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2035 Central Eastside Industrial Council Vision Statement

The Central Eastside Industrial District is a unique and rare example of a historic and active industrial
district preserved within the heart of a major city. While the district is primarily zoned for industrial use
and has been classified by the city as an “industrial sanctuary”, there are retail and commercial corridors
that thread through the CEID to create a balance of uses, attractions and amenities. The district has the
capacity for incubating new businesses, pioneering innovations and creating employment opportunities
for a growing population.
Superior Performance and Position of the CEID through 2035
The CEID is a major employment center in Portland with over 20,000 employees, is an attractive location
for start-up businesses, attracts a diverse and growing list of business clusters and traded sector
businesses, is home to many second and third generation businesses, has outperformed most of the
surrounding districts in job growth throughout the economic downturn, and remains one of the hottest
real estate markets in the city. This impressive track record and well positioned economic outlook is the result of a combination of three factors:

 The Industrial Sanctuary designation and zoning,

 a sought after location in close proximity to downtown Portland,

 stable conditions where long term business investment close to the city core can occur by individuals and families who want to be in the district, have a stake in the community, and who both create and leverage a diverse and established industrial knowledge base.

Value of the Industrial Sanctuary
While Industrial uses in the CEID have changed (sometimes dramatically) over the past 40 years, the
industrial zones and sanctuary classification has created stability for both real estate investment and
business investment. That stability is both enhanced by and a consequence of the high concentration of
owner occupied properties. The City has been extremely wise to support differentiating the CEID as an
industrial district for the following reasons:

Complimentary Function: The industrial economy in the CEID is complimentary to and supports the
Central Business District and does not compete with the primarily commercial, retail and residential
specializations that exist in the neighboring districts.

Economic Diversification: Portland retains a diversity of employment and business types in the inner
city, and therefore reduces its reliance on a narrow band of industry sectors, which helps to stabilize the
city’s economy.

Business Incubation: Small businesses make up the majority of firms in Oregon. The small block sizes,
affordable space in close proximity to downtown and supportive business community make the CEID a
great place to support business incubation, entrepreneurship, and to attract traded sector industries.

Industrial Services Hub: The industrial uses of the district not only compliment the surrounding retail,
education, commercial, and residential districts in Portland, it also serves as a hub to support the outer
and larger industrial districts in the region. For engineers, high end machine shops, specialty suppliers,
industrial equipment and product designers, and many others, the CEID’s central location allows it to
serve as a vital link to the larger industrial community, which strengthens this vital regional segment.

Resources & Industrial Knowledge base: The CEID is a district where companies can start, grow, investand invent. For entrepreneurs and small businesses, the sanctuary serves as a physical encyclopedia of solutions to problems and obstacles small businesses face on a daily basis. New industries recognize and are attracted to the productive, efficient, and collaborative resources that reside in and around the sanctuary.

New Industries & Expanded Industrial Classifications in the Central Eastside
Much gets made of the “new industry versus old industry” or “creative versus industrial” uses in the
CEID. In actuality, creative and newer businesses are attracted to the industrial character of the district
and in most cases compliment, rather than conflict with the traditional uses. In fact, manufacturers are
among the most creative of industries located in the CEID and have much in common with software
developers, food production, film & video production and services, brewers and distilleries, and other
newer uses in the district. They invest substantially in product design, process design, and custom
equipment. They invent products and processes for which there are no blueprints and they access new
technologies to drive efficiencies in a competitive global landscape. While the definition of Industrial
production has broadened over the past 20 years and new clusters are finding the CEID a good fit, the
firms that are attracted to the CEID tend to compliment more traditional industrial and wholesale uses
in the district. In fact, there can be synergy.

Conflicts & Complimentary Uses in the Central Eastside
Not all development and uses compliment the district and there are uses that threaten the long term
viability of the CEID as an industrial sanctuary.

Housing – The CEID is surrounded by residential neighborhoods in all directions and there is no shortage
of residential options close by. While current zoning allows for additional residential development,
residential expansion is the single biggest threat to the CEID due to inherent conflicts and will attract
non-complimentary services and retail businesses to the district. Zoning restrictions and residential
parking policies need to be looked at to prevent sanctuary degradation and conflicts. The 2035 plan
needs to address this issue.

New Development without Adequate Parking – there is already a significant stock of buildings without
off-street parking options. Adding new development without additional provisions for parking demand
will put undue pressure on firms located in the CEID. General Office Employment – A vibrant and healthy downtown is vital to the city and general office needs to be encouraged to locate in existing office districts. There is no shortage of land for general commercial development. South Waterfront, the Lloyd District and Downtown as well as many other areas offer plenty of opportunity for office expansion through 2035.

Entertainment Destination – While there are currently thriving entertainment destination businesses
located in the district, the areas for these should be limited to the existing commercial corridors, OMSI
and Portland Opera area, and along Burnside where currently zoned. Expansion throughout the district
will conflict with and discourage industrial development.

