Bend Once Again an Economic Hub

By Ilene Aleshire
The Register-Guard
JULY 5, 2015


Eugene-based Baker’s Boots & Clothing is moving operations of Drew’s Boots, the Klamath Falls business it acquired last year, to Bend.

Eugene-based Cafe Yumm is opening its second restaurant in Bend and Eugene-based Market of Choice plans to open its first Bend store next year.

And Eugene tech firm CBT Nuggets has opened a satellite office there, with plans to expand it.

The city once known as “Farewell Bend” is more about saying hello these days after bouncing back from the Great Recession.

Lane County firms that are expanding to, or in, Bend cite two main reasons: growth potential and familiarity, with the former being by far the stronger motivation.

Before the recession, Bend had seen an influx of new residents, many of them California transplants attracted by the climate, lifestyle and a significantly lower cost of living. Construction boomed, home prices soared and new businesses opened to serve the new residents.

Then came the recession.

The construction industry, a major pillar of the Bend economy, plummeted, as did tourism. In-migration and home prices plunged and the unemployment rate soared, from 5 percent in 2007 to 14.9 percent in 2009.

But, after bumping along the bottom of the economic charts for about three years, things started getting better in Bend — almost as quickly as they had gotten worse. By mid-2013 unemployment was consistently below 10 percent, by late 2013 it was below 9 percent — and it continued to fall.

“Bend almost beat the state out of the Great Recession hole, even with suffering nearly twice the job losses,” said Josh Lehner, a state economist.

This did not go unnoticed by businesses, including many in Lane County.

Expanding to Bend

In 2014, Summit’s board of directors decided to expand Summit’s market to include Bend, and in April of this year the bank announced it would open a full service banking office there, its first branch bank.

Bank officers ticked off some of the reasons:

It was the only metropolitan area in Oregon making the national top 40 and the only one forecast to be in the top 40 between 2013 and 2030.

It is projected to be the second fastest growing county in the state for 2015-2020.

Its median household income of $53,000 is higher than the overall median for Oregon of $50,000.

And, bank officials said, “While the economy is tied to construction, retail and service industries to a greater extent than most communities, it is developing other business segments that can reduce some of the market cyclicality.”

“We have a much more diverse economy than we did 10 years ago, or even eight years as we entered into the last recession,” said Roger Lee, executive director of Economic Development for Central Oregon. “It’s a combination of things — manufacturing; high-tech; bioscience; health care has really expanded over here; education, with the (Oregon State University) growing, and tourism has been very strong the last four or so years.”

“It’s very encouraging for us to see it’s not just construction coming back,” Lee said. “If you look at what created the (economic) crisis over here, more than half of the jobs losses were through construction, building products.”

Years long process

While it may look like Bend’s economic comeback happened almost overnight, Lee said, the seeds were sown years ago.

“It’s not like we just opened the floodgates,” he said, “This is something we’ve been working on over time. ... One company that located here, we had been working with for 20 years.”

Local economic development agencies and business leaders used just about every tool available to them as they worked to diversify the economy, he said, including enterprise zone tax waivers, temporary property tax abatements and funds generated to offset relocation costs for companies moving to the Bend area.

“Bend has, over the years as well, provided another type of enticement,” Lee said. “We try to work, company by company, to resolve issues, whether it’s transportation or workforce or facilities.

“We’ve worked very hard to keep our companies that are already here happy, as well as (recruiting) new ones. We have a database, a list really, of resources we can bring to bear...sometimes it’s human capital, sometimes it’s financial capital, sometimes it’s knowledge of the area — we know pretty much every building around here. When someone is leaving, sometimes we can plug somebody in before it comes on the market.”

Eyeing growth

When Cafe Yumm! decided to open a second restaurant this year, it picked a spot with an eye to Bend’s growing healthcare industry — which includes Springfield-based PacificSource.

Cafe Yumm opened its first Bend restaurant, a franchise, in 2007 in the Old Mill District. The second one is on the east side of Bend, near St. Charles Medical Center.

“The area where the hospital is has been underserved for some time,” Cafe Yumm! Vice President Ed Gerdes said. “We’ve had lots of requests to expand there... the Central Oregon market is very outdoors oriented, very health conscious, so our food fits well there.”

Gerdes said that with the end of the recession, requests for new Cafe Yumm outlets have increased. What tipped the scales in Bend’s favor, in addition to its demographics, was the availability of a good location and a strong existing franchisee who wanted to expand, he said.

Some of the negatives that Bend dealt with during the recession have turned into positives for the city during the recovery.

Commercial and industrial buildings that went vacant in Bend are now available for companies wanting to open or expand.

“We did have a fair amount of inventory coming out of the recession that could be offered at very competitive prices — light industrial, office space and retail,” Lee said, “This was quicker than if you tried to build new.”

One thing Summit Bank looked at when it reseached the market was the fact that “there were seven community banks there in 2008 that are no longer there,” CEO Craig Wanichek said, either because they were acquired or closed.

“This represented over $300 million in deposits,” Wanichek. And it represented opportunity for Summit, which prides itself on being a community bank.

“That market is a nice complement to the Eugene market,” Wanichek said.”Eugene from 2009 to 2012 was depressed, but it was pretty stable compared to Bend. One is a very stable, mature market. The other one is more dynamic.”

Finding talent

The Market of Choice store scheduled to open next year near the Old Mill District in Bend has been in the works for about three years. It is part of a small commercial complex being developed Eugene-based Willamette Valley Co., with a Eugene-based contractor, Dickerhoof Properties, and a Eugene architect, TBG Architecture and Planning, according to documents filed with the city.

Eugene-based Campbell Commercial Real Estate is the leasing agent. Owner Tim Campbell said Bend has rebounded very quickly from the recession. It has “great schools, medical facilities, infrastructure, and a wonderful parks and rec department” that all make it attractive to new residents, he said.

CBT Nuggets also is keying in on that desirability factor as it plans to expand the Bend office it opened earlier this year.

CBT Nuggets initially opened the office to accommodate a talented employee it had recruited who had a family member who couldn’t tolerate the Willamette Valley because of asthma or allergies, CBT founder Dan Charbonneau said.

Now, he said, “We’re trying to make a push in Bend because a lot of people relocate from the Silicon Valley area for climate and outdoor type of stuff and we’re just thinking it would be a good place to find additional talent since we already have the one gentleman there.”

Personal connections

Along with growth potential and demographics, Bend also has a personal connection for some Lane County businesses opening outlets there.

Baker’s Boots owner Gene Baker said there are many connections between his family and the Bend area.

His father owned a shoe repair and boot store in Redmond in the 1970s and early 1980s, he said, His uncle, Rick Baker, was part owner of the Redmond store. And he owns a home in the Bend area, Gene Baker said.

The Drew’s store in Bend, which is holding its grand opening this week-end, will include its own line of outerwear made in Central Oregon, “(I’m) excited by this new opportunity in Bend,” Baker said.

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