Enhancing Portland’s Business Environment:
A Public — Private Enterprise
City Club of Portland Bulletin, Vol. 90, No. 56, June 27, 2008
City Club members will vote on this report on Friday, June 27, 2008. Until the membership votes,
City Club of Portland does not have an official position on this report. The outcome of the vote
will be reported in the City Club Bulletin dated July 11 and online at www.pdxcityclub.org.
The mission of City Club is to inform its members
and the community in public matters and to arouse in
them a realization of the obligations of citizenship.
Additional copies of this report are available online at
www.pdxcityclub.org or by contacting the City Club office:
City Club of Portland
901 S.W. Washington St.
Portland, OR 97205
503-228-7231 • 503-228-8840 fax
email@example.com • www.pdxcityclub.org
Table of Contents
ExECutivE SummARy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . i
intROduCtiOn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
terminology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
BACkgROund. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
diSCuSSiOn . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6
Factors that impact Portland’s Business Environment . . . . . . . . . . . . . . . . . . .6
Workforce. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8
k-12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Higher Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
transportation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .13
Capital Availability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
Housing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
Quality of Life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
Effective government . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
Relations between City government and the Business Community . . . . .21
taxation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Economic development Programs . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
Public Safety . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
urban Construction Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
measuring Progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
COnCLuSiOnS And RECOmmEndAtiOnS . . . . . . . . . . . . . . . . . . . . . . . . . .36
Conclusions: the Condition of Portland’s Business Environment . . . . . . . . . .36
Recommendations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
ACknOWLEdgEmEntS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
CitAtiOnS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
WitnESSES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
BiBLiOgRAPHy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
In undertaking a study of Portland’s business environment, City Club of Portland
sought to answer important questions that have long been the subject of local de-
bate: What makes a “friendly” business environment? How friendly is the business
environment in Portland? How can the business environment be made better? These
questions have even greater urgency today as the national and local economy slow
and concerns about a recession gather.
After two years of study, including testimony from a broad cross-section of wit-
nesses from both the private and public sectors, your committee has concluded that
Portland’s business environment — the conditions that impact business formation,
recruitment, growth, and success — is reasonably good and many aspects of it have
improved in recent years. Overall, the area’s quality of life — its outstanding natural
setting, vibrant urban core, rich cultural offerings, and civic values — is a competitive
advantage for the city and region, attracting both young, highly educated workers,
and experienced retirees. The city’s business services, including the availability and
quality of accounting, legal, communications, and consulting support, is strong, and
the availability of capital for investment is adequate.
Compared with other benchmark cities, the overall tax burden on Portland businesses
is competitive. Recent reforms to Portland’s business income tax, along with efforts
to improve the city’s permitting process, have been well received by many in the busi-
ness community. However, taxes paid by businesses within the city continue to be
higher than those paid in neighboring jurisdictions, which should remain a concern
for the Portland City Council and the Multnomah County Commission. Nonetheless,
in spite of often-cited claims that high taxes have caused a significant flight of busi-
nesses from the city to the suburbs, your committee found little evidence to support
Portland’s tax structure and its (and the region’s) economic development efforts favor
businesses that export goods and services from the region. Your committee believes
that favoring these “traded-sector” businesses is a sound strategy for long-term eco-
nomic growth, because without the cash infusion produced by such businesses, the
retail sector, service industry, and other local companies that sell to customers within
the region would suffer.
Enhancing Portland’s Business Environment: A Public — Private Enterprise i
Strained relations between business and government, which were a concern when
City Club began this study in January 2006, have been easing. Business and govern-
ment leaders have made efforts to address underlying causes of disagreement and
are working together more frequently to resolve issues rather than attack each other
publicly. City officials also have been actively reaching out to businesses to improve
However, the city and region face a number of challenges to the health of the local
business environment that are not being adequately addressed. These include a
transportation infrastructure that is severely stressed as the region’s population and
businesses continue to grow, lack of stable funding for public education at all levels,
a shortage of skilled workers in certain industry sectors, and a growing lack of af-
fordable housing within city limits for working families. These are areas of common
concern that deserve the attention of both city officials and business leaders.
Homelessness also has a negative effect on downtown business. In late 2006 the city
introduced new steps to reduce homelessness and control its impact on business. It is
not yet possible to draw conclusions on the effectiveness of these efforts on Port-
land’s business environment.
Although the recent formation of a private-sector economic development organi-
zation for the region is a positive sign, improvements are needed in coordinating
economic development programs at the state, regional, and city levels.
Many government services that impact the local business environment, including
public education and public safety, require stable levels of funding throughout the
economic cycle. Your committee believes that waiting until an economic downturn
occurs, and then applying tax surcharges and fee increases to raise needed revenues,
is not a good practice. Economic cycles are here to stay; local and state governments
must prepare in advance to fund needed services during lean times.
Your committee was surprised to find how incomplete the empirical data are to
measure the health of the city’s business environment. Indicators at the state and
regional level are more readily available. Compiling the necessary data for the city
should be a higher priority.
Business and government leaders at the city and regional levels should work with
their state counterparts to plan the programs to address these challenges, to build
public awareness and support for solutions, and to find funding to implement them.
These are thorny problems; strong leadership is needed, and a solid public and private
partnership is essential.
ii City Club of Portland
While your committee believes there is room for incremental improvement with
regard to all aspects of the business environment, we believe that the following rec-
ommendations will have the greatest potential impact:
Relations between City Government and the Business Community
1. City officials and business leaders should recognize that a cooperative working rela-
tionship is the single greatest factor in the city’s business environment. Specifically:
a. City officials should make frequent site visits to businesses and meet often
with business leaders.
b. Business leaders and city officials should be more judicious in using the power
of the media to leverage decisions in their favor.
Economic Development Programs
2. The city of Portland should join with businesses to create an economic development
plan that takes into consideration the economic development plans for the state and
the region, and that is evaluated and updated annually.
3. City Council, the Portland Development Commission, and Metro should continue to
support the development of affordable housing, with a greater emphasis (including
incentives for builders and developers) on building more family-friendly housing that
medium- and low-income workers can afford.
4. A taskforce of business and education leaders should be formed to propose training
programs to ensure that Portland’s workforce skills better match industry needs, to
raise awareness among students and workers about career and training opportuni-
ties, and to monitor progress in meeting labor force needs.
5. The Oregon Legislature should fund primary and secondary education in a consistent,
sustainable manner and at the level recommended by the Quality Education Model.
6. The Oregon Legislature should increase levels of funding for public higher education
to at least match per student funding in Washington and California, our two west
coast competitors, so that:
a. Course offerings support completion of a degree at a community college in two
years and at a university in four years.
b. Faculty salaries are competitive with public colleges and universities in Wash-
ington and California.
c. Tuition at public universities and community colleges in Oregon is comparable
to tuition in Washington and California.
7. Portland State University and Oregon Health and Science University should continue
to develop strong research centers for the region, and both the public and private
sectors should support this effort. The Oregon Legislature should increase invest-
ment and should enact further measures to support transforming innovations from
university laboratories into profitable business enterprises.
Enhancing Portland’s Business Environment: A Public — Private Enterprise iii
8. Metro, in working with the states of Oregon and Washington to create the 2035
Regional Transportation Plan, should assure that the plan does the following:
a. Considers overall needs when prioritizing projects.
b. Identifies funding sources and considers strategies for building public support
for public funding.
c. Identifies how best to maintain and improve bridges throughout the region.
9. City Club should initiate a comprehensive study to determine the best administrative
structure and oversight authority for regional transportation planning and imple-
10. So long as business tax rates in the city of Portland and Multnomah County signifi-
cantly exceed those paid in other jurisdictions in the region, Portland and Multno-
mah County should only undertake new local government spending initiatives with
11. Because revenue from business income taxes is volatile, the city of Portland and
Multnomah County should establish rainy day funds that are sufficient to avoid tax
increases, surcharges, and fees during economic downturns.
12. The city auditor’s office should be provided with the resources that would make
possible tracking the entire range of metrics that assess the condition of the city’s
business environment, including information on economic development spending of
iv City Club of Portland
In January 2006 your committee began Meetings were also held with Mayor
identifying factors that affect Portland’s Tom Potter and with City Council mem-
business environment and analyz- bers Sam Adams, Dan Saltzman, Erik
ing significant differences of opinion Sten and Randy Leonard, with the city’s
regarding the condition of the business Bureau of Planning Director Gil Kelly,
environment. Your committee also be- Metro Council President David Bragdon,
gan examining the city’s strengths and City Auditor Gary Blackmer, and with
weaknesses relevant to doing business officials from the Portland Development
in Portland, and deliberating actions Commission, including its executive
that should be taken to improve the director, Bruce Warner.
city’s business environment.
Your committee also met with econo-
Portland is part of a larger economic mists and experts in measuring business
region that bridges two states. As such, environments, experts in education and
this study is concerned with the eco- workforce preparedness, pollsters whose
nomic environment of the entire region. research is relevant to the business
environment, and experts in business
However, this report focuses primar-
ily on the city of Portland’s economic
health, and consideration of the larger
Between early 2006 and early 2008
region is somewhat limited. The report
— the period that we undertook this
addresses individual cities and counties
study — Portland’s economy improved
within the region only as they relate to significantly and only near the end of
Portland. the study appeared to be on the verge of
a slowdown. For the most part, markets
Your committee compared Portland strengthened for business goods and
with the ten metropolitan areas identi- services; unemployment rates fell; inter-
fied as competitor regions in Portland’s est rates dropped; and housing values
2002 Economic Development Strategy rose significantly. This improvement
(Austin, Denver, Las Vegas, Minne- during most of the period of the study
apolis-St. Paul, Phoenix, Sacramento, had an impact both on the data that
Salt Lake City, San Diego, San Jose and your committee analyzed as well as on
Seattle). the tone of the witness testimony and
media coverage that your committee
To ensure a broad spectrum of perspec- observed.
tives, your committee interviewed 65
witnesses. Specifically, your commit- This report discusses a range of factors
tee heard from panels of CEOs and that contribute to Portland’s business
senior executives from the following environment, examines other studies
business sectors: manufacturing and that evaluate Portland as a place to do
metals, sports apparel and athletic gear, business, identifies areas of concern,
professional services, creative services, and draws conclusions and recommen-
retail, sustainable (green) industry, high dations. The report is not a snapshot
technology, biotechnology, and health in time, rather it reflects trends over a
sciences. Your committee also met with period of several years.
leaders of the Portland Business Alliance
and the Oregon Business Council, and
with local venture capitalists.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 1
A common definition of key terms is essential to understanding the topic:
Business environment — The confluence of conditions in a city or region that
impact business formation, recruitment, growth, and success.
Traded and non-traded sectors — Businesses in the traded sector sell their
goods and services primarily to customers outside the region, bringing in outside
income that is circulated locally, prompting growth through a multiplier effect.
In contrast, businesses in non-traded sectors primarily sell to customers within
the region, and their collective growth is largely tied to population growth in the
Portland region — Except when specifically indicated otherwise, this term refers
to the federal government’s Portland Metropolitan Statistical Area (MSA), which
includes Multnomah, Clackamas, Washington, Columbia, and Yamhill counties in
Oregon, and Clark and Skamania counties in Washington.
The city of Portland — The incorporated city.
Competitors — Other cities or regions that compete with Portland for location
of business facilities. The Portland region and the city of Portland each have
distinct sets of competitors.
Competitors of the Portland region are other economic regions, in the United
States and in foreign countries. This study focused on ten domestic regions iden-
tified in the city of Portland’s economic development strategy: Austin, Denver,
Las Vegas, Minneapolis-St. Paul, Phoenix, Sacramento, Salt Lake City, San Diego,
San Jose, and Seattle.1
Competitors of the city of Portland are other local jurisdictions within the Portland
region where businesses moving into the region may locate, or where businesses
currently in the region may decide to relocate. The city of Portland’s economic
development strategy identifies the following ten local competitors: Beaver-
ton, Camas, Clackamas County, Clark County, Gresham, Hillsboro, Multnomah
County, Tualatin, Washington County, and Vancouver.2
Participants in the business environment — Whether speaking of the region
or the city, the business environment includes businesses (including utilities and
financial institutions), business organizations, government (all branches), educa-
tional institutions, the news media, and the general public.
2 City Club of Portland
The Portland region, with a popula- ing employment essentially level since
tion of about 2.1 million in 2006, 1990. Residential building construction
spans two states and contains almost more than doubled. Education services
half the entire population of Oregon.* (up nearly 80 percent), health care and
Between 2000 and 2006 the region’s social assistance (up nearly 60 percent)
total population grew at an annual rate and amusement, gaming, and recreation
of 1.7 percent. The Washington seg- (up over 80 percent) have all grown sub-
ment of the region grew fastest during stantially. Software producers increased
that period (3.1 percent). In Oregon, 260 percent (though only to 5,400 jobs
Washington County grew at a rate of in 2005). Business support services
almost 2 percent (nearly double the rate grew 225 percent (7,800 jobs).
of Multnomah County) and Clackamas
County grew at a rate of 1.4 percent. As of December 31, 2007, half (12) of
the 25 largest employers in the Portland
Total employment increased over 35 metropolitan area were in manufactur-
percent during the period 1990-2005 ing and retail. Four others were health
(while population increased about 27 care providers, seven were institutions
percent).3 During this period of growth of public education, and the remaining
the region’s economy changed dramati- two were other units of government.4
cally. Metropolitan area employment in
the state’s traditional sectors dropped, The Washington state segment of the
with natural resources and mining region, with 19.5 percent of the popula-
down nearly 24 percent, wood product
tion, accounted for only 12.7 percent of
manufacturing down 24 percent, paper
private employment in 2006.
manufacturing down 33 percent, and
primary metals manufacturing down
Historically, the unemployment rate
28 percent. Even electronic equipment
in the Portland region has swung more
manufacturing employment dropped by
widely between the extremes of the
over 40 percent; another big loser is tra-
economic cycle than it has nationally.
ditional wired communication carriers,
down over 46 percent. During the recession at the beginning
of this decade, the Oregon state por-
These employment losses are far out- tion of the region suffered an extended
numbered by gains in other sectors. In downturn as private non-farm employ-
the manufacturing sector, growth as ment declined from 747,378 in 2000 to
high as 123 percent (for semiconduc- 705,931 in 2003, an annual decline of
tor and electronic components) helped 1.9 percent, higher than the national
offset losses, leaving total manufactur- annual fall of 1.7 percent during that
period. In contrast, between 2003 and
* Population and employment information in 2006 the Oregon portion of the region
this section is based on analysis of statistics
from the Oregon Labor Market Information grew in employment at an annual rate of
System of the Oregon Employment Department 2.7 percent, compared with the national
and the Bureau of Labor Statistics of the U.S. rate of 1.7 percent.
