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Hillsboro, Washington County in driver's seat of regional economy

by: TRIBUNE PHOTO: CHASE ALLGOOD - Construction is nearly complete on improvements to Intel's D1X building and its D1C and D1D facilities on the Ronler Acres Campus.When experts talk about the strength of the Portland-area economy, they increasingly mean Washington County and especially Hillsboro, the fastest-growing city in the region.

Hillsboro Mayor Jerry Willey has experienced the transformative effects of Hillsboro’s growth first hand. They include the creation of a booming high-tech corridor, a revitalized historic district near the Civic Center and new mixed-use neighborhoods at locations that include Orenco Station and the Streets of Tanasbourne.

“I’ve seen Hillsboro’s population grow from about 27,000 in 1983 to over 92,000 today, with high employment and a healthy tax base, even during the recession,” says Willey.

Calling the changes “absolutely positive,” Willey says the increased property tax revenue generated by the growth has allowed Hillsboro to improve its livability with such features as added parks and bike trails.

Many of the changes are the result of the more than $20 billion invested in Aloha and Hillsboro since 1974 by Intel Corp., the semiconductor chip manufacturer. The company now employs more than 17,000 workers in Oregon, mostly in Hillsboro. The company also indirectly supports tens of thousands of other workers throughout the region and the state. And thousands of other workers have been busy building the new $3 billion D1X development facility on company’s Ronler Acres Campus in Hillsboro for nearly two years.

Intel officials are keenly aware of their company’s outsized influence in Hillsboro and the rest of the state, says Jill Eiland, the company’s Northwest Regional Corporate Affairs Manager.

“It helps make us sure that we remain a viable company,” says Eiland, who considers Intel to be a Washington County company because it has facilities in both Aloha and Hillsboro.

Intel’s total economic impact in Oregon was estimated at more than $17.3 billion in a February 2011 analysis prepared by ECONorthwest, an economic consulting firm. The vast majority of that impact was in Washington County, where median household incomes were $62,574 in 2012, far above the nation, state and rest of the region.

by: TRIBUNE PHOTO: CHASE ALLGOOD - Jill Eiland of Intel NW says the microchip giant is keenly aware of its importance to the Portland-area economy. “Economists say Portland drives the state, but Washington County drives Portland and Intel drives Washington County,” says Alec Josephson, the ECONorthwest senior economist who worked on the 2011 analysis.

Hillsboro is not a one-company town. Many other businesses have either opened or moved to its high-tech corridor during the past few years, expanding its impact on the regional and state economy even more. They include the TriQuint semi-conductor company, the SolarWorld solar power company, the Genentech pharmaceutical company, the Eid Passport identify verification company, among others.

And Hillsboro plans to add even more companies to the mix in coming years, according to Willey.

“Hillsboro has always been a forward-looking city,” says Willey.

Creating better jobs

Intel’s story is well known. But it has only been in the past few years that Washington County’s role in the regional economy has been discussed.

For many years, the conventional wisdom was that the Portland area was driving the state’s economy. This was supposed to be especially true after the timber industry collapsed in the 1980s and Great Recession hit Oregon especially hard outside the metropolitan region in 2007 and 2008.

But in 2009, University of Oregon economist Tim Duy offered a more refined analysis. In a Dec. 18 address to the Westside Economic Alliance, Duy said that Portland was having trouble generating family-wage jobs. He noted that average incomes in Multnomah County were lower than Clackamas County and especially lower than Washington County.

“Are we ready to admit there is a problem?” Duy asked the audience of westside business and elected leaders about depending on Portland to save the economy.

The notion that Washington County is doing something right was repeated during the next two years in a series of Economic Check-Up reports released by the Value of Jobs Coalition, which includes the Portland Business Alliance, the Port of Portland and a number of statewide business organizations.

Beginning in late 2010, they found that average wages in the Portland region had fallen below average wages in comparable metropolitan regions in the rest of the country. But each report noted significant achievements in Hillsboro, including increased production at Intel and the opening of the SolarWorld solar cell production plant.

Then in February, the Brookings Institution released a report that highlighted the importance of exports to the regional and state economy. It said that such Hillsboro-based semiconductor companies as Intel and TriQuint currently account for nearly 60 percent of all Oregon exports. The report was released to support the Greater Portland Export Plan, which calls for doubling exports over the next five years to revitalize economy.

The ongoing strength of Washington County’s economy was confirmed again when the state released its monthly employment figures for July. The county unemployment rate was 7 percent, well below the national rate of 8.3 percent and Oregon’s rate of 8.7 percent. Washington County’s unemployment rate was also below the 7.7 percent rate in Multnomah Count and the 7.8 percent rate in Clackamas County.

The figures also showed that Washington County is adding jobs at a faster rate than Multnomah County. Washington County has added 3,700 jobs since July 2011, compared to 4,200 in Multnomah County. That’s only 500 fewer jobs in Washington County, despite the fact that Multnomah County was home to around 208,000 more people in July 2011, according to U.S. Census estimates.

But Washington County and Hillsboro are also growing at a faster rate than Multnomah County and Portland — 2 percent compared to 1.7 percent, according to the census bureau. That put Hillsboro’s population at an estimated 93,455 in July 2011, the highest in Washington County.

According to Business Oregon, the state’s economic development department, since Intel opened its biggest facility in Hillsboro in the 1970s, Washington County has become home to more than five dozen semiconductor firms. Altogether, semiconductor manufacturing in Oregon has grown into an industry cluster of nearly 90 related businesses with more than 24,000 jobs that average more than $101,000 a year, the state says.

Legislative agenda

Knowing Hillsboro’s economic role has made Willey and the rest of the City Council feel they should play a larger role in county, regional and statewide issues. For the first time, the council has adopted a legislative agenda for the 2013 Legislature that begins next January. The agenda includes lobbying for changes in the state’s complicated property tax relief system, which is preventing some other governments from collecting all of the funds approved by their voters.

“We don’t have that problem in Hillsboro, but other governments do and we feel a responsibility to use whatever influence we have to help,” says Willey.

The first-time legislative agenda calls for increased federal and state support of transportation projects to support the efficient movement of goods and services within and outside the county.

Intel also takes its role in the economy seriously. The company is deeply involved in public policy initiatives and charitable organizations. Among other things, Eiland serves as vice president of the Oregon State Board of Higher Education, an indication of her and Intel’s belief that a well-educated and trained workforce is essential to the state’s economic future.

And Intel and the Intel Foundation together donated $7.2 million to United Way of the Columbia-Willamette during Intel’s 2011 Community Giving Campaign — about a third of all donations that year.

Hillsboro’s influence should grow if its economic development plans stay on track. Recent accomplishment include winning approval from the state Land Conservation and Development Commission for thousands of acres to be designated for development during the next 50 years. The board has also approved an expansion of the urban growth boundary administered by Metro, the regional government, for both new industrial and residential development.

Although both decisions are still subject to appeal, Willey is hopeful they will be upheld.

“People have said Hillsboro is a city on the edge because we’re on the edge of the urban growth boundary,” Willey says. “I like to say we’re a city on the cutting edge.”

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