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Tennessee-based manufacturer will open a production facility in city's industrial area to produce prefabricated CLT, glulam building components

PMG PHOTO: JAIME VALDEZ - Matt Lorenzen, Economic Development Manager for the City of Estacada; Kenneth Humbertson, Clackamas County Commissioner #4; Sam Dicke, Economic Development Coordinator; and Jon Legarza, Interim Economic Development Manager, tour the property where Sauter Timber will be built at Estacada Industrial Park. An effort to establish mass timber as a cluster industry in Clackamas County is about to take a giant step forward.

County officials, along with city leaders from Estacada, announced this week that Sauter Timber, recognized nationally as a leading second-tier manufacturer in the mass timber sector, will open an Oregon production plant in 2020.

The company, which is based in Rockwood, Tennessee, has purchased five acres of land in the Estacada Industrial Park located off State Highway 211 and plans to build a manufacturing facility expected to bring at least 25 new jobs to Clackamas County.

Started in the early 2000s by Reinhard Sauter, Sauter Timber built a reputation turning out timber framing and timber components before expanding into prefabricated cross-laminated timber (CLT) and glulam components for buildings. It's the latter service that Sauter Timber plans on focusing on in its Estacada facility, which could be up and running by the middle of next year.

COURTESY PHOTO - Clackamas County Commissioner Ken Humberston, Reinhard Sauter and Estacada Mayor Sean Drinkwine are pictured during a recent meeting where it was announced that Sauter Timber will be opening a manufacturing facility in Estacada.

The decision by Sauter to settle in Estacada is a triumph for both Clackamas County and the city of Estacada. The two jurisdictions worked for about 15 months with Sauter and industrial park owner Park Development to seal the deal. However, the effort to establish both the industrial park and the county as the location of choice for a growing mass timber-focused industry has been in the works for nearly a decade.

A comeback

Timber and lumber mills have historically served as primary sources of employment and identity for Clackamas County and its rural communities. In timber's heyday, the county boasted 25 thriving mills. In Estacada, it was Park Lumber Mill on State Highway 224 that provided six decades of family-wage jobs for the city's residents.

In the 1980s, the county's timber industry began struggling and mills eventually started to shut down. Estacada's mill rallied and managed to hold on until 2007 when it finally closed its doors for good. A couple of years later, the Great Recession hit the area.

"It was really kind of a double whammy," Matt Lorenzen, economic development manger for the city of Estacada, said.

With an eye toward finding ways to replace lost timber-related jobs, Clackamas County began working with its rural communities. In Estacada, that meant working with the city and a company called Park Development to bring 160 acres of land into the city's urban growth boundary. The resulting Estacada Industrial Park became the county's largest contiguous piece of property zoned for industrial use.

PMG PHOTO: JAIME VALDEZ - Rick Gruen, Parks & Forest Manager for Clackamas County; Humbertson; Dicke; Lorenzen; Legarza; and Laura Zentner, Business and Community Services for Clackamas County, tour the property where Sauter Timber will be built at Estacada Industrial Park.

The first phase of infrastructure and a flurry of recruitment efforts at the industrial campus attracted small- and medium-size companies that represented a new way of manufacturing — using high tech, automated equipment operated by skilled technicians.

The emergence of mass timber, including CLT as an alternative building material in the Pacific Northwest, soon posed another opportunity that the county and Estacada tapped.

Analyzing an effort by the state and Oregon State University to establish Oregon as a leader in the mass timber movement, Clackamas County and Estacada officials decided to take a similar approach to return the county and its rural communities to their timber roots, but with a 21st-century twist. The vision connected timber grown in the county with Oregon manufacturers who would turn out CLT and glulam panels, beams, and other components for building construction. CLT is made by taking pieces of wood that have been glued together at 90-degree angles and compressing the material into panels that are lightweight while also being extremely strong. COURTESY: CLACKAMAS COUNTY - Cross-laminated timber is made by taking pieces of wood that have been glued together at 90-degree angles and compressing the material into panels that are lightweight while also being extremely strong.

"It's the opportunity to recreate the (timber) supply chain," Jon LeGarza, Clackamas County's interim economic development director, said. "Oregon's rural areas had so many timber mills that used to be the center of town. The opportunity to bring in this new, emerging trend with mass-timber products we thought would be a good fit to help these communities."

That plan received a significant boost when the county met Reinhard Sauter.

Pros and cons

Billing itself as the first joinery company in the U.S., Sauter Timber earned a reputation for providing wood components and timber framing packages in the residential market.

About five or six years ago, Sauter decided to expand his company by adding prefabricated mass timber components using materials such as CLT and glulam. He purchased a $600,000 German-made computer numeric controlled (CNC) milling machine that was larger than the equipment his company had previously used.

To accommodate the new purchase, he built a 9,000-square-foot building using glulam and CLT. The resulting award-winning structure soon began serving double duty as a marketing tool to show clients what could be accomplished using prefabricated components made from CLT.

COURTESY: CLACKAMAS COUNTY/SAUTER TIMBER - Sauter Timber's award-winning production facility in Rockwood, Tennessee, features glulam framing and cross-laminated timber walls and roof panels. The company will likely use the same materials for the facility it builds in Estacada.