Department of Labor. The Oregon Employ-
ment Department cautions that a change in
definition of sectors makes the data before While employment figures are not
2000 not strictly comparable with the data after
2000, especially with respect to employment in available strictly for the city of Portland
government sectors. (a finding discussed in the body of the
Enhancing Portland’s Business Environment: A Public — Private Enterprise 3
report), during the 2000-2003 down- center for the region, and is home to the
turn Multnomah County was hit much region’s primary venues for perform-
harder than the rest of the region. Em- ing arts and sporting events, as well as
ployment fell almost 3 percent annually, many tourist attractions.
compared with a decline of 1.1 percent
for Washington County and only 0.3 During the course of this study, your
percent for Clackamas County. Unfortu- committee also observed signs of rejuve-
nately, during the recovery Multnomah nation in Portland. In March 2007 The
County also lagged, growing at an an- Oregonian lauded downtown Portland’s
nual rate of only 1.5 percent, compared “biggest transformation in 60 years.”7
with nearly 4 percent in Washington Macy’s undertook a major renovation
and Clackamas counties. Over this en- of the former Meier & Frank flagship
tire 2000-2006 period, private employ- store, Nordstrom embarked on major
ment dropped by a total of 17,079 jobs upgrades to its downtown store and
in Multnomah County while 31,055 jobs Brooks Brothers opened its first Port-
were added in Washington and Clacka- land store in The Galleria in November
mas counties. 2007. The downtown retail market
was cited as being the strongest it has
These statistics, combined with the been in a long time, and the strength
presence of boarded-up windows on extended throughout the city, according
some downtown streets and worries to one downtown real estate broker.8
that light-rail construction on Fifth
and Sixth avenues would cause busi- A similar trend was occurring in office
ness disruption, led several witnesses space during the course of this study.
to question the health of the core Downtown vacancy rates are lower than
downtown business district. Indeed, they have been in years, and rents are
a January 2007 article in the Portland increasing.9 In the third quarter of 2007
Business Journal noted that “downtown the vacancy rate for the central business
has seen a torrent of empty storefronts district dropped to 5.9 percent, down
— at least 40 vacancies — in the last six 0.9 percent from the second quarter,
months.”5 In that same month, the Port- while the local suburban market’s
land Business Alliance released a state- vacancy rate increased 0.5 percent, from
ment that “while downtown Portland 13.2 to 13.7 percent.10 By comparison,
development is the envy of many cities, the office vacancy rate in downtown San
downtown retail is not keeping pace Jose, California, one of Portland’s com-
with outlying and adjacent competitive petitor regions, was 21 percent.11
In January 2007, developer Tom Moyer
Your committee considered these con- announced plans to build a 35-story
cerns significant because Portland is the high-rise combining office, retail, and
hub of the metropolitan region. Port- condominium space on the block im-
land has the most concentrated density mediately west of Nordstrom. One
and diversity of citizens and businesses downtown property owner said that
in the region. It contains the major he had “never been this excited about
intersections of the region’s transporta- downtown,” and compared the outlook
tion network, including the internation- for the area to “the 1950s heyday when
al airport, sea and rail freight, interstate downtown was the place to be.”12 In
highways, and mass transit. The city also March 2007, the Portland Development
serves as the cultural and entertainment Commission adopted the Downtown
4 City Club of Portland
Portland Retail Strategy Update (pre-
pared by the Portland Business Alliance
in January 2007), and the PDC budget
for 2007-08 earmarked over $12 million
for improvements to the city-owned
parking garage at SW Tenth and Yamhill,
renovating The Galleria, and offering
other assistance in retaining and at-
tracting businesses to the downtown
Overall, non-traded-sector businesses
make up a majority of the region’s
private sector employment. These busi-
nesses (retail trade, health care, and
professional services) and government
agencies employ two-thirds to three-
quarters of the region’s workers.13 But
the growth of these businesses is largely
tied to the rate of population growth of
In contrast, businesses in the traded
sector bring in new money from custom-
ers outside the region and serve as an
economic engine for the region’s entire
employment base. These businesses rep-
resent segments, or “clusters,” of the re-
gion’s economy that have been changing
significantly over the last few decades,
due to both macroeconomic forces (such
as globalization, industry consolidation,
and the outsourcing of manufacturing
jobs to foreign countries); and concerted
public and private sector efforts to
diversify our local and regional economy
so that it is less dependent on a single
industry or employer.
The region’s diverse set of evolving and
emerging employment clusters include
the following: sports apparel and athlet-
ic gear; high technology; manufacturing
and metals; distribution and logistics
(including warehousing, truck opera-
tions, and businesses that support and
benefit from traffic through the Port of
Portland); sustainable “green” indus-
tries; creative services; professional and
financial services; and food processing.
Your committee interviews representa-
tives from most of these sectors.
Photo by Susan Shepperd
Enhancing Portland’s Business Environment: A Public — Private Enterprise 5
FacTors ThaT impacT attractions, and a public commit-
ment to preserving these and other
porTland’s Business amenities.
environmenT 8. Quality and responsiveness of gov-
a. The degree to which elected lead-
Evaluating Portland’s business envi- ers understand and appreciate
ronment required identification of businesses and the challenges
quantifiable measures of its health, and that businesses face.
assessment of their relative importance. b. The degree of cooperation be-
Your committee asked witnesses to tween government and business.
identify the most important factors that c. The fairness of taxes, and wheth-
contribute to the business environment, er they provide an adequate and
and to indicate those that most need reliable flow of revenue for public
d. Well-funded and effective eco-
From those discussions and a reading nomic development programs.
of relevant literature, your committee e. Public safety services (fire, police,
identified the following factors that are health, etc.).
important to the health of Portland’s f. A reasonable and effective regula-
business environment: tory environment.
1. Adequacy of local support and ser- Your committee considered whether
vices, including: some of these factors are more impor-
a. Professional services (account- tant than others, and the extent to
ing, legal, management consult- which these factors are inter-related.
ing, etc.). Looking first at the question of im-
b. Availability of land and utilities. portance, most witnesses agreed that
c. Availability of utility services. a skilled workforce and a high-quality
2. Availability of a workforce with ap- public education system are two of the
propriate skills and education. most critical factors affecting the health
3. Stable and adequate funding neces- of the business environment. However,
sary for high-quality public education those who shared this view also ex-
(K-12, community colleges, univer- pressed different preferences depending
sities — both undergraduate and on their business sector.
4. Transportation infrastructure, High technology and professional
including: service employers, for example, recruit
a. Freight transport by road, rail, nationwide to hire highly specialized
staff. The source of their skilled work-
air, and water. force extends beyond the local region.
b. Transportation options for cus- Consequently, for the purpose of adding
tomers and workers, including to their workforce, the most important
public transportation and public factors within the region are quality
parking. of life considerations that help them
5. Availability of investment capital. attract workers from a nationwide
6. Availability of affordable housing. pool. Other factors include continuing
7. Neighborhood livability, recreational education opportunities at the graduate
and scenic opportunities, cultural level for employees, and the quality of
6 City Club of Portland
local public schools for the children of in doorways of businesses), but wit-
employees and prospective employees. nesses from other sectors, even some
operating in the central city, do not
In contrast, sectors that recruit locally share this concern.
are more interested in the degree to
which public schools, community colleg- Even these few examples make it clear
es, and universities directly impact the that no single prioritized list of factors
local labor pools from which they hire determines the health of Portland’s
their employees. Community colleges, in business environment. Witnesses from
particular, frequently are seen as valu- different business sectors offered dif-
able providers of training programs for ferent lists of prioritized factors and,
employees. in some cases, two or more witnesses
within a single sector cited different
“[F]actors that make up the factors depending on their company’s
specific strategic and operational re-
business environment are quirements. As witness Joe Cortright,
inter-related and sometimes a consulting economist, replied when
in tension with each other… asked for his prioritized list: “One size
A mutually beneficial does not fit all.”*
relationship clearly exists
Moreover, factors that make up the
between a high-quality business environment are inter-related
public education system and sometimes in tension with each
and a well-prepared other. One key set of positive interac-
workforce possessing the tions revolves around public education
skills required by various and the workforce. A mutually beneficial
local industries… [But] relationship clearly exists between a
growing congestion and high-quality public education system
rising housing prices, which and a well-prepared workforce pos-
are frequently byproducts sessing the skills required by various
of increased business local industries. A high-quality public
education system also can enhance busi-
activity and vitality, can
nesses’ ability to recruit skilled workers
[also] weigh heavily on both from outside the area, whether recruit-
the business environment ing workers with school-age children
and the city’s broader or those who seek continuing and/or
quality of life.” graduate education opportunities.
Several factors did not rate highly over- At times, however, the various factors
all, but are very important to certain that affect the business environment
industries. Professional and creative are in tension with each other. Growing
services firms value ease of domestic congestion and rising housing prices,
and international air travel, but are less which frequently are byproducts of
concerned about freight transport. Lo- increased business activity and vitality,
cal taxation is a critical factor for some
witnesses, while others simply regarded * The inability to prioritize definitively the
it as a cost of doing business and not a factors affecting the business environment is
not unique to your committee’s assessment of
significant consideration. Downtown Portland. Similar conclusions were reached in
retailers are concerned about public a paper by Dr. Peter Fisher, Professor of the
safety, and especially about issues relat- Graduate Program in Urban and Regional Plan-
ing to the homeless population (e.g. ning at the University of Iowa; “Grading Places,”
Economic Policy Institute, Washington D.C.,
panhandling, public urination, sleeping 2005.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 7
can weigh heavily on both the business for over 68,000 businesses, and about
environment and the city’s broader 135,000 are self-employed.14
quality of life. Elected officials can
frequently be placed in the difficult posi- The Portland region’s workforce is well
tion of balancing the need to invest in educated; 36 percent of the population
maintaining that broad quality of life (in aged 25 and over has an associate’s
a growing city with an aging infrastruc- college degree or higher level of educa-
ture) while stimulating and supporting tion, compared to a national average
the local economy. This, in turn, can of 24 percent.15 The percentage with a
create a conflict between maintaining bachelor’s degree or higher is almost 10
low taxes and fees, which might be good percentage points above the national
for business, and maintaining and grow- average.16 This young, educated talent
ing services and infrastructure, which is pool is highly valued by most business
required for business success. Similarly, sectors, especially apparel and sporting
business leaders are frequently forced to goods and creative services, which are
balance the pursuit of profits in the near among Portland’s strongest sectors.
term with support for community in-
vestment that keeps Portland a magnet In a recent study, economist Joe
for talented workers over the long term. Cortright noted that “in a knowledge-
based economy the skills and abilities
Keeping in mind the way the various of a region’s residents have become the
factors making up the business environ- decisive factor in shaping economic
ment can affect one another, this report prosperity.” While Portland ranked 22nd
continues with a more in-depth discus- out of the 50 cities studied for “young
sion of the factors your committee con- and restless” (25- to 34-year olds with
siders most important. Of the factors at least a four-year college degree), it
listed on page 6, only the availability of experienced a 50 percent increase in this
professional services is not considered desirable demographic between 1990
in greater detail, because none of the and 2000, which ranks fourth highest
witnesses interviewed by your com- among the 50 largest U.S. metropolitan
mittee, nor research we conducted, regions.17 Cortright says, “We empha-
indicated a deficit in this area. size the change variable because it picks
up the direction the economy is headed,
WorkForce and we still have opportunity to grow
this demographic group.”
As noted earlier, nearly all witnesses
identified the same two factors as most Nationwide, much has been made about
important to the business environment: loss of manufacturing jobs, whether to
a trained workforce and a good public globalization and relocation to lower-
education system. Witnesses comment- wage countries or to increased produc-
ed that the region’s economic prosperity tivity and automation. Therefore your
is linked to the skills of its workforce committee was surprised to learn that
and said that one of Portland’s biggest Portland-area manufacturing firms are
draws is its deep pool of talent. short of skilled workers and fear the
situation will become worse. Norm Eder
The population of the Portland met- of the Manufacturing 21 Coalition told
your committee that “a huge percentage
ropolitan region in 2006 was just over
of workers in manufacturing are ap-
2.1 million people, with a labor force of
proaching retirement and no one knows
about 1.1 million workers. They work
8 City Club of Portland
where their replacements will come continuing education and training, and
from.” Numerous witnesses in industry match unemployed or underemployed
and education echoed his concerns that workers with openings.
the local employment pipeline (high
schools and community colleges) for
these skilled, family-wage manufactur- puBlic educaTion
ing jobs is nearly empty. Manufacturing
jobs pay an average of $42,000 annu- The public education system, which in-
ally in Oregon, in contrast with a state cludes K-12 public schools, community
average of $36,200 for all private non- colleges, and universities, was the sec-
farm occupations, yet manufacturing ond factor consistently cited by business
companies increasingly turn away work witnesses as important to the business
because they lack sufficient numbers of environment.*
Public education affects the business
environment in three ways:
“Manufacturing jobs pay an
average of $42,000 annually 1. It provides businesses with a supply
of young people prepared to enter the
in Oregon, in contrast
with a state average of
$36,200 for all private 2. It provides workers with opportuni-
non-farm occupations, yet ties to update existing skills and to
manufacturing companies add new skills in a rapidly changing
increasingly turn away work business environment.
because they lack sufficient
3. It is a factor for attracting companies
numbers of skilled workers.” and individuals considering reloca-
tion to the region.
The health sector is also facing a
major shortage of nurses, primary While employers differ on which of
care physicians, and other health care these three factors is most important,
professionals. According to the Or- all agree that the public education sys-
egon Employment Department, health tem is a very important component of
care employers will need 59,000 new the business environment, and they are
employees to fill job openings between concerned by recent trends.
2004 and 2014. About half of the health
care openings will stem from growth in K-12
demand, the other half will come from
retirements.19 But local health care edu- To better understand the financing of
cation programs, like nursing, cannot K–12 schools in Portland, your commit-
accommodate the volume of qualified tee recommends the excellent report
applicants. on that topic published by City Club
* We do not ignore the many fine private
Your committee found that the cali- schools and colleges in the Portland area. These
ber of the Portland area’s workforce is schools and colleges do an excellent job of
serving their students. Private schools in the
currently a competitive advantage. To Portland region, however, serve only a small
remain so, the city and region must fraction of the total student population, less
maintain a skilled workforce in di- even than in many cities of comparable size.
Consequently only public educational institu-
verse fields, provide opportunities for tions are considered in this report.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 9
in March 2007.20 The report provides funding for excellence in education.21
information about the five public school The Oregon Legislature, however, has
districts in Portland (Portland, Cen- consistently violated its own legisla-
tennial, David Douglas, Parkrose, and tive mandates. According to the latest
Reynolds), documents the sequence of available statistics from the U. S. Census
events that moved a significant portion Bureau, Oregon ranked 31st among the
of school funding in Oregon from the 50 states and the District of Columbia
local level (paid primarily by property in terms of per pupil K-12 funding in
taxes) to the state level (paid primar- 2005–2006, down from 16th in 1992.
ily by income taxes), and reports that When measured as a percentage of the
the result has been highly unstable average personal income of the state’s
funding that negatively affects school citizens, Oregon’s national standing
operations. The report also explains the dropped even more precipitously, falling
Quality Education Model, which was from 11th in 1992 to 39th in 2004.22
adopted by the 1995 Oregon Legislature
to guide school funding decisions. It The Quality Education Model, men-
should be noted that the legislature has tioned above, was established as a
never funded K-12 education at the level metric-based formula to determine the
recommended by the Quality Education level of spending required to provide
Model. high-quality public education in the
state. In December 2006 Oregon’s
Your committee offers another view of public schools were being funded at a
the issue, that of public education’s ef- level more than $1.2 billion below that
fect on the business environment and of indicated by the QEM.23
the changes needed in education fund-
ing to improve the business environ-
ment (which are fully consistent with
the changes recommended in City Club’s
2007 school funding report). While your
committee recognizes that increased
and stable funding will not guarantee
improved educational outcomes, we
also recognize that state funding for
public education in Oregon is far below
the level recommended by the Quality
Photo by Cheryl Juetten
Education Model. This low and unstable
funding creates, at the very least, a per-
ception among business leaders that the Besides receiving less funding than
state is neither sufficiently committed indicated by the QEM, Portland Public
to providing a quality public education Schools itself faces numerous challeng-
nor adequately preparing the state’s es, compared to other school districts
future workforce. in the state, which place additional
financial strains on its schools: a com-
Since the state assumed a significant paratively higher proportion of students
portion of the responsibility for funding with special needs, older buildings
public K-12 education, three different that are costly to maintain, and a large
legislative assemblies (1991, 1995 and proportion of more experienced teach-
2000) enacted either laws or a constitu- ers with higher-than-average teacher
tional amendment mandating sufficient salaries.24
10 City Club of Portland
One negative outcome of the reduced Higher Education
funding has been a reduction in the
length of the school year. Most states, Your committee found that investment
including California and Washington, in higher education also provides strong
require schools to provide at least 180 economic returns. Businesses such as
days of instruction per year. In contrast, Nike, A-dec, CH2M Hill, Leatherman
the average Oregon high school student Tools, Umpqua Bank, Wieden+Kennedy,
is in school about 165 days per year. Reser’s Fine Foods, and Columbia
Students in Portland Public Schools are Sportswear were all founded by gradu-
about 100 hours short of even the sub- ates of Oregon’s public universities. The
standard Oregon minimum, or about 18 same is true of cultural and social ser-
days short of national school practice.25 vice institutions. Care, Oregon Bach Fes-
tival, New Avenues for Youth, Oregon
In a year with high revenue projections,
Shakespeare Festival, and Friends of the
Governor Kulongoski and the 2007
Children were all founded by graduates
legislature increased funding for the
2007-2009 biennium by 18 percent, af- of Oregon’s public universities. Wit-
ter several years of reduced funding. Ac- nesses cited the faculties of Portland
cording to the governor, “after adjusting State University and Oregon Health and
for inflation and enrollment growth… Science University as major economic
[this increase]… will put Oregon back assets that bring federal tax dollars to
on par with the national average of per our city, as well as a cadre of talent.
