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With the Woodburn UGB amendment finally on the books, developers are wasting no time taking advantage



INDEPENDENT PHOTO: TYLER FRANCKE - Todd Sheaffer, president of Specht Development Inc., gestures over 108 acres of land southwest of Woodburn, of which his company holds an option to purchase. The large, shovel-ready parcel has a real market value in excess of $4 million and was one of the main sticking points in the city's fight over its urban growth boundary amendment, which the state finally approved earlier this year.As many an optimistic entrepreneur — and actor Kevin Costner — would tell you, “If you build it, they will come.”

The city of Woodburn is learning the truth in a slightly different adage: “If you let them build, they will come, too.”

For well over a decade, city leaders fought the good fight to incorporate hundreds of new acres into the Woodburn urban growth boundary, encountering obstacles in the form of residents and land-use activists opposed to the plan, as well as snags from Oregon’s complicated and oft-criticized land use system.

Twice in the past 10 years, Woodburn’s proposal stalled out in the state's judicial system, with the primary sticking point being a large southwest industrial area that opponents called excessive and unnecessary, but supporters maintained was needed to bolster job growth and broaden the city’s tax base.

After closed-door mediation sessions in March 2015, a compromise emerged that kept the core of the southwest industrial area intact. An order making that agreement the law of the land was signed off on by the state Department of Land Conservation and Development earlier this year.

The ink on DLCD Director Jim Rue’s signature was barely dry when city planning and economic development staff had their first meeting with a development firm eager to build a major project in Woodburn.

“We started meeting the week the city received the letter from DLCD that the UGB expansion was approved,” Woodburn Economic Development Director Jamie Johnk said.

Who is Specht Development?

The company in question is Specht Development Inc., a Portland-based real estate management and development firm that specializes in office and industrial properties, though it has also dabbled in the retail, mixed-use and commercial sectors.

Specht Properties Inc. was founded in 1980 by Gregory Specht, who still serves as its CEO. The firm’s development services arm was established in 1992.

Though this would be Specht’s first foray into the Woodburn market during its three decades as a regional developer, the company is familiar to Jim Hendryx, the city’s community development director.

Hendryx said he worked with Gregory Specht on a number of projects while he was with the city of Beaverton.

“He has a big presence in the Portland area,” Hendryx said. “He’s a real good developer. He says what he’s going to do and he does a good, quality project.”

Specht’s projects have run the full gamut, from the very large (such as the 493,000-square-foot Interstate Crossroads Distribution Center in northeast Portland, completed last summer) to the very small (like a 7,500-square-foot tasting room and event space the firm oversaw for Dayton’s Sokol Blosser Winery in 2013).

One constant for the company is location. It rarely leaves the state or region, except when consulting for a third party.

“This is home for us,” said Todd Sheaffer, president of Specht Development. “If a client asks us to go to another market to develop a project for them, we’ll do it, but we don’t own any properties outside Oregon and southwest Washington.”

For a development firm, Sheaffer said his company is relatively small and unusually risk averse. He especially credits the second quality with helping Specht navigate a recent recession that hit few industries harder than real estate and development.

“In the downturn, we didn’t lay anyone off,” he said. “We didn’t give any buildings back to the bank. We didn’t have any of our projects get tied up in litigation. For a development company, that’s rare, and we’re very proud of our record.”

The firm also boasts an experienced and long-tenured senior management team. With “only” 20 years at Specht, Sheaffer is its greenest member.

COURTESY PHOTO: GOOGLE MAPS
 - This illustration depicts the size and location of the Specht property in southwest Woodburn.

‘A big piece of dirt’

Specht’s dreams for Woodburn center around a 108-acre parcel that constitutes the centerpiece of the new southwest industrial area.

It is owned by Dallas, Texas, resident Darlene Mahan, a member of the Weisz family that has farmed the land for generations, but Specht has held a purchase option on the property since 2010.

When the city’s UGB hopes were resurrected in mediation last year, the land underwent a similar transformation, its real market value skyrocketing from around $1 million to over four times that, according to county records, and it’s sure to continue to rise.

Its value primarily lies in two factors: location (particularly its close proximity to the Woodburn Interstate 5 Interchange) and size.

“We view this as the largest available green field industrial property between southwest Washington and Salem,” Sheaffer said.

And it’s really the two — size and proximity to a major interstate — working in concert that make the land so enormously valuable, Sheaffer said.

