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February
The Gordian Knot The Journal for Business in Southern Oregon
SouthernOregonBusiness.com
A Few Words from Greg Southern Oregon momentum toward inclusion in state and regional conversations is picking up steam. From Lincoln City to Brookings Harbor on the Oregon coast and Klamath Falls to Prineville along Highway 97 and east to Vale near the Idaho border there has been significant acceptance of what the future will demand and provide. Change is difficult especially when memories of previous generations is solidly imbedded in our sentimental fondness of the way things used to be. Now we’re engaged in creating our own histories as new technologies, potential ecologic and industrial requirements, and the baby boom bubble stepping aside in every aspect of leadership, education and employment, making way for a world that has arrived. Healthcare, manufacturing, housing, agriculture, traded sector business and the way we govern and are governed with a much larger population – that includes a vastly shrinking world – has in every aspect a need for greater individual participation and knowledge attainment. The way we build houses and where we put them is as important as providing health care services in the most remote regions of our end of Oregon. Our nervous excitement is a product of the urgency to solve every problem (opportunity?) simultaneously. The resourcefulness we have seen in critical moments of the past ten years proves the talent is here today. Ubiquitous engagement in problem solving exercises throughout southern Oregon has become infectious, spreading from one community to another, from one industry sector to all others. I am extremely impressed with the generations that are following the Baby Boomers. Greg Greg@SouthernOregonBusiness.com
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The Southern Oregon Business Journal extends sincere thanks to the following companies for their continued presence as important cogs in the wheels of industry in southern Oregon.
A Few Words from Jim
The first month of 2020 is gone. Poof. Just like that. I’m not sure where it went. It’s been a very active month for Greg and I. I have been handing out copies of the print version and I love watching small business owners flip through it and find articles that interest them and how they admire the quality of the publication. The online version of this publication is growing in subscribers every day. The FREE online version is my personal favorite way of reading the articles and sharing them with other entrepreneurs that I think will get something out of them. If you haven’t checked it out, please do. Visit SouthernOregonBusiness.com and let me know what you think. If you have press releases about your company, we would love to hear from you. Send press releases to pr@SouthernOregonBusiness.com and we will publish them on the website right away. That’s a cool feature of the site. It has press releases added to it constantly throughout the month, where as the print version is only updated one per month of course. Jim Jim@SouthernOregonBusiness.com
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February 2020 - Table of Contents Inside This Issue In Defense of Dumb Cities Page 4 Employment Report Keeps Fed On Track Page 6 2020: Businesses Still Scrambling to Find Workers Page 8 2019 was a much better year for business than 2009! Page 11 How Coronavirus is Helping Housing Page 12 NOAH finds new liquified natural gas pipeline in Oregon will not jeopardize species. Page 14 Leading From the Top - The Creation of Boards of Directors And Why Some Fail Page 15 Understanding Methane Page 16 Understanding Renewable Natural Gas Page 17 Central Oregon Economic Indicators Page 18 Southwestern Oregon Economic Indicators Page 19 The Corporate Activity Tax (CAT) (Often referred to as the Gross Receipts Tax)Page 20 Oregon Counts 2020 Website Unveiled, Public Awareness Campaign Underway Page 23
The Gordian Knot
The Gordian Knot is a metaphor for a very difficult or unsolvable problem. It originated over 2300 years ago in Ancient Greece. Today we have problems in business, public service, population needs, trade, equality, education and healthcare among others that seem insurmountable. Like a Gordian Knot our leaders from the local levels to international areas of conflict have seemingly impossible responsibilities.
Your Workforce Is Waiting for You Page 26 Does Your Marketing Appeal to the Customers You Want? Page 28 Climate Fail: Metro’s 2020 Transportation Package Page 30 Community Colleges Can Now Offer Applied Bachelor’s Degrees Page 34 Port Responds to Charleston Ice Plant Fire Page 36
Cover Photo by XXXXXXXXX
STRONG TOWNS BY MICHAEL MCGINN
In Defense of Dumb Cities
Photo by MILKOVÍ on Unsplash
It is a recurring trend, occasionally rising to craze, to imagine that cities will be transformed by technology into entirely different places. Seattle has been participating since its world fair in 1962 (monorails and jetpacks anyone?) and most recently with a tech advisory board to tap into the expertise of local wizards at Amazon, Microsoft, Zillow, etc. The phenomenon is by no means restricted to Seattle, with “Smart City” conferences and articles abounding, breathless descriptions of automated vehicles, and a growing number of city-corporate partnerships to
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tap into big data and the internet of things. It’s time to take a deep breath and reflect on the all the “dumb” things that make cities great, because shared data and information is only part of the puzzle. And this is said with no malice towards what technology can add—as Seattle mayor from 2009-2013 we opened up data portals, posted an accountability dashboard, championed municipal broadband, launched a “Find-it, Fix it” app, as well as real time maps on freezing roads, rainfall, and “where’s my snowplow.” We even held the first “civic hackathon.” Shared information
matters in cities. It is one of the reasons cities form—to be close to the knowledge and activity of others. But it is far from the only one. And investing in a supposedly smart future won’t overcome the failure to get the dumb technologies right. So here is my list of critical dumb technologies—tried and true, nothing fancy, but supremely important: Walking Not technically a technology, but everything trying to replace it is a technology—so play along here. In fact, walking upright may be the ur disruptive technology. A city that
prioritizes fast moving vehicles on its streets is dangerously interfering with the exchange of ideas and goods that are at the heart of places. It’s not just that people on foot are pushed to the edges or into cars. The space taken up by cars moving or being stored separates destinations. And all those lights increase delay. (By the way, why is that never measured as destroying productivity for pedestrians in the way that traffic jams destroy productivity for drivers)? Plus, walking is healthy, has no carbon emissions, no smog, and no particulates that cause cancer. Show us a place full of people walking, and it is almost by definition low impact and economically productive in relation to the space it occupies. The Wheel It’s the technology that every school kid recognizes, along with fire, as one of our greatest technologies. I’m not talking about cars, just wheels without a massive engine attached. Wheelchairs, strollers, bikes, skateboards, scooters, and yes, even those dang solo wheels. Curb cuts, wide safewalks, protected bikeways, along with intersection design that prioritizes them, is another highly effective way to connect humans to each other—to share information, conduct commerce,