But here, once again, trends are disturb-
This roller-coaster approach to school ing. Oregon’s investment in higher
funding negatively affects Portland’s education has fallen dramatically since
business environment by 1) reducing 1990. In 2006, Oregon’s contribution
the readiness of students to enter the per student to the Oregon Univer-
workforce, 2) raising red flags for pro- sity System was $3,858 — down from
spective employees and companies as $4,292 in 1990. In contrast, in 2006,
they consider locating in Portland, and Washington’s per student funding was
3) creating an unpredictable taxation $8,164.27 Adjusting the 2006 Oregon
system disliked by most businesses. figure for inflation, expenditures (in
constant dollars) per student fell from
“This roller-coaster $4,292 in 1990 to $2,442 in 2006, a 43
approach to school funding percent cut.28
negatively affects Portland’s
At the beginning of 2006, Oregon
business environment by ranked 46th among the states in per-
(1) reducing the readiness student higher-education funding,
of students to enter the while Washington ranked 21st and
workforce, (2) raising California ranked 24th.29 The legislature
red flags for prospective provided only 17 percent of Oregon’s
employees and companies higher education budget, down from 27
as they consider locating in percent ten years ago. This decline led
Portland, and (3) creating to dramatic tuition increases.30 Average
an unpredictable taxation annual tuition and fees for an Oregon
system disliked by most student aiming to graduate in four
businesses.” years increased 47 percent since 2001,
to $5,520 for 2006-2007.31 Comparing
Enhancing Portland’s Business Environment: A Public — Private Enterprise 11
higher education spending in Oregon the past 10 years, far below the rate of
with that in other states where the Port- inflation.35 That year’s higher education
land region’s primary competitors are funding was an important step in this
located — Arizona, California, Colorado, direction, but it will be meaningful only
Nevada, Minnesota, Texas, Washing- if it is a starting point for a consistent
ton, and Utah — only Colorado spends commitment to quality.
less than Oregon. In 2005, California
spent $299 per capita and Washington Witnesses also expressed their opin-
spent $225 per capita, while Oregon’s
ion that the Portland region needs a
spending per capita in 2005 was $172.32
Witnesses expressed concern that the “world-class university,” citing Boston’s
quality of Oregon’s public universities Route 128, built around Harvard and
are falling behind other states due to MIT; Silicon Valley, built around Stan-
Oregon’s comparatively low educational ford University; and North Carolina’s
expenditures per capita and that this in Research Triangle Park, built around
turn is having an increasingly negative universities in that region. Your com-
impact on Portland’s business environ- mittee concluded that the Portland
ment. region is indeed moving in that direc-
tion, given the University of Oregon’s
Earning a degree is also taking longer recent expansion in Portland and the
for many students. A recent survey of
impressive development of Oregon
4,300 community college and university
students indicates that about 30 percent Health and Science University and
are unable to earn their degree within Portland State University over the past
the traditional schedule (2 years for 30 years, especially considering the very
community college; 4 years for univer- unstable and diminishing public funding
sity) because of an insufficient number of the past decade. The 2007 legislature
of required course offerings.33 enacted Senate Bill 582 allowing state
universities to establish and administer
Governor Kulongoski initially requested venture capital funds. Your committee
that the 2007 legislature fund a 17 hopes this legislation will help Portland
percent increase for higher education. State University and Oregon Health
At the time, Governor Kulongoski pro-
Science University to better profit from
posed to establish “a stable path to grow
and restore the losses of the last 25 the intellectual capital of their faculty.
years, which will help recruit and retain Both the legislature and regional busi-
quality faculty, make higher education nesses should commit to continue this
more accessible and affordable for more progress.
students, and ensure Oregon’s uni-
versities provide our students with an Top “knowledge workers” in our area
education that prepares them for a 21st require continuing educational oppor-
century workforce.”34 tunities to remain at the peak of their
fields. While a number of programs
Early in the session the legislative
have been established over the past few
leadership responded with a far more
decades, many workers still must travel
modest increase, but major public
outcry and an unexpectedly favorable elsewhere to access the post-graduate
revenue projection allowed the legisla- training they need. Your commit-
ture to enact an 18 percent increase. Put tee believes Portland universities and
in perspective, however, the new figure consortia should expand local offerings
is an increase of only 15 percent over of this kind.
12 City Club of Portland
In summary, Oregon must provide to transportation or heavily reliant on
stable funding for public education at all it, and the proportion is higher in the
levels and through all phases of the eco- Portland region.37
nomic cycle. Failing to do this damages
the business environment of Portland, According to the 2005 downtown busi-
as well as the rest of the state. It also ness census conducted for the Portland
threatens the quality of the workforce. Business Alliance, 49 percent of those
Other states (especially our West-Coast employed in downtown Portland resided
competitors) are doing much better outside Portland’s city limits, but within
than Oregon in funding public educa- Multnomah, Clackamas, Clark, and
tion, and this is an area where many of Washington counties.38 Forty-eight
our international competitors also are in percent of all downtown workers drove
the lead. to work alone, while an equal number
used mass transit, walked, or biked to
Your committee emphasizes as strongly work. By this measure, the city and the
as it can that providing adequate and region’s foresight in investing in mass
stable funding for public schools and transit and alternative forms of trans-
for higher education is essential to a portation has served the city well.
healthy business environment. The busi-
ness community’s support for redirect-
“The region’s patchwork
ing the 2007 “corporate kicker” to a
rainy day fund is a strong statement to
approach to transportation
that effect. decision making and
funding may have served
the region in the past, but
TransporTaTion there are strong signs that
it will not continue to be
Portland is located at the confluence of sufficient in the future.”
two navigable rivers, offering businesses
access to ports anywhere on the Pacific
Rim. It has two interstate highways and Increasingly, the pattern of living in
major rail lines running north, south, the suburbs and working downtown is
and east. The city’s businesses are also expanding to living and working in the
served by relatively inexpensive hydro- suburbs, often involving suburb-to-
electric power, oil, and natural gas pipe- suburb commutes. Suburb-to-suburb
lines running north and south, and the commuting accounts for 41 percent of
only international airport within 150 metro area rush hour traffic. Because
miles. As a consequence, Portland is a Portland’s system of mass transit is
key domestic and international gateway designed primarily to move people
and freight hub. between suburbs and the city center,
a suburb-to-suburb commute that can
Moving both freight and people into, be driven in 30 minutes often can take
from, and through Portland is of more than two hours on mass transit.39
enormous importance to the business
environment. As Michael Powell of Authority and oversight for the region’s
Powell’s Books said at a City Club Friday transportation infrastructure is highly
Forum, “we will be in a ton of hurt if our fragmented. The city of Portland has
surprisingly little control over the
traffic systems fail.”36 One out of five
transportation infrastructure on which
jobs in Oregon is either directly related
Enhancing Portland’s Business Environment: A Public — Private Enterprise 13
it depends. Authority and budget over- expenditures for maintenance, owing in
sight for most of the region’s highways part to increases in cost of materials.40
and waterways are at the state and
federal level. Air and water transporta- City officials have attempted to con-
tion fall under the Port of Portland, trol automobile-induced air pollution
and mass transit under TriMet. Metro without harming economic vitality, and
prepares a regional transportation plan they continue to experiment with how
every five years, and allocates federal best to meet these sometimes conflict-
transportation funds to local govern- ing objectives. In addition to subsidiz-
ments. Multnomah County maintains ing short-term parking in Smart Park
five of the bridges across the Willamette garages, replacing many coin-operated
River, while the Oregon Department of parking meters with “smart card”
Transportation is responsible for main- meters, and improving mass transit,
tenance and operation of the St. Johns, the city is now beginning to experiment
Ross Island, Marquam, and Fremont with eliminating painted parking spaces
bridges. Union Pacific Railroad owns the on the street. According to Ramon Co-
rona, the city’s parking control manager,
Steel Bridge, which is a critical nexus for
the practice will increase the number of
the region’s transit system. Responsibil-
cars parked in a city block from 8 or 9 to
ity for the I-205 Glenn Jackson and I-5
as many as 13, depending on the size of
Interstate bridges, which link Oregon
and Washington, is shared by the two
states. The region’s patchwork approach to
transportation decision making and
funding may have served the region in
the past, but there are strong signs that
it will not continue to be sufficient in
the future. A recent Port of Portland
and Metro study indicated that traf-
fic chokepoints in the region currently
include I-5 across the Interstate Bridge,
I-84 between downtown Portland and
I-205, Oregon 99E from the Ross Island
Bridge to Oregon City, Highway 26 west
Photo by Cheryl Juetten of Portland, and Highway 217 to its
Only city streets are under the direct south.42
control of city government. In fiscal
2005-06, Portland city workers were re- Mayor-elect Sam Adams, who, as a
city commissioner, oversees the city’s
sponsible for 3,941 lane miles of surface
transportation bureau, has said, “We’ve
streets, which often include the impor-
got dozens of bridges that could col-
tant “first mile” from the business or the
lapse right now or liquefy during an
“last mile” to the customer. According earthquake. Add to that the 600 miles
to Portland’s city auditor, in 2006-07 of streets needing repairs and intersec-
the backlog for street maintenance tions where people are dying in acci-
was 627 miles, continuing a seven-year dents on a regular basis and we’ve got
trend of increases. The backlog remains real needs that have to be addressed.”43
far higher than the Portland Bureau of The estimated costs to address these
Transportation’s goal of 250 miles. In problems run to the hundreds of mil-
short, street maintenance backlog is lions of dollars, but only $14 million was
increasing, despite consistent operating made available in the 2007-08 budget.
14 City Club of Portland
Multnomah County Commissioner to relocate warehousing and support
Maria Rojo de Steffey has proposed operations at a cost (independent
closing the Sellwood Bridge, which has of construction) of $1-1.5 million in
a federal sufficiency rating of only 2 out 2006-07.
of 100 (compared with 50 out of 100 for • OrePac increased inventories by 7 to
the Minneapolis bridge that collapsed in 8 percent to compensate for conges-
2007). The county is currently studying tion delays, representing a lost oppor-
whether to repair or replace the bridge, tunity for other investment.
with projected costs nearing $450 mil- • PGE spends an estimated $500,000
lion.44 Yet Multnomah County Chair- per year in additional maintenance
man Ted Wheeler recently said that the labor costs due to transportation
county, which is responsible for several delays.
Willamette River bridges, does not have,
and never will have sufficient resources
to maintain them. Wheeler proposes
creation of a regional bridge authority.45
Other studies, including the City of
Portland 2005 Freight Master Plan, the
Metro 2035 Regional Transportation
Plan, and the TPAC Workshop on Febru-
ary 12, 2007, all concluded that traffic
congestion is already costing money
in lost time, fuel, and missed sched-
ules, and will only get worse if the city,
county, state, and federal authorities do
not start now to address the situation.
Portland Business Alliance members
concurred with this assessment in a re-
cent survey where they ranked conges-
tion just behind education as the biggest
problem facing Portland’s business
Photo by Cheryl Juetten
A 2005 study commissioned by the Port-
land Business Alliance, Port of Portland, The study also cautioned that if trans-
and Oregon Department of Transporta- portation gridlock were to become a daily
tion noted that the region’s population reality, businesses would not be able to
is growing faster than the capacity of function, leading to large-scale business
the transportation systems to carry failures, layoffs, or relocations. The result
people and freight within the region.47 would be a loss of up to $844 million
annually by 2025 ($782 per household in
The report cited specific ways that trans- the region) and 6,500 jobs. Pointing out
portation congestion has negatively that additional regional investment in
affected Portland businesses: transportation would generate a benefit
of at least $2 for every dollar spent,
• Providence Health Systems reported the study also cautioned that currently
that congestion has routinely slowed planned transportation investments will
medical deliveries, requiring them not keep pace with traffic growth.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 15
Predictions for one million more rail and rapid transit.50 The Oregonian
people in the region by 2025 will add has reported that while these cities are
48 percent more cars and 116 percent thinking ahead about new leaps in scale,
more trucks to the region’s roads.48 If the Portland region consists of “collec-
improvements are not made, businesses tions of separate constituencies that of-
will become prisoners of traffic conges- fer unconnected dreams.” Congressman
tion. Earl Blumenauer cautioned that “other
communities are stepping up… on a
The division of responsibility for scale of local investment that we don’t
transportation in the Portland region even contemplate any more.”51
has at least two negative consequences.
First, jurisdictions often try to use the Business leaders have called on the
planning and funding allocation process legislature to spend an extra $350 mil-
to achieve their own narrow objectives lion a year on highway improvements
rather than embracing a more holistic to prevent congestion, but legislative
approach. Commissioner Adams claimed leaders have been unwilling to raise the
this has caused the Metro transporta- taxes required.52 Based on proposals
tion planning and funding allocation developed by Portland’s Safe and Sound
process to be more a program for “divid- Streets Stakeholder Committee, the city
ing the spoils” than a strategic long- of Portland and Multnomah County
term plan.49 Second, this fragmented have proposed new revenue sources,
approach makes it difficult to assemble
including a county vehicle registration
resources to leverage major invest-
fee and a city street maintenance and
safety fee (in water and sewer bills) that
will include “green discounts” that will
Your committee believes that meeting
offset up to 30 percent of the fee. The
the region’s transportation challenges
city and county held a series of meet-
will require holistic assessment, effec-
tive prioritization, creative thinking, ings to gather citizen feedback, and City
and cooperative problem solving. Local, Council is expected to make a decision
regional, and state government of- by July 2008 as to whether to refer the
ficials must think regionally and put revenue-generating measure to voters in
behind them the assumptions used by a the 2008 general election.53
generation of transportation planners.
Government and business leaders must Important questions to be answered
work together to educate the public include the following:
about the need for large-scale invest-
ment in the region’s transportation • Is a regional bridge authority the
infrastructure — whether through tax best approach? How would it relate
increases, fees, or toll options. Unless to other regional transportation
this is done, our patchwork-approach agencies?
to transportation planning will have
a major negative impact on Portland’s • Who can best lead the effort to at-
business environment. tract federal and state funding, to
persuade all the units of government
Competitor cities, including Denver to pay their share, and to educate and
and Phoenix, are moving ahead with persuade the public to accept new
multi-billion dollar transportation taxes, fees, or tolls if they are shown
investments in freeways and roads, light to be necessary?
16 City Club of Portland
In response to the second question, Fund, managed by Credit Suisse’s Cus-
possible lead agencies include: 1) Metro, tomized Fund Investment Group.
with a revised charter to expand its
authority, 2) TriMet, expanding its role According to the fund’s Web site, the Or-
from only mass transit to a broader egon Investment Fund commits capital
regional transportation authority, or 3) to private equity and venture capital
a newly created regional transportation funds that in turn invest in companies
commission. located primarily in Oregon, as well as
in the Pacific Northwest. In addition,
Your committee recommends that City a percentage of the assets of the fund
may be invested directly in operating
Club initiate a comprehensive study to
companies alongside the fund’s private
address transportation issues in the
equity and venture capital managers.55
Portland region. The OIF encourages its member funds
to use “commercially best efforts” to
capiTal availaBiliTy invest in Oregon and Pacific Northwest
companies, while honoring its fiduciary
Your committee recognizes that the responsibility to earn the best return on
availability of capital is a key ingredi- investments.
ent in business growth and prosperity.
