firms has become an even more crucial factor as they make decisions to locate new
plants and facilities. The result has been the emergence of a clear real estate trend, creating a global demand for
large development ready industrial sites, with the immediacy of utility services (both public and private sector) of
critical importance. Through Oregon's statewide planning framework, this analysis is intended to evaluate Central
Oregon's opportunities, competitiveness, ability, and willingness to accommodate recruited and existing firms
requiring new large scale development models.
Successful local and regional industrial recruitment in the 215` Century must consider global competition factors.
Communities, regions and states that focus primarily or exclusively on outdated governance paradigms are ill
suited for keeping up with fast paced global economic and industrial marketplace changes. Industries must be
nimble to be successful in the competitive global marketplace. Manufacturers must be able to quickly produce
new products at expanded, renovated or new production facilities in "just-in-time" fashion. Often accomplished
through on-site expansion on areas reserved for that purpose, industrial site selectors must choose sites large
enough to build-in future expansion capacity. Government must be responsive to align its regulatory and process
requirements to meet market demands if it wishes to capture the considerable benefits of high value industrial
development.
Site selectors shopping the international marketplace of large-lot industrial sites determine the type of land supply
product they will consider. For an individual vacant industrial site to be competitive, it must be large enough to
offer future expansion on-site. It must be proximate to other competitive sites and governed by a regulatory
structure that is responsive to the needs of industry.
Within this analysis a large lot industrial site is defined to be 50 acres or larger with specific site attributes and
amenities that appeal to that industry and support its activities. This delineation is consistent with the State of
Oregon's Certified Industrial Site program, which is Business Oregon's primary tool to certify and market industrial
sites as 'project ready' within 180 days or less. The certified sites programs has had a distinct emphasis on large
lots with an average size of 64 acres and more than half of the lots being in assemblages of over 50 acres. There
have been 65 sites certified in Oregon since 2004 and there has been development on more than 50% of those
properties. The importance of this inventory is attested by the number of employers that have located on certified
sites, several of which are summarized in Figure 1. This activity took place despite the fact that the economy was
experiencing one of the most severe recessions in history.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 2
FIGURE 1: EMPLOYMENT ACTIVITY ON CERTIFIED SITES (2009-2010)
Company Community) Activity on Certified Site
Facebook (Prineville) 2010 New Facility Announcement 200 Construction/35
Permanent
Home Depot (Salem) 2010 New Facility Announcement 175Jobs
Sanyo (Salem) 2009 Opening 200 Jobs by 2010
Solaicx(Portland) 2010 Expansion 60Jobs
Ferrotec (Fairview) 2010 New Facility Announcement 30Jobs
Genentech (Hillsboro) 2010 Fully Operational 30OJobs
Crown Works Dental (Sutherlin) 2009 Facility Opens 125Jobs
Source: Oregon Business Development
So why is lot size often a critical component of a company's site selection decision? Below are some technical and
market requirements provided by Oregon Business Development that contribute to lot-size demanded by
industrial users:
1) On average, industrial sites are only 40% to 60% developable. While the footprint for a large facility
might only be five or ten acres, requirements for setbacks, access, parking, and environmental mitigation
and avoidance (i.e. wetlands) usually require more room than the facility itself.
2) Industries want buffering around their site for a number of very good reasons (security, storage, and
noise). This has been the case for a number of the largest technology and green-industry related
recruitments.
3) Many industries, particularly true in the fast growing clean-energy arena, require land for expansion for
their long-term business plan. While expansion space is not always taken advantage of, it is an essential
part of the site selection strategy due to the cost of future expansion and the flexibility offered.
4) large parcels are also a good way to build a cluster of industries around a high profile anchor business,
which proves the value of the location to other businesses that are less willing to trail-blaze or be first into
a region. The anchor businesses often pull suppliers to the region, further enhancing their economic
benefit.
5) Efficiencies can be obtained by clustering industrial users into large master-planned business parks.
Land use efficiencies can be achieved when businesses are allowed to develop their facilities as needed,
while also having the assurance that there will be nearby parcels available for future expansion. Energy,
water, waste, and material flows can be streamlined in a park setting where multiple businesses can take
advantage of common infrastructure investments and, in some cases, take advantage of each other's
energy and waste streams.
The emphasis of this analysis is on "sites" as opposed to land. Firms require sites that can accommodate their
current and anticipated future needs. The traditional formula approach to industrial land needs determination is
based upon population and employment projections applied to a square footage per employee ratio to arrive at a
total acreage number. The necessary range of parcel sizes, lot configuration, required site attributes, land
banking/growth options, and critical infrastructure factors are essentially de-prioritized, subordinated or ignored in
this traditional static acreage calculation approach. This approach can work for residential and commercial
projections, but is poorly suited to the calculation of industrial site needs.1
1 Unlike office demand, the need for most types of industrial space is difficult to determine using employment projections. Most industrial
uses generate comparatively few jobs per square foot of leasable area, and space needs have little to do with changes in the number of
jobs in production or distribution business... Warehouse and distribution demand (for example) is usually generated by changes in
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 3
For a region to be attractive enough to motivate industrial site selectors to visit, investigate and recommend the
region, it must offer a diversity of large-lot industrial sites (that are either served or serviceable) along with all of
the other needed support factors including adequately skilled workforce, workforce training programs, worker
housing, supportive local government, utility services and transportation, and quality of life. Facebook's recent
move to Prineville was based upon an affordable and adequate water supply, affordable energy prices, year round
cool nights to reduce cooling costs, and various local incentives. The Facebook site offered on-site expansion
opportunity that is already being exercised.
Much of the recent demand for large lot industrial comes from rapidly growing industries that are building
production and research capabilities to establish global scale. Additional demand comes from industry looking for
regional production or as a result of specific logistical concerns (i.e. location near markets or suppliers, access to
specific transportation modes). Warehousing and distribution is an important component of the economy that
keeps international ports expanding and strengthens Oregon's export markets for consumer, industrial and
agricultural products.
Major employers in traded sector industries (export industries) are the primary drivers of economic growth,
providing the impetus for net growth in the regional economy and supporting a wide range of support industries.
At the state and local level, policy makers understand the importance that large-scale employers can have on the
local economy. In 2007 Central Oregon was home to three firms with 1,000 or more employees and an additional
five with at least 500. The State's Industrial Site Certification Program has been a success in coordination with
active recruitment efforts. Nevertheless, suitable land for today's industrial development forms has emerged as
one of Oregon's most severe development challenges. As a region, Central Oregon has specifically targeted basic
industries with large lot industrial needs to support the Region's economic development objectives. While many
locally based service-sector businesses are an essential part of a region's business mix and quality of life, they are
not as effective in creating new living wage jobs.
Figure 2 is a list of some of the annual economic impacts of industrial lands that is based on operating payrolls and
a multiplier that takes into effect spending by the company and its employees in the region. These impacts are
substantial and dwarf the job and income productivity of alternative productive land uses (i.e. agriculture,
forestry). This is particularly true in Central Oregon, which has relatively low agricultural yields per acre.
FIGURE 2: ECONOMIC IMPACT OF EMPLOYMENT LAND
Central Oregon's efforts to identify and promote a number of large lot areas for industry is, in a national context,
relatively modest and completely appropriate for its current size, level of support services, and current and
planned infrastructure. Maintaining a portfolio of competitive sites ranging from 50 to over 200 acres should
result in substantial economic benefits and land use efficiencies.
corporate logistics and freight volumes, not job growth." Reol Estote Market Analysis: Methods and Case Studies, Second Edition, ULI
Press, 2009.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 4
Source: Oregon Business Development
FRAMEWORK FOR REGIONAL ECONOMIC OPPORTUNITIES ANALYSIS
This report is designed to meet the requirements of Oregon Statewide Planning Goal 9 and the administrative rule
that implements Goal 9 (OAR 660-009). This report is a Regional Economic Opportunities Analysis, and is allowed
under the provisions of OAR 660-009-0030 (multi-jurisdictional coordination). The following table describes the
requirements of OAR 660-009 and where those requirements are met within the report. As a regional EOA with a
specific focus on large lot industrial property, the report will not meet all requirements for local jurisdictions.
Requirement of OAR-009
Location Addressed in Report
660-009-0015(1) Review of national, state, regional,
Chapter 3
county, and local trends
660-009-0015(2) Identify required site types
Chapter 5
660-0090015(3) Inventory of industrial and other
employment lands
660-009-0015(4) Assessment of community
Chapters 3 and 4
economic development potential
660-009-0020 Industrial and other employment
development policies
660-009-0025(1) Identification of needed sites
Chapter 5
660-009-0025(2) Total land supply
660-009-0025(3) Short-term supply of land
11. COMMUNITY VISION
A. REGIONAL GOAL AND INTRODUCTION
REGIONAL APPROACH
The Central Oregon region [comprised of Jefferson, Crook and Deschutes counties] proposes regional coordination
and cooperation to attract new industrial employers. Economic activity in the region crosses jurisdictional
boundaries, as does the labor force. While geographically separate, the jurisdictions in the region function in a
manner similar to other metropolitan areas, which often share boundaries. The shared economic function within
Central Oregon supports a regional approach to economic development, particularly with respect to large basic
industries.
Developing and maintaining a regional supply of large readily available industrial sites will allow Central Oregon
communities to compete for a broader range of economic development opportunities than they are currently
capable of. There are a substantial number of large firms regularly seeking sites that are not currently available
within the region, precluding economic development organizations such as Business Oregon and EDCO from
marketing the area to these prospects. As attracting this type of activity is not currently part of regional economic
development efforts, providing an ability to appeal to this segment is seen as additive to existing economic
development efforts. In other words, the region's jurisdictions have developed Goal 9 compliance based on
projected growth reflective of traditional patterns, and the attraction of a large industrial user would be
considered an exogenous impact to these projections.
The primary economic development objective of this analysis is to ensure that the regional industrial land
inventory is adequate to support the specific needs of large lot industrial users. As a result, a substantial amount
of attention is paid to the site selection process utilized by candidate firms. Large firms go through a methodical
and deliberate site selection process for "development-ready" sites. Successful recruitment of these firms requires
a competitive selection of "development-ready" sites meeting a variety of physical and locational requirements. A
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 5
development-ready site, or a "shovel-ready" site, is defined as a property in which site improvement can begin
within 180 days of purchase and development application. Such sites are either served or readily served by
requisite infrastructure and utilities, environmental and other constraints are known and documented, and
permitting can be fast-tracked for rapid facility operations.
The geographic region evaluated in the analysis is the Central Oregon Counties of Deschutes, Jefferson, and Crook.
More specifically, the primary urban areas within this broad geographic region include the Cities of Bend,
Redmond, Prineville, Madras, Sisters, and La Pine. Consistent with Statewide Planning Goal 9, this process will
outline the particular site needs and characteristics associated with potential targeted industries in the region. An
in-depth inventory of potential suitable sites in the region to meet regional economic goals and opportunities will
be a subsequent work task for the jurisdictions in the region.
While not all jurisdictions are likely to need and/or desire the large lot industrial sites necessary to accommodate
these users, the regional availability of these sites is considered desirable for all jurisdictions. As an example, a
major industrial employer locating in a jurisdiction with an appropriate site will provide employment opportunities
for the regional workforce, as well as the opportunity for support industries in other jurisdictions. Competing as a
cohesive region allows Central Oregon to market a larger available work force, the size of which is often a key
locational criteria for firms.
The need for large lot industrial sites is a regional need, with the economic development benefits widely
distributed regardless of the specific firm location. While individual jurisdictions could work towards establishing
independent land inventories to meet this prospective need, a regional approach appeared most responsive to
what is seen as a regional issue.
The goal of this regional effort IS NOT to generate an acreage calculation of needed vacant industrial land supply
BUT rather is to identify the variety and size range of vacant industrial sites needed to make the region attractive
to site selectors and competitive in the global marketplace - a qualitative as well as quantitative outcome. This
effort will provide an adequate supply of large industrial sites to support stable, family-wage jobs in traded sectors
in the short-term and to build future job creation capacity in the long-term (through land banking and a renewing
large-lot industrial land supply) so that established employers do not have to move out of the region to be quick,
efficient, competitive and successful.
This large-lot industrial lands supply initiative exceeds the capacity of any single jurisdiction. It is an industrial
recruitment reality that in order to be competitive, regional clout and appeal along with a critical mass of diverse,
attractive sites is needed. The 21't Century site selection factors in the global marketplace of industrial recruitment
and site development prioritize: 1) expedited site development with certainty and minimal time delay; 2)
opportunities to expand and/or diversify manufacturing activity on-site, taking advantage of existing infrastructure
and facilities investment; and 3) the availability of a high quality work force and training programs.
Central Oregon has the potential to compete well under these criteria as a region, but not as individual
jurisdictions. It is due to the Central Oregon quality of life factor that so many people and businesses have
relocated to the region in the past decade. This region has been the fastest growing in the state. The same quality
of life amenities in Central Oregon that have attracted so many new residents is a major draw and appeal for new
industries looking to locate a facility. These industries want to locate in an appealing living environment that will
serve to attract and retain talented and valued employees.
B. COMMUNITY VISION STATEMENT
The project's Regional Advisory Committee developed a community vision, which summarizes what the region's
economic development goals are as they particularly relate to large lot industrial demand. The following is the
stated vision:
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 6
TO BUILD A STRONG AND THRIVING REGIONAL ECONOMY BY ESTABLISHING AND ACTIVELY MAINTAINING A
COMPETITIVE PORTFOLIO OF LARGE LOT EMPLOYMENT SITES AND COORDINATING PUBLIC INVESTMENTS,
POLICIES AND REGULATIONS TO SUPPORT REGIONAL AND STATE ECONOMIC DEVELOPMENT OBJECTIVES
As outlined in the vision statement, the region is concerned with maintaining a competitive portfolio of large lot
industrial sites. This is viewed as supportive of regional and statewide economic development objectives. In
addition, the vision supports a coordination of investments and policies to this end.
Consistent with this vision, the focus of this analysis is on the establishment and maintenance of a short-term
competitive supply of large lot industrial sites that are "development ready", which are available to allow the
region to compete for major industrial employers cross shopping the region against other potential locations.
III. TREND ANALYSIS
A. NATIONAL ECONOMIC TRENDS
INTRODUCTION
The trend analysis section provides the foundation of economic information that will shape realizable economic
opportunities potential for a jurisdiction, resulting potential job growth scenarios, and ultimately employment land
need over the planning horizon.
In the trend analysis, it is understood that the region, state, and nation as a whole are currently navigating
economic conditions not seen in a generation. Ultimately, current economic conditions make it difficult to produce
highly timely national trend analysis. Johnson Reid therefore, heavily utilizes the economic forecast "of record" by
the federal government, the non-partisan Congressional Budget Office biannual economic forecast.
SHORT-TERM OUTLOOK
Gross Domestic Product
Over the previous two quarters, economic growth has stabilized with a noticeable rebound as federal stimulus
spending has filtered into the economy and businesses inventory replenishment has spurred manufacturing
activity. Growth in the first quarter measured a 3.2% increase following a 5.6% increase during the previous
quarter. However, economic growth, as the recovery takes hold is likely to remain muted in the near term in light
of existing economic turmoil, and continued uncertainly of financial markets. On the basis of previous recessions
and recoveries, the following factors are also expected to contribute to a more measured recovery period2.
• Evidence from the United States and other countries suggest that recovery from recessions triggered by
financial crisis and large declines in asset prices tends to be more protracted.
■ Changes in federal stimulus: While federal stimulus spending associated with the American Recovery and
Reinvestment Act (ARRA) may have helped moderate the severity of the recession in 2009, its effects are
beginning to fade.
■ Loss of investment income and more limited availability of credit are likely to limit growth in consumer
spending in the near term.
Congressional Budget Office. "The Budget and Economic Outlook" January 2010.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 7
FIGURE 3: NEAR-TERM GROSS DOMESTIC PRODUCT
6%
4%
s
2%
- -
0
c7
0
0%
c7
M
-2%
N
_
-4%
Q
-6%
■Actual .
: Forecast
-8
r` n n
O O O
N 00 00 00 00 rn rn rn rn O O O O N M
O O O O O O O O O 1 .-4 a 1 4 ~ .-1 rl
Cf
(Y (Y CY (Y C7 Cl Cl C C! Cl <7 C
~-1 N M
N N N
-q:r 14 N M Cr .-0 N M e-4 N M if
SOURCE: Bureau of Economic Analysis, Congressional Budget Office
GDP growth during 2010 averaged a 2.9% annualized rate of growth, and is projected to expand modestly in a
range from 2.8% to 2.9% through 2013.
Employment
Since the beginning of the recession, payroll employment has fallen by greater than 7 million jobs, reflecting both
the loss of employment and a drop in the labor force. A signature element of the current recession has been both
the depth and duration of employment losses from the peak period of the economic cycle as determined by the
National Bureau of Economic Research. As of June 2010 the current recession is expected to be the deepest and
most lengthy period of sustained unemployment since the Great Depression.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 8
FIGURE 4: NATIONAL UNEMPLOYMENT TREND
12.0%
10.0%
d
0 8.0%
oc
c
6.0%
:Ift
0
a 4.0%
E
of
j 2.0%
0.0%
O O e-1 .1 N N M M r u, V1 w' l0 n r` oo 0o a, a, O
O O O O O O O O O O O O O O O O O O O 4 .-i
C 3 C 3 C 3 C 3 C 3 C 7 C 3 C 3 C 3 C 3 C
SOURCE: Bureau of Labor Statistics
At current, unemployment remains at a seasonally adjusted rate of 9.5%, down slightly from its October peak of
10.1%. The unemployment rate is expected to remain high, and lag the broader economic recovery as there is
significant slack in the economy. As the jobs situation begins to recover, workers who have quit pursuing
employment are likely to reenter the labor force, delaying unemployment recovery. However, it appears that the
national employment situation is stabilizing, with the pace of year-over-year job losses declining since the first
quarter of 2009 and finally turning positive by the beginning of 2010.
NGURE 5: YEAR-OVER-TEAR tMPLOYMENI
400
UNITED JTATES
200
0
c
d
E -200
0
-400
W
3 -600
d
2
-800
Z
-1,000
4 R o 4 o Q o Q o 9 9 9 0 0 0 0 0 9 11
a I-
3 a> c o 3 a> c 3 a> c -M
n z co n Z `-o co n Z f0, 2
SOURCE : Bureau of Labor Statistics
DEscHUTEs COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 9
Consumer Spending
While a recent upward trend is an encouraging sign of recovery, spending by households is likely to remain
constrained by slow income growth, lost wealth, and limited credit availability. Similarly, the overbuilding of
residential and commercial space and units exhibited during the real estate bubble created sizable vacancies in
both sectors. Subsequently, a rebound in investment spending is likely to be much slower than in a typical recovery
period. In the near term consumer spending growth is expected to come in below its long-term average.
FIGURE 6: PERSONAL CONSUMPTION EXPENDITURES
SOURCE: Bureau of Economic Analysis
Other Factors
• Housing Starts have remained stable since mid-2009 and were actually up 17% in the first quarter on a year-
over-year basis. However, the current rate of housing starts remains noticeably weak and is just over a third of
the 15-year average.
Asset Prices remain highly volatile in light of broad based economic and to a certain extent political
uncertainty. Since January of 2008 the Dow Jones Industrial Average has displayed a Hi-Low range of roughly
5,000 points.
■ Inflation in the United States remains low. At 1.7%, change in the Consumer Price index is low relative to
historical averages. Reflecting a large amount of slack remaining in the economy, inflation risk is low, and is
expected to, at best, remain unchanged, and possibly decline further in the near-term. If this trend holds true,
the impact will likely be a stable monetary policy with the Federal Reserve keeping its target rate low for some
time.
■ Federal Debt held by the public as a percentage of total output has reached its highest level since World War
II. Under current policies this condition is expected to exacerbate further. Persistent deficits can have severe
economic consequences, including the crowding out of private investment, limiting the effective use of fiscal
policy, and increasing the risk of a fiscal crisis.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 10
In Millions of Chained (2005) dollars, Seasonally Adjusted
LONG-TERM OUTLOOK
During the first half of the next growth cycle, GDP is forecasted to grow rapidly enough to close the considerable
gap between existing and potential GDP. Beyond the near-term, the United States economy is expected to return
to a typical growth cycle and growth at roughly the same pace as potential output, averaging 2.4% annual growth
between 2015 and 2020. While growth patterns are expected to return to normal, economic growth in the coming
decade is likely to be more measured relative to historical averages. Factors moderating long-term economic
growth include:
• Demographic factors are expected to create a reduction in the potential labor force and potential hours
worked, which account for three-fourths of the economy.
• Federal Debt will increasingly displace business investment and thus growth in capital services.
■ Total factor productivity growth is forecasted to average 1.3% annual growth, slightly above its average
rate of growth since the productivity slowdown of the 1970s but below the 60-year average.
FIGURE 7: LONG-TERM GDP FORECAST
4%
3%
3.396-
2.99$ 2.896 2.998 2.8% 3.096 2.936
r 2% - - - - - 2.396- 2.2/00 2.2x60 2.3
3
0
l`7 1% - - - - - - - -
a
0
0%
0.0%
e
C
Forecast
■ Actual
-2%
-3%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
SOURCE: Congressional Budget Office and HIS Global Insight
Inflation, as measured by the PCE price index will average 1.7% annually during the latter half of the coming
decade. The Federal Reserve will continue to use its monetary influence to control inflation risk in the next cycle.
The Fed is expected to maintain the rate of PCE near the top of its target range.
Long-term unemployment is expected to average 5% during the latter half of the decade, roughly equivalent to
what is considered to be the natural rate of unemployment. Over the next ten years, the U.S economy is expected
to add over 14 million employment positions according to the Bureau of Labor Statistics (BLS). The national
economy is forecasted to continue its exhibited trend toward more service oriented industries. A staggering 62% of
new employment is expected to be concentrated in only two industries, Education & Health Services, and
Professional & Business Services. Over the forecast-term, only the Manufacturing and Mining & Logging industries
are expected to contract in size.
DESCHUTEs COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 11
FIGURE 8: NATIONAL EMPLOYMENT FORECAST BY INDUSTRY 2010-2020
Government
Other Services
Leisure & Hospitality
Education & Health
Professional & Business
Financial Activities
Information
T.W.U.
Retail Trade
Wholesale Trade
Manufacturing
Construction
Mining & Logging
6
0
1,087
722
,830
4,938
56
114
338
59
2
229
-1,027
1,108
-97
-2,000 -1,000 0 1,000 2,000 3,000 4,000 5,000 6,000
Employment Change (In 000's)
SOURCE: Bureau of Labor Statistics and JOHNSON REID
Factors affecting economic growth moving forward
■ Financial Markets: The financial situation of many banks remains delicate; however, the risk of further
deterioration is moderating. Ease and cost of credit is likely to be more limited moving forward, but far
improved from current conditions.
