Newberg and Dundee, unbound

Downtown Newberg Jason E. Kaplan Downtown Newberg

Yamhill County wine-country towns retool and revitalize.


“I think we’re on the brink of something big.” On a weekday afternoon, Jennifer Sitter, 39, is sitting in the Red Hills Market in the tiny wine-country town of Dundee. The place is packed — “on a Wednesday!” exclaims Sitter, whose twin sister and brother-in-law own Red Hills, a restaurant and food emporium.

Sitter, a small business owner who sits on numerous civic and tourism boards, understands the trajectory of wine country. She grew up in Napa and moved to Dundee 10 years ago to join her sister, Michelle Kropf, and in the past few years her parents and younger sister have migrated here, too.

“I feel like there is so much energy and excitement about the wine here. It could be the next Napa.” With one important exception: “Napa is so expensive; it’s so much more affordable here.”

JennifersitterJennifer Sitter, co-owner, Pulp & Circumstance

Five years into an extended economic boom and eight months after the opening of a long-awaited bypass, Newberg and Dundee are flush with activity.

New businesses are opening, long dormant public and private projects are jumping into action, and downtown revitalization projects are flourishing, thanks in part to that $252 million bypass, which allows travelers to the Coast and commercial trucks to bypass downtown Newberg and Dundee.

“There were a lot of heavy trucks rolling through downtown; you were very cautious you didn’t get run over,” says Brett Baker, president of Newberg-based Austin Industries, a holding company for several iconic family-owned businesses. “That has gone away.”

Baker points to downtown improvement projects: spiffed up building façades and color coordinated trash receptacles. “I think Newberg is the cutest town,” he says. “We are just scratching the surface.”

BrettBakerBrett Baker, president of Austin Industries

Oregon Business visited Newberg/Dundee to take the pulse of the area after the bypass. Only four miles apart, the communities have wholly different identities and economic drivers. Steeped in conservative (Christian) values, Newberg, population 23,306, is home to a diversified employment base that includes Providence Medical Center — now undergoing a $46 million expansion — George Fox University and A-dec, a dental equipment manufacturer that raked in a record $360 million this year.

Dundee, population 3,257, is a chi-chi wine enclave riding the surge in wine tourism. “Newberg has the cash, Dundee the cachet,” people here like to say. But in many ways, the story of Newberg/Dundee circa 2018 is about the merging of those identities, as both communities contend with growth pressures, along with the evolution of legacy industries into new economy sectors like software, precision agriculture and tourism. 

“We’re that county in transition,” says Joe Hannan, Newberg’s city manager.

DeniseBacon Joe HannanNewberg city councilor Denise Bacon and city manager Joe Hannan

Yamhill County, home to Dundee and Newberg, grosses around $300 million in ag products annually. Hazelnuts and nurseries rank among the top moneymakers. Wineries, a relative newcomer to the county, now boost its coffers considerably. County wine sales brought in $687 million in 2016, just under the sum ($720 million) produced by the five surrounding counties in aggregate, according to a report by consulting firm Full Glass Research.

At the heart of this activity is Dundee — four wineries are located within city limits — and as more visitors flock to the area the city is looking to add lodging facilities. There is only one hotel in town, the Inn at Red Hills, so new accommodations are a priority. The closest luxury hotel is the Allison Inn & Spa in Newberg, and if Newberg does have more cash, one reason is because its lodging tax base is so much higher than Dundee’s.

To attract development, the city approved an urban renewal district last year; the funds will support infrastructure improvements along the surprisingly blighted Highway 99 corridor that serves as Dundee’s main street. Together with a long-delayed $6 million streetscape project that is widening sidewalks and putting up LED streetlights, city officials hope the strip highway will give way to a pedestrian-friendly community with a defined identity.

The plan appears to be bearing fruit: Over the past two years, several languishing structures have been torn down, and developers have moved to snap up the properties.

graphic courtesyODOTBefore the bypass, about 34,000 vehicles a day passed through Dundee/Newberg. Since the bypass opened, the number dropped to about 22,000

“Some of the reasons businesses weren’t interested before is there was too much groundwork,” says Sitter, the mother of two young children who sits on the Dundee tourism commission and co-owns with her two sisters (the younger, Noel Johnson, works at a local winery) two loft apartments above the Red Hills Market. The renewal district, she says, allows property owners to apply for grants that help development projects pencil out.

Among the new buyers who have filed initial plans with the city are winemaker Saj Jivanjee, co-owner of Archer Vineyard, who in June 2017 purchased several acres that he says he plans to turn into a complex featuring multiple wineries and possibly an interpretative center.

Ryan Harris, president of Domaine Serene Winery, is part of a partnership that purchased another property. Rumor has it that it might be a hotel, with costs potentially running as high as $100 million. Harris declined comment, saying only, “We believe in the town and its potential to promote tourism and help service the needs of the area.”