Although some witnesses worried that An Oregon Investment Fund manager
young businesses requiring growth capi- noted that in addition to a direct invest-
tal may not have adequate local access to ment in Kryptiq (an Oregon company),
private equity from individual investors as of late 2007 the partner funds had
or venture capital firms, most witnesses invested approximately $53 million in
were not concerned about a lack of local eight Oregon or Pacific Northwest com-
capital. It is your committee’s view that panies that employ 1,900 workers in
Portland has an array of capital resourc- the Pacific Northwest (including 367 in
es that is adequate and typical for a city Oregon). He also pointed out that other
of its size. syndicate members of the venture capi-
tal partners had invested an additional
The relative strength of Portland’s $30 million in these companies.56
real estate market has had a positive
impact on home equity loans (typically In 2007, the legislature followed recom-
$200,000 or less), which are a common mendations from the Oregon Innova-
source of capital for launching new busi- tion Council by enacting Senate Bill 579,
nesses. The average value of property allowing the Oregon Growth Account,
in the Portland region increased by 68 an investment account of the Education
percent from 2002 to 2007, making
Stability Fund, to “make investments
capital available to many.54
in or provide seed capital for emerging
In July 2003, the legislature passed growth businesses.”57 By statute, the Or-
House Bill 3613 to encourage the egon Growth Account must concentrate
growth of small businesses in Oregon. its investments within Oregon despite
The legislature tasked the Oregon the possibility of reduced returns. On
Investment Council with designing and a related front, Senate Bill 582 allows
implementing a program to accomplish state universities to establish and ad-
this mandate, using $100 million from minister venture capital funds, allowing
the Oregon Public Employees Retire- more capital to flow into projects that
ment System. OIC chose to develop a can have long-term positive gain for
“fund of funds,” the Oregon Investment both the state and Portland.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 17
“Angel investors” are high-net-worth Based on the information your commit-
individuals who typically invest in tee has gathered, most regional compa-
companies near where they live and nies are able to obtain sufficient funding
work. The Portland Business Journal, saw to meet their capital needs. The area
“a noticeable increase” in local angel where the need is greatest — funding
investment in 2006 and 2007.58 The for small companies — is now the area
Portland Venture Group is a group of receiving the most legislative and pri-
angel investors who are constantly look- vate sector attention. Your committee
ing at investment opportunities in the concludes that current capital resources
region. Portland Angel Network and the are adequately meeting the investment
Women’s Investment Network, which needs of businesses in the region.
are part of the Oregon Entrepreneurs
Network, are also active in the com-
munity. OEN sponsors Angel Oregon,
an annual contest in which start-up
companies compete to win as much as
$200,000 in funding from angel inves-
tors. In early 2007, Portland Angel Net-
work and Women’s Investment Network
created the Oregon Angel Fund where
members pool their money and seek to
invest in two to four early-stage growth Photo by Cheryl Juetten
companies per year.
About a dozen venture capital compa-
nies are located in Oregon, most in the The availability of housing that is not
Portland region. Some, including Capy- only affordable, but also adequate for
bara Ventures and Northwest Venture working families with children, is a
Partners, are seed funds that invest in concern for many businesses. One busi-
a manner similar to angel investors. ness leader told your committee that
Intel Capital, which is one of the world’s “our young employees did not move to
largest venture capital firms, has its Portland to live in a 400-square-foot
main office in Hillsboro, yet it invests a condominium,” and other witnesses
relatively small percent of its capital in expressed concern that the perceived
Oregon companies. trend in Portland away from the tra-
ditional house-and-yard style of living
Venture capital investments in Oregon might have a negative impact, in the
companies declined significantly in the long run, on Portland’s livability.
first half of this decade. In 2006, Oregon
had six venture-capital-funded start- Title 7 of Metro’s Functional Plan gives
ups, totaling $18.4 million. In contrast, Metro the mandate to ensure that all
Washington state had eight start-ups cities and counties in the region provide
funded for a total of $32 million in the opportunities for affordable housing for
first quarter of 2006 alone. However, households of all income levels, with the
Oregon startups raised more venture intent of creating housing opportunities
capital in the first nine months of 2007 commensurate with wage rates across
the region and reducing concentrations
than the state attracted in any of the
prior five years.59
18 City Club of Portland
Figure 1: Portland Metro Area1 Residential2 Home Prices
Item 2002 2003 2004 2005 2006 2007
Average Sales $213,900 $222,500 $246,000 $282,900 $332,600 $342,000
Median Sales 176,900 185,000 204,500 237,500 $270,500 $290,000
Average Price 4.8% 5.6% 10.6% 15.0% 14.1% 6.3%
Median Price 4.9% 10.2% 16.1% 13.9% 7.2%
the metro area includes the following Oregon counties: Clackamas, Columbia, multnomah,
Washington, and yamhill. it does not include Clark County in Washington state.
Residential includes detached single-family homes, condos, townhomes, manufactured homes,
and multi-family units when one of the units is sold.
Average price appreciation based on a comparison of average price to the previous year average
median price appreciation based on a comparison of median price to the previous year median
Source: Regional multiple Listing Service (RmLS™)
home price dropped to $285,000 in
Housing prices in Portland have histori- April 2007, down from $286,200 in
cally been lower than in other major March. That was the first March-April
cities on the West Coast. Recently, drop since 2001.62 Still, on a year-to-
however, home prices have been rising year basis, prices in the city were up in
significantly, as can be seen in Figure 1. October 2007, though there were drops
in some parts of the region.63 And while
Even with these recent increases in annual appreciation has topped 12
housing prices, Portland continues to percent in parts of the city, the median
attract new residents because of its home price in some parts of Portland
comparably affordable housing. The (North and Southeast) remains below
city auditor’s year-end report for 2007, the median price elsewhere in the region
however, highlighted concerns about (Beaverton, Gresham, Tigard, Hillsboro,
rising housing prices. The auditor also and Clark County).64
reported that “the percent of homeown-
ers and renters who spend more than Housing costs in Portland have gener-
half of their incomes on housing has ally been lower than most competi-
reached a new high.”60 Portland Public tor regions, particularly those on the
Schools attributes its declining enroll- West Coast. Should the cost of housing
ment in large part to a lack of affordable continue to rise in the region, however,
housing within its boundaries.61 it will become an increasing concern
for businesses. Housing could easily tip
According to the Regional Multiple List- from a competitive advantage to neutral
ing Service, the Portland-area median or negative. As trends signal reason for
Enhancing Portland’s Business Environment: A Public — Private Enterprise 19
concern, attention from developers and and the eighth fastest growth rate in
public officials is needed to maintain this age group regardless of education.66
Many of these newcomers are attracted
QualiTy oF liFe by Portland’s downtown and central city
neighborhoods, which are vibrant and
walkable, and offer convenient mass
Historically, Portland’s high quality transit, good restaurants, active arts
of life has included short commutes, scenes, and civic festivals.
affordable housing, and quality public
schools. As discussed earlier in this re-
port, all of these attributes are currently
threatened. In this section we consider
a number of additional quality-of-life
factors. These factors impact Portland’s
business environment, either directly or
because they make the area attractive to
prospective employees and businesses.
Businesses thrive in communities where
people want to live, and increasingly so,
people want to live in Portland. Or-
egon’s natural assets of mild climate and
scenic outdoors, along with the city’s
rich cultural life and robust intellectual
environment, contribute to Portland
ranking very high in surveys of the most
livable cities in the United States, es-
pecially those emphasizing factors that
appeal to members of the young creative
class. Portland was recently ranked in
the top five metropolitan areas in at- Photo by Cheryl Juetten
tracting what demographers are calling
Many witnesses highlighted Portland’s
“the young and restless,” 25- to 34-year-
natural beauty and outdoor recreational
olds who are increasingly viewed as a opportunities. Proximity to Mount
city’s economic future.65 Hood, the Columbia Gorge and the
Pacific ocean beaches, and a wealth of
Attracting and keeping the young parks and green spaces make the region
creative class in this age range is key to attractive. These assets contribute to a
building and supporting a knowledge- clean, fertile, green environment that
based economy. As noted earlier, supports citizens who live their values
Portland is doing very well in this by recycling, biking, and supporting
regard. While this demographic declined other environmentally-friendly prac-
nationally from 1990-2000, Portland, tices. In June 2006 Portland was ranked
by contrast, posted remarkable gains. first in a widely publicized survey of
Portland experienced the fourth fastest 50 American cities for sustainabili-
growth rate in the nation for attracting ty.67 More recently, the 2007 Oregon
25-34 year olds with a college education business leadership summit identi-
20 City Club of Portland
fied sustainability as one of Oregon’s environment, and all working together
unique and competitive advantages and to improve it. Your committee believes
encouraged further development of the that the absence of such a relationship is
sustainable business sector.68 the root of both the dissatisfaction that
we heard from witnesses and character-
A number of actions have been taken izations of Portland as “unfriendly to
to maintain or improve the region’s business.” While much of the blame for
livability: Metro has a voter-approved the absence of such a relationship may
charter and an urban growth manage- result from a combination of inexperi-
ment plan, with green corridors along ence, insensitivity, and inaction on the
transportation routes to nearby cities to part of local government leaders, the
control development. In 2006 voters ap- business community also shares respon-
proved $227.4 million in bonds to fund sibility. Fortunately, the situation has
more than 100 projects to protect water been turning around, with both govern-
quality, improve parks, preserve natural ment and business contributing to the
areas, and provide access to nature. improvement.
Besides the direct impact on the retail,
“One essential requirement
restaurant, entertainment, and tour-
ism sectors, the city’s cultural ameni-
for a healthy business
ties contribute to a positive business environment is an effective
environment by helping attract and working relationship
retain workers in the area. A number of between business leaders
witnesses commented that Portland’s and government officials,
breadth of cultural offerings is remark- each understanding the
able for a city of its size and that such important role of the other
offerings serve as an incentive when in the overall business
recruiting prospective employees. environment, and all
working together to
For all of the above reasons, state, improve it.”
regional and city governments, busi-
nesses, and individual citizens should
recognize that Portland’s quality of life Some concerns relating to the city’s
is an important competitive advantage reputation are substantive: taxes are too
to be developed and maintained. high, or the permitting process is slow
and cumbersome. Most of the witness
testimony, however, was subjective. A
eFFecTive governmenT significant number of business lead-
ers interviewed by your committee
Relations between City mentioned the city’s image as hostile to
Government and the Business business. Some believe that city officials
Community have not cared much about whether
businesses locate or succeed in Portland.
One essential requirement for a healthy Many in the business community feel
business environment is an effective there has been no “welcome mat” for
business at City Hall.
working relationship between busi-
ness leaders and government officials,
Witnesses cited Columbia Sportswear’s
each understanding the important role
decision to move its headquarters out
of the other in the overall business
Enhancing Portland’s Business Environment: A Public — Private Enterprise 21
of the city as symbolic of poor relations Citizens clearly see some advantage
between city government and the busi- to Portland’s “divided government”
ness community. This incident may have structure, as indicated by recent voter
been a wake-up call for city officials. rejection of two “strong mayor” charter
When Tom Potter became mayor in proposals in 2002 and 2007. None-
January 2005, he attempted to improve theless, a “divided government,” with
relations between the mayor’s office and agencies reporting to different “bosses,”
the business community, and convened demands special attention to assure that
a business summit in June 2005 as part businesses see a single face when deal-
ing with the city. Insufficient attention
of that effort. The Portland Business
to providing a seamless point of contact
Journal editorialized that the event was
for businesses contributes to the percep-
“more a feel-good event than a business
tion, at least for some in the business
summit.”69 But feel-good events have community, that city bureaus exist to
their place, especially in a city in which enforce rules, not to help businesses.
there has been a perception of antago- Portland commissioners should ensure
nism between city officials and many that they and their agencies provide
business leaders. that seamless point of contact, and not
leave it to businesses to negotiate the
While numerous witnesses remain interfaces that are required.
dissatisfied with relations between city
government and the business com-
munity, others said that relations have
improved over the last three years.
Mayor Potter meets each month with
the Portland Business Alliance, and
Commissioner Adams’s commitment to
visit “100 businesses in 100 days” after
he took office in January 2005 gener-
ated a mostly positive response from
witnesses. Commissioners Leonard and
Saltzman, and former commissioner
Sten, also made efforts to reach out to
the business community.
Yet no matter how business friendly
a mayor or city commissioner may be,
numerous witnesses argued that the
structure of Portland’s government
makes it difficult to coordinate between
bureaus. According to the city’s charter,
the mayor’s authority is coequal with
Photo by kenneth Aaron Photography
that of the four commissioners; his only
additional authority comes from his During the course of this study, Port-
ability to assign city bureaus to the indi- land’s City Council took action on four
vidual commissioners. The result of such fronts that were frequently criticized
a structure is often a lack of consistency by witnesses: (1) referring reforms to
and accountability. the police and fire disability system
22 City Club of Portland
(adopted by voters), (2) restructuring ness entrances, and (4) a pizzeria that
the Business Income Tax to reduce the had to pay “exorbitant” fees to relocate
impact on many small businesses (ad- its business across the street. Had your
opted by council), (3) adopting the SAFE committee conducted interviews later in
committee recommendations for im- 2007, the city’s failed attempt to rename
proving downtown street and sidewalk a street for Cesar Chavez likely would
access (currently being implemented), have made the list.
and (4) referring a charter amendment
to replace the “divided government” These examples emphasize two more
described above with a “strong mayor” important issues regarding the business
form of government with all bureaus climate: first, that perceptions are often
under a single elected official (defeated as important as facts, and second, media
by voters). coverage can reinforce perceptions.
With respect to the concerns about the Your committee found that, in each
permitting process, in the city audi- of these high-profile incidents, the
tor’s 2006-2007 annual report on city situation was not as black and white
government performance, 72 percent as witnesses claimed or as the media
of the “customers” surveyed about the portrayed them. The facts and nuance of
each situation were sometimes over-
timeliness of building permit reviews
considered the city’s effort “good” or
“very good,” compared with only 61 per-
Business leaders themselves, by their
cent in 2001-02.70 However, businesses
own public statements, help create the
surveyed reported only 36 percent
image of Portland as a favorable or unfa-
satisfaction on the overall quality of vorable place to do business. The media
Portland’s building permit services, is quick to report business criticism of
up from 29 percent in 2001-02. City government and too often is used by
Planning Director Gil Kelley asserted stakeholders as a substitute for face-to-
that “ there has been a big turnaround face discussion. One business leader told
in recent years. The city has made great your committee that steady criticism of
strides in improving the permitting pro- government by businesses discourages
cess.” In his State of the City address in customers from patronizing business.
January 2007, Mayor Potter noted that He encouraged businesses to criticize
“permitting has been streamlined, and government officials in private meetings
developers and the community can now rather than through the media.
expect a single point of contact within
the city.”71 More broadly, your committee found
widespread public perception that the
Nevertheless, there is still room for business community does not shoulder
improvement. City Council members set
its fair share of the Oregon tax burden, a
a tone for the city, and their rhetoric has
point that pollsters interviewed said was
impact. Witnesses commonly cited four
examples of anti-business attitudes: (1) evident in their polling. A letter to the
the failed effort by the city to purchase editor published in The Oregonian illus-
Portland General Electric, (2) the city’s trates the point: “Business leaders say
responsibility for cost overruns in build- Oregon’s average schools and student
ing the aerial tram, (3) lack of respon- success aren’t good enough,” the writer
siveness to complaints about homeless said, and then went on to point out
people who interfere with access to busi- that on the previous day the paper had
Enhancing Portland’s Business Environment: A Public — Private Enterprise 23
published an article stating that Oregon this type of shared leadership is more
ranks 50th of 50 states for the share of common.
state budget paid by corporations. The
writer concluded that “perhaps business Fortunately, recent trends show im-
leaders need to put their money where provement. It appears that both city
their mouths are and be part of the officials and business leaders appear to
solution.”89 In 2007 business leaders have a genuine desire to move in the
made an excellent move in the right direction of greater collaboration. It
direction by supporting creation of a is important that this trend continue,
state rainy-day fund and the diversion even be accelerated.
of $300 million in scheduled corporate
kicker rebates into the fund.90 An important element in the effort to
improve Portland’s business environ-
ment is education and communication,
Dialogue is a two-way street, and your
something City Club of Portland does
committee believes that city govern-
well. However, an analysis of City Club
ment and the city’s business leaders Friday Forums over a recent 30-month
should be making greater efforts to period showed what while there have
engage in productive dialogue. For too been many programs related to the
long, city government and the business business environment (e.g. economic
community have regarded each other forecasts, education report cards, devel-
with suspicion. Both sides have seemed opments at the Port of Portland, discus-
more eager to criticize the other than to sions of public ownership of utilities,
work together to find practical solutions traffic congestion, affordable housing,
to issues that face the city. and public safety), there have been few
programs that offer specific business
perspectives on such issues.
