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2013-39-Minutes for Meeting January 07,2013 Recorded 1/31/2013DESCHUTES COUNTY OFFICIAL RECORDS yJ NANCY BLANKENSHIP, COUNTY CLERK 1rd COMMISSIONERS' JOURNAL IIIIIIIIIIIIIIIIIIIIIIIIIIII 01/31/2013 08;24;08 AM 2013-38 Do not remove this page from original document. Deschutes County Clerk Certificate Page . =C- 1 Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org OF BUSINESS MEETING DESCHUTES COUNTY BOARD OF COMMISSIONERS MONDAY, JANUARY 7, 2013 Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend Present were Commissioners Alan Unger, Tammy Baney and Anthony DeBone. Also present were David Givans, Internal Auditor; Peter Gutowsky, Will Groves and Nick Lelack, Community Development; Scott Johnson and Thomas Kuhn, Health Services; and six other citizens. Chair Unger opened the meeting at 10: 00 a. m. 1. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT None was offered. 3. Before the Board was Consideration of Second Reading, by Title Only, and Adoption of Ordinance No. 2013-004, Amending Code (Internal Auditor). David Givans gave a brief overview of the Ordinance. BANEY: Move second reading by title only. UNGER: second. VOTE: BANEY: DEBONE UNGER: Yes. No. (Split vote.) Chair votes yes. Chair Unger did the second reading at this time. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 1 of 12 Commissioner DeBone said he feels that they are in a good position without this, and also have an outside auditor to watch over things. This gives more formality to the Internal Auditor position, but he does not support it in the way it is written. BANEY: Move adoption of Ordinance No. 2013-004. UNGER: Second. VOTE: BANEY: Yes. DEBONE: No. (Split vote.) UNGER: Chair vote yes. 4. Before the Board was a Public Hearing, and Consideration of First Reading, by Title Only, of Ordinance No. 2013-005, Approving Amendments relating to the Ambulance Service District Code. Chair Unger opened the hearing. Regarding potential conflicts of interest, the Commissioners had none to declare. No challenges were offered. Doug Kelly, Redmond Fire Department, and Thomas Kuhn of Health Services came before the Board. Mr. Kuhn said this was discussed with the Board at a work session previously. Mr. Kelly said he chairs the ASA Committee, and a need for these changes was determined. The Committee has about eleven members representing non- emergency transport. Other changes clarify language to comply with statute. Commissioner Baney asked why it is important to adopt this by emergency. Mr. Kelly said they took due diligence and does not feel it has to be done by emergency. Commissioner DeBone would like them to take the extra time. Being no other testimony offered, Chair Unger closed the hearing. DEBONE: Move first reading by title only. BANEY: Second. VOTE: DEBONE: Yes. BANEY: Yes. UNGER: Chair votes yes. Chair Unger conducted the first reading. The second reading will take place no sooner than two weeks from the first reading. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 2of12 5. Before the Board was Consideration of Approval of a New Behavioral Health Assessment Process in the Health Services Department. Scott Johnson and DeAnn Carr explained the item, regarding providing services to those people who need behavioral health care. The staff report explains they deal with about 25,000 people on the Oregon Health Plan plus others who are not insured or are under-insured. There needs to be a process to engage services as soon as possible. With a marked increase of people on the OHP, this is a challenge for all health care providers. They have been trying to refine their process to handle these cases more effectively. This is a matter that the Internal Auditor reviewed, and came up with a number of findings and recommendations. The new process helps to put these into place. Ms. Carr said that they want to allow for more immediate access to assessment and treatment, by reducing the number of steps. They plan to implement an evidence-based model similar to those being used elsewhere. This requires a dedicated team of highly qualified specialists who can react quickly. In order to coordinate a team like this, a strong supervisor is needed. They also have to work well with community partners and the CCO. It all needs to be customer friendly. Mr. Johnson stated that they hope to have four masters' level clinicians to be part of the team. They also need a dedicated supervisor to work full time with this team and other agencies and partners; this would be an additional position. He is mindful of the budget and cost increases, but they could use some reserves to solidly underwrite this plan for three years. Commissioner Baney thanked Mr. Johnson for this work. Quick treatment for clients is needed. She asked if there would be access available to those who are working S to 5; also, whether the ones who will take on this work have an existing caseload. Ms. Carr said that they have some part-time positions who are involved, and 4.5 FTE. This would allow two full-time positions. The third position is currently unfilled. They are looking at strong assessors, and the workload will be adjusted as well as possible. They will try to institute non-traditional hours as much as they can, but that affects building staff as well. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 3 of 12 The Health Services building will be the primary location, but they may end up at other locations eventually. They also will look at the potential of using technology for some consults. Chair Unger asked about contracting versus providing County services. Mr. Johnson said they need to find out what people need. They have a fairly large staff but also work with outside agencies. People will have a choice at the conclusion of the assessment. If it is not a highly specialized service, the customer may be able to identify another group and location to be used. Mr. Anderson stated that the County Administrator normally has the authority to approve this kind of change; however, he thought it would be a good idea for the benefits and services to be described to the Board. Also, they hope to report back on the success of the program sometime soon. Mr. Givans will be at Behavioral Health this spring to review what has been done and the steps taken in the process. BANEY: Move approval of the new Behavioral Health process. DEBONE: Second. VOTE: BANEY: Yes. DEBONE: Yes. UNGER: Chair votes yes. 6. Before the Board was Consideration of Signature of Order No. 2013-001, Accepting a Conservation Easement and Approving a Request to Add a Well on Property Subject to a County-Held Conservation Easement. Will Groves gave an overview of the Order. One use contemplated in the conservation agreement was for a well, providing that certain findings were made. He believes they are eligible for this well. The original easement would be upgraded to accept the previous Planner's signature and allow for the well. BANEY: Move approval of the Order, with the adjustment of the signature block. DEBONE: Second. VOTE: BANEY: Yes. DEBONE: Yes. UNGER: Chair votes yes. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 4 of 12 7. Before the Board was a Public Hearing and Consideration of First and Second Readings, by Title Only, and Adoption by Emergency of Ordinance No. 2013-001, Repealing Ordinance No. 2011-017, regarding Large-Lot Industrial Land Needs. Chair Unger read the opening statement and indicated that the hearing would cover this item and the next; both Ordinances. No Commissioners indicated there was a conflict of interest, and no challenges were offered. Peter Gutowsky provided an overview of the need for the Ordinance. He entered the case file into the record and included a letter of support from Redmond Mayor George Endicott. Mr. Gutowsky did a brief PowerPoint presentation at this time. (A copy is attached for reference) Mr. Lelack explained the reason for the emergency clause. With consensus of all of the parties except one, it is key to move this process forward so the cities can begin their work. Chair Unger said they have worked through this for about five years, and feel there is a good understanding of the issue. He asked for public testimony. Pam Hardy of 1,000 Friends of Oregon said it is good to be getting near the end of a long and difficult process. They believe that the settlement is good; not everyone got what they wanted, but it appears to be fair. They did a good job of drafting the settlement to take into account anticipations for the future. It will be easy to bring in new large lots if justified. This took some really hard work. The one thing that she feels was missed is the larger opportunity for Goal 9 conversations. Goal 9 requires they look at the region and larger trends nationally, and how to identify the most likely path to a prosperous area. She feels this did not happen. This originally started when Business Oregon and EDCO felt as if businesses are not coming here because of the lack of large lots. The REOA and Goal 9 process is supposed to allow for due diligence. The question is whether this is borne out by the data. The large businesses targeted are the ones who in recent years have been laying off people, while the mid- sized and small businesses are doing better. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 5of12 The other issue is that for the size of the area, they were requesting more large sized lots than any other region in the country. In looking at Portland, in more than twenty years they not used as many large lots as is being requested locally. She is not sure the evidence is correct. They never had a chance to talk about this, but are not planning an appeal. They recognize there are differences of opinion. There is good experience here saying that this is needed, but the data does not support that concept. They want to move forward in the best way possible in good faith. They hope the evidence is true. There are continuing concerns. A chart on Page 53 of the large lot analysis talks about infrastructure needs. The chart was developed after discussions regarding what kinds of businesses need what infrastructure. The only businesses needing large lots also need a population of 300,000 or more, or a seaport. Other infrastructure needs remained the same. But the numbers were adjusted to 200,000 or more and there is no mention of a seaport. It does not seem credible for a brewery that requires 20 acres might also need 200 acres. This chart might be used for planning purposes but the infrastructure might not be adequate. Some city may rely on this chart but find out later upgrades are needed. She knows how expensive sewer systems can be. It needs to be done right the first time. She recommended the analysis and IGA indicate this chart is not to be used for planning purposes. Another concern is the references to "short-term". According to the actual rule, the kind of land need under the DLCD rule is a twenty-year need, which is not short-term. She recommends the term "short-term" be changed, which would not affect the outcome. They are concerned that this term will conflict with the DLCD rule for a twenty-year need. This protects the integrity of the settlement. The last thing is a concern about the characterization of their perception of the settlement. They never disagreed about the regional partners working together to improve economic prosperity. They think this is a great idea. The only disagreement came up was in regard to the evidence. There will be a lot of taxpayer dollars being used on infrastructure, and maybe there is another way to bring prosperity to the area. In the long run, they will learn whether due diligence matters. They agree on the overall policy. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 6 of 12 She read a quote about conflict being an opportunity for intimacy. They have gotten to know each other a lot better and will work towards a better community. They all need to be better advocates of the quality of life 1,000 Friends is working towards. They want to make this a community where people will want to live. They have the best interests of the area in heart and hope for improved conversations in the future. Brian Meece of COAR (Central Oregon Association of Realtors), a stakeholder and intervener, read from a statement. He has been involved in this process for over two years. The issue is jobs. Although they favor moving ahead with the Ordinances, they are also disappointed with the outcome. The reason Portland does not have industrial lots moving is the same reason, they don't have any. There has been no way to create these lots in the past because of Oregon's broken land use process. He commended Deschutes County staff on their handling of adversity. The objective of the process was to streamline it. It has been forced back into a UGB issue and Goal 14 will still come into play; they are not done with appeals at this time. Archaic land use laws left the fox in charge of the hen house. In terms of need, development and job creation efforts have been hindered due to lack of industrial land. The needs they examined throughout the country shows that if they don't have enough selection, there won't be any progress. He thanked DLCD staff who taught them a lot of new words, but much was lost in appeals. They have a bureaucratic and political process that may stifle things. 1,000 Friends' activities have cost them a year. They are in support of the process but want the Board to know the barriers. The process would have worked well if it had not been forced into the UGB scenario. It will otherwise take years. From a market standpoint, cities will have to go through a UGB expansion. If there are industrial M-1 lots, no one will downgrade these to a large lot. The only way this would happen is to have these lots located outside the UGB. The sewer and airport are outside the UGB and the land between the city and those areas might work. They will unfortunately have to go through a UGB expansion first. They will continue to work and support the system, but hope this can be pushed forward. All they wanted to do was create job opportunities. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 7 of 12 Bill Robie, representing COBA (Central Oregon Builders' Association), encouraged the Board to move forward. As 1,000 Friends pointed out, the document is clear. Economic Development for Central Oregon and others indicate there is a need. They are worried mostly about double digit unemployment. A strategy of encouraging food trucks and boutique stores won't take the place of having large employers. This was specifically targeted at large lot users. This is about a need for this one kind of employer. The project justifies this. They are concerned about how effective it will be in the real world. It is a tool to use to help recruit businesses. The commercial brokers are often the first contact of businesses. All are aware of this need, but it cannot be filled. Whatever the problems, he wants all to move forward and put the negotiations behind them. Mr. Gutowsky said that he feels when it comes to evaluating sites within the UGB, the rule acknowledges if the cities have identified properties, this program does not replace the local need. These are committed already. The analysis and the land use process are not easy to expedite, but it should not be onerous to look at these sites. Later this month, staff will come back to the Board to ask whether they should provide technical assistance to Redmond to help them to get closer to addressing the need for these sites there. He believes this is achievable, and the County has the skillset to provide this assistance. Mr. Lelack agreed with Ms. Hardy that the first report was inadequate. The deficiencies were addressed. However, they believe the table on Page 53 is important to retain and those concerns have been addressed by the consultant. It is also important to keep the phrase "short-term". That is the whole reason for the work that was accomplished. The intent is six short-term sites that can be replenished over a period of ten years. Commissioner DeBone said this will be routed back to the UGB process. It sounds disheartening. Mr. Lelack said that is correct, and the cities would have to do a buildable lands process to review sites and what can be supported. Commissioner DeBone hopes the cities will look at this soon and support these efforts. Mr. Gutowsky said under Goal 14 if there is a specialized land need not filled within the UGB, they can go outside the UGB. It is designed to allow entitlement of UGB expansion. This process may be able to justify it. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 8 of 12 Chair Unger stated that a city needs to service the site with sewer and water, so it has to be within the UGB for this to happen. Laurie Craghead stated that they did a withdrawal for consideration of an appeal of the previous Ordinance, so that case is no longer at LUBA. 1,000 Friends said they will not appeal this. She asked about the comment regarding the characterization of policy and evidence by 1,000 Friends. Mr. Lelack said they have not characterized 1,000 Friends in any fashion. Mr. Gutowsky said that in the findings and analysis, they went to great lengths to make sure all partners were fully informed and all had an opportunity to suggest changes. They incorporated provisions that seemed reasonable and justifiable. They coordinated with them at length. Commissioner Baney stated that it might be a good idea for Ms. Hardy to point out the exact language that concerns her. Ms. Hardy said that in a number of places in the findings and the introduction to the analysis, there is a phrase that says the settlement consisted of policy concepts. Her concern is that her disagreement was not with the policy but the evidence. They see the nature of the settlement that they conceded they won't object to a lack of evidence, not against the policy itself. Commissioner Baney asked if this is a generalization. Nick Lelack read the wording from the Ordinance. Ms. Craghead said that this doesn't say that 1,000 Friends objected to the policy concepts. Commissioner Baney stated she understands their sensitivity. In the record there is enough testimony showing the position of 1,000 Friends, and it is understood that there is some concern regarding technical concepts. Commissioner DeBone appreciates the conversation and feels it is valuable. Both hearings were closed for Board deliberations. Chair Unger said that the first item is action to repeal the original Ordinance. The other deals with the adoption of an Ordinance after lengthy negotiations with parties to address economic needs. Much will be addressed again when cities try to adjust their UGB. The County needs to move forward so the cities can make progress. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 9 of 12 BANEY: Move first and second readings by title only of Ordinance No. 2013-001. DEBONE: Second. VOTE: BANEY: Yes. DEBONE: Yes. UNGER: Chair votes yes. Chair Unger conducted the first and second readings by title only, declaring an emergency. BANEY: Move adoption of Ordinance No. 2013-001, by emergency. DEBONE: Second. VOTE: BANEY: Yes. DEBONE: Yes. UNGER: Chair votes yes. 8. Before the Board was a Public Hearing and Consideration of First and Second Readings, by Title Only, and Adoption by Emergency of Ordinance No. 2013-002, Adopting an Updated Large-Lot Industrial Needs Analysis and Amending the Comprehensive Plan. Commissioner Baney said not everything has a scientific basis, but there is enough evidence in the record to show that this area needs an opportunity for small and large lot lands. This is a great success in regional cooperation. No one got all they wanted. There need to be tools in the toolbox to create jobs. This does not exclude Goal 9. It will provide opportunities for economic prosperity and they have to try. She does not know what businesses will come, or if they will fill every lot, but her job is to help move these efforts forward, and she feels it is a great compromise. Commissioner DeBone stated that they need to believe there can be something out there. Regional jobs will be very valuable and this will support UGB efforts when justified. He is excited to see closure. Chair Unger added that he hopes they continue to move forward so they can address whatever the future brings. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 10 of 12 BANEY: Move first and second readings by title only of Ordinance No. 2013-002. DEBONE: Second. VOTE: BANEY: Yes. DEBONE: Yes. UNGER: Chair votes yes. Chair Unger- conducted the first and second readings by title only, declaring an emergency. BANEY: Move adoption of Ordinance No. 2013-002, by emergency. DEBONE: Second. VOTE: BANEY: Yes. DEBONE: Yes. UNGER: Chair votes yes. 9. ADDITIONS TO THE AGENDA Commissioner Baney said that a citizen has inquired about reviewing the approved minutes of the December 17 meetings, so she would like to approve them at this time. BANEY: Move approval of the December 17 business meeting and work session minutes. DEBONE: Second. VOTE: BANEY: Yes. DEBONE: Yes. UNGER: Chair votes yes. Being no further discussion, the meeting adjourned at 10:40 a.m. Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 11 of 12 DATED this 0 J Day of 1~±~ 2013 for the Deschutes County Board of Commission s. Am~ (~I= Alan Unger, Chair Tammy Baney, Vice Chair ATTEST: Anthony DeBone, Commissioner Recording Secretary Minutes of Board of Commissioners' Business Meeting Monday, January 7, 2013 Page 12 of 12 Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org BUSINESS MEETING AGENDA DESC1 UTES COUNTY BOARD OF COMMISSIONERS 10:00 A.M., MONDAY, JANUARY 7, 2013 Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend 1. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT This is the time provided f or individuals wishing to address the Board, at the Board's discretion, regarding issues that are not already on the agenda. Please complete a sign-up card (provided), and give the card to the Recording Secretary. Use the microphone and clearly state your name when the Board calls on you to speak. PLEASE NOTE: Citizen input regarding matters that are or have been the subject of a public hearing will NOT be included in the official record of that hearing. 3. CONSIDERATION of Second Reading, by Title Only, and Adoption of Ordinance No. 2013-004, Amending Code (Internal Auditor) - David Givans, Internal Auditor Suggested Actions: Conduct second reading by title only; move adoption. 4. A PUBLIC HEARING, and Consideration of First and Second Readings, by Title Only, and Adoption by Emergency of Ordinance No. 2013-005, Approving Amendments relating to the Ambulance Service District Code - Thomas Kuhn, Health Services Suggested Actions: Conduct first and second readings by title only of Ordinance No. 2013-005; move adoption of Ordinance by emergency. Board of Commissioners' Business Meeting Agenda Monday, January 7, 2013 Page 1 of 5 5. CONSIDERATION of Approval of a New Behavioral Health Assessment Process in the Health Services Department - Scott Johnson and DeAnn Carr, Health Services Suggestion Action: Approve New Assessment Process. 6. CONSIDERATION of Signature of Order No. 2013-001, Accepting a Conservation Easement and Approving a Request to Add a Well on Property Subject to a County-Held Conservation Easement - Will Groves, Community Development Suggested Action: Approve signature of Order No. 2013-001. 7. A PUBLIC HEARING and Consideration of First and Second Readings, by Title Only, and Adoption by Emergency of Ordinance No. 2013-001, Repealing Ordinance No. 2011-017, regarding Large-Lot Industrial Land Needs Peter Gutowsky, Community Development Suggested Actions: Open public hearing, take testimony, and close hearing. Conduct first and second readings by title only of Ordinance No. 2013-001; move adoption of Ordinance by emergency. 8. A PUBLIC HEARING and Consideration of First and Second Readings, by Title Only, and Adoption by Emergency of Ordinance No. 2013-002, Adopting an Updated Large-Lot Industrial Needs Analysis and Amending the Comprehensive Plan - Peter Gutowsky, Community Development Suggested Actions: Open public hearing, take testimony, close hearing. Conduct first and second readings by title only of Ordinance No. 2013-002; move adoption of Ordinance by emergency. 9. ADDITIONS TO THE AGENDA Board of Commissioners' Business Meeting Agenda Monday, January 7, 2013 Page 2 of 5 PLEASE NOTE: At any time during this meeting, an executive session could be called to address issues relating to ORS 192.660(2) (e), real property negotiations; ORS 192.660(2) (h), litigation; ORS 192.660(2)(d), labor negotiations; ORS 192.660(2) (b), personnel issues; or other executive session items. FUTURE MEETINGS: (Please note: Meeting dates and times are subject to change. All meetings take place in the Board of Commissioners' meeting rooms at 1300 NW Wall St., Bend, unless otherwise indicated. If you have questions regarding a meeting, please call 388-6572.) Monday, January -7 8:30 a.m. Swearing In Ceremony - Elected Officials - Courthouse 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - Conference Call with Legislative Representatives 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, January 9 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Thursda Januqn~ 10 7:00 a.m. Joint Meeting with Redmond City Council, Redmond City Hall Monday, January _2_1 Most County offices will be closed to observe Martin Luther King, Jr. Day Wednesda Janu 23, 2013 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Monday, January 28 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Board of Commissioners' Business Meeting Agenda Monday, January 7, 2013 Page 3 of 5 Wednesday, January 30 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Monday, February 4 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, February 6 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Monday, February 18 Most County offices will be closed to observe Presidents' Day Wednesday, February 20 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Monday, February 25 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Wednesday, February 27 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) Board of Commissioners' Business Meeting Agenda Monday, January 7, 2013 Page 4of5 Monday, March 4 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) 3:30 p.m. Public Safety Coordinating Council Meeting Wednesday, March 6 10:00 a.m. Board of Commissioners' Business Meeting 1:30 p.m. Administrative Work Session - could include executive session(s) PLEASE NOTE: At any time during this meeting, an executive session could be called to address issues relating to ORS 192.660(2) (e), real property negotiations; ORS 192.660(2) (h), litigation; ORS 192.660(2)(d), labor negotiations; ORS 192.660(2) (b), personnel issues; or other executive session items. Board of Commissioners' Business Meeting Agenda Monday, January 7, 2013 Page 5 of 5 Agenda Item of BOARD OF COMMISSIONERS' MEETING REQUEST TO SPEAK I 1-7 /r3 Name ?2y'i 0/~ P~eec -o - Address 0,/0 C~-kP &V- - ~S,J rrF I Phone #s . 541, 6 ~ E-mail address Y~Y~a+-~_1re~e. n~ Cam- L BOARD. OF COMMISSIONERS' MEETING R.F,QMT TO SPE,,~►I Agenda Item of Interest 0(-IZLCR o2 Date 7 j BOARD OF C. OAMSSIONERW MEETING REQUEST 27Q S Agenda item of interest L Date t 3 Name Address 1i s IJ O rtan,n L t, ZI Phone #s Sy 1 - '71q-17-ti E-mail address e~^M(a~~-,' In Favor ' [2f NeutraWndecided. .Submitting written doments as part of testimony? Yes E] 6pposed No 9M() Iola Iola CITY OF REDMOND Office of the Mayor 716 SW Evergreen Avenue Redmond, OR 97756 (541) 923-7721 Fax: (541) 548-0706 www.ci.redmond.or.us January 2013 RE: Ordinance No. 2013-001 and 2013-002 To: Board of County Commissioners FICc 0 2i27 4` Ttl r~ Please accept this letter as the Redmond City Council's support for Ordinance No. 2013-001 and Ordinance No. 2013-002, adopting a Central Oregon Large Lot Industrial Land Need Analysis and amending Deschutes County's Comprehensive Plan to include Regional Large Lot Industrial Land Policies for Central Oregon and Declaring an Emergency. For the past two years, staff from the City of Redmond has been participating on the Regional Advisory Committee for this effort. As you know, economic development and job creation is crucial for our region. And Central Oregon is in the unique position of being able to respond to both the regional and state-wide need for large industrial lots through this effort. For Oregon to be competitive on a regional, national and global scale for large employment projects, it needs a reliable supply of large lot high value employment sites to attract investment and create jobs for Oregonians. Central Oregon can respond to this need due to its large expanses of publicly held land that is not currently productive, is contained either within urban growth boundaries or contiguous to existing urban growth boundaries and can be reasonably be served by infrastructure. Additionally, Central Oregon has a proven history of successful regional cooperation, and the REOA offers an effective way to identify suitable large lot industrial sites regionally. We appreciate the leadership that Deschutes County has demonstrated on this project and all of the support that the County had provided to make this effort successful. Yours sincerely, Gear ndicott, Mayor of Redmond r 1000 Central Oregon Office, 115 NW Oregon Ave #21 # Bend, OR 97701 ► (541) 719-8221 ► www.friends.org friends Portland Office - 133 SW Second Ave, Suite 201 - Portland, OR 97204 - (503) 497-1000 - fax (503) 223-0073 of Oregon Southern Oregon Office - PO Box 2442 - Grants Pass, OR 97528 - (541) 474-1155 - fox (541) 474-9389 Willamette Valley Office - 220 East 1 1 1n Avenue, Suite 5 - Eugene, OR 97401 - (541) 520-3763 - fax (503) 223-0073 January 7, 2013 Deschutes County Board of Commissioners 1300 NW Wall Street Bend, OR 97701 HAND DELIVERY at Public Hearing January 7, 2013 Re: Reflections on the Large Lot Analysis Project Dear Commissioners, It is good to finally be nearing the end. of a long, and challenging process. Measured in strictly objective terms, our settlement was well drafted. The County and 1000 Friends split the difference almost exactly in half. The county's original proposal called for 17 large acreage lots. 1000 Friends of Oregon's analysis concluded that the data justified few, if any, lots. The settlement allows for slightly more than half the county's original request. In addition, the settlement includes provisions to re-visit the issue of the region's need for large acreage industrial lots in 10 years, or when 9 such lots are developed, whichever comes first. This provides an opportunity for a check-in and re-evaluation. If more large acreage industrial lots are needed then, the facts will support that. And if not, the region will not have spent money on unnecessary infrastructure. Technically, we did a great job of finding middle ground. What we didn't do is come to a better understanding and regional consensus on what constitutes true economic development, where new jobs come from, and the variety of resources that must be employed to maintain and grow existing businesses, as well as new ones. The conversation seemed to get stuck on raw land - when infrastructure, financial capacity, education, transportation, better use of the existing urban land supply, and many other factors are even more important. However, a regional conversation and approach was initiated, and that is a significant accomplishment. As we understand, the initial interest in this process arose from a request by the Economic Development Central Oregon (EDCO), Business Oregon, and others to make more large lots available for large businesses that would like to move into the region, but have been hindered by the lack of large lots. Oregon land use law allows cities and regions to provide land in large lots for industries that need such sites, provided there is a factual basis for doing so. However, the data did not support the assumptions about a large "exogenous" demand for large acreage lots. To the contrary, the Regional Economic Opportunity Analysis (REOA) data demonstrated that the large businesses the consultant claimed needed the large lots were, in fact, the fastest shrinking sectors of the economy. And, while some businesses were certainly seeking large lots in Central Oregon - such as data centers - there was no information to support the large number of such lots the county proposed. Data in the REOA showed that other cities and regions comparable in size to Central Oregon had fewer large industrial lots per capita than the REOA proposed. For example, we submitted research for the record showing that the Portland Metro region - almost ten times the size of Central Oregon, with interstate freeways and a seaport, had used only about one fifth the large lot acreage over the last twenty years that the REOA said Central Oregon would need in the next twenty years. The REOA did not explain this difference, though it did highlight another fact that makes its conclusions even less supportable. Central Oregon falls behind the Portland region in two important areas for business development: education levels of the local population and availability of industrial scale transportation options. Goal 9 is appropriately conservative of both land and a community's financial resources. It requires local governments to use technical information, research, trend data, and due diligence not anecdotes - to determine the most likely routes to a region's economic prosperity. Goal 9 asks government leaders to evaluate local strengths and weaknesses and encourages a broad based citizen outreach program to create a sense of identity. Then it asks leaders to look at this in light of state, national and industry trends to determine a region's most likely route to success. By adding new large lots to the region's UGBs we are hoping these large businesses will come to Central Oregon. The public should understand this means the region will incur substantial expenses in the provision, operation, and maintenance of infrastructure. Most of these large lots are likely to be at the edge of the region's cities, requiring extended sewer and water lines and roads. Financial resources invested in this means those dollars are not spent in other ways throughout the region, so we join in hoping that the alleged demand for large lots that started this effort comes to fruition. Continuing Technical Concerns In keeping with the spirit of good faith execution of the settlement agreement, we are not challenging this decision. However, we continue to have some strong concerns about the document. Infrastructure Chart on page 53 The chart on page 53 purports to identify the infrastructure (size of sewer pipe, amount of electricity, amount of water etc.) needed by large lot users. However, this chart is not based on actual research. Therefore, it should not be used to determine what size infrastructure needs to be laid, or what size infrastructure might be considered adequate for a large lot user. The original version of this chart (attached here) showed that the only businesses that need more than 25 acres also need a population of at least 300,000 or a seaport - neither of which is available in our region.' The next version of the chart kept the exact same numbers for the size of needed infrastructure, removed population requirements and notes about seaports, and enlarged the needed lot ' Deschutes, Jefferson and Crook County had a combined population of 202,730 in 2012 according to the recent P5U population forecast. Central Oregon Office • 115 NW Oregon Ave #21 • Bend, OR 97701 1000 (541) 719-8221 friends sizes to 200+, without an explanation for these changes. The new chart has not changed the infrastructure requirements but has significantly changed the size of the lots needed. It is not reasonable to assume that a food processing plant, such as a brewery, that needs 10 acres to operate would require identical infrastructure as a plant that requires 200+ acres. Yet, that is what this chart says. There are two main risks of using this erroneous information. The first is that lots with inadequate infrastructure will be added to the inventory, but will never be occupied because of the inadequate infrastructure. This will clog up the system, creating unbuildable land. The second risk is that cities will waste precious general fund dollars by installing the wrong size infrastructure. We recommend. that you amend the document, the findings, and the IGA to make it clear that this chart should not be relied upon for planning purposes. Short Term v .20-Year need In several places the findings emphasize that the nine lots satisfy only a "short term" need. This is not consistent with the settlement agreement, as reflected in OAR 660-024-0045(2)(e), which states "Regional large lot industrial land need" means the need for a specific type of 20- year employment land need, as described in OAR 660-024-0040(1) and (5)." Because the language is not consistent with the settlement, we request deleting the phrase "short term" from the findings and the decision entirely. It is inconsistent with the rule adopted by LCDC to implement the settlement, and it will not change the implementation. The County will still be allowed to reopen the process after nine lots are used, or after ten years. Description of the Settlement Issues Finally, we continue to be disappointed by the way county documents characterize the settlement. We reiterate that we do not disagree with the county on policy. Central Oregon needs diverse, sustainable economic development and jabs. We disagreed on whether there was evidence to support the actions the county proposed to achieve that shared policy objective. From the start we have agreed that it is good policy to work as a region to address economic issues. Although we might not agree now on what the right choice is to achieve sustainable economic development, we all have the best interests of central Oregon at heart. Let's work with what we have now to make central Oregon the prosperous, sustainable, vibrant place our grandchildren will want to call home. 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A6 I~ Je n tom, prnnn L mersw ~Itrv I rv ex errhrdvlM makrnulx. vnnand ov: Group Mackenri., Bu inns Ornean DESCHUTES COUNTY I CEN1 RAL OREGON REGIONAL LARGE-LOi- EOA PAGE 25 Written Statement of y the Central Oregon Association of REALTORSi- - - r before the Land Conservation and Development Commission RE: Central Oregon Regional Large Lot Industrial Lands Rule November 15, 2012.-..