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HomeMy WebLinkAboutREOA Analysis - Findings SummaryDeschutes County Board of Commissioners 1300 NW Wall St., Suite 200, Bend, OR 97701-1960 (541) 388-6570 -Fax (541) 385-3202 -www.deschutes.org AGENDA REQUEST & STAFF REPORT For Board Business Meeting of January 7,2013 Please see directions for completing this document on the next page. DATE: December 24, 2012. FROM: Peter Gutowsky Community Development Department 385-1709 TITLE OF AGENDA ITEM: A public hearing on and consideration of First and Second Reading and Adoption of Ordinance No. 2013-001 Repealing Ordinance 2011-017 and Declaring an Emergency and First and Second Reading and Adoption of Ordinance 2013-002 Adopting a Central Oregon Large-Lot Industrial Land Need Analysis and Amending the Deschutes County Comprehensive Plan to Include Regional Large-Lot Industrial Land Policies for Central Oregon and Declaring an Emergency. PUBLIC HEARING ON THIS DATE? Yes. BACKGROUND AND POLICY IMPLICATIONS: In 2011, Deschutes County exercised its statutory coordinating authority (ORS 195.025) to address an unmet regional need for large-lot industrial sites through Ordinance 2011-017. The ordinance included new comprehensive plan policies and a regional economic opportunity analysis ("REOA") to provide the policy framework for designating lands among coordinating jurisdictions in a mutually agreed proportion. 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 in December 2011. 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 general settlement was 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 to not oppose a regional declaration of a need for up to six large industrial sites in Central Oregon with the ability to add three more as those six sites are allocated to the cities within the tri-county region. The parties also agreed upon policy principles guiding how those sites could be incorporated into existing urban growth boundaries. 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 the Department of Land Conservation and Development ("DLCD") to initiate rule­ making later in the summer. After receiving a recommendation from a Central Oregon Large Industrial Lot Rules Advisory Committee, which met four times over the summer, a draft rule was forwarded to the Land Conservation and Development Commission ("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. At the November 15 hearing, LCDC took public testimony, considered a staff recommendation and adopted the rules to Oregon Administrative Rules (OARs) Chapter 660-024 on November 15. They became effective on December 10. Ordinance 2013-001 repeals the ordinance that adopted the REOA. Ordinance 2013-002 includes a Central Oregon Large Lot Industrial Land Need Analysis (Analysis) and adds a new Deschutes County comprehensive plan amendment that provides the policy framework for the tri-county region to coordinate as a single entity to promote large-lot industrial employment sites that best serve the region as a whole to create family-wage jobs, regional economic diversification and place Central Oregon on the map for regional, national and international industrial recruitment. After Deschutes County adopts these comprehensive plan amendments and findings and all appeal periods have run, Crook and Jefferson counties will adopt a similar amendment to their comprehensive plans. Once all three counties complete their plan amendments, the cities in the region will be able rely on the Analysis to address the short-term need for large-lot industrial sites. FISCAL IMPLICATIONS: None RECOMMENDATION & ACTION REQUESTED: Hold the public hearing. Motion I) First and second reading by Title only of Ordinance No. 2013-001 and declaring an emergency Motion 2) Adopt Ordinance No. 2013-001 Motion 3) First and second reading by Title only of Ordinance No.2013-002 and declaring an emergency Motion 4) Adopt Ordinance 2013-002 ATTENDANCE: Peter Gutowsky and Legal Counsel DISTRIBUTION OF DOCUMENTS: Peter Gutowsky, CDD. Central Oregon Large Lot Industrial Land Need Analysis and Findings Excerpts 1. Provides the factual basis for determination of a regional large lot industrial land need Finding Reference 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. Bev Thacker, Rail Served & Large Industrial Sites Memorandum, March 11, 2008, 1. Economic Development for Central Oregon recognizes that the recruitment of companies in new and existing industries is an important component of any successful economic development program and diversification strategy. New companies bring a different mix of professional and technical talent to communities that can spawn other businesses and technologies. Roger Lee, Economic Development for Central Oregon Letter, June 3, 2011. The Central Oregon Large-Lot Industrial Land Need 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 Central Oregon Large-Lot Industrial Land Need Analysis cites large-lot employment trends and dynamics of the global market place, the strengths and challenges of Central Oregon’s economy and the opportunities for the region to compete for large-lot employers in the data center, high technology and warehouse and distribution industries. Central Oregon Large-Lot Industrial Land Need Analysis, 11-13; 29-34; 40- 47. The Central Oregon Large Lot Industrial Land Need 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. Central Oregon Large-Lot Industrial Land Need Analysis, 35; 42-47. 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. Central Oregon Large-Lot Industrial Land Need Analysis, 7. -2- Central Oregon Large Lot Industrial Land Need Analysis and Findings Excerpts Finding Reference 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 Large-Lot Industrial Land Need Analysis, 7. 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. Central Oregon Large-Lot Industrial Land Need Analysis, 10. 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. Central Oregon Large-Lot Industrial Land Need Analysis, 7. 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 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. Jerald Johnson, Johnson-Reid LLC, October 21, 2011, 5. -3- Central Oregon Large Lot Industrial Land Need Analysis and Findings Excerpts Finding Reference The county finds that the Central Oregon Large-Lot Industrial Land Need 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 Central Oregon Large-Lot Industrial Land Need 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. See Exhibit D to Ordinance 2013-002 (Findings). Page 11 and footnote 24. The Central Oregon Large-Lot Industrial Land Need 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. Roger Lee, Economic Development for Central Oregon Letter, June 3, 2011. 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.” Central Oregon Large-Lot Industrial Land Need Analysis, 60 -4- Central Oregon Large Lot Industrial Land Need Analysis and Findings Excerpts 2. Demonstrates the regional large lot industrial land need is not currently being met by local governments Finding Reference 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. Central Oregon Large-Lot Industrial Land Need Analysis, 6. This regional industrial lands track is different from an Economic Opportunity Analysis (EOA) first because new administrative rules (OAR 660-024-0040 and 0045) 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. See Exhibit D to Ordinance 2013-002, Section (4) OAR Division 9, Economic Development. 10. 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 Central Oregon Large-Lot Industrial Land Need 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. See Exhibit D to Ordinance 2013-002, Goal 9 Planning Guidelines 4. Page 19. -5- Central Oregon Large Lot Industrial Land Need Analysis and Findings Excerpts 3. Determines site need characteristics Finding Reference 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. Figure 24 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. Central Oregon Large-Lot Industrial Land Need Analysis, 52. As outlined in Figure 24, site requirements can be grouped into several broad categories. A brief summation of the basic categories of site requirements (Physical, Infrastructure, Utilities, Workforce and Special Considerations) is discussed in the Central Oregon Large-Lot Industrial Land Need Analysis. Central Oregon Large-Lot Industrial Land Need Analysis, 52-56. Outside of size and configuration, the he Central Oregon Large-Lot Industrial Land Need Analysis also identifies the 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. Central Oregon Large-Lot Industrial Land Need Analysis, 55-56. -6- Central Oregon Large Lot Industrial Land Need Analysis and Findings Excerpts 4. Determines short term land need Finding Reference 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. Central Oregon Large-Lot Industrial Land Need Analysis, 56-62. 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 Central Oregon Large-Lot Industrial Land Need Analysis only provide sufficient evidence to replace up to three sites. Exhibit D to Ordinance 2013-002 (Findings), 12.