“Dialogue is a two-way
street, and your committee City Club could help improve public
believes that city dialogue regarding the business environ-
government and the city’s ment by incorporating more business
business leaders should perspectives into their Friday Forums
be making greater efforts and focusing more attention on address-
ing points of friction between business
to engage in productive
and government. Shortly before publi-
dialogue. ” cation of this report the Club presented
a program on regional economic de-
velopment with the CEO of Greenlight
Some witnesses from the business
Greater Portland, which is the type of
community wondered why local busi-
program your committee encourages.
ness executives are not more active in
government. Portland has historically Taxation
had individuals from the business com-
munity visibly engaged through their According to experts interviewed by
your committee, taxes are not the
participation in the many boards and
primary consideration in deciding
commissions making public policy deci-
where to locate a business. Issues such
sions. Your committee feels it would be
as access to raw materials, availability
a positive development for city and busi- of adequately trained workers, access to
ness leaders to create a climate where transportation, and proximity to mar-
24 City Club of Portland
kets are more important. Nevertheless, taxes, although 0.5 percent of the local
taxes are viewed as a cost of doing busi- sales tax supports C-Tran.
ness, sometimes influencing business
decisions regarding where to locate. The Additionally, in Oregon, businesses
decision by Genentech in 2006 to locate organized as sole proprietorships, or
a packaging and distribution facility in “pass-through” entities such as S cor-
Hillsboro, as opposed to a locality in porations or partnerships, pay taxes on
another state, was attributed in part to their profits as reported on the personal
recent changes allowing Oregon corpo- income tax returns of their owners.
rations to use a “single sales factor” to
determine its corporate tax liability.*
Businesses also rely on tax-supported
“… Oregon has the tenth
public services, such as public education, most favorable state
transportation systems, and police and business tax climate in the
fire protection. In some Portland neigh- nation; Washington, which
borhoods, businesses have voted to includes two counties in
establish Local Improvement Districts the Portland region, ranks
where additional taxes are collected for eleventh.”
provision of additional services. For
instance, the downtown Portland LID
pays for services like extra police patrols State Taxes
and more frequent street cleaning. According to the Tax Foundation, a
nonpartisan organization that educates
Since the Portland region spans two tax payers about tax policy, Oregon and
states, multiple counties and cities, busi- Washington have favorable tax climates
ness taxes vary by locale. At the state for business. The Tax Foundation’s State
level, the tax systems of Oregon and Business Tax Climate Index compares
Washington have markedly different states in five areas of taxation impacting
approaches. While both states collect businesses: corporate taxes, individual
property taxes, Oregon relies heavily on income taxes, sales taxes, unemploy-
personal and corporate income taxes, ment insurance taxes, and taxes on
as well as fees, to fund public services. residential and commercial property.
Washington, on the other hand, has According to this criteria Oregon has
neither a personal nor a corporate the tenth most favorable state business
income tax, relying heavily on a sales tax climate in the nation; Washington,
tax and a business and occupation tax. which includes two counties in the Port-
Businesses on the Portland side of the land region, ranks eleventh.74
Columbia River pay transportation taxes
to TriMet. Businesses on the Vancou- A 2007 study prepared by Ernst and
ver side of the river do not pay TriMet
Young for the Center on State Taxa-
* The recently enacted “single sales factor” tion reported that Oregon and North
formula is an alternative to the prior method by
which Oregon determined the share of the na- Carolina are tied for the lowest effective
tionwide profit of a corporation upon which it business tax rates among all 50 states.
levied its corporate income tax. The single sales
factor formula determines that share solely The effective tax rate is the ratio of state
with reference to the share of the corporation’s and local business taxes to private sec-
nationwide sales located in the state, with the
location of sales considered to be the state tor gross state product (that is, the total
where the goods are delivered to purchasers. value of a state’s annual production of
Enhancing Portland’s Business Environment: A Public — Private Enterprise 25
goods and services, excluding the public percent higher than Clackamas County.
sector). The average effective tax rate This represents not only an increased
across all states is 5.1 percent; the effec- cost of doing business, but also an
tive tax rate in Oregon and North Caro- increased cost of housing for employees
lina is 3.9 percent.75 Oregon’s minimum who want to live in Portland.76
tax on corporations, unchanged since it
was reduced to $10 in 1931, is now the “Property taxes, which
lowest in the nation among states that impact all property owners,
tax corporate income.
are significantly higher in
Nationally, none of Portland’s com-
Portland than surrounding
petitor regions contain tax jurisdic- communities.”
tions with such contrasting state tax
systems as Oregon and Washington. The current Business Income Tax rate is
Most economists interviewed by your 2.2 percent for the city of Portland and
committee believe the close proxim- 1.45 percent for Multnomah County;
ity of such contrasting tax systems is a both are administered by the city.77 In
competitive advantage for the region. the fiscal year ending June 2007, the
Business owners can choose to locate in city collected almost $76 million in Busi-
Washington to avoid the capital gains ness Income Tax revenue, $22.9 million
tax on the sale of their business, or in above budget and far above the $37
Oregon to take advantage of the lack of million collected during the last eco-
a sales tax. While some complain that nomic downturn in 2002-03.78 To deal
such moves lead to tax avoidance, the with this volatility, in March 2003 the
money stays in the region either way. city added a surcharge of 1 percent and
made it retroactive to January 1, 2002.79
Local Taxes From 2003 through 2007, the surcharge
ranged from .07 to .40 percent, with the
Portland businesses pay two principal exception of 2005 when there was no
taxes to the city: property taxes and the surcharge imposed.
Business Income Tax.
In addition, in May 2003 Multnomah
In 2002 the Portland Development County voters approved a three-year
Commission hired ECONorthwest 1.25 percent personal income tax to
to study the competitive impact of support schools, public safety, and
Portland’s Business Income Tax, and health services during a period of
total local taxes collected, both within state funding shortfalls.80 While public
the region as well as across competitive education and public safety are both
regions. This is the only comprehensive important to the business environment,
study of local taxes that your committee the approval of this tax meant that the
located, and though it is more than six owners of “pass-through” businesses in
years old, its findings are revealing. Multnomah County had to pay both the
Property taxes, which impact all prop- Business Income Tax and the temporary
erty owners, are significantly higher in county personal income tax on revenues
Portland than surrounding communi- from their businesses — just as the local
ties. According to the study, the rate per economy was attempting to rebound.
thousand for property taxes in Portland
was 3.5 percent higher than Vancouver, As Oregon faces another economic
10.7 percent higher than Gresham, 39.2 downturn — possibly a recession — in
percent higher than Beaverton, and 42.2 2008, Portland has not yet adequately
26 City Club of Portland
institutionalized a way to continue and county services that are subsidized
stable funding for essential services by other businesses whose sales are
other than by imposing temporary tax within the region. However, traded sec-
increases, which could retard recovery. tor businesses drive the local economy,
In January 2007 the Portland City and assessing the Business Income Tax
Council adopted amendments to the on them would put them at a com-
Business Income Tax that: petitive disadvantage relative to their
competitors outside the city and county.
• Raised the deduction for owners’ Your committee supports exempting
compensation from $60,000 to traded sector businesses from the Busi-
$80,000 initially, and to $125,000 ness Income Tax on sales made outside
within five years. the county.
• Raised the gross revenue level
None of Portland’s competitor cities,
below which businesses are exempt
inside or outside the region, has a busi-
from $25,000 to $50,000.
ness income tax. However, competitor
• In 2008, would impose a revised cities outside Oregon collect a variety
minimum tax.81 of sales taxes, and some of our region’s
other local tax jurisdictions impose
The combined effect of these changes taxes that are not paid by Portland busi-
reduced revenues collected from the nesses (such as gas taxes or utility and
Business Income Tax by approximately road maintenance fees, and the city of
5 percent. These changes to the Busi- Vancouver’s recently enacted business
ness Income Tax addressed some of the license fee).
objections about equity and fairness
that your committee heard from some Although some witnesses expressed
witnesses. A new administrative rule concern that the Business Income Tax
adopted in November 2007 by both has caused businesses to leave the
the city and Multnomah County also city (and The Oregonian echoed such a
created equal treatment among all concern in a 2006 editorial based on
diversified investment funds, by adding anecdotal evidence not cited in the
venture capital firms to the pre-existing piece),83 your committee found limited
Business Income Tax exemption for evidence to support that concern. The
diversified investment funds.82 Your 2002 ECONorthwest study points out
committee believes that these steps are that a large law firm, for example, could
positive, and have somewhat improved not move from Portland to Camas
the business environment in Portland. without reducing net sales. Eric Fruits, a
senior economist involved in the study,
Businesses located in Multnomah said, “I don’t think I’d really pin people
County pay the Business Income Tax leaving (Portland) on the Business
only on income generated from sales Income Tax.”84
within the county. The exemption of
income from sales outside the county Further, in February 2007 Mayor Pot-
favors businesses in the traded sector, ter testified to your committee that in
insofar as businesses whose income is 2004 only 86 businesses moved out
derived from sales outside the county of Portland (less than one percent of
do not pay their proportionate share the city’s nearly 35,000 licensed busi-
for services received from the city or nesses), resulting in a loss of $25,000
county. In a sense they are receiving city of tax revenue (compared to 550 that
Enhancing Portland’s Business Environment: A Public — Private Enterprise 27
closed their doors and 350 that merged
or reorganized). Commissioner Adams “…on balance, the total
stated that, in contrast, between 2000 tax burden borne by
and 2004 Portland registered a net gain businesses in the Portland
of 6,000 new business licenses for a 5 region, relative to other
percent annual growth.85 While some regions nationally, is a
on your committee speculate that the competitive advantage,
imposition of Business Income Tax
which should be protected.
surcharges and the county’s temporary
For businesses located
income tax (along with higher prop-
erty taxes) may have slowed Portland’s
within Multnomah County,
economic recovery and contributed to higher property taxes
some loss of jobs in the city during this and business income
period, your committee could not verify taxes result in a cost
a causal relationship. disadvantage, when
compared with surrounding
Information from the U.S. Census cities within the region.”
Bureau indicates that taxes paid by
businesses in Portland are higher than
those paid in neighboring jurisdictions, Economic Development
more so than in many comparable urban Programs
areas.86 Some of these higher taxes stem Federal, state, regional, and local gov-
from decisions made decades ago, such ernments often invest in programs to
as establishing a pay-as-you-go disabil- stimulate economic growth by investing
ity and retirement system for fire and in infrastructure, promoting the ben-
police officers. City Club recommended, efits of a certain area, or offering incen-
and in 2006 voters approved, much- tives for businesses to invest in an area.
needed reforms that will reduce the Results of these programs seem minor
costs of this system (while maintaining if viewed as a percentage of the region’s
benefit levels) over the long term, but total economy, yet they have significant
will increase the tax burden in the short impact on a region’s economic growth.
term.87 Siltronic Corporation, which employs
about 900 people in the Portland area,
Your committee concludes that, on is an example of a large employer that
located in Portland as a direct result of
balance, the total tax burden borne
the city’s economic development efforts.
by businesses in the Portland region,
relative to other regions nationally, is a
Responsibility for recruiting, retain-
competitive advantage, which should be ing and developing business in the city
protected. For businesses located within of Portland is currently shared by the
Multnomah County, higher property Portland Development Commission, the
taxes and business income taxes result mayor and commissioners, and private
in a cost disadvantage, when compared sector business groups. PDC does much
with surrounding cities within the of this work and is now being aided by
region. Until this imbalance can be ad- Greenlight Greater Portland, a new, pri-
dressed, City Council members should vate sector, regional economic develop-
be cautious about undertaking major ment organization. PDC relies on public
new spending initiatives. and private leaders to be responsive to
28 City Club of Portland
Figure 2: Economic Development Plans, Scope, and Creators
Plan Scope Driving organization
the Oregon Business Plan State initiated by the Oregon Business
(2002; updated dec. 2007) Council, run by Oregon Business
Plan steering committee
CEdS — the Comprehensive Regional the Regional Partners for Business,
Economic development Strat- a consortium of local governments
egy for the Portland-vancouver
metropolitan Region (April
Portland Regional Business Regional initiated by the Portland Business
Plan (2006; updated Jan. 2007) Alliance, run by the Regional Busi-
ness Plan steering committee
Portland Economic develop- City “Blue Ribbon Panel” convened by
ment Plan (2002) mayor vera katz1
mayor katz selected representatives from business associations, non-profits, and government.
requests for assistance in courting busi- 1. Private business leaders involved
nesses considering locating in Portland. their government counterparts in
developing the plan, which led to
The following section discusses econom- a sense of co-ownership during imple-
ic development planning and implemen- 2. The planning team focused on de-
tation efforts for the city and region, veloping a set of specific initiatives
and examines how they relate to PDC’s with clear goals and ways to measure
responsibilities for urban renewal. success.
3. An annual leadership summit was
Economic Development Planning established to bring constituents
together each year to review progress
Between 2002 and 2007, several groups
and to update the plan.
published plans to spur economic devel-
opment for the city, state and region. In contrast to the Oregon Business
Plan’s statewide effort, the Portland
The table in Figure 2 lists these econom- region has two separate economic devel-
ic development plans and their creators. opment plans, one created by the public
sector and the other by the private sec-
The Oregon Business Plan, which has be- tor. To qualify for a federal grant, which
come the model for several other plans mandates submission of a Comprehen-
within the state, has motivated several sive Economic Development Strategy, a
state-level efforts, including innovative plan was commissioned by the Regional
microtechnology and nanotechnology Partners for Business (established by
research, road and bridge improve- thirty municipalities and six counties).
ments, a forest health bill, expansion of In the private sector, the Regional
development-ready industrial lands, and Business Plan was published only a few
a coordinated state branding campaign. months after the CEDS plan. While the
The methods that led to these accom- Regional Business Plan acknowledges
plishments include the following: that linkages with its partners in gov-
Enhancing Portland’s Business Environment: A Public — Private Enterprise 29
ernment and non-profit organizations Your committee is concerned that the
are essential to implementation, most city does not have a team of local busi-
of the government witnesses who met ness leaders regularly reviewing and
with your committee testified that they informing its economic development
were not adequately involved in this strategy. The city should also establish
plan’s development. ongoing economic development plan-
ning that is linked with regional and
The Portland Business Alliance, which state efforts and that is evaluated and
manages the Regional Business Plan, updated annually.
has stated that it is improving collabora-
tion with its partners. The CEDS plan
outlines a goal of eventually combining
the two plans into a single public-pri- PDC implements programs for attract-
vate regional plan that integrates with ing new businesses, encourages business
the economic development plan for the startups, and helps existing businesses
state. thrive and grow, both at the city and
regional levels. While cooperating
with neighboring jurisdictions on the
“Your committee is region’s economic development, it is
concerned that the city essential that PDC not lose sight of the
importance of retaining and recruiting
does not have a team of
family-wage jobs in the city of Portland.
local business leaders Your committee echoes one of the in-
regularly reviewing and terviewees quoted in the regional CEDS
informing its economic plan, “No one wants a hollowed-out
development strategy. The Portland.” 89
city should also establish
ongoing economic A new private-sector organization,
development planning Greenlight Greater Portland, was
formed in 2007. It has raised over $1
that is linked with regional million to market the region (Multno-
and state efforts and that mah, Clackamas, Washington and Clark
is evaluated and updated counties), retain businesses, and attract
annually.” new businesses.90
PDC’s business retention and recruit-
The city of Portland’s last economic de- ing teams measure results based on the
velopment plan was published in 2002 processing of contacts and leads. Ac-
after being developed by a “blue ribbon cording to a 2006 city auditor’s report,
panel” assembled by former Mayor PDC set a goal in 2004 to recruit five
Vera Katz. The resulting plan has been new businesses. It actually recruited 10
used since as the working plan of the out of the 30 that indicated an inter-
Portland Development Commission. No est in relocating to Portland. Between
updates have been published, and this mid-2004 and early 2006, PDC assisted
document does not use the framework 710 businesses that contacted PDC for
of the state or regional plans.88 PDC support. A follow-up survey found that
did, in 2006, release a plan for target 15 percent of respondents were dis-
satisfied, while 68 percent were satisfied
industry clusters, but it has a regional
or very satisfied with PDC’s business
focus and does not specifically address
services. When asked to rate PDC’s help
the city’s economic development.
in retaining or expanding their business,
30 City Club of Portland
61 percent said “important” or “very Portland, but PDC did not have data to
important.”91 support the claim. Your committee also
was unable to verify the claim.