~ The Central Oregon Association of REALTORSO thanks the Commission for the opportunity to testify on the rulemaking to implement Central Oregon's Regional Economic Opportunity Analysis, a.k.a. the Large Lot Industrial. Program. COAR was represented on the REOA's Regional Advisory Committee and was an intervenor on behalf of Deschutes County in the appeal of the REOA by 1000 Friends of Oregon. COAR is the trade association for Central Oregon's real estate industry. We are the second largest REALTORO association in Oregon and represent more than 1,400 real estate professionals and real estate industry affiliated businesses. Our members are engaged daily in residential and commercial transactions providing essential services to their clients and adding value to their communities. They have unsurpassed knowledge of the regional real estate economy in Central Oregon and are often the first point of contact for businesses looking to expand in or relocate to Central Oregon. COAR commends the staff and elected leadership of Deschutes County for their hard work and commitment p the REOA process and end product. We don't believe there is a more collaborative anal transparent governmental body in Central Oregon than Deschutes County. In particular, we'd like to thank Peter Gutowsky, Nick Lelack and Laurie Crlxghead for tWiii efforts to shepherd the REOA through a lengthy and frustrating process. We also appreciate the contributions made to the REOA by the other RAC participants, including Economic Development for Central Oregon, local city and county governments, Business Oregon, the Department of State Lands and DLCD. Unfortunately we are unable to support this rulemaking and the end product of this r unnecessarily lengthy process. The reason is simple: The rulemaking that would implement a large lot industrial program falls well short of what we expected to come out of the REOA project and will make little if any difference in improving Central Oregon's economy. After more than two years of meetings, deliberation, litigation and countless hours of work by staff and RAC volunteers this process has yielded not a single industrial site, much less any jobs in Central Oregon. LOther than general agreement on a short-term need for sites accommodating large industrial users the final product of this effort by Deschutes County largely retains the status quo of the existing regulatory process. That was not what we anticipated when we enthusiastically agreed to participate on the RAC. Furthermore, given 1000 Friends of Oregon's vigorous opposition to the very idea of the project (characterized by their testimony at the first Deschutes County public hearing on the REOA) we are not confident that this program will ever be implemented at the local level because of fear of further litigation. Oregon's land use system is the greatest obstacle to economic development in Central Oregon and this rulemaking will not meaningfully change that. The Central Oregon Large Lot Industrial Need Analysis clearly states the problem we currently face with respect to creating more jobs in Central Oregon and the obstacle posed by our land use system. From page 7: 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 vacant industrial sites to be competitive in global industrial recruitment pursuits. New land supply methods are needed, too. 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. 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. r,~R ,,-'1)ur4ng development of he REOA the RAC was encouraged repeatedly by DLCD staff to 1 "think outside the bo ' and design a solution that would overcome Central Oregon's =:mns s ' ratting large industrial employers. The settlement negotiations with of Oregon anJ-suliwA=t pressed rulemaking largely gutted that effort and represents liqla-rioie than the status quo. - C-7 G ►J G U COAR participated in the . he s irit of nrnfinn ' i the goal of making / some "industrial land grab", as has been alleged by some opponents. We hoped the REOA process would yield a meaningful change to the land use regulatory system to U allow us to attract large job creators to a region with the state's highest unemployment. We were cautiously optimistic during the REOA process that a new program for identifying a regional inventory of large lot industrial sites and protecting them for their intended use would result. In testimony to the county we advocated for a system that would allow industrial uses in the county and not require cities to incorporate industrial sites into an urban growth boundary. That would have been truly meaningful change, but we didn't insist on those policies out of comity and a desire for a consensus-based solution. Despite our growing skepticism we tried to work within the system to make small targeted changes to the land use system that would yield large scale benefits for our region. 2 The proposed rulemaking makes no change to the most significant barrier to economic development in Central Oregon, the Goal 14 urbanization process. As long as cities are required to go through this lengthy and expensive process, with all of its potential litigation, to serve a large industrial lot they will do so only reluctantly. The rulemaking's requirement that cities first look inside their UGBs for large industrial lots is a wasteful bureaucratic exercise intended to limit the program and provide grounds for litigation. The REOA process clearly laid out the need to supply land for an "exogenous" need of large lots not currently being met inside existing UGBs. Presumably, land inside UGBs is already set aside for local, or endogenous, employment needs. The idea of a regional need for large lots is new and additional to the cities' employment needs in their 20-year land supply. The requirement for cities to examine their existing UGBs for large lots to meet this newly identified need is unnecessary and counterproductive to creating a large lot inventory expeditiously. Furthermore, if a suitable site was discovered within a UGB it would not be available. No one who owns developable property inside a UGB is going to downzone to an industrial designation. Involving the regular UGB expansion process in this new program guts any effort at true and meaningful land use reform. Market economics and a bureaucratic process essentially will kill any economic benefit which could have been derived from this program. The successful efforts of the appellants to recruit the Governor's office- to their. side of the debate is unfortunate. They have utilized and abused the political tools and influence available to them to thwart an innovative program to improve Oregon's economic competitiveness. Whether it's eco-friendly destination resorts or large industrial employers, the defenders of the status quo in the Willamette Valley have successfully politicized the land use process to suit their ideological goals at the expense of Central Oregon. Hopefully the pilot project in Josephine, Jackson and Douglas counties and the work of the Governor's UGB expansion task force will result in meaningful and useful changes to a top down regulatory system that prevents regions and communities from pursuing their own paths to growth and development. There is no question in the real estate industry that our land use system is a barrier to Central Oregon's economic success. Unless and until that system changes significantly we will continue to underperform economically. We are disappointed that this promising large lot program has been watered down to be little more than the status quo. That was not the vision that was presented to us when the RAC was convened. But, once again, we see that true reform of the system cannot be left in the hands of the bureaucracy that is its chief defender. We will continue to work with our state association and local legislators to enact meaningful and sustainable reform legislatively. [unfortunately, Oregon's land u vmt* se and r~el`a~ted justice system is broken-) nCA~ f-r~ 3 Document Reproduces Poorly (Archived) 2007 Central Oregon Comprehensive Economic Development Strategy Central Oregon Intergovernmental Council (COIC) Regional Investment Strategy Central Oregon Community Investment Board (COCIB) Approved by the Central Oregon Community Investment Board 11/29/07 Prepared by: Central Oregon Intergovernmental Council Produced with funding assistance by: U.S. Department of Commerce - Economic Development Administration State of Oregon Lottery - Regional Investment Funds managed by the Oregon Economic and Community Development Department Table of Contents 1. Executive Summary ...........................................................................................................................................3 2. Strategy Purpose and Planning Process ........................................................................................................5 3. Needs Examination and Resource Analysis ...................................................................................................7 a. Data Analysis Regional Trends ...8 b. Regional Strength and Weakness Summary ...9 Strengths of the Central Oregon Region ..............................................................................................................9 Weaknesses of the Central Oregon Region ......................................................................................................10 c. Opportunities and Threats for the Central Oregon Region .................................................................................10 Opportunities ......................................................................................................................................................11 Threats ...............................................................................................................................................................11 d. External Trends and Forces that Affect the Regional Economy ........................................................................11 e. Regional Advantages and Disadvantages 12 Regional Advantages: 12 Regional Disadvantages: 12 f. Regional Economic Development Organizations 12 4. Priority Goals and Objectives - Long Term ..................................................................................................13 a. Vision Statement 13 b. Core Values ........................................................................................................................................................14 c. Goals and Objectives 14 Strategy 1: Increase Prosperity for All Central Oregon Residents in Rural and Urban 14 Strategy 2: Develop and Support the Local Workforce 15 Strategy 3: Conserve, Enhance, and Market Environmental Amenities 16 Strategy 4: Develop and Maintain Economic Infrastructure 16 Strategy 5: Enhance Local Leadership and Institutional Capacity to Facilitate Regional Economic Development 17 5. Identified Priorities -Short Term ..............................18 6. Central Oregon Community Investment Board - Six-Year Investment Strategy & Implementation Pian19 7. Rural Action Plan and Rural Set-Aside ..........................................................................................................20 8. Barriers to Implementation .................................------................------..........................21 9. Plan for Involvement of Disadvantaged and Minority Groups 10. Special Uses of Funds ...................................................................................................................................23 11. Management Plan ..........................................................................................................................................24 Section 1. Administrative Agent 24 Section 2. Application Process 24 project Selection Criteria 25 Section 3. Project monitoring and disbursements 26 12. Evaluation Plan ..............................................................................................................................................26 13. First-Source Hiring Agreements for Benefited Businesses ......................................................................27 Appendix A Central Oregon Data Profile Appendix B - COCIB Administrative IGA Appendix C - COCIB Bylaws Appendix D - Public Hearing and Notice Process Appendix E - COIC Audit Report, 2007 Central Oregon Comprehensive Economic Development Strategy Page 2 Regional Investment Strategy 1. Executive Summary This community and economic development strategy provides a framework for long-term economic development planning efforts in the Central Oregon region, which is made up of Crook, Deschutes and Jefferson Counties, Oregon. The information and strategy outlined in this document combines and integrates the- • Comprehensive Economic Development Strategy (CEDS) of the Central Oregon Intergovernmental Council (COIC), required by the U.S. Department of Commerce Economic Development Administration; and the • Regional Investment Strategy required of the Central Oregon Community Investment Board by the Oregon Economic and Community Development Department This publication is made possible through U.S. Department of Commerce Economic Development Administration grant funding; and Oregon State Lottery - Regional Investment Funds administered by the Oregon Economic and Community Development Department. It is the intent of the Central Oregon Comprehensive Economic Development Strategy/Regional Investment Strategy to coordinate the region's needs, priorities, strategies and goals for economic and community development, while aligning those efforts with the Oregon Economic and Community Development Department's Strategic Plan. This strategy provides broad, over-arching regional strategies, goals and objectives that can be supported by regional economic development organizations. In addition, this Strategy is intended to carry out the legislative direction for the Central Oregon Community Investment Board in establishing and funding the Regional Investment Program, especially with respect to advancing Oregon's economy by focusing on state priorities taken for ORS 285B.230(3) and ORS 285A.020(3): • Promote favorable investment climate to strengthen businesses, create jobs and raise real wages; • Improve the national and global competitiveness of Oregon companies; • Assist Oregon communities in building capacity to retain, expand and attract businesses; • Promote the structures and processes of public and private organizations to effectively create, adapt, foster and sustain economic development in the state, emphasizing naval and distressed areas; • Ensure that economic strategies will reinforce Oregon's long-term prosperity and livability; and • Coordinate economic development efforts and efforts to support a locally skilled workforce in order to compete in the global economy. The Comprehensive Economic Development Strategy process resulted in the development of a vision for the region, and identification of a series of long term priority goals to sustain and improve the region's economy. Vision: The buslnessem, governments, community organixaddns, and people of Central Oregon have created a strong regional economy drat Is. diversified, reslNent, Innovative, sustainable, and that supports a rising ids of prosperity which benefits citizens of all Income levels throughout the region. GOAL I: A Distinctive, Competitive Economic Region with Competitive Communities that Leverage Economic Gain from Their Assets GOAL II: A Business Climate that Supports the Region's High Level of Entr9epreneurialism and Innovation GOAL III: Increased Regional Economic Self-Rellance through Diversification of Local Resources Available to Businesses and Citizens GOAL IV: High-Quality K-20 Education Systems to Produce, Retain and Attract Highly Qualified Workforce GOAL V: High-Quality Social and Human Services to Produce, Retain and Attract a Quality Workforce GOAL VI: Sufficient Supply of Housing Affordable for Workforce GOAL VII: Restored Streamflow and Water Quality to the Deschutes River and its Tributaries GOAL VIII: Protected Open Spaces, Critical Wildlife Habitat, and Working Landscapes GOAL IX: Restored Forests and Rangelands GOAL X: Preserved and Enhanced Air Quality In Central Oregon GOAL XI: Economic Decision Makers are Provided with Information and Analysis which Demonstrates the Importance of Environmental Quality to the Regional Economy GOAL Xil: Transportation: Functional and Efficient Movement of Goods, Services, Residents and Visitors Into, Within, Through, and From the Region Central Oregon Comprehensive Economic Development Strategy Page 3 Regional Investment Strategy GOAL All: Sufficient Supply of Land Affordable for Commercial, Industrial and Residential Development GOAL XIV: Adequate Public Works and Private Utility Infrastructure GOAL XV: Adequate Community Facilities GOAL XVI: Ongoing Regional Planning is in Place to Preserve and Enhance the Region's Economic Appeal and Effect Orderly Economic Development GOAL XVII: New Resources are Identified to Help Fill Economic Needs GOAL XVIII: Adequate Local Government Capacity and Favorable Public Perception Regarding Economic This strategy will be used in part by the Central Oregon Community Investment Board (COCIB) as a guide for investing in economic and community development initiatives in Central Oregon. COCIB's strategies for addressing the long-term priority goals are as follows: 1. Family wage job creation in Crook, Deschutes and Jefferson Counties; 2. Job Retention in Crook, Deschutes and Jefferson Counties; 3. Maximizing local, state and federal funds leveraged for job creation and retention projects; 4. Promoting structures and processes of public and private organizations to effectively create, adapt, foster and sustain economic development in Central Oregon; 6. Ensuring that the economic strategies reinforce Central Oregon's long-term prosperity and livability; 6. Coordinating economic development efforts to support a locally skilled workforce in order to compete in the Through the CEDS planning process, past regional Needs and Issues processes, the 2007 Infrastructure Needs Inventory, and through other methods of economic analysis, several major projects, programs and activities have been identified for focus over the next six years: • Support of industry clusters, including secondary wood products, transportation equipment/aerospace/aviation, manufacturing, renewable energy, tourism. + Support emerging clusters including natural resources and prison/comections (Jefferson County). + Infrastructure development and improvement, specifically as related to job seating properties (specific priority projects to be identified through the Infrastructure Needs Inventory). • Essential community facility development and improvement (specific priority projects to be identified through the Infrastructure Needs Inventory). • Transportation issues, including state highway modernization needs, traffic flow on state highway corridors, and funding for local road network, state highways. This has impacted the efficient mobility of goods, services and the workforce within and between Central Oregon communities, and to and from the region. • Rail issues, including supporting the expansion of the Prineville Rail Depot to provide rail support to industrial land. • Support formation and stabilization of the City of La Pine - the state's newest incorporated city • Continue to support targeted training for the regions clusters of Secondary Woods products, Aerospace Production and Parts, and targeted sectors including Appeal and Sporting Goods, High Technology including Information Technology, Renewable Energy, Light Industrial and Manufacturing, and Research and Development. Assist in the retention, expansion, and recruitment for these industries. • ADA accessibility issues for community facilities. - • Access to higher education in areas outside of Bend. • Address workforce supply; shortage of qualified workers. • Address housing affordability trends. • Need for regional public transit. • Challenges surrounding endangered species reintroduction. The Strategy focuses specific attention on rural areas of the region, which are defined as Crook and Jefferson counties in their entirety, and Deschutes County outside of the urban growth boundary of Bend. The Central Oregon Community Investment Board will ensure rural communities are notified of the availability of Regional Investment Funding, and will monitor project awards to ensure that rural communities are adequately served by this program. The strategy will support projects and activities targeted specifically to rural communities, including: Central Oregon Comprehensive Economic Development Strategy Page 4 Regional Investment Strategy • Business development projects that lead to job creation and retention. While rural job creation project typically result in less net job gain than in urban areas, the projects are extremely valuable to rural distressed communities. Specific effort will be made to invest in rural community job creation projects. • Infrastructure development, community facility development. Through the infrastructure needs inventory, priority rural projects will be identified and supported. While population totals are lower in rural areas and resources are limited, infrastructure and facility costs can be equal to costs in urban areas. Additional support of these communities is needed. • Technical support and assistance. Rural communities often lack the capacity to identify and secure funding for critical projects. COCIB, COIC and EDCO provide support and assistance to rural and distressed communities. • Specific focus on economic clusters critical to rural communities, including secondary wood products, travel/tourism, renewable energy, corrections/prison industry, agriculture, natural resources, and manufacturing. • Marketing of low-cost, available industrial and job creating properties. To evaluate performance toward implementing this strategy, the Central Oregon Community Investment Board will monitor jobs created/retained, other funding sources leveraged, wages of jobs created, and number of community infrastructurelfacility projects completed. This information will be reported every six months to OECDD. 2. Strategy Purpose and Planning Process This community and economic development strategy provides a framework for long-term economic development planning efforts in the Central Oregon region, which is made up of Crook, Deschutes and Jefferson Counties, Oregon. The information and strategy outlined in this document combines and integrates the: • Comprehensive Economic Development Strategy (CEDS) of the Central Oregon Intergovernmental Council (COIC), required by the U.S. Department of Commerce Economic Development Administration; and the • Regional Investment Strategy required of the Central Oregon Community Investment Board by the Oregon Economic and Community Development Department Economic Development District COIC serves as the Economic Development District representing Crook, Deschutes and Jefferson counties as designated by the Economic Development Administration (EDA). One function of the Economic Development District is developing, 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 economic growth. The CEDS is a pre-requisite for EDA funding for all public works, economic adjustment, and planning grant projects within Central Oregon. The CEDS clarifies economic development organizational roles, and how economic development organizations work together in Central Oregon; identifies priorities and projects that are consistent with the economic development strategies, which leads potentially to funding; and identifies regional economic development strategies on which communities within the region can collaborate to bring about sustainable economic prosperity. Central Oregon Intergovernmental Council (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 - Crook, Deschutes and Jefferson counties; the cities of Bend, Culver, Madras, Metolius, Prineville, Redmond and Sisters; and appointed representatives of key economic sectors - business and Industry, tourism and recreation, agribusiness and agriculture, timber and wood products, and the unemployed/underemployed. Since 1972, COIC has served Central Oregon, working with community partners to create and sustain a healthy regional economy. Formed initially to serve the region by providing employment and training services, COIC has evolved into the diverse organizations it Is today by changing as Central Oregon granges. COIC works with individuals, with businesses and with entire communities. As a Council of Governments, COIC involves all three counties, seven cities and representatives from key economic sectors in policy making, program planning and delivery. Through program offerings in employment and training, community and economic development, and business loans, COIC is able to offer valuable services to the community. The overarching purpose of COICs Economic Development program is to strengthen Central Oregon communities through the creation and retention of family wage jobs in industries that support local quality of life, as defined by each community. COIC's Economic Development programs are aimed at benefiting the entire Central Oregon Central Oregon Comprehensive Economic Development Strategy Page 5 Regional Investment Strategy region, with a specific emphasis on increasing the capacity of communities to provide economic development services and manage economic development needs over the long-term. The core functions of COIC's Economic Development services are: • to explore and document regional economic development planning and interjurisdictional collaboration opportunities; • to provide finance and industry development support to Central Oregon businesses and entrepreneurs; to assist local jurisdictions in developing the information, infrastructure, public improvements and other necessary conditions that ready communities to accommodate the startup, retention, expansion, and recruitment of business; and • to serve those communities that do not have professional economic development expertise or capacity. Central Oregon Community Investment Board COIC serves as administrative and fiscal staff to the Central Oregon Community Investment Board. The Central Oregon Community Investment Board (COCIB) was created in 1988 through an agreement between the counties of Crook, Deschutes and Jefferson. The Board's purpose is to develop a regional investment strategy, and to award Regional Investment Fund dollars to support community and economic development projects throughout the region. The Central Oregon Community Investment Board members led development of the 2007 Regional Investment Strategy, which guides specific Regional Investment Fund allocations to projects addressing the long-term and short-term economic development priorities of the region. Crook, Deschutes and Jefferson Counties entered into an Intergovernmental Agreement Central Oregon Intergovernmental Council (COIC) for administrative and fiscal management of the Regional Investment and Rural Investment Program. COCIB Organizational Structure and Board Membership Crook, Deschutes and Jefferson Counties have entered into an Intergovernmental Agreement (IGA) establishing the Central Oregon Community Investment Board to oversee the State's Regional Investment Program. The responsibilities of the Board, its membership, and operational guidelines are specified in the IGA and the COCIB Bylaws. Central Oregon Comprehensive Economic Development Strategy Page 6 Regional Investment Strategy The Board consists of 17 members with each county appointing five members plus alternates. These members represent the broad community and economic development interests of the region, and include representatives from cities, counties, and significant representation from the private economic sector and rural interests. Comprehensive Economic Development Strategy Committee COIC convened an ad hoc committee to guide the 2007 CEDS development process. The committee's functions were to provide: 1) Guidance and broad perspective throughout CEDS development process. "Big picture" thinkers. 2) Review of strategy and consultation from specific representational perspective 3) Technical expertise in issue areas. 4) Identifying community and economic development needs. 5) Identifying and communicating long-term priority goals and strategies. B) A SWOT analysis for the region. Private and Non- rofit• R Lee Economic Development for Central Director R nti Private Business Mike Schmidt Bend Chamber of Commerce Director R Chambers of Commerce Cook Central Oregon Regional Housing A Director, R Housing Karen Pringle Central O n Partnership Interim Director R tiand Unemployed Tod Heisler Deschutes River Conservan Director, Representing Resouroes Ivia Ha es 3E Stmt tes Director R ti Sustainabif Public: Mike Mo an City of Madras Administrator Representing Central Oregon Cities Alan Unger City of Redmond M r ftresent129 Central Oregon Cities Scott Cooper Crook County resenti Central OreW Counties Brian Shetterly City of Bend Lo Ran92 Planni Man er ti Regional Land Use Ray ila Tribal Planner, rRepresenting the Confederated Tribes of Warm S n James Middleton tral Oregon Community College President R Higher Education Beth Wickham COCC Business Devel ment Centw Director. R ti Business Development Tom Moore Central OgMM 1 emmental Council Director R resen Workforce Janet Brown Govemor Kulo "s R Tonal Coordinalor R tithe State of Jay Patrick Redmond City Councilor and COIC Chair R res the Eoonomic Development District The CEDS priority goals and objectives were reviewed by organizations in the region, including: • Economic Development for Central Oregon Board (private business) • Bend 2030 Economic Strategy Committee (private business, city, county) • Central Oregon Workforce Investment Board (workforce committee) • Central Oregon Intergovernmental Council Board (public and private business) • Central Oregon Community Investment Board (public and private business) Regional Investment Strategy The Regional Investment Program was initiated by the 1999 Oregon State Legislature, as an update to the previously existing Regional Strategy program. The Regional Investment Program was made into law through Oregon Revised Statutes 2858.230-.264 and its implementing rules are found and formalized in Oregon Administrative Rules (OAR) Chapter 123. All references to specific requirements of the law are listed by ORS number. This section of the Regional Investment Strategy meets State Program requirements, for the Regional Investment Fund made available to the Central Oregon Region: • ORS 2858.239(e): "A long-term plan to implement the regional investment strategy," • ORS 2858.239(0: "A six-year investment strategy that describes projects and activities to be undertaken..." As described in ORS 2858.239, the Central Oregon Community Investment Board has designed an investment strategy to focus on the performance measures of "long-tern and short-term job creation and retention activities,"Ieveraging long-term investments," and "maximizing moneys leveraged with short-term investments." 3. Needs Examination and Resource Analysis The Central Oregon Comprehensive Economic Development Strategy Committee participated in a regional analysis exercise in 2006. The process included identification of regional economic strengths, weaknesses, opportunities, and threats. The committee also identified "exterior" trends that affect the regional economy. The Central Oregon Comprehensive Economic Development Strategy Page 7 Regional Investment Strategy committee then identified economic development organizations within the region, and summarized relevant regional plans that should be coordinated with the regional economic goals and strategies that result from this process. a. Data Analysis - Regional Trends Central Oregon Comprehensive Economic Development Strategy Page 8 Regional Investment Strategy COIC conducted a detailed data analysis to develop a clear understanding of the regional economic situation. Appendix A includes data summary tables and narrative analysis. Following is a general overview of key demographic trends that informed the CEDS Committee in their long-range goal and priority development process. b. Regional Strength and Weakness Summary This is a summary of items identified by CEDS committee members during the facilitated discussion at the December 15, 2005. Strengths of the Central Oregon Region a. Our People and Culture Civic engagement - the level of citizen engagement is broad: people care about place to an extent not seen in other communities. P le want to contribute to the ual' of life. "Pioneer Spirit" - a different/independent way of thinking: innovative and collaborative public actions that s hen the economy. People - increasin racial and cultural diversi . Entrepreneurship - According to one measure, Bend metro area ranks as the in the nation for entre reneurshi . Opportunities - a vital economy and sense of economic timism. b. Education and Training Higher education - COCC and OSU Cascades Campus. Workforce - educated and skilled. NOTE: this strength Is variable throughout the region - lack of educated/skilled workforce is a threat in some communities within the ion. Man in-m" rants are bringing skills and a s of oommuni meat. A strop sup rt network for transitions workforce. c. Local Government Open and inclusive governments and organizations - institutions are generally open to public ardd n. Political leadership - high uali elected leadership, transpaLen. H h quality city/county government staff. Innovative local vemment practices addressl developMgM arks etc . Tribal relations - improved communications between local governments and the Confederated Tribes of Warm SOngs. Coordination between anizatkxns and emments. Publio-private partnerships - a willingness to develop partnerships between government and business. d. Local Buslnesses, Ca / and §Spg2d Diverse economy - particularly in Deschutes County, with eight sizable economic dusters. A business COmmuni that is wiM' to take risks. Existing employers - a strong business base that is supportive of communities and socially res ible man kcal owned and g)erated. A cone of emgloyers that provide A strong network of business support services clambers of commerce and other groups/oManizations. Availability of I for business. Banking - a I e number of banks institutions; banks. Supportive business anizadons. e. Environmental Amenities Natural environment and scenic beauty. Abundant dean air and water. Sunshine, b2ERM!~g climate. Outdoor reaction itres/ blic lands. f.OtherAmenlUas Im in cuitural opp9dwides. Housing - large numbers of upscale houses, high degree of housing availability. Upscale housi brings M2M Into the ion in Specific economic and social amenities Redmond Airport, Deschutes County Fair and Expo Genter, Mt. Bachelor and numerous resorts. Medical community - a large offers of high-quality facilities and gmOklers. Low crime rate - safe neighborhoods. Communication sys tern - televisionradio and rant Telecommunications Infrastructure - fiber optics and broadband, throughout the region rndudi man rural areas). Regional standing Central Oregon has been "discovered" nationally, and statewide political importance is increasing. A relative level of seclusion - distance from urban arm. g, Affordable Housing E1Piorts Affordable housing quality - well-designed/well managed housing communities, often devekxW through public private R2ELnership that are vehides toopportunity for residents. Support for affordable housing - a climate of support in developing affordable housing to assist the most vulnerable residents. Central Oregon Comprehensive Economic Development Strategy Page 9 Regional Investment Strategy Weaknesses of the Central Oregon Region a. Keeping up with Growth Population growth was recognized as a challenge, weakness, and threat. Projected rapid growth of the senior population demographic (this was seen as a "threat" rather than a weakness Unemployment rates - in-migration and pockets of poverty are driving up unemployment rates. Lack of regional vision strategic regional vision for land use and planning, connections between communities loran corn rehensive plan for the region) b. Challenges for Workforce - quality and quantity varies throughout the region, and by sector. Workforce Businesses shortages in some areas of the ion Gast and supply of industrial and job creating properties (varies throughout the region - Bend has high costs and a shortage of industrial and job creating property, while other communities have affordable land available Regional variability in land cost and availability - this dynamic presents challenges for _Mk anl level planning. In some arts of region the cost of lands for housiffl is very high. c. Strains upon the Economic stratification - a strong service based economy results in low wages and a Workfarce growing economic gap between the service workers and other residents. Demands for specific kinds of love-wage services by particular segments of the growing population might be causing our local economy to be weighted heavd towards low-wage service jobs. ±YgtgMdy rate - andspecifically child poverty Wages - lower a scales and average Lads of "career ladders" - challenges in moving from an $81hour job to a family wage job. NOTE: there was some discussion and disagreement on this "nt. Affordability of housing - traditional housing for lower income homeowners, such as mobile home arks, are being converted to higher-cost housing Lack of child care options and aftrclabili!X Drug use d. Transportation Issues Geographic Isolation distance from markets Lack of public transportation within and between communities Transportation costs all modes Lack of regional connectivity in transportation - higher commuter rates have resulted in road "bottlenecks". 'To and through' problems. Shortage of funds for public infrastructure e. Access to Health Care Access to health care - lack of affordability/high insurance costs. Some employers unwilling to provide cove e. Medical providers not accepting "certain kinds of oov Distance from medical care with the trend of medical consolidation in Bend, other communities are losing local medical care options. High occurrence of "no pays" In some communities. Senior access to health care - lack of access to primary care for seniors, in part due to low Medicare payments f. Water Supply Issues Water access - the presence of "perverse incentives" for using water. Difficulty in shifting water to new uses (i.e. agriculture to civic or instream uses). Difficulty in capitalizing on efficlency sins in use of water. Present water allocation system not suited to current needs. Lack of a Tonal water use an g. Education and Training Limited support for public schools - variable throughout the region. There is a concern that Challenge; man In-migrants are not wIIII to invest In education. School overcrowding and lack of funding for education Combating the trend of child disengagement In school - the common occurrence of children note in in education because he/she views school as 'borin ' Community college program availability - variable throughout the reglon, as a result of consolidation trend. As COCC decreases presence in communities outside of Bend, access to COCC programs and services decreases. Specifically, a lack of credit courses outside of Bend. Centralization at colt a has resulted in part, from declining funding Shortage of distance learning opp2!tunities Lads of vocational traini opportunities State trends - such as public education financing structure challenges. The group recognized the im of statewide trends on the local economy. c. Opportunltles and Threats for the Central Oregon Region A CEDS Committee facilitated discussion on the Opportunities and Threats facing the legion on February 16, 2006 produced the following lists. Central Oregon Comprehensive Economic Development Strategy Page 10 Regional Investment Strategy Opportunities Better Coordination of Regional Economic Development Opportunities in Clean and Renewable Energy Development Restoration of Salmon and Steelhead to Upper River Areas (recreation, iconic Tap into Visitors to Region (taxes? other ways to get more from visitors?) Better Linkages Among Transportation, Tourism, and Economic Development Becoming an Entrepreneurial Mecca for the Northwest (resources, expertise Innovation in Distance Learning Smart Growth Planning (Infrastructure, Services, Schools, Crime, Open Space Protection Well Planned Growth can Provide Many Benefits Expand Philanthropy Workforce Investment - Linkages to Education Service Delivery Increasing Cultural Diversity Expansion of Existing Clusters Tap into Retirees (Baby Boomers as Workers, Other Ways for Retirees to Contribute-) Develop Alternative/Public Transportation Threats Parochialism Threatened and Endangered Species Regulation Insufficient Education Funding Insufficient Transportation Funding In general, Insufficient Public Funding Aging Population Care, Healthcare and Transportation Needs Threats to Natural Resource Base and Quality of Life Amenities from Poorly Planned Growth Pattern of Development Driven Solely by Market Forces Not Enough Leadership Negative Perception of Government Lack of Opportunity for Non-English Speakers Due to Lads of Services Strains Upon the Workforce (costs of housing, childcare, education, etc) Disproportionate Growth in Low Wage Industries Limited Addiction Services De-stabilization of the Family Unit Land Cost and Availability Limited Planning for Growth Results in Problems: Transportation, Quality of Life Degraded Declining Levels of Civic Disengagement Region of Haves and Have Nots d. Extemal Trends and Forces that Affect the Regional Economy External trends and forces are the state, national and/or worldwide trends that greatly impact the regional economy but for which there is limited local control or influence. These trends are important to understand and consider when planning for regional economic development. 