Road to Recovery

New retail and hospitality businesses have rejuvenated the main street of Burns in Eastern Oregon

Millennial- and Gen X-owned businesses inject new life into the remote farming and ranching communities of Burns and Hines.

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The colorful mural inside the newly renovated Historic Central Hotel in the Eastern Oregon town of Burns is a reminder of this remote farming community’s once vibrant economic past. The mural depicts the heyday of the now-closed Hines Lumber mill, located in nearby Hines.

In the 1960s, it was one of the largest pine mills in the world, producing more than 134 million board-feet of lumber.

That mill is long gone. It was finally shut down in 2006, the result of a decline in timber supply from federal forests. The economies of Burns and Hines have since struggled to recover from the disappearance of family-wage jobs.

Both towns’ economies rely heavily on the cyclical agricultural sector.

But Burns and Hines are starting to see buds of growth as new businesses take root, including an agricultural-products manufacturing plant scheduled to open by March 2020 on the site of the former Hines mill. Several new recreational and tourism-centered businesses have emerged on Burns’s main street.

Like many towns and cities in rural Oregon, broad macroeconomic forces are driving change to communities traditionally rooted in agriculture and forestry. In Burns and Hines, these forces are bringing diversity to the local economy, as well as much-needed tax revenue to the county’s constrained budget.

It is a long drive to Burns (pop. 2,800) and Hines (pop. 1,550) if you are coming from a large metropolitan area. The nearest big city is Bend, located 130 miles to the west. The next closest large city is Boise, Idaho, 190 miles to the east. Harney County, of which Burns is the county seat, is one of the most sparsely populated in Oregon, with around 7,000 residents in an area covering 10,266 square miles.

The unemployment rate is 7%, among the highest in all counties in Oregon.

Because of its remoteness, Burns was an isolated farming community that few people outside of the area had heard of. That changed in early January 2016, when armed militants seized and occupied the headquarters of the Malheur National Wildlife Refuge, 30 miles from Burns.

The occupiers, who hailed from Arizona and Nevada, sought to advance their view that the federal government should hand over public land it owns to individual states.

The six-week-long occupation ended violently when law enforcers shot and killed one of the occupiers, Robert LaVoy Finicum, during an arrest attempt in which Finicum reached for a concealed handgun.

In Harney County’s conservative ranching community, the occupation created divisions, with some locals sympathizing with the militants and others opposing them. But what most agree on is that the occupation put the tiny farming community on the map.

If there is one visible example of economic revival in Burns, it is the Historic Central Hotel on the town’s main street. Shuttered for 20 years and fallen into disrepair, the Prohibition-era hotel, first opened in 1929, was almost a forgotten relic and destined to be pulled down.

That was before a husband and wife saw potential to renovate the building and reopen the hotel. Forrest and Jen Keady bought the building in 2016 for $60,000. Forrest Keady, a carpenter and builder from Hillsboro, did a remodel, turning it into a trendy new hotel that caters to tourists and visitors passing through.

IMG 1562The newly renovated Historic Central Hotel on Burns’s main street

The 12-room establishment, which includes five hostel-like rooms with shared bathrooms, also contains an event space and outdoor patio with food trucks and a bar operating out of a former shipping container.

The owners have maintained historical Prohibition-era features, including re-creating a speakeasy in the basement. Old furniture and vintage pieces give a nod to its historical past. The Hines mill mural, painted by a local artist, and other depictions of the area’s history create a connection to its past.

This characteristic of the hotel attracts tourists who want to stay in hotels that have a direct link to place and history. “People are seeking out experience. This is not a traditional hotel. We meet historians, people who like quality of details,” says Jen Keady, who grew up in the area.

IMG 1555The Historic Central Hotel maintains features of its Prohibition-era past 

Jen left Burns in the early ’90s with no intention to return. When she was growing up in Burns, she says it was a “thriving, happy place.” But when recession hit the community in the ’80s, the town suffered.

Eventually, she returned in the early 2000s to help run a family restaurant. She opened an optometry practice in town and started to get involved in local economic development meetings.