These results seem acceptable, but your
committee believes other measures may
also be important: (1) the number of
leads that PDC generates, and (2) the
percentage of leads that are converted
into business sitings and investments.
While commending PDC for its interest
in greater tracking and accountability
(especially since PDC requested the
audit), the 2006 city auditor’s report
found “PDC lacks clear goals, measures Photo by Cheryl Juetten
and data it needs to continually improve
its decision-making processes and bet- In 2005-06 the city’s General Fund con-
ter link its investments to community tribution to PDC for economic develop-
results.”92 The report made recommen- ment, excluding urban renewal areas,*
dations for improving the outcomes was approximately $870,000, which
that PDC tracks. was only 0.4 percent of PDC’s overall
budget.93 Your committee views the
Recruiting efforts also depend on the city’s June 2008 decision to contribute
city to provide a highly attractive busi- $2.3 million for economic development
ness environment. Therefore, feedback efforts as a positive sign.
to the city from PDC (and Greenlight
Greater Portland) is important to The Impact of Urban Renewal on
give city managers insight into what Economic Development
prospective businesses are saying about City Club’s 2005 study of PDC noted
city services, features, strengths, and that its greatest contribution to eco-
weaknesses. Such a feedback loop allows nomic development is through its urban
the city to respond and improve. renewal activities.94 PDC seeks to rede-
velop and increase the vitality of an area
City Investment in Economic by using financing methods that rely on
Development the expected increase in tax value of the
In 2007, only five PDC staff members redeveloped property in that area.
supported seven major industry clusters
while also responding to requests for as- The city auditor’s report showed that
sistance from Portland businesses. Your these urban renewal efforts are indeed
committee finds this level of staffing having a positive impact: “The Urban
inadequate. PDC should strengthen its Renewal Areas did not see the decline in
efforts to support key industry clusters jobs experienced city-wide. In addition,
and expand efforts to track and commu- wages and the market value of real es-
nicate the economic contributions made tate in those areas clearly outpaced the
by key sectors to the city and the region. city as a whole.” It noted that wages paid
by jobs in URAs increased by 25 percent
PDC officials told your committee that
* PDC’s major areas of operations include
many competitive cities invest more housing, urban renewal, and economic develop-
money in economic development than ment..
Enhancing Portland’s Business Environment: A Public — Private Enterprise 31
compared to an 8 percent increase in Federal Bureau of Investigation, Port-
the rest of the city and a 14 percent land ranks higher than some competitor
decline in the control areas.* “Persons cities in certain kinds of crimes, and
living in poverty decreased by 6 percent below those same cities in other kinds
in the URAs compared to no change in of crimes.96 Such rankings can be mis-
the control areas and a 2 percent decline leading, but in any event, your commit-
city-wide. The ratio of building-to-land tee found no evidence that crime rates
increased 49 percent in the URAs versus have any material influence on decisions
2 percent in the control areas.”95 by businesses to locate in the Portland
metropolitan area rather than in some
In summary, your committee be- other city.**
lieves that the city of Portland should
cooperate with businesses to create an According to data from the Portland
economic development plan for the city Police Bureau, the incidence of crime
that takes into consideration the eco- in downtown Portland has decreased
nomic development plans for the state in recent years. The number of crimes
and the region. It is imperative that against persons in Portland’s central
such an economic development plan precinct, which includes downtown
also be assessed and updated annually. and the Pearl District, declined by 36
percent between 2000 and 2005.97 The
Public Safety number of property crimes increased in
the years immediately following 2001,
Owners of downtown businesses told
perhaps as a result of a change in policy
your committee that their customers
regarding the manner in which inci-
are concerned about crime levels in the
dents of theft were compiled, but even
downtown area. Downtown businesses
with that change, property crimes in the
have voted to establish (and to fund
central precinct decreased by 7 percent
through extra taxes) a Local Improve-
from 2000 to 2005.98 A city auditor’s
ment District, in part to provide extra
report indicates that the crime rate has
security patrols. Some business owners
reached a new low and residents gener-
told your committee that they moved
ally feel safer in their neighborhoods.99
from downtown locations to suburban
National statistics released in June 2007
communities in part because of their confirmed a continuing drop in crime
concern for the safety of their customers
in Portland as a whole, but indicate a
and employees. Such concerns caused
your committee to look at public safety new and disturbing trend: while murder
issues as a component of the business and arson continue to drop, robberies
environment. rose 14 percent from 2005 to 2006, and
street robberies jumped 25 percent in
Statistics do not show a significant dif- the same period.100
ference in crime rates between Portland
and other competitive urban regions. Indeed, crime in the downtown area
According to the annual reports of the remains a concern to many Portland
* The auditor selected three separate “control residents. Citizens surveyed in 2007
areas” with land use patterns similar to the for the city auditor’s annual report felt
URAs that did not receive major government
investment during the comparison period, as ** The FBI itself warns that its rankings “lead
indicated in the auditor’s report; Portland City to simplistic and/or incomplete analyses that
Auditor, “Portland Development Commission: often create misleading perceptions adversely
Economic development efforts effective, but affecting cities and counties, along with their
improvements needed to measure and manage residents;” http://www.fbi.gov/ucr/05cius/
future success,” June 2006, p. 6, map on p. 13. about/variables_affecting_crime.html.
32 City Club of Portland
far less safe walking alone in downtown Urban Construction Costs
Portland at night (27 percent) than dur- Some witnesses complained that
ing the day (68 percent), although they constructing or remodeling a business
generally felt slightly safer in 2007 than facility in Portland typically costs 20
they did two years earlier.101 percent more and takes longer to build
than an identical project in suburban
The incidence of crime is not the only areas such as Beaverton or Hillsboro.
factor that contributes to public safety It was implied that unreasonable and
concerns on the part of business owners costly regulations placed by the city
and the public at large. Panhandling and of Portland on projects within the city
other unsavory activities often associ- constitute the major reasons for these
ated with homelessness — rightly or differentials.
wrongly — are often cited as factors
that may lead businesses to move away Your committee contacted two local
from the downtown area. architects and a cost estimator to deter-
mine whether such a cost differential ex-
The city has made several important
ists and, if so, what factors contribute to
improvements with respect to the
the differential. These experts confirmed
quality of life in downtown Portland. In
that projects in the city often, though
December 2006, business owners, civil
not always, cost more and take more
rights lawyers, homeless advocates, and
time to build, for the following reasons:
the police bureau agreed on a plan to
reduce the number of homeless people
• Land costs usually are higher in
on downtown streets. The plan, labeled
urban areas than in suburban loca-
“Street Access for Everyone” (SAFE),
proposed a day center for homeless
people, additional street benches, and
• Density in urban areas often results
additional public restrooms in the
in less available staging area for
downtown area.102 In addition, as
construction projects, raising costs
Mayor Potter noted in his State of the
for materials and equipment stor-
City address in January 2007, the city’s
age, and increasing the frequency
new sidewalk obstruction ordinance,
of moving materials, which must be
adopted in late 2006, “will keep our
done in smaller loads.
business areas welcoming to all by pro-
hibiting anyone from sitting or lying on
• Office space must be rented in adja-
a public sidewalk in downtown Portland
or the Lloyd District between 7 a.m. and
• More traffic on streets and side-
walks place more restrictions on
Your committee supports this policy but
closures, raising costs of working
has concerns about its implementation
around the pedestrian and vehicu-
and enforcement. To be successful it will
require full funding and close monitor-
ing of its effectiveness. The city auditor • Buildings in suburban areas are
should publish data illustrating the built out; in urban areas they are
policy’s effect on the incidence of crime built up. Multi-story buildings are
and homelessness on downtown streets. more costly. In particular, buildings
Enhancing Portland’s Business Environment: A Public — Private Enterprise 33
taller than 75 feet are required to process — an “economic dashboard”
have more extensive and expensive designed to provide measurements
fire and life-safety systems. of Portland’s economic health. Your
committee encourages further work on
• Even when buildings in urban areas that front to help measure progress and
are not higher, they are more often identify where attention is needed.
built adjacent to other buildings,
which can raise construction costs
Each year the city auditor issues a report
due to fire protection requirements
on the performance of city government.
for perimeter walls. Suburban
In December 2007 the city auditor
buildings can be spaced farther
apart, eliminating the need for issued the seventeenth such report,
these costs. which summarized the city’s progress in
accomplishing its major goals: (1) ensur-
• Buildings constructed in urban set- ing a safe and peaceful community;
tings are often designed for longer (2) operating and maintaining an effec-
life, requiring higher costs for tive and safe transportation system;
materials and construction. (3) improving the quality of life in
neighborhoods; (4) protecting and
In some cases additional costs occur enhancing the natural and built environ-
in suburban locations due to provi- ment; (5) promoting economic vitality
sion of utilities, construction of roads, and opportunity; and (6) delivering
and other factors less often required efficient, effective, and accountable
in urban settings. During the course of municipal services.105
this study, concerns about permitting
grew in some outlying communities. The Portland has established a host of
Oregonian columnist Jerry Boone noted, benchmarks that relate to the local
“some disgruntled developers contend economy, environment, health and
Beaverton paves its permit process with
families, urban vitality, education,
speed bumps and potholes. They say a
governance, civic participation, and
project that might take six months in
public safety. The city auditor’s office has
Hillsboro can take two or three times
that in Beaverton — all as the inflation responsibility for tracking and reporting
meter continues to run.”104 outcomes for these benchmarks. Unfor-
tunately, 19 of the benchmarks remain
On balance, the experts interviewed by unmeasured “because data are incon-
your committee stated that there is too sistent, unreliable or unavailable at the
much variation from project to project county level; or the benchmark requires
that cannot be attributed to urban vs. further research to determine the most
suburban regulatory requirements. appropriate data to track and report.”
Some of the untracked benchmarks with
key relevance to the business environ-
measuring progress ment include: total taxation, per capita
dollars spent for local government ser-
Measuring and tracking progress on vices, timeliness of government permit
the entire range of factors that affect issuance, small business failure rate, job
Portland’s business environment is im- training, export activity, industrial land
portant. In 2005 Commissioner Adams availability, and job growth in down-
began work on a project that is still in town Portland.106
34 City Club of Portland
Your committee found it difficult, and
in some cases impossible, to assess
city performance on economic factors
because data were not available nor
reasonably easy to access. For example,
in late 2007, PDC was just beginning to
look at what competitor cities spend on
economic development, but no data are
as yet available. Such data is an example
of information important for justify-
ing an appropriate level of spending
for Portland’s program. Similarly, your
committee was unable to obtain data
on how many for-profit jobs have come
and gone in the city, or data on jobs in
the city by neighborhood, industry, pay
scale, or education requirements.
Measurement is clearly important to
identify shortfalls, gauge improvement,
and rectify false perceptions, which your
committee often uncovered when com-
paring testimony to factual evidence.
While the city auditor provides a level of
analysis not found in most other cities,
it is nevertheless imperative that the
city auditor be provided the resources to
better track data assessing the condition
of the city’s business environment.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 35
Conclusions and Recommendations
conclusions: The condiTion oF porTland’s
Your committee found many dimensions to Portland’s business environment and
little agreement among businesses on how they should be prioritized. This lack of
consensus makes it impossible to assign a meaningful quantitative grade to Portland’s
business environment or to quanti-
tatively compare it with the business
environments of other cities. And
“[Y]our committee believes even if everyone agreed on a univer-
that compared with sal set of factors, we could not rate
competitor cities in the some of them because reliable data is
United States, the local often not available at the city level.
business environment is
relatively good and has While your committee cannot give
the condition of Portland’s business
improved over the course
environment a numeric score, we be-
of this study.... Yet your lieve that compared with competitor
committee sees warning cities in the United States, the local
signs, and some of them business environment is relatively
are serious.” good and has improved over the
course of this study. A strong overall
economy — the current national
economic downturn notwithstanding
— deserves much credit, but the business environment also has benefited from ef-
forts by city officials to improve it, and because business leaders have pursued a more
collaborative approach to resolving issues with city government.
Portland’s Business Income Tax has been modified by city ordinance, addressing an
issue that was particularly problematic to many businesses. Permitting processes have
been improved and attitudes are being tracked to ensure that “customers” are finding
these processes less burdensome. A private-sector, regional economic development
organization has been formed, and new steps are being taken to address some of the
impacts of loitering and homelessness on business.
Yet your committee sees warning signs, and some of them are serious. Portland’s
quality of life provides an important competitive advantage. At one time, available
and affordable family housing, short commute times, and good public schools were
among the city’s greatest assets. Over the past decade these aspects of Portland’s
generally high quality of life have been challenged. A rapid rise in housing prices,
36 City Club of Portland
increased traffic congestion, and unstable school funding have put at risk some of the
attributes that have drawn people and businesses to our region. It is essential that
business and government leaders and others recognize the importance of quality-of-
life factors to the business environment, before the problems undermine Portland’s
Although Portland’s ability to attract young, highly educated workers is a competitive
advantage compared to other regions, there is a shortage of local workers with train-
ing in a number of key industries, including manufacturing, construction, and health
care. And Portland risks losing its younger talent pool as they mature, if affordable
family-friendly housing and high-quality public schools are not in adequate supply.
Businesses in the city of Portland and Multnomah County pay higher property and
business income taxes than businesses in other jurisdictions within the region, which
places them at a competitive disadvantage.
Information important to identifying problems and setting priorities must be gath-
ered and tracked, and further improvement is needed in coordinating economic devel-
opment planning and programs at city, regional, and state levels.
Many of the problems that should be addressed are out of the hands of local deci-
sion makers and will require cooperation among stakeholders throughout the region.
Some transportation problems can be addressed by better organizing regional activi-
ties, but a great deal of the effort to resolve major transportation issues will require
a better structure for making decisions and funding levels that are sufficient to deal
with Portland’s traffic congestion and maintenance shortfalls.
The quality of public education is a prime concern for businesses considering locat-
ing in Portland and workers considering relocating to jobs in the area. The legislature
must stabilize education funding overall and invest more in higher education.
Other problems stem from the region’s growth and success. For instance, the eco-
nomic vitality of the region has also contributed to traffic congestion, and an increas-
ingly severe shortage of developable land within city limits negatively affects both
industrial development and housing costs.
Your committee believes that local government and business leaders can best serve
city businesses not with divisive rhetoric, but by forging partnerships and finding
common solutions to the city’s and the region’s serious problems, working with state
and federal decision makers, and leading the public through the difficult decisions
that must be made and the implementation steps that will be required.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 37
While your committee believes there is room for incremental improvements with re-
gard to each aspect of Portland’s business environment, we believe that the following
recommendations will have the greatest potential impact:
Relations between City Government and the Business Community
1. City officials and business leaders should recognize that a cooperative work-
ing relationship is the single greatest factor in the city’s business environment.
a. City officials should make frequent site visits to businesses and meet often
with business leaders.
b. Business leaders and city officials should be more judicious in using the power
of the media to leverage decisions in their favor.
Economic Development Programs
2. The city of Portland should join with businesses to create an economic develop-
ment plan that takes into consideration the economic development plans for the
state and the region, and that is evaluated and updated annually.
3. City Council, the Portland Development Commission, and Metro should con-
tinue to support the development of affordable housing, with a greater emphasis
(including incentives for builders and developers) on building more family-
friendly housing that medium- and low-income workers can afford.
4. A taskforce of business and education leaders should be formed to propose train-
ing programs to ensure that Portland’s workforce skills better match industry
needs, to raise awareness among students and workers about career and training
opportunities, and to monitor progress in meeting labor force needs.