1. Growing, Aging Population 2. Increasing Social and Cultural Diversity 3. Shifting Economic Base - from manufacturing to service and knowledge-based economy 4. Energy Supply Instability and Cost increases; projected shortages of fossil fuels 5. Education Funding Challenges (specifically for Oregon) 6. Decreasing Public Resources - unstable Oregon state budget 7. Methamphetamine and Other Drug Use Increases, corresponding social problems -8. Expanding Use of Communications Technology - worker mobility, distance education, outsourcing, telehealth 9. Cooling of National Real Estate Market 10. Increasing Health Care Costs and Decreasing Percentage of Population Covered 11. Globalization of Economic Competition 12. Shrinking Middle Class 13. Increasing Interest Rates Central Oregon Comprehensive Economic Development Strategy Page 11 Regional Investment Strategy 14. Global Climate Change 15. Terrorism/Natural Disaster 16. Lack of Trust/Belief in Government e. Regional Advantages and Disadvantages Regional Advantages: 1. People skilled workforce (in part due to in-migration of skilled professionals), strong business community, entrepreneurial spirit. 2. Higher education institutions - COCC and OSU Cascades 3. Strong, collaborative local governments and leaders 4. Quality of life - environmental benefits, outdoor recreation amenities, cultural amenities, scenic quality, emerging 5. Availability of capital, strong business support climate 6. High quality medical providers 7. Airport 8. Housing availability, diversity in housing options (large numbers of upscale houses) 9. High quality affordable housing 10. Regional image -desirable location 11. Communications infrastructure - telecom, television, radio, print 12. Regional wealth - significant numbers of wealthy retirees, lifestyle 6migrds, and second home buyers. Real estate equity gains. 13. Strength in a number of economic clusters 14. Number of shovel-ready industrial sites; enterprise zones Regional Disadvantages: 1. Challenges in keeping up with population growth - impacts on schools, roads and other infrastructures, environmental impacts, increased homelessness numbers, rising crime rates 2. Skilled workforce availability (varies across region) 3. Rising real estate costs - stresses on workers, businesses; insufficient quantity of affordable housing 4. Rising inter-community commuter rates in part a function of uneven housing costs across the region 5. Increasing road congestion In cities 6. Distance from markets, ports and interstates 7. Workforce challenges: lack of affordable child care, low average wages 8. Consolidation of higher education and medical services in Bend, local health care systems increasingly unviable 9. Water supply issues 10. Low levels of educational attainment in parts of the region 11. Scarcity of industrial lands in parts of the region 12. Inadequate diversification of regional economy 13. Lack of public transit 14. Lack of services to non-English speaking citizens 15. Rising drug use f. Regional Economic Development Organizat/ons Central Oregon has a broad array of economic and workforce partner organizations. Businesses and individual job seekers have access to a range of training, technical assistance, grants and loans, and other support services. The following outline of those involved in regional economic development efforts is not exhaustive. However, it does provide an indication of the multiple facets and many players invoved in economic development in the region. Active input, communication, collaboration, and cooperation among these entities is a cornerstone of developing and implementing the regional economic development strategy. Central Oregon Interrcovernmentai Council (COIC): COIC provides workforce and economic development services to individual businesses and job seekers. Workforce development services include: worker skills training, job search skills, recruiting and screening of job applicants, and customized trainings. Central Oregon Comprehensive Economic Development Strategy Page 12 Regional Investment Strategy Central Or@gon Community Investment Board (COCIB): COCIB is a regional economic development board that receives state lottery dollars and allocates fund to community and economic development projects in Central Oregon. Economic Deyelomnent for Central_Orecon (EOCO]: EDCO is a private, non-profit organization that attracts new, permanent primary jobs and capital investment to Central Oregon through marketing and recruitment, and also assists and supports the growth of existing businesses. COCC Business Development Center: The COCC Business Development Center provides advice and information to assist businesses, with a focus on assisting the expansion of existing firms in the Central Oregon area. Services include: • Business plan and loan proposal development; • Market planning and marketing; • Reviewing financial strategies for your business; • Adopting healthy, profit-oriented business operations; and • Evaluating the business feasibility and profitability. Chambers of Co rce: Seven chambers of commerce are located throughout Central Oregon, providing business support and visitor services. Redmo9 9,gggpmiC Q2velooment (RED j: RED is a partnership between private business and the public sector to encourage economic development in the City of Redmond. The organization's Mission is to increase the quality and number of jobs as well as capital investment within the community. Nneville/Crook County Economic Development Prineville/Crook County Economic Development assists existing businesses with expansion or retention issues, works on behalf of Prineville and Crook County on new business and industry recruitment projects, and on other strategic community-based projects with significant impacts to the local economy. The Prineville/Crook County Economic Development program is a partnership between EDCO, the Prineville/Crook County Chamber of Commerce, Crook County, and the City of Prineville, and local businesses. QMgAIDMgon Workforce Response Team 8WRT): The WRT receives and allocates Employer Workforce Training Funds, which are private sector grant dollars that support the retention and growth of living wage jobs, a skilled workforce and competitive businesses in Crook, Deschutes and Jefferson Counties. The emphasis of the funds is to upgrade skills of the private sector workforce in order to increase productivity, keep Central Oregon businesses viable and competitive, and to offer new skills and opportunities to Central Oregon workers. Opportunity Knocks (OK): OK is an entrepreneurially-managed, volunteer-driven small business assistance organization whose mission is to train, educate and provide problem solving opportunities to small business owners. Services include peer-to-peer leaming in either a Board of Advisors setting or in a seminar format. Economic Revitalization Team (state agencies): The ERT was established to focus state agencies on working together at the local level to increase economic opportunity and help local governments and business and property owners bring industrial sites to "shovel ready" status. The ERT emphasizes multi-agency coordination on projects of local and statewide significance. IZfo_ldmg= Investment Board: The Central Oregon Workforce Investment Board is a public/private partnership with a mission is to serve employers and workers by leading and coordinating regional workforce services, which include recruitment, personnel, financial & business services as well as training & education. CONS accomplishes its goals through the oversight of a one-stop service center - WorkSource Redmond and other service sites in Bend, Madras, Prineville, and La Pine. Central O[Rgon.Jurisdlcdons. • Counties: Crook, Deschutes, Jefferson • Cities: Bend, Culver, La Pine, Madras, Metolius, Prineville, Redmond, Sisters • Tribe: Confederated Tribes of the Warm Springs 4. Priority Goals and Objectives Long Term Through the development of the Central Oregon Comprehensive Economic Development Strategy, a set of long- term priorities were identified for the development of the regional economy. a. Vision statement The businesses, governments, communhy organizations, and people of Central Oregon have created a strang regional economy that is diversified, reslllent, innovative, sustainable, and that supports a rising tide of prosperity which benef/ts citizens of all Income levels throughout the region. Central Oregon Comprehensive Economic Development Strategy Page 13 Regional Investment Strategy b. Cone Values • Economic conditions vary within individual Central Oregon communities. Each community's unique economic development opportunities will be supported through regional economic development. • The region will capitalize on its high levels of entrepreneurialism and local leadership, rich natural and cultural amenities, and excellent quality of life to increase regional economic self-reliance, attract and grow local businesses that compete well in all markets, and attract a quality workforce. • Through quality training, education, and human services the region will produce a quality workforce which will be retained and sustained through abundant opportunities and living wage jobs. • Local governments and institutions will help to create a fertile environment for quality economic development by providing focused incentives, environmentally and community sensitive land for industriallcommercial development, infrastructure, and integrated regional planning. The resulting business climate will assist private enterprises to thrive in Central Oregon. c. Goals and Objectives The Goals and Objectives can be categorized into one or more of five meta-level "Strategies" for economic development. Each of these strategies has been promoted by economic development theorists and practitioners as a critical underpinning of a healthy community or regional economy. Economic development goals and actions, in any setting, generally flow from a belief in one or more of these strategies. Due to the diversity of perspectives on the CEDS Committee, all of the strategies are considered to be important: Strategy 1: Increase Prosperity for Al Central Oregon Residents in Rural and Urban Communities by Balancing, Diversifying, and Developing the Region's Economy Strategy 3: Develop and Support the Local Workforce Strategy 3: Conserve, Enhance, and Market Environmental and Cultural Amenities Strategy 4. Develop and Maintain Economic and Community Infrastructure Strategy 5: Enhance Local Leadership and Institutional Capacity to Facilitate Economic Development Strategy 1: Increase Prosperity for All Central Oregon Residents in Rural and Urban Communities by Balancing, Diversifying, and Developing the Region's Economy New traded sector and investment capital is critical for building a strong regional economy. Additionally, diversification of businesses and industries provides regional economic resilience to downturns in any one or set of associated industries. A regional economy also needs supportive, value-adding government and support services to maximize growth, and rich internal linkages to promote maximum recirculation of capital. Finally, a prosperous regional economy is defined by rising prosperity among all groups and communities within the region. Central Oregon Comprehensive Economic Development Strategy Page 14 Regional Investment Strategy Objectives: f. Develop a business-friendly environment which is responsive, timely, adds value and regulates to levels necessary to protect public health and safety and preserve community values that make Central Oregon an attractive lace to live and to do business. Sustain the r ion's status as Entrepreneurial Mecca for the northwest resources a ertise h. Implement and expand business administration 13A and/or MBA with emphasis in entrepreneurialism I. Nurture companies to prepare them for venture capital or sustainable operation ; e.g. mic rocxedit programs, technical assistance, business planning This is ancillary to the above two goals. Use incentives and support services to maximize traded sector business development congruent with regional values. Retain capital in the region through collaborative ventures and communication systems which increase finks es between businesses and between citizens and local businesses. Objectives: J. Promote the development of locally-produced products and services (inputs) for local businesses (business to business buying and selling) k. Promote the development of locally-products products and services for local consumers 1. Protect world landsca s to pLotect Central Oregon food and fiber resources m. Develop a ionai clearinghouse/network to link local investors and local investment opportunities. n. Develop a diverse set of affordable local power sources. Strategy 2: Develop and Support the Local Workforce A skilled, stable and adequately sized workforce is critical to the success of the Central Oregon economy. However, Central Oregon employers are experiencing difficulty attracting and retaining qualified employees due to a variety of factors, including: • Tightening of the labor pooldow unemployment rates - a shortage of highly qualified workforce • A shortage of affordable workforce housing in some communities • Increased inter-city, commuting due to uneven housing costs across the region, at a time when fuel costs are increasing • Need for improved educational attainment levels and appropriate worker skills for the unique industry base in each community Opportunities exist for improved connections and coordination between the business community, education institutions, and workforce development organizations for the benefit of Central Oregon workers. Additionally, improved access to affordable workforce housing, child care, and health care services are needed. The Strategy 3 Goals address the need to develop and support the local workforce for the benefit of the regional economy: Objectives: o. Improve regional equity in access to educregon - expand local community college educational opportunity through (a) campuses In outlying communities, (b) transportation networks, and (c) distance leaming innovations supported by expanded communications networking, course development and student support syMms p. Improve the regional workforce by leveraging financial support and improving linkages between private business, woridonce 00MLopmentagencles and education institutions q. Improve and expand workforce training opportunities for job seekers and incumbent workers (entrance/pre- em yment): u .business efficiency, retrainin alternative career training r. 5 bn ration and effici of the K-201CC/Universi lbrce Trains continuum Objectives: s. Expand access to and affordability of quality childcare options t. Improve skills and workforce opportunities for non-English speaking residents - e.g. expand availability of ESL. Provide S ish u trains themployers u. Expand access to affordable health care services in all communities Central Oregon Comprehensive Economic Development Strategy Page 15 Regional Investment Strategy public-private partnerships to ensure the long-term supply of affordable housing for the workforce in all communities x. bevel opportunities for incentive-based em er-assisted housing ms Preserve existing affordable housi stock z. Improve regional access to state and federal affordable housing programs; improve advocacy and communication/regional awareness of programs Strategy 3: Conserve, Enhance, and Market Environmental Amenities Central Oregon's environment is the context and framework within which our economy operates. Environmental amenities are the natural capital at the foundation of our regional economy. Careful, sustainable management of natural resources and environmental amenities is critical to avoid degrading our future economic opportunities and potential. Unplanned growth has the potential to degrade the very environmental amenities and quality of life that drive our growth and development in the first place. Objectives: aa. Develop a water management plan to restore stream flow while meeting the needs of agricultural, municipal and industrial users bb. Implement no nt source pollution reduction measures in both urban and rural areas Objectives: cc. Develop programs to increase the economic viability of farms and working forests to counteract the trend toward urbanization of these lands dd. Promote urban devel ent ttems that reducesprawl and facilitate efficient transportation ee. Maximize workin landscape retention through rural land use icier ff. Delineate and eserve critical wildlife corridors gg. Identify and reserve valuable recreational lands Ob ectives: B. Im ement strat i~ to reduoa Tonal rgenhouse emissions kk. ( lement strategies to reduce diesel articulate matter emissions 11. Manage regional smoke emissions from wildfire and prescnbed fire to minimize health impacts Public and private infrastructure provides the basic foundation of a functioning economy - serving the businesses and residents of Central Oregon while also facilitating access to markets outside the region. Central Oregon governments, organizations and businesses strive to provide quality infrastructure within the context of rapid regional population growth, development, and expanding urban growth boundaries. This rapid growth has led to the need for intergovernmental communication, collaboration, and planning in developing and maintaining infrastructure. Strategy 4 goals and objectives support the construction, expansion and rehabilitation of essential public and private infrastructure and facilities necessary to create and retain private sector jobs and investments, provide access to markets, attract private sector capital, promote regional competitiveness, and protect regional quality of life. Strategy 4: Develop and Maintain Economic Infrastructure Central Oregon Comprehensive Economic Development Strategy Page 16 Regional Investment Strategy woddonce pp. Develop and/or improve intennodal facilities for the efficient movement of s and services qq. Secure funding for backlog of transportation project needs, as per COACT project needs list Objectives: rr. Develop an adequate supply of affordable commercial land in Central Oregon communities ss. Develop an adequate supply of affordable industrial land in Central Oregon communities tt. Develop an adequate supoy of affordable residential land in Central Oregon communities Objectives: uu. Identify infrastructure deficiencies and capacity needs and develop financing and implementation strategies for infrastructure construction a community and a regional level vv. Construct and/or expand infrastructure facilities in high-density areas and extend Infrastructure to areas within urban growth boundaries. ww. Identify community facility needs and develop financing and implementation strategies for community Strategy 5: Enhance Local Leadership and Institutional Capacity to Facilitate Regional Economic Development Population growth and development patterns have contributed to challenges across the region such as a lack of housing that is affordable to the workforce in some communities, increasing commuter rates, an acute shortage of qualified workforce, and overburdened local government budgets. There,is a need for broad discussion among communities, between local govemment and state and federal govemment, and among public agencies and the private sector. To effectively address the myriad of issues, a forum for cross-issue regional discussion and integration should be formed, and the broader community should be engaged in developing and implementing solutions. The Strategy 5 goals address the need to develop and support regional planning, resource development, and leadership development for the benefit of the regional economy: Objectives: aaa. Deveft strategies to to into ilanthro and retirees; bbb. Develop local capacity to better access state and federal grant opportunities. Direct resources to help businesses. Use Internet to effectlv communicate availability of economic development resources. cx. Encomage and promote innovative. boll approaches by loci governments to achieve resources necessary to support adequate infrastructure for economic development (e.g. Increased gas tax, issuance of bonds for infrastructure ddd. Create a data depository or clearinghouse (e.g. detailed city-level data and analysis), to facilitate informed pm_qMm and lanni decisions Central Oregon Comprehensive Economic Development Strategy Page 17 Regional Investment Strategy 5. Identified Priorities -Short Term The Central Oregon Community Investment Board will address the long term priorities identified in Section 4 by supporting projects and initiatives that result in one or more of the following short-term priorities, which are consistent with ORS 285B.230(B): 1. Family wage job creation in Crook, Deschutes and Jefferson Counties; 2. Job Retention in Crook, Deschutes and Jefferson Counties; 3. Maximizing local, state and federal funds leveraged for job creation and retention projects; 4. Promoting structures and processes of public and private organizations to effectively create, adapt, foster and sustain economic development in Central Oregon; 5. Ensuring that the economic strategies reinforce Central Oregon's long-term prosperity and livability; 6. Coordinating economic development efforts to support a locally skilled workforce in order to compete in the Through the CEDS planning process, the regional Needs and Issues process, the regional Infrastructure Needs Inventory, and through other methods of economic analysis, several major projects, programs and activities have been identified for focus over the next six years: • Support of industry clusters, including secondary wood products, transportation equipment/aerospace/aviation, manufacturing, renewable energy, tourism. • Support emerging clusters including natural resources and prison/corrections (in Jefferson County). • Infrastructure development and improvement, specifically as related to job creating properties (specific priority projects to be identified through the Infrastructure Needs Inventory). • Essential community facility development and improvement (specific priority projects to be identified through the Infrastructure Needs Inventory). • Transportation issues, including state highway modemization needs, traffic flow on state highway corridors, and funding for local road network, state highways. This has impacted the efficient mobility of goods, services and the workforce within and between Central Oregon communities, and to and from the region. • Rail issues, including supporting the expansion of the Prineville Rail Depot to provide rail support to industrial land. • Support formation and stabilization of the City of La Pine - the state's newest incorporated city • Continue to support targeted training for the regions' clusters of Secondary Woods products, Aerospace Production and Parts, and targeted sectors including Appeal and Sporting Goods, High Technology including Information Technology, Renewable Energy, Light Industrial and Manufacturing, and Research and Development. Assist in the retention, expansion, and remitment for these industries. • ADA accessibility issues for community facilities. • Access to higher education in areas outside of Bend. • Address workforce supply; shortage of qualified workers. • Address housing affordability trends. • Need for regional public transit. • Challenges surrounding endangered species reintroduction. Alignment with OECDD Strategic Plan The long-term and short-tern priorities align with the goals established for Oregon Economic and Community Development by the Legislature and the Oregon Economic Development Commission: .1. Promote a favorable Investment climate to strengthen business, create jobs, and raise real wages 2. Assist Oregon's communities to build capacity to retain, expand and attract new business 3. Improve national and Global competitiveness of Oreaon companies. The Regional Investment Strategy short-term priorities align directly with the OECDO Strategic Plan goals, with their focus on supporting on-d"round job creation projects, maximizing resources, and coordination among economic development organizations. Central Oregon Comprehensive Economic Development Strategy Page 18 Regional Investment Strategy Additionally, the CEDS long-term priority Goal I incorporates elements of the OECDD strategic plan, and is the primary vehicle for consistency with the OECOD plan (see page Strategy 1, Goal 1, page 15). 6. Central Oregon Community Investment Board - Six-Year Investment Strategy & Implementation Plan The Central Oregon Community Investment Board's six year strategy and implementation plan is contingent upon Legislative action in 2008 to fund the Regional Investment Program. If the Legislature funds the program, COCIB intends to implement its Community Investment Strategy through funding projects that align with the Board's long- term goals and priorities, and that address specific shat-term priorities: 1. Family wage job creation in Crook, Deschutes and Jefferson Counties; 2. Job Retention in Crook, Deschutes and Jefferson Counties; 3. Maximizing local, state and federal funds leveraged for job creation and retention projects; 4. Promoting structures and processes of public and private organizations to effectively create, adapt, foster and sustain economic development in Central Oregon; 5. Ensuring that the economic strategies reinforce Central Oregon's long-term prosperity and livability; and 6. Coordinating economic development efforts to support a locally skilled workforce in order to compete in the global economy. The Community Investment Board has adopted a two-pronged approach that will effectively utilize Regional Investment Fund dollars to address the above priorities. First, the Board will obligate a portion of its Regional Fund allocation to Economic Development for Central Oregon (EDCO) to fund private sector job creation through the "Business Development Opportunity Fund" project. Secondly, the Board will utilize remaining Regional Investment Program funds, less administrative expenses, to provide 'Immediate Opportunity" grants to projects identified by and/or supported by cities, counties and the Confederated Tribes of Warm Springs for the purpose of funding job creation and retention projects. Both the Business Development Opportunity Fund and the Immediate Opportunity Fund will make grants only to eligible recipients; COCIB will not make loans. Fallowing are detailed descriptions of these initiatives: Jusiness Development Opportunity Fund: The Community Investment Board made private sector investments in the 2001-2003, 2003-2005, and 2005-2007 biennia through Economic Development for Central Oregon (EDCO). These investments focused on private sector job creation through business recruitment and retention activities. The Community Investment Board chose to grant funds to EDCO for the following reasons: • EDCO has a highly visible public, web and community presence and often serves as a "gateway" for new businesses seeking to enter Central Oregon. • EDCO's board of directors is representative of all Central Oregon communities, including rural areas. • EDCO has an experienced economic development staff that is well networked with other Oregon Economic Development professionals and well respected in the region. • Due to the presence of a "retention specialist" on its staff, EDCO can often respond to the needs of businesses struggling to stay in the region. • Because EDCO is a private non-profit entity, it has the ability to act rapidly and to respond to immediate job creation and retention opportunities. • EDCO is well networked with the Chambers of Commence in the region, which provides an alternative "gateway" to the region for new businesses seeking to the region and those businesses struggling to stay in the region. The fundamental components of this project are as follows: • The Community Investment Board and EDCO will establish contractual targets for job creation, retention, and funds leveraged. These targets will be based on the Community Investment Board's performance measurement targets. • EDCO will provide sub grants to private businesses for the purpose of job creation and retention. These grants will be structured such that job creation, retention and leveraging targets can be met. • Grants will focus on traded sector industries, manufacturers, and key regional economic dusters. • EDCO and the Community Investment Board will agree to the ratio of funds targeted toward recruitment projects versus retention projects. EDCO will invest no Regional Investment Funds in retention projects without first ascertaining that all other opportunities for loan and grant capital have been exhausted. Central Oregon Comprehensive Economic Development Strategy Page 19 Regional Investment Strategy Throughout the term of the contract, EDCO will regularly canvass the Central Oregon Chambers of Commerce, Central Oregon Intergovernmental Council, Oregon Economic and Community Development Department, Central Oregon Visitors Association and other entities involved in regional economic development to identify businesses that may be candidates for Regional Investment Funds. In making investment decisions, EDCO will attempt to distribute investment among communities and counties located in Crook, Deschutes and Jefferson Counties. EDCO will give priority to 1) communities where investments of Regional or Rural Investment funds have not yet been made; and 2) the most rural and distressed communities of the region as indicated by the Oregon Economic and Community Development Department Rural and Distressed Community index. EDCO will report quarterly to the Community Investment Board regarding investments and outcomes. Business Development Opportunity Fund sub grants will be made to private sector businesses located within Crook, Deschutes or Jefferson Counties. Regional and Rural Investment dollars will fund the following private business sub-grantee activities: • Facility construction costs • Fixed asset equipment purchase • Marketing • Business relocation costs • Statutorily permissible personnel costs General industry cluster targets for the Business Development Opportunity Fund include- • Aerospace/Aviation • High Technology (includes software, hardware and biotechnology) • Recreational Equipment Manufacturing • Secondary Wood Products • Headquarter Firms • Light Industrial and Manufacturing (Plastics, printing, misc.) • Research and Development Firms • Renewable/Sustainable Energy Immediate Opportunity Fund: In lieu of a one-time call for projects with a competitive application process, the Community Investment Board will make available the remainder of Regional Investment Program funds on an Immediate Opportunity basis, to fund job creation and retention projects and activities proposed and/or supported by Central Oregon cities, counties and the Confederated Tribes of Warm Springs. Fallowing are components of the Immediate Opportunity fund: • The Community Investment Board will accept project applications from jurisdictions and organizations at any time throughout the biennium, until such time that all Regional Investment funds are committed. • The Community Investment Board will fund projects that address the overall regional long-term and short term priorities, as identified in the Central Oregon Community Investment Strategy (Section 7). • The Community Investment Board will make funding decisions on a quarterly basis. • Projects will contribute to regional job creation and/or retention, and will leverage local, state and federal funds. • The Board will utilize the statewide Infrastructure Needs Inventory and Needs and Issues Inventory process when evaluating project applications. Immediate Opportunity Fund projects types include, but are not limited to: • Public infrastructure in support of job creation or retention projects • Community facilities • Planning or regional problem solving projects In support of economic development, duster planning The regional priority list derived from the Infrastructure Needs Inventory will be amended into this plan to demonstrate high priority Immediate Opportunity. Fund projects. 7. Rural Action Plan and Rural Set-Aside The Central Oregon Community Investment Board will allocate a portion of Regional Investment Funds are targeted toward rural areas of the region. "Rural" is defined by the Board as Crook and Jefferson counties in their entirety, Central Oregon Comprehensive Economic Development Strategy Page 20 Regional Investment Strategy and Deschutes County outside of the urban growth boundary of Bend. The Board will ensure rural communities are notified of the availability of Regional Investment Funding, and will monitor project awards to ensure that rural communities are adequately served by this program. The Strategy will be focused on benefiting distressed communities in Central Oregon. Coun Index Economic Status Crook County 0.85 Distressed Jefferson County 0.82 Distressed The Central Oregon Community Investment Board will support projects and activities targeted specifically to rural communities, including: • Business development projects that lead to job creation and retention. COCIB recognizes that while rural job creation project typically result in less net job gain than in urban areas, the projects are extremely valuable to rural distressed communities. Specific effort will be made to invest in rural community job creation projects. • Infrastructure development, community facility development Through the infrastructure needs inventory, priority rural projects will be identified and supported. COCIB recognizes that while populations are lower in rural areas and resources are limited, infrastructure and facility costs can be equal to costs in urban areas. Additional support of these communities is needed. Specific projects will be identified through infrastructure inventory. • Technical support and assistance. Rural communities often lack the capacity to identify and secure funding for critical projects. COCIB, COIC and EDCO provide support and assistance to rural and distressed communities. • Specific focus on economic dusters critical to rural communities, including secondary wood products, travel/tourism, renewable energy, corrections/prison industry, agriculture, natural resources, and manufacturing. • Marketing of low-cost, available industrial and job creating properties. COIC will outreach to rural communities to identify appropriate Immediate Opportunity Fund projects. Outreach will include the cities of Culver, La Pine, Madras, Metolius, Prineville, Redmond and Sisters; Crook, Deschutes and Jefferson counties; and the Confederated Tribes of Warm Springs. Upon the availability of Regional Investment Funding, each of the cities will receive information and application materials. Economic Development for Central Oregon will conduct outreach to rural communities to identify appropriate Business Development Opportunity Fund recipients. Outreach by EDCO will include Chambers of Commerce, Central Oregon Intergovernmental Council, Oregon Economic and Community Development Department, Central Oregon Visitors Association, Prineville/Crook County Economic Development. Redmond Economic Development, and other entities involved in regional economic development to identify businesses in rural areas that may be candidates for Regional Investment Funds. COCIB will earmark a minimum of 50% of Regional Investment funds toward projects benefiting rural areas. Assuming that the Central Oregon Community Investment Hoard receives an allocation of Regional Investment Funds for the 2007-2009 that is the same as the past biennium, then the minimum amount of the rural set-aside will equal $233,950. 8. Barriers to Implementation A detailed summary of regional weaknesses and threats is included in Strategy Section 4. This summary includes many broad regional challenges, such as affordability of land, energy costs, workforce availability, distance from markets, and other factors. Beyond these issues, several regional challenges have become barriers to implementation of the Central Oregon Community Investment Strategy: 1) Decreasing state and local government budgets resulting in a lack of public funding for high priority economic development projects. 2) Increasing stresses upon the region's infrastructure and housing costs as a result of rapid population growth. Central Oregon Comprehensive Economic Development Strategy Page 21 Regional Investment Strategy 3) Decreasing (and potentially eliminated) Regional Investment Program grant resources. The de-funding of this program would effectively eliminate the Board's ability to leverage resources to address regional priorities. The Community Investment Board's means to overcome these barriers include: • funding projects that support the Community Investment Strategy long-term and short-term priorities; • funding projects that leverage private and public sector investment; • funding high priority projects as identified by cites, counties, and the tribe; and • funding projects that lead to job creation or retention as a means of building the employment base of the region 9. Plan for Involvement of Disadvantaged and Minority Groups The Central Oregon Community Investment Board will involve the disadvantaged, minority groups, and rural areas in all stages of Strategy development and implementation. Notice of the public meeting prior to the adoption of the Regional Investment Strategy will be sent to the list of disadvantaged and minority group representatives. When the Central Oregon Community Investment Board initiates the implementation of its regional Strategy by advertising for applications, it will again notify the disadvantaged and minority groups, and.the cites, counties, tribes, special districts, and non-profit organizations related to economic and community development through a direct mailing. Following is a list of Organizations contacted directly: AARP Alvce Hatch Center ARC of Central Bend Area Habitat for Humanity Bend Communl Center Bethlehem Inn Homeless Shelter Bo and Girls Club Bridges to Hope Ministry CASA of Central Oregon Central Oregon Battering and Rape Alliance Central Oregon Council on Aging Central Oregon Intergovernmental Council Central Oregon Resources for Independent Living Central Oregon Partnership Central Oregon Family Resource Center Central Oregon Veteran's Outreach Crook County Family Resource Center Crooked River Ranch Senior Group Deschutes County Commission on Children and Families Crook County Commission on Children and Families Jefferson County Commission on Children and Families Deschutes County Healthy Beninninas Early Intervention Grandma's House of Central Oregon Haven House Health Start J Bar J Youth Services KIDS Center La Pine Senior Citizens Inc. Lutheran Family Services Neighbor Impact Opportunity Foundation of Central O n Ochoco Community OiniclOchooo s System Prineville Senior Center United Senior Citizens of Bend ncil for Senior Citizens ft:!Nond Residential Assistance Prog. Salvation Arm t'1 Senior Citizens of Jefferso n Coun Sisters Senior Council L incent DePaul Confederated Tribes of Warm S rin HAABLA Human Dignity Coalition Latino Community Association Cities Confederated Tribes of Wart S Special Distrids Counties Economic Development O nizaWns Central Oregon Comprehensive Economic Development Strategy Page 22. Regional Investment Strategy COCIB will also issue news releases announcing the availability of grant funds. These news releases will be sent to the following media organizations: The Bulletin, The Madras Pioneer, The Central Oregonian, The Redmond Spokesman, The Nugget Newspaper. Cascade Business News, Frontier Advertising, and The Spilyay Tymoo. All COCIB meetings are public meetings, with notice sent to media outlets. COCIB's elected officials represent all constituencies within their jurisdictions, including minority and disadvantaged groups. Five groups within the region require special attention. Seniors, disabled, Hispanics, Native Americans (Jefferson County), and citizens living below the poverty line may be affected by economic and community development activities. Total 19,182 115,367 19,009 153,558 Senior 65+ 2,818 14.6016 15,089 13% 2,363 12.4% 20,270 13.2% Disabled 4,,085-- 21.2% 18,454 15.9% 3,496 18.3% 26,035 16.9% Hispanic 1,082_ 5.6% 4,304 3.7% 3,372 17.7% 8 758 5.70/6 Native American 250 1.3% 956 0.8% 2,981 15.6% 4,097 2.6% - Poverty- 2 357 12% 11,561 9.6% 2,692 13.9% 1%010 10.8% County Index Economic Status Crook County 0.85 Distressed Jefferson County 0.82 Distressed Additionally, there is a significant migrant farm worker population in Jefferson County. This population supports the agricultural industry, which is primary industry in Jefferson County. 