Miracle Growth

Photo: Jason E. Kaplan
Erika Fitzgerald, senior economic development specialist, in historic downtown Gresham

Gresham has attracted several large manufacturers, helping to boost the local economy. It now faces the challenge of translating that success into well-paying jobs.

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In the spring of 2009, as families, businesses and local governments struggled under the weight of the Great Recession, the City of Gresham released a forward-looking report entitled “Setting Gresham’s Economic Table.” The report acknowledged the city’s economic struggles and identified several sectors that Oregon’s fourth-largest city could use to bounce back.

The first and most profitable was the city’s manufacturing and industrial capacities, given Gresham’s close proximity to the Portland airport and access to Interstate 84.

Among the report’s many conclusions was that traded-sector manufacturing companies represented not only new money being pumped into Gresham but also that the sector had the best potential for creating new jobs. The city’s plan for recovery has, in many ways, been a success.

By making use of the state’s Enterprise Zone program (which provides tax abatement on new investments), and developing efficient permitting practices, Gresham’s city council and economic development team have transformed the Portland suburb into the state’s newest industrial heart.

But despite the high concentration of jobs in Gresham, median income still lags behind the Greater Portland region. By using workforce-development initiatives, the city now plans to use its new business assets to strengthen its workforce and translate economic gains into higher-paying jobs.

In what might appear to be a crowning achievement of the city’s recovery, Hawthorne Hydroponics, a subsidiary of gardening manufacturer ScottsMiracle-Gro, leased a 378,800-square-foot industrial building at Blue Lake Corporate Park in October 2020. It is the largest industrial lease in the Portland metropolitan market over the past 12 months.

The facility is scheduled to open its doors this year and will be used to house and distribute 3,000 of the company’s gardening products, including a wide range of formulas and supplies for growing industrial-scale cannabis.

The gardening company is not the first publicly traded company to open a facility in Gresham. In 2016 automotive company Subaru opened a 600,000-square-foot auto-parts distribution center in the Gresham Vista Business Park.

In 2020 U.K. lab-grown diamond manufacturer Lightbox opened its first U.S. factory in Gresham. Its CEO referred to the region as a “hub for advanced industries.”

“The Subaru facility was really a catalyst for our economic development,” says Erika Fitzgerald, senior economic development specialist for the city. “There has been significant economic growth over the past seven years. We’ve seen a lot of new facilities. There have been a lot of speculative building developments. Now almost all of those projects are fully leased.”

The Hawthorne Hydroponics facility was originally built on a speculative basis by the Trammell Crow Company, which owns the industrial park, and an investment fund advised by Principal Real Estate Investors.

Completed in May 2020, the facility is one of two new Class A industrial developments on Airport Way totaling 463,500 square feet. Hawthorne Hydroponics will serve as the industrial park’s anchor tenant.

The Blue Lake facility was a good fit for ScottsMiracle-Gro. It is close to its manufacturing and distribution hub in Vancouver, Wash. The move is also in line with the company’s strategy of becoming a larger player in the cannabis industry.

In 2013 ScottsMiracle-Gro CEO Jim Hagedorn called legal cannabis the “biggest thing [he’s] ever seen in lawn and garden.” In 2015 the company acquired General Hydroponics, a growing company specializing in soil-less, industrial-scale, cannabis-growing products.

Between 2016 and 2020, ScottsMiracle-Gro sales nearly doubled, increasing from $2.5 billion to $4.1 billion.

0531spotlight adamIT4A9806Adam Sharp, supply chain vice president at Hawthorne Hydroponics, inside the company’s Vancouver, Wash., warehouse.  Photo by Jason E. Kaplan

“Gresham really checked all the boxes for us,” says Adam Sharp, vice president of supply chain at Hawthorne Hydroponics. “We needed to be in close proximity to our current footprint in the region.

Additionally, there was the city’s Enterprise Zone, which gave us the financial incentive. But largely it was because the facility suited our needs.”

Gresham’s Enterprise Zone program, adopted in 2006, allows property-tax exemptions for between three and five years for companies moving into the area. The program has been effective because of Gresham’s proximity to the airport and the interstate roads.