create art, and decide matters of civic importance. Successful places soon outgrow their capacity to make those connections if everyone is encapsulated in a car, endlessly circling the block for a space, or spiraling upwards or downwards in the parking garage. But you can add a lot of wheels powered by people or lightweight electric motors—particularly if you take away some of the space occupied by cars. Streets and Public Squares The streets of Pompeii. Strong Towns president Chuck Marohn has written about the “spooky wisdom” embodied in cities like Pompeii. Image credit. Streets are the spaces between buildings in settled and developed places. Historically, they are open to all users. And in some places, often the intersections near important buildings, they become public squares and public markets. We need to distinguish between streets and roads. Roads connect distant places—the Yellow Brick Road, the network of Roman roads, the Silk Road, the railroad, the interstate highway. Somewhere after the invention of the car we got the idea to turn city streets into roads—prioritizing the fast movement of vehicles through the place. We need to return to the ancient idea of streets, where
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(continued on page 37) Southern Oregon Business Journal February 2020 | 5
FED WATCH BY TIM DUY DUY@UOREGON.EDU
If you were looking for something exciting out of this labor report, you were disappointed. Mostly it is is a continuation of recent trends that will encourage the Fed to retain their basic optimism while providing them no reason to change course. Probably most important for policy was the weak nominal wage growth. Absent an explosion in wage growth, it is hard to describe the labor market as overheated. At the same time, note that low inflation means that the labor market is generating real wage gains. Nonfarm payrolls grew a notch below expectations at 145k:
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Employment Report Keeps Fed On Track
Although previous months were revised downward slightly, the average monthly gains in the final quarter of the year were a solid 184k. Still, there is a modest downtrend in the annual pace of job growth that will be more evident after annual revisions. The unemployment rate held at 3.5% while wage growth softened: Obviously, the Fed is watching wage growth for signs the economy is overheating. And here is Federal Reserve Chair Jerome Powell from December: “The labor market is strong, I don’t know that it’s tight because you’re not seeing wage increases,” Powell
said in response to a question from Yahoo Finance on Dec. 11. “Ultimately if it’s tight, that should be reflected in higher wage increases.” Faster wage growth does not necessarily mean inflation will accelerate, but it it difficult to expect any sustained acceleration of inflation absent faster wage growth. In other words, it is tough to get too bent out of shape about some inflationary threat with nominal wage growth crawling along around 3%. And minimal inflation worries will leave the Fed on hold; there is simply to reason to think that they need to reverse last year’s rate cuts anytime soon.
All that said, I think it is important to push back on this idea: The weak spot – and ongoing concern – was wage growth, up just 2.9 percent over the past year. Experts say wages would have to grow between 3.5 to 4 percent in order for workers to really feel an impact.
Accounting for low inflation, the tighter labor market is now generating real wages on par or better than the pre-Great Recession boom: I point this out to suggest that we should beware of excessive pessimism. Tighter labor markets appear to be having the intended effect of improving real wage growth, which in turn helps support
consumer confidence and spending growth. Yes, I know, everything is terrible and you can never say anything good about the economy. That attitude though would have led one to sit out a multi-year equity rally as some surely have. Bottom Line: The employment report will keep the Fed on hold. As always avoid excessive pessimism.
Southern Oregon Business Journal February 2020 | 7
AMERICA EMPLOYED BY BILL STOLLER EXPRESS EMPLOYMENT PROFESSIONALS
78% Have Trouble Filling Vacancies Job Seekers Holding Out for Higher Wages
2020: Businesses Still Scrambling to Find Workers
half, 52%, reporting it was “somewhat difficult.” The number of decision makers
The next decade is set to kick off with near record low unemployment, leaving businesses scrambling to find skilled workers or candidates who will even show up for the interview. Yet some job seekers say it will be even harder to find employment in 2020. So, where is the disconnect?
In a recent Express Employment Professionals Job Insights survey of business leaders, 26% of respondents said it is “very difficult” to fill open positions, with more than
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who said recruiting was “very difficult” is down from 33% in January 2019.
The number one reason businesses can’t find candidates is the robust health
of the economy/job market, according to David Robb, director of marketing at the Grand Rapids, Michigan, Express office.
“Almost everyone who has quality skills and wants to be employed is already working,” he said. “To attract top talent, employers will have to lure them away from other companies or catch job seekers in a time of transition.”
In Mobile, Alabama, Express franchise owner Chris Ashcraft says companies must be willing to offer competitive wages to not only attract job
seekers, but to make sure they stay.
“If you are not willing to pay (more), it is difficult to find reliable workers,” he said. “The key word is reliable. I can fill a $10 per hour job, but they may walk off or not show up at all.”
interviews. Another added that most companies in their area promoted from within, making it harder to move forward to a better position.
But Wakefield, Massachusetts, franchise owner John Dickey
Unemployed in a Time of Low Employment
Surprisingly, 46% of job seekers said finding a new job in 2020 will be “somewhat difficult” in a December 2019 Express survey of job seekers. Another 36% percent agreed that securing employment would be “hard.”
One job seeker said they had applied to more than 75 businesses with only three
disagrees with this outlook and says the reason for the mismatch between companies and job seekers boils down to pay.
“People who are eligible and willing to work should be able
to find a job in this market,” he said. “However, we talk to candidates who expect a higher pay rate than employers are willing to pay for their skills and experience.”
Terri Greeno, Express franchise owner in Crystal Lake, Illinois, also sees pay rates as a source of frustration.
“We do see candidates who have an unrealistic pay expectation,” she said. “With all the hype about some states requiring a $15 per hour minimum wage, some unskilled people walk into a company expecting that salary with a spotty job history. While a lot of skilled positions pay more, a $15 per hour required minimum wage isn’t here yet, despite some people who are starting to expect that pay rate.”