10. Special Uses of Funds A portion of the Regional Investment funds will be used for activities and projects that assist individual private businesses in acquiring assets such as land, buildings, machinery and equipment through Business Development Opportunity Fund sub grants. Grants for fixed asset acquisitions will not displace existing private or public sources of funding for these acquisitions. Eligible Activvities - Activities eligible to receive grant funds include: acquisition of fixed assets (land, plant, equipment or other tangible asset that has a useful life lasting longer than twelve months, and is normally subject to depreciation for income tax purposes), training, and marketing. Grant funds may be used to strengthen the equity position of the business allowing the project to be financed where it would not otherwise be eligible for loan funds or gap financing. Ineligible Activities - Grant funds cannot be used for the following: • Assistance in excess of what is needed to accomplish the purpose of the project. • Distribution or payment to the owner, shareholders, or beneficiaries or members of their families when such persons will retain any portion of equity in the project or business. • The transfer of ownership unless the grant will keep the business from closing, or prevent the loss of employment opportunities in the area, or provide expanded job opportunities. • For the purpose of refinancing or restructuring existing debt. • Displacing existing private or public sources of funding. Priorities - The following criteria will be considered when determining grant recipients: • Degree to which the project addresses regional long-term and short-term priorities. • Number of full time jobs that will be created or retained through the project. • Dollars invested per job created or retained. • Funds leveraged. • Project readiness. ' Source: US Census, 2000 Central Oregon Comprehensive Economic Development Strategy Page 23 Regional Investment Strategy If selected as a finalist for grant funding, private business applicants may also be requested to provide additional information as requested by COIC such as: personal financial statements, personal income tax returns, a resume, business tax returns for the subject business and all affiliate businesses, and income statements, cash flow statements and balance sheets for the subject business. If requested, this information will be considered confidential and will be used to perform a financial analysis. The financial analysis must show that the company is viable but cannot reasonably assume more debt. The Business Development Opportunity Fund project will exercise reasonable prudence and caution in investment of Regional/Rural Investment funds, including but not limited to due diligence, "clawback" clauses and security interest in capital investment where appropriate. The Community Investment Board will not provide loan funds through the Business Development Opportunity Fund. 11. Management Plan The Central Oregon Community Investment Board will periodically submit performance reports in a form prescribed by the Economic and Community Development Department for the Regional Investment Program, to the county governing bodies in the region, the Oregon Economic and Community Development Commission, the Governor and the Legislature. Section 1. Administrative Agent Crook, Deschutes and Jefferson counties have entered into an agreement with the Central Oregon Intergovernmental Council for the fiscal and administrative management of the Central Oregon Regional Investment and Rural Investment Fund programs. The Central Oregon Intergovernmental. Council (COIC) is a government entity organized under ORS 190. COIC is a state-sanctioned Council of Governments, and since 1972 has been one of the few organizations in the region that involves all three counties and seven cities in policy-making, program planning and service delivery. COIC is governed by a 15-member Board, with representatives from each of the member governments: the counties of Crook, Deschutes and Jefferson, and the cities of Bend, Culver, Madras, Metolius, Prineville, Redmond and Sisters. Five members representing the interests of business, tourism, agriculture, wood products, and the unemployed/underemployed are also on the COIC Board. From 1993 to 2007, COIC was the fiscal and administrative agent for the Central Oregon Regional Strategies Board and the Central Oregon Community Investment Board. In the upcoming biennium, as was the case this past biennium the majority of the staffing services provided to the Central Oregon Community Investment Board by COIC will be undertaken by the Program Administrator for Economic Development and the Program Assistant for Economic Development. The following COIC staff will also provide some level of services to the Central Oregon Community Investment Board: Executive Director, Fiscal/Administrative Manager, Staff Accountant, Accounting Clerk, Community Relations Coordinator, Computer Technician, and additional administrative staff as needed. COIC will receive all Regional Investment funds and maintain discrete accounting records for expenditures and cash balances as required by the State. COIC will develop project contracts for all projects awarded grant funds by the Community Investment Board. COIC staff will track project progress, submit regular progress reports to the Community Investment Board, and will enforce terms and conditions of the grant awards. COIC will arrange facilities, provide appropriate notice under the Public Meetings Law, prepare agendas and other supplemental meeting materials, and record the minutes of all public meetings. Additionally, COIC will file, retain, dispose of, or allow inspection of public records as required by State of Oregon Public Records Law (see appendix E - COIC Internal Control Policy and Procedures). Section 2. Application Process The Central Oregon Community Investment Board will address Strategy priorities through a two-pronged approach. The application process for these two approaches is as follows: Busi ess Development Opportunh Fund: The Central Oregon Community Investment Board will contract with Economic Development for Central Oregon (EDCO) to identify business recruitment and retention projects that lead to job creation and/or retention. Throughout the term of the Business Development Opportunity Fund contract, EDCO will regularly canvass the Central Oregon Chambers of Commerce, Central Oregon Intergovernmental Council, Central Oregon Comprehensive Economic Development Strategy Page 24 Regional Investment Strategy Oregon Economic and Community Development Department, Central Oregon city and county governments, and other entities involved in regional economic development to identify businesses that may be candidates for Regional Investment Funds. EDCO will develop and utilize a specialized project application form EDCO will not select businesses for the Business Development Opportunity Fund that result in the relocation of a business facility within Oregon from one labor market area to another, unless the job losses in the originating labor market area are less than or equal to 0.1 percent of the most recently available estimate for the civilian labor force therein, or unless the relocation entails an improvement in the quality and a significant increase in the size of the business' total in-state employment, without being detrimental to any rural area, subject to determinations by the State of Oregon Economic and Community Development Department. Immediate Oooortunity Fund: The Central Oregon Community Investment Board will advertise the availability of Regional Investment funds through the Immediate Opportunity Fund by issuing news releases, and through direct mailings to cities, counties, tribes, special districts, and non-profit organizations related to economic development. The Board will make Immediate Opportunity Grants only to city or county sponsored projects, and will accept project applications at any time throughout the biennium, until such time that all Regional and Rural Investment funds are committed. The Community Investment Board will make Immediate Opportunity funding decisions on a quarterly basis. Applicants will be asked to address the overall regional priorities identified in the Central Oregon Community Investment Strategy, and to identify levels of job creation, retention, and funds leveraged. Applications will be reviewed by COIC for completeness, accuracy, and compliance with the minimum program requirements related to job creation and funds leveraged. Any applicants that do not succeed in passing this review will be notified and given an opportunity to correct the application. All applications that pass final staff review will be forwarded to the Central Oregon Community Investment Board. Applicants that do not pass final staff review may appeal the staff decision to the Executive Committee of the Central Oregon Community Investment Board. The decision of the Executive Committee on the appeal is final. Project Selection Criteria Business Development Opportunity Fund and Immediate Opportunity Fund applications will be evaluated based upon the criteria established below. • Extent to which the project addresses the regional long-term and short-term priorities established by the Board in the Central Oregon Community Investment Strategy (see Section 7), including job creation and retention. • Extent to which the project is ready-to-proceed • Extent to which the project will leverage additional matching funds • Extent to which the project is feasible in the short and long-run • Extent to which the project cannot secure funding from other financing sources • Extent to which the outcome of the project can be measured • Track record of applicant • Request does not include ineligible costs - Grant funds cannot be used for: debt retirement; reimbursement of expenses incurred prior to grant award; or the relocation of a facility from one labor market area within the state to another if not accompanied by an expansion of the applicant's business or employment. Other Review Criteria Specific to the Regional Investment Fund: Extent to which the project addresses at least one of the following objectives of the Regional Investment Fund: (a) the support of communities and populations that have been left out of Oregon's economic expansion and diversification; (b) the assistance of companies that are starting up or already in business in Oregon to compete globally; (c) the reinforcement of Oregon's long-term economic prosperity and livability; and (d) the coordination of regional efforts for economic and community development, education, workforce development, natural resource management, and other civic activities Regional Investment Funds will not substitute for available budgeted resources in supporting ongoing public services or infrastructure that already exist, but rather will support only new or enhanced services. The funds will not maintain existing staff of a public or private entity, except staff time dedicated to the administrative needs of the Strategy or Central Oregon Community Investment Board; or redirected or augmented efforts consistent with the strategy such as new technical assistance for enhancing regional coordination or local economic development activities/capacity. Central Oregon Comprehensive Economic Development Strategy Page 25 Regional Investment Strategy The funds will not be used to fulfill objectives or activities of the Strategy as initiated in a previous biennium. The funds will not be used to assist with the relocation of a business facility within the state from one labor market to another, unless the hob losses in the originating labor market are less than or equal to 0.1 percent of the most recently available estimate for the civilian workforce therein; or the relocation entails an improvement to the quality and a significant increase in the size of the business's total in-state employment without being detrimental to any rural area, subject to determination by OECDD. Section 3. Project monitoring and disbursements Regional Investment Fund grant dollars will be distributed to Recipients based on the submission of one or more grant draw down requests by the Recipient, and approval of those requests by COIC. Grant funds will be distributed on a reimbursement basis for eligible project expenses that are consistent with the project budget and are incurred during the project period. Source documentation must be submitted for all grant expenses, as outlined below: A. All grant draw requests must include source documentation for the full amount of funds requested. This documentation shall include one or more of the following: 1. Invoices, with corresponding cancelled check copy or check number; 2. Receipts for purchases; 3. Credit card statements that dearly delineate purchases, with corresponding cancelled check copy or check number; 4. Payroll or time and attendance records that clearly demonstrate employee wages and hours; and 5. Other sources that meet the requirements of sections B and C below, and are deemed sufficient by COIC. B. These documents must permit the tracing of funds to a level of expenditure adequate to establish that the uses of grant funds are consistent with the approved grant budget as stated within the grant award contract, and that grant funds have not been used in violation of the restrictions and prohibitions of the grant award contract. C. These documents must be sufficient to facilitate an effective audit. Record Retention: The Recipient must maintain proper books of account and records related to the receipt and expenditure of grant funds in accordance with Generally Accepted Accounting Principles. The books of account and records must be maintained in sufficient detail to verify how the grant funds were expended or utilized. The books of account and records shall include receipts and invoices, as appropriate. The Recipient shall retain and keep accessible the books of account and records for a minimum of three years following the grant ending date; provided, however, that if there is any audit issue, dispute, claim or litigation relating to this grant funds, the Recipient shall retain and keep accessible the books of account and records until the audit issue, dispute, claim or litigation has been finally concluded or resolved. Central Oregon Community Investment Board Monitoring COIC provides financial to the Board no less often than quarterly. Status reports on projects are also provided to the board no less often than quarterly. The grant contract template is approved by legal counsel. Analyzing, processing and reporting financial transactions are conducted in accordance with GAAP. 12. Evaluation Plan Following are the Central Oregon Community Investment Board's adopted 2007-2013 regional benchmarks and performance measures: Job Creation and Retention: The Central Oregon Community Investment Board will create or retain a minimum of 1 job for every $5,000 of funding available within the Regional Investment program, including interest earnings. Of the jobs created or retained, 80% will be short-term job creation, 20% will be long-tern job creation. A majority of the jobs created or retained will be at or above the county average wage. Leverage: The Central Oregon Community Investment Board will leverage a minimum of $5 for every $1 of funding available within the Regional and Rural Investment programs, including interest earnings. Of the private and public sector funds leveraged, 80% will be short-term investments, and 20% will be long -term investments. Central Oregon Comprehensive Economic Development Strategy Page 26 Regional Investment Strategy Other measures: Number of community capital projects assisted for construction (infrastructure and community development); number of industrial sites certified as "project ready." Assuming that the Central Oregon Community Investment Board receives an allocation of Regional Investment Funds for the 2007-2009 that is the same as the past biennium, then the performance targets are as follows: Jobs Created or Retained, Short-Term 83 Jobs Jobs Created or Retained, Lon Term 21 Jobs Funds Leveraged, Short-Term $2,079,544 Funds Leveraged, Long-Term $519,886 Average Wage, Jobs Created or Retained $15.85 Amount of Personal Income Tax generated by the Board's investment in ' bs er ear $195,547 Number of Communi Capital Pro ects Assisted 9 Number of industrial sites certified as pro ect read 2 Sources of Data: Project reports, OED data Data on performance outcomes will be gathered over the six-year period beginning 7/1/07. Outcomes will be reported every six months. The Central Oregon Intergovernmental Council will monitor and evaluate the Strategy's effectiveness and efficiency by collecting job creation, retention and leverage reports from projects funded by Regional and Rural Investment Funds. These reports will be summarized and regularly presented to the Community Investment Board and the State. 13. First-,Source Hiring Agreements for Benefited Businesses The Central Oregon Community Investment Board does not require firms receiving benefit from Regional Investment Funds to enter into a first-source hiring agreement with publicly-funded training providers. Central Oregon Comprehensive Economic Development Strategy Page 27 Regional Investment Strategy F+ 10 r) O Gl 2 Ci7 c Q CL '0 0~0 IN CL 3 Q m t. ' a " a w m 4 m M •D 3 ° y O y f ~p H ro 7 3 ~ O. 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W W N F+ Q1 to N W N H 1~ N ~ O W to ~ ~ O QQ ( p ~ Q O Q C O ~ O d v v c ~ ° ~ ° g ~ ~ v r n to + p 0 p ~ r O 4 o Q o g g C ° O O 0 ~ o $ Peter autowsk From: La Pine Industrial Group <lapineig@uci.net> Sent: Thursday, October 27, 20114:29 PM To: Peter Gutowsky Subject: Re: La Pine Prospect Peter: I just returned from a three-day business trip to northern Idaho and did not have a chance to provide the information about the La Pine Industrial Park before I left. I don't know if you can still use it but here it is: We have 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 Midstate Electric Cooperative developed a site plan to show that it could meet their specifications. Unfortunately, the company decided to locate in Richland, Washington. Richland offered the company a larger site for $7,000 per acre fully developed. We could not match that. By the way, the company was a State OECDD prospect and they brought the Ferguson site selectors on the tour of Central Oregon properties. Lee Smith General Manager 541-536-9042 Office Phone 541-410-0886 Cell Phone AWL JOHNSON REID LAND USE ECONOMICS 7RAN❑ DATE: October 21, 2011 TO: DESCHUTES COUNTY BOARD OF COMMISSIONERS 1300 NW Wall Street Bend, OR 97701 FROM: Jerald Johnson, Johnson Reid SUBJECT: Response to REOA Critiques and Questions Submitted by 1000 Friends of Oregon Over the last few months the Commission as well as Deschutes County Planning Staff has received a series of correspondence from 1000 Friends of Oregon with respect to the Central Oregon Regional Economic Opportunities Analysis. These include the following: • August 111h Letter, Pam Hardy, Staff Attorney, 1000 Friends of Oregon • August le Letter, Pam Hardy, Staff Attorney, 1000 Friends of Oregon • September le email, Mia Nelson, 1000 Friends of Oregon • September 26`h Memorandum, Pam Hardy, Staff Attorney, 1000 Friends of Oregon • October 5`h Memorandum, Pam Hardy, Staff Attorney, 1000 Friends of Oregon We appreciate 1000 Friends input on the document and participation in the process to-date, and share their support for increased regional cooperation and an improved economic development environment. This memorandum provides a technical response to many of the issues and/or arguments outlined by 1000 Friends. The following is a basic summary of the issues/questions raised in the correspondence: ■ No evidence that large industrial lots mean many jobs ■ Are jobs from large lot employers better than those from small lot employers? ■ Conflicting evidence that large industrial lots would result in a net job loss in the region ■ Insufficient evidence that large companies would set up shop in a community like ours ■ Table does not reflect a need for large lots ■ The findings are greater than the identified need for the Portland metro area GENERAL COMMENTS First of all, I would like to speak to the inherent lack of precision in any forecast of land need over a twenty year planning period. I am aware of no forecasters that would express a high level of certainty over a forecast of this duration, particularly as it pertains to employment. The variables that factor into a projection of land need for employment include the following: ■ Employment growth by sector ■ Operational characteristics of a wide range of firm types 316 SW Washington, Suite 1020 Portland, OR 97204 503/295-7832 F-71 National/International production chains o Absolute and relative shipping costs over time o Shifts in currency exchange rates, relative labor prices and international regulations ■ Technological changes o Shifts in production techniques and requirements over the next twenty years, I would expect that the Western United States and Central Oregonwill see growth in sectors that do not even exist at this time. Existing as well as new industries will likely have operational characteristics significantly different from their current operations, with a commensurate shift in the character of space needed. Shifts in national and economic production chains will likely shift what are viable industries to target for the area, while technological shifts will alter the economics of production, including returns on scale, necessary infrastructure and locational requirements. i mention all of these factors not because they are known, but because they are unknowable over the forecast period with any degree of certainty. Nonetheless, the land use system does require jurisdictions to produce twenty year projections based on reasonable and rational assumptions as well as the best available information. We believe that the REOA clearly does this, relying heavily upon the most knowledgeable professionals available and gathering input and comments in public forums. 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. 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. Again, we are less concerned with the twenty year supply than maintenance of an adequate five year supply. PAGE 2 I have organized my response based on general issues raised by 1000 Friends, as well as some miscellaneous comments organized by specific letter. DEMONSTRATION OF SUCCESS IN OTHER SIMILAR COMMUNITIES, Ms. Hardy suggested that the REOA be expanded to include the experience of similar communities that have maintained large lot industrial sites as an economic development tactic. We believe that the current version of the REOA has addressed 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. RELATIONSHIP BETWEEN LARGE INDUSTRIAL LOTS AND JOBS 1000 Friends contends 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. The REOA sets the regional stage for the creation of large lot industrial employment potential and/or associated opportunities that otherwise would not be possible. 1000 Friends asserts that the REOA 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 due to site supply constraints. • 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. PAGE 3 ss ~ 1 i? In Ms. Hardy's August 18th letter, she includes a study she interprets to support the position that attracting a large, externally owned company would have a net impact of reducing employment in the area. The study, authored by David Fleming and Stephan Goetz, is used In a manner inconsistent with the findings of the study. The study Included retail commercial employers, and the impact they found is largely attributable to "big box" and chain operations. The primary negative impact of large firms was associated with large retailers, not industrial users. While we welcome their call for further research on economic development issues, the specific study cited has no substantive findings relative to the findings of the REOA. FINDINGS F NEED The recommended competitive large lot industrial inventory finding in the REOA is challenged by 1000 Friends. In general, we share their view that there is a limited ability for precision in such a speculative forecast, but believe that the recommendations in the REOA reflect a reasonable interpretation of best available information. The findings of need have been challenged in a September 19th email from Mia Nelson, with some of these arguments reiterated in Ms. Hardy's October 5'h letter. The email included an Excel spreadsheet comparing a selected number of other EOAs that Ms. Nelson was familiar with. In the email, Ms. Nelson takes the position that the site need numbers are inconsistent with other EOAs evaluated. ■ The overall 20 year large lot industrial land need identified in the REOA is characterized in Ms. Nelson's email as representing an estimated 2,600 acres. This is based on the recommended long term inventory. It is important to remember that the report does not recommend adoption of the long term inventory, but only the short-term inventory. This reduces the tota number of sites from 17 to 6, and the acreage to 725 using Ms. Nelson's methodology. RECOMMENDED COMPEr11 VE LARGE LOT INDUSMIAL INVENTORY Number of Sites 3 2 1 6 Jurisdictions 3 2 1 Number of Sites 10 5 2 17 Jurisdictions 5 3 2 • The study was an economic development driven effort, with extensive input from EDCO and Business Oregon. The recommended inventory is intended to reflect a regionally and 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. ■ It should be noted that Business Oregon has had four active recruitments in the past six months in Central Oregon looking at industrial lots of this size. One firm was looking for a site in the 100 PAGE 4 to 150 acre 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. it is not known if the company has reached a final location decision. That search started in the 50 to 100 lot size and then expanded to the 150 to 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. ■ Ms. Nelson also cites a 20-year employment growth estimate for the Central Oregon EOA that is less than that assumed for the City of Bend, which is included in the broader Central Oregon study area. This is based on a long term forecast included in the REOA (pg. 35) based on an extension of the Oregon Employment Department's 10 year forecast. The point of this REOA is that this is what is needed to perform better than this forecast. As stated later on page 35 of the report: 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 NAILS 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- These aspirational goals were clearly reflected in the Bend EOA, and the State mid-term forecasts were used as context as opposed to being the basis for the forecasts for large lot demand. As explicitly stated in the report, the industries being targeted are exogenous to the region, and if attracted would not be expected to be reflected in the trended State-generated projections. ■ The following is a revised version of the Excel chart provided by Ms. Nelson. The chart has been adjusted to reflect the short-term lot supply only, as well as reflect a 20 year regional employment growth trend based on a proportional adjustment of Bend's growth estimate. Metro's analysis has been replaced by Hillsboro's, which is intended to address Goal 9. Metro's Urban Growth Report, which is not intended to be Goal 9 responsive, has an large lot industrial demand number well below the agglomerated demand numbers of its constituent jurisdictions. PAGE 5 Fl- LARGE LOT DEMAND ESTIMATE/20-YEAR EMPLOYMENT GROWTH 0.04 0 04 . 0.03 1 0 03 . 10.02 0A1 0.02 10.01 0.01 0.00 HObboro WBaorrvlM Nkdfwd Bend Salem Eugene' SPrnrgReW Bear Creek CO-REOA XONSOWTION ■ Ms. Nelson's also 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 Ms. Nelson appears 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 PAGE 6 With these modifications, the large lot demand based on the rate of employment growth is not inconsistent with the limited number of case studies cited. w;. 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. The preceding analysis is presented as a response to specific issues presented by 1000 Friends, but we don't view the argument in general to have particular relevance to the REOA for Central Oregon. Economic development efforts and patterns vary substantially by geographic area, and are always evolving. The approach outlined in Central Oregon's REOA is intended to provide the region with the ability to compete for targeted industries, and is informed by the input of those professionals most knowledgeable in the region and field. • 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. AWusT 11T" LETTER FROM PAM HARDY Ms. Hardy is concerned 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 concern 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. The letter also 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 PAGE 7 Oregon added 47,000 residents, reflecting a 31% increase. During that same period, covered employment in the region increased by 5,521 jobs (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. Ocrose J14' !&HER_ FROM PAM HARDY Ms. Hardy provides a helpful distillation of issues that 1000 Friends remains concerned about in this letter. The following is a response to their provided clarifications, organized in a similar manner: Businesses with 20 or more employees are shedding jobs 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 citied 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 primary target of the REOA is firms exogenous to the current economy, the firm death estimates are not relevant to the forecast. Revisions to the Industrial,Dgvelopm,ent Profile Chart Ms. Hardy notes that a chart included in an early draft of the EOA is inconsistent with the chart used in the final EOA. This reflects the fact that the chart was being updated by Business Oregon at the time of the early draft, and the final version reflects a more current profile of site needs. The initial table was completed over a decade ago, and site requirements and industry structures have shifted considerably since that time. The table was included in the earlier draft as contextual, and we were actively working with Business Oregon to generate an updated table. What is it about competing regions that has enabigd, IN Ir success? Ms. Hardy notes a finding in Metro's Urban Growth Report that firms in the Metro area have assembled parcels to meet their needs, which is largely a phenomenon in the Sunset Corridor. This is an area in which locational criteria are both highly favorable and difficult to substitute for. This is not necessarily the case for Central Oregon. 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. While policy PAGE 8 considerations such as university offerings can support economic development, they are longer term as opposed to short-term considerations. Does the Ion term needs incorporate the short-term needs? Yes, the long-term needs number is inclusive of the short term needs figure. Employment Forecast 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. Market Choice 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. Net Expansion Rate This issue has been covered earlier in this memo. Land Need Relative to Other Jlurisdictlons This issue has been covered earlier in this memo. SUMMARY In summary, we believe that the comments provided by 1000 Friends have been either substantively addressed in the current REOA, or reflect a misunderstanding of the work and findings. As a regional effort with a very limited area of focus (large lot industrial), the report is distinct from historical EOA efforts in the State of Oregon. As a result, there is likely to be an unusual level of confusion with respect to how to interpret the REOA. 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. The analysis has been heavily informed by the real world experience of business recruitment professionals. As note previously in this memo, Business Oregon is seeing significant active recruitment potential in the region, but has been hampered by a lack of appropriate large lot industrial inventory. There is an inherent lack of precision in long term employment forecasts in general, which is more pronounced for when we limit the forecast to large industrial users. For this reason, the REOA has stressed the maintenance of a short-term over the long-term inventory. It is not our belief that adoption of the REOA requires meeting the long-term inventory finding. Establishing a system for active management and updating to maintain a competitive readily available inventory is of primary importance for the region's economic development objectives. PAGE 9 Deschutes County Board of Commissioners 1300 NW Wall St., Bend, OR 97701-1960 (541) 388-6570 - Fax (541) 385-3202 - www.deschutes.org MINUTES OF BUSINESS MEETING DESCHUTES COUNTY BOARD OF COMMISSIONERS MONDAY, OCTOBER 31, 2011 Commissioners' Hearing Room - Administration Building - 1300 NW Wall St., Bend Present were Commissioners Tammy Baney, Alan Unger and Anthony DeBone. Also present were Laurie Craghead, County Counsel; George Kolb, Road Department; Nick Lelacl, Peter Gutowsky and Terri Payne, Community Development; and about a dozen other citizen including media representative. Hillary Borrud of the Bulletin. Chair Baney opened the meeting at 10: 00 am. PLEDGE OF ALLEGIANCE 2. CITIZEN INPUT None was offered. 3. Before the Board was Consideration of Second Reading by Title Only, and Adoption of Ordinance No. 2011-018, Making Minor Technical Changes to Title 17 of Code (Minimum Design Standards Roads). George Kolb gave a brief overview of the item. Laurie Craghcad said there were a few minor changes, nothing substantive, but primarily for clarification. Ms. Craghead read the changes into the record. DEBONE: Move second reading, by title only. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 1 of 15 Pages BANEY: Chair votes yes. Chair Baney did the second reading, by title only. UNGER: Move approval with the changes as read into the record by Counsel. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 4. Before the Board was Consideration of Second Reading by Title Only, and Adoption of Ordinance No. 2011-026, Making Minor Technical Changes to Title 12 of Code (Utility Permits - Roads). UNGER: Move second reading, by title only. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Chair Baney conducted the second reading, by title only. LINGER: DEBONE: VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 5. Before the Board was a Public Hearing and Consideration of First and Second Readings and Adoption, by Emergency, of Ordinance No. 2011- 027, Adopting Amendments to the Comprehensive Plan. Chair Baney read the opening statement. No conflicts of interest were declared by the Commissioners, and there were no challenges from the public. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 2 of IS Pages Terri Payne provided a brief explanation of the item. The Ordinance will coordinate changes into the new Comprehensive Plan document. The Planning Commission unanimously approved the changes. The Comprehensive Plan is going through the adoption process at this time, and this document helps to adopt changes that need to be a part of the Plan. Ms. Craghead added that the Comprehensive Plan is part of Title 23, and this will help to make a smooth transition in a timely manner. No public testimony was offered, so the hearing was closed. UNGER: Move first and second readings of the Ordinance, by title only, declaring an emergency, effective the same date as the Comprehensive Plan document. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Chair Baney conducted the first and second readings of the Ordinance, by title only, declaring an emergency. UNGER: Move adoption of Ordinance No. 2011-027. DEBONE: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. 6. Before the Board was a Public Hearing and Consideration of First Reading, by Title Only, of Ordinance No. 2011-017, to Adopt a Regional Economic Opportunity Analysis and Regional Large-Lot Industrial Land Policy for Central Oregon. Mr. Gutowsky entered the entire file into the record, and submitted an e-mail document received regarding the Ordinance. 1,000 Friends of Oregon also provided testimony, as did several other persons. This will be part of the record. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 3 of 15 Pages Mr. Gutowsky said that the Board has had a work session on this and input is going to be provided by individuals who are involved with the process. Pam Hardy, representing 1,000 Friends of Oregon, came before the Board. She said major improvements were made to the document, but she feels there are still deficiencies. She asked for additional time to review the evidence that will be submitted today, and feels 14 days will be adequate. She referred to written testimony she submitted and explained how she commented on the various parts of the Ordinance. She had provided this information in the past, but said that she had been asked to be very specific about desired changes, so she drafted the document to make this clear. There are certain sections where her recommended changes are relevant. Red print means a major appeal point, yellow is a possible appeal point, and green means she fords the language agreeable. There were three essential questions: Legal? Good policy? Does this document meet the necessary standards? She said yes, it is legal; OAR encourages this type of policy. It is good policy since regional activities provide opportunities of scale that individual entities could not do by themselves, and DLCD has stepped in to help with the process. However, it is very complicated and more information is needed. In particular, significant issues include the fact that there is no trend analysis showing this is an egnognist need. The Oregon Employment Department prediction figures do not support some of the findings. It is hard to find a case showing the need is there. A way to get to a need that is over and above standard employment information is to look at industry trends, such as data center moving into more remote sites. There have to be local assets to attract those kinds of trends, but this information is not in the findings. What is in the record now are just statements from experts largely unsupported by data. Missing is an objective trends analysis. There will be a substantial evidence question to support why it is felt a certain number of new lots are needed. Inventory is required per statute, and the findings admit that there has to be a regional inventory. Cities are not to undertake an inventory because the counties will be doing this. It has to be complete. Instead of adopting the document, the County should set up the group to do a review. There is no data included as to what is going on industry-wide, specifically relating to data centers. Distinctions need to be made. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 4 of 15 Pages Nothing can change until the inventory is done. She suggested that the inventory be done first so more information can be gathered and a rock-solid solution can be developed. It will cost less (avoiding an appeal); it takes less time (appeals take a long time); and it may help to make the area more competitive. The changes need to happen on the ground and soon. She would like more time to come to a compromise that will be mutually beneficial. Chair Baney stated that this is analyzing assumptions, with a lot of moving parts. There has to be a lot of guesswork as this work continues. There are no absolute certainties. She asked at what point they do move forward, since the assumptions will always be changing. They will never get to the end result this way, so have to move forward. At some point they have to put a stake in the ground and go from there. Ms. Hardy said it is hard to predict the future, but as you look into the future, experts that are certain they are right are more likely to be wrong than those who give smaller odds on being correct. People who are not as certain have a more realistic viewpoint and come up with the best analyses. Those who feel they are 100% right are probably missing something. The question is where you stop, and that would be with experts who have a 60% likelihood of what will be happening. Data centers are a trend but it is not known how long that will last. There needs to be adequate power and other infrastructure in place for them. You start with what is most likely, but acknowledge that in two years things could be very different. Commissioner Unger stated that a lot of the requirements and needs for industry are similar, so common elements are needed. As it goes to city by city, other details will be addressed and developed by the cities. Ms. Hardy said that she feels the industries targeted are not similar. Data centers don't need the parking and personnel that warehouses do, nor the energy consumption. She argued that the kinds of targeted industries sought may need the same size lot, but other needs might not be similar. Commissioner Unger said the County wants to create the opportunity and keep things at a broad brush level. Ms. Hardy feels the law indicates that the larger question needs to be addressed at the County level to start. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 5 of 15 Pages John Skidmore, business advocate for City of Bend, said he was with Madras previously. This is a huge opportunity to make changes to a stagnant land use system and start to calculate Goal 9 land use needs. Economic development experts in the area indicate that large lot industrial lands are needed. This will help the area be competitive. Sitting back and tinkering at the system will probably still not get the full support of 1,000 Friends. There are a lot of local experts who have provided input, and he feels this is fully vetted. At a certain point, you've reviewed the trends and have to make an informed decision. He feels the findings are strong and can be supported. If this is appealed, it will be worked at from the legislative angle. He feels the information is thorough and defendable. He appreciates what 1,000 Friends does, but taking on a regional cooperative process is important. Florida just lost its land use planning system due to problems tied to inflexibility and frustration. Commissioner Unger asked that since there is legislative action possible, is it better to wait for this to happen. Mr. Skidmore stated that if it can be handled at the local level and tri-county support obtained, that would be best. There are fewer sideboards if it then goes to Salem. This is not overreaching, and a lot of the future inventory and forecasting will be done on at a more specific, precise level. Commissioner DeBone asked if the City has large lot industrial lands available. Mr. Skidmore said they have a deficiency at this time. Some lots were just platted in Juniper Ridge, but they are smaller. This activity does not assure success, but without change there will be no success. Michael Williams, an industrial lands specialist for Business Oregon, said he is involved in a program that certifies industrial sites across Oregon for new businesses. He supported the REOA in May and supports the current findings now. The methodology is targeted and accurate. They did review current industries. Many industries that will be around in ten years are unknown at this time, but they have to be ready for these today. You have to be ready to move quickly, and be patient in the meantime. Over the last twenty years, the demand in the Metro area came mostly over a two-year cycle. The land use system as structured cannot react that quickly. These are also good proxies for tomorrow. Clean industries are doing well even during the downturn, and some need large lots. Warehousing and distribution is Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 6 of 15 Pages also a growing industry. Also, supply and logistics trends are always changing. Product lines change all the time. There are exterior forces making these changes, so that is why you have to be ready for a broad range of industries. He feels the context of the REOA is to be encouraged at a local level. Companies look at regions and usually do not just look at a specific city. They analyze educational institutions, the employee base, transportation and other aspects. Having six sites is very conservative, and the demand may be for more. At first they looked at firms with 500 or more employees, but then looked at specific industries and recruitments, and examined other areas that have grown due to large lot industrial development. Some has been said that perhaps large employers are not beneficial. He feels they are as a basis for the community. These opportunities are based on site selection, tracked by nine industries. Over the past year, requirements of 25 acres or more have had strong demand. Five of the nine categories want more than 50 acres. In four categories, they want more than 100 acres. These are bad economic times, and if he sees that demand now, it will only increase in the future. Commissioner DeBone asked how much Central Oregon will be the place to locate, when compared to the bigger cities. Mr. Williams said that Facebook put a marker down here and put the area on the map. This was great exposure, and gives other large companies comfort that this area is desirable. There is a lot of large lot development at the Port of Morrow. However, you need good transportation and space, and also a good labor force. The other thing is that some employers will start small but grow over time. They may only need ten acres today but their business plan may look to more space in the coming years. Oregon tries to match a user to a particular site, but he would like to see more focus on business park development. There are a lot of business parks with developers behind them, getting it done. They try to place a user in the right place. They will not come if the sites available are small and segmented. You need large building blocks to work with. There is a lot of evidence that these are quality employers. Commissioner Unger said he toured the Port of Morrow and saw how successful their plan is. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 7 of 15 Pages Chair Baney asked about the importance of having a regional approach such as this one. They are getting some pushback as to when the area is ready for this kind of thing. Mr. Williams replied that this helps to diversify the economic base, for large and small businesses alike. They have analyzed both and they've done well even with the poor economy. It needs to be an ecosystem to work efficiently. The regional approach will be a great signal to the market that this is important to the region and gives reassurance to companies that the area wants them there. By showing there is a regional approach and planning, it is an advantage over time. This will help elevate this area. There is a good regional economic development group here as well, who can highlight all the community assets. Scott Edelman of the City of Prineville said he wanted to indicate that Prineville is in support. They do have the industrial lands that they need right now in his area, but appreciates the approach and he is glad Crook County is involved. He also feels that Pam Hardy should be lauded for her input and the input of her group to help keep the work focused and open. Peter Gutowsky has done an admirable job of moving this forward. He does not disagree with some of 1,000 Friends' comments, but likes the common sense approach, and feels that six sites is reasonable. Overall the report backs this up. He said there are too many variables to be exact on what might happen. This project is meant to make it possible for companies that could be here to do so. It is not so much about the number of sites or size, but variety. There are great differences in companies. There need to be enough sites available to be able to address this. It makes sense to have a few sites in each area because of the differences in each area. There are things in this process that do protect land use in the State, such as the types of uses or how the land is utilized. The standards will be strict, which might mean some land is not used or becomes general industrial land. However, the risks are limited when compared to the benefits. There has to be a decision as to the use of each site, and they have to recognize that each area can't have everything that might be needed in their particular area. People still want to live in Central Oregon and want to have businesses here. The process will help them do that when they are ready and when they have learned about the area. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 8 of 15 Pages Roger Lee of EDCO said they are seeing the demand first-hand. They work with a broad spectrum of businesses, many of which do not need this size lot. Prineville has an adequate supply, while other regional cities do not. There is a huge deficiency in inventory, and the infrastructure also has to be addressed. Historically there has been demand, and they are seeing it even today with the soft economy. All of this is documented. They have had inquires as recent as last week. There is not enough here for someone to visit, so they will offer virtual tours. Failing to go forward with this process ensures failure. This does not take away from small to medium sized businesses. There is not enough flexibility at the State level, and there can never be enough information. This is the best attempt to look at all the factors. The current land use process, Goal 9, has served some communities well and some not well at all. The City of Bend has a lack of industrial land and it shows. Redmond has the same issue. This process won't circumvent land use laws, but is an opportunity to get some necessary land available. There are some with smaller employment numbers but the facilities are large and a huge investment for them. It is not theoretical; it is real. Jon Stark, Redmond Economic Development Manager, said he works for EDCO but also deals with 24 other managers. A year ago a site selection firm contacted him regarding obtaining 80 acres. He sent information to them :regarding one available site in Redmond. They visited the area and walked the grounds. The incentive package was also of interest to them. They wanted a specific timeline and actually would have wanted more acreage in the future. The additional land was not in the UGB. There is another site that might have been rezoned, but the timeline with the State land use planning process was outside of their project plans by about a year. The area was eliminated for that reason. They support the REOA as a way to give the area a competitive advantage over other areas. The OSPR could be a viable property as well as adjacent properties in Redmond, but at this point the needs cannot be addressed. This must be adopted so a way can be found to give the area a competitive advantage. By not doing this now, it tells the marketplace that we are not open for business or the demands of industry in the future. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 9 of 15 Pages There has been other interest from manufacturers, not just computing firms. This is the real world problems they face. Commissioner Unger disclosed that he is the County representative for the REDDI Board. Chair Baney said it is important to know that the area was considered and lost out because of the lack of the right kind of land. This sends an important message. Rob Hallyburton of the DLCD stated that the DLCD supports the REOA and this effort, as the first local jurisdiction to consider this. Regional planning is a hot topic right now and studies are being done to figure out how to plan better in Oregon. No one thinks that working regionally is a problem. There are other regional efforts being made, such as in Jackson County, looking at the greater Medford area and six cities. That effort has just been adopted, so they are still uncertain about details as well. Everyone thinks regional planning is a good idea but the pushback was the justification to wait. He spoke about Goals and Rules. The County is required to coordinate comprehensive land use plans in that County. It does not go beyond the County but the regional efforts are encouraged in Goal 9. They leave it up the area to figure out how to do this. They do realize there are a lot of details to address. The action does not take the designation of any comprehensive plan map in the County, so this does not directly support new employers. It sets the groundwork for the cities to do the real, specific work at their level. The Goal 9 rule does not have any requirements except a framework. The findings do not have to follow the minutiae that the cities will have to deal with, but will help set the stage and streamline the work. At the Senate committee, he was grilled as to whether the land use program gets in the way of economic development. He had to admit when there are unanticipated opportunities, they are not very good at dealing with those quickly. Anything the county or region can do to help with those is a good thing. Commissioner Unger thanked him for testifying and for the support of DLCD. Chair Baney added that this is unique and they are trying to be nimble. They Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 10 of 15 Pages want to be prepared for the unknown, perhaps trends that are not yet trends. This will help to get to the end result. Doug Parker, an asset planner with the Oregon Department. of State Lands, stated that he thought John Skidmore explained' some -ftoteworthy things. They are an active partner and support the County's efforts to adopt the REOA. The County has emerged as a leader Statewide for doing this. County staff is confident and knowledgeable. Oregon's land use was modified in order to assess land use needs at a regional level, on the hope this would help resolve the lack of large lot industrial throughout the State. It is tied to the land use process. It hopes to break free from the historic process and create a more economically welcoming environment. In response to the question, why should we do this? The answer is because large lot traded sector manufacturers have a multiplier affect. They spin off to the community and the region. Also, when all employment sectors are focused in a certain area and the sector takes a downturn, it affects all. It helps to diversify the economy, making it less vulnerable to trends. He suggested the most important reason is that it will allow your children and grandchildren to have meaningful work at home. This is being done for people who will eventually move into the job market. The DLCD did empower this project with a grant, a top notch consultant and involvement of all planners in the region. He suggested that the folks engaged in the process made this the most dynamic process he has seen. It took leadership and answers to hard questions to move forward. There is another benefit to an REOA. It provides a regionally consistent template for all jurisdictions to use when they want to adjust their boundaries. It may be the County setting the stage for a consistent process that is under control, confidently and professionally standing behind it. There has been a request for certainty in numbers and need. If they do nothing now, there will be none coming. The genuine critical issue at this juncture is to have this land available, protected from land division and other compromises that erode their use. The next process will include key factors on these sites. These communities need to say they are a player, but the stage needs to be set regionally first. The REOA is critical for these reasons. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 11 of 15 Pages This is not the exclusive economic development tool, but supplements the other initiatives going on. If they do nothing, they will remain where they are today. Peter Gutowsky expressed his appreciation to those who testified. He indicated that it is important to note that the DLCD has been cooperative, and they were able to provide leadership, funding and technical expertise that was imperative. It comes back to whether the Board feels the regional approach to large lot industrial is a good idea. In regard to trends, Quincy, a city located in central Washington, did a similar exercise. They realized they had an excess of cheap power. They made an effort to attract data centers, and since then they have attracted five of them. Central Oregon has the capability to be a top attraction. Jerry Johnson, the consultant, cites Business Oregon where it was said that traded sector employers have done four active recruitments. There is a lot of interest in this region by large employers. If these are not trends or specific instances of interest, he does not know what they are. Other experts have said this is truce, but it is also said to be so by active economic development experts. The question is whether there is a factual basis. The Board needs to consider whether this a wise decision, and there has to be evidence in the record along with findings that are consistent with Oregon land use. There is a question as to whether Central Oregon needs to identify this type of land. The County can encourage cities to plan for this unmet need in Deschutes County. The County can set a cap on the number of sites that can be planned for and developable, at six sites in three different jurisdictions. There has been extensive testimony that inventory is needed. If there is a cap, this leaves the individual jurisdictions to go through their inventory. The Board can choose to make this decision based on the findings. It is a tall task and a burden. The evidence does not have to be perfect but needs to be made on the best available information. With the testimony today distributed via a video feed and the testimony of economic development experts, this is a lot to offer. There was testimony today asking for fourteen days to respond to comments and documentation. There was not a lot of substantive written testimony offered. The Board could close the record today and deliberations could start in a week. A second approach would to be to leave the written record open until the end of the week. It is meaningful to be able to be in a position to adopt this by the end of November. The legislature will be convening soon and this helps put the region in a good position at that point. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 12 of 15 Pages Since it was nearing noon, Chair Baney asked for a quick break to adjust afternoon meeting plans. Chair Baney feels that nothing has been submitted today that would require her to wait on a decision. Commissioner Unger asked if there is concern about allowing the rest of the week for responses, although this has taken 18 months already and there has been a lot of discussion on the issue. Commissioner DeBone wants to keep it simple. Jobs are needed and this can help with that. Chair Baney stated that there are two major points. The letter from 1,000 Friends is just three new pages. There has been a good job of condensing down a lot of questions to just a few that may never come to a meeting of the minds. She feels testimony today shores up the findings. She would like to close the hearing today and rather than trying to solve the underlying questions, let this be handled in the inventory process. Commissioner DeBone supports closing the record at this time. Ms. Craghead said there are a few typographical errors and that the wording `compelled' should instead be `encouraged' in regard to the cities' working on this. She suggested time be allowed to make these adjustments, and the findings document could be ready by Monday. The written record was closed, and deliberations began. Commissioner Unger sees this process as a model for the State. He envisions this moving forward to recognize the deficiencies in the region and encouraging regional support and cooperation. He supports the Ordinance and wants to move forward. Perhaps a legislative concept will come to bear eventually. They have tried to stay away from appeals, but this may not be possible. Commissioner DeBone stated that it does not seem to be that contentious to him since it encourages economic development and jobs. This will ultimately be addressed at the city level. Chair Baney thanked staff, DLCD and 1,000 Friends. She said this has been a lot of good work and the process has been very thorough. The findings are Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 13 of 15 Pages exhaustive, and the collective approach is important to note. The regional support lays the groundwork for the cities to do the detailed work. It is the right approach and makes sense. Ms. Craghead said that the first reading should not take place until the adjustments are made so they won't have to be read into the record. This document can be ready for the Monday, November 7 Board business meeting. 7. ADDITIONS TO THE AGENDA Before the Board were Deliberations (continued from October 24) and Consideration of First Reading of Ordinances Nos. 2011-001 and 2011-002, Amending Titles 18 and 23 to Modify Deschutes County Zoning Map and Comprehensive Plan Map for the Areas Eligible for the Destination Resort Overlay. Peter Gutowsky provided an overview of the item, which includes a few changes in regard to testimony. There is now an updated set of findings and the revised Ordinance. He explained that the changes relate to specifically to noticeable findings. Ms. Craghead said that the changes should be listed for the Commissioners. Ms. Gutowsky stated that he did not have a specific list but there were various small and a few large changes since the last deliberation date. Ms. Craghead said that the backup documentation and maps are complete and contain this information. DEBONE: Move first reading of Ordinance No. 2011-001, by title only. UNGER: Second. VOTE: DEBONE: Yes. UNGER: Yes. BANEY: Chair votes yes. Chair Baney conducted the first reading by title only. DEBONE: Move first reading of Ordinance No. 2011.002, by title only. LINGER: Second. VOTE: DEBONE: Yes. Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 14 of 15 Pages s UNGER:: Yes. BANEY: Chair votes yes. Chair Baney conducted the first reading by title only. The second readings can be considered on or after November 21, 2011. : reing no further items to come before the Board, the meeting adjourned at 12:.10 p.m. DATED this q: Day of 2011 for the De4'chutes County Board of Commissioners. i Y Tammy B ey, Ch i Anthony DeBone, Vice Chair ATTEST: w Alan Unger, Commissioner Recording Secretary Minutes of Board of Commissioners' Business Meeting Monday, October 31, 2011 Page 15 of 15 Pages OREGON EcoNoM1C & COMMUNITY DEVELOPMENT DEPAKTMENT FiECEIVE MEMORANDUM MMJ12008 March 11, 2008 TO: Douglas Parker, Asset Manager Department of State Lands FROM: Bev Thacker, Industrial Lands S cia RE: Rail Served & Large Industrial- Sites Summary in order to address a state-wide need, the Department of Economic and Community Development supports the addition of large industrial sites, especially those of 100 to 200 net, contiguous developable acres, to the state's industrial land inventory providing they meet the following criteria: • Loral ordinances restrict the ability of landowners to subdivide these larger sites into parcels of less than 100 acres, • The sites are contiguous to an existing Urban Growth Boundary and have ready access to local utilities such as sewer, water and energy, • Transportation access is not constrained, • The. site owners and the city agree to meet the requirements for certification under the state's Certified Industrial Site program. • if the site does not currently meet the above conditions, OECDD would support the project provided there is a plan in place to address any issues. Background 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 last few years. This change in demand and the changing nature of OECDD's account base clearly document that global business trends have emerged as key elements in Oregon's economy. Global projects share a common platform made up of capital intense applications, economies of scale and mass market demands. Time to market is more important then ever with ever shrinking product life cycles and faster turns in the market cycle. We see a uniform demand for ready to go sites, superior multi-modal transportation connectivity and large structures coupled with ever shortening site selection time lines. For example, the average size warehouse facility in 1999 was around 150,000 sf and is now over 375,000 sf with average clear interior height increasing from 28 ft to 32-36 ft. In order to meet demand for large, ready-to-go sites, in 2003 the State instituted its Certified Industrial. Sites program. Certified sites undergo a stringent process to ensure that they are project ready and building can begin within 180 days of a development decision. Dues related to environmental clearances, zoning, utilities and transportation have been addressed and state and local regulatory agencies have confirmed the site's readiness to proceed. While 57 sites have been certified statewide, only 12 of these sites were over 100 acres. Of these, eight are still undeveloped. However, these sites are constrained by their locations in rural areas off the major interstates and lack of sufficient workforce. Global accounts have tended to be very attractive to the state and community bringing leading.edge tedl}nology, large capital investments, labor intensive and higher wage rate employment opportunities. While the chart is not a comprehensive record, it does show that.the demand for larger sites has increased in the measurement period and that employment has moved to higher employment densities. The shortage and even lack of large sites is now resulting in opportunity loss to our communities and the state. OECDD documents that the demand for the large sites has increased over time and the nature of the utilization now reflects the impacts of Globalization as shown in our "rough" outline of large projects since 1996: Project Location Lot Size est. Building Size est. Type 1996 Target Albany, Or 175 acres 1.3 mm SF Distribution 1997 Wal-Mart Hermiston, or 200 acres 1.3 mm sf Distribution 2002 Dollar-Tree Ridgefield, Wa 75 acres 800,000 sf Distribution 2002 Familian lumbin . Tri-Cities, Wa 75 acres 500,000 sf Distribution 2002 Wal-Mart (Cold Stora a Granview, Wa 100+ acres 900,000 if Distribution 2004 Loges Lebanon, Or 204 acres 1.3 marry to 2.2 mm .sf Distribution 2004 Olympic (Vanity Fair) Shafter, Ca (back 12/27/07 100+ acres 90:0,000 sf Distribution 2005 EADS Portland Area 100+ 2.5 million Aerospace 2006 October (cold storage) Salem, Or (STALLED 145+ acres 1 mm sf Distribution 2006 NOAH-P siCo Alban. 204 acres 2.5 mm sf Manufacture 2006 Private Project Technolo Northern Oregon I-5 100+ 1 million Manufacture 2006 Project GoForth Salem Area 75-100 1 million Distribution 2006 Genentech Hillsboro 100 500,000 Man/Dist 2006 SolarWorld Hillsboro 100 1 million Man/Tech 2006 Jindo Oreon 100 Manufacture 2006 A ricus N-Ore on 250 Very large Man/Tech 2007 Crystal Millersberg 100 Man/Tech 2007 HOT Northern Ore n 100 Man/Tech 2007 Gold Rush E-Ore on 930 Very lar a -Man 2007 Navitas Ore n 150/200 Man/Tech 2007 NN2 Hillsboro 150 1.5 million Man/Tech 2007 Tahoe Ore n 150 Man/Tech Central Oregon Central Oregon has the workforce and educational infrastructure to be attractive and support large parcel projects and the area's Economic Development plan has targeted sectors that will require larger sites. Central Oregon's targeted key industries are Secondary Wood Products, Aerospace/Aviation, High Technology, Light Industrialhnanufacturing, Research & Development and Recreational Vehicles. The following chart that shows the range of site demand associated with these key industries. Key Industry Minimum Site Size Predicted Site Size Secondary wood Products 5 acres 50 acres Aero ace/Aviation 2.5 acres 150 acres Hifi~ Technology 2.5 acres 2,50 acres Light Industrial 2.5 acres 50 acres Li t Manufacturi ng_ 2.5 acres 75 acres Research & Development .5 aches 10 acres Recreation Vehicle manufactures 5 acres 100 acres The department's Central Oregon Business Development Officer, working with community ED partners, developed the following list: of Central Oregon sites for sale with or near rail access. There are three possible sites `in the market area measuring over 100 acres in size. Two of these.sites are potentially close to beibg shovel ready. However they have issues related to transportation and utilities that. will require expensive fixes. Our analysis would indicate that the shortage of larger, ready to go industrial sites.in Central Oregon will soon emerge as a significant constraint to the areas economic growth. The largest rail served site (potential service) is the 200-acre Williams property in Prineville. Currently, 30 acres of the site is in escrow for a pending sale. The next largest site is the Juniper Ridge site in Bend that measures 120 acres. There is one large non-rail served sites in Redmond that has significant readiness challenges. _....._..._..._._I?e !on l largc_site inventor y_ breaks down as follows: Prineville: Hooker Creek property is 37 acres and has rail access. Rhoden Property 33 acres and has a rail stub to the site. Williams Property: 200 acres, with 30 acres currently in escrow for a pending sale. The property is adjacent to the Prineville Short line Rail Road line, and does not currently have rail access, but the railroad has indicated that it would be possible to install a spur track to serve the site. 78 acres of this site is a State Certified Industrial Site. 4 Prineville Railroad Property: 32 acres, and has full rail access. The site is a full service trans-load, reload, and warehousing facility. Shrum property: 27 acres without rail access, but it does have a right-of-way for rail to serve the site through the adjoining Williams property. 2590 NW Lamota Road site: about 14 acres. The property is adjacent to the Prineville Railroad line, and does not currently have rail access. A spur track could be installed to serve the site. Stafford property: 30-40 acres, a former LP mill site with an existing rail spur Contact Lumber, site, 12-20 acres, behind their existing mill with rail access. Culver: Genmar (former Sea Swirl Boats) property- 29 acres, and has rail access. Bead: Hooker Creek (former Korpine Mill) property: 23 acres with two rail spurs. Juniper Ridge: 120 acres rail served. This site is ready to go and has excellent rail service. LaPine: Former PAC Equities Property, and Crown Pacific mill site: 35 acres near a 2-acre site with rail access owned by Deschutes County for off loading (trans-load) with a short haul to the site. Deschutes County Property: 80 acres near rail access, but across the tracks from the 2- acre County=owned site with rail access. That rail access could be used for a trans-load with a short haul to the site, or a spur could be added to the, 80-acre site. State Certified Industrial Site LaPine would be difficult to get the owners of the mainline, BN & UP, to serve. The large railroads do not like to stop trains for switching unless it is for a large number of rail-cam..to..bemo.ved.onto-midi Redmond:, Maynard Alves property (former Crown Pacific Mill): 70 acres and has rail access that includes four rail spurs. Desert Rise site: Up to 200-acre site that appears to have utility service challenges. Madras: No large properties are currently for sale with rail access. The Department of State Lands Property The Department of State Lands (DSL) is proposing to add approximately 980 acres to the City of Redmond's Urban Growth Boundary, Their plans call for approximately 670 acres of this to be zoned industrial. Because of the location of the site and its proximity to existing utility services and transportation corridors this site could be an important addition to the state's large site inventory. It is also consistent with the state's strategic economic development. plan, provide. DSL and the City of Redmond pursue certification under the state's Certified Industrial Site program and that restrictions be placed on the site to preclude sub-dividing it in the future. It will also be important for DSL to continue working with state and local. officials to resolve transportation issues. surrounding access to State Highway 97 and the railroad. Access to city water and sewer services will need to be provided which will require the extension of existing litres. Current restraints on power availability must be addressed to ensure that the site is marketable. W=W 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. (1 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 equipmcnt 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 contraryl 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 (.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.cog! 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, 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.. June 10, 2011 Nick Lelack Planning Director Deschutes County Community Development Department 1300.NW Wall St. Bend, OR 97701 Dear Nick, 211.2 N.B. 4th Street • Bend, OR 97701 (541) 382-3452 • FAX (541) 383-3020 w ww,cervtraloregonrealtors_com The Central Oregon Association of REALTORS0 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 REQA's recommendations. The economic crisis that has gripped Central Oregon since 20Q7 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 ta! 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 perananently 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 thinkifhg 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. Longtime periods for infrastructure development and transportation plan updates are signifwant barriers to economic development. 19 ReALt'ORV • is a registered mark ~ idantmes it pmlessienal in resi estate wrq subecrbes 0 3 sftk COd! bt 2thes as a m mzer of the NATIONAL ASSOCIATION OF RpATORS. RtAt7pR" 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 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. Unf0; ely,. our.. top down, command and control land use system lacks the flexibility onsiveness that we need to attract and retain manufacturers and other employers, large tracts of land. If the system worked properly we would currently have an ad e 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 documents one of principle reasons for this trend is the lack of shovel ready large sites suitable for indusa[ development. The REOA identifies a real problem with our economic competitivbness and proposes a targeted solution. A comprehensive approach to economic d ' lopment involves accommodating all types of businesses, Imp and small. PU'~y excluding large employers from our region will prevent us from diversifying opr economy. The uncertainty created by our land use laws and regulatory pI ley is a deterrent to private sector investment and growth. As the city of Bend's ence demonstrates, the UGB expansion process is lengthy, expensive and unprediC=. Any community that attempts a land use action in the vicinity of a state highway fads the challenge of the Transportation Planning Rule. In addition to those butreauc= barriers to expeditious land use actions, cities and counties are likely to face numerouj 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 movingito 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 provi4g family wage jobs. A new process is needed. There is no existing model to rely onbecause 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 "fi*ovate" for them. They've stated they want this new concept to succeed. The REOA is a rbasonable proposal to do things differently, to innovate. It will not solve all of our probl~ms, but it is a critical part of our future economic success. If Central Oregon continues tote 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 exude. For the REOA to have a positive impact on our economic competitiveness it must provide flexibility to local governments in identifying and secuiting 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. Requirements that eligible sites be adjacent to UGBs also willlimit 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 w ' d otherwise be candidates for industrial development, but are not adjacent to the city's UPB. We also need to consider both public and private land for eligibility. i 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;wisb 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 tb~ugh the normal. UGB expansion process this program will not work in a timely faun. The process is too cumbersome and subject to lengthy legal battles that will deteg 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 impl~mentation 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 (LLX) zone in county jurisdictions, not necessarily within a city UGB. The second *uld 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 Avithin 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. 7erely, William Robie Government Affairs Director a L d u x W 0 C C "a C m MI) eo C d 2 "O C 4-0 M E 4-+ J tL C 0 N L 0 ea L 4.1 dJ u w L G1 aE° J aZfz O a E {n (U (A L ~ U ro 00 r y a 7 0 N co ,1 N v c Q u v b~.. O O y 0 L o tv c ~ U o ar m ~m ti VI O C O v a 2 C U nv cq N ri, er' Vf O C O v o Z C C U v r--: •ti O C O o~ C C V 13 a - -0 r- ° t: c V) m a ° .2 c m 0 u (MU 0 41 ro ° (u 10 a ea '0 c a o r~ o a r at c ~ Z { to O q~ (ru U m ro C ro Q .o m r -0 `J O to v C c D C O ' t6 O` r U v v m r ro u O i2 c CL 41 v c T E 'c C E o oo v ° a 01 ro E v o w ~ ~ E G i(U + J C cu m a ut u O u 0 'o N U C cu CL a a Q c9 a r v %A i U -8 • U t' 2 GJ u E 3 V ro o V) r~ y c ro o N ° C r r f0 c c • o s a .C 41 p cn r d o y E A t p 7 a m cp t w- u) r G O c o o a O+ v v + v~ -C.+ C `n .r. 