The first project she and Forrest were involved in was renovating an old building on Burns’s main street. They remodeled the first floor into a space for Jen’s optometry business, as well as creating a retail space, which is occupied by Robin’s Closet, a women’s clothing store. The second floor is where the couple lives, in a loft apartment.

Cheap properties in Burns meant the couple could afford to make mistakes while experimenting with their real estate development ideas, says Forrest. Their efforts ended up spurring others to try the same thing.

Inspired by the Keadys, others have bought cheap real estate on main street, including a local couple — the Hemphills — whose day jobs are in health care. They bought three buildings with a plan to renovate.

“We got the ball rolling,” says Jen. “Other people want to do this too.”

One recent new business that opened on Burns’s main street in November 2018 is Alden’s School of Leather Trades. Owner Tim Alden, 32, came to Burns from Rogue River in Southern Oregon, where he worked in the leather-making trade. He liked Burns because of the cheap land and the small-town feel.

Alden holds two or three six-day leather-making classes every month. Students come to Burns from all over North America to learn how to make leather goods, such as purses, saddles and jewelry. His classes are so popular that he has had to “turn away 20 to 30 people for classes,” he says.

The young entrepreneur is tapping into a resurgence in craft and buying local. “People who are retiring want to do something with their hobby. People want to buy something that has a story, that is not from a Chinese factory. It is trendy to meet the maker, [the] people who made your food,” says Alden.

IMG 1600Tim Alden, owner of the recently opened Alden’s School of Leather Trades on the main street of Burns

If there is a couple that epitomizes the new, entrepreneurial millennial set in Burns, it is wife and husband Tory and Jeff Schmidt. The young couple recently moved to Burns, where Tory grew up, to open a graphic design business — Sage Designworks — on Broadway in the center of town.

Artist Tory painted the mural of the former Hines Lumber mill in the Historic Central Hotel. She has also painted several murals in town. The couple’s first project was for the Burns Paiute tribe, which has a new business incubator and cultural center in the center of town. The couple resized historical photos of the tribe, which decorate the exterior of the building.

“We are trying to bring life back to Burns,” says Tory.

Tory left Burns to study but recently moved back after living eight years in Montana. The couple likes the outdoor lifestyle, and Tory says the area offers a lot for young people. “People are moving here for [Bureau of Land Management] jobs and to be fire crews. A lot of new teachers are moving here. They like the ability to be outside,” she says.

Indicative of the changing winds blowing through the area are her efforts to create a branding campaign for Burns that plays on the outdoor lifestyle. “Harney Wild, Gateway for Oregon’s Outback” is one of her logo ideas.

“A lot of people think this place is just cows. I don’t want people to think that,” says Tory. Cattle outnumber people in Harney County 14 to one.

IMG 1582The main street of Burns

The county may be famous for its cows, but an annual bike race builds on its growing reputation as a place for outdoor recreation. The 127-mile backcountry Skull Gravel Race started a couple of years ago. (The Malheur National Wildlife Refuge occupation delayed its launch for a year and a half.) Last year it attracted 125 people.

Richard Roy, owner of Steens Mountain Brewing Co. in Hines, is a race sponsor. “The idea is to create a new industry — adventure tourism,” says Roy.

Roy founded a small brewery on the main thoroughfare through Hines five years ago. It is the only brewery in the area where beer is brewed on-site. Roy’s full-time job is working for the Bureau of Land Management; the brewery is a side gig that he plans to do full time when he retires.

His brewpub is starting to attract more locals, he says. Breweries are often the first sign of gentrification and economic growth in an area. But local residents haven’t always been welcoming. “Somebody said, ‘You are going to turn this into Bend,’” says Roy.

Other locals have complained the economic development efforts will turn Burns into Sisters, another Central Oregon city that has become a tourist destination over the past decade.

The biggest economic driver in Harney County is the opening of the agricultural pellet factory on the former site of the Hines Lumber mill. The factory is the brainchild of Chuck Eggert, a food-business entrepreneur and former owner of Pacific Foods.