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What Employers are Looking For
For those who predict finding a job in 2020 will be difficult, a strong work ethic/integrity is the No. 1 attribute business leaders value in candidates per the Express Job Insights survey.
“As we saw in 2019, jobs are out there, and businesses are desperate to fill them,” said Bill Stoller, CEO of Express. “But employers and job seekers need to meet in the middle in the new year with candidates proving their value and companies willing to pay for it.”
About the Surveys Ashcraft agrees and says this is because businesses are willing to raise wages and expect more from employees who work hard and possess integrity. And while Robb also put work ethic/integrity at the top of his list of traits, he says these actually play more of a role down the line.
“This, and attitude, are the most important aspect in keeping a job, but is less of a factor in getting a job, because it is hard for employers to see it until candidates are hired,” he said. “Job experience and consistent work history are what employers end up looking at since they can’t always tell attitude and work ethic before hiring employees.”
In December 2019, Express Employment Professionals surveyed 585 business owners, decision makers and human resource professionals about the overall national hiring trends in the market today and how their business is impacted.
The survey of 200 workers and job seekers was conducted in December 2019 on the Express Job Journey site.
About Bill Stoller
William H. "Bill" Stoller is chairman and chief executive officer of Express Employment Professionals. Headquartered in Oklahoma City, the international staffing company has more than 800 franchises
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in the U.S., Canada and South Africa. Since its inception, Express has put more than 7.7 million people to work worldwide. About Express Employment Professionals Express Employment Professionals puts people to work. It generated $3.56 billion in sales and employed a record 566,000 people in 2018. Its long-term goal is to put a million people to work annually. For more information, visit ExpressPros.com.
EMPLOYMENT BY WILLIS COOK
The Roseburg Express Employment Professionals franchise opened in mid-2007 and focused on serving Douglas County businesses, that was not the best time to start a staffing business. Fast forward to 2019 and Express saw a record year in hiring for permanent and temporary jobs, putting more people to work in partnership with local companies than ever. The Roseburg office was recognized by the franchisor for achieving the Silver Level - Circle of Excellence Award, that put them in the top 10% of Express franchises worldwide. This is great to see here in Southern Oregon. Willis Cook, the Roseburg Express owner said, “In 2019 we saw the majority of our customers use the Express hiring model as a way to evaluate and bring employees into their core workforce. It is rewarding to partner with companies that are
2019 was a much better year for business than 2009!
growing and place employees in a job that fits their skill set allowing them to provide for themselves and their families. Growth in the staffing industry tends to be a leading indicator of economic growth, we are encouraged to see the positive trend locally and excited for 2020.” Other southern Oregon Express offices are seeing the same trend. The Medford/Grants Pass franchises achieved the Gold level - Circle of Excellence placing them in the top 5% of all Express franchises. Andy Linerud, coowner of the Medford and Grants Pass locations said, “In this strong job market employers continue to turn to Express as the preferred method to expand their workforce and quickly respond to the needs of their customers.” Roseburg Express was also honored to be named the #1 Employment Agency in the News
Review’s Readers’ Choice Awards for 2019. This is a testament to their service and the quality of jobs they are placing employees in. “We are excited for the new year and will continue to place employees in local skilled trades, office, light Industrial, wood products, and professional positions”. Willis Cook, Roseburg Franchise Owner. “Eugene has developed a strong Healthcare business which serves all of Lane County. Celebrating 32 years in Lane County we have been able to adapt to our client company developments and changes in staffing needs. Those help us to initiate new areas of growth and training. Looking forward to 2020.” Pat Murphy, Franchise Owner - A Woman Owned Business, Express Employment Professionals. https://www.expresspros.com/ RoseburgOR/About-Us/ Southern Oregon Business Journal February 2020 | 11
US HOUSING MARKET
How Coronavirus is Helping Housing
BY CURT SANDFORT
Although there were a few caveats, last week saw one of the biggest jumps in new home construction in more than decade. Now this week's data shows existing home sales at their highest in nearly 2 years, and close to highest in more than a decade. Is housing starting to boom again? The following chart of existing sales helps put things in perspective. There were multiple months from 2016 through early 2018 where sales were similarly high, and several where they were higher. The quickest conclusion is that housing is merely getting back to where it was before after taking a year to cool-off a bit in 2018. Things may not be that simple, however. December's inventory of homes for sale fell to a
record low in the same report. And it's been near that level for 3 years running. To whatever extent an absence of inventory is constraining home sales, the
housing market could be even stronger than the headlines suggest. There are several factors driving the strong home sales environment, but one factor that always matters is affordability. Given that the average home is financed, that makes mortgage rates a key
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factor in the health of the housing market. Fortunately, rates are doing a great job of holding a steady range at levels that are not too far from alltime lows. Rates take cues from inflation, the economy, Fed policy, government spending, and headline news among other things. Assigning credit for today's low rates or guessing where they're headed next would involve a qualitative debate. One thing every market participant can agree on this week, however, is that the coronavirus outbreak in China (aka Wuhan Virus or simply "nCov," which means it's a "novel" or previously unseen type of coronavirus) has been clearly connected to
rather extreme, with some pundits crediting it for pushing Hong Kong into a brief recession in
lower rate momentum in the short term. For those who haven't taken a deep dive into the impact of the Ebola news cycle in 2014 or SARS in the early 2000's, this might sound like a joke. It's not. Relative to the amount of people killed by SARS, its impact on financial markets was
mid-2003. In terms of the impact on interest rates in the US, when
Fast forward to January 2020 and the evolution of the coronavirus news cycle is the defining factor in a rate reversal. This move began earlier in the month when the identification of the virus put an end to upward momentum in rates. It then kicked into higher gear mid-month when China confirmed it could spread among humans. Since then, every major update on incidence and mortality has coincided with another little bump toward lower rates. Naturally, the whole world is hoping this outbreak is contained as quickly as possible. Until then, markets will continue accounting for the uncertainty by buying more bonds, and more bond buying means downward pressure on rates. Be aware (or even be "warned") that rates may bounce fairly quickly as soon as it looks like the tide is turning with respect to containment. Subscribe to my newsletter online at: http:// mortgagenewsletters.org/ goprimewithcurt
the CDC finally announced that SARS was contained, it marked the bottom of a quick move to the lowest rates in a long time.