5. The Oregon Legislature should fund primary and secondary education in a
consistent, sustainable manner and at the level recommended by the Quality
6. The Oregon Legislature should increase levels of funding for public higher educa-
tion to at least match per student funding in Washington and California, our two
west coast competitors, so that:
a. Course offerings support completion of a degree at a community college in two
years and at a university in four years.
b. Faculty salaries are competitive with public colleges and universities in Wash-
ington and California.
c. Tuition at public universities and community colleges in Oregon is comparable
to tuition in Washington and California.
7. Portland State University and Oregon Health and Science University should
continue to develop strong research centers for the region, and both the public
and private sectors should support this effort. The Oregon Legislature should
increase investment and should enact further measures to support transforming
innovations from university laboratories into profitable business enterprises.
38 City Club of Portland
8. Metro, in working with the states of Oregon and Washington to create the 2035
Regional Transportation Plan, should assure that the plan does the following:
a. Considers overall needs when prioritizing projects.
b. Identifies funding sources and considers strategies for building public support
for public funding.
c. Identifies how best to maintain and improve bridges throughout the region.
9. City Club should initiate a comprehensive study to determine the best adminis-
trative structure and oversight authority for regional transportation planning
10. So long as business tax rates in the city of Portland and Multnomah County
significantly exceed those paid in other jurisdictions in the region, Portland
and Multnomah County should only undertake new local government spending
initiatives with exceptional justification.
11. Because revenue from business income taxes is volatile, the city of Portland and
Multnomah County should establish rainy day funds that are sufficient to avoid
tax increases, surcharges, and fees during economic downturns.
12. The city auditor’s office should be provided with the resources that would make
possible tracking the entire range of metrics that assess the condition of the
city’s business environment, including information on economic development
spending of competitor cities.
Mary Ann Huff
Sharon VanSickle-Robbins, chair
John Moreland, research adviser
Tony Iaccarino, policy director
Your committee would like to thank the staff at the Oregon Employment Depart-
ment and Joe Cortright, Consulting Economist at Impreza Consulting, for responding
generously to our numerous requests for information and for assistance in helping us
interpret complex data.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 39
1. Portland Development Commission, “Economic Development Strategy for the
City of Portland,” Oct. 2002.
3. Institute of Portland Metropolitan Studies, Metropolitan Briefing Book 2007, p.
4. Portland Business Journal, “2008 Book of Lists,” 2008.
5. “All downtown needs is $150 million,” Portland Business Journal, Jan. 26, 2007,
6. Portland Business Alliance, “Downtown Portland Retail Strategy Update,” Jan.
2007, p. 4.
7. Fred Leeson, “Retail challenge of malls drives downtown changes,” The Orego-
nian, March 8, 2007.
8. Mark New of New & Neville in “Space for lease,” Daily Journal of Commerce, Nov.
9. Dylan Rivera, “Office space in a squeeze,” The Oregonian, Nov. 9, 2006, p. C1;
and “Office market heats up,” Portland Business Journal, Jan. 26, 2007, p. 10.
10. Cushman & Wakefield “Marketbeat Snapshot,” Third Quarter 2007, Office
Overview for Portland, Oregon; available online at https://www.cushwake.com/
11. “Downtowns: Where the lights aren’t bright,” The Economist, March 3, 2007, p.
12. Dylan Rivera, “Tower may signal renaissance,” The Oregonian, January 20, 2007,
pp. A1, A6.
13. Institute of Portland Metropolitan Studies, Metropolitan Briefing Book 2007, p.
15. Portland Development Commission and Portland Regional Partners for Busi-
ness, Portland Metropolitan Region Fact Book, p. 10.
17. Joe Cortright, “City Vitals,” a report prepared for CEOs for Cities, 2006, pp.
18. Brent Hunsberger, “Manufacturing jobs go begging,” The Oregonian, April 22,
2007, p. W11.
19. Patrick O’Neill, “It’s code red for health care,” The Oregonian, April 22, 2007, p.
20. “Writing a New Chapter: A City Club Report on School Funding,” City Club of
Portland Bulletin, Vol. 89, No. 11 (March 16, 2007).
21. ORS 329.035(3); ORS 329.035(4)(a); “Writing a New Chapter,” p. 23; and Or.
Const., Art. VIII, § 8(1).
22. U.S. Census Bureau, “Public Education Finances 2006,” p. 11; and U.S. Depart-
ment of Commerce, Economics and Statistics Administration, Census Bureau,
“Government Finances — Public Education Finances,” 1992 Census of Govern-
ments, Vol. 4, No. 1 (Government Finances—Public Education Finances) 24
(2005), (“1992 Census Report”) (Ex. 4), p. 25.
23. Quality Education Commission, “Quality Education Commission Report 2006,”
Dec. 2006, p. 15.
40 City Club of Portland
24. “Writing a New Chapter,” p. 12.
25. Amy Hsuan, “For many, school let out weeks ago,” The Oregonian, June 15,
2007, p. B1.
26. Ted Kulongoski, “The Governor’s Hope and Opportunity Budget 2007–2009,” p.
14; available online at http://www.governor.state.or.us/DAS/BAM/docs/Publi-
27. David Sarasohn, “Bernstine’s exit underscores the erosion in higher education,”
The Oregonian, April 22, 2007, p. E4.
28. David Sarasohn, “Subtracting higher ed,” The Oregonian, April 29, 2007, p. E1
29. “An assignment for higher ed,” The Oregonian, Nov. 19, 2006, p. B1.
30. John von Schlegell, “Higher ed: Luxury or wise investment?,” The Oregonian,
June 13, 2006, p. B9.
31. Bill Graves, “Goal: Get, keep more kids in college,” The Oregonian, p. W50.
32. Oregon Business Plan and Oregon Progress Board, “2007, Competitive Index:
Indicators of Oregon’s Global Economic Competitiveness,” Table 24, “Student
33. Bill Graves, “Class scarcity drags out college,” The Oregonian, March 28, 2007, p.
34. Ted Kulongoski, “The Governor’s Hope and Opportunity Budget 2007–2009,” p.
14; available online at http://www.governor.state.or.us/DAS/BAM/docs/Publi-
35. Editorial, Eugene Register-Guard, June 9, 2007, p. A12.
36. Ann Gardner, Jay Waldron, and Michael Powell, “The Cost of Congestion: How
Traffic Jams Waste More Than Just Your Time,” City Club of Portland, March
37. “Step on it, Oregon,” The Oregonian, March 25, 2007, p. E4.
39. James Mayer, “Mess transit: A two-hour slog,” The Oregonian, May 20, 2007, p.
40. Portland City Auditor’s Report, Fiscal Year 2006; Portland City Auditor, “City of
Portland Service Efforts and Accomplishments: 2006-07, Seventeenth Annual
Report on City Government Performance”; available online at http://www.
41. Janet Goetze, “Downtown parking: Spots are open, really,” The Oregonian, April
22, 2007, p. W46.
42. James Mayer, “Traffic flows, except at rush hour,” The Oregonian, April 22, 2007,
43. Jim Reddin, “Bridge repairs add to budget crunch,” Portland Tribune, Oct. 24,
44. Arthur Gregg Sulzberger, “Official pushes to close aging Sellwood Bridge,” The
Oregonian, March 19, 2008, p. E1.
45. Ted Wheeler, “State of Multnomah County,” City Club of Portland, Jan. 25,
46. Portland Business Alliance membership survey conducted by Davis, Hibbitts &
Midghall, Dec. 2005.
47. Economic Development Research Group, Inc., “The Cost of Congestion to the
Economy of the Portland Region: A Report to the Portland Business Alliance,
Metro, Port of Portland and Oregon Department of Transportation,” Dec. 2005.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 41
49. Nick Budnick, “Destination unknown: Our transportation future,” Portland
Tribune, Nov. 28, 2006.
50. Randy Gragg, “Running on empty,” The Oregonian, May 20, 2007, p. E1.
52. James Mayer, “Business leaders: Keep traffic moving,” The Oregonian, March 23,
2007, p. D1.
54. Regional Multiple Listing Service, Sept. 2007.
56. Conversation wtih David Almodovar of Credit Suisse, Nov. 27, 2007.
58. “Angels spread wings,” Portland Business Journal, Feb. 1, 2008, p. 1.
59. Mike Rogoway, “Startups step out of the shadows,” The Oregonian, Nov. 2, 2007,
60. Portland City Auditor, “City of Portland Service Efforts and Accomplishments:
2006-07, Seventeenth Annual Report on City Government Performance,” p.
2; available online at http://www.portlandonline.com/shared/cfm/image.
61. Portland Public Schools, Annual Budget, 2007–2008, p. 39.
62. Dylan Rivera, “Home prices slip, supply up,” The Oregonian, May 18, 2007, p. C1.
63. Ryan Frank, “While sale prices of U. S. homes fall, the Rose City’s still rise,” The
Oregonian, Nov. 17, 2007 p. D1.
65. “Cities compete in hipness battle to attract young,” The New York Times, Nov. 25,
2005, p. A1.
66. Joe Cortright and Carol Coletta, “The Young and the Restless,” Portland Business
Journal, June 21, 2004, p. 26.
67. “SustainLane’s 2006 US City Sustainability Ranking;” available online at http://
68. “Portland named ‘most sustainable city,” Daily Journal of Commerce, June 5,
2006, p. 5.
69. Editorial, “Business summit misses the mark,” Portland Business Journal, July 1,
2005, p. 47.
70. Portland City Auditor, “City of Portland Service Efforts and Accomplishments:
2006-2007,” p.7; available online at http://www.portlandonline.com/shared/
71. Mayor Potter’s speech available online at http://portlandcityhall.blogs.oregon-
72. The Oregonian, Sept. 25, 2006.
73. Betsy Hammond, “Voters may settle corporate rebate fate,” The Oregonian, Feb.
74. The Tax Foundation, “Oregon’s State and Local Tax Burden, 1970-2007,” April
2007; available at http://www.taxfoundation.org/research/show/336.html.
75. Ernst & Young LLP and Council on State Taxation, “Total State and Local
Business Taxes: 50 State Estimates for Fiscal Year 2006,” available online
42 City Club of Portland
76. ECONorthwest, “Business Income Tax Analysis,” Portland 2002 Strategy for
Economic Vitality, Appendix 2-6, Business Income Tax Analysis.
77. City of Portland Business Licenses and Multnomah County Business Income
Tax, Frequently Asked Questions and Info; available online at http://www.port-
78. City of Portland; “2007 Comprehensive Annual Financial Report,” pp. 24,
96; available online at http://www.portlandonline.com/shared/cfm/image.
79. School Funding Surcharge Frequently Asked Questions, available online at
80. City of Portland Business Licenses and Multnomah County Business Income
Tax, Frequently Asked Questions and Info; available online at http://www.
portlandonline.com/shared/cfm/image.cfm?id=41285; and conversation with
Karen Johnson, Auditor, Operations Division, Portland Bureau of Revenue, Feb.
81. Portland City Council Ordinance No. 180863, approved April 4, 2007; available
82. Andy Dworkin, “County is better risk to venture capitalists,” The Oregonian, Nov.
30, 2007, p. C1.
83. “Soften the blow for small businesses,” The Oregonian, Dec. 8, 2006, p. B4.
84. ECONorthwest, “Business Income Tax Analysis,” Portland 2002 Strategy for
Economic Vitality, Appendix 2-6, Business Income Tax Analysis.
85. Ryan Frank, “Taxes Don’t Drive Businesses from Portland, Adams Says,” The
Oregonian, Feb. 11, 2007, p. D1.
86. U.S. Census Bureau, “Employment, Payrolls, Average Earnings in Individual
Municipal and Township Government Having 25,000 or More Population by
State: March 2002.”
87. “Portland’s Fire and Policy Disability and Retirement Fund: Time for Change,”
City Club of Portland Bulletin, Vol. 87, No. 36 (Feb. 3, 2006).
88. Portland Development Commission, “Economic Developement Strategy for the
City of Portland,” Oct. 2002.
89. ECONorthwest and Impresa Consulting, “Comprehensive Economic Develop-
ment Strategy for the Portland-Vancouver Metropolitan Region,” June 2005, p.
90. Conversation with Jim Mark, President of Greenlight Greater Portland, Jan.
2008; and Jonathan Brinckman, “Private business starts 4-county development
group,” The Oregonian, Jan. 4, 2007, p. C1.
91. Portland City Auditor, “Portland Development Commission: Economic develop-
ment efforts effective, but improvements needed to measure and manage future
success,” June 2006.
94. “Portland Development Commission: Governance, Structure and Process,” City
Club of Portland Bulletin, Vol. 86, No. 34 (Jan. 25, 2005).
95. Portland City Auditor, “Portland Development Commission: Economic develop-
ment efforts,” p. i.
96. The most recent report is “Crime in the United States 2005,” available on the
FBI’s website at http://www.fbi.gov/ucr/05cius/.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 43
97. The data are available at on the Portland Police Bureau website, at http://www.
99. Portland City Auditor, “City of Portland Service Efforts and Accomplishments:
2006-07,” p. 2; available online at http://www.portlandonline.com/shared/cfm/
100. Nick Budnick, “Robberies rise as other crimes fall,” Portland Tribune, June 8,
101. Portland City Auditor, “City of Portland Service Efforts and Accomplishments:
2006-07,” p. 19.
102. The plan is described in “A better plan for vagrancy?”The Oregonian, Dec. 10,
2006, p. B1; and “Downtown prospects called bright,” The Oregonian, Dec. 3,
2006, pp. B1 and B3. Mayor Potter also described the plan in his January 2007
State of the City address to the City Club. That speech is available online at
103. Mayor Potter’s January 2007 “State of the City” speech is available online at
104. Jerry Boone, “Speculations are rife over the ‘king’,” The Oregonian, April 16,
2007, p. B1.
105. Portland City Auditor “City of Portland: Service Efforts and Accomplichments:
2006–2007,” Dec. 2007.
44 City Club of Portland
Sam Adams, Commissioner, City of Portland
Susan Anderson, Director, City of Portland Office of Sustainable Development
Rebecca Armstrong, Managing Director, Johnson Cowhan Hanrahan Advertising
David Atiyeh, President, Atiyeh Brothers
Gary Blackmer, Auditor, City of Portland
David Bragdon, President, Metro Council
Steve Buckstein, Senior Policy Analyst, Cascade Policy Institute
Tim Boyle, President & CEO, Columbia Sportswear
Matt Chapman, founder, CFI Software
David Chen, Partner, OVP Venture Partners
Bonnie Choruby, Senior VP of Merchandising, Lucy Activewear Inc.
Jay Coalson, Principal, Green Building Services
Joe Cortright, Consulting Economist, Impresa Consulting
Pat Donaldson, President, Forbes & Associates; President, Alliance of Portland
Neighborhood Business Associations
Norm Eder, Executive Director, Manufacturing 21 Coalition
Wayne Embree, Managing Partner, Cascadia Ventures
Paul Ehrlich, VP of Business Affairs, Adidas
Jim Francesconi, former Commissioner, City of Portland; Acting Executive Director
of Construction Apprenticeship and Workforce Solutions (CAWS) Initiative
Kevin Jeans Gail, Director, Portland Workforce Alliance
Scott Gibson, Vice Chairman, OHSU Board of Directors; co-founder, Sequent
Tim Greve, President, Carl Greve Jewelers
Tim Grewe, Chief Administrative Officer, City of Portland
Lisa Grove, Principal, Grove Insight
Doug Henne, Partner, Isler & Company; President, Oregon Society of CPAs
Tim Hibbitts, Partner, Davis, Hibbitts & Midghall
Gordon Hoffman, Managing Director, NW Technology Ventures
Steve Holwerda, COO, Ferguson Wellman Capital Management
Bill Hostetler, Commercialization Officer, Portland State University
Jim Johnson, CEO, Tripwire
Gil Kelley, Director, City of Portland Bureau of Planning
Jill Powers Kirk, President, Portland Schools Foundation; Vice President, Oregon
Randy Leonard, Commissioner, City of Portland
Rochelle Lessner, Policy and Public Affairs, Portland Development Commission
Carl Marker, President, IMS Capital Management
Sheila Martin, Director, Institute of Portland Metropolitan Studies, Portland State
Rob Mawson, Vice President, Heritage Consulting Group; Senior Program Manager,
Alliance of Portland Business Associations
Bob McCarthy, COO, Tripwire
Sandra McDonough, President and CEO, Portland Business Alliance
Andrew McGough, Executive Director, Worksystems, Inc.
