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Bend's economy is coming back to life

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Articles - July 2011
Wednesday, June 22, 2011
From pure insanity to real opportunities, and a way forward

Tom Fristoe was not happy to see home prices fall in Bend. He bought in 2006. “We just sit and stare at it every month,” he says of his investment property, laughing. “Yeah, we’re way under water.”

The fact that he is laughing tells you a few things. By now, the once-shocking reality of owing more money to the bank than your property is worth is commonplace in Bend, so Fristoe is hardly alone. Also, he has plenty of good news to offset the bad. His young business, TeamUnify, has grown quickly to 17 employees in an office in Northeast Bend. It’s 8 a.m. on a Friday and the office is humming.

Fristoe is another Bay Area tech refugee who moved to Bend for lifestyle reasons and found it a good place to build a cloud-based software company. A competitive swimmer, he took over administration of his masters’ swim team and started writing software “just for fun.” Now TeamUnify has 1,600 teams as clients and a million unique web visitors. The company has developed a mobile app for coaches and parents and an online voting system to enable customers to choose future features.

“Our goal is to keep adding teams to the platform as fast as we can,” Fristoe says. “We can do that through our profits. We don’t need any more money.”

Fristoe expects to add 10 or so jobs over the next few years as he seeks to tackle untapped markets in Germany, France and Australia. He says it takes a while to find good employees in Bend because of the small population base, but it can be done. He’s doing it, after all, and so are others. “You can grow a business here,” he says. “You can find good people. And you can certainly buy a lot of house for not much money.”

As I head back from TeamUnify to check out of the Mill Inn, it occurs to me that the opportunities for these growing niche tech companies are almost limitless. Who would have thought you could build an exciting young company by helping people run swim teams better? Or by improving Google rankings for self-storage companies? Dan Hobin told me that when local entrepreneurs launched the Bend Venture event a few years ago to boost hot young tech companies, there really weren’t any around. Now there are dozens, bringing millions of dollars into the local economy. All were founded by entrepreneurs drawn to Bend by its landscape.

That point hits home again as I head out to the headquarters of Bend Research in a pastoral setting of horse pastures, trout streams and snow-capped mountains. The founder, chemist Harry Lonsdale, was a Bay Area refugee doing contract research for the government. All he needed was a mailbox and a telephone. He chose Bend for the fishing.

Thirty-plus years later, Bend Research is vital to the local economy, with a payroll of about $13 million, a steady flow of business visitors from major pharmaceutical firms and a growing collection of successful spin-offs. Rod Ray reinvented the business weeks after taking over as CEO two and a half years ago, shifting from one exclusive contract with Pfizer to 60 clients making medications to treat cancer, heart disease, chronic pain and other maladies.

Ray serves as a trustee of the OSU Foundation with the goal of supporting Bend’s OSU-Cascades campus and helping it to grow from a minor presence into a stand-alone institution. He is also looking for ways for his company to share space with OSU-Cascades as both expand in Bend. “It’s a good environment for my guys to be around. And we need space. We’re out of space.”

One of the reasons Bend Research is out of space is Ray has been too busy rebuilding the company from 135 to 205 employees to build new facilities. Also, he has been hesitant to take on debt after the economic calamity he has witnessed in Bend. “I saw people go down the tubes because they took too much risk,” he says.

With his long history in Bend, his deep involvement in the community, his Sam-Elliot-style lawman’s moustache and his laid-back, tell-it-like-it-is Western style, Ray seems a logical choice to offer the long view on what happened to Bend – and what should happen next.

“It just needs to be done in a reasonable way,” he says. “Growth and risk, all of that, it needs to be controlled. What was happening was out of control. Right before the recession hit, Bend was nuts. It really was crazy. If you look at what people, banks and builders were doing, it was insane. A lot of people in town, people who I respect, say the economy is much healthier now. The growth is based on reality and real opportunities, rather than speculation. So that’s the lesson.”

It’s hard to call an economy healthy when unemployment is still over 12%, half of the home sales are distressed deals and thousands of manufacturing jobs have vanished. But my week in Bend has convinced me that something compelling is taking root here. Dynamic companies are rising from the ashes, and while not all of them will thrive, some will. The OSU campus is expanding, Bend Research and BendBroadband are moving in promising new directions, startups are popping up all over town and the tourism/lifestyle scene is benefiting from an ever-expanding menu of trail runs, bike rides, triathlons, outdoor concerts and ski events. It will take years for property values to recover and manufacturing jobs may never bounce back, but a diverse assortment of entrepreneurial seeds have been planted, and they are sprouting.