■ Monetary Policy: The Federal Reserve is likely to continue aggressive monetary support for the economic
recovery until the risk of higher inflation outweighs the risk of economic deterioration. The recent economic
crisis saw the Fed take a larger and more nontraditional role in its monetary influence, namely the purchase of
large amounts of mortgage backed securities on the open market. This has created a more complicated view
of Fed influence and monetary policy actions. With nearly twice its pre-recession asset holding, the Fed can
now withdraw monetary influence by either raising its target Federal Funds Rate or reducing its asset holding.
■ Fiscal Policy: The fiscal impacts of the ARRA have already begun to wane and are expected to turn negative by
2011. Moving forward, mounting federal deficits could limit the government's fiscal capabilities in the long-
term while placing upward pressure on tax rates.
■ Investment: Inventory levels are beginning to equalize, and firms are more likely to increase production to
more closely match sales. However, the spread between housing vacancies and housing starts remains high,
and a rebound in housing investment is unlikely until later in the cycle. Investment in durable equipment and
software is expected to lead the recovery. Many industry sources predict a "pent up" demand for facilities
and equipment that will materialize in terms of companies seeking immediate, development-ready locations.
■ Consumer Spending: Growth is expected to remain protracted through 2011. Persistently high unemployment
will limit income growth and dampen consumer spending growth even further.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 12
B. STATE ECONOMIC TRENDS
GENERAL INDUSTRY TRENDS
Oregon experienced exceptional employment growth between mid-2003 and 2007. Growth began slowing
towards the end of 2006 and continued through 2007. The Oregon Employment Department's employment
estimates for second quarter 2010 indicate that Oregon is following the U.S. economy with decreasing job losses
and a turning point in the unemployment rate. Figure 7 demonstrates how closely tied the Oregon economy is to
economic trends at the national level. Since 1939, Oregon has tracked the peaks and valleys of the U.S. economy.
Also illustrated is improved diversity in Oregon's economy as evidenced by alleviation of the volatility that plagued
Oregon during the 1980's recession.
FIGURE 9: U.S. AND OREGON HISTORICAL EMPLOYMENT TREND: 1939-2009
160,000 2,000
■ United States 1,800
140,000
c : Oregon
1,600 _ZZ
8 120,000 0
1,400 °o
d 100,000
E 1,200
o as
a 80,000 1,000 >
E o
W CL
W 60,000 800 W
A C
y~ 600
40,000 d
400
20,000
200
0 0
O N Ln W 4 mt r` O M to m N Ln w ri Q n O M w m N Ln w
M d' ~ ~ u1 V7 ~ l0 lD tD tD r` n n a0 00 a0 01 Qi 01 O) O O O
01 01 01 01 01 01 01 Oi Q1 01 01 01 Q1 Q1 01 G1 01 01 01 01 01 O O O
rl ey rl .-1 rl rl rl rl rl rl rl rl e-1 .-1 e/ ~ .-1 eH .-1 ri .-i N N N
SOURCE., Bureau of Labor Statistics
Oregon's economic growth since 2005, but prior to the current precipitous slowdown, is due in large part to
explosive growth in exports. For example, between first quarter 2007 and first quarter 2008, Oregon exports
increased by 23.7%, more than six points higher than the U.S. growth during the same period. Oregon's export
growth is primarily due to export growth in agricultural products which grew by 82.2% and computer and
electronics products which grew by 24.8%. Computer and electronics account for nearly 40% of total Oregon
exports. Several other industries experienced high growth in exports during the same period: Waste and Scrap
(+71.6%), Nonmetallic Mineral Products (+54.0%), Chemicals (+47.6%), Primary Metal Manufacturing (+31.0%),
Miscellaneous Manufactured Commodities (+26.0%) and Wood Products (+23.8%).
Industry Analysis
The first quarter of 2010 represented the first positive quarterly job increase since 2008. Figure 8 outlines a
breakdown of Oregon's primary industries, where they appear to be in the cycle, and forecasts of growth over the
near-term.
DESCHUTES COUNTY ) CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 13
Almost all service sectors posted seasonally adjusted job growth in early 2010. Housing market dynamics are
expected to continue dragging down the Construction and Financial Activities Sectors in the near-term, but growth
should turn positive in 2011. A similar trend is anticipated for Oregon's Wood Products industry. Positive spots in
the economy include High-Tech Manufacturing, Food Processing, and Education & Health Services.
FIGURE 10: OREGON ECONOMIC CONDITIONS AND ESTIMATES BY INDUSTRY
Recovery Growth Projections
Industry Signal 2010 2011 Comments
Wood Products
Stabilizin
-5.4%
g
Computer & Electronic Equipment
4
Positive
0.1%
Transportation Equipment
Contractin
-10.3%
g
Metals and Machinery
Stabilizing
n/a
Food Processing
4
Positive
6.8%
Construction
Contractin
-15.0%
g
Information
F~7*
Flat Growth h
0.0%
Financial Activities
Stabilizin
-1.4%
g
Professional & Business
bilizin
St
0.1%
g
a
Education & Health
4
Positive
1.9%
Leisure & Hospitality
~j
Flot
Growth
0.8%
-
Government
F
47
-0.5%
Slowly recovering but still feeling the housing
5.7% market
3.7%
4.5%
2.8%
0.8%
1.3%
Good corporate earnings
Still among Oregon's most troubling sectors
Sector never got too bad
Among Oregon's strongest sectors
Commercial real estate extending the decline
Newspaper & publishers feeling a weak retail
2.8% sector
2.2%
5.9%
2.1%
Weakness in real estate limits growth in 2010.
Stable sector poised for a robust 2011 recovery
Among Oregon's strongest sectors.
Performed poorly in 2009 with little near-term
0.7% growth expected.
Negative state and local growth partially offset
-0.3% by Federal gains.
SOURCE: Oregon Office of Economic Analysis and Johnson Reid, LLC
Economic Recovery Prospects
In the State of Oregon, the consensus among economists is that the State economy is holding in a soft-patch
period, as federal stimulus and inventory investment fade by the third quarter of 2010. Businesses are beginning to
feel better about the economy, while persistently high unemployment has kept consumer sentiment down.
However, the outlook for Oregon is positive relative to other parts of the nation. In the most recent publication of
the Federal Reserve Bank of Philadelphia's Coincident Index of Economic Indicators, Oregon posted a 1.2%
improvement, ranking 13th in the country and 1st in the West. Moreover, according to the Oregon Office of
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 14
Economic Analysis (OEA), Oregon's risk of slipping into recession is now currently below the 50% mark for the first
time since late 2007.
FIGURE 11: FEDERAL RESERVE BANK OF PHILADELPHIA'S COINCIDENT INDEX OF ECONOMIC INDICATORS
Employment Factors
Similar to trends at the national level, the State of Oregon began exhibiting a decrease rate of job losses (on a year-
over-year basis) beginning by mid-2009. However, at the state level jobs have yet to turn positive but are certainly
trending in a positive direction. The State's unemployment rate has moved in a positive direction, down to 10.5%
from a 2009 peak of 11.6%, seasonally adjusted. Nevertheless, Oregon's rate remains elevated relative to the
national average.
Document Reproduces Poorly
(Archived)
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 15
FIGURE 12: YEAR-OVER-YEAR EMPLOYMENT CHANGE, STATE OF OREGON
80,000
60,000
40,000 NEME_
c
20,000
0 0
CL
E 20,000
W
-40,000
d
} -60,000
4 -80,000
-100,000
d
-120,000
-140,000
Oro Oro Oro 01 01 01 01 O~ O`b O1 OP SP 65 005 005 'b0 .~O
~a~ PJav ~pJ ~~C ~aJ PJQ; ~p~ ~~C ~a~ Pp~i ~pJ ~e~ ~aJ PJQo ~p~ e
SOURCE. Oregon Employment Department
Over the longer-term, Oregon's economic growth is expected to outpace growth at the national level. By 2018, the
State's employment is expected to grow by over 14% with Oregon's population growing by 9% over the same
interval. Additionally, Global Insight, a national leader in economic forecasting, project's Oregon's Growth State
Product to have the second highest growth rate in the nation in the coming years. Oregon's high growth prospects
are due to a number of factors:
0 Population growth, primarily due to net in-migration
0 Relative location near Canada and Asian countries
0 High commodity prices
0 Export growth
0 Business Cost Advantages
0 Affordable housing
0 Biotechnology and Clean Technology
0 Renewable Energy and Sustainable Development
0 Quality of life
0 State tax incentives, including the Single Sales Factor Tax
Through 2017, the OEA forecasts 223,000 new jobs in the Oregon economy. Mirroring national forecasts, a
significant share (41%) are expected to fall in Professional & Business Services and Health Services. The state is
expected to add over 25,000 new manufacturing jobs based on the 2010 base, roughly 8,000 of which are
expected to be high wage High Tech Manufacturing jobs.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 16
FIGURE 13: FORECASTED EMPLOYMENT GROWTH BY INDUSTRY, STATE OF OREGON 2010-2017
Construction
1900
Manufacturing
25, 00
Wood Products
High Tech
000
Transportation & Equipment
Retail Trade
Wholesale Trade
Information
Professional & Business
Health Services
Leisure & Hospitality
~
to
Government
10,000
20,000
30,000 40,000 50,000 60,000
Jobs
SOURCE: Oregon Office of Economic Analysis (OEA)
RISK FACTORS
While signs of systematic economic recovery are emerging, the State of Oregon still faces notable downside risk in
key sectors. Housing and real estate remain weak, and Oregon's dependence on the stability of export markets is a
regular concern. Other factors which could affect the Oregon's economic outlook include:
■ Credit Markets: While conditions are improving, consumers and businesses are still facing greater difficulty
getting loans relative to the previous cycle. This is also a risk reflected nationwide.
• Prolonged Housing Market Weakness: While signs are emerging that the housing market has hit bottom, a
full housing recovery remains several years off. However, Oregon has fared better than most western states,
and if the economic recovery beats expectations, Oregon will be better off than most of the region.
■ Fading Inventory Cycle and Federal Stimulus: Much like in the national analysis, these two metrics are
credited with propping up the economy over the previous two quarters. With support broadly expected to
wane, uncertainty is on the horizon.
■ Global Economic Conditions: As mentioned previously, Oregon's economy is highly export based and Oregon
has above average exposure to global economic conditions, particularly conditions among its major trading
partners. Expectations for economic growth in Asian countries such as China are a positive sign for Oregon.
■ Energy Prices: Currently low energy prices relative to the previous cycle will be a short-term boon for the
economy, as businesses with the ability will chase cost savings. However, price increases are expected to
return commensurate with broad based economic recovery, and maintaining a cost based competitive
advantage is likely to be central to Oregon's economic development success.
4,300
,
1,500
13,80
12,700
3,100
54,8
,600
8,400
0
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 17
C. LOCAL TRENDS & CONDITIONS
ECONOMIC FACTORS
The Central Oregon economy was historically dominated by Wood Products Manufacturing and Natural Resources.
In recent decades, this changed dramatically as population influences and tourism activity spurred growth in
service oriented industries and manufacturing diversity. Central Oregon became among the fastest growing
regions in the West. Affluent new residents attracted to the region's quality of life brought wealth from outside the
region, fueling demand for services and housing with the infusion of their disposable income.
Central Oregon was among the hardest hit regions in the state during the current recession, with unemployment
rates remaining near 15% in the current quarter, significantly higher than the statewide average.
FIGURE 14: COMPARATIVE UNEMPLOYMENT ANALYSIS 2003-CURRENT
25.0%
,Crook
20.0% ,Deschutes
Jefferson ;
°C 15.0%
Oregon
d
E
10.0%
M 5.0%
0.0%
O'5 O'5 ON (Z~ Qy A`' Oh OrO Q10 01 01 O1b Q% OO. O°1 O°, ti0
SOURCE. Oregon Employment Department
Several key factors have contributed to both the depth and duration of Central Oregon's economic weakness.
Firstly, industries that supplied goods and services to Central Oregon's real estate development market and served
a rapidly growing population were largely responsible for its robust economic expansion. With the bursting of the
housing bubble in 2007, the concentration of the regional economy dependent on real estate development
created an economic contraction as dramatic as its rise. Central Oregon has lost one in four construction jobs since
the peak of the cycle.
Secondly, Central Oregon's new service concentrated economy is far more susceptible to changes in consumer
sentiment and disposable income. The national recession's impact on tourism markets, consumer spending, and
the acquisition of vacation properties or second homes compounded Central Oregon's decline. The Central Oregon
economy was highly dependent upon "discretionary" activity, which tends to be very cyclical.
Thirdly, unemployment in Central Oregon has remained persistently high in part as the result of continued
population growth attracted to the region's quality of life. Central Oregon maintained positive in-migration
through 2009. Coupled with stagnated employment growth, this in effect has kept unemployment high by
maintaining higher labor force levels.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 18
As such, Central Oregon's last year-over-year employment gain occurred in 2007, with the region posting
employment losses every quarter since. Manufacturing continues to depress the employment situation in both
Deschutes and Crook Counties, posting 15% and 16% job losses in 2009, respectively. Employment losses are
moderating however, and bright spots in the economy are emerging. Several industries including Wholesale Trade
and Education & Health Services have maintained growth throughout the recession and several other industries,
including Leisure & Hospitality have been showing year-over-year increases in employment in the second quarter
of 2010.
POPULATION
Central Oregon's dramatic Population rise was largely the effect of significant in-migration. During the 2000-2009
decade, Central Oregon averaged 4.0% annual population growth while adding more 65,500 new residents.
Despite an influx of retirement age residents, 55% of residents are working age between the age of 25 and 64. This
is consistent with the statewide average.
FIGURE 15: LOCAL POPULATION GROWTH TREND
The City of Bend is the primary demographic hub in the region, accounting for 37% of the regional population and
44% of growth during the last decade. Over the next 20-years, the OEA estimates Central Oregon will continue
demographic growth at a 2.1% annual pace adding 45,000 new residents by 2020. However, this State developed
rate of growth may be slightly conservative in nature, Deschutes County's 2004 coordinated population forecast is
projecting 47,000 new residents in Deschutes County alone over the same interval.
EDUCATION
An area's level of educational attainment is often used as a proxy for the skill level of the population base. From an
economic development perspective, Central Oregon is consistent with regional averages, with 29% of the working
age population having at least a bachelor's degree. However, a 2010 study of Central Oregon's (Deschutes County)
competitiveness evaluated Central Oregon in light of a sample of competitive economic peers in the west. The
study found Central Oregon to be in the middle of the road relative to its peers. An educated and skilled workforce
is a competitive asset among Central Oregon's target industries. An inability to "stand out" in this metric may limit
the region's ability to recruit employers within specific industries.
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 19
3uum.C: ruruanu 3IDEe rupuiauon nesearcn renter
FIGURE 16: COMPARISON OF EDUCATIONAL ATTAINMENT
Boulder County, CO %
I I I
Ada County, ID 34
I I
Washington County, UT 2 %
I
Kootenai County, ID = 23%
Central Oregon 29%
Portland 33%
I l
Oregon 8%
0% 10% 20% 30% 40% 50% 60% 70%
% of Working Age Pop. With a Bachelor's Degree
SOURCE. Headwaters Economics, U.S. Census Bureau, and Johnson Reid, LLC
WAGES
Since 2002, wage levels in Central Oregon have averaged a 3.2% annual rate of growth, comparatively better than
a 2.8% annual growth rate at the State level. Deschutes County's average 2009 wage level of $35,295 was well
below the statewide average. Lower relative wage rates coupled with housing affordability concerns can limit the
region's ability to attract a high quality workforce to the region.
FIGURE 17: CENTRAL OREGON WAGE TRENDS
$38,000
$36,000 Sg ,
$34,315 Bend MSA $35,195
$34,000 0A 37a - -
3 $32,000 17 $31,491
- - -
$30,091
$30,000 - - - - -
$18153 Portland Metro $4 33
$28,000 - - - - - - -
$26,000 - - - - - - -
$24,000 - - - - - - -
Oregon 40,740
$22,000 - - - - - - -
$20,000
2002 2003 2004 2005 2006 2007 2008 2009 $20,000 $27,500 $35,000 $42,500 $50,000
Average Annual Wage
SOURCE. Oregon Employment Department, Covered Employment Survey
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 20
IV. TARGET INDUSTRY ANALYSIS
A. LARGE-LOT TRENDS AND DYNAMICS
Changes in global business patterns have pressured firms to develop more capital intense production models,
placed a greater emphasis on economies of scale, as well as production efficiency and flexibility. The result has
been the emergence of a clear real estate trend, creating a global demand for large development ready industrial
sites. As such, large, development ready sites have emerged as one of Oregon's most severe development
challenges.
Workforce characteristics, quality of life, proximity to large U.S. West Coast markets, and coordinated public
involvement and recruitment have landed Oregon "on the radar" of many large-scale projects shopping for sites in
the United States. Many of these projects have been concentrated in cutting edge industries important to the
State of Oregon's economic development targets. The state and region have had measured success in the
placement of large-scale projects, with lack of suitable sites (size & infrastructure), lack of market choice, and time
duration to entitle and develop sites commonly cited as development constraints.
Large scale global firms represent an important prospective economic development engine for the state and
region. Global scale firms have the ability to open new markets, bring cutting edge technology to the region, are
associated with high wage jobs, and expend significant capital investment. As an additional benefit, the high
assessed value of these projects contribute significantly to the stability of the tax base that allows provision of
necessary services to all residents of the region. Therefore, the goal of this process is to evaluate Central Oregon's
opportunities for large scale economic growth in light of statewide planning goals and practices, as well as land
and infrastructure availability.
LARGE LOT TRENDS
Shifting global market factors have increased the need for large lot industrial sites over the last several decades.
Warehouse properties have substantially increased in size as distribution reflects increasing returns to scale as well
as the concentration of production in larger production facilities. Production facilities are also increasingly scaled
for global as opposed to regional or national needs. The following are examples of recent warehouse projects that
have located to the State of Oregon, as compiled by Business Oregon:
Jurisdiction
Tenant
Site Size
Square Footage
Albany
Target
175 acres
1.3 million
Hermiston
Wal Mart
200 acres
1.3 million
Lebanon
Lowes
204 acres
+13 million
Salem
Home Depot
50 acres
500,000
As shown in the preceding table, the emerging module for distribution facilities now regularly tops 1.0 million
square feet of building area, with site sizes in excess of 200 acres. Over 55 projects have shopped the State of
Oregon over the last ten years with site demand over 50 acres, averaging over 5 new projects per year. Business
Oregon currently has 10 estimated outstanding leads in this size category.
Manufacturing has also shifted to larger site needs, with examples including Genentech, SolarWorld and Intel's
new expansion in Hillsboro. Each of these required sites are in excess of 50 acres in size, with Intel's located on
land held in reserve adjacent to a currently operating facility. While these projects show a need for large sites,
they also speak to a desire for even larger sites than immediately needed to provide flexibility. While Intel didn't
immediately need the land used for their recent expansion when building the initial Ronler Acres facility, the
flexibility provided by this excess property made the site more competitive vis-a-vis alternative locations that had a
greater probability of limiting future expansion options.
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 21
Business Oregon estimates that they see approximately 15 serious inquiries a year for large scale manufacturing
sites. Combined with warehouse/distribution inquiries, Business Oregon sees over 20 annual inquiries a year
statewide for large lot industrial sites. As not all leads are picked up by Business Oregon, one would expect the
overall activity to be significantly higher.
Economic Development for Central Oregon (EDCO) is currently working with 72 companies seriously considering a
location in Central Oregon, of which five would require a site 20-50 acres in size, while three would require a site in
excess of 100 acres. Industries that have contacted EDCO for large acreage sites include the following:
• Distribution and warehousing;
• Data centers;
• Renewable energy equipment manufacturing;
• Energy production facilities (biomass, solar, geothermal, synthetic fuels),
• High technology; and
• General durable goods manufacturing.
Johnson Reid completed a survey of industrial brokers active within the State of Oregon in 2010, asking a series of
questions with respect to market activity for large lot industrial sites. These surveys revealed the following:
• Industrial brokers surveyed fielded an estimate of eleven 50+ acre parcel queries annually over the last
ten years, largely by technology manufacturers and warehouse/distribution users.
• Technology manufacturers comprised 35% of all 50+ acre site queries over the last decade, indicating
continued viability and continued growth potential for the cluster.
• For every public lead that generated a large site query fielded by a broker, private brokerages fielded
nearly 3 large site queries independent of public economic development involvement.
• The State loses at least one large site query annually due explicitly to site unavailability, however Johnson
Reid concludes more are also likely lost due to site unavailability but limited broker involvement and firm
confidentiality prevent verification.
• Almost one of every three sites purchased by large users over the last ten years has not yet realized
development. In other words supply capacity should include at least 33% land investment and
"transaction demand" capacity to enable firms adequate choice for the large site market to function.
In summary, Business Oregon fields over 20 inquiries annually for large lot industrial land, while EDCO fields an
additional amount. If the broker experience holds true, the actual volume of prospective site queries is in excess
of 80 annually statewide.
IMPORTANCE OF LARGE-LOT SUPPLY AND MARKET CHOICE
Oregon is entering an increasingly competitive dynamic in the recruitment and retention of global large scale
employers and producers. In their search for suitable site locations for business expansion, firms typically follow a
site selection process and evaluation of regional characteristics and livability, workforce/industry dynamics,
operating costs/incentives, and availability of a selection of sites ready for immediate development. A
development-ready site, or a "shovel-ready" site, is one in which site improvement can begin within 180 days of
purchase and development application. Such sites are served by requisite infrastructure and utilities,
environmental and other constraints are known and documented, and permitting can be fast-tracked for rapid
facility operations. Many large business location searches are conducted by hired site selectors; their task is to
present their clients with a "short list" of feasible options. Because of their mandate, site selectors admittedly look
for reasons to remove sites from consideration because of some inadequacy in characteristics; their job is not to
keep sites in consideration based on promised improvements in any deficient condition.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 22
Initial Location Candidates
Workforce and Existing Cluster
A
.s
~
0
O,,,
e01,
0
01
d
ti•
~c
oc
a
o~
0
a"
oa0
n`
Johnson Reid has organized this process into a
simple model that follows the progression of firms'
decision criteria in location analysis. In addition to
identifying a progression of selection criteria,
Johnson Reid have found land diversity and market
choice to be of particular importance. Industrial
recruiters at Business Oregon and other entities
around the state strongly assert that a lack of sites
puts Oregon at a distinct competitive disadvantage
relative to competitor communities across the
nation. The consensus has emerged that a general
lack of development-ready sites to choose from
eliminates a city or region from contention very
early in the site selection process. Moreover,
market choice among several sites further
preserves price stability and transaction certainty
that tends to deteriorate in a single-seller scenario,
threatening placement of potential firm.