There are some other large industrial parcels available, like in the Cornelius area, but they are not nearly as well-served by major infrastructure. There are properties in Portland that offer more in the way of transportation options, but they are not nearly as large.

Plus, the Woodburn property is flat, mostly clear and can be easily served by adjacent utility hook-ups. In two words, it is about as “shovel ready” as a piece of land can be.

“It’s a big piece of dirt, and there’s not a lot of them,” Hendryx said. “It’s the biggest available site between hither and yon. There’s just really not big dirt for big development anymore; it’s all been chopped up. That’s why, from the start, we realized this could develop real quickly.”

Sheaffer said Specht’s plan is to market the land as a “speculative industrial project,” meaning it would develop the property for a particular end user, then sell or lease it to the user once construction is complete.

“Because of the large size of the property, we have an opportunity for companies to come to us, where we can develop a project to their specifications,” Sheaffer said.

Specht has already launched into the process of courting a new user, dubbing the development the I-5 Logistics Center. Visiting www.i5logisticscenter.com directs users to a slick website promoting the project, and several possible concepts for its construction, as well as the Woodburn area and the state of Oregon.

Johnk said this type of approach is common when marketing large commodities.

“They want to cast the widest net possible for companies within the state and outside the region,” she said. “They need to be able to show what’s possible out there, even though it’s broad.”

A close comparison can be drawn with another Specht project, the aforementioned Interstate Crossroads Distribution Center in Portland, which was developed on 28 acres at a cost of $33.6 million, according to its website.

One of the leading concepts for the I-5 Logistics Center would make Crossroads look small. It features two buildings, a 221,000-square-foot structure off Highway 219 and a 1,676,800-square-foot behemoth set farther back, for a grand total of a whopping 1.9 million square feet.

Such a structure would dwarf anything else in the area, including the neighboring WinCo Foods Distribution Center (which contains about a million square feet) and the nearby Woodburn Premium Outlets, which boasts about 350,000 square feet of retail space.

Still, Sheaffer stressed that these are just concepts. Exactly what the project ultimately looks like, including its size, will be largely up to the end user.

Hendryx confirmed this, saying the concepts are purely a marketing tool, and no whisper of an actual building plan or architectural schematic has crossed his desk.

“We haven’t done any level of review whatsoever,” he said. “All it is is a concept. They’re going out there and saying, ‘Hey, we can provide you a 2 million-square-foot building. Interested?’”

Looking to the future

As shovel ready as the land may be, there is still a lengthy planning process ahead before any dirt can be moved.

First of all, the land has to be annexed, which will take at least three to six months and requires public hearings and reviews by both the city and Marion County.

In addition, Specht will have to propose a master plan for not just its property, but the entire southwest industrial reserve.

“They’ll have to submit a master plan for how the entire area could develop: roads, water, sewer, pedestrian pathways,” Hendryx said.

The master planning will likely be fairly straightforward, as the rest of the land in the reserve is also owned by members of the Weisz family.

Sheaffer said that if his firm finds a user for the property soon, there are mechanisms that may allow the process to be accelerated. But Specht’s current projections are to secure building permits and begin construction sometime in mid-2017.

Sheaffer spoke enthusiastically of his interactions with the Weisz family and city staff and elected officials.

He described city leaders’ determined pursuit of new businesses, quality jobs and sustainable economic growth as another strong advantage in developing the new UGB areas sooner rather than later.

“The city has indicated that they really want businesses to locate here, and that’s consistent with our desire, obviously,” Sheaffer said. “We’re not in the business of owning farm land.”

He said nothing has made that desire to support new and existing businesses more clear than the UGB expansion itself. He said that city leaders’ quixotic quest to fight — and ultimately, to compromise — for the new development lands have raised Woodburn’s profile far beyond the local area.

“Everything you do like that shows you mean it when you say you want businesses to be successful here,” Sheaffer said. “For them to work for years and years to expand the UGB really shows their commitment.”

Specht, which was not part of the mediation sessions but has, by all accounts, closely followed the process and been supportive of the city’s efforts, is ready to carry the torch forward.

“We’re very appreciative of the city’s efforts to bring this into the boundary,” Sheaffer said last week, looking over the property he hopes will soon serve as the setting for his company’s next big project. “We look forward to taking it to the next step.”

Tyler Francke covers all things Woodburn. He can be reached at [email protected] com or 503-765-1195.