Kat Merrick
+1 #1 Bend Economy Coming back to LifeKat Merrick 2011-06-27 14:19:00
Thank you for your honest, critical evaluation of Bend's overblown speculative real estate market pre-2008. I was however, very disappointed that while you were able to id the historical damage caused by the speculation, you failed to notice or mention that the speculation is still going on.

Despite the recent crash in the market, and 1,000's of homes on the market in Bend the City of Bend is allowing the developers still standing to continue to clear natural land and lay infrastructure for additional homes - something this town clearly does not need. Northwest Crossing is currently the worst offender.
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Puppie Woggins
-1 #2 EVERYTHING IS JUST FINE IN BEND, AS ALWAYSPuppie Woggins 2011-06-27 16:10:28
I don't know what this "Kat Merrick" (possible descendant of "ELEPHANT MAN" John Merrick) is talking about, because everything is JUST FINE IN BEND.

There never was a Bubble, and therefore there could have never been a crash. We all have reason for ETERNAL OPTIMISM here in Bend, because any GOD FEARING person knows, the only thing you need to prop up real estate prices is a RIVER. And possibly mountain views. And proximity to skiing. Jobs? Psh, that is so 2006.

There are some that call us CRACKED-OUT NARCISSISTS. Some call us CALI-BANGER MORONS. Some call us FART-SNIFFING DIP[blocked]S. And then there are some, possibly the worst of all, that call us some fourth thing. You know what I say to that?

Anyway. Bend is OK. As soon as we get past this little rough patch of DEVELOPER SUICIDES, IMPLODING BUSINESSES, and POSTAGE-STAMP SIZED SUBDIV'S THAT WILL NEVER BE BUILT AS FAR AS THE EYE CAN SEE, well, we'll be just fine. JOPLIN-FINE as my grandpappy calls it.

I for one am glad that the bubble we never had brought cali-spankin speculators to this town. They done made it a much better place to live out my final years. Now they can tell me in person how they will change Bend into the last place they lived in Southern California, a place they despise, but still a place they feel the need to re-create here. Thank God for these Saints.

Frankly, this whole FINANCIAL CRISIS is really a blessing in DISGUST. Fer (yep, Fer) instance, now the entire town can forego the HARDSHIP of home ownership, and can eternally join the Rental Set, with parties every night, and only the occasional METH-FUELED GUN BATTLE to offend the eye.

Secondly, everyone is flat-ass broke. Ever-budee was getting pretty uppity, with their non-stop eating, feeding their kids and driving to work.

Third, people like working forever, and now since our munee is gone, we can all count on working forever, hopefully dying at work before they then run our corpse down the kitchen disposal at Mikkie Doogles.

Unemployment. Suicide. Landscape gashes instead of ugly trees & open areas.


If this past decade has taught us nothing, it's taught us... Well, it is clear we haven't lurnt much. I just hope people see thru the MEDIA-FUELED HORROR, and open their eyes to the truth:


Now let's all get back to the business of WILDLY OVERMARKETING OURSELVES, cuz it seems clear from the consequences of the past, that it will do us nothing but good in the END.

P.S. Never was a bubble.
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0 #3 Where have all the locals gone?LavaBear 2011-06-27 18:19:47
It appears that every single business featured in this article is owned by people who have no historical ties to the area. People like myself who were raised here, bought residences before 'the boom', are highly educated and experienced, are rarely EVER recognized for their achievements. Starting a new business (not tech, retail or industry-relate d) is truly very difficult, with little community support. A lot of us have already been run out of our hometown, which by the way, was a much easier and enjoyable place to live in the '80s and early '90s before everything on two legs moved here. I miss the serenity we once had. I miss the affordability. I miss my friends who have been forced to move away. Developers have virtually erased our history and traditions and trampled Bend's natural spaces as they grow in every direction of town, like a spreading cancer. Maybe an article should be written about that, the REAL Bend, and interview the REAL people?
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0 #4 RE: Bend's economy is coming back to lifeGuest 2012-07-07 07:03:54
I used to live in Bend from the mid-70s to the early 80s. it's too bad what's happened but things in 1980 got really bad so I had to vacate and relocate. Most years I still visit Bend. In all the time I lived in Bend earning a living has been difficult at best. In recent visits, I don't see much change except for the massive highways that replaced that 2 lane roads. The main cause of employmenr is the restrictive land policies. It is difficult to impossible to create subdivisions in the Bend area.
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