Curt Sandfort
 GoPrime Mortgage Branch Manager, Loan Officer Branch: Roseburg Office Phone: 541-492-1154 Mobile: 541-580-8583 csandfort@goprime.com Serving: CA, ID, OR Southern Oregon Business Journal February 2020 | 13
JORDAN COVE UPDATE
NOAH finds new liquified natural gas pipeline in Oregon will not jeopardize species.
BY MICHAEL.MILSTEIN@NOAA.GOV AT WWW.NOAA.GOV/
NOAA Fisheries has issued a final biological opinion on construction and operation of the Jordan Cove terminal in Coos Bay, Oregon, and the associated 229-mile long Pacific Connector Liquid Natural Gas pipeline. After conducting a thorough review, NOAA scientists determined that the proposed action does not jeopardize protected species or adversely modify their critical habitat. “NOAA’s opinion on Jordan Cove will pave the way for more American jobs and vastly expanded exports of domestically sourced liquified
natural gas to prized Asian markets,” said Secretary of Commerce Wilbur Ross. “The speed of this decision was only made possible by recent reforms to the infrastructure permitting process, while still allowing the relevant authorities ample time to determine that no species or critical habitat would be jeopardized.” The pipeline would connect the terminal to other major pipelines in the West, linking it to gas supplies across the United States and Canada. The terminal in Coos Bay would be capable of liquefying up to
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1.04 billion cubic feet of natural gas per day for export to markets around the world. This biological opinion considered the effects of construction and operation of the terminal and pipeline on 17 species listed under the Endangered Species Act and their critical habitats. The affected species include whales, sea turtles, salmon and other fish species. NOAA Fisheries determined that impacts on the species and their habitat would occur only in the short-term or on small scales, and would be dispersed
broadly across about 250 miles. The biological opinion fulfills requirements under the Fixing America’s Surface Transportation Act, known as FAST-41, and Executive Order 13807, which sets a goal of speeding environmental reviews.
Leading From the Top The Creation of Boards of Directors And Why Some Fail Recent news about the failures and other difficulties of cooperatives in agriculture and non profit board
The company, Pembina Pipeline Corporation, committed to important best management practices that would reduce effects on listed species, and proposed mitigation measures that will benefit species in the long-term.
leadership has prompted extensive communication about
The measures include restoration of at least 72 acres of tidelands and 2.7 acres of freshwater floodplain that provide important habitat for protected salmon and other species. The company would also establish at least 2.7 acres of eelgrass habitat. Additional measures would restore and improve freshwater habitat at 60 sites along the pipeline route, including placement of large wood in streams, riparian vegetation planting and fencing, fish passage improvement, and road improvements that will reduce delivery of fine sediment to streams.
Using the resources of academic studies and interviews
michael.milstein@noaa.gov 
 https://www.noaa.gov/
assessment of organizational makeup. The causation of ineffectiveness which may lead to failure is a many pronged study. The causes could be any of many possibilities.
with organization leaders experiencing difficulties as well as histories of the now failed organizations, the Southern Oregon Business Journal will be addressing the issues of organizational development including the creation of administrative boards, advisory teams, and consulting services. Our research and published articles will begin appearing in our March 2020 issue. The continuation of the articles will last until all our information is published. We expect to have this information in consecutive issues of the journal beginning in March and ending in May 2020 . Greg Henderson, Founder and Co-Publisher Southern Oregon Business Journal Greg Southern Oregon Business Journal February 2020 | 15
16 | Southern Oregon Business Journal January 2020
Southern Oregon Business Journal February 2020 | 17
Central Oregon Economic Indicators December 2019 Edition
www.QualityInfo.org (November 2019 data)
Industry Gains and Losses (Over-the-year net employment change)
Local Area Unemployment Rates
Crook County
(Seasonally adjusted)
Deschutes County Graph Table of the Month Bend-Redmond Metro Tops U.S. “Work-From-Home” List Source: U.S. Census Bureau, ACS 2018 1-Year Estimates, Table S0801
Metros With the Greatest Share of Workers Who Work From Home Share of Workers Who Work Margin Metropolitan Statisical Area (MSA) From Home of Error Rank St. George, UT 13.4% +/- 2.1 1st Boulder, CO 12.3% +/- 1.3 2nd The Villages, FL 11.7% +/- 4.3 3rd Punta Gorda, FL 11.6% +/- 3.0 4th Bend-Redmond, OR 11.5% +/- 2.3 5th Portland-Vancouver-Hillsboro, OR-WA Grants Pass, OR Eugene, OR
8.1% 7.8% 7.0%
+/- 0.4 +/- 2.6 +/- 1.0
23rd 27th 46th
Jefferson County
The Bend-Redmond metro nabs yet another accolade under its belt for being the metro with one of the highest shares of people who work from home. Not only that, but some of Oregon’s other metros ranked in the top 50 out of 384 metro areas in the nation, as well. What are some examples of occupations that allow someone to work from home? Are these all remote workers? Read the original article to find out more! Article:
Bend-Redmond Metro Ranks 5th in the U.S. for Those Who Work From Home
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Need local data? Want to join the distribution list? Contact me! Kale Donnelly | Kale.Donnelly@Oregon.gov | 541.306.1645
Southern Oregon Business Journal February 2020 | 19
TAXES FROM OREGON DEPARTMENT OF REVENUE:
The Corporate Activity Tax (CAT)
(Often referred to as the Gross Receipts Tax)
Photo by Kelly Sikkema on Unsplash
What is this new tax? A: The new Corporate Activity Tax (CAT) is imposed on businesses for the privilege of doing business in this state. The CAT is not a transactional tax, such as a retail sales tax, or an income tax. Oregon’s CAT is measured on a business’s commercial activity–the total amount a business realizes from transactions and activity in
Oregon. Certain items are excluded from the definition of commercial activity and, therefore, will not be subject to the CAT. In addition, Oregon’s CAT allows a 35% subtraction for certain business expenses. The CAT is applied to Oregon taxable commercial activity in excess of $1 million. The tax is computed as $250 plus 0.57% of Oregon commercial activity of more than $1 million. Only
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taxpayers with more than $1 million of taxable Oregon commercial activity will have a payment obligation. The Department of Revenue has begun developing administrative rules for the new CAT program. We encourage all stakeholders to provide feedback. Please send any comments to cat.help.dor@oregon.gov.
