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Economic News

The Mild West: ​Portland is having a moment. Is Beaverton invited?

April 01,2016 | By Amy Milshtein, Oregon Business
Portland is having a moment. Is Beaverton invited?
Photos by Jason E. Kaplan

It’s 3:00 on a Friday afternoon, and Prolifiq Software’s 60 employees are celebrating. There’s birthday cake in the large, modern kitchen and cold beer flowing from the portable tap. The high-ceilinged, open-plan loft space is decked out with boldly painted walls, low-partitioned workstations, a ping-pong table and a wall rack to store bikes.

At first glance, Prolifiq’s design and vibe reads cool and modern: a software company buzzing with young, urban energy. But when employees step outside Prolifiq’s doors, they aren’t in Old Town or the Big Pink or the Pearl District. They’re in a suburban strip mall off of Highway 217, anchored by a Burlington Coat Factory and a Nordstrom Rack. They’re in Beaverton.

Prolifiq CEO Jeff Gaus couldn’t be happier with the location. Gaus moved the firm, which designs software for pharmaceutical and life-sciences companies with revenues “north of $10 million but below $50 million,” from another spot in the west- side suburb in 2014. He needed to double his space while staying within a reasonable distance from his employees’ homes. Downtown Portland would have fit the bill, but it wasn’t even on his radar.

“Beaverton is more affordable,” he explains. And it’s not just the rent per square foot or taxes, but everything from parking to the price of lunch. “Right now 3% to 4% of my operating budget goes to real estate. If I was in the Pearl District, that number would be eight to nine.”

Gaus loves the city and the amenities it offers. He loves the mayor’s office, going so far as to wish that “Salem had the same pro-business perspective.” And yet, right there on the company’s webpage, it says, “Prolifiq is headquartered in Portland, Oregon…”

Gaus is quick to explain. “When we talk to people on the East Coast, we say Portland. It’s an easier name to know… When we say ‘Portland,’ they get it.”

And so it goes for Beaverton, Hillsboro and the surrounding areas known as unincorporated Washington County. Portland is having its moment as the rest of the world discovers its charms: funky walkable neighborhoods, independent stores and world-class restaurants. It seems that there’s a spotlight trained on the city as people and businesses move in, revitalize districts, create opportunities and generate excitement. Does any of that glow climb over the West Hills and spill into Washington County’s suburbs?

Does it even need to? While Portland basks in its newfound attention, the west-side suburbs have been chugging along just fine. Powered by the twin economic engines of Intel and Nike, well-regarded schools and a variety of housing stock, the area seems self-sustaining. Incomes are high: Hillsboro reports a 2014 median household income of $66,668, while Beaverton’s is $69,797. Satisfaction is high too. A Beaverton Community Survey found that 95% of residents would recommend their neighborhood to someone looking to move.

But the outside force of growth is stressing these first-ring suburbs in the same way it’s stressing Portland. Metro’s projections of 725,000 new residents pushing the population to the 3 million mark by 2035 will challenge the entire region. But along with rising real estate prices, displacement and congestion, Beaverton and Hillsboro face an extra hurdle: the stereotype of the suburb.

To be sure: Beaverton is a city in its own right with a population diverse in ethnicity and ideas, an evolving downtown, forward- looking development and a welcoming attitude to business. The 123-year-old Beaverton wasn’t created as a suburb of Portland, says Ethan Seltzer, a professor of urban studies and planning at Portland State University. “It’s a historic town with a real history, not just a gleam in some developer’s eye.” Regardless, the region faces an identity crisis — more than one person has referred to Beaverton as “Beavertron,” aka “The Tron.” The implication is that the city is soulless; a homogeneous place beholden to the car and filled with strip malls, chain restaurants, Stepford Wives and look-alike production housing. Can the western suburbs shake their bland, suburban image?

Right now that’s hard to imagine, looking out from Beaverton Mayor Denny Doyle’s office on to Cedar Hills Boulevard. Strip malls with huge parking lots, car dealerships and fast food outlets line the main thoroughfare into the city center. Like Gaus, however, Doyle believes Beaverton is a good place to be. In office since 2009, the energetic and upbeat 67-year-old clearly enjoys his work. Peppering his language with phrases like “we’re having fun” and “it’s a blast,” he’s aware of Beaverton’s reputation. “We’re supposed to be an unknown secret,” he says wryly. “Some people want to keep a certain city weird; we want to keep Beaverton safe.”

