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Obstacles slow business growth

March 31, 2006

Ashland was a finalist when a Portland-based dental business was looking to expand into another city.

Quality of life, excellent schools and Southern Oregon University motivated officials with The Oregon Dental Service Companies to visit Ashland twice as they weighed the attractiveness of five cities in Southern and Central Oregon, according to Andrew Franklin, the senior vice president and chief operating officer for the business that provides insurance, software and business services to dentists.

But the company announced in March that it had selected Redmond for a mixed-use dental education and office facility, he said.

Businesses that want to move to Ashland or expand their existing facilities here face many of the same issues ODS encountered. They are attracted by the education system, big-city cultural amenities, easy access to the outdoors and other qualities, but hesitate because of a perception that land is limited and the planning process is difficult, high housing costs and other impediments, according to interviews with people in the business community.

Franklin said ODS officials balked when they learned Ashland's median house price was more than $400,000, compared to a median house price of $240,000 in Portland.

&

That just appalled us. We came away with great concern for the employees we would hire,&

he said.

The fear that employees would not be able to buy homes topped company officials' reservations about locating in Ashland, followed by concerns that the town's planning process is too difficult and contentious, according to Franklin.

Company officials had hoped for a downtown location in the Northlight complex, which was proposed on the site of the former Copeland Lumber site but was denied by the Ashland Planning Commission in 2005.

The dental facility could have occupied an upper floor, with a cancer center below, Franklin said.

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There was a perception that it was going to be relatively difficult to build what we needed in downtown Ashland because there's a significant part of the population that is anti-growth,&

he said.

Tackling problems

Ashland's home-grown technology businesses that formed a miniature Silicon Valley on A Street suffered when the Internet bubble burst, but now many are on the rebound, according to Project A President Jim Teece.

He said he hopes to move from his leased space into a larger building, or even to have a new building constructed in Ashland to house Project A.

&

The cost of land has increased and the availability of space has gone down,&

Teece said. &

If you need more space and it's not available in Ashland, you have a problem.&

But Teece, a former chair of the Ashland Chamber of Commerce's Economic Sustainability Committee, said the chamber is working to remove some of the stumbling blocks that prevent businesses from relocating or expanding existing operations in Ashland.

The Economic Sustainability Committee conducted the first phase of a Business Retention and Expansion survey of 33 businesses in 2005. The results are still being analyzed, but results show employment grew by 23 percent in the past three years and most businesses expanded or remodeled or expect to do so in the future.

The most frequently mentioned challenges of doing business in Ashland involved the high cost of living relative to income, a limited labor pool, small market size, infrastructure issues such as air travel and roads, inadequate office space and land use issues, according to a recent chamber report to the Ashland City Council.

To help businesses, the chamber co-sponsored a housing workshop in December that provided information to employers about how they could help employees find housing.

The chamber also deploys a Rapid Response Team to aid businesses that hope to expand and businesses that are considering a move to Ashland.

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A lot of what we do around business retention and expansion is invisible to the public,&

said Graham Lewis, a member of the Economic Sustainability Committee and Rapid Response Team. &

It's not stuff we publicize. From the business's side, it needs to be confidential.&

Chamber of Commerce Executive Director Sandra Slattery and the Rapid Response Team worked with a Colorado-based high-tech company that eventually relocated to Ashland in 2005. The team also has worked with several existing businesses that hope to expand but are having difficulty finding space, according to the chamber report to the city council.

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I'm very pleased with the chamber's efforts,&

said Mayor John Morrison. &

I think they respond quickly. They spend a lot of time with businesses and keep me very well apprised of what's going on. I talk to Sandra one, two, three, four times a week. A lot of businesses want to keep their plans confidential. having the chamber as a partner, it helps us maintain contact with the business community.&

Ashland City Councilor Kate Jackson noted that the chamber's activities are especially important given that the city government does not have a staff member devoted to economic development.

To help businesses that want to expand or construct a new building, architect and Economic Sustainability Committee Chair Jac Nickels helped develop a brochure that describes requirements and timelines for the city's planning and building permit processes.

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The perception outside and inside Ashland is that it's difficult to develop,&

Slattery said. &

It can be challenging, but it can also be successful. We want businesses to know that we do have a community that supports family wage jobs, clean industry and jobs for residents.&

The chamber's assistance continues after businesses relocate to Ashland.

Slattery reviewed the Colorado company's business plan after it moved to Ashland, set up meetings to help them find potential funding sources and provided other services, according to the chamber's report to the council.

Dagoba Organic Chocolate moved to Ashland from Central Point in 2005.

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After we settled in, the chamber president met with us to build a personal connection and bring us up to speed on local planning and development issues. As an ecologically conscious company, we really appreciate the Chamber&

s &

Earth Smart, Money Wise&

130;&

guide, and have used it to save energy costs at our facility and learn about rebates and tax credits associated with energy saving projects,&

Dagoba Founding Alchemist Frederick Schilling wrote in a January letter that was included in the packet to the city council.

Working from the other end

The City of Ashland also is working on multiple fronts on projects that ultimately could smooth the path for businesses.

The city commissioned a report on the Ashland Community Development Department to see if organizational changes need to be made. Another study examines whether some of Ashland's land use rules are confusing and contradictory.

Ashland Housing Program Specialist Brandon Goldman completed a Buildable Lands Inventory in November 2005 that lists the amount of acreage in the city limits and within the urban growth boundary for different uses, including housing and manufacturing.

The inventory shows the city has nearly 97 acres within the city limits zoned for business use and almost 155 acres earmarked for business use within the urban growth boundary.

The city is contracting for a paper that could help guide development on dozens of acres on the former Croman lumber mill site &

although progress has not come fast enough for some developers who told city councilors in a study session that the lack of a plan has thwarted projects there.

Whether Ashland actually has enough land for business development is a matter for debate. But the city has commissioned a study that will project economic growth in Ashland and the region and help the city council decide whether the mix of land available matches business growth forecasts, according to Morrison.

As for affordable housing, the council continues to make incremental progress, he said.

On March 21 alone, the council approved an annexation that added 17 units of affordable housing and authorized the purchase of land for a park and five units of affordable housing. The council is scheduled to select projects this month to receive the city's annual allotment of federal affordable housing funds.

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It all builds together,&

Morrison said. &

It's a shotgun approach, not a bullet approach.&

Staff writer can be reached at 479-8199 or vlaldous@yahoo.com.