Expanded Zoning Overlays – The IG zones should be preserved to create the certainty necessary for
industrial investment within the sanctuary. Existing overlays as currently written should not be
expanded throughout the district and carefully examined to measure their impact on the industrial
properties nearby. Exceptions should be considered on a case by case basis based on use and how they
complement industrial uses. We recognize the importance of evaluating the impact of new
development on maintaining the viability of industrial activity.

Wholesale vs. Retail – Many businesses located in the district have a mix of uses in different parts of
their businesses. In general, businesses with large wholesale and business to business components fit
the function of the district better than those with mostly retail components, except in the commercial
corridors. Rapid expansion of destination retail companies without adequate off-street parking will tend
to conflict with companies that rely on incoming and outgoing freight on a daily basis.3
Emerging Trends

The internet and improved transportation links create worldwide connections and opportunities. While
opportunities are borderless, there is a strong sense of people moving back to a local base where
business and interpersonal connections add value. On a local scale, Portland can participate in greater
economic growth by focusing on the conditions that will contribute to the advancement of industry and
technology in the 21st century. The Central Eastside has a rich history of industrial activity which has
laid the foundation for developing a vibrant economic center that attracts investment in innovation
businesses. The Central Eastside can become a model for inner city economic vitality, job creation, and
business development by focusing civic and private resources on a shared goal.

Urban Growth Boundary (UGB)
The urban growth boundary reduces sprawl and leads to intensification of uses the results of which can
be both beneficial and challenging for business.
Beneficial consequences of intensification:
- Lower energy expended per local domestic product hence greater efficiency
- More concentrated economic activity leading to greater synergies
- Greater proximity of friends, services, and employment.
- Enhanced potential for cross fertilization of ideas and business contacts and activity.

Challenging consequences of intensification:
Without careful planning and implementation, increased density of people and businesses can lead to
congestion, parking and transportation conflicts, loss of open space and degradation of our
environment.

Comprehensive Plan/zoning patterns
Zoning is one of the tools available to restrict sprawl and create intensification of use. Zoning also
defines type of use and works to moderate conflicts between incompatible uses. Zoning and use
definitions need to be flexible enough so that the changing nature of economic activity is recognized and
encouraged for the good of the community while maintaining reasonable controls to avoid conflicting
activities in close proximity.

Central Eastside is composed of subareas which are distinguished by current uses, building typology, size
of parcels and transportation/parking assets.
- OMSI: Cultural/institutional district with new light rail and streetcar enhancements
- Industrial sanctuary: Distribution and production businesses with some multiple use vertical buildings.
- MLK/Grand, bridgehead corridors, EX zoned properties: Mix of commercial, retail and possibly housing.
- Eastern edge: Transition between employment district and residential neighborhoods.

Use classifications within the industrial zone category include: warehouse, manufacturing, industrial
services, industrial office. The zoning should reflect the intention of the community regarding the
optimum use of scarce land within the City. In the case of the Central Eastside, the essential industrial
nature of the district should be maintained with allowance for changing transit oriented development in
certain areas such as the Burnside Bridgehead, OMSI, the major corridors and existing areas zoned EX.
The EX zoned areas provide an opportunity for intensification of uses as well as the need to carefully4
manage the impact on the adjacent industrially zoned land. New developments on EX zoned properties
could have a negative impact on industrial properties if conflicts arise related to parking, traffic, freight
operations, noise and other issues. The City should explore methods to mitigate and reduce conflicts
that would negatively impact the ability of industrial users to operate their businesses.

Economic Environment
Economic vitality is driven by the synergy between businesses. The focus of activity is guided by the
zoning classifications but the strength of the economic engine depends on the support of the
community in fostering the conditions for economic success. In the CEID, there are a wide range of
businesses and economic activities some of which are located here due to special circumstances
(proximity of major arteries or to the riverfront) or due to the nearby location of supporting businesses
and suppliers. Some businesses have unique and growing relationships with other areas of the City
such as OMSI with the higher education institutions of OHSU and PSU. The businesses within the CEID
produce goods and services for the rest of the City and region and also consume considerable goods and
services from other companies in the area. The concentration of business activity in the CEID serves to
support many ancillary businesses such as restaurants, coffee shops, printing, accounting, and banking
services. The businesses of the CEID depend on a workforce that can find local, affordable housing and
transportation options. The ability of workers to live in close proximity to their work area is a benefit to
them and to the community in terms of life/work balance and this proximity encourages the use of
public transportation and biking as a means of getting to work. The diversity of economic activity in the
area generates a demand for a workforce with diverse skill sets ranging from basic entry level manual
effort to highly skilled technical personnel. This mixing of various levels of education and technical skill
has a number of social benefits and speaks to the equity goals in current City planning.
The CEID is also an area where small companies can start, grow, and then consolidate their operations.
The close proximity of established and newly formed or young companies is a benefit in terms of cross
fertilization and new supply relationships within the district, a process that feeds on itself with the
outcome of greater economic vitality.