Additional industrial development and business trends affecting large-lot industrial demand include:
• Companies trending toward expanded portfolios.
Among key industries such as high-tech/renewable energy manufacturing and biosciences, evolving
production models requiring substantial capital investment and reinvestment have created a need for
land capacity beyond current needs. Firms require land holdings with flexibility and expansion capacity.
The value of this flexibility to a firm exceeds the marginal cost of holding land for many firms, leading to
firms seeking sites often well in excess of immediate space needs.
• Higher fuel and energy costs are forcing firms into more regionally distinct operations for sourcing their
raw materials and/or distributing their finished products.
• Large, available vacant structures are a popular commodity for some industries where time-to-market is a
critical element of location decisions.
• Location incentives are playing an increasing role in location criteria, at least in the context of "leveling
the playing field" among competitor locations.
• Low cost, high capacity existing utility infrastructure is emerging as a deterministic quality in site criteria
for many targeted industries; if capacity does not currently exist it must be available within the project
timelines for sites to remain in consideration.
For most companies making location decisions, land is a "means to an end"; that is, they need the land to locate
some kind of facility so they can produce the product or service that is their primary business. They want:
• Diverse sites in a region to choose from in the early stages of their search; most companies want to pick
and choose.
• A single point of contact/negotiation; companies are not interested in protracted negotiations with
multiple parties; they want the process to be as quick and painless as possible.
• Prospects are very concerned how the land procurement process affects their project time lines and
ultimate time-to-market of their product; often, in fact, the actual land price is of lesser consideration to
the company than how quickly and easily the property transaction moves forward.
• Prospects are highly unlikely to be patient when it comes to services (water, wastewater, power); the
availability of service needs to fit into the project timeline, and not be a roadblock issue.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 23
Location
ecisi
Assembling multiple smaller parcels into a cohesive "large lot" product can be a very difficult task. Among the
barriers to land assemblies are:
• Property owners unwilling to sell (for many reasons: price, tax impact, sentimental value, replacement
costs, and viable alternative locations).
• The sheer cost of the land; owners have an inflated expectation, or perhaps only one ownership out of a
larger site assembly is a problem.
• Ownership interests are fractured (often true in family inheritance situations); this issue often is
combined with absentee ownership, so that owners don't really have a "stake" in the transaction and its
impact on the community.
• Regulatory environment (zoning, environmental overlays, mandated parcel size).
• Infrastructure demands caused by land assembly, and the commensurate ability to finance necessary
improvements.
• Legal issues, including clear title, easements, and encumbrances.
As these possible barriers are viewed from the standpoint of the business making a location decision, it is not
difficult to perceive why multiple parcels often represent a "deal-killer" to companies who do not have the time,
patience, or expertise to wade through a possible quagmire of issues.
The key to the site selection process is that it is essential for candidate sites to be truly development-ready instead
of simply "buildable". A general lack of development-ready sites to choose from eliminates a city or region from
contention early in the site selection process. In addition, firms in the site selection process prefer to have
multiple options within a region that meet their criteria. Ideally this would include multiple ownerships, as well as
multiple jurisdictions. This allows for competitive pricing, a wider range of options, as well as making the area
more attractive for site visitation.
COMPETITIVE INVENTORIES
While the State's land use system is concerned with meeting demand over the next 20-years, of more critical
importance is the availability and maintenance of a competitive inventory of readily available sites. As the Central
Oregon region considers new, large industrial site supply, the region specifically seeks to provide a supply of large,
development-ready sites that is competitive with other markets nationwide.
Johnson Reid prepared a number of surveys over the last several years, documenting the supply of development-
ready site inventory (180-day) marketed by national competitors. Johnson Reid would underscore that at least
two of the competitors shown - Albuquerque and Austin - have identified replacement industrial land supply
exceeding a thousand acres according to officials interviewed. The City of Hillsboro is also actively working
towards increasing its large lot industrial acreage inventory.
Competitive
50-100 Acre Sites
100+ Acre Sites
50+ Acre Sites
Market
Site Count
Acreage
Site Count
Acreage
Site Count
Acreage
Colorado Springs
20
1,500
5
500
25
2,000
Raleigh
2
126
12
1,470
14
1,596
Austin (Round Rock)
5
380
6
855
11
1,235
Albuquerque
3
225
9
900
12
1,125
Hillsboro
1
78
0
0
1
78
SOURCE: Johnson Reid Survey (Feb. 2010)
Many site selectors will require the ability to review multiple options in the region in order to reduce the risks
associated with varying levels of environmental mitigation, local government policy, site avoidance factors and
planned levels of infrastructure utility investment.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 24
Central Oregon competes with regions across the country that offer significantly greater development-ready
industrial land supply, selection, diversity, and lower land cost. Continued inability to factor competitiveness as
borne out by surveyed industrial broker activity, including diversity of large industrial site supply and competitive
cost, sacrifices the region's long-term competitiveness for these key industries. As noted by EDCO, "with many
options (depending upon the geographic scope of the search) we have seen a resistance by site selectors,
corporate real estate professionals and company representatives to invest the time and travel to visit the region
without more than just one or two large lots to consider."
B. STRENGTHS AND CHALLENGES IN THE CENTRAL OREGON ECONOMY
In June of 2010 Deschutes County and the consultant team moderated the Central Oregon Industrial Lands Forum.
Participants in the forum discussed economic development trends at a national and regional level, as well as
specific opportunities and challenges for Central Oregon.
In this section, the findings of this session are summarized, as well as additional input from the Regional Advisory
Committee and the consultant team. The Central Oregon region has a number of strengths with respect to
economic development, including the following key attributes:
• Quality of Life - The region's extensive recreation amenities and commercial services base are a
substantial advantage. While the concentration of destination resorts in the area attest to the
attractiveness of these assets, their existence also supports a much more substantial services amenity
base than the full-time population could support. This makes it easier to attract executives as well as a
quality work force. With advancements in telecommunications, firms are more footloose now than
traditionally, and quality of life criteria play a greater role in location decisions.
• Access - The Central Oregon communities serve as the commercial hub of a much broader rural area. In
addition, Highway 97 provides a major north/south alternative to Interstate 5. Central Oregon's location
makes it a natural commercial services hub for a very broad area. While Highway 97 is not perceived to
be of equal value as Interstate 5 as a north/south link, its function is equivalent and sometime superior for
many prospective firms.
• Commercial Air Service - The Redmond Municipal Airport provides commercial service links, while Bend,
Madras and Prineville have general aviation airports. This is supportive of firms making location decisions
for quality of life reasons, while still maintaining a functional and convenient link to major metropolitan
areas.
• Rail - The region has made major investments in the Regional Freight Depot, supported by Connect
Oregon grants.
• Natural Resource Proximity.
The primary challenges facing the area are related to scale and accessibility. While the region as a whole has a
significant population base, none of the jurisdictions are considered large enough to meet many firms initial
screening. In addition, Central Oregon's distance from the Interstate system is a major impediment for many
prospective firms.
The competitive characteristics of Central Oregon can be strengthened through a regional approach. Individual
jurisdictions in the region are too small to be considered viable candidates for many of the targeted firms. The
region acts as a cohesive economic unit, sharing work force and commercial amenities, and should be marketed as
such to increase its perceived scale in the market.
The following is a more detailed profile of the individual strengths and challenges facing each of Central Oregon's
major communities with respect to the suitability for large-lot industrial.3
3 Profiles gathered from the June 28, 2010 Central Oregon Industrial Lands Forum.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 25
MADRAS (JEFFERSON COUNTY)
The City of Madras has some strong industrial sites near the airport, including large lot industrial properties with
rail access. The City's position at the intersection of Highways 26 and 97 provides logistical advantages,
particularly for firms needing access to the Portland metropolitan area and Interstate 84. The airport is also a
major facility that provides an amenity for certain businesses. Within Central Oregon, the Madras area is at the
northern edge of the population and economic base, placing it at a disadvantage for regional distribution as well as
for firms looking for large work forces.
Strengths/Advantages Challenges/Disadvantages
• The Oregon Transportation Planning Rule is an
• Industrial airport issue on Hwy 97
• Airport has improvements scheduled
• Available industrial sites proximate to rail
• There is no a continuous 4-lane highway
between Madras and Bend
• Relative skill set of work force
• Some areas do not have large surplus of gas
• Opal Springs provides ample water and electricity
• Strong agricultural and manufacturing section
businesses
• Most proximate to the Portland metro area
• Most proximate to 1-84
• Highways 97 and 26 run through middle of
Madras
• Development costs substantially than other
Central Oregon cities
LA PINE (DESCHUTES COUNTY)
Similar to Madras, La Pine's position at the southern edge of the Central Oregon region places it at disadvantage
for regional-serving distribution. The City does have some advantages for firms looking to serve both Central
Oregon as well as the Klamath Falls area to the south.
Strengths/Advantages Challenges/Disadvantages
• There are industrial sites available • Sewer and water districts independent of City
• They do have some larger lots available • Sewer and water systems not coordinated
• In transition between County codes and City
• The County is in control of some of the sites codes
• Most proximate to Northern California, • Transportation challenges; necessary
Klamath Falls improvements
• Active economic development efforts
• Very near passenger rail line (Chemault)
PRINEVILLE (CROOK COUNTY)
While the City of Prineville is located at the eastern edge of the Central Oregon region, it has strong rail access and
relatively easy truck/auto access to Redmond, Madras and Bend. The Regional Freight Depot represents a major
public investment. The City has a reputation as being business friendly, and the recent siting of Facebook has
raised the jurisdiction's profile in economic development circles. The area has excellent and affordable housing
stock. While the City has a number of industrial sites, many of these are either poorly located or constrained. The
City has historically competed well within the region as a relatively low cost location with a strong labor force, but
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 26
this advantage has diminished somewhat with the declines in the region's real estate markets. Sites at the
western edge of town are best located to serve regional needs.
Strengths/Advantages
• Ease of permitting
• Rail access/freight depot - City owned and
operated short line rail service and the
Regional Freight Depot
• General aviation airport adjacent to industrial
properties with expansion underway
• Larger, available workforce
Challenges/Disadvantages
• Sites are a distance off Hwy. 97 and Hwy. 126
has limited capacity
• Grade differentials in sites make some easier
to serve via rail (lower level) than others
(higher level)
• Ochoco Lumber mill site bordered by 2
highways so "double indemnity" for any
development activity triggering TPR issues.
Recognized as future mixed use site.
• Potential large lot industrial lands not
protected under current zoning from splitting
into smaller parcels.
• Somewhat warmer climate, but cool evenings • Water supply challenges
• Community welcoming of
development/newcomers/jobs
• Prineville is centrally located to
Redmond/Bend with relatively lower
priced land for industrial use to other Central
Oregon area
• Facebook data center under development at
airport location causing high interest by other
firms seeking future locations
BEND (DESCHUTES COUNTY)
As the largest city in Central Oregon, Bend is most commonly cited as the desired location for new firms
considering locating in the region. The City offers a wide range of commercial services and executive housing
options, and as a result of recent trends, provides affordable housing as well. The current scarcity of industrial
land in the city is the primary challenge to future economic development, with sites that are small, expensive and
often facing substantial transportation problems.
Strengths/Advantages
Challenges/Disadvantages
• Largest metro area in region
• Scarcity of industrial land
• Regional employment center
• Price of industrial land
• Most "urban" of regional cities
• Overall costs to develop
• Immediate access to natural amenities
• Relatively complex/sophisticated permitting
process
• Central Oregon Community College main
. Water and sewer capacity limited
campus
• Good communication infrastructure
• TPR is an issue
• Juniper Ridge master-planned mixed-use
• Ongoing "discussions" with LCDC about UGB
community
expansion (remand, negotiations, etc.)
While Bend has the greatest level of services and scale, its vacant industrial land inventory is severely limited.
DEscHUTEs COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 27
REDMOND (DESCHUTES COUNTY)
The City of Redmond serves as a major hub of the region, and the commercial airport provides a key advantage.
The community has historically seen land prices somewhat below Bend, and is well situated to serve the region
due to its central location. The area has some small and medium sized industrial sites, and the range of
commercial services trails only Bend in the region.
Strengths/Advantages Challenges/Disadvantages
• 465 acres located in the industrial area in the
• Commercial airport city limits currently in holding zone of open
Space Park Reserve - rezoning prevented by
TPR.
• Affordability of industrial land coming back
• Available water/wastewater capacity into line with market
• Good telecom infrastructure
• Central regional location allows workforce
drawn from all over region
• Available small/medium sites
Can large public entity land holdings (irrigation
district and DSL) be brought into play?
TPR is always a factor when land is being
considered for development
The diverse public entities that own land might
have different objectives
• COCC technology center
• Family-centric, stable community
• Enjoys a business friendly reputation; Ease and
speed of permitting
• BNSF rail mainline through town
• Prineville freight depot/short line railroad
SISTERS (DESCHUTES COUNTY)
The City of Sisters is located at the western edge of region, and is poorly situated for serving the broader region
and capitalizing upon the depth of the workforce. The community does offer a strong amenity base for its size, as
well as extensive executive housing options nearby.
Strengths/Advantages Challenges/Disadvantages
• Natural amenities • Small community (2,000 population)
• Small airport • Possible expansion land not in city limits
• Transportation system needs funding, but
• Streamlined permitting process some elements coming into place
• Large parcels abut city limits
• Community is interested in/supportive of
economic development
Available lots are plotted into small parcels in
industrial parks
80 acre Forest Service site in town might
become available which could trigger TPR
issues
• Possible water/wastewater limitations (not
• Just joined Redmond's E zone really clear)
C. TARGET INDUSTRY OPPORTUNITIES IN CENTRAL OREGON
Led by the Economic Development for Central Oregon (EDCO) in participation with local leaders, the Central
Oregon region has gone through the lengthy process of identifying specific industry sectors for business
recruitment, retention, and entrepreneurial support. Several of these industries have had successful results to-
date, while others are relative young in Central Oregon. In the summaries below, Johnson Reid draws largely from
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 28
EDCO's evaluation of industries in Central Oregon as well as extensive research and evaluation produced as a part
of the Oregon Business Plan.
Renewable Energy Development
Renewable or clean energy development is a global industry on the rise. In 2008 Global Insight forecasted U.S.
employment growth related to "green industries" would reach 2.5 million over the next ten years. In Oregon, solar
manufacturing has been an early entrant, taking advantage of Oregon's existing and highly related semiconductor
industry and proximity to large U.S. West Coast markets. Central Oregon currently has a small but diverse cluster
of renewable energy related industries ranging from solar power and fuel cells to wind power and biomass
production.
Aviation/Aerospace
There is an existing concentration relating to Redmond's airport and Bend's metro area. Specifically, Lancair has
been operating in Redmond since 1992. Oregon's aviation industry includes 200 firms providing manufacturing,
first and second supply chain services, and product distribution. Oregon's kit plane manufacturers also provide
over 70 percent of all of the kit planes sold within the U.S. each year to global customers.
Software
Oregon is home to more than 1,500 software companies, and is particularly strong in the areas of: electronic
design automation, financial solutions, open source, educational and training software, embedded software and
healthcare applications. Central Oregon itself is home to over two dozen established software engineering firms.
Software development firms are typically smaller in scale, where quality of life and telecom infrastructure is
important. However, the Central Oregon region and the State of Oregon face both human and financial capital
challenges to further development of the Software/IT cluster.
Biosciences
Oregon's bioscience industry has over 600 companies and research institutions. Biosciences include research and
development, medical devices, medical diagnostics, human and animal therapeutics, pharmaceuticals, reagents,
research services, bio-agriculture, bio-fuels, and medical software operations. Bioscience is a $2.5 billion traded
sector industry in Oregon. While Oregon is not seen as a bioscience hub nationally, Central Oregon is home to a
segment of Oregon's promising bioscience future, specializing in pharmaceutical research and development.
However, biosciences are highly workforce dependent and are often related to large scale higher education
resources, which are currently absent in the region.
Data Centers
Data centers are an emerging economic development engine in Oregon bringing significant capital investment to
regional communities. The Central Oregon region offers key critical components in the recruitment of data center
projects, specifically affordable electric power, municipal water and sewer capacity, robust telecom infrastructure,
ability to attract technical talent to operate data center facilities, and a climate that can significantly lower power
usage. These factors were instrumental in EDCO's recruitment of both Bend Broadband's Vault project and
Facebook's $188 million investment in Prineville.
Recreation Equipment
Oregon is home to some of the world's most recognized brands in footwear and sports apparel. Locally
headquartered firms include Nike, Columbia Sportswear and the North American headquarters of Adidas.
Additionally, hotbed recreational regions such as Hood River and Central Oregon have long seen start-up
recreational equipment firms flourish into significant contributors to local economies. Central Oregon specifically is
home to diverse range of mountain, river, and recreational vehicle and equipment manufacturers.
Higher Education
Central Oregon is just beginning the process of establishing planning efforts in the establishment of a higher
education facility in the region. Local policy market and economic development professionals realize the broader
importance of higher education on workforce quality, culture, and business development. Higher education
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 29
facilities are typically campus style development requiring large affordable sites with good telecom and
transportation infrastructure. Sites need to be proximate to population centers.
Regional Distribution Centers
Central Oregon can play a role in distribution, with Highway 97 representing an option to the I-5 Corridor. Option
planning is taking a larger role in logistics and is expected to play a bigger role in diversifying risk away from a
single supply route.
Wood Products
The Wood Products cluster is a long standing economic driver in Central Oregon. The cluster includes primary and
secondary wood products, machinery manufacturing, paper & pulp manufacturing, wholesaling, and business
management. Where Central Oregon was once a primary wood products region, secondary wood products
manufacturing now accounts for 25% of all manufacturing employment in the region. While wood products have
largely been a low growth industry over the last decade, the Central Oregon region is targeting additional value-
added firms. Moreover, innovated new-age primary lumber production models have emerged in recent years of
which Central Oregon would have a distinct competitive advantage.
D. SITE/RESOURCE CHARACTERISTICS OF KEY DEVELOPMENT CLASSES
Figure 18 highlights specific land, workforce, and operations characteristics among key industrial classifications in
Central Oregon. For this stage in this analysis, Manufacturers fall under a single category, whereas subsequent
drafts will explicitly underscore development site needs and characteristics of specific industries.
SOURCE:EDCO
The findings in Figure 18 reflect the findings in the progressive criteria "funnel model". With the exception of data
centers which have highly unique utility requirements, availability of a qualified and ample workforce is of upmost
importance. For some industries such as Distribution and Warehousing, access to transportation networks is a key
concern.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 30
FIGURE 18: KEY INDUSTRIAL LAND/INDUSTRY CHARACTERISTICS
TARGETED INDUSTRIES WITH LARGE LOT NEEDS
While it is unlikely that several industries being targeted by communities within the Central Oregon region will
generate significant demand for large-lot industrial land, some sectors have a demonstrated track record for
creating enormous exogenous absorption of properly-zoned industrial sites. For example, software, recreational
equipment and aviation/aerospace all have precedent for large corporate campuses: respectively Microsoft in
Redmond, Washington; Thor Industries in Elkhart, Indiana; Cessna in Wichita, Kansas. Typical companies,
however, require building footprints well under the 40-50 acre threshold we have defined as a large lot industrial
site. These needs are generally met by the existing land use process in Oregon.
Industries requiring large acreages that hold promise for the Central Oregon region include:
■ Data centers
■ Warehouse/distribution centers
■ Select high technology/biosciences operations
Changing economic conditions and global trends are impacting each of these industries, creating opportunities for
rural and small metropolitan areas. The tri-county region already has established operations in each of these
sectors and precedent for large-acreage users. Appendix B contains a summary of other geographic areas where
each of these sectors has grown from a similar small foundation to become national leaders - some in a relatively
short period of time. Additionally, any one of these sectors has the potential to create the exogenous demand that
would trigger the need for additional large, industrial-zoned land in Central Oregon since so few of these sites exist
- particularly in the region's largest cities.
CENTRAL OREGON VIABILITY FOR THE DATA CENTER INDUSTRY
According to global data center site selector David Aaroe, (co-founder and principal, Fortis Construction), Central
Oregon has all the elements to rival Central Washington as a top location for the data center industry in North
America. Other site selectors from across the country are already focused on the tri-county area as a result of
Oregon's largest data center project with the construction of the Facebook campus at Prineville (currently 125
acres, 300,000 sf).
"The combination of low cost-not the lowest-reliable electric power, incentives, telecom capacity
and the area's climate could make the Central Oregon area as competitive as any in North America for
the data center industry."
2011 presentation by David Aaroe, Principal, Fortis Construction
A leading global data center site selection firm
A key component that could lead to explosive growth in the Central Oregon area is enormous Bonneville Power
Administration power transmission lines that transport electricity from hydroelectric generation the Columbia
Gorge to California. These transmission lines are located such that Prineville, Redmond, Bend, and La Pine all
become viable locations for the data center industry. This steady, inexpensive base load electric power is in high
demand by the data center industry.
Low cost, high capacity power is at the very top of the site location criteria list for the data center industry. The
ability to quickly and reliably add load to the system is also critical. As quickly illustrated by the national district-
by-district map below, tri-county rates are well below the national average for electricity in all sectors. For
industrial customers, Central Oregon providers offer rates up to nearly 20% below the national average and 50%
below neighboring California where considerable data center activity is currently centered.
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FIGURE 19: INDUSTRIAL POWER RATES
Another key factor is the requirement for robust telecom infrastructure. Over the past 12 years, more than $100
million in infrastructure has been invested in the region, including a self-healing fiber loop for incumbent provider
CenturyLink (formerly Qwest), numerous fiber rings by competitive local and regional providers and multiple
Points of Presence (POP). With multiple telecom routes via San Francisco, Portland and Seattle, the tri-county
region's access to markets in Asia is especially good.
Perhaps one of the greatest natural assets the area possesses for data centers is the significant year-round cooling
factor offered by the high desert climate. Simply stated, cool nights year-round and low humidity enable data
centers to use less power for cooling servers-making the center much more cost efficient.
Reasonable power costs, power savings made possible by the region's climate, the lack of a sales tax in Oregon and
meaningful incentives (property and incomes tax exemptions) all combine to make the Central Oregon region a
globally competitive location.
Because of the significant investments characterized by data centers both in mission critical
infrastructure and physical plant (typical cost per square foot is $1,000), most companies require large industrial
sites for future expansion. The current inventory of appropriately zoned sites with proximity to needed
infrastructure in Central Oregon is potentially uncompetitive, and as such could be a major impediment to further
growth of the sector for next 10-15 years.
The economic development community recognizes that most jobs come from existing companies, and fostering
entrepreneurship and retention expansion of existing traded-sector companies is a major focus of regional efforts.
