NOVEMBER 2007: COVER
THE NEW ECONOMIES
Finding the future in what grows in timber’s shadow
By Abraham Hyatt
ONCE, OREGON WAS A ONE-ADJECTIVE state.
Timber, with its jobs and its history, not only defined the
state’s economic base, it defined how Oregon and its
cities thought about themselves: timber country, timber
economy.
Then came the slow-motion coup that deposed natural resources
as that blanket adjective, that singular statewide identity.
Being a physically isolated city, which had never been a
drawback under the timber-is-king economic model, was suddenly
deadly. Innovation, which had never been required of small
rural towns, was suddenly imperative. It’s taken years,
but cities around
Oregon are beginning to successfully reinvent and develop
their own industries. And along the way, they’re creating
new identities for themselves.
Medford has become a health-care hub for a region that
stretches over two states. Astoria saw approximately 48,600
cruise ship passengers and crew members pass across its docks
this year. After the collapse of the aluminum industry, The
Dalles has created 500 jobs in its port district. Cities around
Oregon have benefited as the state’s nine federally
recognized Native American tribes have created dozens of
service and manufacturing jobs. Bend is perhaps the biggest
success story of all, an economic engine that’s changed
the face of Central Oregon. City after city holds examples,
some big, many small.
But in nearly all of the cities that have begun shaping new
economic identities there’s a feeling that they’re
being ignored by the state’s largest economic center.
It’s a common complaint: “Why isn’t Portland
paying attention to the great things we’re doing? Why
doesn’t the rest of the state care about the strides
we’ve made?”
That’s not a new sentiment. The classic
urban-versus-rural conflict is ingrained in Oregon, an almost
historical trait. And it’s not unique to Oregon: In Utah,
Salt Lake City faces off against the rest of the state. The
dynamic is the same for Seattle and Boise. In fact, some
economists say that California, thanks to its sheer size, is
the only Western state that’s the exception to the
rule.
But the creation of community-specific identities around
Oregon is a new facet in how rural and urban interact. So the
question is, does it really matter what Portland —
whatever that word represents — thinks of smaller
burgeoning economic centers? And what does the creation of
those new economic identities mean for Oregon and its role in
the global economy?
A GENERALIZED DESCRIPTION of how cities outside of Portland
and the northern Willamette Valley are changing is by necessity
crude and overly simplistic. Each city is unique. But Oregon
economists and researchers who’ve studied urban and rural
interactions agree that the
one-identity-becoming-multiple-identities concept is an
accurate overall portrait.
What are some specific changes? Point somewhere on a map of
the state and you’ll find an example. In the most rural
areas, an attempt at reinvention often involves tourism. For
instance, cities all along the coast have — successfully
and unsuccessfully — spent the last decade transitioning
from timber to the tourism industry. In the northeast, the
Wallowa-Union Eaglecap Excursion Train shuttles fishermen from
fishing hole to fishing hole along crystal clear rivers.
Joseph’s bronze foundries are both an employer and a
tourist destination.
Manufacturing is also playing a role in reinvention in rural
regions. Reedsport, halfway between Florence and Coos Bay, lost
700 mill jobs in the late 1990s. It’s trying to play up
tourism thanks to its proximity to the Oregon Dunes. But in
2003, it also brought in American Bridge with its 50 jobs, and
more recently, a contract to build part of the new San
Francisco Bay Bridge. A new zeolite (a volcanic mineral with
ultra-absorbent characteristics) plant near the conjoined twins
of Burns and Hines will partially make up for the 92 jobs lost
in their latest mill closing this last summer.
To find an example of a city making a bigger impact as it
changes its economic identity, visit The Dalles. The arrival of
Google’s server facility is only a small part of that
shift. The city’s attempts to diversify its job base
after the collapse of the aluminum industry has seen the
creation of 500 jobs in the port district over the last 10
years; to foster more tourism business, they’ve secured
partial funding for a $2.3 million cruise ship dock. The
recreation of the Gorge doesn’t just draw tourists, it
also help
ed pull in companies that are part of the growing aerospace and
high-tech cluster in The Dalles and Hood River. Hood River may
have one of the best examples of industry reinvention: Carbon
fiber manufacturers from the windsurfing industry are now
working with local high-tech unmanned aircraft companies.