Who is subject to the CAT? A: Any business, or unitary group of businesses, doing business in Oregon may have responsibilities under the CAT. This includes all business entity types, such as C and S corporations, partnerships, sole proprietorships, and other entities. The CAT sets four thresholds to determine whether a business or unitary group has CAT responsibilities. These thresholds are based on the amount of commercial activity the business or unitary group earns in Oregon over the course of the year. Excluded–No Requirement Less than $750,000 Business or unitary group with less than $750,000 of Oregon commercial activity are excluded from all CAT requirements. Registration Threshold $750,000+ Business or unitary group with Oregon commercial activity in excess of $750,000 must register for the CAT. Filing Threshold $1 Million Business or unitary group with Oregon commercial activity of $1 million must file a return.
A: A taxpayer is required to include the value of property transferred into Oregon within a year of purchase outside Oregon if the purchase outside Oregon and transfer into Oregon was intended, in whole or in part, to avoid the CAT. Omitting the value of property purchased outside of Oregon and transferred into Oregon within one year of purchase will be considered a representation by the taxpayer that there was no intent to avoid the CAT. This is subject to review by the department.
Tax Payment Threshold More than $1 Million Business or unitary group with taxable Oregon commercial activity in excess of $1 million must file a return and pay tax. If you are unsure whether your business is part of a unitary group, please see our Unitary Group FAQ. Who is not subject to the CAT? A: The CAT legislation excludes certain types of business entities from any CAT liability, unless such business has unrelated business taxable income under federal law. Exempted entities include but are not limited to:
Otherwise, the taxpayer should include as commercial activity on its CAT return the value of property transferred into Oregon within a year of the purchase outside Oregon.
Nonprofit organizations. Farmers’ cooperatives that are exempt from federal income taxation.
Can I pass the CAT on to my customers?
Federal, state, and local government entities (e.g., public school districts).
A: The laws establishing the CAT (Oregon Laws 2019, chapters 122 and 579) do not prohibit any business from recovering a business expense when setting the total price for the sale, lease, or license of an item or the sale of a service. The CAT is imposed on the entity doing business in Oregon and is considered part of the business’ expenses. A business may include the CAT with other business expenses when setting the total price charged to
Hospitals, long-term care facilities, and other entities subject to the health insurance premium and managed care assessment or the hospital and long-term care facility assessment. When is property brought into Oregon included in taxable commercial activity?
Southern Oregon Business Journal February 2020 | 21
Price elasticity of demand (continued)
customers. However, the total price charged (including any amount estimated to be attributable to the CAT) is included in the business’ commercial activity.
150-317-1040 Sourcing Commercial Activity Other Than Sales of Tangible Personal Property in This State
How can I contact the Oregon Department of Revenue with questions about the CAT?
150-317-1200 Cost Input or Labor Cost Subtraction
A: Visit our website at https:// www.oregon.gov/DOR/. Click on the "Business" link, then the "Corporate Activity Tax" in the "Information" column on the next page. We have a mailing list registration for future updates. Also, you can email your questions to Cat.help.dor@oregon.gov. Temporary rules Corporate Activity Tax Visit the Corporate Activity Tax page for draft rules. To provide input on CAT rules, email cat.rules.dor@oregon.gov. Temporary Administrative Order 150-317-1000 Definition of Commercial Activity
150-317-1100 Agent Exclusion 150-317-1130 Property Brought into Oregon
150-317-1300 Estimated Tax When Estimated Payments Are Required 150-317-1310 Estimated Tax Payments Delinquent or Underestimated Payment or Both, Constitutes Underpayment 150-317-1320 Estimated Tax Unitary Groups and Apportioned Returns 150-317-1330 Extension of Time to File Property Tax Property Tax Deferral– Temporary Administrative Order 150-311-0655 Deferral Criteria When Applying with a Reverse Mortgage
150-317-1010 Substantial Nexus Guidelines for Corporate Activity Tax 150-317-1020 Factors Used in Determining Whether a Group of Persons Forms a Unitary Group 150-317-1030 Sourcing Commercial Activity to Oregon from Sales of Tangible Personal Property 22 | Southern Oregon Business Journal February 2020
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ADS 17,000+ Business People get a chance to see your ad in the monthly Business Journal. Send your ad copy to: Greg@SouthernOregonBusiness.com Greg Henderson, Co-Publisher
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Oregon Counts 2020 Website Unveiled, Public Awareness Campaign Underway With a sixth congressional seat and resources estimated to be upwards of $900 million dollars on the line, the State, Association of Oregon Counties (AOC), cities, and advocacy organizations are all involved in the Oregon Complete Counts Committee and are actively spreading the message to get Oregon to a complete count. To view the work of the committee, visit https://www.oregon2020census.gov/or-complete-count-committee. Starting in mid-March of 2020, Oregon households will receive their first mailing from the U.S. Census Bureau soliciting participation in the census. The official Census Day is April 1, but efforts do not stop there. In May enumerators will begin their follow up with households that have not responded, and at the end of July, the count ends. Contributed by: Megan Chuinard | Public Affairs Associate http://oregoncounties.org/oregon-counts-2020-website-unveiled-public-awareness-campaign-underway/#iLightbox[gallery20323]/0
Southern Oregon Business Journal February 2020 | 23
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Barry Robinson,
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Welcome to Umpqua BroadBand! High Speed Internet for Rural Douglas County. Rural homes, farms, ranches and businesses now have an option. We have towers strategically located all over the Umpqua Valley. We have hundreds of happy customers that have made the switch to Umpqua Broadband™, replacing their slow DSL or Exede wireless service. umpquabroadband.com 1604 NE Vine St. #2 Roseburg, OR 97470 1 (541) 672-3793 customercare@umpquabroadband.com Southern Oregon Business Journal February 2020 | 25
CAREER DEVELOPMENT BY JULIE NILES-FRY DIRECTOR OF CAREER DEVELOPMENT & MARKETING, LOGOS PUBLIC CHARTER SCHOOL.