Brock Metcalf, Managing Partner, Cascadia Ventures
Jennifer Nolfi, Small Business Advocate, Portland Development Commission
Enhancing Portland’s Business Environment: A Public — Private Enterprise 45
John Noordwijk, CEO, Sapa
Steve Olczak, Director of Secondary Education, Portland Public Schools
Bob Packard, Managing Partner, Zimmer Gunsul Frasca Architects
Bobbie Parisi, Vice President of Marketing, Keen Footwear
Roger Pollock, CONTECH Stormwater Solutions
Nan Poppe, President, Extended Learning Campus of Portland Community College
Tom Potter, Mayor, City of Portland
Steve Pratt, Chairman and CEO, ESCO Corporation
Mike Riley, Research Director, Riley Research
Michael Roach, Owner, Paloma Clothing; President, Hillsdale Business Association
John Russell, President, Russell Development
Patricia Ryan, Senior Manager of Economic Development (Industry Clusters
Specialist), Portland Development Commission
Dan Saltzman, Commissioner, City of Portland
Joe Schneid, CPA, Aldrich Kilbride & Tatone LLC
Chuck Sheketoff, Executive Director, Oregon Center for Public Policy
Bert Sperling, President, Sperling’s Best Places
Lynn Spruill, COO, Arnerich Massena
Erik Sten, Commissioner, City of Portland
John Tapogna, Senior Policy Analyst, ECONorthwest
David Thorpe, Creative Director, Ziba Design
Chris Van Dyke, President, Nau, Inc.
Thom Walters, Partner, Coraggio Group
Bruce Warner, Executive Director, Portland Development Commission
Duncan Wyse, Executive Director, Oregon Business Council
Activewear and Gear—Choruby, Ehrlich, Parisi, Van Dyke
Business Organizations—Wyse, McDonough
Creative Services—Armstrong, Packard, Thorpe, Walters
High Tech/Life Science—Chapman, Embree, Johnson, McCarthy, Metcalf
Metals—Eder, Noordwijk, Pratt
Market Research—Grove, Hibbitts, Riley
Professional Services—Henne, Holwerda, Marker, Spruill
Retail Businesses—Atiyeh, Donaldson, Greve, Mawson, Roach
Sustainable/Green Industries—Anderson, Coalson, Pollock
Taxation—Buckstein, Schneid, Sheketoff, Topagna
Venture Capital and Technology Transfer—Chen, Gibson, Hoffman, Hostetler
Workforce Training—Francesconi, Gail, Kirk, McGough, Olczak, Poppe
46 City Club of Portland
Buckstein, Steve. “Prosperity or Portland? Remove Portland’s Business Income Tax to
Improve the City’s Economy.” Cascade Policy Institute. Nov. 2005.
Cortright, Joe. “City Vitals.” A Report Prepared for CEOs for Cities. 2006.
Cushman & Wakefield. “Marketbeat Snapshot.” Third Quarter 2007, Office Overview
for Portland, Oregon. 2007.
Davis, Hibbitts & Midghall. “Portland Business Alliance Membership Survey.” Dec.
Economic Development Research Group, Inc. “The Cost of Congestion to the Economy
of the Portland Region: A Report to the Portland Business Alliance, Metro, Port of
Portland and Oregon Department of Transportation.” Dec. 2005.
Economic Development Research Group, Inc. “The Cost of Highway Limitations and
Traffic Delay to Oregon’s Economy: A Report to the Oregon Business Council and
Portland Business Alliance.” March 2007.
ECONorthwest. “Business Income Tax Analysis.” Portland Strategy for Economic
Vitality. July 2002.
ECONorthwest and Impresa Consulting. “Comprehensive Economic Development
Strategy for the Portland-Vancouver Metropolitan Region.” Prepared for the Regional
Partners for Business and the CEDS Strategy Committee. June 2005.
Ernst & Young LLP and Council on State Taxation. “Total State and Local Business
Taxes: 50 State Estimates for Fiscal Year 2007.” 2008.
Fisher, Peter. “Grading Places.” Economic Policy Institute. Washington D.C., 2005.
Impresa, Inc. and Portland Business Alliance. “Regional Business Plan for Multno-
mah, Washington, Clackamas and Clark Counties.” Jan. 2006.
Impresa, Inc. and Portland Business Alliance. “Regional Business Plan Progress Re-
port.” Jan. 2007.
Institute of Portland Metropolitan Studies. Metropolitan Briefing Book 2007. Portland
State University. 2007.
Oregon Business Plan. “Moving Forward: 2008 Oregon Business Plan Policy Play-
book/Initiative Guide.” Presented at the 6th Annual Oregon Leadership Summit. Dec.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 47
Oregon Business Plan and Oregon Progress Board. “2007 Competitive Index: Indica-
tors of Oregon’s Global Economic Competitiveness.” 2007.
Portland Business Alliance. “2005 & 2006 Downtown Portland Business Census &
Survey.” Dec. 2005, 2006.
Portland Business Alliance. “Downtown Retail Strategy Update.” Jan. 2007.
Portland Business Journal. “2008 Book of Lists.” Dec. 2007.
Oregon Center for Public Policy. “Oregon’s Business Tax Burden: Lowest in the Na-
tion?” Jan. 23, 2004.
Portland Development Commission. “Economic Development Strategy for the City of
Portland.” Oct. 2002.
Portland Development Commission. “Economic Development Target Industry Plan,
Fiscal Year 2006-2007.” March 2007.
Portland Development Commission. “Strategic Plan 2008-2012: Celebrating Our Past
and Embracing Our Sustainable Future.” Feb. 2008.
Portland Development Commission. “Target Industry Fact Sheets (Bioscience, Cre-
ative Services, Distribution & Logistics, Footwear/Activewear/Outdoor Gear/Cycling,
High Tech, Metals, Professional Services, Specialty Foods, Sustainable Industries).”
Portland Development Commission and Portland Regional Partners for Business.
Portland Metropolitan Region Fact Book. 2007.
SustainLane. “2006 U.S. City Sustainability Ranking.” 2006.
The Tax Foundation. “Oregon’s State and Local Tax Burden, 1970–2007.” April 2007.
The Brookings Institution. “Portland in Focus: A Profile from Census 2000.” Nov.
City of Portland Business Licenses and Multnomah County Business Income Tax. Fre-
quently Asked Questions and Information; http://www.portlandonline.com/shared/
City of Portland Office of Transportation. “Safe, Sound and Green Streets Proposal.”
48 City Club of Portland
Kulongoski, Ted. “The Governor’s Message: A Great Opportunity.” The Governor’s
Hope and Opportunity Budget. 2007-2009.
Metro Joint Policy Advisory Committee on Transportation. “2035 Regional Transpor-
tation Plan, Final Draft for USDOT Review.” Jan. 18, 2008.
Portland City Auditor. “Financial Condition in the City of Portland: 1997-2006.” April
Portland City Auditor. “Portland Development Commission: Economic Development
Efforts Effective, but Improvements Needed to Measure and Manage Future Success.”
Portland City Auditor. “Service Efforts and Accomplishments: 2006-07, Seventeenth
Annual Report on City Government Performance.” Dec. 2007.
Portland City Auditor and Multnomah County Auditor. “Students, Spending, Ser-
vices, and Accomplishments, Multnomah County School Districts.” 2005.
Portland Multnomah Progress Board. “Benchmarks.” http://www.portlandonline.
Quality Education Commission. “Quality Education Commission Report 2006.” Dec.
Tax Supervising & Conservation Commission. “Local Government Finance in Multno-
mah County: 2007-08 Annual Report.” Jan. 2008.
United States Census Bureau. “Employment, Payrolls, Average Earnings in Individual
Municipal and Township Governments Having 25,000 or More Population by State.”
United States Census Bureau. “Public Education Finances 2006.” 2006.
United States Department of Commerce, Economics and Statistics Administration.
“Government Finances – Public Education Finances.” Vol. 4. No. 1. 1992 Census of
News Articles and Editorials
“A better plan for vagrancy?” The Oregonian, Dec. 10, 2006.
“All downtown needs is $150 million.” Portland Business Journal, Jan. 26, 2007.
“An assignment for higher ed.” The Oregonian, Nov. 19, 2006.
“Angels spread wings.” Portland Business Journal, Feb. 1, 2008.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 49
Boone, Jerry. “Speculations are rife over the ‘king’.” The Oregonian, Apr. 16, 2007.
Brinckman, Jonathan. “Private business starts 4-county development group.” The
Oregonian, Jan. 4, 2007.
Budnick, Nick. “Destination unknown: Our transportation future.” Portland Tribune,
Nov. 28, 2006.
Budnick, Nick. “Robberies rise as other crimes fall.” Portland Tribune, June 8, 2007.
“Business summit misses the mark.” Portland Business Journal, July 1, 2005.
“Cities compete in hipness battle to attract young.” The New York Times, Nov. 25,
Cortright, Joe, and Carol Coletta. “The young and the restless.” Portland Business
Journal, June 21, 2004.
“Downtown prospects called bright.” The Oregonian, Dec. 3, 2006.
“Downtowns: Where the lights aren’t bright.” The Economist, Mar. 3, 2007.
Dworkin, Andy. “County is better risk to venture capitalists.” The Oregonian, Nov. 31,
Frank, Ryan. “Taxes don’t drive businesses from Portland, Adams says.” The Orego-
nian, Feb. 11, 2007.
Frank, Ryan. “While sale prices of U.S. homes fall, the Rose City’s still rise.” The Orego-
nian, Nov. 17, 2007.
Gragg, Randy. “Running on empty.” The Oregonian, May 20, 2007.
Graves, Bill. “Class scarcity drags out college.” The Oregonian, Mar. 28, 2007.
Graves, Bill. “Goal: Get, keep more kids in college.” The Oregonian, April 21, 2007.
Goetze, Janet. “Downtown parking: Spots are open, really.” The Oregonian, Apr. 22,
Hammond, Betsy. “Voters may settle corporate rebate fate.” The Oregonian, Feb. 20,
Hsuan, Amy. “For many, school let out weeks ago.” The Oregonian, June 15, 2007.
Hunsberger, Brent. “Manufacturing jobs go begging.” The Oregonian, Apr. 22, 2007.
Leeson, Fred. “Retail challenge of malls drives downtown changes.” The Oregonian,
Mar. 8, 2007.
50 City Club of Portland
Mayer, James. “Business leaders: Keep traffic moving.” The Oregonian, Mar. 23, 2007.
Mayer, James. “Mess transit: A two-hour slog.” The Oregonian, May 20, 2007.
Mayer, James. “Traffic flows, except at rush hour.” The Oregonian, Apr. 22, 2007.
O’Neil, Patrick “It’s code red for health care.” The Oregonian, Apr. 22, 2007.
“Office market heats up.” Portland Business Journal, Jan. 26, 2007.
“Portland named ‘most sustainable city’.” Daily Journal of Commerce, June 5, 2006.
Redden, Jim. “Bridge repairs add to budget crunch.” Portland Tribune, Oct. 24, 2006.
Rivera, Dylan. “Home prices slip, supply up.” The Oregonian, May 18, 2007.
Rivera, Dylan. “Office space in a squeeze.” The Oregonian, Nov. 9, 2006.
Rivera, Dylan. “Tower may signal renaissance.” The Oregonian, Jan. 20, 2007.
Rogoway, Mike. “Startups step out of the shadows.” The Oregonian, Nov. 2, 2007.
Sarasohn, David. “Bernstine’s exit underscores the erosion in higher education.” The
Oregonian, Apr. 22, 2007.
Sarasohn, David. “Subtracting higher ed.” The Oregonian, Apr. 29, 2007.
“Soften the blow for small businesses.” The Oregonian, Dec. 8, 2006.
“Space for lease.” Daily Journal of Commerce, Nov. 7, 2006.
“Step on it, Oregon.” The Oregonian, Mar. 25, 2007.
Von Schlegell, John. “Higher ed: Luxury or wise investment?” The Oregonian, June 13,
City Club Reports and Friday Forums
“A City Club Report on Ballot Measure 26-91; Amends Charter: Changes Form of City
Government.” City Club of Portland Bulletin. Vol. 89, No. 16 (April 20, 2007).
Doug Blomgren, Randy Leonard and John Russell, “The Long-Term Future of the
Portland Development Commission,” City Club of Portland, June 17, 2005.
David Bragdon, “A New Look at the State of the Region,” City Club of Portland, June
Enhancing Portland’s Business Environment: A Public — Private Enterprise 51
Rex Burkholder and Gail Achterman, “Transportation for the 21st Century.” City Club
of Portland, June 29, 2007.
Susan Castillo, “Are Oregon’s Schools Making the Grade? The State of Public Educa-
tion.” City Club of Portland, Dec. 9, 2005.
Joe Cortright, Jerry Johnson, and John Mitchell, “Economic Forecast for 2007,” City
Club of Portland, Jan. 5, 2007.
Ann Gardner, Jay Waldron, and Michael Powell, “The Cost of Congestion: How Traffic
Jams Waste More Than Just Your Time,” City Club of Portland, March 31, 2006.
John Fregonese, Gil Kelley and Ruth Scott, “Is Downtown in Trouble? A Frank Discus-
sion,” City Club of Portland, Sept. 8, 2006.
Fred Hansen, “TriMet on Track?” City Club of Portland, Dec. 7, 2007.
Sandra McDonough and John Carroll, “Downtown Portland: The Next Iteration,” City
Club of Portland, May 18, 2007.
Vicki Phillips, “What’s Going on with Portland Public Schools?” City Club of Portland,
Mar. 9, 2007.
Royce Pollard, Bart Phillips, and Patrick McDonnell, “Vancouver at 150,” City Club of
Portland, June 22, 2007.
George Pernsteiner, Timothy Nesbitt, Gretchen Schuette, and Edward John Ray,
“Higher Education in Oregon: Aligning Opportunity with the Needs of the Knowledge
Economy,” City Club of Portland, May 20, 2005.
“Portland Development Commission: Governance, Structure and Process,” City Club of
Portland Bulletin. Vol. 86, No. 34 (Jan. 21, 2005).
“Portland’s Fire and Police Disability and Retirement Fund: Time for Change,” City
Club of Portland Bulletin. Vol. 87, No. 36 (Feb. 3, 2006).
Tom Potiowsky and Randy Pozdena, “2008 Economic Forecast,” City Club of Portland,
Jan. 4, 2008.
Tom Potter, “2007 State of the City Address,” City Club of Portland, Jan. 19, 2007.
Tom Potter, “2008 State of the City Address,” City Club of Portland, Jan. 18, 2008.
Tom Potter, Sheila Martin, Tom Hughes, and Jensine Larson, “Two Mayors, Two Vi-
sions: How Conversations Can Change Communities,” City Club of Portland, July 14,
Mark Rosenbaum and Erik Sten, “State of the Portland Development Commission,”
City Club of Portland, Mar. 2, 2007.
52 City Club of Portland
Ken Wade, “Housing Troubles on the Horizon?” City Club of Portland, Dec. 14, 2007.
Ted Wheeler, “State of Multnomah County,” City Club of Portland, Jan. 25, 2008.
“Writing a New Chapter: A City Club Report on School Funding.” City Club of Portland
Bulletin. Vol. 89, No. 11 (March 16, 2007).
Bill Wyatt, “Connecting Portland to the Global Economy: Trade, Transportation and
the Port,” City Club of Portland, July 21, 2006.
Enhancing Portland’s Business Environment: A Public — Private Enterprise 53
Photography by Cheryl Juetten
Photo of City Hall by kenneth Aaron Photography
Photo of Portland Building & the Hawthorne Bridge by Susan Shepperd
All photos used with permission
City Club of Portland
901 SW Washington St., Portland, OR 97205
503-228-7231 | 503-228-8840 fax
firstname.lastname@example.org | www.pdxcityclub.org