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" + Ln Z - c 'A V) 4- tn 0 -0 ai (U r- ro a~ c E c E o L aui ro u 3 M a a Y (U _0 CLO 4- 41 .C W e c N c e 7 D S] O '~A J p E `L- 7 w d d N N C Q `0 U VI a o t! J O " O " O bA " C X 0) by " di (U (U N Ic 4- 0 O Z O O in Lb Community Development Department Planning Division Building SaWyyDivision 5nvjrQnrTjaptaJSoJf1 Division P.O. Box 6005 117 NW Lafayette Avenue t-.nd, Oregon 97708-6005 (541)383-6575 FAX (541)385-1764 http://www.co.deschutes.or.us/cdd/ DATE:. TO: FROM: RE: December 7, 2012 MEMORANDUM Deschutes County Board of Commissioners Peter Gutowsky, Principal Planner Central Oregon Large Lot Industrial Lands Project / Work Session / Public Hearing The Deschutes County Board of Commissioners will be conducting a work session on December 17 at 10:00 a.m. to discuss the Central Oregon Large Lot Industrial Lands Project in preparation for a forthcoming public hearing. The hearing is scheduled for January 7, 2013 at 10:00 a.m. The following materials are attached with this memorandum: o Central Oregon Large Lot Industrial Program Overview o Central Oregon Large Lot Industrial Program Core Principles o Central Oregon Large Lot Industrial Program Milestones o Ordinance 2013-001 o Ordinance 2013-002 Exhibit A (Deschutes County Code 23.01.010, Introduction) Exhibit B (Comprehensive Plan, Chapter 4, Urban Growth Management) Exhibit C (Comprehensive Plan, Chapter 5, Supplemental Sections) Exhibit D (Findings) Central Oregon Large Lot Industrial Land Need Analysis o Land Conservation and Development Commission Rulemaking The text below provides an overview of this project. REOA Deschutes County received two Technical Assistance Grants from the Department of Land Conservation and Development (DLCD) 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 Regional Economic Opportunity Analysis (REOA). Over the course of eleven months, the REOA went through several iterations with the assistance of a Regional Advisory Committee (RAC). The RAC consisted of Central Oregon cities and counties, Johnson-Reid LLC, Business Oregon, DLCD, Department of State Lands, Central Oregon Intergovernmental Council (COIC), 1,000 Friends of Oregon (1,000 Friends), Economic Development for Central Oregon (EDCO), Central Oregon Association of Realtors and private area developers. The RAC met officially six times before the REOA was finalized on May 31, 2011. Quality Services Performed with Prime The REOA project aimed to determine if such an industrial land demand exists in Central Oregon and, if so, to identify the deficiency. The study attempted to document an unmet twenty year land need for large lot industrial sites in the region. It also concluded that competing as a cohesive region can allow Central Oregon to market a larger available work force, the size of which is often a key locational criterion for firms. While geographically separate, the jurisdictions in the region function in a manner similar to other metropolitan areas like Reno and Salt Lake City, which often share boundaries. According to the REOA, the shared economic function within Central Oregon supports a regional approach to economic development, particularly with respect to large traded sector industries. APPEAL Deschutes County exercised its statutory coordinating authority (ORS 195.025) to address this unmet regional need for large-lot industrial sites through Ordinance 2011-017. New comprehensive plan policies and the REOA provided the policy framework for designating lands among coordinating jurisdictions in a mutually agreed proportion. Ordinance 2011-017 attempted to integrate comprehensive plans between the County and its respective cities by encouraging them to address a short and long-term specialized employment land need. Ordinance 2011-017 was adopted by the Board of County Commissioners on November 30 2011, but was appealed to the Land Use Board of Appeals by 1,000 Friends of Oregon last December. SETTLEMENT The appeal however, was stayed in early 2012 to allow Deschutes County, the Governor's Office, and 1,000 Friends to explore a settlement. Spanning three months, a settlement was ultimately reached in April 2012. The settlement consisted of an agreement that the technical document produced would not be called an Economic Opportunity Analysis (EOA) as that term is understood in Oregon land use law. 1000 Friends agreed that the region has a need for up to nine large industrial lots in Central Oregon and the parties agreed upon policy principles guiding how those sites could be incorporated into existing UGBs. The settlement consisted of policy concepts focusing entirely on Central Oregon's short-term need for large-lot industrial sites as well as a commitment from DLCD to initiate rule-making later in the summer. RULEMAKING After receiving support from a Central Oregon Large Industrial Lot Rules Advisory Committee which met four times over the summer, a draft was forwarded to LCDC for their consideration. A public hearing conducted by a LCDC hearings officer was held in Redmond on September 27, 2012, followed by a hearing with the full commission on November 15, 2012 in McMinnville. LCDC adopted the rules to Oregon Administrative Rules (OARs) Chapter 660-024 on November 15. They become effective on December 10. PLAN AMENDMENT Deschutes County's plan amendment provides the policy framework for 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. Upon adoption, Crook and Jefferson counties will adopt a similar amendment to their comprehensive plans. Once all three counties complete their plan amendments, municipalities in the region will be able rely on the Central Oregon Large Lot Industrial Land Need Analysis to address the short-term need for large-lot industrial sites. -2- December 17, 2012 In 2008, the Oregon Economic and Community Development Department's (now Business Oregon) industrial lands specialist Bev Thacker stated in a letter, "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." She specifically identified a statewide need of industrial lands of 100-200 acres in size. Economic Development for Central Oregon (EDCO) also identified similar challenges for the tri-county (Deschutes, Jefferson and Crook) region. Executive Director Roger Lee and others have repeatedly stated that site selectors often will not even visit the region if only one or two sites are available. The arrival of Facebook and Apple, while unique in many regards, has put Central Oregon on the international map for data centers among other potential large lot employers. However, the region lacks a supply of sites and cities' traditional Economic Opportunity Analyses (EOAs) do not account for such a land demand. This project aimed to determine if such a land demand exists in Central Oregon and, if so, to identify the deficiency. A Regional Economic Opportunity Analysis (REOA) attempted to document an unmet 20-year land need for large lot industrial sites in the region. On November 28, 2011 Deschutes County adopted a Comprehensive Plan amendment to officially recognize the REOA as a technical study, and a series of policies that establish the legal basis to encourage cities to address this unmet employment land need as well as a planning framework for creating a regional entity to oversee the program. The amendment was appealed by 1,000 Friends of Oregon to the Land Use Board of Appeals. However, a settlement was reached in April 2012 with the assistance of the Governor's office, Department of Land Conservation and Development (DLCD), and members of a Regional Advisory Committee (RAC). It focused entirely on the short- term need for large-lot industrial sites as well as a commitment from the Oregon Department of Land Conservation and Development (DLCD) to initiate rule-making. Below is a summary of the legal basis for the Central Oregon Large Lot Industrial Project and its accomplishments to date. 1. NEW ADMINISTRATIVE RULES / OAR DIVISION 24. The Land Conservation and Development Commission (LCDC) adopted administrative rules (OAR 660-0024-0040 and 660-024-0045) in November 2012 tailored to Central Oregon's short-term need for large lot industrial sites. The rules allow cities in the tri-county region to utilize a regional large lot industrial land need analysis, largely taken from the REOA, as the justification. The rules, which became effective on December 10, 2012 recognize a need for six 50+ acres sites and up to three for replenishment. They also address how cities may amend their Urban Growth Boundaries (UGB), thereby providing a clear legal framework for Central Oregon to address a known land use deficiency. NEW REGIONAL APPROACH 1. Two DLCD Technical Assistance (TA) Grants funded: a) $50,000.00 for a technical study to determine a regional land need not currently recognized in existing City EOAs (Phase 1, 2009-2011). b) $25,500.00 for Regional Governance Approaches, Site Suitability Characteristics, Model Large Lot Industrial Overlay Zone (Phase 1, 2009-2011). c) $35,000.00 to establish regional authority with COIC (Phase 2, 2011- 2013). 2. Deschutes County created a Regional Advisory Committee to oversee the project. Members included: cities, counties, EDCO, COIC, 1000 Friends of Oregon, Central Oregon Realtors Association, DLCD, DSL and Business Oregon. 3. RAC hired Johnson Reid LLC, consultant team, with expertise in real estate development and land use economics. 4. New regional approach addresses the recent demand of large-lot employers and rapidly growing industries that are building production and research capabilities to establish global scale. 5. Land Conservation and Development Commission (LCDC) adopted rules in November 2012 tailored to Central Oregon's short-term need for large lot industrial sites. 6. Deschutes County is now exercising its statutory coordinating authority (ORS 195.025) to address this short-term unmet regional need for large-lot industrial sites. It assures an integrated comprehensive plan between the County and its respective cities by encouraging them to address it. 7. Deschutes County is also voluntarily coordinating with Crook and Jefferson Counties and their respective cities as authorized in ORS 190.003- 190.620 to exercise their coordination authority with parallel plan amendments. Document Reprochxes Poorly 2. CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS. The County can now demonstrate that the evidentiary record and findings support a regional approach to large-lot industrial siting and that it is consistent with Oregon's Land Use Program. The "Analysis" documents an unmet short-term need for large-lot industrial sites, 50-acres or larger in tri-county area with: o National, state and local economic trends and conditions o Large-lot industry trends, dynamics, opportunities, and site needs o Local objectives and their respective strengths and challenges o Business Oregon data o Expert opinion by Johnson-Reid LLC, EDCO, and others The "Analysis" recognizes that 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. 3. LAND DEMAND. Economic development focuses on short-term, 5-year time frames. This program does the same. The table below shows the short-term large lot industrial inventory for Central Oregon. The minimum site is between 50-100 acres. The largest one, a 200+ acre site needs to be near the region's geographic and workforce center in either Bend or Redmond. Recommended Competitive Short-term Large Lot Industrial Inventory 50-100 acres 100-200 acres 200 + acres TOTAL SHORT-TERM # of Sites 3 2 1 6 Jurisdictions 3 2 1 4. CENTRAL OREGON'S COMPETITIVENESS. 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. 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 traded sector industries. S. REGIONAL AUTHORITY. The Central Oregon Intergovernmental Council (COIL) as the beneficiary of a DLCD TA Grant has formalized their organization as the regional authority to organize, coordinate and promote large-lot industrial strategy. 6. SITE-NEED CHARACTERISTICS. Physical: 50 acres or above. Flat slopes. Rectangular sites. Transportation: accessible or in close proximity to auto/truck, rail and air service. Utilities: water, sewer, natural gas, electricity/power, telecommunications. Location: acceptable distance to work force. Special considerations: willing property owner to sell at market consistent price and participate in infrastructure investments to support the development. 7. IMPLEMENTATION NEXT STEPS. (1) Adoption of Deschutes County's Comprehensive Plan amendment. (2) Jefferson and Crook Counties adopt similar plan amendments. (3) COIL finalizes Intergovernmental Agreements with Central Oregon cities and counties. (4) Cities comply with new administrative rules and the statewide planning program requirements to change land designations for large lot employment sites, and collaborate with willing property owners. (5) Cities adopt plan amendments and Large Lot Overlay Zone. (6) EDCO markets the region's short-term supply of vacant, developable sites. COMPREHENSIVE PLAN AMENDMENT GOAL • To build a strong and thriving regional economy by coordinating public investments, policies and regulations to support regional and state economic development objectives in Central Oregon. POLICIES (abbreviated) • Deschutes County supports a multi- jurisdictional cooperative effort to pursue a regional approach to establish a short-term supply of sites particularly designed to address out- of-region industries that may locate in Central Oregon. Deschutes County recognizes the importance of maintaining a large-lot industrial land supply that is readily developable in Central Oregon. The Central Oregon Regional Large Lot Industrial Land Need Analysis ("Analysis"), adopted by Ordinance 2013-002 is incorporated by reference herein. Within 6 months of the adoption of (Deschutes County] Ordinance 2013- 002, in coordination with the participating local governments in Central Oregon, Deschutes County shall, execute an intergovernmental agreement with the Central Oregon Intergovernmental Council that specifies the process of allocation of large lot industrial sites among the participating local governments. In accordance with OAR 660-024-004 and 0045, 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. E ~ L O (J'f O W ~r1JJ Q m 3 t2 O U T 7 C . N a Q- T c c g D 0 p m 3 C: m D +mm + a a a O L v c u C ° i p O Cl C J v C O C Q •7 p 4p O m X ° L of a L 7 O tl w~ !6 7 a 0 O p V C ~ - ' . a O E N G N v O . 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WHEREAS, on November 30, 2011, the Board of County Commissioners ("Board") adopted Ordinance 2011-017 to amend Title 23 of the Deschutes County Comprehensive Plan to adopt a Regional Economic Opportunity Analysis and Regional Large-Lot Industrial Land Policies for Central Oregon; and WHEREAS, the 1,000 Friends of Oregon ("1,000 Friends") submitted a Notice of Intent to Appeal Ordinance 2011-017 to the Land Use Board of Appeals on December 21, 2011 (1000 Friends of Oregon v. Deschutes County, LUBA No. 2011-121); and WHEREAS, Deschutes County, 1,000 Friends, the Governor's Office and Oregon Department of Land Conservation and Development ("DLCD") reached a settlement on April 30, 2012; and WHEREAS, in order to complete the tasks agreed to in the settlement, Ordinance 2011-017 must be repealed and a new ordinance adopted, which is Ordinance 2013-002, adopted contemporaneously with this ordinance; and WHEREAS, the Deschutes County Planning Commission reviewed this ordinance at a work session on December 13, 2012 and, on that same date, forwarded to the Board a recommendation to repeal Ordinance No. 2011-017; and WHEREAS, the Board considered this matter after a duly noticed public hearing on January 7, 2013, and on that same date, concluded that the public will benefit from the repeal of Ordinance No. 2011-017; now, therefore, THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, ORDAINS as follows: Section 1. REPEALED. Ordinance 201 1-017 is hereby repealed in its entirety. PAGE I OF 2 - ORDINANCE NO. 2013-001 Section 2. EMERGENCY. This Ordinance being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this Ordinance takes effect on its passage. Dated this of , 2013 BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON ANTHONY DeBONE, Chair ATTEST: Recording Secretary Date of 15t Reading Date of 2nd Reading: Commissioner Anthony DeBone Alan Unger Tammy Baney ALAN UNGER, Vice Chair TAMMY BANEY, Commissioner day of , 2013. day of , 2013. Record of Adoption Vote Yes No Abstained Excused Effective date: day of , 2013. PAGE 2 OF 2 - ORDINANCE NO. 2013-001 REVIEWED LEGAL. COUNSEL BEFORE THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON An Ordinance Adopting a Central Oregon Large-Lot Industrial Land Need Analysis and Amending the Deschutes County Comprehensive Plan to Include * ORDINANCE NO. 2013-002 Regional Large-Lot Industrial Land Policies for Central Oregon and Declaring an Emergency. WHEREAS, staff initiated this ordinance pursuant to the April 30, 2012 agreement between Deschutes County, 1,000 Friends, the Governor's Office and Oregon Department of Land Conservation and Development ("DLCD") in settlement of 1000 Friends of Oregon v. Deschutes County, LUBA No. 2011-12 1, as outlined in Exhibit D, attached and incorporated by reference herein; and WHEREAS, the Deschutes County Planning Commission reviewed this ordinance at a work session on December 13, 2012 and, on that same date, forwarded to the Board a recommendation of approval; and WHEREAS, the Board of County Commissioners considered this matter after a duly noticed public hearing on January 7, 2013, and on that same date finds it in the public interest to adopt a Central Oregon Large- Lot Industrial Land Needs Analysis and corresponding regional large-lot industrial land policies into the Comprehensive Plan; and WHEREAS, because three years have passed since the project to create and adopt regional large lot industrial land policies began, these new policies could provide a dramatic improvement in the Central Oregon economic situation such that a delay in the effective date could considerably delay the region's ability to take advantage of these new policies; now, therefore, THE BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON, ORDAINS as follows: Section I. AMENDMENT. Deschutes County Code 23.01.010, Introduction, is amended to read as described in Exhibit "A," attached and incorporated by reference herein, with new language underlined and deleted language set forth in Section 2. AMENDMENT. The Deschutes County Comprehensive Plan, Chapter 4, Urban Growth Management, 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 strikethrough. Section 3. AMENDMENT. The Deschutes County Comprehensive Plan, Chapter 5, Supplemental Sections, is amended to read as described in Exhibit "C," attached hereto and by this reference incorporated herein, with new language underlined and language to be deleted in strikethrough. PAGE 1 OF 2 - ORDINANCE NO. 2013-002 Section 4. FINDINGS. The Board adopts as its findings Exhibit "D," attached and incorporated by reference herein. Section 5. EMERGENCY. This Ordinance being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to exist, and this Ordinance takes effect on its passage. Dated this of~ 2013 BOARD OF COUNTY COMMISSIONERS OF DESCHUTES COUNTY, OREGON ANTHONY DeBONE, Chair ATTEST: ALAN UNGER, Vice Chair Recording Secretary TAMMY BANEY, Commissioner Date of I" Reading: day of , 2013. Date of 2"d Reading: day of , 2013. Record of Adoption Vote Commissioner Yes No Abstained Excused Anthony DeBone Alan Unger Tammy Baney Effective date: day of 72013. PAGE 2 OF 2 - ORDINANCE NO. 2013-002 Chapter 23.01 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 2012-005, are incorporated by reference herein. D. The Deschutes County Comprehensive Plan amendments, adopted by the Board in Ordinance 2012-012, are incorporated by reference herein. E. The Deschutes County Comprehensive Plan amendments, adopted by the Board in Ordinance 2012-016, are incorporated by reference herein. F. The Deschutes County Comprehensive Plan amendments. adopted by t:h.e Board in Ordinance 2013-002, are incorporated-by reference herein. (Ord. 2013-002 § 1, _201.3~Ord. 2012-016 §1, 2012; Ord. 2012-013 §1, 2012; Ord. 2012-005 §1, 2012; Ord. 2011-027 § 1 through 12, 2011; Ord.2011-003 §3, 2011) Page 1 of 1 - EXHIBIT "A" TO ORDINANCE 2013-002 sect%oo, 4.2 Ltrbaw'zat'W , 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. Table +4.2,1 - Population Growth in Deschutes County 1980 to 2000 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 9-EXHIBIT "B" TO ORDINANCE 2013-002 Table 4.2.1 -Coordinated Population Forecast 2000 to 2025 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. Table 4.2.3 _ Coordinated Population Forecast 2000 to 2025, Including La Pine 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 2 OF 9 - EXHIBIT" "B" TO ORDINANCE 2013-002 Ca rnent P16produces Poo o (Archived) Table 41.4 - Deschutes County 2030 Population Forecast. Year Bend Redmond Sisters La Pine Unincorporated Total County UGB UGB UGB UGB County 2030 119,009 51,733 4,426 2,632 88,748 266,538 Source: County estimates based on the 2004 Coordinated Population Forecast as shown below: 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. Unincorporated Area Figure 4.1 Deschutes County 2030 Estimated Population Sisters 2% La P 10 19% In 2030 Rand 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 FLAN - 2011 CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION PAGE 3 OF 9 - EXHIBIT "B" TO ORDINANCE 2013-002 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 2012 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. ~II1L.Yi~ WPM ti, .r ;~AY ryr kh. W ~+t "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." Central Oregon Large Lot Industrial Land Need Analysis During the 1990s, the Central Oregon region experienced a dramatic transformation from an economy concentrated largely in wood products into a service based economy serving a DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011 CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION PAGE 4 OF 9-EXHIBIT "B" TO ORDINANCE 2013-002 rowing 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 initial.lly 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. In 2010, 2011. and 2012. Desch utes._Crook and Jefferson counties and their respective cities undertook an unprecedented regional evaluation of the economic opportunities and constraints associated with users of large industrial parcels in the Central Oregon region. The purpose of this evaluation was to aid in providing a more diversified economic base for the region that would accommodate industrial uses with a need for larger lots than possibly may be current) available in an of the Central Oregon cities. As art of that evaluation Deschutes Count hired a consultant to draft an analysis of Central Oregon's opportunities, competitiveness, ability, and willingness to attract more basic industries. The analysis focused specifically on industries that r@ quire large lots. The result was a document called the Central Oregon Regional Economic O ortuni Analysis, and was the basis for Ordinance 2011-017, datedMU 31, 2011. .Ordinance 201 1-017 was appealed to the Land Use Board of Appeals b 1,000 Friends of Oregon " 1,000 Friends"). The appeal was stayed in earl 2012 to allow Deschutes Count the Governor's Office and 1,000 Friends to explore a settlement which was ultimate) reached in April. 2012. The settlement consisted of policy concepts focusing entirely on Central Oregon's short-term need for lar a-lot industrial sites as well as a commitment from the De artment of Land Conservation and Development "DLCD" to initiate rule-making that summer. The three counties, their respective cities. 1.000 Friends, and DLCD staff then engaged in drafting a proposed rule. In August, the final draft of that rule was then sent to the Oregon_ Land Conservation and Development Commission "LCDC" . As a result in November, the LCDC adopted Oregon Administrative Rule (OAR) 660-024-0040 and 660-024-0045. That rule provides that that the large lot industrial land need analysis agreed upon b all of the artier once adopted b )Leach of the participating governmental entities would be sufficient to demonstrate a need for u to nine large industrial sites in Central Oregon, Six of the sites will be made available initially. Three more sites may be added under the rule as the original sites are occupied. After the adoption of the new OARS Deschutes Count voluntarily repealed Ordinance 201 1-017 and adopted a new ordinance Ordinance 2013-002 in accordance with the OARS. Utilizin the new OARS Ordinance 2013-002 emphasized Central Oregon' short term need for a critical mass of competitive and diverse vacant, developable industrial sites. An additional necessary component is an intergovernmental agreement ("IGA" ) between the region's jurisdictions and the Central Oregon Intergovernmental Council 'COIC" . Through thelGA COIC will provide oversight of the short-term land supply of large-lot industrial sites to enable the region to become competitive in industrial recruitment. Once each of the three counties and their respective cities adopt similar ordinances and enter into an IGA with_COIC, the large lot sites will enable industrial recruitment opportunities to attract potential industrial users to DESCHUTES COUNTY COMPREHENSIVE PLAN 2011 CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION PAGE 5 OF 9--EXHIBIT "B" TO ORDINANCE 2013-002 consider the region that may not have otherwise without the availabilit of these large lots. Participating local governments will review the program after all nine sites have been occupied or after ten ears whichever comes first. DESCHUTES COUNTY COMPREHENSIVE PLAN-2011 CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION PAGE 6 OF 9 - EXHIBIT "B" TO ORDINANCE 2013-002 SectGOw 4.2 Lt.rba01'zatG0v1, POL%cLes 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 DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011 CHAPTER 4 URBAN GROWTH MANAGEMENT REFERENCES PAGE 7 OF 9-EXHIBIT "B" TO ORDINANCE 2013-002 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 strop and thriving regional economy b coordinatin public investments, policies and regulations to support regional and state economic development objectives in Central Ore on. Policy 4.2.12 Deschutes Coun supports a multi-jurisdictional cooperative effort to ursue a regional approach to establish a short-term su I of sites articular) desi ned to address out-of-region industries that may locate in Central Oregon. Pnlirv 4213 Deschutes Countv recognizes the importance of maintaining a large-lot industrir Policy 4.2.14 The Central Oregon Regional Large Lot Industrial Land Need Analxsis "Anal sis" adopted b Ordinance 2013-002 is incorporated b reference herein. Policy 4.2.15 Within b months. of the adoption of Ordinance 2013-002, in coordination with the participating local governments in Central Oregon. Deschutes County shall, execute an inter overnmental agreement "IGA" with the Central Ore on Intergovernmental Council " COIC" that specifies the process of allocation of large lot industrial sites among the participating local governments. Policy 4.2.16 In accordance with OAR 660-024-004 and 0045, Deschutes County, fulfilling coordination duties specified in ORS 195.025, shall approve and update its comprehensive plan when participating cities within their jurisdiction le islativel or through a quasi-judicial process designate re ionall significant sites. Policy 4.2.17 Deschutes Count supports Economic Develo ment of Central Oregon (`EDCO" a non-profit o Zanization facilitating -new job creation and capital investment to monitor and advocate for the re ion's efforts of maintaining an invento of appropriate sized and located industrial lots available to the market Policy 4.2.18 Deschutes Count will collaborate with regional public and private representatives to engage the Oregon Legislature and state agencies and their commissions to address public facilit transportation and urbanization issues that hinder economic development opportunities in Central Oregon. DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011 CHAPTER 4 URBAN GROWTH MANAGEMENT SECTION 4.2 URBANIZATION PAGE 8 OF 9 - EXHIBIT "B" TO ORDINANCE 2013-002 Policy 4.2.19 Deschutes Coun will strengthen lone-term confidence in the econom b building innovative public to private sector partnerships. DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011 CHAPTER 4 URBAN GROWTH MANAGEMENT REFERENCES PAGE 9 OF 9-EXHIBIT "B" TO ORDINANCE 2013-002 sect%ov1.5.12 Leg%sl,at~ve H-%stor~ Background This section contains the legislative history of this Comprehensive Plan. Table 5.11.1 Comprehensive Plan Ordinance History Ordinance Date Adopted/ Effective Chapter/Section Amendment 01 1-003 -10-11/11-9-11 All, except Transportation, Tumalo and Terrebonne Community Plans, Deschutes )unction, Destination Resorts and ordinances adopted in 2011 omprehensive Plan update 201 1-027 10-31-11/11-9-11 2.5, 2.6, 3.4, 3.10, 3.5, 4.6, 5.3, 5.8, 5.1 1, 23.40A, 23.40B, 23.40.065, 23.01.010 Housekeeping amendments to ensure a smooth transition to the updated Plan 2012-005 8-20-12/11-19-12 23.60, 23.64 (repealed), 3.7 (revised), Appendix C (added) Updated Transportation System Plan 2012-012 8-20-12/8-20-12 4.1, 4.2 La Pine Urban Growth Boundary 2012-016 12-3-12/3-4-13 3.9 Housekeeping amendments to Destination Resort Chapter Central Oregon Regional 2013-002 1-7-13/ 1-7-13 4.2 Large-lot Employment Land Need Analysis 44 DESCHUTES COUNTY COMPREHENSIVE PLAN - 2011 CHAPTER 5 SUPPLEMENTAL SECTIONS SECTION 5.12LEGIsLATIvE HISTORY PAGE I OF I - EXHIBIT "C" TO ORDINANCE 2013-002 FINDINGS PROPOSED PLAN AMENDMENT The proposed amendments to Deschutes County's Comprehensive Plan are described in Ordinance 2013-002, Exhibits A, B, and C. Added language is underlined and deleted shown as strokethrougI4 BACKGROUND Ordinance 2011-017 Deschutes County received two Technical Assistance Grants from the Department of Land Conservation and Development (DLCD) 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 Regional Economic Opportunity Analysis (REOA). Over the course of eleven months, the REOA went through several iterations with the assistance of a Regional Advisory Committee (RAC). The RAC consisted of Central Oregon cities and counties, Johnson-Reid LLC, Business Oregon, DLCD, Department of State Lands, Central Oregon Intergovernmental Council (COIC), 1,000 Friends of Oregon (1,000 Friends), Economic Development for Central Oregon (EDCO), Central Oregon Association of Realtors and private area developers. The RAC met officially six times before the REOA was finalized on May 31, 2011. The REOA project aimed to determine if such an industrial land demand exists in Central Oregon and, if so, to identify the deficiency. The study attempted to document an unmet twenty year land need for large lot industrial sites in the region. It also concluded that competing as a cohesive region can allow Central Oregon to market a larger available work force, the size of which is often a key locational criterion for firms. While geographically separate, the jurisdictions in the region function in a manner similar to other metropolitan areas like Reno and Salt Lake City, which often share boundaries. According to the REOA, the shared economic function within Central Oregon supports a regional approach to economic development, particularly with respect to large traded sector industries. Deschutes County exercised its statutory coordinating authority (ORS 195.025) to address this unmet regional need for large-lot industrial sites through Ordinance 2011- 017. New comprehensive plan policies and the REOA provided the policy framework for designating lands among coordinating jurisdictions in a mutually agreed proportion. Ordinance 2011-017 attempted to integrate comprehensive plans between the County and its respective cities by encouraging them to address a short and long-term specialized employment land need. Ordinance 2011-017 was adopted by the Board of County Commissioners on November 30 2011, but was appealed to the Land Use Board of Appeals by 1,000 Friends.' The appeal however, was stayed in early 2012 to 1 1,000 Friends submitted a Notice of Intent to Appeal to LUBA on December 21, 2011. PAGE 1 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 allow Deschutes County, the Governor's Office, and 1,000 Friends to explore a settlement. Spanning three months, a settlement was ultimately reached in April 2012. The settlement consisted of an agreement that the technical document produced would not be called an Economic Opportunity Analysis (EOA) as that term is understood in Oregon land use law. 1000 Friends agreed that the region has a need for up to nine large industrial lots in Central Oregon and the parties agreed upon policy principles guiding how those sites could be incorporated into existing UGBs. The settlement consisted of policy concepts focusing entirely on Central Oregon's short-term need for large-lot industrial sites as well as a commitment from DLCD to initiate rule-making later in the summer. Ordinance 2013-002 Because of the unique nature of the agreement, DLCD agreed to memorialize the agreement in rule. OAR 660-024-0040(1) and (5) and 660-024-0045 were narrowly crafted to implement the intent of the agreement so it still complies with Goals 9 and 14. The amendments are applicable in only Crook, Deschutes and Jefferson counties. After receiving support from a rule-making committee consisting of the parties to the LUBA appeal, in August, a final draft was forwarded to the Land Conservation and Development Commission (LCDC) for their consideration on November 15, 2012. At the meeting, LCDC took public testimony, considered a staff recommendation and adopted amendments to administrative rules at Chapter 660-024. They became effective on December 10. Rule-making now provides a clear legal framework for local governments in Central Oregon to address a known deficiency of large-lot industrial sites. Utilizing the new OARS, Ordinance 2013-002 now responds to Central Oregon's short term need for nine competitive and diverse vacant, developable large lot industrial sites. These sites can enable site selectors, representing potential industrial businesses, to consider the region. COIC has agreed to manage the distribution of sites among the various jurisdictions through intergovernmental agreements. Participating local governments will review the program after the regional supply of six sites has either been replenished by three additional sites or after ten years, whichever comes first .2 REVIEW CRITERIA Ordinance 2013-001 repeals Ordinance 2011-017. Ordinance 2013-002 adopts the Central Oregon Large Lot Industrial Land Need Analysis (Analysis) and several regional large-lot industrial land policies into Deschutes County's Comprehensive Plan to comply with the new OARs.3 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 2 OAR 660-024-0045(13) 3 OAR 660-024-0045(2)(a): "Analysis" means the document that determines the regional large lot employment land need within Crook, Deschutes, or Jefferson County that is not met by the participating local governments' comprehensive plans at the time the analysis is adopted. PAGE 2 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 Statutes (ORS), Statewide Planning Goals, 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) - OAR Division 24, Urban Growth Boundaries • Section (6) - Other Statewide Planning Goals • Section (7) - Deschutes County Comprehensive Plan 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 a short-term 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. Aided by new OARS (660-024-0045(5a) and 660-024-0045(7)), Deschutes County is fulfilling its regional coordination responsibilities by formalizing, through policies, a regional governance and land use planning framework with COIC.4 COIC serves as the Economic Development District representing Crook, Deschutes and Jefferson counties as designated by the Economic Development Administration, Deschutes County is applying its coordination authority to cities as well, for those willing to fulfill this regional short-term employment need, consistent with Oregon's Statewide Planning Program. Deschutes County's plan amendment provides the policy framework for 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, 4 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. OAR 660-024-045(5a) requires local governments to enter into an intergovernmental agreement with COIC. OAR 660-024-045(7) describes COIC's coordination process. 5 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 3 OF 21 EXHIBIT "D" TO ORDINANCE 2013-002 region economic diversification and place Central Oregon on the map for regional, national and international industrial recruitment. Upon adoption, Crook and Jefferson counties will adopt a similar amendment to their comprehensive plans. Once all three counties complete their plan amendments, municipalities in the region will be able rely on the Analysis-to address the short-term need for large-lot industrial sytes.6 * 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 a short-term supply of large-lot industrial sites in Central Oregon. These efforts will result in the joint adoption of the Analysis, policies, and findings. Crook and Jefferson counties will initiate their own plan amendments in early 2013. 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. 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 to allow ample opportunities for citizens and stakeholders to participate in this process. Last fall, after four public hearings, Deschutes County adopted Ordinance 2011-017 on November 30, 2011. As mentioned earlier, Ordinance 2011-017 was subsequently appealed to the Land Use Board of Appeals by 1,000 Friends. The appeal however, was settled in April 2012. During that process, Deschutes County collaborated regularly with the RAC to obtain their input and eventual 6 OAR 660-024-0045(5b). PAGE 4 OF 21 - EXHIBIT °D" TO ORDINANCE 2013-002 endorsement. One of the outputs of the settlement was a commitment from DLCD to initiate rule-making. After receiving support from a Central Oregon Large Industrial Lot Rules Advisory Committee which met four times over the summer, a draft was forwarded to LCDC for their consideration.' A public hearing conducted by a LCDC hearings officer was held in Redmond on September 27, 2012, followed by a hearing with the full commission on November 15, 2012 in McMinnville. LCDC adopted the rules on November 15. They became effective on December 10. The Deschutes County Planning Commission held a work session on December 13. The Board of County Commissioners held a public hearing on January 7, 2013. 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. Finding: See Section 1, page 3. * 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 4 * 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 that include an Analysis that documents Central Oregon's need for establishing a short-term supply 7 Crook, Jefferson and Deschutes counties, 1,000 Friends, Cities of Redmond, Bend, La Pine, and Madras, COIC, EDCO, and a Citizen Involvement Advisory Committee member participated on the rules advisory committee. PAGE 5 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 of large-lot industrial sites. The Analysis 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-9 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 short-term 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.10 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.11 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 500.12 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.ls Deschutes County's choice to pursue a regional short-term supply of 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. a See note 3 above. 9 Central Oregon Large-Lot Industrial Land Need Analysis. Pages 35; 42-47. 10 Ibid., 7. 11 Ibid. 12 Ibid., 10. 13 Ibid., 7 PAGE 6 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 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. 14 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.15 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: 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. 16 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 three have been looking for sites in the 150 to 200 acre range. One firm 14 See note 5 above (Central Oregon Comprehensive Economic. Development Strategy), 4 and 17. 15 Ibid. 16 Ibid., 14. PAGE 7 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 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. 17 * 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. 