Recruitment of new companies in new and existing industries, however, is an important component of any
successful economic development program and diversification strategy. New companies bring a different mix of
professional and technical talent to communities that can spawn other businesses and technologies. Intel's
expansion to Hillsboro in the late 1970s is a good example in Oregon. At that time it was a recruitment project, but
in the subsequent decades the global leader in semiconductor technology and production spun off more than 100
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 32
companies that significantly contributed to the overall diversification of Oregon and of course many well-paying
jobs.
CENTRAL OREGON VIABILITY FOR THE HIGH TECHNOLOGY INDUSTRY
While the Central Oregon region clearly has different attributes than either the Hillsboro or Austin examples
outlined in Appendix B, it does have some of the key components that make the high technology sector a viable
option for industry targeting. Several important technology sectors have a foothold in the region including:
■ Semiconductor and peripherals manufacturing (Microsemi, TriQuint Semiconductor, Nanometrics)
■ Renewable/alternative energy equipment and software (Advanced Energy, Idatech, PV Trackers, E1, InEnTec)
■ Software (Vertex, GL Solutions, Novis, Manzama, AudetteMedia, Team Unify)
• Biosciences (Bend Research, MediSISS, Agere Pharmaceutical, Phillips, Accelrys).
This small but successful and diversified group of high technology companies provides a foundation on which to
build a broader industry, provided that other site location fundamentals are in place.
The Central Oregon region scores well on most critical location factors. Power rates are among the lowest in the
nation and nearly half of those in neighboring California. Not all communities are equally prepared, but generally
water and wastewater capacity is adequate to accommodate high technology industry needs. Oregon's property
tax incentives offered through the Enterprise Zone program generally favor high technology projects with
significant capital expenditures, much as it benefits companies in the data center industry. Higher education
infrastructure to develop local scientific and technical talent needs improvement within the region, and is currently
considered by site selectors to be a barrier, however many technology companies acknowledge that most talent
recruitment today is done on a national or international basis. Access to local technical, engineering, and scientific
coursework and degrees are a plus and can be a swing factor between one site or another, however an area with
quality of life and some technical talent can attract other technology employers. It happened in Hillsboro and
Austin not because of the university infrastructure there, but because other site location factors worked (access to
power, water & wastewater facilities) and there were well educated people who chose to live there or could be
recruited from other places.
A potentially significant barrier is the lack of large industrial lot options that have proper zoning and necessary
infrastructure, specifically in Bend and Redmond which have been of greatest interest for companies, site selectors
and corporate real estate professionals. That Bend, one of Oregon's seven largest cities and among the fastest
growing (both in terms of net jobs the past decade and population), has no industrial-zoned lots over 20 acres
would be inconceivable in most states.
According to EDCO, the sector with the most activity in terms of location decisions and new production facilities in
the past five years has been renewable energy equipment and related manufacturers. Included are solar power
panel fabrication (thin film and silicon) polycrystalline refinement, and solar power generation- all which require
large acreages with appropriate zoning. Biomass and gas-fired electric power plants also have a need for large
industrial acreage, but usually prefer a rural location if adequate infrastructure can be developed cost effectively.
While existing computer and electronics manufacturers in the area have historically operated in facilities on
acreages less than 40 acres, there are many examples in Oregon and across the country where once small high
technology firms have grown into large campuses. Hewlett-Packard in Boise, ID and Corvallis, OR; Micron in Boise,
Microsoft in Redmond, WA all serve as excellent examples of local companies that organically grew into large,
multi-building campuses that greatly exceed the 40-50 acre threshold established by this REOA.
CENTRAL OREGON VIABILITY FOR THE WAREHOUSE & DISTRIBUTION INDUSTRY
Because of its removed location from major interstates, the tri-county has not historically been a target for the
warehouse and distribution industry. Still, some significant distribution activities do occur - primarily tire
distribution by the Les Schwab Company, which has over 2 million square feet under roof at its warehouse
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operations in Prineville. There, tires and auto components manufactured globally are consolidated and distributed
to 400+ stores in a seven state area. The company is the #1 highest volume customer for the Port of Portland and
operates one of the largest distribution operations in Oregon.
In addition to this warehouse, several durable goods manufacturers in the area have
larger-scale distribution nationally from their Central Oregon location, including
Bright Wood Corporation, Deschutes Brewery, Keith Manufacturing, Contact
r.. Industries, Jeld-Wen, and Advanced Energy (PV Powered). Online retailer
w Altrec.com also consolidates and distributes orders directly from its
Redmond, OR warehouse and does so cost competitively vis-a-vis other
west coast locations.
Over the past decade, consolidation has been the dominating trend in
wan rrr..
warehouse and distribution -fewer but larger DCs located in strategic
geographic area - to achieve greater efficiencies and cost advantages
sarn k offered by economies of scale. With the sharp rise in fuel prices in
gad recent years, industry experts are predicting that the industry could
migrate to smaller facilities serving smaller distribution areas. Key to this
a. more dispersed model is the availability of rail to more cost effectively
La nd' transport goods (approximately within the regional distribution area.
Rather than the 11 or 9 state model, respectively, offered by Salt Lake City, UT
or Reno-Sparks, NV the smaller 5 to 7 state model successfully utilized by Les
Schwab for the past 50 years might prove more cost effective with $5-6 dollar
per gallon fuel prices.
"in general, companies will respond to the higher fuel prices by expanding their distribution networks to
include additional DCs, but it remains to be seen just how big the impact will be. Some will tweak their
networks by adding one or two DCs or relocating one or two of them in order to economize on freight-
miles and fuel consumption."
2010 report by ProLogis, a leading global provider of distribution facilities
Led by the Prineville Railway, the nation's only municipally-owned short-line railroad, Central Oregon has been
working to expand its ability to provide logistics and freight connections between Class I railroads and traditional
truck distribution models. Over the past several years, the Prineville Railway has invested nearly $10 million in a
new freight depot, track, and railcar handling equipment to efficiently transfer rail freight to trucks either for final
destination delivery or for warehousing. With ongoing global upward pressure on oil prices, these projects could
be the beginning of a wave of investments in to accommodate a growing transloading facility. Planning is already
underway for a unit-train switch yard upgrade adjacent to the UPRR/BNSF mainline just on the northern borders of
the Redmond UGB and expanded warehouse and distribution facilities in Prineville.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 34
E. REGIONAL LARGE-LOT DEMAND
LONG RANGE EMPLOYMENT FORECAST
Figure 20 outlines estimated growth in employment projected by the Oregon Employment Department (OED) for
the Central Oregon region. The OED's most recent projection estimates employment growth by industry over a 10-
year horizon beginning in 2008. For the purposes of this analysis, Johnson Reid applied the State's 10-year growth
rates to 2010 base year estimates of employment by industry and extrapolated growth through 2030.
FIGURE 20: BASELINE LONG RANGE EMPLOYMENT FORECAST
Industry
Base Estimate
2010
2015
Year
2020
2025
2030
'10230
Change
AAGR
Natural Resources
1,044
1,075
1,107
1,140
1,174
130
0.6%
Construction
4,093
4,123
4,153
4,183
4,213
120
0.1%
Manufacturing
5,493
5,747
6,013
6,290
6,581
1,088
0.9%
Wholesale Trade
2,238
2,287
2,337
2,388
2,440
202
0.4%
Retail Trade
10,138
10,804
11,514
12,271
13,077
2,939
1.3%
T.W.U.
1,605
1,735
1,876
2,027
2,192
587
1.6%
Information
1,437
1,433
1,428
1,424
1,420
(17)
-0.1%
Financial Activities
3,741
3,910
4,086
4,270
4,463
722
0.9%
Professional & Business
7,001
7,607
8,266
8,981
9,759
2,758
1.7%
Education & Health
10,099
11,478
13,045
14,826
16,850
6,751
2.6%
Leisure & Hospitality
9,981
10,643
11,349
12,102
12,905
2,924
1.3%
Other Services
2,533
2,687
2,851
3,024
3,209
676
1.2%
Public Administration
11,985
12,742
13,547
14,403
15,313
3,328
1.2%
TOTAL
71,388
76,271
81,571
87,331
93,596
22,208
1.3%
SOURCE. Oregon Employment Department and Johnson Reid, LLC
Over the next 20-years the Central Oregon region is expected to add roughly 22,208 new employees according to
State projections. The bulk of projected growth is expected to fall within the Health, Leisure & Hospitality, and
Professional & Business Services sectors. However, State level projections are often demographically driven
methodologies, developed for long range budgetary and government planning purposes. They very rarely reflect
the qualitative economic development goals of local jurisdictions and economic development agencies. For
example, as mentioned above, EDCO and the tri-county region have committed to the broad based recruitment,
retention, and organic expansion of the region's Software/IT industry, which is generally under the information
NAICS classification. However, this economic development goal is not reflected in the State's forecast of
Information employment. In other words, aspirational goals, policies, and dedication of resources have real direct
impacts on the path of economic development likely in a local geography.
More importantly is an inherent disconnect between any trended forecast methodology and the potential demand
for large-lot industrial employers. By nature, large industrial placements are "game-changers", whereas a single
placement can change the economic landscape of a community. The employment impacts are not reliably
"forecastable". Communities are best served by providing a range and supply of suitable options for prospective
recruitments in addition to organic expansions. This is particularly prevalent in today's landscape, where firms,
products and even entire industries shopping Oregon for suitable sites did not even exist a cycle ago. The
Facebook placement in Prineville is a prime example of a firm and industry that did not exist even 10-years ago.
While large lot users may reflect growth of existing industries, they are more often reflective of a regional, national
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 35
or global site selection process, and are competitive in nature. A survey of site selection professionals found that
large firms go through a methodical site selection process for "development-ready" sites and that agencies seek to
maximize quantity and selection of large "development-ready" sites for successful employer recruitment. A
development-ready site, or a "shovel-ready" site, is one in which site improvement can begin within 180 days of
purchase and development application. Such sites are served by requisite infrastructure and utilities,
environmental and other constraints are known and documented, and permitting can be fast-tracked for rapid
facility operations. If all these conditions cannot be met in accordance with project time frames, sites will not be
kept on the list for further consideration. The key to the site selection process, therefore, is that it is essential for
candidate sites to be immediately development-ready instead of simply "buildable." Furthermore, a general lack of
development-ready sites to choose from eliminates a city or region from contention early in the site selection
process. Until sites win development-ready status, they are not truly effective supply for large industrial site
demand as viewed by firms seeking to potentially locate in the region. It is critical to keep in mind that the site
selection process begins as a process of elimination; it only becomes selection after a short list of potential sites
that meet all pertinent criteria has been created.
INDUSTRY PLACEMENT VELOCITY
For the reasons cited previously, a matrix is included, showing recent target industry placements, large and
medium nationwide, in addition to industrial recruitment activity in Oregon4 to demonstrate a snapshot of large-
lot characteristics and the velocity of recruitments handled by Business Oregon.
4 Oregon Business Development, 2010
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 36
FIGURE 21: SELECTED LARGE LOT RECRUITMENTS IN OREGON AND SOUTHERN WASHINGTON
YEAR
PROJECT
LOCATION
LOTSIZE
BUILDING SIZE
COMMENTS
1996
Target
Albany, Or
175 acres
1.3 msf
1997
Wal-Mart
Hermiston, Or
200 acres
1.3 msf
2002
Dollar-Tree
Ridgefield, Wa
75 acres
800,000 sf
2002
Familian (Plumbing)
Tri-Cities, Wa
75 acres
500,000 sf
2002
Wal-Mart (Cold Storage)
Granview,Wa
100+acres
900,000sf
2004
Lowes (certified)
Lebanon, Or
204 acres
1.3 msf to 2.2 msf
2004
Olympic (Vanity Fair)
Shafter, Ca
100+acres
900,000 sf
2005
Amy's Kitchen
White City
50
2006
October (cold storage)
Salem, Or Lost
145 +acres
1 msf
2006
NOAH-PepsiCo
Albany
204 acres
2.5 msf
2006
Private Project (Technology)
Northern Oregon 1-5
100+
1 msf
2006
Project GoForth
Salem Area
75-100
1 msf
2006
Genentech (certi fied)
Hillsboro
50 range
500,000 sf
2006
Apricus
N-Oregon
250
Very large
Wentto Singapore
2006
Jindo-china
Oregon
100
2006
Pacific Ethanol
Boardman
137
2007
SolarWorld
Hillsboro
75 range
1 msf
2007
NN2 Lost-Cal
Hillsboro
150
1.5 msf
Optisolar
2007
Crystal Lost Malaysia
Millersberg
100
Wentto Malaysia
2007
HOT-lost
N. Oregon
100
2007
Gold Rush
E-Oregon
350 est
Verylarge
2007
Navitas
Oregon
150/200
EverGreen-lost
2007
Apricus
Northern Oregon
200
2.5 msf
REC
2007
Fed Ex
Troutdale
78
500,000 sf
2008
Valancia
Northern Oregon
100
1 msf+
Delayed
2008
Schott
1-5
50+
200,000 sf, expansion
to 800,000 sf
New Mexico
2009
SEH
Vancouver
75
1msf+-
Leasing Space to HP.
2009
Cambridge
1-5
50
500,000 sf
Plainfield
2009
Facebook (certified)
Prineville
118
147,000 sf
Room for up to four
datacenters.
2010
Home Depot (certified)
Salem
50 to 100
400,000+
50 Acres Plus Option
2010
Big Solar
Portland/1-5
250
1.4 msf
February 2010 Lead
2010
Green Manufacturing
Mid-Valley
100
December 09 Lead
Source: Oregon Business Development
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 37
FIGURE 22: MATRIX OF RECENT MAJOR TARGET INDUSTRY PLACEMENTS
industry/Activity Company Location Land/Site Size
Solar; plant for solar panels and power systems
Xtreme Power/
Wixom, Michigan
320 acres
Wind: plants in Brighton-blades and nacelles Windsor-blades
Pueblo-towers
Vestas
Colorado (3 locations)
Brighton= 176 acres
Windsor-75 acres
Pueblo= 800 acres
Wind: plan[ for concrete tower bases
Tindall
Newton, KS
144 acres
Solar: facility for R&D and panels
Green 2V
Rio Rancho, NM
124 acres
Wind: plant for nacelles
Siemens
Hutchinson, KS
108 acres
Batteries: plant for leaf batteries
Nissan Leaf Batteries
Smyrna, TN
72 acres
Solar: plant for solar receivers
Schott Solar
Rio Rancho, NM
80 acres
787 fuselage
Boeing
Charleston, SC
1.2 millions . ft. building only)
Parts depot
Lockheed Martin
Papillion, NE
85,600 sq. ft. (building only)
R&D
Lockheed Martin
San Diego, CA
158,000 sq. ft. (building only)
Service
Cessna
Valencia, Spain
152,000 sq. ft. (building only)
Drone production
General Atomics
Sabre Springs, CA
193,000 sq. ft. (building only)
Helicopter training academy
2 licopter
Ft. Worth, TX
160,897 sq. ft. building only)
Helicopter hangar addition
Helicopter
01
Amarillo, TX
97,678 sq. ft. (building only)
Software testing
Galmont Consulting
Lexington, KY
4,000 s q. ft. (building only)
Global software development facility
HSBC
Burnaby, BC
146,000 sq. ft. (building only)
Company H.Q.
Projekt202
Austin, TX
8,500 sq. ft.
Software support
Microsoft
Austin, TX
10,000 sq. ft
Innovation and technology center
Microsoft
Reston, VA
63,000 sq. ft. (building only
Computer lab
Microsoft
Redmond, WA
57,000 s q. ft. (building only)
Office space
Microsoft
Bellevue, WA
1.34 million sq. ft. (office lease)
Pharmaceutical development facility
Analytical Biochemist Laboratories
Columbia, MO
90,000 sq. ft. (building only)
Corporate campus
Biogen Idec
RTP, NC
176 acres
Fill and finish facility
Genentech
Hillsboro, OR
75 acres
Insulin manufacturing facility
Mann Kind
Danbury, CT
251,875 sq. ft. (building only)
Mammalian cell culture proteins
Pfizer
County Cork, Ireland
130,000 sq. ft. (building only)
Contract manufacturing
Cook Pharmica
Bloomington, IN
250,000 sq. ft. (building only)
Data center
E bay
South Jordan, UT
250,000 sq.ft. (building only)
Data center
Oracle
West Jordan, UT
200,000 sq. ft. (building only)
Data Center
National Security Agency
Camp Williams, UT
200 acres
Data Center
Cisco Systems
Allen, TX
140,000 sq. ft. (building only)
Data Center
Apple
Maiden, NC
500,000 sq. ft. (building only)
Data Center
Target
Brooklyn Park, MN
111,800 sq. ft. (building only
Data Center
Equinix
EI Segundo, CA
177,000 sq. ft. (building only)
Data Center
Advanced Data Centers
Sacramento, CA
500,000 sq. ft. (building only)
Data Center
Facebook
Prineville, OR
1
147,000 sq. ft. (building only)
Data Center
Microsoft
Quincy, WA
470,000 sq. ft. (building only)
Innovation Center
Western Michigan U.
Kalamazoo, MI
69,000 sq. ft. (building only)
Aviation programs
Western Michigan U.
Battle Creek, MI
92,000 s q. ft building and 20 acres
Tre burn Corporate Park
North Carolina State I.J.
Raleigh, NC
256 acres
Biomedical campus
U of Arizona and A.S.U
Phoenix, AZ
28 acres
Campus expansion
University of Memphis
Memphis, TN
250,000 sq. ft. building only)
Campus expansion for student housing
SMU
Dallas, TX
Redevelopment of bakery facility
Campus expansion
Duke
Durham, NC
1.3 million sq. ft. (building only)
•
Factory store
Danner Boots
Portland, OR
59,000 sq. ft. (building only)
Paddle craft production
Johnson Outdoors
Old Town, ME
N/A
Custom skis
Wagner Custom Skis
Telluride, CO
N/A
Sports research lab
New Balance
Boston, MA
3,000 sq. ft. building only
SOURCE. Iron Wolf
It should be noted that Business Oregon's database reflects only a subset of overall activity in this market, with
many firms making decisions without contacting the agency, or working more directly with regional economic
development agencies such as EDCO.
Over the previous two years Central Oregon has seen a total of 53 major recruitment leads evaluate the region.
The majority of leads ended quickly as the region did not meet the firm's minimum criteria. Most commonly, the
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 38
region missed on lack of Interstate highway transportation routes, lack of large acreage parcels, or specific
infrastructure limitations. However, the region did make it to the visitation process in four of the 15 instances it
passed the first criteria round with one, the Facebook placement, actually locating in the region.
FIGURE 23: SUMMARY OF INDUSTRIAL RECRUITMENT LEADS
RECRUITMENT LEADS FOR CENTRAL OREGON
June 2008 -June 2010
Total Leads
53
Central Oregon Did not Make Minimum Criteria
37 of 53
Made Minimum Criteria
15 of 53
Got to the Site Visit State
4 of 53
Firm Located in the Region
1 of 53
SOURCE. EDCO and Business Oregon
As noted previously in this report, Central Oregon's lack of appropriate sites largely precludes it from competing
for many prospective leads at it is unable to meet the minimum criteria specified.
V. ASSESSMENT OF POTENTIAL
Information gathered from research as well as extensive input from State and regional economic development
professionals were incorporated into an estimation of regional large lot industrial needs.
A. SITE NEED CHARACTERISTICS
Site needs for the targeted large lot industrial users are inherently difficult to assess based on the high level of
uncertainty in industrial recruiting. Site requirements for specific industries are discussed in this section, but there
are a great number of site requirements that are generally common among most major industrial users.
Business Oregon maintains a matrix of site needs for major industry sectors that they are actively recruiting. While
the matrix is not limited to large lot users, the requirements outline provide guidance with respect to site
requirements by major industry group. The following table summarizes key site characteristics required and
preferred by several major development types. While key characteristics are often listed as preferred, these may
be required by specific firms or used as screening variables to differentiate competition. The Central Oregon
region expresses a desire to maintain a competitive portfolio of sites, which would imply sites having preferred as
well as required characteristics.
A more generalized summary column is included, showing large lot site requirements. This recognizes that while
one may target specific industries, the nature of large lot demand and firm characteristics is highly variable. The
generalized site requirements summarize key characteristics that are broadly valued by the identified industries.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 39
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As outlined in the preceding table, site requirements can be grouped into several broad categories. The
following is a brief summation of the basic categories of site requirements:
PHYSICAL
• Size - Large lot demand is defined in the context of this analysis as sites 50-acres or above. Sites
of significantly larger size provide greater flexibility, as they can meet large site needs as well as
providing the ability to be subdivided.
• Slope - Industrial development has a very limited capacity to deal with slopes. This is particularly
true in areas such as Central Oregon, in which the geology makes grading costly.
• Configuration - Rectangular sites provide for the most efficient layouts. Sites with irregular
configurations need to be larger to accommodate similar levels of development.
INFRASTRUCTURE
• TRANSPORTATION
o Auto/Truck
■ Interstate
■ Highway
• Major Arterial
o Rail
o Marine Port
o Airport
■ General Aviation
■ Commercial
■ International
• UTILITIES
o Water
o Sewer
o Natural Gas
o Electricity
o Telecommunications
• Major communications capacity
■ Route diversity
■ Fiber optics
LOCATION
• WORKFORCE
o Locations within acceptable distance of appropriately scaled labor market
o Housing options for workforce and executives
SPECIAL CONSIDERATIONS
• Availability - Owner willing to sell at market consistent price
• Ownership -Willingness to hold, front infrastructure investments
• Flexibility - Ability to meet a variety of demands
• Site Certification - Not necessary, but criteria should be at least inclusive of the certification
criteria
• Funding -Viability of funding necessary infrastructure to support development
Sites designated to meet the regional demand for large lot industrial uses should be able to meet most of
these criteria where practical. While physical and workforce issues cannot be addressed by actions of an
individual jurisdiction, the remaining locational criteria largely involve infrastructure investments, which
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 41
can be actively targeted to enhance the supply of competitive sites. Additionally, jurisdictions actively
engaging property owners in discussions about land price, lot configuration, and investments necessary to
make sites usable can provide a context for owners' readiness to sell their property.
Outside of size and configuration, the following are key characteristics associated with a competitive land
supply for Central Oregon, which should be considered as the criteria under which sites are evaluated to
meet identified needs. This list of criteria reflects input from EDCO.
Availability
The site must be under ownership of an entity that is willing to sell the site at market-appropriate
pricing. Sites controlled by unmotivated or unrealistic owners are of little use for the stated
community economic development objectives.
Infrastructure
Utilities - Municipal water and sanitary sewer, electric power, natural gas and telecom in
capacities needed for specific companies or industries are critical. The ranking and magnitude
needed for each varies from industry to industry. If nearly all utilities noted above are not in
place or proximate to the site, and without some existing unused capacity, most companies will
not consider a community (or that site at least) further. Most private businesses, even large
ones, are not coincidentally experienced developers, and even with experience their timelines
for projects are such that they are unwilling and/or unable to wait while major infrastructure
projects are executed by public sector entities.