Your Workforce Is Waiting for You
Photo by Saulo Mohana on Unsplash
The 2018-2019 Oregon high status, among others. What Career Technical Education school graduation rates were inspires me are two pieces of (CTE) and Talented and Gifted just released and the (TAG) stats. This is average across the the data that is state now 80%. relevant to What inspires me are two pieces of data that While everyone businesses: Students tell a story of what the student did in high wants 100%, who study in CTE school, the Career Technical Education (CTE) reaching 80% has graduate in the 90th and Talented and Gifted (TAG) stats. This is never been percentile like TAG the data that is relevant to businesses: achieved in the students. Students who study in CTE graduate in the state and is cause Businesses who don’t 90th percentile like TAG students. for celebration. A need future university deep dive into the graduates can now data will tell you cheer; your workforce data that tell a story of what the many things about students; not only exists but you’ll find gender, ethnicity, economic student did in high school, the them to be smart and savvy. 26 | Southern Oregon Business Journal February 2020
So, don’t delay, your workforce is waiting for you! It’s time to offer job shadows and internships to high school students. It’s not only the “high-flyers” that engage in these activities. In fact, high schools now require career engagement with business and industry to graduate. Begin to imagine the day when people are knocking on your door to work for you, instead of desperately placing help-wanted ads and poaching employees from other businesses. Yes, fresh talent exists, but they need a little help from you who has eyes wide open to possibility. What to do? 1. Join the Rogue Valley Business Education Partnership. This group is comprised of Southern Oregon high school administration and career coordinators, business owners, and workforce development organizations like SOREDI and WorkSource Rogue Valley. They have launched a summer internship program for students across the region. Contact Amy Browne at
SOREDI, 541.773.8946 or Michele Laird at Quantum Innovations, 541.608.7772.
wondering how best to connect with you. Reach out!
2. Contact Youth Pathways Partnership to create internships with high school students throughout the year. Gene Merrill from Illinois Valley
High School created it and works with BOLI at the state level to jump the hurdle of traditional requirements. Yes, those under 18 can engage in your workplace, even if there are mighty machines there! Check out their website at www.path4youth.com.
4. Call me and I’ll help you create a program utilizing Youth Pathways Partnership’s BOLI approved plan. Julie Niles-Fry, 541.282.4795. Bottom line: If you own a business, and you are planning on staying in business, your workforce is graduating from high school at a high rate. They’re not all bound for university, many are graduating high school with industry certifications, and career technical education is inspiring smart, savvy, and often bored students to graduate. Act now to get students into internships to experience your business. Help them graduate – with a career. Julie Niles-Fry Director of Career Development & Marketing, Logos Public Charter School. On-air KOOL 103.5/100.7/104.3FM Rogue River, Oregon
3. Reach out to the Career Coordinators at your local high school and tell them what you need. Because education and business don’t speak the same language, schools are
An enthusiastic professional that successfully employs creativity and insight, customer service and people skills, marketing, and sales abilities to any development project. Southern Oregon Trade Careers Expo 2019
Southern Oregon Business Journal February 2020 | 27
MARKETING
Does Your Marketing Appeal to the Customers You Want?
BY STEVE SMITH GROWTHSOURCECOACHING.COM
Photo by Maarten van den Heuvel on Unsplash
One of the biggest challenges all small businesses face is attracting good customers. The main difference between attracting any customer and a good customer is the appeal of your marketing message. Having an appealing message is a critical part of marketing and has huge implications for keeping revenues flowing from the customers you want most. When we think of finding and attracting customers, we tend to think of the relationship from our own perspective. After all, it’s what we offer that makes them want to do business with us, right? Wrong! Consumers today have more choices of whom to do business with and what selection to choose from than ever before. And with everyone holding on to their money so tightly these days, the usual marketing approaches
have become mostly ineffective when it comes to attracting the right customers that want what you have and are willing to pay you your asking price. Attracting Customers is an Age Old Problem: Since commerce began, entrepreneurs and business owners have resorted to a variety of sales tactics and promotional gimmicks to lure potential customers to their place of business. Not surprisingly, consumers eventually figure out these methods and become indifferent to offers of special discounts, creative pricing strategies, frequent shopper programs, and other limited time offers. Add to this, the sheer number of merchants doing the same thing and you have a consumer that grows numb because they simply
28 | Southern Oregon Business Journal February 2020
don’t see the need to purchase or feel they really want what you sell at the time you want to sell it. Viewpoint is a Big Part of the Problem when attracting customers: Small business owners are a proud and resilient bunch! Most have worked very hard and sacrificed enormously to have the business that many times bares their name. They therefore, tend to view all reasons for doing business with them from their point of view: ‘We’re honest’; ‘We’ve been in business 30 years’; ‘Our customers love us’: ‘We have the lowest prices’, etc., etc. While all these statements may be true, they have little effect on enticing people to decide to patronize a particular business. The reason? All these statements are features that
favor the business. As an example, ‘We have the largest selection anywhere’, doesn’t speak to anything in particular that a customer may really want. Strong Marketing Separates ‘Wants from Needs’: When I meet with new business owners, I typically ask them what they do and who their ideal client is. Most will tell me that ‘anyone’ can use their service or ‘everyone’ needs what they have. Here’s reality. Not everyone wants what you have to sell. In fact, people will buy what they really want before they buy what they need. And since ‘Wants’ are driven by emotions, trying to sell people with general feature based statements will not move anyone to purchase anything. Attracting customers requires understanding how they make decisions: In the face of numerous choices, people will do one of two things. They either defer the decision all together because they are too overwhelmed with the choices or they will find something specific to make the decision on. What they choose as a differentiation point is unique to what is important to them. For some, it could be convenience; for others it could be variety. But for all, there has to be a specific reason for selecting one