18 * Jon Stark, Redmond Economic Development Manager for Economic Development for Central Oregon described a recruiter recently visiting Redmond.19 * 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.20 * ORS 197.712 (2)(b) Comprehensive plans shall contain policies concerning the economic development opportunities in the community. Finding: Deschutes County is responding to a specific short-term employment need recognized in OAR 660-024-0045(2a) and identified in an Analysis for large-lot industrial sites. As shown in Exhibit B, Deschutes County is adopting several regional industrial land policies to comply with ORS 197.712 (2)(b) that recognize Central Oregon's economic development opportunities for establishing a short-term supply of large-lot industrial sites. * 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. 17 Jerald Johnson, Johnson-Reid LLC, October 21, 2011, 5 18 Lee Smith, General Manager La Pine Industrial Group, October 27, 2011, email. 19 Oral Testimony, Board of County Commissioners public hearing, October 31, 2011. 2° Ibid. PAGE 8 OF 21 EXHIBIT "D" TO ORDINANCE 2013-002 Findnnc.: Deschutes County is exerting its statutory coordination authority to encourage cities to address an unmet, short-term large-lot industrial land need by adopting an Analysis and several regional industrial land policies. As noted in OAR 660-024-0045(4) and the Analysis, there is a demonstrated need for vacant, suitable and available large- lot industrial sites in Central Oregon. The short-term need encompasses 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. The Analysis identifies site need characteristics for large-lot industrial sites and recommends a competitive, short-term inventory.21 * 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. Finding: Ordinance 2013-002 adopts the Analysis and several regional large-lot industrial land policies into Deschutes County's comprehensive plan to comply with the new OARS. Participating cities will need to address this criterion when they propose a large-lot industrial site into their comprehensive plans and land use regulations to demonstrate the use is compatible on or near industrial and commercial zones. It is important to note that based on the new OARS adopted by LCDC, a participating city that designates a large-lot industrial site is required to apply a regional large-lot industrial zone or overlay zone to it in order to protect and maintain the site for regional large lot purposes.22 * 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 over time through changes to urban growth boundaries. Findin : Based on the new OARS, a participating city may amend its comprehensive plan and land use regulations, including its Urban Growth Boundaries (UGB), in order to designate a large-lot industrial site in accordance with OAR 660-024-0045(8). 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. 21 See note 9 above (Central Oregon Large-Lot Industrial Land Need Analysis), 52-56; 62. 22 OAR 660-024-0045(9), (10). PAGE 9 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 Finding: This track is different from an EOA first because OAR 660-024-0040 provides an alternative path for this pilot project. The new path encompasses all of the steps of an EOA (trend analysis, site types, inventory and estimate of needed sites). But because these steps are distributed in both time and authority between three counties (trends, site types and need estimate) and cities (inventory and location analysis), there was concern that the standard EOA path would be confusing and possibly troublesome. Due to rule-making, OAR 660-024-0040(1) and (5) acknowledge that local governments in Crook, Deschutes and Jefferson counties may determine the need for regional large- lot industrial land by following the provisions of OAR 660-024-0045 for areas subject to that rule. Section (5) - OAR Division 24, Urban Growth Boundaries * OAR 660-024-0040 - Land Need (1) The UGB must be based on the adopted 20-year population forecast for the urban area described in OAR 660-024-0030, and must provide for needed housing, employment and other urban uses such as public facilities, streets and roads, schools, parks and open space over the 20-year planning period consistent with the land need requirements of Goal 14 and this rule. The 20-year need determinations are estimates which, although based on the best available information and methodologies, should not be held to an unreasonably high level of precision. A local government in Crook, Deschutes and Jefferson Counties may determine the need for Regional Large-Lot Industrial Land by following the provisions of OAR 660-024-0045 for areas subject to that rule. (5) Except for a metropolitan service district described in ORS 197.015(13), the determination of 20-year employment land need for an urban area must comply with applicable requirements of Goal 9 and OAR chapter 660, division 9, and must include a determination of the need for a short-term supply of land for employment uses consistent with OAR 660-009-0025. Employment land need may be based on an estimate of job growth over the planning period; local government must provide a reasonable justification for the job growth estimate but Goal 14 does not require that job growth estimates necessarily be proportional to population growth. A local government in Crook, Deschutes and Jefferson Counties may determine the need for Regional Large-Lot Industrial Land by following the provisions of OAR 660-024-0045 for areas subject to that rule. Finding: Deschutes County is now exercising the provisions of OAR 660-024-045(5) by adopting the Analysis into its comprehensive plan that documents the short-term need for regional large-lot industrial land. As demonstrated in the Analysis and summarized in the table below, Deschutes County, by exercising its statutory coordination authority, has chosen to compete for large-lot industrial employers by creating a dynamic and competitive short-term large-lot industrial land supply portfolio and inventory that appeal to industrial site selectors. 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 Analysis. PAGE 10 OF 21 EXHIBIT "D" TO ORDINANCE 2013-002 Table 1 - Central Oregon Large-Lot Industrial Land Need Synopsis Objective Evidence Conclusion Ensure that the regional industrial land inventory is adequate to support the specific needs of large lot industrial users. 23 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.`' 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 d1VCFSif1Cati0r1 strategy. New companies brine' a different mix of professional and technical talent to communities that can spawn other businesses and technologies.25 The Analysis provides reasonable information and analysis pointing to an unmet short-term land need for large-lot employment sites, currently not part of regional economic development efforts. 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 Analysis cites large-lot employment trends and dynamics of the, global market place, the strengths and challenges of Central Oregon's eronomy and the opportunities for the `region to compete for large-lot employers in the data center, high technology and warehouse and distribution industries. 26 The county finds that the Analysis has been appropriately and reasonably tailored to address conditions and policies unique to the Central Oregon region. 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 Analysis 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. 27 * OAR 660-024-0045 - Regional Large Lot Industrial Land (1) Local governments in Crook, Deschutes or Jefferson Counties may determine a need for large lot industrial land in the region and provide sites to meet that need in accordance with this rule. 23 See note 9 above (Central Oregon Large-Lot Industrial Land Need Analysis), 11. 24 Bev Thacker, Rail Served & Large Industrial Sites Memorandum, March 11, 2008, 1. 25 Roger Lee, Economic Development for Central Oregon Letter, June 3, 2011, 26 See note 9 above (Central Oregon Large-Lot Industrial Land Need Analysis), 11-13; 29-34; 40-47. 27 Ibid., 44-45. PAGE 11 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 Finding: Based on the conclusions of fact supplied in the Analysis, which is attached to this exhibit, Deschutes County finds there is a need for nine large lot sites in the Central Oregon region. Only six sites shall be available at any given time, but, once a site is assigned to a city, it may be replenished for a total of nine sites. At least one of the sites must be 200+ acres in size. Two of the sites must be 100-200 acres in size. The remaining sites must be 50-100 acres in size. The sites must be distributed throughout the region in at least three different jurisdictions. At least one site, preferably the largest shall be located in the population and employment center of the region at either the north end of Bend or the southern end of Redmond. No jurisdiction shall be allowed to add a site under these provisions unless it signs the Intergovernmental Agreement (IGA) administered by COIC to fairly distribute these sites throughout the region. If one of the six sites is occupied by a bona fide industrial user it may be replaced by a site of like size pursuant to the criteria in the IGA administered by COIC. The facts available in the Analysis only provide sufficient evidence to replace up to three sites. * OAR 660-024-0045 (2) In addition to the definitions in OAR 660-024-0010, the following definitions apply to this rule: (a) "Analysis" means the document that determines the regional large lot employment land need within Crook, Deschutes, or Jefferson County that is not met by the participating local governments' comprehensive plans at the time the analysis is adopted. The analysis shall also identify necessary site characteristics of needed land. Finding: Deschutes County is now exercising the provisions of 660-024-045. As noted earlier, the Analysis satisfies OAR 660-0045(2)(x) because it determines the regional short-term large lot employment land need within Croak, Deschutes, and Jefferson counties is unmet and not presently addressed in local governments' comprehensive plans. The Analysis also identifies necessary site characteristics of needed land.28 (b) "CO/C" means the Central Oregon Intergovernmental Council. (c) "Intergovernmental Agreement (IGA)" means the document adopted by the three counties and any participating city to implement the provisions of the analysis. (d) "Participating city" means a city within Crook, Deschutes, or Jefferson County that has adopted the analysis and entered into an intergovernmental agreement to implement the provisions of the analysis. (e) "Participating local government" means Crook, Deschutes, and Jefferson Counties, and participating cities. Finding: OAR 660-024-0045(2)(b-e) define COIC, the IGA, a participating city, and a participating local government. Deschutes County is a participating local government and will be required to enter into the IGA to implement the provisions of the analysis. 26 Ibid., 52-56; 62 PAGE 12 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 (1) "Regional large lot employment land need" means the need for a specific type of 20- year employment land need, as described in OAR 660-024-0040(1) and (5), that is determined based upon the analysis. Finding: The Analysis documents a need for nine large lot industrial sites. (g) "Site" means land in the region that. (A) Provides the site characteristics necessary for traded sector uses as set forth in the analysis, (B) Is 50 acres or larger as provided in section (3) of this rule; and (C) Is determined to be "available, " as that term is defined in OAR 660-009-0025(7), for regional large-lot industrial users and for purposes identified by the analysis. (h) "Site characteristics" has the meaning given that term in OAR 660-009-0005(1). (i) "Traded Sector use" has the meaning given that term in ORS 2858.280. Finding: OAR 660-024-0045(2)(g-i) define site, site characteristics, and traded sector use that participating cities will need to demonstrate that they are meeting when proposing a large-lot industrial site under this program. * OAR 660-024-0045 (3) For purposes of subsection (2)(g) of this rule, a large lot is at least 50 acres if it is: (a) A single lot, parcel that is at least 50 acres, (b) An aggregation of existing lots or parcels under the same ownership that comprises at least 50 acres, or (c) An aggregation of existing lots or parcels not in the same ownership created and maintained as a unit of land comprising at least 50 acres through a binding agreement among the owners. Finding: OAR 660-024-0045(3) defines large lot for the purpose of this program. * OAR 660-024-0045 (4) Participating local governments may adopt the analysis and implement its provisions. The analysis may demonstrate a need for six vacant, suitable and available sites in the region, and up to three additional sites that may be designated in order to replace one of the original six sites that is developed or committed to development as provided in section (12) of this rule. The original six sites must include two sites of at least 100 acres and not more than 200 acres, and one site more than 200 acres. Finding: The Analysis documents that there is a demonstrated need for vacant, suitable and available large-lot industrial sites in Central Oregon. The short-term need encompasses 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.29 29 Ibid. PAGE 13 OF 21 EXHIBIT "D" TO ORDINANCE 2013-002 * OAR 660-024-0045 (5) If a participating city adopts the analysis, it is deemed to provide an adequate factual basis for the determination of regional large lot employment land need for that city provided. (a) The city and other participating local governments have entered into an intergovernmental agreement with the COIC, and (b) The analysis is adopted by Crook, Deschutes and Jefferson counties. Finding: Deschutes County, through Ordinance 2013-002 is adopting the Analysis. * OAR 660-024-0045 (6) Participating cities may adopt the analysis and enter into the intergovernmental agreement without amending the Economic Opportunities Analysis adopted by the city prior to the adoption of the analysis. Findin : OAR 660-024-0045(6) allows participating cities, after they enter into the IGA with their respective counties, to rely on the Analysis without having to amend their local EOAs. * OAR 660-024-0045 (7) The intergovernmental agreement shall describe the process by which the COIC shall coordinate with participating local governments in: (a) The determination of a qualifying site that a participating city may designate in order to satisfy the regional large lot industrial land need; and (b) The allocation of the qualifying sites among the participating cities in accordance with section (4) of this rule. Finding: COIC is presently coordinating with participating local government to satisfy this rule. * OAR 660-024-0045 (8) A participating city may amend its comprehensive plan and land use regulations, including urban growth boundaries (UGB), in order to designate a site in accordance with the requirements of this rule, other applicable laws and the intergovernmental agreement, as follows: (a) A participating city must show whether a suitable and available site is located within its existing UGB. If a participating city determines that a suitable site already exists within the city's urban growth boundary, that site must be designated to meet the regional industrial land need. Cities shall not be required to evaluate lands within their UGB designated to meet local industrial land needs. (b) If a site is not designated per subsection (a), then a participating city may evaluate land outside the UGB to determine if any suitable sites exist. If candidate sites are found, the city may amend its UGB in accordance with Goal 14, other applicable laws and the intergovernmental agreement. Finding: OAR 660-024-0045(8) describes the process participating cities must follow to amend their comprehensive plans and land use regulations, including Urban Growth Boundaries (UGB), in order to designate a site in accordance with this rule. It is not applicable at this time since no site is being officially designated. PAGE 14 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 * OAR 660-024-0045 (9) A participating city that designates a site shall apply a regional large-lot industrial zone or overlay zone to the site in order to protect and maintain the site for regional large lot purposes. The zone or overlay zone must: (a) Include development agreements and other provisions that prevent redesignation of the site for other uses for at least 10 years from the time the site is added to the city's comprehensive plan to meet regional large lot industrial land needs; (b) Prohibit division or separation of lots or parcels within the site to new lots or parcels less than the minimum size of the site need until the site is developed with a primary traded sector use requiring a large lot; and (c) Limit allowed uses on the site to the traded sector uses, except as provided in section (10) of this rule. Finding: OAR 660-024-0045(9) requires a regional large-lot industrial zone or overlay zone to include certain provisions noted above when a site is designated under this rule. It is not applicable at this time since no site is being officially designated. * OAR 660-024-0045 (10) The zone or overlay zone established under section (9) may allow. (a) Subordinate industrial uses that rely upon and support the primary traded sector use when a site is occupied by a primary traded sector use,, and (b) Non-industrial uses serving primarily the needs of employees of industrial uses developed on the site provided the zone includes measures that limit the type, size and location of new buildings so as to ensure such non-industrial uses are intended primarily for the needs of such employees; Findin : OAR 660-024-0045(10) allows subordinate and nonindustrial uses subject to this rule. It is not applicable at this time since no site is being officially designated. * OAR 660-024-0045 (11) If a participating city adds a site to its plan pursuant to this rule, it must consider the site in any subsequent urban growth boundary evaluation conducted to determine local industrial land needs and the adequacy of land available to meet local industrial land needs. Findin : OAR 660-024-0045(11) requires a participating city to evaluate a regional site under this rule when they reevaluate or amend their local EOAs. It is not applicable at this time since no site is being designated under this rule. * OAR 660-024-0045 (12) A site may be considered developed or committed to industrial development if a large-lot traded sector user demonstrates a commitment to develop the site by obtaining land use approvals such as site plan review or conditional use permits, and (a) Obtaining building permits; or (b) Providing other evidence that demonstrates at least an equivalent commitment to industrial development of the site as is demonstrated by a building permit. PAGE 15 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 Finding: OAR 660-024-0045(12) describes the circumstances for a site to be developed or committed under this rule. It is not applicable at this time since no site has been officially designated. * OAR 660-024-0045 (13) The participating local governments shall review the analysis after the regional supply of six sites has either been replenished by three additional sites or after ten years, whichever comes first. Finding: OAR 660-024-0045(13) requires participating local government to review the program after ten years or after the regional supply of six sites has either been replenished by three additional sites or after ten years, whichever comes first. Section (6) - 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 2013-002 complies with applicable statewide planning goals and state law. • Goal 1, Citizen Involvement; see Section 2 starting on page 4 • 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 35-day notice was initiated on November 29, 2012.30 This FINDINGS document and Analysis provides the adequate factual basis for this plan update. 1400 Friends of Oregon v. City of Dundee, 203 Or App 207 (2005) require Deschutes County to locally adopt the Analysis as part of the comprehensive plan in order for local governments in the county to base land use decisions upon it. OAR 660-024-0045(5b) also requires local adoption. • 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. 30 Deschutes County completed period review on January 23, 2003. PAGE 16 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 • 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 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 an Analysis of the economic opportunities and constraints associated with users of large industrial parcels in the Central Oregon. This document concludes 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 5. 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 8. 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 9. 4. Limit uses on or near sites zoned for specific industrial and commercial uses to those which are compatible with proposed uses PAGE 17 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 Finding: This requirement has already been addressed. See the findings addressing ORS 197.712(2)(d) above on page 9. Goal 9 Planning Guidelines specify. 1. 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 Analysis documents large-lot trends and dynamics, the importance of a large-lot supply and market choice, and target industry opportunities in Central Oregon. EDCO, in participation with local leaders, went through the lengthy process of identifying specific industry sectors for business recruitment, retention, and entrepreneurial support. EDCO 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.31 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: "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." 32 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 short-term employment land need recognized in new OARS and identified in an Analysis for large-lot " Roger Lee, Economic Development for Central Oregon Letter, June 3, 2011. 32 See note 9 above (Central Oregon Large-Lot Industrial Land Need Analysis), 60. PAGE 18 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 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 UGB. OAR 660-024-0045(8) specifies: A participating city may amend its comprehensive plan and land use regulations, including UGBs, in order to designate a site in accordance with the requirements of this rule, other applicable laws and the intergovernmental agreement. 3. Plans should designate the type and level of public facilities and services appropriate to support the degree of economic development being proposed. Finding: The timing for designating suitable sizes, types and locations of large-lot employment sites, consistent with public facility and transportation system plans will occur when cities choose to implement this program. As noted in the findings addressing ORS 197.712 (2)(g) on Page 9, OAR 660-025-0045(8) requires a participating city, when amending its UGB, to comply with applicable laws. Those laws include the Transportation Planning Rule (OAR 660-012-0060) and Boundary Location Alternative Analysis with respect to the provision of public facilities and services (OAR 660-024-0060(8)). 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: New OARS allow Central Oregon to address industries with a need for large-lot industrial land to support the region's economic development objectives. The Analysis does not diminish the importance of small existing, 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. 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. 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 PAGE 19 OF 21 - EXHIBIT "D" TO ORDINANCE 2013-002 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 land need identified in the Analysis for large-lot industrial sites in Central Oregon. Participating cities will need to address this guideline, which is also cited in Statewide Planning 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 UGB. • 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. • 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 a short-term supply of large readily available industrial sites is not currently part of regional economic development efforts. New OARs specifically grant local governments in Central Oregon that ability to determine the need for regional large-lot industrial land by following the provisions of OAR 660-024-0045. By adopting the Analysis as allowed under OAR 660-024-0045(2)(a), Deschutes County has demonstrated that there is a regional large lot employment land need that is not presently being met by local governments in Central Oregon. Regional large-lot employment need is defined in OAR 660-024-0045(2)(e) as a need for a specific type of 20-year employment land need. Participating cities as noted under OAR 660-024-0045(5a) and (5b), can adopt the Analysis to provide the factual basis for the determination of regional large lot employment land need. Lastly, as specified in OAR 660-024-0045(6), participating PAGE 20 OF 21 - EXHIBIT "D" TO ORDINANCE 2013.002 cities may adopt the Analysis and enter into an intergovernmental agreement without amending their existing 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 (7) - Deschutes County Comprehensive Plan * Urbanization Chapter Finding: This plan amendment is consistent with the Comprehensive Plan, Section 4.2, Urbanization, Urbanization Goals and Policies as shown in Ordinance 2013-002, Exhibit B. 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. Attachment: Central Oregon Large Lot Industrial Land Need Analysis PAGE 21 OF 21 EXHIBIT "D" TO ORDINANCE 2013-002 I~ ,I5 ' • ~rA~~~ s ~yni 4 ,r Tc. N ;tom Y +y` N'r" rig 2 ell Z~l ,;b• ~ rho p>q xr•! `~r7'.Y~~ Z ~~r! ~dk r~r ~ ~~rRG ~ ha~ ~11,~tir rN14 w r i r r4 S~ A'1 ~,j./° . 41i~~ q s r'~ y'"x 37. -41 F Central Oregon Large Lot Industrial Land Need Analysis t~ Via, w rr;r~..1 "mil J r .f ..r.,1 1 r. (41 1 % rv j(j( rr~~"r rl { r r'Ir~rJr k~i'~'." ~ ~C Hit... November 20, 2012 DESCHUTES COUNTY I CENTRAL OREGON REGIONAL LARGE LOT EMPLOYMENT NEED ANALYSIS TABLE OF CONTENTS 1. Background 4 A. Oregon Department of Land Conservation and Development Grant 4 B. Regional Economic Opportunity Analysis 4 C. Ordinance 2011-017 and 1,000 Friends of Oregon Appeal 5 D. Oregon Land Conservation and Development Commission Rule Making 5 11. Project Introduction 6 A. Problem Statement 7 B. Framework for Central Oregon Regional Large Lot Employment Need Analysis 11 III. Community Vision 11 A. Regional Goal and Introduction 11 Regional Approach 11 B. Community Vision Statement 13 IV. Trend Analysis 13 A. National Economic Trends 13 Introduction 13 Short-Term Outlook 14 Long-Term Outlook 17 B. State Economic Trends 20 General Industry Trends 20 Risk Factors 25 C. Local Trends and Conditions 26 Economic Factors 26 V. Target Industry Analysis 29 A. Large-Lot Trends and Dynamics 29 Large-Lot Trends 30 Importance of Large-Lot Supply and Market Choice 31 Competitive Inventories 34 B. Strengths and Challenges in the Central Oregon Economy 35 Madras (Jefferson County) 36 La Pine (Deschutes County) 36 Prineville (Crook County) 37 Bend (Deschutes County) 38 Redmond (Deschutes County) 39 Sisters (Deschutes County) 39 C. Target Industry Opportunities in Central Oregon 40 PAGE 2 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS D. Site/Resource Characteristics of Key Development Classes 41 Targeted Industries with Large-Lot Needs 42 Central Oregon Viability for the Data Center Industry 43 Central Oregon Viability for the High Technology industry 45 Central Oregon Viability for the Warehouse and Distribution industry 46 E. Regional Large-Lot Demand 47 Long Range Employment Forecast 47 Industry Placement Velocity 49 VI. Assessment of Potential 52 A. Site Need Characteristics 52 B. Gross Land Demand (Short-Term Only) 56 APPENDIX: Examples of Local Governments Proactively Planning for Industrial Development 63 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 3 I. Background A. Department of Land Conservation and Development Grant Deschutes County received two Technical Assistance Grants from the Department of Land Conservation and Development (DLCD) 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 Regional Economic Opportunity Analysis (REOA). 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, DLCD, Department of State Lands, Central Oregon Intergovernmental Council (COIC), 1,000 Friends of Oregon (1,000 Friends), Economic Development for Central Oregon (EDCO), 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 on May 31, 2011. 8. Regional Economic Opportunity Analysis In 2008, Bev Thacker, Industrial Lands Specialist with the Oregon Economic and Community Development Department (now Business Oregon) stated in a letter, "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] lost few years." She specifically identified a statewide need of industrial lands of 100-200 acres in size. EDCO identified similar challenges for the tri-county (Deschutes, Jefferson and Crook) region. Executive Director Roger Lee and others have repeatedly stated that site selectors often will not even visit the region if only one or two sites are available. The arrival of Facebook and Apple, while unique in many regards, has put Central Oregon on the international map for data centers among other potential large lot employers. However, the region lacks a supply of sites and cities' traditional Economic Opportunity Analyses do not account for such a land demand. The REOA project aimed to determine if such a land demand existed in Central Oregon and, if so, to identify the deficiency. The study concluded that there was an unmet twenty-year land need for large lot industrial sites in the region. It also concluded that 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. While geographically separate, the study concluded that the jurisdictions in the region can function in a manner similar to other metropolitan areas like Reno and Salt Lake City. According to the REOA, the shared economic function within Central Oregon supports a regional approach to economic development, particularly with respect to large traded sector industries. PAGE 4 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS C. Ordinance 2011-017 and 1,000 Friends of Oregon Appeal Deschutes County exercised its statutory coordinating authority (ORS 195.025) to address an unmet regional need for large-lot industrial sites and adopted Ordinance 2011-017. Ordinance 2011-017 was intended to implement the REOA but was appealed to the Land Use Board of Appeals by 1,000 Friends. The appeal however, was stayed in early 2012 to allow Deschutes County, the Governor's Office, and 1,000 Friends to explore a settlement. Spanning three months, a settlement was ultimately reached in April. During that process, Deschutes County also collaborated with the RAC. The settlement consisted of an agreement that the technical document produced would not be called an Economic Opportunity Analysis (EOA) as that term is understood in Oregon land use law. 1000 Friends agreed that the region has a need for up to nine large industrial lots in Central Oregon and the parties agreed upon policy principles guiding how those sites could be incorporated into existing UGBs. The settlement consisted of policy concepts focusing entirely on Central Oregon's short-term need for large-lot industrial sites as well as a commitment from DLCD to initiate rule-making later in the summer. D. Oregon Land Conservation and Development Commission Rule Making Deschutes County received a commitment from DLCD that they would initiate the Oregon Land Conservation and Development Commission (LCDC) rule making process. Upon recommendations from an advisory group that consisted of the parties to the LUBA appeal, rule-making consisted of narrowly crafted amendments to Oregon Administrative Rules (OAR) Chapter 660 Division 24 that reinforces the short-term need for large-lot industrial sites and allows Central Oregon cities to utilize a regional large-industrial analysis as the justification. Documentation of the regional large lot employment need, cited in this report, is based exclusively on excerpts from the REOA.1 Given the challenges that this project received last year at Deschutes County's initial adoption stage, rule-making now provides a clearer legal framework for local governments in Central Oregon to address a known deficiency of large-lot industrial sites. It specifically acknowledges in OAR 660-024-0040 and 660-024-0045, Central Oregon's short-term need for large lot employment land. After receiving support from a rule- making committee in August, a final draft was forwarded to LCDC for their consideration in November. LCDC adopted the rules at their November meeting and they became effective on December 10, 2012. Utilizing the new OARS, Ordinance 2013-002 now emphasizes Central Oregon' short term need for a critical mass of competitive and diverse vacant, developable industrial sites. These sites can enable site selectors, representing potential industrial recruitment opportunities, to consider the region. COIL has agreed to pro-actively manage, through intergovernmental agreements, the short-term land supply of large-lot industrial sites to enable the region to become competitive in industrial recruitment. Participating local governments will review the 1 OAR 660-024-004S(2)(a): "Analysis" means the document that determines the regional large lot employment land need within Crook, Deschutes, and Jefferson County that is not met by the participating local governments' comprehensive plans at the time the analysis is adopted. The analysis shall also identify necessary site characteristics of needed land. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 5 program after the short-term supply of sites have been replenished or after ten years, whichever comes first. II. Project Introduction Deschutes County, in coordination with its regional partners, 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), EDCO and Business Oregon 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 Business Oregon. 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. PAGE 6 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS A. 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 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 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 process requirements to meet market demands if it wishes to capture the considerable benefits of high value industrial development. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 7 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. FIGURE 1: EMPLOYMENT ACTIVITY ON CERTIFIED SITES (2009-2010) i~p'~p'ri'"Ak1"^r. s-I~•< 'alt li5 ~1 i v! . ~ . T. ~I i+yh I Faczotaok iPrinavit#a) 7910 N2W FaOkV Atnioonr&nWj 20OConstrurtiony35 Femonent HomeRepot (Salsm) 201:t4w Fa_il•tvwrn,>L>_S.-int 1751.0h5 Sanyu IS t.._.rr'. Solai.x IPortlandl Fer-otec (Fairvlew) Genentpth Hiilsboru, COS open TV :Ol~'NEIN Y a: I TJ prrau~_z-,t 110joos -.23 12 h 5 =)c... Oy _J-J 501abs CruivnWu4sDsntaIJSuther1r,} =DDS Pa_i'ft',J 25jnhs 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. PAGE 8 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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.' 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. z 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 corporate logistics and freight volumes, not job growth." Real Estate Market Analysis: Methods and Case Studies, Second Edition, ULI Press, 2009. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 9 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. 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 r y 4; Lowe's Distribution 205 $207,500 Payroll + Potential Impact of Large Business Oregon Multiplier distribution Center in Lebanon Solar Cluster 179 $1,400,000 Payroll + Potential impact of three Business Oregon Multiplier firms in Portland, Hillsboro, and Salem Genentech 75 $400,800 Payroll + Potential Impact Study Business Oregon _Multiplier Contracted for Incentives Title 4 Lands Hillsboro 3,388 $616,000 Payroll No Industrial Lands in Business Oregon Multiplier Hillsboro based on Employment Data Source: Oregon Business Development 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. PAGE 10 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS B. Framework for Central Oregon Regional Large Lot Employment Need Analysis This report is designed to meet the requirements of Oregon Statewide Planning Goals 9 and 14 and the administrative rule that implements this specific program, OAR 660-0024-0040 and 660-024-0045. This report is a Central Oregon Large Lot Industrial Land Analysis, and is allowed under the provisions of OAR 660-024-0045(2a). M. Community Vision A. Regional Goal and Introduction Regional Approach The Central Oregon region (comprised of Jefferson, Crook and Deschutes counties) proposed 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 a regional short-term 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 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, DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 11 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 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. 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 21st 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) Availability of a high quality workforce and training programs. PAGE 12 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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. E. 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: 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. IV. 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 13 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 period. • 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. FIGURE 3: NEAR-TERM GROSS DOMESTIC PRODUCT 6% 4% 4j 2% U a C% 8 2% C -4%: -6% -8% ■Actual Foreca n N n n 00 oa 00 cn 0 0 cl" 0 u o Q 0 -4 N T-1 RV M -r N rn '7 .-1 N M zt .-I N M r N N N SOURCE- Bureau of Economic Analysis, Congressional Budget Office 3 Congressional Budget Office. "The Budget and Economic Outlook" January 2010. PAGE 14 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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. FIGURE 4: NATIONAL UNEMPLOYMENT TREND 1.2.0% 10.0% 2 M 8,0% fC dr 6.0% ca Ir a 2,0% 0,0% ral R I I I I I I SOURCL : Bure au Labor S' a ' Ines 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 15 FIGURE 5: YEAR-OVER-YEAR EMPLOYMENT CHANGE, UNITED STATES 400 c a~ y -200 -400 w -600 d -800 Z -1,000 200 r- (l- n n rw r». ad as CO 0 M co M Q'1 (n R'S M M €D ~ to CU M qi 6 M 3 m U is M m q~ 0 IV SOURCE: E31;rc au of Labor Srza_v'-,;Jc:: 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. C1f_'1 IRC 9• PFRCIIAIAI rniucI IRAPTIMU FXPFIUnITI IRFC PAGE 16 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS in ivnmUns Ui L nalneu ILUU7J UUUdrs, JCd]Ufldlly NUJU]LCU 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. 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 17 FIGURE 7: LONG-TERM GDP FORECAST 4% 3% % r 2 3 ~ t 1 m O OL 0% 3 3 2.99 7 ,996 F ti:,, 3.0°6 7..+ % Forecast. ■ Actual 2008 2009 2010 2011 2012 2013 .2014 2025 2016 2017 2018 2019 .2020 .SOURCE- Congressional audgetOfficeand HI'SG1'obal 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. PAGE 18 DEscHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS FIGURE 8: NATIONAL EMPLOYMENT FORECAST BY INDUSTRY 2010-2020 Government 1 722 Other Services 6 0 Leisure & Hospitality 1,OR7 Education & Health 4,938 Professional Business ,830 Financial Activities r22 Information T.1'. U. Ret all Trz~ de Wholesale Trad? Manufacturing -1,027 Construction 1,109 Poining & Logging -97 -2,000 -1.000 0 1,000 2,000 3,000 4,000 5,000 6.000 Employment Change (In ms's) .