March 7, 2013

Getting Things Shovel Ready. Oregon House Bill 2284 Provides Hope.


Years ago during former Governor Kulongoski’s first run for Governor, I was asked to provide a list to his campaign of land use items that I saw as extremely important to creating jobs in Oregon.  I identified three: First, the Columbia River Crossing to help freight mobility. Second, streamlining permitting processes (even back then I was puzzled by the fact that multiple agencies at all levels – federal, state and local – regulate wetlands). Third, the need to get more industrial and jobs sites “shovel ready.”  Not much has changed in a decade.  I would still rank these three items in the top five.

This last item seems to be the cause célèbre the past few years.  The Portland Business Alliance, Port of Portland, Metro, Business Oregon, and NAIOP commissioned a market study of large lot industrial land availability by my friends at Group MacKenzie.   The Columbia River Economic Development Council (“CREDC”) conducted a similar analysis on the north side of the Columbia.  Unsurprisingly, both of studies found that the collective urban growth areas in the Portland/Vancouver metropolitan area contain very few large lot industrial sites that are “shovel ready” and could accommodate a large employer looking to build or expand in our region.

The lack of “shovel ready” sites really is created by two root causes.  Obviously the lack of parcels of adequate size zoned for larger users is the first.  This could be the result of two things.  First, the cumbersome process of bringing in new large parcels into various urban growth areas.  The second being that of parcelization that occurred decades ago creating five-acre tracts outside of UGAs.  Many of these sites converted because it was easy for them to pass a percolation test to get a septic tank.  But also in the quest to preserve resource lands that began with Senate Bill 100 in Oregon and GMA in Washington, larger parcels were preserved for those purposes while challenged or parcels with non-agricultural soils were left to be subdivided.  Now it is those large parcels that are locked away with the sacred resource designation that hold tremendous promise for large users.

The second cause for the lack of “shovel ready” sites is for a lack of infrastructure.  This problem is more market driven.  But it is also where the private and public sectors can work together to get sites ready.

My experience in permitting businesses through the land use process is that they are not in the business of real estate development.  While they may choose to do their own development as a means of saving money on the costs of land, it is not the primary function of their business.  Most would probably rather forego the headaches, the process, and years it can take to get a site “shovel ready” if they could find sites that were ready to go that meet their needs.  The problem here again being that who should bear the risk of getting infrastructure ready, the public or private sector?  If it is the public sector, you risk making an investment that may take years to pay back.  But it takes a special kind of user that wants to wait years to go through the entitlement process, potential appeals, and construction before being able to operate on a site.

Now here comes Oregon House Bill 2284 proposed by Representative Tobias Read. I think this attacks the problem of infrastructure head-on in a creative way.  This bill requires the Oregon Business Development Department to create and administer a new program called the Oregon Site Readiness Program for sites of 25-net acres or greater in the metropolitan statistical area defined by ORS 267.010 or 15-net acres in a rural area defined by ORS 285A.010.  Under Section 3 of the bill, the program would make loans to qualified project sponsors to assist them in getting regionally or state-significant industrial sites up to “shovel ready” status.  Sites could also have forgivable loans if there is an employer already contracted with the project sponsor.

With the risk of editorializing, I think this bill might provide a tool for local government to work towards getting sites “shovel ready” and provide a way to partner with businesses wanting to locate to the area knowing that they will not have to bear the full freight of getting a site up to being shovel ready.  Time will tell if it passes, but it might provide the right tool at a time when it is really needed.

Should the public be involved in developing infrastructure for jobs lands?  Are there other alternatives?  Please send me your thoughts on this bill.

For more information on this topic, please contact or call (888) 598-7070.


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