From Sagebrush to Stability

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Crook County Annual Forum Hails Huge Economic Development Strides

Successful team efforts that hauled Crook County out of the recessionary depths were praised at the annual luncheon of the Prineville branch of Economic Development for Central Oregon (PEDCO) held at Meadow Lakes Golf Club

Under the theme, Tumbleweeds to Stability, How Economic Development Efforts Helped to Sustain Prineville’s Economy, business and community leaders heard guest speakers reflect on the city’s bleak trajectory at the beginning of the Great Recession to its significantly strengthened current position, with a positive outlook for the future.

In a spin on the old movie It’s a Wonderful Life, the panel discussed how Prineville may have looked without incentive programs and concerted economic development efforts by EDCO and local leaders over the last nine years which instead produced a stabilizing economy and bright prospects for the community moving forward.

Prineville City Manager Steve Forrester recalled how forest products built the town before the economic fallout out around 2008-09 triggered multiple sawmill closures and job losses, compounded by industry technological changes seeing lower labor intensity and ponderosa pine practically being engineered out of window and door components.

Faced with unemployment at over 20 per cent, Prineville suffered population loss and health care sector struggles as wells as diminishing tax revenues and a declining city railroad.

But the community showed its remarkable resilience, with Forrester observing: “Despite the challenges, we kept reminding ourselves that we still had all those wonderful attributes of the pre-recession years and had the opportunity to prepare for better times.

“Then an interesting thing happened as the city and county were contacted by Facebook who were exploring locations to site a state-of-the-art data center, and it turned out we had traits such as plentiful land, close proximity to power, tax incentives and a climate offering a hitherto unknown economic advantage regarding cooling servers.

“We put together a willing team including city and county staff with the support of the state and bodies like EDCO and by deploying a quick response strategy we outpaced the competition and won the prize.”

Forrester said the first data center project produced many spin-off benefits for the community including Facebook helping with funding for road upgrades and infrastructure improvements and helped “build a bridge” to help Prineville through the recession.

He added that other tech data center projects that followed including Apple’s presence, were now the envy of the industry and attracted new in-migrants in their wake, commenting: “It was a long road to recovery, but the needle was moving in the right direction with boosts such as increased electric franchise fees and an opportunity to restructure debt.

“It took a great team and community including EDCO to get the ball rolling and connect the dots and we have seen great successes with highlights including the fantastic new St. Charles medical facility and the Barnes Butte Elementary School which was constructed with the help of a site commitment from Brooks Resources at their Ironhorse development.”

Prineville Parr Lumber manager Travis Garner took a local business perspective, recalling how leading into the recession the company’s sales had rocketed 40 per cent from 2003 to 2006 and managing such growth was a major challenge during the housing boom before starts tailed off substantially in the fall of 2007.

He said: “Between ’07 and ’09 were dark times – our sales dropped 94 per cent and we had to proactively downsize from 24 to 7 employees and take a hard look at how to survive.

“We analyzed our volume regionally and realized something was happening in Prineville and wanted to maintain a presence here.

“Things were somewhat tough and many contractors left but we held on and saw sales coming back and along came the data centers to give a major stimulus leading to 2013 being a turning point for us.

“Today it is a much brighter picture and in the last couple of years things have raced back and we have seen 60 percent growth and substantial new construction in the housing market.

“The efforts of the community and economic development team members such as EDCO have been key in the recovery and we are excited about the future here.”

Mark Hester, Prineville branch manager for Eoff Electric, which offers a full line of electrical products and solutions for contractors and end-users, said: “We saw the economic downturn coming and used to serve Prineville from our Bend location, but we were fortunate to partner regarding the data center developments and decided we needed a formal presence in Prineville.

“We started with a 10,000 square foot warehouse facility then added a storefront and now, following the economic uptick, have turned the location into a full stand-alone branch staffed with local team members.

“The community has also embraced projects such as the medical center expansion and new elementary school and we are excited to be here and continue to be part of such a supportive community.”

Forrester added that continued vigilance was needed to diversify the economy but strengthened city finances had allowed for public safety investment and the undertaking of capital improvements.

He said: “Of over 300 data center workers more than half are local and we are seeing Crook County graduates back working here.

“The community must continue to think strategically and we have great upcoming initiatives including the city wetlands project, sewer capacity upgrades and an ambitious Apple-backed move to build a wastewater treatment facility that will have the potential to expand considerably to serve new data centers or other industries that might come to Prineville.”

Other recent economic highlights included: the city railroad seeing 900 cars already this year compared to 80 in the recession and revenues surpassing $1 million with the help of a record rail distribution year for local major employer Les Schwab; Prineville airport closing in on $1 million in annual revenue and now employing 32 people as well as winning a $6 million grant for improvements to accommodate future growth; technological innovation seeing a resurgence in the secondary wood products industry for components; increasing school district enrollment and more affordable housing projects.

Forrester added: “We have the capacity to attract business including offering a special quality of life. Our leaders care about the future of the community, the environment we live in and the ability of our kids to have a future here.

“EDCO is also a servant leader with expertise in attracting and supporting business growth and is a great partner in working hard to increase economic opportunities.”

Republican State Representative Mike McLane who represents District 55 hailed the economic progress of the community but warned that a significant threat was looming in the shape of Ballot Measure IP28 which could severely impact the state’s business climate.

The measure, which will be voted on this year, is sponsored by public employees unions and if passed would tax corporations 2.5 per cent on gross receipts of over $25 million at every level of the distribution chain.

McLane said: “In politics they say you are either at the table or on the menu.

“State policy can be effective in economic terms but we are constantly battling the tax and spend movement which has an insatiable appetite regarding tax revenues. Proponents estimate this bill would raise an additional $6 billion, or 27 per cent of the state budget, but it would grow government by 27 per cent and effectively raise costs for every taxpayer, with those earning under $21,000 annually being disproportionately affected.

“This measure has been called the biggest regressive tax anyone has ever seen and groups like EDCO throughout the state are lobbying against it as it would have a huge impact on economic growth.

“Tax policy is important and EDCO is doing a fantastic job in being protective of economic growth. We want our children to have the ability to stay here, but IP28 would erode an estimated 38,000 jobs and raise the tax rates of companies by 400 per cent and have the potential to cut off economic growth.

“Apple and other Fortune 500 company leaders are asking what is going on in Oregon. We are one of their biggest discussion topics and they can’t believe the state could be ‘economically suicidal” if the measure passes. In fact, the proposal is already having a stalling effect and companies have put a big ‘X’ on Oregon until seeing what happens regarding IP28.

“This measure is sponsored by public employees unions who want to government to grow larger and I would appeal to everyone to get engaged in the outcome discussion – I believe it is the most important matter on the ballot in 2016.”

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Simon Mather CBN Feature Writer

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