Changing nature of industrial activity
Internet and quick international travel provides an International marketplace for production and
distribution – products can be conceived; produced anywhere and shipped everywhere. This opens up
opportunities for existing and new, creative companies to prosper in markets that were once not
available to them. Significant technological changes are also redefining what is meant by ‘industrial’.
The industrial revolution drove manufacturing processes into large scale plants where economies of
scale could be realized. The new industrial revolution is moving back to local production and smaller
scale processing which add value from technological advances, not necessarily by driving costs down
based on volume production. Changing technology promotes more customization and drives highly
differentiated production markets. Innovation and creativity are redefining the business landscape and
this is happening in the CEID already. Warehouse space is being converted to activities that are based
on new technologies. The pace of change to this new industrial paradigm based on innovation will be
accelerated by fostering the conditions to attract larger players to this space. Attracting ‘lead’
companies to the CEID would create significant employment and generate opportunities for local
businesses in supplying the goods and services to the ‘lead’ companies. It is critical to insure that
conditions support confidence in the viability of long-term investments.

Transportation and parking
The CEID has a diverse mix of transportation systems ranging from Interstate Highway access and local
street systems to new public transport options such as the streetcar and the Portland-Milwaukie light
rail system (PMLR). In addition, the growth of biking has impacted the District in significant ways.
Future planning must be directed to aligning the mix of transportation elements to the specific area of
the district and its needs. Otherwise, the potential for serious conflict between the intended –zoned –
activities in an area and the transportation uses will exacerbate. Industrial areas and the public benefit
when street design and other transit operations reflect the predominant use of the area. Industrial
areas require loading docks, curbless streets, and wide radius cornering. Commercial areas require
appropriate parking controls, curbs, and street amenities.

Congestion and transit conflicts will increase with growth and City planning can be effective in
addressing these issues. The City and TPAC should encourage on-site and off-site parking to meet the
demands of the district. Areas that City planning can address include parking systems that optimize the
movement of goods in industrial areas and that respond to the particular needs of each sub-area, that
encourage the use of public transportation, and that provide incentive and/or funding for structured
parking facilities as surface parking acreage is developed.

Social welfare
Providing good employment opportunities is the key strategy for promoting a more resilient community. The District is already a mélange of different employment types from blue collar technically trained
workers to individuals with academic degrees. In terms of social equity, there is perhaps no more
important element than that of employment. Living wage employment allows for the creation of
households that are self-sustaining and which can participate in the life of the City on an equal footing
with all other citizens. It allows for affordable housing and participation in the essential aspects of urban
life including education, community events, and cultural attractions. City efforts to promote job
creation will have immense benefits for the community and the CEID has the opportunity to be a
significant job creation zone with appropriate policies and encouragement.

Waterfront
The waterfront is a major asset that is currently underutilized. We believe that there are opportunities
for greater access of the waterfront for commercial and personal use. From a commercial point of view,
we envision the development of businesses along the waterfront that make use of the river for
transportation and recreation. The Willamette River has been designated as part of the National
Marine Highway System. City promotion and support of a transportation and marine terminal along the
east bank waterfront near the TriMet light rail station at OMSI would increase the use of the river for
commuter ferries to Oregon City, Lake Oswego, and Vancouver thereby reducing road congestion and
pollution. There are opportunities for commercial float plane operations on the river to ease transport to Seattle for business and vacation travelers.

Key Success Factors to Capitalize on Growth Potential
A strong commitment to the Industrial Sanctuary designation and zoning, complementary real estate
development that adds to the existing uses in the district, and a new mix of companies and services that
add to the resources and knowledge that already exist in the district is a great foundation for economic
growth in the CEID. But there are other factors that must be addressed on an ongoing basis in order to
capture the true potential of the district over the next 25 years.

Parking & Transportation Priorities – Due to the wholesale nature of the district, scarce on-street
parking must be protected and preserved for the benefit of the businesses and employees located here.6
A mix of solutions that may vary in different sub-areas will need to be employed. The Central Eastside
Transportation and Parking Advisory Committee must control and mediate solutions to conflicts that
protect the integrity of the Industrial makeup of the district. Employee parking and transportation
options, the preservation of freight access and movement, and eventual investment in parking supply is
critical to the growth potential of the district.

Business Climate – The CEID must remain a safe, efficient, cooperative, and business friendly
environment. Policies that inhibit problem solving, unnecessary business regulation, lack of
responsiveness to general business problems, and unsustainable increases in costs will short circuit
business investment (especially industrial business investment) and limit the economic potential of the
district. No amount of public marketing and subsidies will make up for a declining business climate
where uncertainty and rising costs discourage long term investment.

Strong Relationships – The Central Eastside Industrial Council (CEIC) plays a big role in advocacy and in
building strong relationships in the CEID. It should continue to attract both older and newer businesses
to get involved in order to preserve and enhance the opportunities that exist for businesses in the
district.

Close in Industrial districts have been dismantled in favor of real estate development opportunities in
cities all over the country. Portland is unique in embracing the differentiation of a close in Industrial
Sanctuary. Real estate development is not a long term driver of the economy. Instead, a healthy real
estate development market is the result of a diversified, growing economy. The industrial infrastructure
in the CEID and other industrial districts provides much needed traded sector income and employment.
As the city moves forward with the 2035 Southeast Quadrant planning process, the Industrial Sanctuary
should be embraced and recognized for the unique opportunities it provides for business and job
growth in the heart of a great city.

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