Doyle expects Beaverton to grow “gently, but to be more bikeable and walkable.” Signs of that gentle approach are apparent downtown. Located on Broadway, a short street sandwiched between Canyon and Farmington roads, the historic downtown is pretty easy to miss. Until recently, there really wasn’t much of a reason to find it. Longtime home to the 91-year-old Beaverton Bakery, a sub shop and a few bars, the shabby street was not very welcoming.

But that’s changing. Sidewalk and storefront improvements, added parking and a small, charming plaza have energized Broadway. Two art galleries, an antique shop and a chocolatier invite browsing and lingering. A tea room is in the works. More food choices like Big O’s Wood fired Pizza and two higher-end bars draw in more people at night. New business owners, Deb Messina for one, are happy with her surroundings. A Beaverton native, the 57-year-old opened Quilter’s Corner Store four years ago, leasing the downtown location strictly as a studio space. (Messina’s company, OneMark Creations, makes tea cozies and tea wallets for wholesale distribution). Since opening, she has grown her customer list from 200 to 2,000 and organizes a quilt shop hop that brings 600 people to the store three times a year. “I call it the accidental quilt shop,” she says.

The Round, the mixed-use development located to the north of downtown across Canyon, has also had a turnabout of fortune. For decades the project languished as a contentious embarrassment, plagued by bankruptcies, construction defects and lawsuits. Today it’s a lively spot. In 2012 the city bought one of the two office buildings for $8.6 million. In 2014 they moved in,  (occupying three floors and renting out the other two.) Commuters stream on and off the MAX or drive in to visit its offices, health club, restaurants and condos. Last year’s Night Market event brought thousands of people, so many that this year it will be spread over two nights. “In 10 years,” Doyle says, “this area better be an 18-hour neighborhood.”

Like many first-ring suburbs around the county, Beaverton is looking to become what a recent National Association of Realtors report describes as the “anti-suburb suburb” with walkability and urban amenities. One example is La Scala, a mixed-use building springing up in Old Town with 44 units of market-rate housing on top of 5,000 square feet of retail. The developer, Roy Kim of RKM Development, is taking a lesson from his own success creating density in Bethany, and filling the La Scala retail area with micro-restaurants. “It was the only way to make this pencil out,” he explains, as the area only supports $15 a square foot for rent.

The project shares a block with the newly completed Barcelona, a 47-unit apartment complex developed by the Community Partners for Affordable Housing, for seniors, people with disabilities and low-income residents. Beaverton hopes that these projects, along with The Signal, an 87-unit, market-rate project a few blocks away, will act as a catalyst, further energizing the part of the city that already features the city library, farmers market, swim center and post office. “There are a lot of underutilized blocks in this area, and I think this will prompt further development,” says Kim.

High-density housing is evidenced away from Beaverton’s core too. Anchored by a main street shopping center and a new middle school, the Timberland subdivision between Barnes and Cornell roads mixes single-family houses, town homes and apartments in one dense location.

The West-Side’s status as an employment powerhouse is rarely questioned. Start with Intel, the state’s largest private employer — and one of the inspirations for the “Tron” moniker. “Intel’s investment in Hillsboro in the late 1980s through the 1990s is perhaps the greatest concentration of industrial capital in the nation’s history,” says Seltzer. To date the company’s capital investments in the area have topped $25 billion according to a fact sheet provided by the chipmaker. More than 12,000 of Intel’s 16,500 employees live in Washington County, earning upwards of $2 billion. In 2013 the company undertook a massive expansion of the D1X research fab and other projects generated $1.5 billion in new construction in Hillsboro.

Nike, the area’s other publicly traded giant, has also re-upped its commitment to the area. An expansion of its world headquarters will add some 3.2 million square feet of office, mixed-use and parking facilities to the campus. Then there are the other big firms that also call the west-side home: Columbia Sportswear, Sage Software, SolarWorld Industries, Genentech, Laika Entertainment and Reser’s Fine Foods.