Astoria has built up its cruise industry as well: In the 1980s
and 1990s it pumped about $10 million into upgrading parts of
its docks. Each year since, there has been a steady increase in
ships, with 18 ships carrying aproximately 48,600 passengers
and crew members stopping this year. Next year there will be 19
ships. Manufacturing and even fishing are getting stronger.
Lektro, one of the nation’s largest makers of the
vehicles that tow large airplanes around on the runway,
recently went through a $2.7 million expansion. Last year, the
Port of Astoria was ninth in the nation for the amount of fish
(164.1 million pounds) that moved across its docks.
That’s due in part to the booming sardine industry, which
has allowed companies like Bornstein Seafoods to construct
46,000 square feet of new facilities and grow to 100 employees.
But tourism —
estimated as having a $400 million impact in Clatsop County
— is a key focus. Bornstein is building a museum-style
interpretive center alongside its plant. The Cannery Pier Hotel
has been built on an old cannery pier. The restored Liberty
Theater continues to be major player in how the city revamps
its downtown.
Drive 230 miles southwest from Astoria and just outside of the
city of Prineville you’ll find an Oregon State University
lab that’s creating new strains of potatoes and new ways
of marketing them. Contact Industries, like other lumber
companies in Oregon, kept its Prineville mill open by switching
to making laminated wood products. The city-owned railroad,
which only recently has begun recovering from the timber
decline, is about to begin a $2 million expansion of it freight
operation. The 2,951-unit mixed-use development IronHorse
started construction this year — a testament to the
region’s, but particularly Prineville’s, growth in
the coming decades.
Medford may be the classic example of a city that’s
reimagining itself as it reinvents its industry base. The tree
fruit in
dustry — which supplies pears to, among others, Harry
& David (with 6,500 seasonal employees) — still makes
up about 10% of the region’s economy. Timber has not
disappeared, either. But over the last decade, the city has
turned itself into a regional health-care mecca that serves
nine counties in two states and currently employs about 10,600
people in the Medford area.
The backbones are Providence Health Systems and Asante Health
Systems’ hospitals and health-care facilities. It’s
an industry that — combined with the city’s central
location, good weather and growing tourism industry — is
turning Medford into a retirement destination. Interwoven
in that regional growth are cities such as Grants Pass and
Ashland, each with it own existing and emerging economic
centers. Tom Becker, CEO of Rogue Valley Manor retirement
community, says the region has one of the nation’s
highest percentages of seniors. It’s going to increase
— “We’re trying to get ready for the tidal
wave,” he says — and it’s going to turn
Medford, like Bend, into an economically powerful niche
destination.
DOES IT MATTER if the rest of Oregon pays attention to these
cities as they reinvent themselves? It depends on whom you ask.
One argument says a city’s successful transformation of
its economic identity adds to the success of the state but is
really most important to the community itself. And the more
you’re successful, the less outside opinion should
matter.
Then there’s the argument that cities are proud to be
Oregonians and want to feel part of a family. And they want
respect. While he was getting his doctorate in forestry at
Idaho State, Max Nielsen-Pincus studied how people in small
communities in Western Oregon saw the world around them. He
calls the changing nature of rural cities “an evolution
of community.” The links that connect regions, he says,
are fundamental and important. How those links can be
strengthened, however, is a difficult question.
But whatever the answer, it’s unanimous among economists
and researchers that strong regional identities are good for
the state. And while disparate, they make Oregon more
competitive in the global marketplace. Oregon’s
geographical size means that another blanket economy is
improbable at best. Smaller states can find one industry and
make it their own, attracting similar business and adjunct
industries. The trick for Oregon is to develop the big, little
and tiny economic resources that have been discovered following
the fall of timber and fishing, says Tim McCabe, the
governor’s economic development policy adviser. In the
global picture, diversification not only protects against the
single-industry boom and bust we know so well, but it gives
Oregon more ways to compete, whether it’s with zeolite,
tourism or potatoes.
Will Portland — or Salem or any other bigger city
— ever notice those changes as much as some people would
like? If the historic urban vs. rural bellyaching dance is any
indication, no. But some small cities are destined to become
future Bends. And with or without the current emphasis on
clusters and interconnectivity of industries, it’s
undoubtedly true that they’ll play a major role in the
future of Oregon.
Then it will be up to them to decide what their adjective will
be.
Have an opinion? E-mail feedback@oregonbusiness.com
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