As the company's CLT and glulam services began to grow, Sauter decided to start looking to the Pacific Northwest to expand his company's division. He was attending a mass timber conference in Oregon when he met representatives from Clackamas County and learned about their interest in attracting new companies working in mass timber to the area.

"We showed him some land in Molalla, Estacada and Sandy," LeGarza said. "He reached back out and said he would like to meet the folks in Estacada, so we introduced him to the city, and that's how it all started."

While Sauter found a lot to like in Estacada, including city leaders whom he said he felt were "trustworthy," he also was considering a space in an industrial park in Longview, Washington. The latter location offered cheaper land. The campus was fully built out, and the configuration of the property Sauter was considering was more straightforward.

"It would have been easier to start (in Longview)," he said. "We would have already been in production."

But the Longview industrial park lacked many of the features that Sauter and his 15 employees at the Tennessee location consider crucial both to the company's business approach and its culture.

For starters, Sauter was impressed with the efforts of Estacada and Clackamas County officials along with the broker to structure a deal that would work for the manufacturing company.

Sauter wanted a five-acre site, for example, but there wasn't a single lot of that size in the Estacada Industrial Park that was already outfitted with basic infrastructure. The owner's broker managed to stitch together enough usable land in the developed part of the industrial park to meet Sauter's acreage needs. In addition, when it looked like a grant that would be used to extend a street to make the cobbled-together configuration work might not come through for at least six months, city officials in September agreed to temporarily provide roughly half of the approximately $900,000 needed for the work.

COURTESY: CLACKAMAS COUNTY - Clackamas County Commissioner Ken Humberston (center) and others from the county visited construction sites to learn about how cross-laminated timber and other mass timber materials are being used in Oregon building projects.

Sauter also liked the focus of the businesses that would be his neighbors in the Estacada industrial park, a mix that includes a timber-framing company. The Longview industrial park contained mainly heavy-industrial tenants that Sauter felt didn't fit with his company's commitment to sustainability.

Equally as important was Estacada's ability to offer a rural setting while still being within a reasonable drive of Portland. Sauter Timber's employees relish a quality of life that includes easy access to outdoor recreation, according to Sauter.

"As soon as everyone in Tennessee heard we were opening (a location in Oregon), my top guys said they wanted to go," he said.

Time for a turnaround

Sauter said his company currently is choosing between two models of CNC machines for the Estacada facility. Once that step is completed, the building design and layout will be determined. Like Sauter Timber's Rockwood plant, the Estacada building will likely feature CLT and glulam. Sauter said his company is eyeing a groundbreaking in February or March, with plans to begin operating out the new building sometime next summer.

The company has pledged to create 25 jobs at the Estacada plant within five years of opening, a promise that qualified the project for a state business development grant. Sauter said he's confident the Estacada operation will hit the promised number of positions. However, if that goal isn't realized, the grant will need to be repaid. How that would be accomplished took some negotiation, but in the end, it was agreed that any repayment would be split between all of the parties involved, Lorenzen said.

The jobs Sauter creates will help bump up employment numbers that have steadily climbed in Estacada as more companies have moved into the city's industrial park. At its peak, the mill in Estacada employed between 200 and 250. That's roughly the same number of jobs created in the industrial park, according to Lorenzen. Many of those new jobs, however, require a workforce with more technical skills than traditional mill jobs.

"The jobs are still here, but they're different jobs," Lorenzen said. "There are jobs in the industrial campus that are going unfilled. So, the challenge is no longer a lack of jobs; it's a lack of people with the necessary work skills."

With an eye toward supplying employees armed with the high-tech skills needed to fill those jobs, Clackamas Community College has been working with local businesses and county officials to attract students to programs designed to meet the workforce needs of modern-day manufacturing companies like Sauter Timber.

Another promising development for filling those open jobs is the fact that Estacada is experiencing an influx of new residents. The most recent statistics indicate the city's population grew from 3,400 to 3,725 in a single year, according to Lorenzen.

"You might say (adding) 325 people is nothing, but as a percentage, that's huge," he said.

Similar to the rest of the Portland metro area, the cost of housing in Estacada is starting to creep up. A new development in the city that will bring about 300 new rooftops when fully built is offering new three-bedroom homes starting around $325,000. While that's high for Estacada, it's still more affordable than Portland, Lorenzen said.

If that selling point attracts more new businesses like Sauter Timber in the future, Estacada and its industrial park will be ready for them, according to Lorenzen. Most of the industrial park lots served by infrastructure that's already in place have been sold, with only a handful pending sales or still on the market. However, there are plans for future phases that will bring in infrastructure to bring more developed lots to market.

The city's move toward better economic times also is visible in its downtown area, where just a handful of storefronts are vacant.

"It's not a ghost town anymore. It's a vibrant commercial district," Lorenzen said. The city is investing in beautifying the downtown. In three years, there will be a water access facility adjacent to downtown where people can access Estacada Lake.

Additionally, city leaders are looking at rezoning parts of the city to create more opportunities for multifamily development. Part of that effort is expected to focus on the land that previously housed the lumber mill, shifting the area from heavy industrial to a mix of residential, commercial and recreational uses.

"There's a lot of really positive momentum in Estacada right now," Lorenzen said. "People are looking toward the future and trying to prepare for growth so that it happens in a healthy way rather than just being reactive."

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