business over the next when multiple businesses serve the same purpose. In the event that none of the choices have any particular benefit that the consumer values and the consumer ‘needs’ to make a choice- i.e. a non emergency repair, they will most likely focus on price as all choices appear to be the same. Profitable Customers Come from Niche Marketing Rather Than Mass Marketing: If you are one of the Fortune 500, you can afford to advertise to the world. Often times, these companies are working on brand or company image. Other times, it’s a simple matter of staying visible as in the case of Coke vs. Pepsi. Here is a factoid that will make your hair curl; it takes approximately $100 million to establish a national brand in the US today. The small businesses that are successful in today’s sea of marketing overload have focused on a particular niche. Niche marketing does not have to be geographically based. In fact, the more specific your client profile is and the better you match up to them with what they value, the more profitable you will be. There is no magic bullet for attracting customers in today’s marketplace: Like any proven method, successfully attracting
customers requires a systematic approach focused on what you do that uniquely benefits the customers you want. They will buy what they want well before they buy what they need so marketing to their ‘wants’ trumps broad-based advertising every time. They will buy from you if they see a clear reason why you are a better choice than your competition. People are not just looking for products and services, they are looking for solutions. Show them that what you have is the perfect solution for what they want and you’ll never have to ‘sell’ again! Invest in Doing It Right So Your Results are Worthwhile: If you have not considered this kind of marketing approach because you don’t think you can make it work for your business, get help from a professional who specializes in marketing strategies like these. Marketing takes time to gain traction and can drain your bank account if you are not sure of what to do. And when it comes to opportunity costs (the revenue you are not getting now because of what you are not doing to get it) doing the same things over and over is not a successful way to attract the customers you really want. Steve Smith growthsourcecoaching.com
Reprinted by permission: growthsourcecoaching.com/ business-articles.html
Southern Oregon Business Journal February 2020 | 29
TRANSPORTATION BY JOE CORTRIGHT PRESIDENT AND PRINCIPAL ECONOMIST OF IMPRESA
Metro’s multi-billion dollar transportation package does nothing to reduce greenhouse gas emissions Spending $3 billion reduces Portland’s transportation greenhouse gases by .05 percent This package costs nearly $40,000 per ton in reduced GHG emissions Metro Portland knows that climate change is one of the most serious problems we face. We know that transportation, particularly automobiles are the largest source of greenhouse gas emissions. Our state, region and city have all formally adopted legal commitments to reduce greenhouse gas emissions. Officials from throughout the region say that dealing with climate change is one of the key priorities of a proposed multi-billion dollar transportation package. But in reality, this package will do virtually nothing to reduce greenhouse gas emissions.
Climate Fail: Metro’s 2020 Transportation Package
A bit of background: Portland’s regional government, Metro, has convened a year-long process to develop a multi-billion dollar transportation spending proposal. The process is down to selecting projects to receive funding. According to Metro, one of the project’s core values is to help reduce greenhouse gas emissions. Early on in this process, the Metro Council set the direction for this package, saying: Our imperative to reduce greenhouse gas emissions and prepare for a climate-change future is increasing. More broadly, Metro’s Transportation Work Plan sets six specific outcomes for its Regional Transportation Plan, including: Climate leadership – The region is a leader in minimizing contributions to global warming.
30 | Southern Oregon Business Journal February 2020
It sounds pretty bold, but until recently, there’s been little indication how the proposed multi-billion project list will advance the climate agenda. On December 18, for the first time, Metro staff presented their estimates of the decrease in greenhouse gas emissions associated with the approximately $3 billion proposed spending package. They estimate that the combined effect of the investments would be to reduce greenhouse gas emissions by about 5,200 tons per year. From Metro’s December 18, 2019 Staff Presentation Task Force members were quick to ask for a bit of context (not everyone has immediate access to an inventory of the region’s greenhouse gas emissions). Metro staff were at a loss at the time to come up with any figure for a total regional greenhouse gas emissions.
Let us help: Data from the national DARTE transportation emissions database show that in 2017 (the latest year for which data are available) the Portland metropolitan
area had transportation greenhouse gas emissions of 3,892 kilograms per capita. The region’s population was 2,456,000. That puts total greenhouse gas emissions from transportation in the Portland area at about 9.5 million metric tons (2,456,000 x 3,892 /1000). And its not like this number should be so difficult for Metro staff to determine. Their own “Climate
Smart” Strategy, published five-years ago estimated that greenhouse gas emissions from “light-duty” vehicles (cars, SUVs and light trucks) were about 5.2 million tons in 2010. (That
estimate omits emissions from larger trucks, buses, and other modes of transportation, and also is apparently just for the area inside metro’s urban planning boundary–but its clearly in the same ballpark as the DARTE estimates). So here’s what Metro’s $3 billion transportation plan buys in terms of carbon emission reductions. That 5,200 tons per year of reduced
greenhouse gas emissions works out to five one-hundredths of one percent of all the greenhouse gases currently emitted from transportation: 0.05 percent. That may be a little bit difficult to visualize, so we’ve prepared a diagram that shows just how big this reduction is. The following graphic shows 2,000 dots, each corresponding to a little less than 5,000 tons of annual greenhouse gas emissions. The greenhouse gas reductions attributable to Metro’s 2020 transportation package are equal to one slightly oversized red dot in the upper right hand corner of the chart. That’s a trivially small reduction; its about the amount of greenhouse gases produced by fewer than 6 hours of driving in the Portland metropolitan area. It is so tiny that its within the margin of error of estimates of overall greenhouse gas production.