=RCE; Bore au ~A L:aI'. s 1>1:,l 1 .I r<'. r I;I..II 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 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 19 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. 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 ZEi I, JJ:) 2,,J0 3 ..~4~a 140, w f r~ 1. L. 1 ~1 w - 11J ua 1 . , `r LS ut:).~ 0J. Lee Ali, J');I " t KG()RCt: L L >f , I :t:: , 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. PAGE 20 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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. 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 21 FIGURE 10: OREGON ECONOMIC CONDITIONS AND ESTIMATES BY INDUSTRY Recovrty Grwolh Frojcctlons Inuustr~ Signal 2010 M11 Con3nxnts Wood Products i Computer & Etcctronic Equipment Transportation Equipment Metal's any Machinery n/a Food Processing C,; By, construction " 45.0% Information ~ at a'9.Vni Financial ACtivities Professional PiaBusiness 01 1ti Education & Health '3F Leisure Via. Hospitality Government Ctnti: x^ Sloeitr recovering but stitlt -sling tht? housing 1% market 33% 4.531, 2.% Good corporate earnings Still among Oregon`s most troubling sectors Sector na;er gottoo bad among 0regon`sstrongest sactois ti_ommerdA real estate extendingthe decline lle hasp apex la ulr lish ers fe eli ng a hve al: retai 1 2.1% sector 2.2% 5. 2,1, breakness in real estate limits grokAh in 2010. Stable sector poisad for a rolaust 2011 .recovery Arno ng Oregon s strongest sectors. Performed poorly in 2005',•,ith IittlF nearvterm IJ,I". gm-.,th expected. 1 le gate: a scat a and 1o to I gro,'R 17 p arti ally off set l.3 ivy Fed aralgain- 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 Economic Analysis (OEA), Oregon's risk of slipping into recession is now currently below the 50% mark for the first time since late 2007. PAGE 22 DESCHUTES COUNTY ( CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS FIGURE 11: FEDERAL RESERVE BANK OF PHILADELPHIA'S COINCIDENT INDEX OF ECONOMIC INDICATORS 0?*0,0rn a L 2% ,i ~~~Ruftk~pl 1.3f~t) c-1 7--Mw I{ rm Employment Factors r :;:Jnt7 n,i r t-n 1J -L L- th;-1 Similar to trends at the national level, the State of Oregon began exhibiting a decrease rate of job losses (on a year-aver-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. DEscHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS ~mmmm PAGE 23 FIGURE 12: YEAR-OVER-YEAR EMPLOYMENT CHANGE, STATE OF OREGON iC(. 6U ..s'rM. ~tM1 b[,,GGC LU,CGU Ong 5 p 4 ~~a ya p 4'o ~aA 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. PAGE 24 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS FIGURE 13: FORECASTED EMPLOYMENT GROWTH BY INDUSTRY, STATE OF OREGON 2010-2017 Construction l i ,900 Manufacturing 25,1 00 Wood Products 4,300 High Tech ,000 Transportation & Equipment 1,500 Retail Trade 13,8 Wholesale Trade 1Z 700 Information 3,100 8 0 Professional & Business 54, Health Services 3 7,600 Leisure & Hospitality 15, 00 Government 8,400 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 25 ■ 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. C. Local Trends and 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 1S% in the current quarter, significantly higher than the statewide average. FIGURE 14: COMPARATIVE UNEMPLOYMENT ANALYSIS 2003-CURRENT x",. :rook Z t.J : DcschUtes =Jrffersal7 -Oregon C ¢r , ~ c', uh; it J 03 ❑3 011` 1:~` o115 prO P p, a~ p~ o~ jai o°' 4 SO 11~pll' 1~~ 19 1~9 %4 CF; e If -if lep, 10 Ile SCLIHCL; I i I t- t 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 PAGE 26 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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. 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 1S: LOCAL POPULATION GROWTH TREND The City of Bend is the primary population 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 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 27 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. FIGURE 16: COMPARISON OF EDUCATIONAL ATTAINMENT oulder Cuur,:y. CO I > > Ada Coun:y, - I I 'VV,15 1111-l un Cour-Y, I 2 1 ~ Koo*enai Coun- I 23% Cer.ral Orcror 7 Pordar, % of Working.Age Pop. With a 13achelor's Degree ;5'OURCiE. He idf,vaters Economics, U.S. CerlsLas Bureau., and 1 fins n 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. PAGE 28 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS FIGURE 17: CENTRAL OREGON WAGE TRENDS $38,000 $36,000 $ , C~C 204 $34,315 Bend MSA $35295 $34,000 ----...._...............m.... _$33324 $32,000 _ $3L491 $30,091 3 $30,000 -S2s,~24•. C $2$253 Portland Metro $46233 y $28,000 m $26,000 - a $24,000 Oregon x740 $22,000 $20,000 A -1 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 V. 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. DESCHUTES COUNTY ( CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 29 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. 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); PAGE 30 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS • 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 I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 31 Johnson Reid has organized this process into a simple model that follows the 3+~ progression of firms' decision criteria in MbVcrtkf4rta ard Fai ~rt~ ~Iu;,Trr location analysis. In addition to identifying a progression of selection ?il 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 C, S 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. PAGE 32 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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. 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 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 33 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 5€}-IDUAcre Sites 1UG+Acre .Sites 5[)+Acre Sites market Site Count Acreage Site Count Acreage Site Caunt Acmage Colorado Spn r e i 20 1.507 5 500 25 2,000 F.alei gh 2 126 12 1,470 14 1,596 Austin (Round Rock) 5 380 6 855 11 1,235 Albuquerque 3 275 9 9W 12 1,125 Hillsboro 1 78 a 0 1 78 SOURCE- J©hnsmn Raid Survey (Fmb. 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. 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." PAGE 34 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 .rwiMiwrr~s DESCHUTES COUNTY ( CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 35 facing each of Central Oregon's major communities with respect to the suitability for large-lot industrial.a 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 • Industria! airport Iht 0ju&Qn T,jn port~tk:) i i k)m i..g ftu e an issue on Hwy 97 • There is no a continuous 4-lane highway • Airport has imnrnvemena scheduled between Madras and Bend + Available industrial, e i,r aximate to rail • Relative skill set of work force + Opal Springs provides ample water • Some areas do not have large surplus of gas and electricity 1,tro ~;r agricultural and manufacturing s-c.ti,w Ii, i ;inesses Pvlost proximate to the Portland metro area • Most proximate to 1-84 + Highways 97 and 26 run through middle of Madras • Development costs ...l ,f i tially than other Central Oregon citie. La Pine (Deschutes County)5 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. ° Profiles gathered from the June 28, 2010 Central Oregon Industrial Lands Forum. S During the adoption process for Ordinance 2011-017, stakeholders from La Pine wanted La Pine's strengths and weaknesses to reflect new information. PAGE 36 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS Strengths/Advantages _ Challenges/Disadvantages • stl tc of c, egun Certified Shovel-ready 0+ Dcrc ev.,-r ,:i r1 d , ~2' irL i, rt. • Uisr lr;,ntN-inn industri rl nl .bk_ :,nu proximate to rail the city. To be absorbed by the City eat ,y, to mid-2012 • Neighbour ~ ;xi,ill _ d r eclii-irr sites available for • Transportation challenges; TSPto be J,.,;t1~r" of cofi by mid-2012 • The n-f-t f; , r r ih r r;lec.tr c rates in Central City codes adopted and scheduled to he lark t;nr implemented early 2012 • More than adequate water and sewer capacity " " • Need large keystone employer for new industry • i~ revel flexible land use code and supportive c.it! IF r~ c s • i he cvw , I; ii~ rn atrul of some industrial sites • Enterpn_, a 2or , h.,r ta:e 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 1-5 and Eugene. • BNSFgi{ rn:,in'irr° thri, industrial park. Near p ,j raii fine. "Best Rail Industrial site in r r n,,:;J n : gon, • Low housing costs. Riverfront hornes, ranches, and community neighborhoods are available. • La Pine has a large labor pool of skilled labor a,rl divr,rsF oonulaticin with extensive work r i,F r i. r c as indicated by large amount of ni lr r,,jelingnorth. • 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." 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 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 37 Strengths/Advantages - Challenges/Disadvantages • Sites are r,l i Hv,y- 97 and Hwy. 126 • Ease of permitt ru has limited capacity , • Rail access/freight depot - City owned and Grade differentials in sites make some easier operated short line rail service and the to serve via rail (lower level) than others Regional Freight Depot (higher level) U~.I oc c umber mill site bordered by 2 • General aviation airport adjacFnt to industrial va r s, s•o "double indemnity" for any properties with expansion underway evelupr, nt vitytriggering TPR issues. R(,c„r, ,,,std as future mixed use site. • Potential large lot industrial lands not • Larger, available workforce protected under current zoning from splitting into smaller parcels. • Son• -.vh i~ .r.armer climate, but . cnni evenings • Water supply h.,l • Cor,rni.inil/v:Flcomingof developmei ~ji, ;vc n,ers/jobs • Prineville is Genii„II forated to Redmond/Bend with r0 it vely lower priced land for indl r,trial ,e to other Centr,il Oregon area • Facebook data center under development at airport location causing high interest by other firms seeking future locations Bend Deschutes Count 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. While Bend has the greatest level of services and scale, its vacant industrial land inventory is severely limited. Strengths/Advantages • Largest menu- rca irr region • Regional employment center • Most "urban of regional cities • Immediate access to natural amenities • Central Oregon Community College rnain campus • Good communication intrastructure • Juniper Ridge master-planned mixed-use community Challenges/Disadvantages • Scarcity of industrial lane. • Price c>f industrial larid • Overall CWJt, to dev iop • Relatively complex/sophisticated permitting process Water and sew cipacit_y iirritt-d • TPR is an issue • Ongoing "discussions" with LCDC about UGB , expansion (remand, negotiations, etc.) PAGE 38 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 • r un-imercial airport • ;ll:+il l;la is/Atpr/wa-tc.v ilcr capArity + Gcx7il ti Ir cwi infrastructure • Central regional location allows workforce drawn from all over region • Avg ilahlk, mall/medium sites • COCC technology center • Family-rrntric, 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) Challenges/Disadvantages • 465 acres located in the industrial are~r in t ne currently in holding zone of Opei i e I', i k Reserve rezoning prevented by • fforo,,l lity of industrial land coming bad, into line with r„arket • Can large public entity ! id hr.lciirr (irrigation district and D ,-d ) be brougct into play? + TPR is always a factor when land is being considered for development • The diverse public entities that own I, -,d might have different objectives 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 • Trili or, rn::'iut 000 po pu t,o ) • Small airport + Po>siole expan-Jon land nc:t in _ I , + Tran-portation system needs funding, but • Streamlined permitting process some elements coming into place • Available lots are plotted into small parcels in • Large parcels abut city limits industrial parks • Cornrnunity is interested in/supportive of . `3t7 acre Forest Service site in town might 1ecome available which could trigger economic development Just joined Redmond's E zone • • Possible water/wastewater limitations (riot reallv clear) DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 39 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 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 PAGE 40 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 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. 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 41 F_oo unary R&prock;ces P dy (Archived) 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. 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 PAGE 42 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS FIGURE 18: KEY INDUSTRIAL LAND/INDUSTRY CHARACTERISTICS 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. The Appendix 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. DESCHUTES COUNTY ( CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 43 FIGURE 19: INDUSTRIAL POWER RATES Q~14" Y W AL C 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 ,a Pip I CI I.A PAGE 44 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 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 the Appendix, 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, Navis, 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 45 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 RE CIA. Central Oregon Viability for the Warehouse and 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 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 a. area have larger-scale distribution nationally from their Central Oregon location, including Bright Wood Corporation, Deschutes Brewery, 'w Keith Manufacturing, Contact Industries, leld-Wen, and r +r,, G ,',I Advanced Energy (PV Powered). Online retailer 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 warehouse and distribution --fewer but larger DCs located in strategic geographic area -to achieve greater efficiencies and cost advantages offered by economies of scale. With the sharp rise in fuel prices in recent years, industry experts are predicting that the l 7 PAGE 46 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS industry could migrate to smaller facilities serving smaller distribution areas. Key to this more dispersed model is the availability of rail to more cost effectively 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 Ms, 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 economise 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. 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 47 FIGURE 20: BASELINE LONG RANGE EMPLOYMENT FORECAST Industry Base Estimate 2010 2015 ---fYear 2020 2025 2430 '10-'30 Change AAGR Natural Resources 1,044 1,075 1,10/ 1,1:0 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 1,420 117) Financial Activities 3,741 3,910 4,086 4,270 4,463 722 0.90/0 Professional & Business 7,001 7,607 8,266 8,981 9,759 2,758 13% 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% 5OURCE: 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 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 PAGE 48 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 Oregon to demonstrate a snapshot of large-lot characteristics and the velocity of recruitments handled by Business Oregon.s 6 Oregon Business Development, 2010 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 49 FIGURE 21: SELECTED LARGE LOT RECRUITMENTS IN OREGON AND SOUTHERN WASHINGTON YEAR - PROJECr LOCATION LOTSUE BuILDWNZE COMMENTS '-Zz Ta"EE A Cs- Y, 0, '173 1~]T7 `IVa9-Mitt I-erm!Fton, of 20D awes 1.3 msf 20C2 z- sr-Trce9 _ `.d3 - 2c -z 80o..0 OD f 2442 FaiT:an(Piumlfirg}.' Ti-C:Yees,,wa. 7532-es ','..51)E)DOOsf 2.4JC ',Y -V r -.-d 3tt2.•]Js6K! '31 .~.>t 3 iLV -•=s 90D.,OOD if 2,3014 Lawes certifisel L,963non, Or 2,D4,3 -res: . 13 msfto z z msf `v ( or:'. 73 3, 3ftL-. C3 3. "sx C=_-c 711.53 Al-f'J K_ltChJl t"tat ty 1~ . 2A46 rw GAf-.:-Gaps l{7 2OC*~ Project Go Forth Sa,emArea tm:f 5 ~r~nt _ - _ bo'c 500,000 of zoos ARricos N-)Felton 2s3 %wytarge Weil t to 2,G 1''r dv c r a, c R 2006 Pacific Maw♦. Beatdman 2007 5{. 3`Ac r- sae,c 7E _ --f 2007 14AZ LCst-C.3; Ftil lEbwo 150 iS Imf opl-SC'.3,•. 20" .2. r.3 _ N`3..a y.3 t,f !,3t! 1C.~ C'..i223 2;,07 hCT- st _ C.'zg1- too 2-1 37 f,aVt3.5 2007 F-_ Cat Tf0ista3! a ?R 3tl01DCU Sf ZA49 3~fi:ott t-5 n~+ ..~J:»~»J si, xa:Fars-^.^ Ne f Fr: rc< 2409 C:a^ I-5 3%• 50J. 3Sf F`3fs w 20 LO rDme Depot Ice•f f S:; r1a Rr.. 90 to 100 5- _•es fi , pt W- ZQLO Q)L~W hl-.f Lf3CtL • r=- r,Ed vail¢y Intl c= c3 =a PAGE 50 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS FIGURE 22: MATRIX OF RECENT MAJOR TARGET INDUSTRY PLACEMENTS fndus1ry/A0fvlty Company Locatiat i.andf5fta: She Renewable Energy Solar; plant for solar panels and power systems Xtreme Power/ Wixom, Mitt an 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: plant 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 Aviation/Aerospace 787 fusels a Boeing Charleston, SC 1.2 million sq. ft. (building only) Parts depot Lockheed Martin Papilllon, 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 Bell Helicopter Ft. Worth, TX 160,897 sq, ft. (building only) .Helicopter hangar addition Bell Helicopter Amarillo, TX 97,678 sq. ft. (building only) f h l ogy Softwarelin ormation Tec no Software testing Galmont Consulting Lexington, KY 4,000 sq. ft. (building only) Global software development facility HSBC Burnaby, BC 146,000 sq. ft. (building onl ) Company H.O. 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 sq. ft. (building only) Office space Microsoft Bellevue, WA 1.34 million sq. ft. (office lease) Pharmaceutical development facility Analytical BioChemistry Laboratories Columbia, MO 90,000 sq. ft- (building only) Corporate campus Blogen Idec RTP, NC 176 acres Fill and finish facility Genentech Hillsboro, OR 75 acres insulin manufacturing facility MannKind 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 Centers Data center E bay South Jordan, UT 250,000 sq.ft. (buildin 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 El Segundo, CA 177,000 sq. ft. (building only) Data Center Advanced Data Centers Sacramento, CA 500,000 sq. ft. (bullding only) Data Center Facebook Prineville, OR 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. Tt. (building only) Aviation programs Western Michigan U. Battle Creek, MI 92,000 sq, ft building and 20 acres Treyburn Corporate Park North Carolina State U. Raleigh, NC 256 acres Biomedical campus U of Arizona and A.S.U Phoenix, AT 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 bake facility Campus expansion Duke Durham, NC 1.3 million sq. ft. (building only Recreational Equipment Factory stare 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 51 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 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. Vl. Assessment of Potential 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. PAGE 52 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS Y ~ 'i 3 x x x N V) y y a m G x vi oo ur ~ rv u m a s ~y O yy v u x x 'm 'm 'm `1D t~ x w° yI w rv u z z a a r Q y T' x x g tl z M n Q x W m ~i W n x N v n, r, v) c a rt x x ° w z z a x 'b K F , , n a r a C ~ C n +p V1 R u x x ~ u~~j m ° 'Cu ~ io ~ c°> n n n u ~ ty °C7 S?" ~ c~" h w x m z a ~ a ~ p4 W r . N fv x x i[ ~ p. 'G% C1. Gl .y x W fa Cd Su w [,f' Y ~L c7 GI kC u! (JC d 4~ a 2 n p m M M arty .ffi 'ffi °m ca ou Q '$i m g o x a " a F a a i a a ` kl~ te, x n x ~u c a w'a a m n sy w Erg Er F " .+K C] ~ yr 'n cc o h, h. c.. n+ a.. h, c[ pp o,. h, r[ o, a a ~ u ni d o h O 4 a L M u 6 ro l7 w m O LL h. ✓1 c 4 Ji -Y E _G. • Ll FT y C c N C .M. C U pp W B -F. N~ • a e U h Z iL r y A kZ X r cQ C w O a r Z CW C a O J w W J Q t/1 d z N W w D V LL O O e~ ~r n ~ C M _ r_ n o r_ T 2 O tic 61 N c I m N V) J Q Z Q W Lij Z ❑ Z J a ❑ Z O J Lij O l7 z a z u z 7 u F u LU w Q m Ll1 C7 Q 0. 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 Housing options for workforce and executives PAGE 54 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 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. Transportati- 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 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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 55 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 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 (Short-Term Only) 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. PAGE 56 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS FIGURE 25: BIRTHS, DEATHS, EXPANSION & CONTRACTION OF FIRMS, 2006-2007 i Ern lo•rnen[Siie of Enter riw? T rarAE 1-4 1D-19 2o-99 14(1-439 50D. lnitial year establ ishments Chan e i n a£t:ablish ente P erc ent change i n astahii shrrtents Establi shment births Establi shment deaths Establi shment expansions Estahli shmw~nt contrac:tions P'ercentchange 1n establishments due to bi rths P err ent change 1 n i~sta.:bli shments due to d ea the Initial year amploynwt Change in employment P erc ent cha nge i n >e:'np loym.en t Change i n employn~*ntduetohirtha Ch s n;?a in em ploy ment due to d each s Chenga i n employ ment due to expsns ions Changain emplaymantduettgcantractions Perc erat c h a nge i n emp loym en t du+e to bi rths Fementchs;nseirarnploymentdue to deaths Persert change i n employment duetn eupanslrans & t+irths Percentchan;einEmFf_Yr--rtdu:etc ccmtra•ctiuns & deaths 1,067.847 469,155 172,870 1479,332 1.1.2, s13 51,354 1.52,517 30,002 14,386 2,955 1,85'2 4,423 3,175 3,181 22% 3.1* 1.7% 1.7 6 3.9:4 S.2% 21% 156,465 92,965 16,242 9,816 12,751 6,771 17,616 126,463 78,483 13,297, 7,934 9,3.28 3,596 14,435 258,461 98,643 52,935 37,671 41,205 17,966 49,681 296,885 E5,033 64,334 47,564 49,639 20,493 49,772 14,6% 19.8`54 5.456 13.955 11.4% 13.255 1.1.5% 1.1:3% 16J56 7:7% 72 7.4% 7.44 9536 18,258,552 370,374 1,524,249 1,4£16,325 3,444,532 2,756,375 8,556,107 37,174 173,315 31,231 2,741 -43,E49 •76,264 -56,540 4.2.58:1 195% 22%, 0-2% -L3% -2.3% -0.7:x. 1,176,589 162,494 101,728 110,547 234,975 173,462 393,827 -1,031,363 -1.33.995 -52,878 -93,033 -192,320 -134,396 -394;741. 1„918,936 234.651 147,936 154,1902 334,050 252,161 795,2.36 -2,,026,983 -83.331 -135,455 -169,635 -420,514 -367,091 -650,857 6.476 16.756 9.13M 7.934 6.6."51 6.356 4.6 35 -5.6% -13.8% -7A% -5.6% -5,6% -4.9% -4.6 17L55G 40.9ib 22.2:5 18.95% 15.5 15.41E 13.9 0 -16.75 22.4' -19.4:5 -18.715 -2735 5 -1825 -14.6% 50URCE: US Census sae;, ~:atistits of US Bu Zir asses 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 (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. DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 57 CIf;-I IRF 7A• DRr1FIl F r1F FIRMS RV C17F RAAIM: ANn INnI ISTRV lA/FSTFRN I INITFn STATFC XIOR tntal Firm4. ySlugRanBP In dustry Code dpc6pt Ion in 1, 1-,4 5-6 10.19 2rr49 . 51199 10.' 249 250-439 .W 9'l9 .1,0170+-' Forestry, fishing, hunting, and AgricUture Support 5,3L5 ;.=,02 698 486 319 134 65 is 3 3 Mining, quarrying, and ail and gas extraction 1,332 =65 216 242 l8t 60 44 8 3 2 tRAtties 1,84 011 284 223 220 124 97 35 13 12 Construction - - 124,560 !d.572 20,929 12,801 8,20A ?.571 1,169 237 51, 22 Manufacturing W, 383 22.430 10,621 9,214 8;547 3,246 46139 734- 26S 114 Whulesaletrade 78.3' 41,552 14,795 10.55 ' 7,Z+S 2,415 ` 1,221 254 91 38 etsil^raCe I•.. -j - .n u. , -1 411 14,x,- t "'D 711-1 30 3 TtansportatlnnandvvarFhorrirg: 3i.6'i71 Iii 4=3 5,7 1 l9 a, 158 1 710 185 87 43 Information K,1-+y i5'u2.7 9,22h 9,925 2,uw'~o 750 265 114 63 Finance and Insurance 73,237 43,916 13,712 5,657 4,517 L284 728 236 734 53 Real estate and rental and leasing 66,337 48,318 9,997 4,989 2,074 605 270 60 17 7 professional, sc'rentif1c,andtechnical services 148,273 103,085 21,137 12;653 7,382 2„316 1,199 303 107 91 Managementofcc-paniesandFnter.prises 6,7 2,390 1.047 1,018 I,OS2 530 432 467 63 47 Administrative and5upportandWIsteMang iandRernediationSrvs 60,140 33,713 9437 6,532` 5,285 2,419 1,869 578 2D4 103 Educational services 15,693 7,259 2,690 2,379 2,044 716 418 101 40 46 Health pre and social assistance 132,605 68,973 29995 17,375 10,057 3,321 2,094 417 199 274 Arts, entertainmenx,and recreation 25, 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 Othersew! ces(exceptpubilcadmInlstration) 99,577 61,316 2x480 10,516 5,422 1,246 475 73 35 14 TOTAL FOR ALL SECTORS 1,239,028 670,529 225,897 153,763 106,351 35,707 154 3 4,739 1,615 998 PERCENTOF TOTAL 55.0'% 18.5% 12.6% &7% 19% 16% 0.4% 0.1% 0.1111 TOTA FOR INDUSTRIAL-ORIENTED SECTORS 354„ 194,071 61,327 43,279 32,822 12,601 7,705 2,063 718 332 INDUSTRIAL-OMENTE®PFRCENT OF TOTAL 54.7% 17.3% 12.2% 9.2% 36% 22% 0.6% 0.23E 0.1% Sourca: 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. FIGURE 27: PROFILE OF FIRMS BY SIZE RANGE AND INDUSTRY, CENTRAL OREGON, 2008 s. . Total fl- size RBn~c industry EDdedescriplibn Flints 1-4 5-6 1419 217449 50-99 100249 ?50439 50LF9fi L000+ Fore stry,fishing, huntir_t.. 5A 43 1 1 0 Mining, quarrying, and ailendydse+'-acti, 11 6 1 2 0 0 C, t' 0 Utilities 23 4 4 2 0 1 0 0 Construction 1'398 1,006 `'1 101.. 44 10, 3 0. 0 U Manufacturing ?66 173 7? 48 i5 is 11 2 n 0 Wholesale trade 31.0 184 59 42 21 5 0 0 0 0 Retail trade 984 477 2310 131 90 34 10 4 0 0 Transportation and warehousing 16 103 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 D 0 0 Professional, scientlflc, and technical services 722 550 89 51 31 0 1 0 0 r, Managementof companies and enterprises 29 13 7 2 4 3 0 0 0 0 Administrative and Support and Waste Mang and Remediation Sws 371 238 59 32 33 7 2 0 0 0 Educational services 74 37 13 11 11 2 0 0 0 0 Health pre and social assistance 614 322 128 85 43 24 9 2 0 1 Arts, entertainment, andrecreation 128 75 21 9 16 3 3 0 1 0 Accommodation and food services 593 194 116 165 105 17 3 2 1 0 Other services(exceptpublic administration) 515 313 127 52 19 4 D 0 0 0 TOTAL FOR ALL SECTORS 7,370 4,480 1,336 836 504 144 52 11 6 1 PERC.ENTOFTOTAL 60.8% 18.1% 11.3% 6.8% 2.0% 07% 0,ih 0.1% 0, U/. TOTAL FOR €NOUSTMAL-ORIENTED S-C.TORS 2.644 1,767 419 241 147 45 20 2 3 0 €NOUST'RIAL-OMENTEDPERCENT OFTOTA 66-WA 15.8% 9.1% 5.6% 17% 0,8% 0,rA 0,1r 0'00 Source: U.S. Census Bureau PAGE 58 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 CerrtmI 'Nrstern Oregon us Total Firrns 7,370 1,219,028 Firms - 500-999 Employees 6 11615 % of Total 0.08% 0.13% Share of Western U5 0.37% 100.00% Firms - +1,000+ Employees 1 998 % of Total 0.01% 0.08% Share of Western U5 0.10% 100.00% Firms - r 7 2,613 I %ofTotaI 0.09% 0.21% Share of Western US 0.27% 10Q00% Estimated Annual Birth Rate 1/ 11.5% 115% Expansion Annual Rate 1/ 32.6% 32.6% Annual Births 1 302 Annual Expansions 2 851 Estimated Annual Activity 3 1,152 S/ ASS u:rtte4 pattp7ns consist@rit with We stern US data summarized in Figure 21 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 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 59 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 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. Maintaining an appropriate short-term 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 PAGE 60 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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 a short-term 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. The following are additional factors that should be considered in establishing and maintaining a short-term 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 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. A property that would allow for a range of partitioning options for large lot industrial would be DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 61 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 short-term 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. The short-term available inventory is most critical in economic development efforts. PAGE 62 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS APPENDIX: Examples of Local Governments Proactively Planning for Industrial Development DESCHUTES COUNTY ( CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 63 INDUSTRY FOCUS: DATA CENTERS Community: Quincy, Washington (Grant County) Population: 2000: 5,044 1 2010: 6,750 1 % Change: +33.8% Number of 50+ acre industrial sites absorbed 1990-2000: 0 z Number of 50+ acre industrial sites absorbed in past decade: 5 Number of 50+ acre industrial sites now available: 6 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 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.S 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. loop-, 4 L ~ nt At ~.~rww.~ r" I. 'I~IbM:✓'IiG1 l i 'iahnd ' y ~Ali .~~a~ ~,~i ~ ~ ~'h • ~`.ny~F~S'~ y i Pi ' ' ~1 ~ err " M rn N If WI r t rf . I r F'TV n A i r Legend "w .;yte Bour+dsry I RxH ~ "TT7'11w T y` Mir 4 F US kV Li" EKix P* d4%n1*d YI `u 1 iii inf~terc er U,* I '4 Futur* RKlotim"d V*Wif *3y Jg4W fine , - PAGE 64 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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. INDUSTRY FOCUS: HIGH TECHNOLOGY Community: Hillsboro, Oregon (Washington County) Population: 2000: 70,187 1 2010:91,611 % 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 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 65 nocLiment ice. pro es PccriY (Archived) 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. 'j PAGE 66 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 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. Community: Austin, TX (Austin County) Population: 2000: 656,562 1 2010: 790,390 1 % Change: +20.4% 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 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL. LAND NEED ANALYSIS PAGE 67 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. Community: Hermiston, Oregon Population: 2000: 13,1541 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 new Amazon 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: 00120 ■ 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) 77"1111 r", j. iWA PAGE 68 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS Community: Morrow County, Oregon Population: 2000: 10,995 1 2010: 11,175 1 % Change: +1.6% Number of 50+ acre industrial sites now available: 2,500 subdividable acres f . 808rdman Industrial P?, k Airport Industrial Park ' south wrrgw Industrial park 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 I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 69 iocumenf R rOr, ces Food (Archived) Community: Reno, Nevada (Washoe County) Population: 2000: 180,480 1 2010: 225,221 I % 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: ■ PetSmart (990,000 sf) ■ MEPT USA (700,000 sf) ■ Kmart ■ JCPenney • Toys R Us (300,000 sf) ■ Barnes & Noble (642,000) ■ Husgvarna • US Ordinance ■ Patagonia (171,000 sf) ■ Walmart (890,000 sf) ■ Urban Trends (clothing) - 430,000 sf • Sherwin-Williams ■ Starbucks (160,000 sf) ■ Snap-on Tools (120,000 sf) Several of the large scale distribution centers have FC" wl •r , ewe located in the Tahoe-Reno Industrial Center (TRIC), a .y 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. ti ! The park also 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. PAGE 70 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS ' e arena fshwle &rk r~ r rrprw r~i i day tru=k wit ice. Tfie area; shaded b--h gmrn repmwn a ruCk *MX-C 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) - est. 400,000 sf warehouse M DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS PAGE 71 ■ 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. PAGE 72 DESCHUTES COUNTY I CENTRAL OREGON LARGE LOT INDUSTRIAL LAND NEED ANALYSIS 660-024-0040 Land Need (1) The UGB must be based on the adopted 20-year population forecast for the urban area described in OAR 660-024-0030, and must provide for needed housing, employment and other urban uses such as public facilities, streets and roads, schools, parks and open space over the 20-year planning period consistent with the land need requirements of Goal 14 and this rule. The 20-year need determinations are estimates which, although based on the best available information and methodologies, should not be held to an unreasonably high level of precision. Local governments in Crook, Deschutes or Jefferson Counties may determine the need for Regional Large-Lot Industrial Land b following the rovisions of OAR 660-024-0045 for areas subject to that rule. (5) Except for a metropolitan service district described in ORS 197.015(13), the determination of 20-year employment land need for an urban area must comply with applicable requirements of Goal 9 and OAR chapter 660, division 9, and must include a determination of the need for a short-term supply of land for employment uses consistent with OAR 660-009-0025. Employment land need may be based on an estimate of job growth over the planning period; local government must provide a reasonable justification for the job growth estimate but Goal 14 does not require that job growth estimates necessarily be proportional to population growth. Local governments in Crook Deschutes or Jefferson Counties may determine the need for Regional Large-Lot Industrial-Land bYfollowing the provisions of OAR 660-024-0045 for areas subiect to that rule. OAR 660-024-0045 Regional Large Lot Industrial Land (1) Local governments in Crook, Deschutes or Jefferson Counties may determine a need for large lot industrial land in the region and provide sites to meet that need in accordance with this rule. (2) In addition to the definitions in OAR 660-024-0010, the following definitions apply to this rule: (a) "Analysis" means the document that determines the regional large lot industrial land need within Crook, Deschutes, or Jefferson County that is not met by the participating local governments' comprehensive plans at the time the analysis is adopted. The, analysis shall also identify necessary site characteristics of needed land. (b) "COIC" means the Central Oregon Intergovernmental Council. (c) "Intemoy_er_nmental Agreement f IGA.)"means the document adopted by the three counties and any participating city to implement the provisions of the analysis. (d) "Participating city" means a city within Crook. Deschutes, or Jefferson County that has adopted the analysis and entered into the intergovernmental agreement to implement the provisions of the analysis- (e) "Participating local government" means Crook. Deschutes, and Jefferson Counties, and participating cities. f "Regional large lot industrial land need" means the need for a specific type of 20-year em to ment land need, as described in OAR 660-024-0040(1) and (5), that is determined based upon the analysis. (g) "Site" means land in the region that: (A,) Provides the site characteristics necessary for traded sector uses as set forth in the analysis: (B) Is 50 acres or larger as provided in section (3) of this rule: and. (C) Is determined to be "available." as that term is defined in OAR 660-009-0025(7), for regional large- lot industrial users and for purposes identified by the analysis. (h) "Site characteristics" has the meaning given that term in OAR 660-009-0005(1). (i) "Traded Sector use" has the meaning given-that term in ORS_285_ B.280. (3) For purposes of subsection (2)(g) of this rule, a large lot is at least 50 acres if it is: A single lot, parcel that is at least 50 acres (b) Ana gregation of existing lots or parcels under the same ownership that comprises at least 50 acres. or (c) Anaggregation of existing lots or parcels not in the same ownership created and maintained as a unit of land comprising at least 50 acres through a binding agreement among the owners. (44) Participating local governments may adopt the analysis and implement its provisions. The analysis may demonstrate a need for six vacant, suitable and available sites in the region,„ and up to three additional sites that may be designated in order to replace one of the original six sites that is developed or committed to development as provided in section _(12)_of this rule. The original six sites must include two sites of at least 100 acres and not more than 200 acres, and one site more than 200 acres. (5) If a participating city adopts the analysis, it is deemed to provide an adequate factual basis for the determination of regional large lot industrial land need for that city provided: (a) The city and other Participating local governments have entered into an intergovernmental agreement with the COIC,,and (b) The analysis is adopted by Crook, Deschutes and Jefferson Counties. G Partici atin cities may ado t the analysis and enter into the intergovernmental agreement without amending the Economic Opportunities Analysis adopted bathe city -prior to the adoption of the analysis. 7 The inter overnmental agreement shall describe the process b which the COIC shall coordinate with participating local governments in: (a) The determination of a qualifying site that a participating city may designate in order to satisfy the regional large lot industrial land need: and (b) The allocation of the qualifying sites among the participating cities in accordance with section (4) of this rule. (8) A participating city may amend its comprehensive plan and land use regulations, including urban growth boundaries (UGB),_in order to designate a site in accordance with the requirements of this rule, other applicable laws and the intergovernmental agreement, as follows: (a) A participating city must show whether a suitable and available site is located within its existing UGB. If a participating city determines that a suitable site already exists within the city's urban growth boundary, that site must be designated to meet the regional industrial land need. Cities shall not be re uired to evaluate lands within their UGB designated to meet local industrial land needs. (b) If a site is not designated per subsection(a), then a participating, city „may evaluate land outside the UGB to determine if any suitable sites exist. If candidate sites are found, the city may amend its UGB in accordance with Goal 14, other applicable laws and the intergovernmental, agreement. (9), A participating city that designates a site shall apply „a regional large-lot industrial zone or overlay zone to the site in order to protect and maintain the site for regional large lot purposes. The zone or overlav zone must: (a) Include development agreements and other provisions that prevent redesignation of the site for other uses for at least 10 years from the time the site is added to the city's comprehensive plan to meet regional large lot industrial land needs: (b) Prohibit division or separation of lots or parcels within the site to new lots or„ parcels less than the minimum size of the site need until the site is developed with a primary traded sector use requiring a large lot: and (c) Limit allowed uses on the site to the traded sector uses, except as provided in section (10) of this rule. 10) The zone or overlay zone established under section 9 may allow: a Subordinate industrial uses that rely upon and su ort the primary traded sector use when a site is occupied by a primary traded sector use: and (b) Non-industrial uses serving primarily the needs of employees of industrial uses developed on the site provided the zone includes measures that limit the type. size and location of new buildings so as to ensure such non-industrial uses are intended primarily for the needs of such employees: (11) If a Participating city adds a site to its plan pursuant to this rule, it must consider the site in an subsequent urban growth boundary evaluation conducted to determine local industrial land needs and the adequacy of land available to meet local industrial land needs. (12) A site may be considered developed or committed to industrial development if a large-lot traded sector user demonstrates a commitment to develop the site by obtaining land use approvals such as site plan review or conditional use permits and a Obtainin building Dermitsm or (b) Providing other evidence that demonstrates at least an equivalent commitment to industrial development of the site as is demonstrated by a building permit. (13) The participating local governments shall review the analysis after the regional supply of six sites has either been replenished by three additional sites or after ten years. whichever comes first.