Transportation - Most projects, with a few exceptions, have significant transportation and
logistics aspects. It is important to note that the current access approval process in Oregon
(whether on a state highway or not) is broken and a significant barrier to economic development
in general and large lot development specifically. The Transportation Planning Rule (TPR) and
relationship with LCDC approval is specifically creating the greatest problems for land
development in the Central Oregon region.
Workforce
Throughout the tri-county area, the question for larger projects is first and foremost about
quantity of available workers. Bend or the Deschutes County MSA is often the smallest area in
the field of consideration during a site selection process. Quality can also be an issue, but at the
end of the day, communities have little influence on either, at least at the point when companies
come looking. The current unemployment statistics, which indicate an available workforce,
could indeed make Central Oregon attractive to prospective employers if there are available sites
to accommodate them.
Education & Training
Some companies are keenly interested in higher education opportunities both for the overall
workforce and continuing education of their employees. That the Central Oregon region has
been underserved for both higher education and training opportunities is a factor noted by
several large projects in the past as a concern.
Incentives
While Oregon is not a "big player" in the incentives game nationally, the state does have in place
several incentives that favor large, capital intensive projects. Specifically, few areas have the
type of property tax incentives Oregon offers that can exempt these taxes for 3-15 years. Nearly
all Central Oregon industrial areas have access to these incentives through the enterprise zone
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 42
and/or Strategic Investment Program. At the same time, Oregon does not have the type of
payroll or jobs-based incentives available as in other places in the country.
B. GROSS LAND DEMAND
From an economic development perspective, Central Oregon seeks to offer a range of readily developable
sites that are supportive of regional and statewide economic development objectives, as well as
competitive with alternative regions.
The demand for large industrial sites within Central Oregon cannot be derived using typical employment
projections by industry, extrapolating future anticipated growth patterns based on historical patterns.
Establishing and maintaining a competitive large lot industrial inventory is intended to expand upon the
range of potential economic development opportunities that Central Oregon can compete effectively for.
Central Oregon as a region will be competing for large lot recruitments within a broader context that will
likely include Idaho, Washington and Northern California. The following table provides a profile of firm
changes by size of enterprise within this broader area over a one year period.
FIGURE 25: BIRTHS, DEATHS, EXPANSION & CONTRACTION OF FIRMS, 2006-2007
Size of
Initial year establishments
Change in establishments
Percent change in establishments
Establishment births
Establishment deaths
Establishment expansions
Establishment contractions
Percent change in establishments due to births
Percent change in establishments due to deaths
Initial year employment
Change in employment
Percent change in employment
Change in employment due to births
Change in employment due to deaths
Change in employment due to expansions
Change in employment due to contractions
Percent change in employment due to births
Percent change in employment due to deaths
Percent change in employment due to expansions & births
Percent change in employment due to contractions & deaths
TOTAL 1 1-4 1 5-9 1 10-19 1 20-99 1 100-499 1 500+
1,067,847 469,155 172,870 109,832 112,019 51,354 152,617
30,002 14,386 2,955 1,882 4,423 3,175 3,181
2.8% 3.1% 1.7% 1.7% 3.9% 6.2% 2.1%
156,065
92,869
16,242
9,816
12,751
6,771
17,616
126,063
78,483
13,287
7,934
8,328
3,596
14,435
298,061
98,603
52,935
37,671
41,205
17,966
49,681
296,885
65,083
64,334
47,564
49,639
20,493
49,772
14.6%
19.8%
9.4%
8.9%
11.4%
13.2%
11.5%
11.8%
16.7%
7.7%
7.2%
7.4%
7.0%
9.5%
18,258,562
970,374
1,124,249
1,406,925
3,444,532
2,756,375
8,556,107
37,174
179,815
31,231
2,741
-43,809
-76,264
-56,540
0.2%
18.5%
2.8%
0.2%
-1.3%
-2.8%
-0.7%
1,176,589
162,490
101,728
110,507
234,975
173,062
393,827
-1,031,368
-133,995
-82,878
-93,033
-192,320
-134,396
-394,746
1,918,836
234,651
147,836
154,902
334,050
252,161
795,236
-2,026,883
-83,331
-135,455
-169,635
-420,514
-367,091
-850,857
6.4%
16.7%
9.0%
7.9%
6.8%
6.3%
4.69
-5.6% -13.8% -7.4%
17.0% 40.9% 22.2%
-16.7% -22.4% -19.4%
-6.6% -5.6% -4.9%
18.9% 16.5% 15.4%
-18.7% -17.8% -18.2%
SOURCE: US Census Bureau, Statistics of US Businesses
As shown in the table, firms with 500 or more employees represented 14% of total firms in 2006, but 47%
of total employment. Firms over 100 employees represented 19% of firms and 62% of total employment.
While the net change in establishments in these size ranges is significant, the number of births (new firms)
exceeds the net change in establishments by 384%. For firms with 500 or more employees, births exceed
the net change by 554%. Firms primarily become prospective recruitment targets when they are formed
or find their existing facilities or business environment inadequate. As a result, the number of births
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 43
(which can include new firms as well as firms expanding into a new classification) is a key indicator of the
depth of potential market demand. The following table summarizes a profile of firms by size range in the
Western Unites States in 2008. This shows close to 27,000 firms with 100 or more employees, of which
10,800 are in industries that are historically considered to be industrial oriented. The nature of industrial
space usage is highly variable, and many industries not historically associated with industrial space now
utilize this type of space. An example of this would be industries previously categorized under
information, which would include major employers that have recently located on industrial space such as
Facebook and Google.
FIGURE 26: PROFILE OF FIRMS BY SIZE RANGE AND INDUSTRY, WESTERN UNITED STATES, 2008
• • • • • • • • •1111
Total
Firms b Size Range
industry code description
Firms
1-4
5-6
10.19
2049
50.99
100.249
250-499
SOD-999
1,000+
Forestry, fishing, hunting, and Agriculture Support
5,315
3,592
698
486
319
134
65
15
3
3
Mining, quarrying, and oil and gas extraction
1,332
566
216
242
186
60
49
8
3
2
Utilities
1,849
841
284
223
220
124
97
35
13
12
Construction
124,560
78,572
20,929
12,801
8,204
2,571
1,169
237
55
22
Manufacturing
58,383
22,430
10,621
9,214
8,547
3,846
2,609
734
268
114
Wholesale trade
78,309
41,552
14,795
10,505
7,408
2,415
1,221
284
91
38
Retail trade
154,392
68,746
38,164
23,342
14,340
5,642
3,380
736
39
3
Transportation and warehousing
31,667
16,963
5,261
4,004
3,158
1,226
740
185
87
43
Information
27,199
15,027
3,728
3,325
2,696
1,231
750
265
114
63
Finance and insurance
73,237
43,916
13,712
8,657
4,517
1,284
728
236
134
53
Real estate and rental and leasing
66,337
48,318
9,997
4,989
2,074
605
270
60
17
7
Professional, scientific, and technical services
148,273
103,085
21,137
12,653
7,382
2,316
1,199
303
107
91
Management of companies and enterprises
6,786
2,380
1,047
1,018
1,082
530
432
167
83
47
Administrative and Support and Waste Mang and Remediation Srvs
60,140
33,713
9,437
6,532
5,285
2,419
1,869
578
204
103
Educational services
15,693
7,259
2,690
2,379
2,044
716
418
101
40
46
Health care and social assistance
132,605
68,873
29,995
17,375
10,057
3,321
2,094
417
199
274
Arts, entertainment, and recreation
25,090
16,820
2,823
1,991
1,874
886
494
120
47
35
Accommodation and food services
106,050
34,423
19,804
23,497
21,531
5,135
1,371
185
76
28
Other services (except public administration)
99,577
61,316
20,480
10,516
5,422
1,246
475
73
35
14
TOTAL FOR ALLSECTORS
1,219,028
670,528
225,897
153,763
106,351
35,707
19,430
4,739
1,615
998
PERCENTOFTOTAL
55.0%
18.5%
12.6%
8.7%
2.9%
1.6%
0.4%
0.1%
0.1%
TOTA FO R I N DUSTRIAL- ORI EN TE D S ECTORS
354,908
194,071
61,327
43,279
32,822
12,601
7,705
2,053
718
332
INDUSTRIAL-ORIENTED PERCENT OF TOTAL
54.7%
17.391
12.2%
9.2%
3.6%
2.2%
0.6%
0.2%
0.1%
Source: U.S. Census Bureau
A similar profile for Central Oregon shows a total of 70 firms with more than 100 employees. This
represents 0.9% of total firms in the area. If the regional profile was consistent with the Western United
States, with 2.2% of firms having 100 employees or more, the region would have a total of 162 firms of
this size. For firms having 500 employees or more, this number would increase the firm total from 7 to 17
in Central Oregon.
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 44
FIGURE 27: PROFILE OF FIRMS BY SIZE RANGE AND INDUSTRY, CENTRAL OREGON, 2008
• • • • • • •
Total
Firms by Size Range
Indust code description
Firms
1-4
5-6
10.19
20-49
50.99
100-249
250.499
500-999
1,000~
Forestry, fishing, hunting, and Agriculture Support
54
43
7
1
1
2
0
0
0
0
Mining, quarrying, and oil and gas extraction
11
6
2
1
2
0
0
0
0
0
Utilities
38
23
5
4
4
2
0
0
0
0
Construction
1,398
1,046
194
101
44
10
3
0
0
0
Manufacturing
366
173
77
48
35
18
11
2
2
0
Wholesale trade
310
184
58
42
21
5
0
0
0
0
Retail trade
984
477
238
131
90
34
10
4
0
0
Transportation and warehousing
161
103
26
14
10
3
4
0
1
0
Information
143
82
24
19
7
7
2
1
1
0
Finance and insurance
412
256
94
40
17
3
2
0
0
0
Real estate and rental and leasing
447
355
51
28
11
0
2
0
0
0
Professional, scientific, and technical services
722
550
89
51
31
0
1
0
0
0
Management of companies and enterprises
29
13
7
2
4
3
0
0
0
0
Administrative and Support and Waste Mang and Remediation Srvs
371
238
59
32
33
7
2
0
0
0
Educational services
74
37
13
11
11
2
0
0
0
0
Health care and social assistance
614
322
128
85
43
24
9
2
0
1
Arts, entertainment, and recreation
128
75
21
9
16
3
3
0
1
0
Accommodation and food services
593
184
116
165
105
17
3
2
1
0
Other services (except public administration)
515
313
127
52
19
4
0
0
0
0
TOTAL FOR ALL SECTORS
7,370
4,480
1,336
836
504
144
52
11
6
1
PERCENTOFTOTAL
60.8%
18.191.
11.3%
6.8%
2.09/6
0.7%
0.1%
0.1%
0.0%
TOTA L FO R I N DUSTR IAL-ORI ENTED S ECTO RS
2,644
1,767
419
241
147
45
20
2
3
0
INDUSTRIAL-ORIENTED PERCENTOFTOTAL
66.8%
15.894
9.1%
5.6%
1.7%
0.8%
0.1%
0.1%
0.0%
Source: U.S. Census Bureau
Firms sized at 500 employees or larger can be a general proxy for large lot industrial site demand. The
Central Oregon region currently accounts for 0.27% of firms of 500 employees or more in the Western
United States. The ratio of large firms in Central Oregon relative to the overall number of firms (0.09%) is
less than half the ratio in the broader Western United States (0.21%). Using the current profile of firms by
size in the Western United States and Central Oregon, combined with birth and expansion patterns
summarized in Figure 25, Johnson Reid can generate a model of annual large firm location activity in the
region.
FIGURE 28: ESTIMATED ANNUAL LARGE FIRM LOCATION ACTIVITY
Central
Western
Oregon
us
7,370
1,219,028
6
1,615
% of Total
0.08%
0.13%
Share of Western US
0.37%
100.00%
Firms - 1,000+ Employees
1
998
% of Total
0.01%
0.08%
Share of Western US
0.10%
100.00%
Firms - 50G+ Employees
7
2,613
% of Total
0.09%
0.21%
Share of Western US
0.27%
100.00%
Estimated Annual Birth Rate 1/
11.5%
11.5%
Expansion Annual Rate 1/
32.69.
32.69,o
Annual Births
1
302
Annual Expansions
2
851
Estimated Annual Activity
3
1,152
1/ Assumes patterns consistent with Western US data summarized in Figure 21.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 45
Assuming Central Oregon retains its current mix of firms, one could expect average annual large firm
activity of 3 location decisions per year, or 15 over a five year horizon. Not all of these will require new
sites, as many will be able to expand at existing locations or locate in vacant or underutilized existing
facilities. If Central Oregon's share of large employers mirrored its share of overall employment, the level
of annual estimated activity would increase to 7 firms. It should be noted that the demand for large lot
industrial land is also a function of supply. In other words, if no sites are available to accommodate these
users the region will get none of these users. What is modeled is a prospective demand, assuming that a
competitive inventory is available and maintained, allowing the region to capture a "fair share" of market
activity.
Economic recruitment benefits from some degree of market choice. Firms evaluating prospective
locations are a more likely to consider Central Oregon if multiple appropriate sites can be seen in a single
trip. As outlined in the vision statement, the region is hoping to establish and maintain a "competitive
portfolio" of large lot industrial sites. This would include an inventory of readily available and appropriate
sites consistent with baseline criteria, allowing the region to clear the initial site selection screening. To
the extent that multiple prospective sites are available in the region, Central Oregon's competitive
position would be enhanced as site selectors prefer to have multiple options before physically visiting an
area such as Central Oregon.
Business Oregon is mandated by ORS 197.717 (2) to "provide a local government with state and national
trend" information to assist in compliance with ORS 197.712 (2)(a)." The department has reviewed the
Central Oregon area, and made the following recommendations:
Given its current size and expected growth, it is not unreasonable to assume that the
region being examined as part of the current Central Oregon Large Lot Economic
Opportunity Analysis should have a mix of large lot sizes for potential employers and site
selectors to choose from. Such a mix would have at least multiple ready sites in the 200,
100 and 50-acre plus acreage ranges in order to meet expected 20 year land supply
needs.
Working with EDCO and Business Oregon, the following matrix of large-lot site needs has been developed.
FIGURE 29: RECOMMENDED COMPETITIVE LARGE LOT INDUSTRIAL INVENTORY
50-100 ACRES
100-200 ACRES
200+ ACRES
TOTAL
Number of Sites
3
2
1
6
Jurisdictions
3
2
1
•
Number of Sites
10
5
2
17
Jurisdictions
5
3
2
The preceding table summarizes what has been determined to be a regionally and nationally competitive
portfolio of large industrial lots. A readily available and developable inventory of six large sites in at least
three separate jurisdictions will provide for choice to prospective industries or site selectors. While the
table presents both a short term and long term inventory, the short term inventory is what is relevant
from an economic development perspective. The longer term inventory's value would be in identifying
sites that can replace the short term inventory if absorbed or if market conditions and needs shift. Based
on the projected level of demand for these sites, replenishment of the inventory will likely be needed on a
regular basis.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 46
Maintaining an appropriate available lot supply that is readily developable is a key priority for the region,
and strongly affirmed in the community vision. Projecting the demand for industrial land in this size range
is inherently highly speculative, as it is a thinly traded and highly competitive sector. In other words, with
fewer transactions and multiple areas competing for these transactions, there is an unusually high degree
of uncertainty in any forecast. The degree of uncertainty can be offset by emphasizing short term ready
supply, with a mechanism to replace supply in a timely manner when needed. While this may be
achieved during a periodic review, there should also be provisions for more rapid response if the market
supports it.
In the professional opinion of the economic development professionals contributing to this analysis, a
competitive portfolio of industrial sites would include a collection of large industrial parcels in some
selected communities, and a major, centrally located large-scale development near the region's
geographic and workforce center, and where key infrastructure is in place and has excess capacity. This
would be optimally located on the north end of Bend, but infrastructure challenges will make this choice
problematic for at least the short-term. The next most optimal location is on the southern end of
Redmond, east of Highway 97. The area has few neighbors, possible secondary transport access and most
of the municipal and franchise utilities with excess capacity.
Another three large lot parcels available throughout the region is also recommended as part of a
competitive portfolio. These sites would be 100 to 200 acres in size, and located in three distinct
jurisdictions. Recommended jurisdictions include Bend, Prineville and La Pine. The City of Madras has
available land within its current UGB for a large lot industrial user.
What is important from an economic development perspective is maintaining an inventory of
appropriately sized and located lots available to the market in any given period. From a market
perspective, sites need to be readily developable with infrastructure in place or readily available,
controlled by a willing seller and appropriately priced. While long term (20- year) needs are delineated,
the critical issue is to establish and maintain the short-term inventory. Longer term planning can allow for
sites to progress towards being available to meet short-term demands in future periods. As the
projection of needs for large lot industrial needs is unusually speculative, a focus on short-term needs is
probably more prudent, with mechanisms established to allow for maintenance of an adequate inventory
in the region. In addition, the nature of industrial demand is likely to change over a twenty year period,
and the nature of a regionally and nationally competitive portfolio of sites would be expected to change
commensurately. Reflecting this, a process to allow for ongoing updating and refinement of the identified
need for these types of sites should be established.
The following are additional factors that should be considered in establishing and maintaining a
competitive supply:
It should be noted that while Johnson Reid is evaluating large lot site needs as independent of
the need for smaller sites, the targeted employers are often "game changers", which will
generate a range of associated site needs within the region for suppliers and support businesses.
While likely smaller in scale, the ability of the region to serve associated industrial growth is seen
as critical.
• Land banking is a relatively common pattern in large lot industrial land use. Firms often seek
sites that are well in excess of their immediate needs, but capable of supporting later expansion
of their operations. While land is being "banked" by an employer is not developed, this
sequestered land is not available to the market and subsequently of limited use in economic
development efforts. In effect, banked land should be treated as though it were held by an
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EGA PAGE 47
unwilling/uncooperative seller, as per earlier discussions in this report. While it may serve longer
term needs, it should not be counted towards meeting short term needs.
The ability to cost effectively serve sites with adequate infrastructure should be a key
determinant in their usefulness for economic development. Industrial land is characterized by
relatively low values per square foot, providing limited ability to be burdened with off-site
infrastructure costs. In addition, even when fiscally viable, infrastructure provision may only be
available in a time frame that is inadequate to meet identified needs. Certain industrial users can
have significant offsite impacts associated with their operations. These operational externalities
may make cause conflicts with neighboring uses, limiting the appropriate locational options for
these types of firms.
While the research indicates a range of large lot site sizes and characteristics are needed within
Central Oregon, a degree of flexibility should be maintained, recognizing the imprecision
inherent in twenty year forecasts. A property that would allow for a range of partitioning options
for large lot industrial would be considered to be highly desirable. As an example, a 400 acre site
that can be subdivided into parcels as small as 50 acres would have the ability to accommodate
either a very large user, or a series of smaller users. This would provide more flexibility in terms
of potential configurations than two 100 acre sites and four 50 acre sites.
Maintaining a competitive inventory of sites in the region will require regular replacement of sites as
consumed, with modifications made to determinations of appropriate inventory based on available
information and periodic reviews. Again, particular emphasis should be placed on the short-term
immediately available inventory, which is what is most critical in economic development efforts.
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 48
APPENDIX A: LETTERS FROM ECONOMIC DEVELOPMENT
PROFESSIONALS
DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 49
November 8, 20 10
Nick Lelack, AICP
Deschutes County
117 NW Lafayette,;
Larry Pederson
IronWolf Comi
17079 SW Too:
Portland OR 9'
RE: Large
Dear Mr. Lelack:
business
or ~
business growls
Planning Director
ommunity Development Dept.
3end. OR 97701
Resources
Ct.
Site Demand
Changing Global market factors have brought significant changes to the profile of the industrial
property and building demand over the past fifteen years. For example, warehouse properties
have dramatically i7creased in size and interior ceiling heights (cube storage) as distribution
takes on new dimensions to scale and reflect the concentration of production in larger "global"
production facilities. Likewise, production facilities scale in size to produce in mass and
compete on global scale rather than regional or national levels.
As an example of the increase in warehouse dimensions can be seen in the list of the "historic"
warehouse properties build since 1995; as follows.
✓ Albany-Target; 175 acres-1.3 million SF
✓ Hermiston-'Val-Mart; 200 acres 1.3 million SF
✓ Lebanon-Lowes; 204 acres +1.3 million SF
✓ Salem-Hom6 Depot; 50 acres 500,000 SF
The total number of "warehouse" projects that have shopped Oregon, in the past ten years, with
site demand over 50 acres, is estimated at well over 55 projects, or around 5 warehouse "type"
projects a year on average. Currently, we have as many as 10 outstanding leads in this size and
category. !
Manufacturing has also seen a movement to larger scale as demonstrated by the following recent
new Oregon compan>es and expansions:
✓ Hillsboro-Genentech: +50 acres
✓ Hillsboro-SolarWorld; +75 acres
✓ Intel Expansion
i
Business Oregon recruitment staff estimates we see around 15 "serious" inquiries a year for large
scale manufacturing sites. Currently, we have two very active accounts outstanding in this
category, code namb Apollo and DK. In addition, we have multiple interests in an existing large
facility outside of these numbers.
775 Summer St NE, Suite 200 • Solem, OR 97301-1280 .
123 • fox 503-581-5115 • TTY 800-735-2900 • www.oregon4biz.com
Overall, we estimat
or building categor,
these large projects,
Given its current sis
examined as part of
should have a mix <
Such a mix would l
in order to meet exl
users, many site sel
to reduce the comrr
government policy,
investment.
that ten to fifteen percent of all our recruitment leads fall into the large site
The trend, if anything, seems to skew towards an increase in the number of
and expected growth, it is not unreasonable to assume that the region being
ie current Central Oregon Large Lot Economic Opportunity Analysis
large lot sites for potential employers and site selectors to choose from.
ve at least multiple ready sites in the 200-, 100- and 50-plus acreage ranges
cted 20 year land supply needs. Given the complexity of placing such large
tors will require the ability to review multiple options in the region in order
i risks associated with varying levels of environmental mitigation, local
ite avoidance factors and planned levels of infrastructure and utility
Please let me know you have any questions and good luck on your analysis,
1~-
Bruce Laird
Clean Technology
Oregon Business 1
Officer
Department
November 17, 2010
Nick Lelack, AICP
Planning Director
Deschutes County Community Development Department
117 NW Lafayette
Bend, OR 97701
Dear Mr. Lelack:
As a professional who works with all jurisdictions in the state of Oregon promoting business investment,
I can't speak enough about the need for industrial land, especially those that are large lot and ready to
develop. Once industry makes a decision on a location, they tend to move very quickly and taking time
to go through extra steps to get a piece of property ready to go will eliminate sites quickly from
consideration. When we worked on the Facebook project, we started in January of 2008 and
announced in December 2009. It took less than one year to get through the siting process, which is an
incredibly short time.