“Tourism is important; it’s one of the strong economic drivers,” says Ted Crawford, a Dundee city councilman, as he digs into a hamburger at the swanky Dundee Bistro, located across the street from Red Hills Market. A sign of growing coordination between the two cities, Newberg and Dundee are hashing out a plan to hire a joint tourism-marketing employee, says Crawford, a patent attorney who served a stint as Dundee mayor in 2010.

But tourism alone won’t allow the town to grow sustainably, he says. “Too much of tourism is low-paying jobs. A lot of people who work here can’t afford to live here. I wish there were more family-wage jobs.”

tedcrawfordTed Crawford, Dundee city councilor

The city’s “Riverside District,” a 360-acre area southeast of town that will virtually double the size of Dundee, should alleviate some of the pressure. A rezoning project targets land for employers and a variety of housing types.

In parallel, Crawford would like to see the wine industry diversify into “ancillary industries,” wine-tank manufacturing, for example. “Tourism might have one high-paying position and 20 not-so-high-paying, whereas if you had a tank manufacturer, you would have 50 or 60 well-paying jobs.”

It’s a ubiquitous challenge. “I have no quarrel with tourism,” says Baker of Austin Industries, sitting in the company’s low-slung headquarters just outside of downtown Newberg. “But they are generally minimum-wage jobs. What [Newberg/Dundee] wants is what every community in Oregon wants: more trade-sector jobs.”

Like A-dec. The company was founded in 1964 by Ken Austin and his wife Joan, whose family retains an outsize presence in the county and around the state. (Joan passed away in 2013.) The couple built the Allison Inn & Spa, and A-dec is helmed by Ken’s son-in-law Scott Parrish, who also happens to be the chair of Oregon Business and Industry, the state’s largest business association.

Known for their philanthropy, the Austin family in the past couple of years formalized its giving under the auspices of a new foundation, the Austin Family Foundation. It will be one of the largest foundations in Oregon, Baker says, and so far has disbursed about $1 million, including a $500,000 donation to the new medical wing at Providence. Going forward the focus will be K-12 education and school readiness, Baker says.

Another Austin family enterprise, Springbrook Properties, recently sold 260 acres of farmland near the Allison Inn & Spa to Pahlisch Homes, a Bend developer. “Because the family owns all the land that can be developed in Newberg for housing, we felt compelled to make it available,” Baker says.



A master plan for the property has been on the books since before the recession, when the sale was put on hold. The plan features around 1,200 mostly low-density homes, with a few high-density/mixed-use pockets. The deal has not closed, but Baker says he expects development to get underway in the next 18 months.

It’s impossible to write an article about Newberg without featuring the mill that continues to define the city and its economic development prospects (see story below). The other institution that shapes the community is George Fox University, the private Christian college that is not at all an ivory tower.

“We’ve never been an institution that is elite, producing people who go outside the state,” says president Robin Baker. “We’re an entirely embedded institution that is designed to serve the broader economy of the region. So we’ve looked at vocational needs and tried to move in that direction.”

robinBakerRobin Baker, president of George Fox University

This means meeting demand from the aging population with a new hybrid online nursing program launching in 2019 and a proposed physician’s-assistant program expected to launch in 2021, pending accreditation.

A bioengineering major is starting this fall. The school’s vocational emphasis translates into extensive business partnership and internships with area employers: A-dec, senior-housing developments and even vineyards, where engineering students at this dry college (students are not allowed to drink, on or off campus) work on energy conservation and precision viticulture.

George Fox itself runs like a business, Baker says, complete with a six-person data analytics team whose sole focus is running the university more efficiently. (Salesforce, the software company known for its customer relationship management platform, trains its admissions staff.)

The strategy appears to be working: Enrollment has increased 21% over the past seven years. As university coffers grow, so too has its largesse.

As part of the seamless town-gown interaction, George Fox recently donated $500,000 toward construction of a new Newberg aquatic facility. Students participate in a community service day, and many of the new shops that are springing up in downtown Newberg are owned by former students or employees. Brenda Burg, co-owner of the Newberg Bakery, which opened in 2014, is a former George Fox administrative assistant.

Earlier this year, a partnership of current and former students opened Uflora Plant House, a retail and design studio. Students work for Pulp & Circumstance, a gift shop co-owned by Sitter, who in addition to her civic involvement in Dundee serves on two downtown Newberg coalitions. Visiting professors keep the Airbnb she co-owns (with her sisters) above the shop full.

newbergbakeryNewberg Bakery, co-owned by Brenda Burg

The Pulp & Circumstance building is owned by Ken Austin’s daughter, Loni Austin Parrish, who is married to Scott Parrish and owns a gallery, Art Elements, among other properties. Alongside a burgeoning downtown retail corridor, the innovation sector is taking root. Ground zero is the Chehalem Valley Innovation accelerator, where a handful of companies ranging from mobile dental care to wine-cellar software are pushing traditional industries into the 21st century.