But even as the area’s twin engines continue to grow, there are signs the Silicon Forest is beginning to thin. To wit: In March Act-On Software and Zoom+ became the latest companies to leave Beaverton and Hillsboro for downtown Portland, where a thriving software cluster, trendy dining scene and high density bike and walk urban environment are attracting a steady stream of local and national players. SurveyMonkey, Webtrends and New Relic are all housed in Big Pink, while Elemental Technologies, Puppet Labs, Jive Software and more sit close by. The pull has already lured others from the west-side, like Lattice Semiconductor and Zapproved, founded by former Intel employee Monica Enand.

With its nominal licensing fees, Beaverton seems like a smarter choice over the business tax based on net revenues imposed by Multnomah County. Office rents are cheaper too, by about 20% or more according to the city’s economic development manager, Mike Williams. But that wasn’t enough for Enand, who started the legal software company in her Bethany-area home in 2008. She eventually moved the operation to the Sunset Center in Tanasbourne on 185th Avenue.

Last year Enand pulled up stakes yet again, this time settling in the Pearl District. “Some people wouldn’t even interview with us because of our location,” she says. Since the move, Enand has hired 30 people and expects to add another 20 employees over the next six months. “There’s something palpable and exciting happening down here [in Portland] and people want to be a part of it,” says Enand, who recently relocated her own family to a condo in the Pearl — to avoid, she says, the bumper-to-bumper traffic on Routes 26 and 217.

In an era when walking and biking have gone from alternative transportation methods to critical business-recruitment strategies, Beaverton lags behind. And yet for every Enand, there is a Jim McCreight. The director of strategic partnerships for the Oregon Technology Business Center (OTBC), McCreight extolls the incubator’s advantages over others in downtown Portland. “It’s easy to get to with lots of free parking,” says McCreight.

While the incubator has been around for 11 years, it now offers a funding incentive with the Beaverton $100K Startup Challenge. Created with money from the city and investor group Westside Startup Fund, LLC, the Challenge offers a $20,000 convertible note investment and one-year free rent to winners. This year’s class includes eWind Solutions, an alternative-energy company, and goumikids, a company that makes baby clothes.

Located just north of The Round, OTBC’s home is about to undergo more change with the development of the Creekside District. The 50-acre area will see a new park that showcases the city’s waterways and a plaza for gathering. Cambria Hotel & Suites is signed on to build a 140- to 150- room hotel, and there are plans for an Arts and Culture Center. Improved streets will encourage walking and biking.

As the entire Portland metropolitan region grows and densifies, Beaverton finds itself in an interesting position. Stereotyped as a white-bread suburb, the city is more ethnically diverse than Portland, with one in four residents born outside of the U.S. and one in three identifying as person of color. “People think Beaverton is Yuppieville and all ‘Abercrombie and Fitch’, but it’s not,” says Owen Morehart, owner of Big O’s Woodfired Pizza. La Vida Veggie, a Latin-inspired vegan restaurant run by Heather Solano, is a case in point. Solano, along with five part-time employees, opened her 15-seat restaurant 14 months ago in Old Town. Business has tripled since opening, with customers walking from the nearby high school and driving from as far as Northwest Portland. “The energy here is uplifting. It’s so creative and different that it just felt right,” says the 33-year-old.

Are Solano and Prolifiq’s Gaus the future of Beaverton? In a word: maybe. But it’s not fair, or accurate, to call Beaverton a Portland wannabe. Seltzer, for one, feels Beaverton’s role is to balance out the city, to the benefit of the entire region.
“Hillsboro, Beaverton and Portland are inseparable,” he says. “Having a variety of locations makes our entire region stronger and more vibrant.” Hillsboro mayor Jerry Willey has another take on Beaverton’s slow and gentle growth. Portland’s shiny new success has been a long time coming, he says. “The Portland Development Commission has been investing and working for 40 years, and is finally starting to see some fruition.” The suburbs are in sync with local and national business and planning trends, but Beaverton is a more conservative town than Portland, and it’s moving at a more conservative pace.

What if Nike and Intel decide to relocate  to the Rose City? It’s highly unlikely, although in today’s disruptive business environment, never say never. Recall Nike was almost lured by Multnomah County to the South Waterfront District. But for now, Beaverton remains a smart choice, a safe choice — and a more exciting choice than it was 10 years ago.

That’s okay with Gaus. He’s fine with grabbing some of Portland’s reputation when he needs it, and even putting out-of-town VIPs in the city’s downtown hotels, but he is ultimately satisfied with the suburbs. “Beaverton doesn’t have the buzz, but we’re not interested in being buzzy,” he says.

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