Recently, I was with a site selection consultant looking for 65 acre parcels in Oregon for a distribution
center and we were visiting a city of approximately 10,000 people. I asked him, since he travels all over
the US siting projects, what amount of industrial land should be available and ready to go in a city of
that size his response was that for a city of 10,000 people they should have at a minimum 350 acres of
ready to go industrial land. Currently that city had approximately 150 acres available. Many of our
communities in Oregon want a greater inventory for development opportunities ...this is a consistent
message regardless of location in the state. Every community that wants to promote growth should
have some parcels that are at least 50 acres up to 100 acres with the opportunity to divide parcels to
meet company needs.
We at Business Oregon want to make industrial land project ready we want to bring our communities
up to a level of knowledge about their properties so that there are no surprises. That is why our land
readiness and site certification programs are important. Companies and site selection professionals
expect this level of readiness as a standard.
Regarding Central Oregon, I find it a challenge to get prospects to look beyond interstate road systems,
even though Highway 97 has become a significant corridor in Oregon. It will only make our jobs harder
if Central Oregon has limited alternatives when it comes to a lack of large industrial parcels. Having a
sufficient inventory will put Central Oregon on the same playing field of other communities even with
the transportation challenges. They need a variety of alternative sized sites as well as having all their
industrial properties ready to go.
When you look at a state the size of South Carolina and then read that they just increased their
industrial land inventory statewide by 6000 acres, you know that in order to be in the game, you must
have ample inventory in all locations in the state. Central Oregon is a significant Metropolitan Statistical
Area (MSA) for Oregon and each county (Jefferson, Crook & Deschutes) should have sufficient inventory
to keep the people working in the region rather than see them move to other locations to find jobs.
I support all the efforts underway to increase the industrial land inventory in Central Oregon and am
more than happy to answer any questions. I can be reached at 503-551-0997.
Warm regards,
Jill A. Miles, CEcD
National Recruitment Officer
Business Oregon
C: Larry Pederson, Iron Wolf Community Resources
ECONOMIC DEVELOPMENT
FOR CENTRAL OREGON
November 23, 2010
Nick Lelack, AICP
Planning Director
Deschutes County Community Development Dept.
117 NW Lafayette, Bend, OR 97701
Dear Nick:
I am writing to support the recent pilot project to expand the inventory of large lot industrial
sites in the Central Oregon region. Founded nearly 30 years ago, Economic Development for
Central Oregon is the tri-county area's primary business development and recruitment
organization with four offices. Over the past decade and a half we have recruited 89
manufacturing and high technology companies to the area and assisted in the expansion of
another 67 traded sector firms, many of which are the region's largest employers. With this
foundation of real world experience, we believe EDCO is uniquely qualified to provide useful
market-based information about the need for industrial and specifically large lot industrial
inventory.
Large Lot Definition
Based on current supply, what comprises a large lot can vary greatly from community to
community in Central Oregon. For example, a large lot in Prineville, Madras and La Pine is 50+
acres. In Bend or Sisters it is 5-10 acres. From a market perspective, 5-10 acres is clearly not
considered a large lot, so these prospective projects don't look (or look long) at Bend for a
location currently.
Lead and inquiry activity passing through EDCO suggest that 20-50 acres are considered large
lot, and there are a limited number of projects that fall into the "mega" category of 100+ acres.
Regional Industrial Land Supply
While some communities within the region have a better inventory than others, for many years
the tri-county area overall has had a significant deficit of larger industrially-zoned land that is
project ready. Bend, the largest city and Oregon's 5"' largest metropolitan statistical area, has had
the least inventory in terms of total acreage, total large lot industrial and total industrial land
overall as a ratio to employment. Most traded-sector companies looking to expand or relocate to
Oregon that will consider the Hwy 97 corridor and central part of the state start with Bend.
Redmond lies near the center both geographically and for the regional workforce. For these
reasons, along with an established reputation for being responsive and friendly to business, it is
often looked at by expanding or relocating companies as well. Importantly, it has for much of
the past decade, effectively served to supply a portion of Bend's inventory of industrial land -
specifically larger acreage.
EDCO • 109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 • 800-342-4135 • www.edcoinfo.com
DLCD - Central Oregon Regional Industrial Land Initiative
Page 2 of 5
An inventory of large lot industrial parcels has historically existed in Prineville and La Pine and to
a lesser degree in Madras, which developed its first new industrial park in decades about five
years ago. Generally, the region has inventory where the marketplace historically has expressed
the least interest.
Market Demand
EDCO is the region's clearinghouse for traded sector expansion and relocation projects,
including large lot industrial prospects. Over the past five years, there has been a small but steady
stream of prospects looking for large acreages. Few of these projects have located in the region,
in part because of the supply issue. The most recent large lot location decision in the region is
Facebook with their selection of a 125 acre industrially-zone parcel in Prineville earlier this year.
If all phases are built, nearly one million square feet of data center space could be constructed.
EDCO is currently working with 72 companies that are seriously considering Central Oregon for
expansion or relocation. Five (5) of these would meet the 20-50 acre "large lot" threshold and
three (3) the 100+ acre "mega" size noted on the previous page. These are not just leads or
inquiries, but rather companies that have the region on the list of finalists, which we refer to as
"pending projects". Lead or prospect activity (i.e. companies or site selectors just looking) is
usually three to four times the volume of our pending projects list.
In our experience, industries requiring large acreage include:
■ distribution and warehousing;
■ data centers;
■ renewable energy equipment manufacturing;
■ energy production facilities (biomass, solar, geothermal, synthetic fuels)
■ high technology (several sub-sectors); and
■ general durable goods manufacturing.
An issue the region struggles with regularly is the ability to market multiple large lot locations to
prospective users. With many options (depending on the geographic scope of the search - i.e.
multi-state, national, international) we have seen a resistance by :site selectors, corporate real
estate professionals and company representatives to invest the time and travel to visit the region
without more than just one or two large lots to consider. Greater inventory (acreages) and
variety (communities) are needed to better compete for these projects.
It is also worth noting that while most communities offer bare land to new industrial employers,
most manufacturing and technology companies are looking for existing buildings or industrial
complexes to meet their needs. This is especially true today when existing facilities can be
purchased well below construction costs. Today, many companies are simply looking for a good
deal, and one that will not require them to get familiar with all state and local building and
development processes. Often, an accelerated timeline offered by an existing building (even if it
needs modification), is also a driving reason along with lower upfront capital expenditures.
Industrial Land Supply Characteristics
The size of an industrial parcel is certainly only one of many factors in the site selection process.
Access to utilities, workforce, transportation, education and training services, and incentives are
EDCO - 109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 - 800-342-4135 - www.edcoinfo.com
DLCD - Central Oregon Regional Industrial Land Initiative
Page 3 of 5
all important location factors for large projects. However, if there are no viable, ready-to-go sites
- somewhere to physically locate - the discussion about these other factors never starts.
Additionally, if owners of industrially-zoned land are not motivated sellers it has the result of
effectively taking those lands out of the community's inventory. This "ghost" inventory of
having, but not really having industrial land, common in central and eastern Oregon.
Once the viability of the site question has been answered, most large industrial users need access
to the following for a community to move to the next stage of consideration:
Infrastructure
Utilities - Municipal water and sanitary sewer, electric power, natural gas and telecom in
capacities needed for specific companies or industries is critical. The importance ranking
and magnitude needed for each varies from industry to industry. If nearly all utilities
noted above are not in place or very nearby or without some capacity, most companies
will not consider a community (or that site at least) further. Most private businesses, even
large ones, are not coincidentally experienced developers.
Transportation - Most projects, with a few exceptions, have significant transportation
and logistics aspects. It is important to note that the current access approval process in
Oregon (whether on a state highway or not) is broken and a barrier to economic
development in general and large lot development specifically. The Transportation
Planning Rule (TPR) and relationship with LCDC approval is specifically creating the
greatest problems in the Central Oregon region.
Workforce
Throughout the tri-county area, the question for larger projects is first and foremost
about quantity. Bend or the Deschutes County MSA is often the smallest area in the field
of consideration for a site selection process. Quality can also be an issue, but at the end
of the day, communities have little influence on either, at: least at the point when
companies come looking.
Education & Training
Some companies are keenly interested in higher education opportunities both for the
overall workforce and continuing education of their employees. That the Central Oregon
region has been underserved for both higher education and training opportunities is a
factor noted by several large projects in the past as a concern.
Incentives
While Oregon is not a "big player" in the incentives game nationally, the state does have
in place several incentives that favor large, capital intensive projects. Specifically, few
areas have the type of property tax incentives Oregon offers that can exempt these taxes
for 3-15 years. Nearly all Central Oregon industrial areas have access to these incentives
through the enterprise zone program. At the same time, Oregon does not have the type
of payroll or jobs-based incentives available as in other places in the country.
Certification, as offered through a local or state agency, can be helpful, but in our experience has
not been a large determinant in being able to attract new, large users. The exercise certainly has
benefit in addressing issues, but most of the companies and site selectors have not inquired about
EDCO • 109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 • 800-342-4135 • www.edcoinfo.com
DLCD - Central Oregon Regional Industrial Land Initiative
Page 4 of 5
certification. In our experience, those who are familiar with the! term and process don't know
how its rigor compares to programs in other states.
EDCO Recommendation
The current process for inclusion of large lot industrial is not working. Additionally, the Central
Oregon region does not have a compelling number of "project ready" large lot sites to lure larger
prospects to the area. As noted earlier, the region has the greatest inventory where the
marketplace generally has the least interest. What would be compelling would be a collection of
large industrial parcels in some selected communities (not all) and a major, centrally located large-
scale development near the region's geographic and workforce center, and where key
infrastructure (outlined on the previous page) is in place and has excess capacity.
Addition of Large Lot Parcels to Selected Communities
EDCO suggests the addition of three large lot parcels through this regional approach, in Bend,
Prineville and La Pine. Madras currently has an area that can serve a 40 acre user and up to a 200
acre user. We suggest that these parcels be no less than 100 acres in size and not larger than 300
acres. Selection criteria should be based on:
• proximity adjacent to the existing UGB;
• topography conducive to accommodating large industrial facilities;
• proximity to needed infrastructure; and
• motivated seller with financial strength to hold large acreage parcels and extend utilities.
Creation of Regional Industrial Complex
From a market perspective, the logical place to locate a regional facility, Central Oregon's
"Research Triangle" would be between Bend and Redmond. Since such a development is
inconsistent with Oregon's land use laws, the second most optin:ial location would be on the
north end of Bend. Transportation, municipal water, sanitary sewer and natural gas infrastructure
challenges discovered during the development process for the City of Bend's juniper Ridge make
this choice problematic - at least for the next three to five years.
The next optimal location for a development to meet regional demand for industrial property is
on the southern end of Redmond, east of Hwy 97. The area has few neighbors, possible
secondary transport access and most of the municipal and franchise utilities with excess capacity.
It is a compelling location in the marketplace.
The supply of large-lot industrial land should be reviewed by the region's cities, counties and
economic development organizations periodically. We suggest e five (5) year timeframe for re-
evaluation. If the inventory has not been absorbed, then no changes are made to the supply.
Conversely, property acquired by end users during that time would be replaced.
Thank you for the opportunity to provide comment and support for the process to expand the
region's inventory of large industrial parcels. It is an important initiative to help the region
diversify and rebuild its economy.
Sincerely,
EDCO • 109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 • 800-342-4135 • www.edcoinfo.com
DLCD - Central Oregon Regional Industrial Land Initiative
Page 5 of 5
Roger J. Lee
Executive Director
EDCO • 109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 • 800-342-4135 • www.edcoinfo.com
APPENDIX B: EXAMPLES OF LOCAL GOVERNMENTS PROACTIVELY
PLANNING FOR INDUSTRIAL DEVELOPMENT
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 59
Document Reproduces Poorly
(Archived)
Community: Quincy, Washington (Grant County)
Key Industry Site Location Factors:
■ Proximity to large capacity, low cost power
■ Access to municipal water and sewer (large capacity)
■ Mission critical telecom infrastructure (speed and capacity)
■ Large acreage industrial sites (with proximity to utilities)
■ Climate conducive for lower cost cooling
■ Meaningful incentives, tax climate
Population: 2000: 5,044 2010: 6,750 % Change: +33.8%
Number of 50+ acre industrial sites absorbed 1990-2000: 0
_ Number of 50+ acre industrial sites absorbed in past decade: 5
Number of 50+ acre industrial sites now available: 6
Economic Outcomes
In 2004, the rural town of Quincy, WA was essentially 100% agriculturally based economy in a county with
some of Washington's highest chronic unemployment rates. The community had no technology
companies operating there and, as a result, no local technology jobs. Poverty rates also ranked among
the highest in the state.
A key asset the community did have that aligned well for the data center industry was the fact that it had
over 500 megawatts of stranded electric power capacity resulting from closure of several foundries within
Grant County. Rates set by the local PUC were also very attractive for large users - among the lowest in
the country. The community and county overall had numerous large industrial sites that could
accommodate significant projects such as Microsoft's 1.5 million square foot data center facility.
Today, there has been an 8 percentage point improvement in the unemployment rate and six major
technology companies (Yahoo!, Microsoft, Dell, Intuit, T-Mobile & Ask.com) have a presence in Quincy.
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 60
While critics (most of which are outside community) make arguments that the jobs produced for the
electric power used is a poor economic development tradeoff, the reality is that these centers would be
built somewhere to accommodate market demand for mobile devices, online computing capacity and
Internet-based software and professional services. The community, via its local and professional
economic development organizations, had tried to attract other industries with little success. The data
center industry has brought sustained economic activity that is benefiting most residents.
Other economic impacts in Quincy and Grant County, WA include:
• $2.9+ billion in facility construction and IT infrastructure investment
■ 275 average construction jobs since 2004 (peaks exceeding 600)
■ 200 full time direct hire positions with technology companies
■ 250 full time contract employees for facility maintenance (ongoing)
Capital investments alone from data center development have added considerably to the local property
tax base, which supports local government, schools and special districts.
Of importance was the fact that Washington's land use system was able to accommodate six new large
acreage industrial users in a very concentrated timeframe. Oregon's current land use law would never
allow a community of 6,000 residents to have such an inventory, especially given a historical lack of
demand for such development property. Nonetheless, the availability of this inventory was integral in the
area attracting major new employment concentrations.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 61
INDUSTRY FOCUS: HIGH TECHNOLOGY
Community: Hillsboro, Oregon (Washington County)
Population: 2000: 70,187 1 2010: 91,611 1 % Change: +30.5%
Industry Target: High Technology
Number of 50+ acre industrial sites absorbed 2000-2010: 6
Number of 50+ acre industrial sites now available: 5
Key Industry Site Location Factors:
■ Proximity to large power capacity at low cost
■ Access to municipal water and sewer (large capacity)
• Large acreage industrial sites (with proximity to utilities)
• Proximity to technical, scientific talent (existing critical mass & higher education)
• Meaningful incentives, tax climate
Economic Outcomes
Home to Intel, Hillsboro has been planning for and working toward growth of its high technology
employment base for more than 25 years. Utilizing a large and renewable resource from its Coast Range
watershed, Hillsboro offers the semiconductor, bioscience and renewable energy equipment
manufacturing industry a valuable resource for process water. Additionally, the community is
strategically located to tap significant electric power transmission capacity in the Portland metro area,
which is also another common thread in high technology manufacturing.
Intel opened its first Hillsboro facility, Hawthorn Farm in 1979. This campus was followed by the opening
of the Jones Farm location near the airport in 1982 and the Ronler Acres location in 1994. The Ronler
Acres development was the result of a substantial effort by the City to assemble a site with multiple
ownerships to provide for a large lot industrial opportunity. Along with several smaller campuses, Intel
Oregon had approximately 15,500 employees, making it the largest Intel site and the largest private
employer in Oregon.
Intel is directly or indirectly responsible for more than 100 spin-off high technology companies and has
played a leading role in attracting other national and international high technology manufacturers to the
Hillsboro area (TOK America, Tokai Carbon, Lattice Semiconductor, FEI Company, Sun Microsystems,
Epson, etc.).
Significant capital investments in infrastructure and physical plant characterize these high technology
companies. For these reasons, large, well-served industrial sites are required. Recent examples include
pharmaceutical giant Genentech (75 acres), Solar World (93 acres), and TriQuint (32 acres). In 2007,
SolarWorld AG acquired the Komatsu silicon wafer production facility in Hillsboro. The Komatsu site is
approximately 93 acres total, and included 480,000 sf manufacturing and approximately 60 acres of
excess land for additional fabs or support buildings. SolarWorld has since built an additional 500,000 sf
module manufacturing facility on the site. TriQuint Semiconductors has a 32-acre corporate campus in
Hillsboro, which manufactures semi-conductors (4" to 6" wafers) and offers integrated technologies for
wireless and base station communications applications. Complete engineering design, manufacturing,
testing, research and development are included at this facility. TriQuint has completed thee expansions at
their Hillsboro HQ since 2006.
DESCHUTES COUNTY ) CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 62
Dwumant Reproduces Poorly
(Archived)
Hillsboro has continued to plan for future industrial development of its high technology cluster. The City
has strategically focused industrial development efforts in the northern section of the City and is
supporting that decision through zoning, industrial infrastructure, and transportation access. Despite
having approximately 850 additional buildable acres within the City's North Industrial Area (Shute,
Evergreen, and Helvetia Industrial Areas), the sites have been hampered by multiple ownership patterns,
wetlands and natural resource issues, and lack of infrastructure.
The City has completed a strategy intended to prepare approximately 700 acres of vacant land in the
North Industrial area for development. The strategy addresses the key challenges to development in this
area including infrastructure concept design and funding; mitigation of wetlands and environmentally
sensitive lands; and land assembly (with the goal of providing a 100 acre site that is truly "shovel ready").
The city also realizes that high quality and reliable infrastructure (roads, water, sewer, electricity) is
necessary. Millions of dollars are being invested, or are programmed for investment by local utility
suppliers in phases over the next 10 years to accommodate development of these key industrial lands.
While Hillsboro is one of the best positioned communities from an industrial land perspective, only two or
three other options exist for large lot users in within cities in the greater Portland area, a metro with
nearly 2 million residents.
That Hillsboro is preparing for the future with an inventory of large-lot industrial land positions it for
future success. It is hard to imagine how the community could accommodate additional large
technology-based companies (either through recruitment or from organic growth of existing businesses)
without such an inventory.
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 63
Community: Austin, TX (Austin County)
Population: 2000: 656,562 2010: 790,390 1 % Change: +20.4%
Number of 50+ acre industrial sites absorbed 2000-2010: xxx
Number of 50+ acre industrial sites now available: 11
Key Industry Site Location Factors:
■ Proximity to large power capacity at low cost
■ Access to municipal water and sewer (large capacity)
• Large acreage industrial sites (with proximity to utilities)
■ Proximity to technical, scientific talent (existing critical mass & higher education)
■ Meaningful incentives, tax climate
Economic Outcomes
Austin is considered to be a major national center for high technology development and manufacturing.
Among its largest employers are Dell, Freescale Semiconductor, IBM, Apple, Advanced Micro Devices,
Silicon Labs, Hewlett-Packard, Google, AMD, Applied Materials, Cirrus Logic, Cisco Systems, eBay/PayPal,
Bioware, Intel, Samsung, Silicon Laboratories, Oracle and Rackspace.
The proliferation of technology companies has led to the region's nickname, "the Silicon Hills", and
spurred development that has greatly expanded the city. Austin is also emerging as a hub for
pharmaceutical and biotechnology companies; about 85 companies in the bioscience industry are based
in Austin.
While the presence of some of the companies noted occurs in more intensive developments (high rise
buildings in a downtown location), the majority of technology employers in the Austin area have
considerable space for their operations.
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 64
Community: Hermiston, Oregon
Population: 2000: 13,154 2010: 16,795 1 % Change: +27.7%
Number of 50+ acre industrial sites now available: 8
Hermiston is a progressive, growth-oriented urban center for an area based economically on distribution
warehousing, agriculture, food processing, utilities and other light industry. Centrally located, Hermiston
has become a transportation center accessed by Interstate Highways 1-84 (east to west) and 1-82 (north
and south) as well as rail and river transportation systems. As well as large properties up to and including
a 300-acre site that is subdividable with railroad spur frontage. The City will work with developers of
industrial and commercial business that create job opportunities for local citizens to assist with location of
infrastructure to appropriate sites. The Port of Umatilla has helped in the development of industrial parks
in the area, and has recently attracted a newAmazon facility on their nearby McNary property.
Key Industry Site Location Factors:
■ Clean water
■ Economical power
• Transportation access (Interstate and Columbia River)
■ Advanced communications
■ Room to grow
Economic Outcomes
The City of Hermiston strong locational attributes and readily available industrial land supply has
supported growth in agricultural processing, utilities and distribution/warehousing. Major employers
include:
• Wal-Mart Distribution Center - 850 employees
■ Lamb Weston - 700 employees
■ Hermiston Foods (NORPAC) - 500 employees
■ Marlette Homes - 450 employees
■ Union Pacific Railroad - (315 employees)
■ Good Shepherd Health Care System - (358 employees)
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 65
mson
BOAROMAN
gone
-'C7 Lexington
;Heppner
* Boardman Industrial Park
* Airport Industrial Park
South Morrow Industrial Park
Community: Morrow County, Oregon
Population: 2000: 10,995 1 2010: 11,175 % Change: +1.6%
Number of 50+ acre industrial sites now available: 2,500 subdividable
acres
The Port of Morrow has led economic development efforts within Morrow
County. The Port serves the industrial community by continually
developing its three industrial parks, and offers assistance with financial
services. Connections to the local labor market are also provided. The Port
offers industrial building sites from 1 to 2,000 acres in size as an economical
alternative to metropolitan areas.
Key Industry Site Location Factors:
■ Clean water
■ Economical power
■ Transportation access (Interstate and Columbia River)
■ Advanced communications
■ Room to grow
Economic Outcomes
Building on its reputation as a prominent food processing center, the Port is also home to fiber and seed
processing industries, lumber processing and transportation facilities. Port tenants include:
■ McGinn Brothers Trucking
• Morrow Cold Storage
■ Devin Oil
■ Oregon Hay Company
■ Oregon Potato
■ Pacific Rock Products
■ Portview Ranches
■ Rivercrest Farms, Inc.
