Is industrial development finally coming to Coffee Creek?
Development activity in Wilsonville's Coffee Creek industrial area appears primed to ramp up in the coming years following recent infrastructure projects that have cut costs for prospective investors, city officials say.
Over 15 years ago, Wilsonville City Council adopted a master plan for Coffee Creek, a highly-parcelized 200-acre sector among the select locations in the tri-counties designated for future industrial growth.
In 2016, the city adopted an urban renewal plan intended to outline the infrastructure needed to catalyze development, according to Community Development Director Chris Neamtzu.
But the financial feasibility of development in Coffee Creek has been a continual challenge. A 2020 analysis produced by the Port of Portland, Greater Portland Inc. and Metro, reviewed by the Wilsonville council, found a $62 million financing gap for a 76-acre site in Coffee Creek to be economically advantageous for developers, taking into account surrounding infrastructure costs such as utilities and public roads.
In 2021, Wilsonville completed the first project in the urban renewal plan: improvements to Garden Acres Road that city officials said in 2020 could potentially spur imminent development east of the road.
"We advanced a sewer line and a water line all the way down Garden Acres Road, and we improved the frontage — we put in all the stormwater planters, we put in the landscaping," Neamtzu said. "An industrial developer would have had to do those improvements absent the city coming in and doing them."
Since the completion of the roadway projects, Wilsonville is now closing in on having the Coffee Creek Logistics Center — the area's first industrial warehouse totaling over 110,000 square feet — occupied in June. Plans for another warehouse nearly 150,000 square feet in size additionally passed the city's Development Review Board on May 23.
Neamtzu said circumstances are looking "significantly brighter" in 2022 than in 2020, when two proposed projects — a hospital and a bioremediation facility — were deemed financially unfeasible and fell through.
Matt Lorenzen, economic development manager for the city, says a key factor driving the slow development process in Coffee Creek is the motivation, or lack thereof, from existing landowners whose homes and businesses have long been established in the area. The city has also expressed concern about storage yards and other low-productivity uses there.
"The folks who are currently the owners of those properties have varying degrees of motivation and timelines for when they may desire to sell their property for new development to occur," Lorenzen said. "That disparate ownership of property within the district has probably been the leading factor of what has delayed or at least lengthened the timeline for new developments in the area."
Neamtzu explained that the purpose of urban renewal is to increase the value of an area through investing in development and in turn boost the tax base. He said once the Coffee Creek Logistics Center is occupied and 2022 is complete, the development will become part of that increased valuation.
"Then we will have the increment that we need to build additional projects that are identified in the Coffee Creek Urban Renewal Plan," Neamtzu said, reiterating that these investments are intended to spur additional development.
Future infrastructure projects in the urban renewal plan include transportation upgrades such as roadway expansions, intersection improvements and sewer system enhancements on SW Day Road and SW Grahams Ferry Road. Fiber optic cable will be installed throughout Coffee Creek to improve internet connectivity.
The Logistics Center, led by industrial developer Panattoni, is in the final phases of construction and is anticipated to be completed "around mid-July," according to a representative for the developer by email.
"Currently we are finishing the frontage improvements to the project, which include landscaping, street paving, curb, and gutter," the spokesperson wrote, adding that the developer is in the completion stage of "tenant improvements" for the two businesses under contract to lease the building.
Neamtzu said the tenants will include Newberg-based dental equipment company A-dec and Wilsonville-based medical equipment supplier Owens & Minor Inc.
"The Coffee Creek location is an appealing site for development because of the proximity to I-5 and the 16-mile radius from Downtown Portland," the spokesperson wrote. "The city continues to make infrastructure improvements, making truck access easier and diminishing traffic issues within city limits."
On May 23, the city approved a series of plans, permits and waivers that brought an additional warehouse — located between SW Grahams Ferry Road and SW Garden Acres Road and developed by the Black Creek Group — closer to development.
A representative for Ares Management, which acquired Black Creek Group in 2021, declined to comment on the ongoing development, citing company policy.
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