Another tenant is Fidgetech, a nonprofit aimed at providing education and work opportunities for people on the autism spectrum. “Our role is to change lives and provide opportunities for these young people,” says director Justine Haigh, the mother of a son with autism, and not surprisingly, a marketing professor at George Fox.

Fidgetech runs several education and workforce programs and this month will partner with Portland coding school Epicodus on a six-month certificate program. The organization puts Newberg at the center of the burgeoning “neurodiversity” movement, a nationwide effort to accommodate people with autism in the workplace. Partners include Portland tech companies New Relic and Intel; according to Haigh, Intel is slated to launch an autism-hiring program this fall. An Intel spokeswoman declined comment.



Much of the challenge in rural Oregon is about how to retool economic activity to align with market trends. As economists puzzle over what works and what doesn’t, one variable in the Newberg/Dundee trajectory stands out: proximity to a major metro area. Located just 7 miles from Sherwood, Newberg has always been “medium rural,” as Hannan puts it, or “a tweener,” as Brett Baker says.

Looking ahead, odds favor increasing (sub)urbanization. The bypass is part of that. Anyone who travels Highway 99 from Tigard to Newberg/Dundee knows the misery of sitting in bumper-to-bumper traffic. The new highway alleviates some of the congestion while also making the area easier to access. A second leg that will connect the existing segment to Rex Hill Winery received $22 million in the transportation package Oregon lawmakers passed in 2017. It is expected to get underway in the next few years.

A new light-rail line to Tigard will also bring Newberg/Dundee closer to the metro area, a TriMet link Newberg has not welcomed in the past. “People who have been here want to keep the look and feel of the existing community,” says Brett Baker. “Inertia is going to go the other way.”

If Newberg and Dundee are indeed on the way to something big, it’s because the sister communities have hit on a winning formula: a market-oriented Christian college, upscale wine tourism and access to Portland. (The new Providence hospital wing, which will help establish Newberg as a major medical center, is another asset.)

The trifecta will help the area weather the next, inevitable downturn. But it also raises a sobering question for other small towns in Oregon, communities that are struggling to adapt to changing times. Is it possible to retool rural economies in the absence of critical assets?



For those that are so blessed, as some in this community might say, it’s important to keep on innovating. In his office, Robin Baker contemplates a radically changing higher-education landscape. Among other changes, George Fox is considering what it might mean to create non-degreed programs — for skilled machinists, for example. “Most of those programs have been given up on by state schools,” Baker says. “So what if a private college took that on as part of its mission?”

Like the community in which it is located, the college is succeeding through a combination of old and new. “We’ve done well not because we’ve changed the business model,” Robin Baker says, “but because we’ve developed programs that people and companies here have been willing to invest in.”

Related stories:

Future of mill property uncertain, as riverfront planning process moves forward

The closure of Newberg’s WestRock paper mill two years ago has prompted a revisiting of the Newberg Riverfront Master plan. The approximately 450-acre study area includes around 100 acres of the former WestRock Mill site, as well as parkland on the Willamette River.

A citizens committee has been working on the plan in a process that is slated to end by August 2019. “This is the largest single industrial parcel in the metro area, on the river, rail lines,” says city manager Joe Hannan. Newberg would like to enhance the riverfront but also reserve about half the area for industrial/manufacturing uses, possibly a data center, he says.

As the planning process moves forward, uncertainty surrounds the mill property itself. Atlanta-based owner WestRock has said at various times it was open to selling to another mill operator, or that the conditions of a sale were contingent on destroying and removing all paper making equipment. “We’re hopeful,” Hannan says. The mill has cleanup challenges, “but it’s a very attractive site.”

Housing crunch

Newberg needs more residential stock as Portland area prices push city folk to outlying communities. “Most of my customers are from Portland, who commute to jobs in Hillsboro, Beaverton,” says Newberg realtor Lucinda Hage. So far in 2018, 425 homes in Dundee and Newberg have been sold; 80 were new construction, Hage says.

The median housing price in Newberg is $486,000, up from $360,000 five years ago. Finding an apartment is even more difficult. “You can’t find rentals unless you know a landlord,” says city councilor Denise Bacon. Insufficient supply hits service industry and farmworkers especially hard, city manager Joe Hannan says. “Workforce housing is super high on the list.”

It’s unclear whether the Springbrook Property will meet that need. The original master plan calls for a mix of housing types that would be suitable for people employed in Newberg, according to Austin Industries’ Brett Baker.


To subscribe to Oregon Business click here

 

 

Linda Baker

Linda Baker is the former editor of Oregon Business

Leave a comment

Make sure you enter all the required information, indicated by an asterisk (*). HTML code is not allowed.