■ Tidewater Terminal Services
■ Vanco
■ Watts Brothers Re-Pack Facility
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 66
Community: Reno, Nevada (Washoe County)
Population: 2000: 180,480 2010: 225,221 1 % Change: +24.8%
The greater Reno, NV area has grown over the past two decades into a significant
regional distribution center for the West Coast. Its geographic location provides
optimal service to a six to nine-state area, but most strategically to California -the
most populous and largest state economy in the United States. Warehouse and
distribution is a major industry and source of employment in the Reno-Sparks area, comprising nearly 13%
of all jobs. The area has established a large Foreign Trade Zone (FTZ) of nearly 7,500 acres and many
large-scale distribution centers have a presence in the Reno-
Sparks area including:
si
■ PetSmart (990,000 sf)
I~ N
■ MEPT USA (700,000 sf)
■ Kmart
VP
■ JCPenney
■ Toys R Us (300,000 sf)
90M
. Barnes & Noble (642,000)
C4
Denver
■ Husgvarna
r.DU m1e~
■ US Ordinance
San 0
■ Patagonia (171,000 sf)
AZ 11.011 mks
■ Walmart (890,000 sf)
VA
■ Urban Trends (clothing) - 430,000 sf
MW
■ Sherwin-Williams
The area shaded dark green represents
■ Starbucks (160,000 sf)
1 daytrucksen,-ace
■ Snap-on Tools (120,000 sf)
The area shaded light green represents
2 day truck ser%ice
Several of the large scale distribution centers have located in
the Tahoe-Reno Industrial Center (TRIC), a 110,000 acre
industrial park is among the largest in the nation. Since 2000, TRIC has attracted 83 companies and
construction of nearly five million square feet of warehouse and industrial buildings.
markets that it has 900 megawatts of power available for, .
companies. The development is well served with rail and
highway access, but prior to its conception, the rural area
east of Reno had no historical industrial development - -
giving credence to the "build it and they will come"
strategy employed more famously at the 7,000 acre/'
Research Triangle in North Carolina. 17
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 67
The park also
Community: Salt Lake City, Utah (Salt Lake County)
Population: 2000: 898,387 1 2010: ,029,655 1 % Change: +14.6%
Key Industry Site Location Factors:
■ Strategic geographic location for target metropolitan markets
■ Access to multiple interstate and rail transportation systems
■ Availability of low cost, large acreage land
■ Meaningful incentives, tax climate
The Salt Lake City, UT area is geographically positioned to serve an eleven-state area in the Western U.S.
with one day truck service - making it a hub for the nation's distribution industry. Key factors supporting
Utah's status as a distribution destination include an extensive freeway system with more than 43,155
miles of highways and roads; a major rail system with more than 1,400 miles of railroad track stretching
throughout the state; an international airport handling over 550 million pounds of air cargo and air freight
annually. Salt Lake City is also a Customs Port of Entry, serving as a full-service port city. Utah's low
operating costs and available labor force make Utah an attractive location for the distribution industry.
Over 1,500 trucking companies have a presence in the state.
A long list of companies have large scale distribution operations in the greater Salt Lake City area,
including:
■ The Hershey Company (chocolate food
products) - 600,000 sf warehouse
■ Overstock.com (consumer products) -
950,000 sf warehouse
■ Sephora USA (beauty products) - 320,000
sf warehouse
■ U.S Foodservice (wholesale food products)
- 265,000 sf warehouse
■ Huish Detergents (private label
detergents) - 200,000 sf warehouse
■ Icon Health & Fitness (exercise equipment
mfg. & distribution) - 300,000 sf facility
■ Lifetime Products (sports equipment mfg.
& distribution) - 2.6 million sf complex
■ Nestle USA (packaged frozen foods)
■ Merit Medical Systems (medical devices,
supplies)
■ Nu Skin Enterprises (beauty products) -
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 68
est. 400,000 sf warehouse
■ RC Wiley Home Furnishings (furniture manufacture and distribution) 860,000 sf warehouse
• ICU Medical (medical devices and supplies) - 450,000 sf facility (140,000 sf distribution)
■ Walmart (large scale retailer)
■ Easton (sporting goods) -140,000 sf distribution
Salt Lake City and surrounding communities have planned for growth of this industry, which has seen
considerable expansion in the past two decades. Nearly all of the distribution centers noted above
require large scale industrial parcels for initial buildings and future growth.
DESCHUTES COUNTY ( CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 69
APPENDIX C: CORRESPONDENCES RESPONDING TO REGIONAL
ECONOMIC OPPORTUNITY ANALYSIS
DESCHUTES COUNTY CENTRAL OREGON REGIONAL LARGE-LOT EOA PAGE 70
534 SW Third Avenue, Suite 300 • Portland, OR 97204 • (503) 497-1000, fax (503) 223-0073 • www.friends.org
1000
Southern Oregon Office • PO Box 2442 • Grants Pass, OR 97528 • (541) 474-1 155 • fax (541) 474-9389
friends
Willamette Valley Office • 220 East 11 th Avenue, Suite 5 • Eugene, OR 97401 • (541) 520-3763 • fax (503) 575-2416
of Oregon
Central Oregon Office • 115 NW Oregon Ave #21 • Bend, OR 97701
• (541) 719-8221 • fax (866) 394-3089
May 17, 2010
Nick Lelack
Deschutes County Development Department
1300 NW Wall Street
Bend, OR 97701
Re: Central Oregon REOA
Dear Nick,
I am writing today to provide comments on behalf of 1000 Friends of Oregon on the most recent draft
of the REOA. As I mentioned at the end our last meeting, we support the basic principle behind the
REOA effort: cooperative efforts on land use decisions in order to improve Central Oregon's
economic prospects.
Our primary concern with the current draft is that it not only fails to comply with the land use law, but
it is inconsistent with important policies behind those laws; policies that are sound principles of good
governance. Our concerns center around Goals 9 (Economic Development) and 14 (Urbanization).
Together, these Goals require cities to examine larger economic opportunities in light of community
character, strengths, weaknesses, geographical and natural assets, market opportunities, labor force,
infrastructure, and other qualities. Regional coordination is required, and regional planning is
encouraged. The principle behind Goal 9 is that the EOA provides the basis to determine the
economic opportunities that would be most effective to pursue. In other words, Goal 9 requires a
region to take a realistic look at itself in the larger economic context, to determine what it needs to do
to be economically successful. This is a sound principle.
Specifically, according to Goal 9 an EOA should look at
inventories of areas suitable for increased economic growth and activity after taking
into consideration the health of the current economic base; materials and energy
availability and cost; labor market factors; educational and technical training
programs; availability of key public facilities; necessary support facilities; current
market forces; location relative to markets; availability of renewable and non-
renewable resources; availability of land; and pollution control requirements.
OAR 660-015-0000(9).
355
Celebrating Thirty-five Years of Innovation
With this factual basis under Goal 9, Goal 14 directs a jurisdiction to determine what capacity is
needed to accommodate that growth. The capacity need should grow out of the facts; it might be in
the form of new land, or it might be using existing land differently or more efficiently, or it might be
using existing vacant buildings, or any combination of those options. Or, the "capacity" needed
might be in the form of better education of citizens, or improvements to key infrastructure such as
rail. For example, if the goal is to bring in high tech and bioscience, different capacity and
infrastructure is needed than for mobile home manufacturing or server farms like the Facebook
installation. Looking at just one industry sector, every solar-related business that has located in
Oregon has done so inside existing urban growth boundaries, and in some instances (such as Solar
World in Hillsboro), using existing buildings as well.
Unfortunately, this Draft EOA fails to truly address these basic principles. Although it includes many
critical facts, such as the strengths and weaknesses of various areas, those facts are not actually used
to analyze the potential they create. The strengths and weaknesses are not considered in light of the
larger market forces; they are merely recited. Further, potentially critical distinctions are not made,
such as the difference in the percentage of people with college degrees in Bend v. Madras, and what
difference that might make in the kinds of businesses that choose one town over the other, and how
that might influence the location of a large lot. There is no analysis of whether any of the strengths
and weaknesses would actually cause any large employer to locate in Central Oregon. And, there is
no analysis of the needs those businesses would have. For example, some large employers, such as
information technology businesses or biotech, may house many more employees per acre with less
infrastructure than server farms such as Facebook, which required over 100 acres and most of the
available electric and water capacity for the city of Prineville for only 35 permanent employees. In
short, without an analysis of the likely needs, this REOA is simply incomplete.
Importantly, there is no analysis of other efforts necessary to attract new employers or grow jobs at
existing employers, such as course offerings at the local university, or better transit for potential
employees. Instead, the REOA creates an artificially limited scope by proclaiming the community
goal to be
To build a strong and thriving regional economy by establishing and actively
maintaining a competitive portfolio of large lot employment sites...
There is little support in the region's comprehensive plans that there is truly a goal of attracting the
kinds of employers that require large lots when statements about large employers are read in context.
By placing the assumption that large lot employers create a strong and thriving economy in the
"vision statement" the document tries to avoid the task of making the case that employers that require
large lots would actually improve the local economy. The document simply assumes that this is true.
Actually, research shows that the opposite is true. The vast majority of job growth comes from
existing small businesses.
Lfr'i0e0nods Central Oregon Office • 1 15 NW Oregon Ave #21 • Bend, OR 97701
(541) 719-8221 • fax (866) 394-3089
mi
Page 2
When the REOA analyzes how many lots and acres are necessary it considers only one statistic: that
regionally we have a smaller percentage of large industries than is common in the western U.S.,
which it explains includes Washington, Oregon, Idaho, and California. This analysis fails to account
for the small size of Central Oregon cities compared with places like Seattle, Portland, the San
Francisco Bay Area, Los Angeles, and Boise, all of which were included in the western regional
statistic. It is not obvious that small cities under 100,000 will attract as large a percentage of
companies with more than 500 employees as large cities with over a million people in the region. In
fact, common sense would suggest the exact opposite result. Smaller towns would be expected to
have smaller businesses. The analysis of how many large lots are required does not consider any
other factors.
Even assuming that Central Oregon could attract as many employers of over 500 people as Portland,
there is another analytical error in this reasoning. Most of the cities in the REOA analysis area have
already expanded their UGBs to account for their anticipated population growth over the next 20
years. (Bend will likely have that process complete in the next two years.) As a result, if this REOA
is going to justify bringing in more land than will be needed in 20 years under normal conditions, it
has to show why employment will grow faster than population. There is no analysis in the REOA that
supports this conclusion. The analysis showing that central Oregon has a smaller percentage of large
employers than the western U. S. in general actually supports the conclusion that the local trend is for
smaller employers. It doesn't provide a basis for a reasonable expectation of extraordinary economic
growth.
Central Oregon has many attributes that could attract new businesses and cause existing ones to stay
and grow. The region is very desirable to the "creative class" of young people looking for
outstanding recreational opportunities. The region has a well developed economic development
community and will soon have a university. While the REOA lists some of these facts, none of them
is actually used in an analysis of the kinds of companies that may stay and grow or locate in central
Oregon, or the type of capacity, infrastructure, and other elements those companies might need. A
potentially valuable way to approach this question would be to look at other regions that have
accomplished the economic growth this REOA hopes for. What assets did they have? What
strategies did they use to make the most of those assets? Do we have similar conditions here? If not,
could we create them?
The REOA appears to assume that large, established employers in traded sector industries are the
primary drivers of job creation, and that cities need to focus their efforts on attracting these businesses
away from other areas. Assumed growth in this segment of the economy appears to be the basis of
the REOA recommendation to set aside large tracts of land to serve these employment needs, above
and beyond the need established by the employment forecast. However, research indicates that small,
start-up companies are the true creators of overall job growth, and that large, established firms shed
more jobs via layoffs and closures than they create via new hiring.
Lftlioe Central Oregon Office • 115 NW Oregon Ave #21 • Bend, OR 97701
s (541) 719-
8221 • fax (866) 394-3089
Page 3
Economic development literature that I have located generally recommends nurturing the strengths or
assets that already exist in an area, rather than attempting to fundamentally change the employment
base. For example, the International Economic Development Council's guidance on business
retention and expansion explains that "real job growth over time comes from local business
expansion." 1 Research since the 1970s shows that most new jobs come from the growth of small
businesses that already exist in the community.2 In light of this research, the new concept of
"Economic Gardening" is beginning to gain significant popularity in economic development circles:
regions should establish programs to nurture existing, growing businesses. Littleton, Colorado is one
example. It has added 15,000 jobs to a town of 40,000 since 1987. Its history can be found at
hqp://www.littleton-gov.org/bia/economicgardenin .
These trends apply both locally and nationally, and in both good and bad economic conditions. This
table from the Kauffman Foundation report titled "The Importance of Startups in Job Creation and
Job Destruction" shows that for all but seven years from 1977 to 2005, existing firms suffered net job
losses, while smaller start-ups grew jobs:
Table 2:
U.S. Job Growth at Startups
versus Existing Firms, 1977-2005
1977
t •
3,678 254
i f
505,053
1978
2 389 561
1,584,463
1979
2,839,666
1,143 865
1980
2,493 488
-1,615,875
1981
3,126 098
-2,271,818
1982
2,759,993
-2,554,516
1983
2,235 799
-4,227,716
1984
2,558 051
1,994,505
1985
2,878 640
-132,860
1986
3,036,472
-663,117
1987
3,261050
-2,060,647
1988
2,988 404
169,818
1989
2 878 562
-572,196
1990
2,919,266
-458,161
1991
2,666,705
-4,008,737
1992
2,802,951
-2,341,570
1993
2,623,685
-888,863
1994
2,902,461
-1,142,396
1995
2,935,062
710,181
1996
2,953,276
-1,193,941
1997
3,059,236
-246,371
1998
3,455,186
-130,450
1999
3,220,463
-744,582
2000
3,086,508
524,335
2001
2,890,248
-2,397,512
2002
3,223,919
-5,021,578
2003
3,125,422
-1,067,903
2004
3,116,725
-1,226,832
2005
3,569,440
-1,088,343
Source: Business Dynamics Statistics, recunfigured by
Tin) Kane, The Kauffman Foundation.
1 See http://www.iedconline.org/?p=Guide_BRE.
2 See Richard Greene, "Job Growth in Private Industry," Monthly Labor Review, September 1982, critiquing the work of
David Birch the MIT researcher who was first able to demonstrate statistically that job growth comes from small existing
firms, not from importinglarge external firms. Additionally, the article compares Birch's work with other more recent
studies attempting to replicate his work with other data.
1000 Central Oregon Office • 115 NW Oregon Ave #21 • Bend, OR 97701
friends (541) 719-8221 • fax (866) 394-3089
o/Oreglm
Page 4
In addition, the larger a firm is, the more likely it is to shed more jobs than it creates. The following
table is taken from the draft REOA and covers our four-state region:
rIGURE c4: DIRTHS, UEATHS, UPANSION & LONTRACTION OF FIRMS, 2006-20U7
Initial year establishments
Change in establishments
Percentchangein establishments
Establishment births
Establishment deaths
Establishment expansions
Establishment contractions
Percentchangein establishments due to births
Percent change in establishments due to deaths
Initial year employment
Change in employment
Percent changein employment
Change in employment due to births
Change in employment due to deaths
Change in employment due to expansions
Change in employment due to contractions
Percent change in employment due to births
Percent change in employment due to deaths
Percent change in employment due to expansions & births
1,067,847
469,155
172,870
109,832
112,019
51,354
152,617
30,002
14,386
2,955
1,882
4,423
3,175
3,181
28%
3.1%
1.7%
1.7%
33%
6.2%
2.1%
156,065
92,869
16,242
9,816
12,751
6,771
17,616
126,063
78,483
13,287
7,934
8,328
3,596
14,435
298,061
98,603
52,935
37,671
41,205
17,966
49,681
296,885
65,083
64,334
47,564
49,639
20,493
49,772
14.6%
19.8%
9.4%
8.9%
11.4%
13.2%
115%
11.8%
16.7%
7.7%
7.2%
7.4%
7.0%
9.5%
18,258,562
970,374 1,124,249 1,406,925
3,444,532 2,756,375 8,556,107
37,174
179,815
31,231
2,741
-43,809
-76,264
-56,540
0.2%
18.5%
2.8%
0.2%
-1.3%
-2.8%
-0.7%
1,176,589
162,490
101,728
110,507
234,975
173,062
393,827
.1,031,368
-133,995
-82,878
-93,033
-192,320
-134,396
-394,746
1,918,836
234,651
147,836
154,902
334,050
252,161
795,236
-2,026,883
-83,331
-135,455
-169,635
-420,514
-367,091
-850,857
6A%
16.7%
9.0%
7.9%
6.8%
6.3%
4.6%
-5.6%
-13.8%
-7.4%
-6.6%
-5.6%
-4.9%
-4.6%
17.0%
40.9%
22.2%
18.9%
16.5%
15.4%
139%
SUUMU; U5 Gen5u5 Bureau, 5tafistics of US Businesses
Comparing the "Change in Employment" rows shows that the smallest firms gained 18% during
2006-2007, stepping down from there to firms over twenty employees, which had a net loss of jobs.
Note that existing 1-4 employee firms gained 234,651 jobs due to expansion, yet lost only 83,331 due
to contractions. Compare this to the hundreds of thousands of jobs that were lost to contraction in
firms over ten people in size, beyond those gained due to expansion, even during the favorable
economic conditions of 2006 and 2007.
Given this research, and the fact that the REOA acknowledges that the local trend is for small
businesses, the REOA should explain why central Oregon should be seeking to change this trend,
rather than reinforce it.
At the outset this REOA looks impressive because of its size and cost. It states over and over that
large employers need large lots. The implicit assumption is that if we have the lots, the large
employers will come. But that assumption is not supported in the facts and analysis. The report
points out that new companies have located on large lots in and around the Portland region, but that
does not prove that the same or similar companies would have located here if we only had the land.
1000 Central Oregon Office • 115 NW Oregon Ave #21 • Bend, OR 97701
friends (541) 719-8221 • fax (866) 394-3089
of Ore~m
Page 5
Portland has numerous assets that central Oregon lacks such as the education level of its workforce,
several colleges and universities, interstate access, an international airport, and an international
shipping port. Some of those assets likely made a difference in the decisions to move to Portland,
rather than Bend, Prineville, or Madras.
1000 Friends supports efforts to achieve regional cooperation on land use decisions that improve
central Oregon's economic outlook more than any smaller jurisdiction could have achieved alone. A
more robust analysis might reveal opportunities to create regional economic growth greater than
historic economic growth. It's just that this document fails to do it.
I look forward to working closely with this group to make the land use system support economic
growth in our area. Please feel free to call if you have any questions.
Sincerely,
Pam Hardy
Staff Attorney & Central Oregon Advocate
Lfriends Central Oregon Office • 115 NW Oregon Ave #21 • Bend, OR 97701
(541) 719-8221 • fax (866) 394-3089
n
Page 6
business
or e s
business grows
May 19, 2011
Nick Lelack
Deschutes County Development Department
1300 NW Wall Street
Bend, OR 97701
Re: Central Oregon REOA
Dear Nick:
Business Oregon recommends that the findings of the Central Oregon Regional Advisory
Committee (RAC) should be formally adopted by the participating communities and the
Land Conservation and Development Commission.
The completion of this study and the implementation of its findings by the communities of
Central Oregon should prove to be a major step forward in the provision of large-lot sites
for potential employers, as well as family-wage jobs to its citizens. Our recommendation
for adoption is based on the following:
1. The methodology of the Regional Economic Opportunity Analysis (REOA) is
correct in its targeted approach to current industry trends, site selection
considerations, and land entitlement issues.
2. The REOA is correct in its recognition and analysis of the regional context in
which all high-value industrial recruitments take place.
3. The REOA is correct in the narrowness and the economy of its mission and
findings: the identification of a limited number of high-value locations to serve
the large-lot needs of a region over a short and long tern planning horizon.
Methodology: The methodology of the study follows best practices in economic
development with its focus on a specific cross-section of industry and a specific land need.
This process is consistent with Oregon Business Development's Key Industry strategy,
which identifies industries that are considered to be globally competitive in Oregon.
Further, industry identifications are made in a number of exhibits and summaries that cite
recent large-lot placements across the state and the nation.
The focus on sites is an important one and is a welcome approach. Site selectors focus on
narrow site requirements and regional inputs that meet specific needs. These needs vary
significantly from employer to employer. While some employers may focus on labor force
considerations, others may be more concerned with sites with superior water treatment,
775 Summer St, NE, Suite 200 • Salem, OR 97301-1280
503-986-0123 • fax 503-581-5115 • TTY 800-735-2900 • www.oregon4biz.com
power capacity, or needed redundancy in telecommunications. Further, other employers
may be focused on avoidance factors, as their operations may not be compatible with
nearby residential and commercial uses`.
The consultant was correct in deriving a methodology for gross land demand in the large-
lot segment. It is our experience that these exercises are imprecise (it is hard to forecast 5
years in the future let alone 20), but can be used for consideration of scale and
appropriateness. The consultant used firms with more than 500 employees as a `general
proxy' for large-lot demand. This is a very conservative assumption for multiple reasons.
First, firms with 500 employees are well within the range of what is considered small
business. The U.S. Small Business Administration defines small manufacturing businesses
as having a maximum between 500 and 1,500 employees and small wholesaling to have
between a 100 and 150 employeesz. Facilities in these employment ranges for
manufacturing and small wholesaling can exceed the 50-acre threshold. Second, many of
the large-lot employers in the state and the country start at levels well below 500
employees and ramp-up production and employment over a period of years and even
decades. Third, highly efficient, automated and capital intensive industries are producing
more product with fewer employees. Since 1975, U.S. inflation adjusted manufacturing
output has more than doubled while employment in manufacturing has shrunk by more
than 30%3.
The Urban Land Institute, a well respected organization in real estate, sustainable
development and land use, has specifically deemphasized employment growth as a
determinant of the demand for industrial space in its leading publication on real estate
market analysis: "Unlike office demand, the need for most types of industrial space is
difficult to determine using employment projections. Most industrial uses generate
comparatively few jobs per square foot of leasable area, and space needs have little to do
with changes in the number ofjobs in production or distribution businesses. i4
The consultant was correct to cross-check his findings from the admittedly blunt
`employment context' with economic development professionals, at the state and local
level, who work with businesses and real estate concerns on a daily basis. Those methods
are included in the REOA and were appropriately blended with the gross land demand
methodology mentioned above. Further, ample supporting evidence was provided,
including actual industry recruitments in Oregon and Southern Washington (Figure 20),
Recent Major Target Industry Placements (Figure 21), Industrial Development Profile
Matrix (Figure 23). Finally, a balanced account of the strengths and challenges associated
with large lot development was presented for each of the participating counties.
i All of the factors mentioned above are also incorporated into the Governor's Shovel Ready Industrial Site
Certification Program.
Source: hup://www.sba.gov/content/what-sbas-definition-small-business-concem
3 Federal Reserve. U.S. Bureau of Labor Statistics
4 Real Estate Market Analysis Methods and Case Studies, Second Edition, U LI Press
Regional Context: Regions are considered to be more essential to site selection than
specific towns or communities for a variety of reasons. Most large employers count on
labor sheds for workers that extend beyond the city of origin. The broad range of skills and
backgrounds needed to fulfill the needs of the largest and most sophisticated
manufacturing, research and warehousing facilities are not frequently met by a single
community. Further, needed educational programs are usually met through regional
college and community college systems. Mobility considerations, an increasingly
important supply chain factor, are also provided on a regional basis as the major transfer
points between ports, airports, highways, and rail systems are usually developed with a
regional service area clearly in mind.
