Lincoln County is diversifying beyond marine sciences and education. Will young entrepreneurs take the bait?
Two years ago, Brittany Heins loaded up her Jeep with all the merchandise her partner, Pete Sanok, had designed, headed out to the local surf shops and, within two hours, sold out of every piece she had. The company, since dubbed Specifically Pacific, did not even have a name yet. But today their trademarked Highway 101 logo designs — hand-printed in Newport with nontoxic, water-based ink — are available in 28 shops around Oregon and are attracting buyers both out of state and within.
“It’s growing tremendously,” Sanok says. “What we’ve done is built a coastal-lifestyle company that embraces everything that we have on the coast. It’s diff erent than the rest of the state and country. We built something that is a symbol to embrace that lifestyle.”
Heins, 23, and Sanok, 33, exemplify the can-do spirit that is energizing this community, translating to growth unprecedented in recent years. After being stuck in the stagnation of the recession since 2008, tourism is booming, the marine science research and education sector is expanding, and there are myriad construction projects in the works, including two new hospitals, two port projects and a new Newport community pool.
But the young couple are also an anomaly, the all too rare members of the younger population who have found a way to make the coast lifestyle work.
It’s one of several challenges, along with a lack of affordable housing and a dearth of rental vacancies, that Lincoln County continues to struggle with. Lincoln City planning and community development director Richard Townsend describes the population as shaped not like the typical pyramid but rather a mushroom.
“There’s a bulge for the baby boomers, but there is no bulge below that,” said Townsend. “The echo boom — the boomers’ kids — we don’t see that generation. It’s always been a retirement destination, so we get older people moving here. But the job situation is such that often kids leave.”
While those challenges threaten to dampen the future if they continue to go unmet, community leaders say they are committed to finding solutions.
“We certainly have challenges, housing, poverty, child care, all rural issues,” says Birgitte Ryslinge, president of Oregon Coast Community College. “But there are just a lot of positive things happening in Lincoln County. It’s a pretty exciting place to be.”
Lincoln County first began to feel the impacts of the recession in 2008. But it wasn’t until a year later that the gravity of what lay ahead became apparent. “It dropped off the table overnight,” says Lincoln County commissioner Bill Hall. “In 2009 to 2010, the county government lost 18% of our revenues and shed 15% of our workforce. It was across the board — taxes, fees, interest income, state revenues.”
The unemployment rate topped out at 11.1%, the highest in at least two decades. At Gold Motors, a family-run business since 1990, vice president and co-owner Mike Henneman prepared for the worst — the loss of the business. General Motors had filed for bankruptcy and gave Henneman notice that it was taking away its franchise.
“It was 2009, General Motors went bankrupt,” Henneman recalls. “Their theory was that they were going to kill off all small franchises. There were some big ones that went down, too. At one point, we received a letter that we were losing the franchise. The only way we could stay open was if we had one new car left. We got down to one vehicle and we left it there.”
Only in keeping that one car could Gold offer warranty services and obtain parts for warrantied cars. So Henneman kept the car — a Chevy Aveo, as he recalls — refusing to sell it for six months. Still, with business down by 70%, and the impending threat from GM, Henneman had no choice but to consider what new business he could establish on the Highway 101 property.
Times were equally tough in the tourism industry. “People were very cautious about spending any money they might have, and with gas prices soaring, traveling became more restricted locally,” says Lorna Davis, executive director of the Greater Newport Chamber of Commerce. “We had banner years in 2005 and 2006, which made the downturn have a seemingly larger impact. And because people budgeted higher income reflecting the banner years, the decline had more impact.”
The saving grace for some hotels turned out to be a shift to the international market. “When the recession was bad and a lot of hotels were crying, we weren’t crying as much because we jumped on the international band wagon-,” says Jennifer Morkert, director of sales and marketing at the Elizabeth Street Inn in Newport. “A lot of hotels didn’t want to offer the discounts. We jumped on that right away. Without the international market, it would have been pretty bad.”
And in many sectors of the economy it was. “Everyone was impacted in one way or another,” says Davis, “some much worse than others in business and personally.”
But while plenty of businesses went under, there were survivors, too. Gold Motors not only managed to hang on to its franchise but added to it, now holding the dealerships for Chevrolet, Cadillac, Buick and GMC.
The tourism industry is seeing record numbers, with visitor spending up $24 million from 2012 to 2014 alone. By comparison, it took a full 10 years, from 2001 to 2011, to grow visitor spending $26 million. Occupancy of the Port of Newport’s RV park is up by 36%, and Lincoln City saw lodging revenue top $70 million, an all-time high, according to Ed Dreistadt, executive director of the Lincoln City Visitors and Convention Bureau. “For this year so far, anecdotally, it’s continuing to be really, really strong.”
Lincoln City is also seeing progress in addressing the affordable housing problem and lack of vacancies. Fifty-five new apartment units — the first in several years — were recently completed, with approval granted for another 29, with interest from a developer to build 100 more, Townsend says.
It can’t come too soon. “There is a huge need for housing,” says Townsend. “I see on the web people asking, ‘Do you know of a place for rent?’ People are just desperate to find places that are available and livable.” The city is also working on a new comprehensive plan.
LIVING HISTORY: Thirty-two years ago, when Goody Cable and Sally Ford purchased the Gilmore Hotel in Nye Beach, it was a run-down hotel populated largely by artists, alcoholics and flower children. “Ken Kesey said it was ‘the only flophouse on the coast with a view and a waiting list,’” recalls Ford. “Those may not be the exact words, but that’s the gist of it.” It seems only fitting that three years later, when the hotel was finally ready for opening, it would become the literarythemed Sylvia Beach Hotel. Today, of course, the inn with rooms named for literary giants is world-renowned, written up in nearly every major travel publication in the U.S. and beyond. “And we now have a Ken Kesey room,” says Ford. “There is this huge full circle.”
Like its neighbor to the north, Newport is also working to find solutions to its housing problems, but there’s not a lot of available land, and what is available is expensive, often in steep areas and without services, says Derrick Tokos, Newport’s community development director.
“We’ve got some unique challenges on the coast,” says Hall. “Someone told me that in just a few short years, vacation rentals have gone from 80 to 180. That is sucking up more of the housing stock. We’ve gone from 2% rental vacancy to less than 1%. People who were renting month to month have switched to nightly rentals because it is so easy with Airbnb and other options. There’s no real economic incentive to build for low and moderate market when there is more return building for a high-end market.”