Since selling Pacific Foods to Campbell Soup for $700 million in 2017, Eggert has launched several organic-food brands. His project in Harney County is part of his effort to develop rural Oregon’s agricultural economy.

The facility, which occupies one-third of the space of the original mill, uses state-of-the-art technology to produce alfalfa pellets to feed cows. It will also be rigged out to produce wood pellets for animal bedding and heating.

IMG 1591The agricultural pellet mill occupies part of the site of the former Hines Lumber mill

The business will employ an estimated 20 people in Harney County. In this sparsely populated county, it is the equivalent of employing thousands of people in the Portland metro area.

Initially, alfalfa from Eggert’s own land will be used to make pellets to feed his livestock. As the facility grows, it will use other farmers’ alfalfa, says Jerry Staley, general manager. At full capacity, it will be able to produce 10 tons of alfalfa pellets an hour.

The factory will also take woody biomass from forest thinning to make wood pellets.

News of the wood-pellet facility has excited the local logging community. Staley gets calls “every other week” from loggers asking if the mill is ready to accept wood products, he says.

IMG 1594General manager Jerry Staley shows the new state-of-the-art pellet-making machinery 

The factory will be one of few agricultural businesses that employs people year-round. Burns and Hines often struggle in the winter with higher unemployment because agricultural labor tapers off and tourists stop passing though.

Harney County Judge Pete Runnels points to the importance of the mill to the local economy. “We haven’t had any manufacturing of any sort in the past 10 years. It is the first time someone has ventured in with a vision and money,” says Runnels. “We need to locate small manufacturing to the area to increase the tax base.”

Nobody can dispute the importance of agriculture to Harney County. The new businesses in town that focus on hospitality, recreation and retail will not take over as the mainstay of the local economy. But economic-development experts point to the newcomers’ ability to enhance the livability of the area, as well as attract new investment.

Luring outside development may become a reality since Harney County’s recent designation as an opportunity zone. Opportunity zones were created in 2017 as part of the Tax Cuts and Jobs Act. They provide capital-gains tax breaks to developers for investing in disadvantaged communities.

Economic-development officials hope that the designation will spur investment in much-needed infrastructure, such as a fiber-optic network, housing, sewer upgrades and the refurbishment of a World War II-era airport.

In a crucial step forward, the county reached an agreement with MiWave, a local internet provider, to install broadband services in businesses and homes.

Several challenges face the county in its drive toward increasing investment. A lack of housing is one impediment. Few new residential houses have been built in the area because the cost of construction does not match up with the appraised value of new homes.

Some progress in homebuilding has been made. In Hines a new 20-unit apartment complex is planned. But in Burns, new residential construction is hampered by the fact that a lot of the land is in a flood plain, and flood insurance is prohibitively expensive, says Runnels.

The county is working on recertifying the flood-plain designation to move it close to the river that runs through town, a move that could take between two and three years, says Runnels.

It takes leadership and vision to boost development in economically depressed rural areas. The City of Burns is searching for a manager who can take the city forward. The current city manager, Dauna Wensenk, is seeking to retire.

City officials are having trouble filling the position. The last person hired for the job lasted a couple of weeks.

Wensenk says it has been difficult to attract applicants because of the remoteness of the community, as well as the limited salary that the city can offer for the position.

Wensenk welcomes the upswing in business activity on Burns’s main street. But she says the city’s constrained budget limits what it can do to attract more development. “There is not a lot the city can do. We help where we can, but our budget is strapped.”

City administrators are considering privatizing some services to shore up the budget. “It will take a few years to build the budget back up,” says Runnels.

Despite the county’s limited resources, a sense of optimism pervades this small agricultural community. Denise Rose, an officer at Harney County Economic Development, says the local community response team, a group of representatives from a range of organizations, is more active than in the past and that the monthly meetings are well attended. “There is momentum growing,” says Rose.

“The county has set a direction it wants to go, and that has created enthusiasm.”

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