The regional focus on the implementation of the plan should also prove to be a substantial
economic advantage. Regional decision making around site selection, infrastructure
financing and marketing will all be viewed as assets by recruiters and potential users.
Findings: A readily available and developable inventory of six large sites in at least three
separate jurisdictions will provide for some diversity in locations and features in order to
meet the highly individualized needs of prospective industries. This is a modest
recommendation for a region the size of Central Oregon and should be the region's first
priority. A further recommendation to plan for a long-term inventory of 17 sites in five
communities is also reasonable given Central Oregon's potential for long-term growth.
The mechanisms for providing these sites should be thought over carefully, in order to
insure a consistent level of short-term competitive sites.
Having multiple sites in multiple communities increases the chances of meeting the needs
of a specific employer and is an essential component of any 20-year inventory. One
employer might find a northerly Portland-facing location in Madras as a perfect fit, while
another employer might find a Southern, more California facing, location in La Pine to be
more appropriate. The identification of sites in both Redmond and Bend are essential, as
these are the two largest and most recognizable communities in the region. Prineville is
quickly raising its profile as a center for new industry with its recruitment of Facebook and
its certification of three industrial sites, with one more pending. Further, these sites are
likely to have differing site-specific attributes as they relate to labor force, transportation,
utilities, and avoidance issues that employers will seek out for highly individualized
reasons.
In summary, this is a state of the art approach for identifying the land needs of industry. It
recognizes the targeted and diverse set of regional and site-specific factors that traded
sector large-lot users require. A regional large-lot strategy benefits a variety of businesses
and we are confident that the very capable communities in the three county region can
focus on multiple priorities, including those of large and small business whether they are
existing or new, locally grown or based in another state or country. This effort should
become a model for the state, moving towards a land provision model that encourages land
efficiency and economic growth through a strategic emphasis on industry analysis, local
capacity and regional cooperation.
Sincerely,
]c.(+f
Michael J. Williams
Oregon Business Development, Industrial Lands Specialist
Master of Regional Planning
Adjunct Professor, Portland State School of Urban Studies and Planning
c: Land Conservation and Development Commission
JOHNSON REID
LAND USE ECONOMICS
May 31, 2011
Nick Lelack
DESCHUTES COUNTY DEVELOPMENT DEPARTMENT
1300 NW Wall Street
Bend, OR 97701
SUBJECT: Response to May 17th Letter from 1000 Friends of Oregon Relating to the Central
Oregon REOA
Dear Nick:
This letter responds to a May 17th letter received from 1000 Friends of Oregon as it relates to the
Regional Economic Opportunities Analysis (REOA). The letter was drafted by Pam Hardy, who was also
active in the advisory committee that assisted in the development of the REOA. I have structured my
response to parallel the aforementioned letter, and have tried to address the range of substantive
issues raised.
GENERAL COMMENTS ON THE REOA
Strengths and Weaknesses not adequately considered
• Ms. Hardy claims that the strengths and weaknesses of various areas were not
adequately considered in the REOA. As an example, she cites issues such as the
relative percentage of the population with college degrees in Bend v. Madras, and the
potential impact that may have on the two jurisdictions' relative attractiveness.
I would respond to Ms. Hardy's contention on multiple fronts. First of all, the point of
the Regional approach in Central Oregon was to recognize that the individual
communities worked cooperatively as a largely cohesive economic unit, with business
and commuting patterns reflecting this relationship. As a result, the labor force was
seen as mobile within the region. The study does not make a distinction within the
region as to which jurisdiction will be most viable for certain employment types, but it
does outline the relative strengths and weaknesses from an economic development
perspective of the constituent jurisdictions.
In addition, the identified target industries reflect those with locational needs
consistent with the Central Oregon region. The targeted industries have been
deemed as the most likely to locate in the region by both Business Oregon and
Economic Development for Central Oregon (EDCO), a finding reinforced by the
subsequent research done by Johnson Reid.
316 SW Washington, Suite 1020 Portland, OR 97204 503/295-7832
.0
Large Lot Employers
Ms. Hardy feels that the case is not made that large lot employers create a strong and
thriving economy. We would agree that attracting these types of employers is not a
necessary condition or alone enough to create a "strong and thriving economy". The
intent of the technical advisory committee in developing the vision statement was to
state a desire to maintain this type of inventory. It was perceived by the group to
represent an additional tool to broaden the region's economic attractiveness, but by
no means to represent the entirety of their economic development efforts.
III. Lot Supply Relative to Other Communities
• The newest version of the REOA has addressed many of Ms. Hardy's comments
regarding the ability of smaller cities to attract large employers. As outlined in
Appendix B, we have seen a number of similarly sized or smaller jurisdictions have
considerable success in attracting large firms.
IV. Link between REOA and Population Projections
The critique points out that individual jurisdictions within the region have population
and employment forecasts already in place, and incremental increases in employment
will entail employment growing faster than population. While population and
employment growth projections are expected to be coordinated, they do not have to
be synchronized. Central Oregon as a region has had a consistent disconnect between
population and employment numbers. Between 2000 and 2010, Central Oregon
added 47,000 residents, reflecting a 31% increase. During that same period, covered
employment in the region increased by 5,521 jobs, or 9%. Due to the high percentage
of retirement and second homes in Central Oregon, the relationship between
population and employment has historically been unusually weak.
The magnitude of any marginal shift in employment related to the limited number of
sites identified through the REOA is not particularly significant relative to the overall
employment needs in Central Oregon. If the inclusion of these lands increases
employment in the region, population numbers can be adjusted commensurately if
the region sees fit.
V. REO assumes that large, established employers in traded sector industries are the primary
drivers of job creation.
As noted previously, the REOA does not assume that large employers are the primary
drivers of job creation, although we would maintain that traded sector industries are
primary drivers. The REOA's findings on large lot industrial demand reflect that
accommodating these types of users reflects a reasonable component of an economic
development strategy. As outlined in the REOA, these types of users are actively
seeking locations, and Central Oregon to a large extent has been unable to compete
effectively for this type of industrial activity.
PAGE 2
We would agree with 1000 Friends research on "economic gardening". This concept
is hardly new, and simply reflects a semantic if not substantive shift in economic
development efforts. Start-up firms are an important component of economic
growth, and have been for many decades. While larger firms in aggregate did lose
jobs, it is important to recognize that many large firms expanded considerably during
the period outlined in the 1000 Friends letter, and that many of the start-ups were
established to serve the larger firms.
• Again, the REOA does not diminish the importance of small, start-up firms. What it
does do is note that these firms represent only a portion of the spectrum of firms, and
a balanced economic development program would provide for these types of firms as
well as larger industrial firms. The two categories are complementary, not
competitive.
VI. Central Oregon is not the Portland Region.
We readily recognize that economic development opportunities in Central Oregon will
be fundamentally different than those in the Portland metropolitan area, and have
made efforts to reflect this in the REOA. As part of this effort, we recruited extensive
participation by industrial recruiters from Business Oregon and EDCO, as well as
including Larry Pederson of IronWolf on our team. The input of these participants was
invaluable in generating a list of viable target industries specific to Central Oregon, as
well as documenting their specific needs.
In summary, we believe that the comments provided by 1000 Friends have been either substantively
addressed by recent edits, or reflect a misunderstanding of the work and findings. The large lot
industrial demand outlined in the REOA is intended to address the potential for exogenous industrial
opportunities that the region is not currently competitive for, and not to diminish the more general
need to appeal to a broad spectrum of firm types and sizes. During the preparation of this report we
consistently sought the best available information from the most experienced practitioners, and the
findings of the REOA are reflective of this input. The targeted industries are regionally-specific, their
requirements well documented, and represent viable economic development opportunities for the
region.
Sincerely,
Jerry Johnson
Principal
Johnson Reid, LLC
PAGE 3
1 =1 44 ECONOMIC DEVELOPMENT
FOR CENTRAL OREGON
June 3, 2011
Nick Lelack
Deschutes County Planning Department
1300 NW Wall Street
Bend, OR 97701
Dear Nick,
I would like to respond to a letter submitted to you regarding the Central Oregon Regional
Economic Opportunities Analysis (REOA) by 1000 Friends of Oregon dated May 17, 2010. (I
believe the letter's author intended the date to be 2011.) As a member of the REOA over the past
nine months, my first comment is to point out that the group is comprised of every community
development and top planner for the cities and counties in the Central Oregon area. These are our
local land use experts working day-by-day in the field. None appears to share the view, position or
perspective expressed by the letter.
Generally, I found the letter relatively hard to follow from one subject to another and some were
covered in the same paragraph. Many of the points made within the letter:
■ do not pertain to the task at hand, namely to determine if a shortage of large acreage
industrial land is a hindrance to overall economic development and diversification efforts,
■ are focused on economic development strategy, not economic opportunities (and uses
references of relatively simplistic or "in vogue" economic development concepts),
■ attempt to insert 1000 Friends subjective statements about specific industries and even
companies into what should be a part of the REOA methodology, and
■ clearly comes from a perspective that favors the status quo for our current land use system
rather than the innovation.
This letter is an attempt to coherently address the major concerns raised by 1000 Friends, not in the
order cited in the letter, but by category.
Status Quo
The first few pages attempt to make a case that existing land use law provides all the tools necessary
for communities to meet large and small industrial development needs. If this were the case, the
DLCD grant for this project would be a complete waste of valuable time and resources. The
implication that large industrial lot needs could somehow be met using existing land already inside
Urban Growth Boundaries (UGBs) or vacant buildings is simply wishful thinking. If history has
provided any lessons for Oregon communities the past decade they would be that there is a natural
propensity for industrial land within UGBs to be converted from industrial zoning to other uses.
Most Central Oregon communities have already completed inventories of industrial land and for
some there are virtually no options or they are extremely limited. Similarly, while considerable
aggregate inventory currently exists for existing industrial buildings in the region, they consist mostly
of small footprints, problematic adjacent zoning and uses, older structures - none can meet the need
of a large user even if consolidation was physically or economically feasible.
Page 2 of 4 1000 Friends Technical Response June 3, 2011
The argument also is made that the solar equipment manufacturing industry in Oregon has been
able to grow, adding companies and jobs within existing UGBs. While it is true that former
semiconductor manufacturing facilities in Oregon have been a compelling asset to the industry, the
simple fact remains that locating such industrial developments outside UGBs is not legal in this
state. Given the sheer shortage of rural industrial land inventory and the requirement of companies
to develop their own onsite water and wastewater treatment, we should expect to see nearly 100% of
any industrial sector to grow within UGBs, and more specifically within the city limits of
municipalities. This again assumes that the status quo, in the face of persistent demand, is adequate
to deal with large lot users. This assumption is dubious.
The real question really remains: how many companies needing large industrial-zone acreage
bypassed Oregon because of the widely acknowledged dearth of such properties? The REOA
attempts and, we believe succeeds, to quantify this inherently difficult metric.
Subjective Commentary
EDCO finds it very interesting that 1000 Friends have boldly made a value statement not only about
an industry communities in the region have selected to target, but actually a company that located
recently in the region. To this point, it is clear that the community in which that company located is
pleased with the result. Contradicting their own statement claiming that "There is no analysis of
whether any of the strengths or weaknesses would actually cause any large employer to locate in
Central Oregon" yet names that large employer, Facebook, that purchased 125 acres. Clearly, there
is very recent precedent, there is demand and there will be more. Apparently, because 1000 Friends
does not "like" the volume of land or utilities used by the facility or industry in general, this is not a
relevant example.
Economic Opportunities Analysis Scope & Economic Development Assumptions
The implication that a community's large industrial lot needs - capacity to accommodate current or
future opportunities - can be met via improved education of its residents is entirely out of the scope
of the REOA. A case is also made that economic development strategies are not adequately
outlined as a part of the work to be completed by REOA. The purpose of the study was not to
provide an A-Z roadmap for economic development and the many and complicated steps needed to
achieve success for a community, the region, or for any specific industry. As a point of clarification,
these strategies are already in place. The scope of the REOA is to determine if a shortage of large
acreage industrial land is a hindrance to economic growth and diversification efforts. If so, the
REOA is to recommend steps to address this deficiency.
Comments made in the letter infer that attraction of large industrial lot users is the only strategy of
local and regional economic development efforts. Nothing could be further from the truth.
Efforts to help existing companies (large and small) to grow or sustain their employment have been
in place for more than a decade. Efforts to help start-ups and early stage companies are also solidly
established. Local and regional recruitment efforts to attract new firms do not focus only on large
employers or large facilities. Quite the contrary! A majority of time, money and effort is directed to
smaller operations - most of which may never have need of a large industrially-zoned lot. This has
been documented in presentations by the consultant and within the REOA. Most importantly, the
REOA is not a prescription of how to do economic development as 1000 Friends implies.
EDCO understands that most jobs come from existing companies, which is why it dedicates more
than 50% of its efforts to fostering entrepreneurship and the retention/ expansion of existing traded-
sector companies. Recruitment of companies in new and existing industries, however, is an
EDCO.109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 •800-342-4135 • www.edcoinfo.com
Page 3 of 4 1000 Friends Technical Response June 3, 2011
important component of any successful economic development program and diversification
strategy. New companies bring a different mix of professional and technical talent to communities
that can spawn other businesses and technologies. Intel's expansion to Hillsboro in the late 1970s is
a good example in Oregon. At that time it was a recruitment project, but in the subsequent decades
this global leader in semiconductor technology and production spun off more than 100 companies
(many small) that significantly contributed to the overall diversification of Oregon and of course
many well-paying jobs.
The letter also mistakenly tries to make the case that that large employment is generated by large
industrial lot users, which necessitates the amenities and resources, such as higher education found
only in larger metro areas. With several industries, this is not the case. While a typical
manufacturing company needing 50-100 acres and building 200,000 - 1,000,000 square feet would
employ thousands of people, this does not hold true for the data center industry, warehousing and
distribution industry and certain high technology manufacturers such as are found in electronics and
the renewable energy industry (i.e. polycrystalline refinement). In fact, it is more likely that
companies in these sectors will actually seek less populated areas to locate operations because of
several cost factors including land, transportation capacity, utilities and labor.
Furthermore, there should be no assumption, as is made in the 1000 Friends letter, that location of
these operations, on a per company basis, generates a large jump in economic or population growth.
Similarly, population growth rarely determines where large facilities are located.
A case is made in the letter that small employers create jobs and large employers (a false premise for
large industrial lot users) shed jobs. Research on this topic is far from conclusive. An obvious
question raised by this hypothesis is: What happens to start up activity in the absence of large
employers? That is to say, if you have a dearth of larger employers, from which a disproportionate
number of small ventures spring, what is the corresponding rate of new or small company job
growth. Would the Seattle area have over 1,000 software firms if Microsoft were located in New
Mexico? The fact remains that the "who creates jobs" argument misses the point of the REOA.
Without places for larger employers OR industries that need large acreage, Central Oregon (and the
state overall) implicitly forces out these operations. A real world example of where this is
happening is Boulder, Colorado.
The Boulder area is a hotbed for startup activity, research and development and technology transfer
from area universities, anchored by the University of Colorado. But strict planning controls in
Boulder force out the most successful companies because there is literally no place for companies of
size to locate. Some find homes in neighboring communities, others leave the state altogether. This
trend is documented in a 2010 study by Headwaters Economics of Bozeman, MT that specifically
compares peer communities in the western U.S. to Central Oregon (Deschutes County).
Toward the end of the 1000 Friends letter, it makes reference that Central Oregon simply can't
compete with urban areas for large projects. The fact is that we do compete on a regular basis with
areas with much larger populations including Boise, Spokane, Seattle (and surrounding communities)
Portland, Reno and other small/midsize metros that offer similar lifestyle attributes and mix of
business location factors. Often, Central Oregon is competing for projects where owners or
managers are not looking for a dense urban area for their operations where the cost of land is
expensive, transportation routes too congested, labor costs and competition are high.
EDCO. 109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 •800-342-4135 • www.edcoinfo.com
Page 4 of 4 1000 Friends Technical Response June 3, 2011
Lastly, the letter reiterates the position of 1000 Friends of Oregon that the REOA is lacking and that
their organization supports regional cooperation and land use decisions that foster economic
growth. The proposal outlined in the REOA to create an inventory of six sites initially region-wide
that would be exclusive for large-lot users is innovative, does not dismantle Oregon's land use
system and provides some options and alternatives to attract employers to the region. It also
enjoys the unified support of city and county planning directors, Oregon's economic development
department, and EDCO. To say the least, it is disappointing that the work encompassed by the
REOA garnered so little support and so little constructive feedback from 1000 Friends. Still, now
is the time to move on and move forward. With unemployment rates in Central Oregon more than
double state and national averages, action, not rhetoric or preservation of the status quo is needed.
Respectfully,
AP- Roger J. Lee
Executive Director
EDCO. 109 NW Greenwood Avenue, Suite 102• Bend, OR 97701 •800-342-4135 • www.edcoinfo.com
Central Oregon
Association of
REALTORS_
2112 N.E. 4th Street • Bend, OR 97701
(541) 382-3452 • FAX (541) 383-3020
www.centraloregonrealtors.com
June 10, 2011
Nick Lelack
Planning Director
Deschutes County Community Development Department
1300 NW Wall St.
Bend, OR 97701
Dear Nick,
The Central Oregon Association of REALTORS® expresses its support for the Regional
Economic Opportunity Analysis and urges the Land Conservation and Development
Commission to approve the report's findings and recommendations. We also encourage
all of the other local governments in the region to cooperate with each other and
Deschutes County in this regional effort to implement the REOA's recommendations.
The economic crisis that has gripped Central Oregon since 2007 is largely the result of a
rapid decline in the real estate development and construction industry and the subsequent
collapse of home prices. Our region has long been subjected to economic disruptions
caused by our overreliance on a few industries. Without a more diversified economy this
pattern of growth and collapse will continue, at some point permanently tarnishing our
high quality of life image. It is vital that state and local governments act to improve our
economic competitiveness while there is a rare political consensus regarding this problem
and its severity. To that end, the REOA represents fresh thinking and an innovative
approach that has the potential to improve Central Oregon's economic competitiveness,
create jobs and put people back to work.
The REOA points out Central Oregon's natural disadvantages that impact our economic
competitiveness. Unfortunately there is little we can do about those factors. More
importantly the REOA does an excellent job of identifying the obstacles to economic
development posed by the state's complex and burdensome land use system.
1. Economic development trends and patterns change within the 20-year planning
period enshrined in land use law.
2. Time is critical to the private sector. Long time periods for infrastructure
development and transportation plan updates are significant barriers to economic
development.
® REALTORD - is a registered mark which identifies a professional in real
estate who subscribes to a strict Code of Ethics as a member of the
NATIONAL ASSOCIATION OF REALTORS.
REALTOR
3. The immediate availability and diversity of sites is more important to businesses
than a community's 20-year supply of land. Economic development requires a
real inventory of quality sites at any given time to meet the private sector's needs.
It is clear from the REOA that Central Oregon's ability to meet the needs of businesses
and to do so rapidly is essential to our competitiveness. Unfortunately, our top down,
command and control land use system lacks the flexibility and responsiveness that we
need to attract and retain manufacturers and other employers needing large tracts of land.
If the system worked properly we would currently have an adequate supply of large lots
for industrial development.
One of the criticisms of the REOA by 1000 Friends of Oregon is that a local trend toward
small business development should be the focus of our economic development efforts.
Perhaps they missed the main point of the document: one of the principle reasons for this
trend is the lack of shovel ready large sites suitable for industrial development. The
REOA identifies a real problem with our economic competitiveness and proposes a
targeted solution. A comprehensive approach to economic development involves
accommodating all types of businesses, large and small. Purposefully excluding large
employers from our region will prevent us from diversifying our economy.
The uncertainty created by our land use laws and regulatory policy is a deterrent to
private sector investment and growth. As the city of Bend's experience demonstrates, the
UGB expansion process is lengthy, expensive and unpredictable. Any community that
attempts a land use action in the vicinity of a state highway faces the challenge of the
Transportation Planning Rule. In addition to those bureaucratic barriers to expeditious
land use actions, cities and counties are likely to face numerous and protracted legal
challenges from powerful anti-growth pressure groups taking advantage of Oregon's very
low bar for appeals. The recent example of Solopower moving to Portland explicitly to
avoid a political battle with local activists in Hillsboro demonstrates the problems a
community may face in trying to land a large employer providing family wage jobs.
A new process is needed. There is no existing model to rely on because Oregon's land
use system has prevented necessary land from being available for large lot industrial
development when opportunities arise. DLCD officials have asked us, "What would you
do if you could do things differently?" They've asked us to "innovate" for them. They've
stated they want this new concept to succeed. The REOA is a reasonable proposal to do
things differently, to innovate. It will not solve all of our problems, but it is a critical part
of our future economic success. If Central Oregon continues to be burdened by a nearly
forty year old land use system that is not responsive to the economic conditions of today,
much less tomorrow, then our quality of life will continue to erode.
For the REOA to have a positive impact on our economic competitiveness it must
provide flexibility to local governments in identifying and securing large sites for
potential industrial development. Eligible sites must be "shovel ready" immediately. A
20-year land supply is not real inventory, and a false inventory is worse than having
none.
2
Requirements that eligible sites be adjacent to UGBs also will limit the effectiveness of
the program. For example, areas east of Bend in the vicinity of the airport and/or sewage
treatment plant are capable of being served by utilities and would otherwise be candidates
for industrial development, but are not adjacent to the city's UGB. We also need to
consider both public and private land for eligibility.
The REOA also will be less effective if sites adjacent to city boundaries are required to
be brought into a UGB. There should be flexibility to allow sites to remain in the county,
perhaps under a new zoning designation. If local governments wish to bring eligible sites
into their UGBs they should be able to do so under an expedited process, whether or not
the sites are in an urban reserve. If cities are required to go through the normal UGB
expansion process this program will not work in a timely fashion. The process is too
cumbersome and subject to lengthy legal battles that will deter potential employers.
If the real goal is job creation in a timely manner, then Central Oregon needs LCDC's
blessing and support for an expedited process. The future implementation of this regional
large lot industrial program may take multiple paths. The first would be pursuing
necessary plan changes to create a new large lot industrial (LLl) zone in county
jurisdictions, not necessarily within a city UGB. The second would be through a
streamlined UGB expansion process for this new zone. In practicality, with only a few
publicly-owned possible exceptions, eligible sites do not exist within our existing UGBs;
and if they do, changing to the large lot industrial zone would be a downzone and
therefore economically unlikely.
We appreciate the opportunity to work on this project and COAR looks forward to being
involved with the implementation and site evaluations going into the future.
Sincerely,
J
William Robie
Government Affairs Director