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Sustainability, exports fuel region's economic growth

by: TRIBUNE PHOTO: JAIME VALDEZ - Portland is growing as the economy recovers. Hassalo on Eighth in the Lloyd District is just one project attracting out-of-state investment.The Portland area is poised to grow as the economy recovers, but the benefits may not be spread evenly throughout the region. More jobs are being created at the upper and lower ends of the pay scale, widening the income gap. And downtown is likely to see more investment than east Portland or the suburbs.

Those were among the messages delivered at two forums last week that featured national economic and real estate experts. One was the Portland Business Alliance’s monthly breakfast forum, which featured a presentation by Bruce Katz of the Brookings Institute. The other was the annual Emerging Trends in Real Estate presented by the Urban Land Institute.

Katz is the co-author of “The Metropolitan Revolution,” a new book that argues metropolitan areas are leading the economic recovery, in large part because the federal government has become dysfunctional. Noting that federal entitlement programs are growing as the population ages, Katz predicted the federal government soon will be little more than “a health care company with an army.”

Katz praised regional leaders for defining Portland as a leader in sustainable development during the Great Recession, creating an identity that is drawing young, high-tech and creative workers.

Portland also is benefiting by boosting its export economy, Katz said, especially semiconductors and electronic goods produced in Washington County’s Silicon Forest, where Intel and other high-tech companies have large manufacturing plants.

“Portland is not just weird and crunchy, it’s an export powerhouse,” said Katz, vice president and director of the Metropolitan Policy Program at the Brookings Institute, a Washington, D.C., think tank.

At the same time, Katz said the country needs to improve its education system to prepare more people for good-paying jobs.

“Inequality is the central debate in many cities,” said Katz said. “The big challenge is to close the gap in the ability to be successful.”

Mayor Charlie Hales, who appeared on a panel following Katz’s presentation, admitted that equalizing educational opportunities throughout the region is difficult. He noted there are five different school districts in Portland. Metro President Tom Hughes, who was in the audience, agreed, noting that his elected regional government “is not set up to address the educational needs of the region.”

The following morning, a panel of real estate experts talked about the future at a seminar hosted by the Northwest chapter of the Urban Land Institute, a nonprofit research and education organization that advocates responsible land use. The seminar featured the release of the ULI’s 34th annual forecast, a widely read report that provides an outlook on development trends, based on interviews with hundreds of real estate experts across the country. This year’s forecast is the most positive since 2007, the state of the recession.

The panelists included John Chamberlain, chief executive officer and president of American Assets Trust, the San Diego company building 500 new apartments in the Lloyd District. Chamberalin described Portland as a city with many development opportunities that is just being discovered by the investment community.

“All of the ingredients are here” for Portland to become a leading investment market, said Chamberlain, whose company owns 16 adjacent blocks in the Lloyd District that it plans to develop four at a time.

But Bob Lewis, managing director of San Francisco’s BlackRock, said a disproportionate share of the investments will be made in downtown and the inner east side of Portland.

“I cannot interest my investors in east Portland or the suburbs,” Lewis said.

At the same time, ULI Executive Director Dean Schwanke, questioned whether many people were ready for the coming growth.

“You are about to get bigger, and I’m not sure that’s what you really want,” said Schwanke, referring to the region’s reputation for livability.

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