Bouncing Back … Slowly

You would be forgiven for thinking that Clark County, which has one of Washington states highest unemployment rates, has been written off by businesses as an exurb of Portland with a sales tax. But there are signs that this region on the north bank of the Columbia River is starting to rebound, if at its own pace.

Looking beyond the immediate downturn in the economy, Farwest Steel found room to grow and the ingredients for consolidating its regional operations in Clark County, where the company is planning a $30 million fabrication and distribution plant.

Were seeing signs that things are getting better, says John Worstell, vice president of manufacturing and operations for Eugene, Ore.-based Farwest. Weve got a lot of confidence in the Northwest.

Farwests expansion is among several indicators that the county may be starting a gradual rebound.

Along with the Farwest complex, which will be built on land purchased from the Port of Vancouver and eventually employ up to 228 people, mining company BHP Billiton in August selected the port as its preferred location for a potash export facility that could create at least 60 full-time jobs and handle more than 8 million metric tons of cargo annually. Port officials and BHP Billiton are negotiating a lease agreement for the project, slated to begin in 2012 and be completed by April 2015 on roughly 60 acres of the ports Terminal 5.

Other recent economic development activity in Clark County includes:

A $44.6 million waterfront access project in downtown Vancouver that will lay the groundwork for more than $1 billion worth of retail, office and residential space on a 32-acre former Boise Cascade site;

An 18-acre, $40 million shopping center in east Vancouver, set to open in early 2011, that is projected to create roughly 500 new jobs;

Construction of a two-building campus in Camas for Fisher Investments, which currently has 325 employees in Vancouver and may relocate its headquarters from California to the new site.

Despite these signs of growth, local experts say the near-term economic outlook in Clark County remains grim. Its unemployment rate in September stood at 12.2 percent, compared with 8.6 percent statewide and 9.2 percent nationally. Weve lost 7 percent of our employment basethats about 9,000 jobs in the current recession, says Scott Bailey, southwest Washington regional economist at the state Employment Security Department. I just dont see much, locally or nationally, generating employment.

Bart Phillips, president of the Columbia River Economic Development Council (CREDC), concurs that the path back to pre-recession employment levels may take years. But this is what a recovery looks like, says Phillips.

Foresight by port pays off

Port of Vancouver leaders had prepared for future growth long before the deals with Farwest Steel or BHP Billiton started taking shape. For example, the port acquired the land now owned by Farwest several years ago with a mind toward drawing in future industrial development.

Selling property is unusual for the port, which last did so in 1971, but the ports executive director, Larry Paulson, says the Farwest deal meshed with his organizations long-range strategy as well as the communitys more immediate economic needs. This opportunity came at a time when the community needed jobs and we needed some revenue to build our rail, notes Paulson.

The port is making roughly $140 million worth of rail improvements over the next seven years as part of the West Vancouver Freight Access project, which includes a $14.6 million, 6-mile rail loop at Terminal 5. Completed earlier this year, the loop enables the port to handle unit trainswhich can stretch more than 1.5 miles longwhile relieving congestion on the regional rail system.

These improvements proved instrumental in attracting Farwest and BHP Billiton to Vancouver.

The port has spent a lot of money on rail infrastructure, so theyve got a great ability to bring trains to our parcel very economically, says Farwests Worstell. That makes it very convenient for us to bring in materials from any of the mills in North America as well as to process deliveries of steel that arrive by ship from overseas suppliers.

Farwest plans to transfer its central distribution operations from Eugene to the new Vancouver facility, which is slated to open in early 2012, and consolidate its six Portland- and Eugene-area locations into two. The new facility will also handle steel fabrication and processing. Worstell says these moves will reduce freight transportation costs and speed delivery of finished products to Farwest customers. That allows us to become much more competitive.

In addition to new business development spurred by its rail improvements, the port has created a profitable niche in serving the renewable energy industry. It imported 101,104 metric tons of wind energy components in 2009, compared to just 6,347 metric tons in 2001. To handle the massive wind turbines and other heavy cargo, the port invested $7.8 million in a pair of mobile harbor cranes that can each lift up to 140 metric tons and a combined 210 metric tons.

That opened a lot of doors for us to be ready when wind energy really came into its own, says Paulson. To further solidify this niche, the port is developing a 108-acre industrial park targeted to renewable energy businesses.

Over the last 10 years, the port has been intentional about looking to the future, he observes. We havent sat on our hands.

High tech holding steady

Another relatively bright spot for Clark County is its growing cluster of high-tech companies such as WaferTech, SHE America, LinearTech, Kokusai and Logitech. Electronics manufacturing employment in the county rose to 2,900 in September, up just 100 jobs from September 2009, still well below the 2008 total of 3,500 jobs. But its a modest sign that companies are starting to ramp up capacity again. Among the reasons for optimism: Global semiconductor sales are projected to top $300 billion in 2010, a 32 percent increase from the previous year, and grow by 5 percent in 2011.

I think weve all benefited from that worldwide trend, says Rob Bernardi, president and chief operating officer at Kokusais facility in Camas and chairman of the Clark County High Tech Community Council. Bernardi, who has been working in the local semiconductor industry since 1990, says he believes high tech is more vital than ever to Clark Countys economic future.

Weve had a few ups and downs, but overall, the curve has been pretty much up and to the right over the last 20 years, he explains. Sustaining that trend will largely hinge on whether companies can continue to find and retain highly skilled employees in the county, says Bernardi.

Efforts to deepen the local talent pool have included launching a four-year electrical engineering degree program at Washington State University Vancouver in fall 2008. About 50 undergraduates are enrolled in the program, and WSUV is constructing a $43.5 million, four-story Applied Technology Classroom building that will open in fall 2011 and accommodate up to 150 electrical engineering students.

You should never underestimate the power of talent to draw other companies, says the CREDCs Phillips. We are seeing some major investments being made here that will create jobs in a year to 18 months.