To date, the tax abatement has brought an estimated $800 million investment into the city. In 2016 the state renewed the program for an additional 10 years.

Another factor drawing companies to Gresham, and one that has earned the city a reputation for being good for business, is the efficiency of its city’s economic development team. Acting as a concierge service for businesses, the team walks companies through the state’s permitting processes.

“It’s our job to be a company’s go-to as they grow into our city,” says Fitzgerald. “One of the biggest upsides for companies moving to Gresham is that we use our abilities to move companies through the permitting process very quickly. When a company is looking to set up shop, they want to do so within a certain time frame.”

Part of the permitting process includes conforming to the Oregon Environmental Protection Act, a piece of 2018 legislation that prevented the Trump administration’s rollbacks of federal emissions standards from taking effect in the state.

A national evaluation by financial advisory website WalletHub ranked Oregon the No. 1 state in the country for carbon-neutral government policies and business practices, and the No. 3 greenest state in the country.

The study was conducted before Gov. Kate Brown’s 2020 executive order on carbon emissions, which directed government agencies to set more aggressive emissions standards and updated the Clean Fuels Program to make it one of the most ambitious fuel-economy initiatives in the country.

The order was initially criticized by manufacturing companies, many of which warned that publicly traded businesses would move to neighboring states with less stringent emissions standards.

This has so far not been the case in Gresham, in part because the economic development team says it makes environmental oversight easy to navigate.

“Oregon might have different environmental standards than other states, but we are here to help companies navigate those processes. It’s one of the ways our team can be helpful. We find that many of the companies that we work with want to be good environmental stewards,” says Fitzgerald.

Oregon’s sustainability protocols may be ambitious, but they are also positive for a growing number of companies seeking to be part of the next wave of clean-energy technology.

“We are an environmentally oriented company. It’s part of the way we think and how we operate,” says Sharp of Hawthorne Hydroponics. The company had planned to install LED lighting and a solar-reflective roof before it moved into the Gresham facility, which had already been certified by Leadership, Energy and Environmental Design (LEED).

Despite the upswell of traded-sector companies in Gresham and the high concentration of jobs, median income in the city has consistently lagged behind the Portland metro area, as well as the rest of the state. In 2019 median household income in Oregon was $62,800 compared with $54,000 in Gresham.

Part of the deal for companies receiving Enterprise Zone tax abatement is that they channel a portion of the savings into workforce development. Using the funds from the Enterprise Zone, the city funded a mechatronics program at Mt. Hood Community College.

“There are businesses that are more than happy to sit in on college boards to help inform our curriculum,” says Fitzgerald. “It’s in their best interest to do so because it builds the community-to-employment pipeline.”

Some companies have gone a step further to develop human capital. In 2018 Subaru offered a first-of-its-kind degree in Subaru automotive technology, available exclusively through Mt. Hood Community College.

There are signs the number of family-wage jobs in Gresham has increased. Despite median income lagging by 14% behind Oregon in 2015 and having a 5% higher poverty rate, income in Gresham has steadily risen at a rate of 3.2% per year, according to the Census Bureau.

As part of its workforce-development agreement, Hawthorne Hydroponics posted all its positions locally, with the goal of eventually having an entirely local workforce.

“We’ve been recruiting a lot lately. I anticipate over half of the employees at the facility will be local at the beginning. The rest will be tenured associates helping to train our systems and our processes,” says Sydney Peters, leader of distribution operations at Hawthorne Hydroponics. “As time goes on, the shift will occur, and it will be 90% to 100% local.”

Peters is impressed with the amount of homegrown talent in Gresham, owing in large part to the different industries already present in the area. Gresham’s relatively diverse population has also made it easy for Hawthorne Hydroponics to satisfy its diversity, equity and inclusion initiatives.

“Between the food manufacturing and retail manufacturing and all the different industries that the greater Gresham area provides, we have a very diverse group that are going to add a lot of value to our team,” says Peters.

0531spotlight bluelakesiteHawthorne Hydroponics’ new facility in Blue Lake Corporate Park, Gresham.  Photo by Jason E. Kaplan

“And of course, it’s a brand-new shiny building. We’re all excited to start working out of Gresham.”

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