Southern Oregon Business Journal February 2020 | 31
Also, keep in mind that transportation, while the largest single source of greenhouse gas emissions in the Portland area is
So, on an annual basis, Portland area transportation emissions were about 1.6 million tons higher in 2017 than in 2013. The annual rate of carbon
greenhouse gases associated with the Metro plan.
about 40% of the total. That means that the reduction in greenhouse gases based on the total is about 0.025%. There’s a second way to put this number in context.
emissions increased by about 4,500 tons per day over the past four years. That means that the 5,200 ton yearly reduction in carbon emissions works out to the equivalent of offsetting less than a day and a half of the growth in annual carbon emissions we’ve recorded over the past several years.
Portland’s proposed multi-billion dollar transportation initiative does effectively nothing to reduce the region’s transportation-related greenhouse gas emissions.
Transportation-related greenhouse gas emissions in Portland have been increasing for the past four years according to the DARTE database. In fact, emissions are up substantially, by about 1,000 pounds per person annually over the level of 2013. In 2013, total transportation greenhouse gas emissions were approximately 7.9 million tons in the Portland area. That rose steadily to 9.5 million tons in 2017, mostly due to the big per capita increase in emissions, that in turn are attributable to the 40 percent decline in gasoline prices in 2014.
Metro’s reduction in greenhouse gas is smaller than the width of the blue line on this chart. So on this chart, if Metro’s 2020 projects were in place today, we would expect regional greenhouse gas emissions to decline by about 5,000 tons, from roughly 9,560,000 tons today to about 9,555,000 tons with the Metro projects. On this chart, that difference is simply invisible: For reference, the blue line on the chart is about 100 tons wide, or about 20 times larger that the reduction in
32 | Southern Oregon Business Journal February 2020
Despite the high-minded rhetoric,
Finally, it has to be said that we are taking Metro staff’s estimates of the greenhouse gas reductions associated with the spending package at face value. The agency hasn’t disclosed how these estimates were generated, and seems unlikely that Metro’s travel modeling has accounted for the induced demand for travel that would come might be caused by capacity increases and traffic flow improvements in the spending package. Alarmingly, Metro has propagated the fiction that the region’s greenhouse gases can be reduced by speeding traffic to reduce time spent idling, a claim that we’ve repeatedly debunked. A careful
independent analysis of the environmental effects of this spending program might show it increased greenhouse gas emissions, rather than decreasing them.
The price of carbon savings It’s worth considering how much those carbon reductions cost. The total cost of this package is about $3 billion; that amount has an annualized value of roughly $200 million at a 5 percent interest rate. The annualized cost of the Metro transportation plan (about $200 million per year) divided by annual reduction in the number of tons of greenhouse gases is $200,000,000 / 5,200 = $38,500 per ton.
Of course that’s a crude estimate for a variety of reasons. Reducing greenhouse gases isn’t the only objective of the transportation package, so arguably some of the cost is aimed at achieving other objectives. But its also the case that the investment package doesn’t cover the entire costs of many of the projects. For example, the package’s
largest project is a proposed Southwest Light Rail extension, of which the package would cover only about one-third of the capital cost.
of investment. Current transportation emissions are slightly more than 9.5 million tons per year. To reduce that to 4.75 million tons per year at a cost of $40,000 per ton would cost on the order of $190 billion per year. To put that number in context, that is more than three times the total personal income of the Portland metropolitan area — about $57 billion per year.
Joe Cortright
Does it make any sense to spend nearly $40,000 to reduce a ton of carbon? There’s a lot of debate about the “social cost of carbon” with current estimates running roughly $50 per ton, and some economists speculating that the threat of climate change may necessitate of charge of several hundred dollars per ton to fully reflect climate costs and encourage the needed level of emission reductions
Just as a hypothetical, let’s ask how much it would take to achieve a 50 percent reduction in transportation related greenhouse gas emissions from current levels making this kind
Joe Cortright is President and principal economist of Impresa, a consulting firm specializing in regional economic analysis, innovation and industry clusters. Over the past two decades he has specialized in urban economies developing the City Vitals framework with CEOs for Cities, and developing the city dividends concept. Joe’s work casts a light on the role of knowledge-based industries in shaping regional economies. Prior to starting Impresa, Joe served for 12 years as the Executive Officer of the Oregon Legislature’s Trade and Economic Development Committee.
Southern Oregon Business Journal February 2020 | 33
EDUCATION
Community Colleges Can Now Offer Applied Bachelor’s Degrees
FROM A KCC PRESS RELEASE
An Oregon Senate bill that was signed into law July 1 was recently formalized at a signing ceremony in Salem with Gov. Kate Brown and representatives from Klamath Community College and
Chemeketa Community College. Senate Bill 3 permits community colleges to offer applied baccalaureate degree programs under specified conditions and
34 | Southern Oregon Business Journal February 2020
upon receiving approval from Oregon’s Higher Education Coordinating Commission. The signing ceremony for SB 3 took place at the Oregon Capitol on Nov. 19.
The law will go into effect Jan. 1, 2020. KCC President Dr. Roberto Gutierrez explained that the purpose of the law is not to compete with four-year institutions, but to allow community colleges to help fill deficits in workforce training. He said KCC is in the process of developing curriculum for an Applied Bachelor of Nursing. “This is an exciting time for us, as KCC and Chemeketa may be among the first community colleges in Oregon to offer a baccalaureate degree,” Gutierrez said. “Offering our community this opportunity assures we can meet our region’s health care needs now and into the future.” According to Marie Hulett, executive director of institutional advancement at CCC, the Salem-based institution hopes to offer applied bachelor’s degrees in early childhood education, nursing, human services, and business management. Some
programs could start as early as fall 2021. KCC and Chemeketa first presented the applied
bachelor’s concept to lawmakers in 2016 in an effort to expand urban and rural degree offerings to address workforce shortages in fields such as nursing and early childhood education. “I appreciate the work of past Chemeketa President Julie Huckestein, who spearheaded this effort in Salem,” Gutierrez said. “Julie was instrumental in building the legislative support needed to allow Oregon’s community colleges to address industry needs through education, and this initiative may not have come to fruition if not for her strong leadership.” Under the bill, Oregon’s community colleges that wish to establish an applied
bachelor’s program must submit program information and documentation to the Higher Education Coordinating Commission to qualify for approval. “Senate Bill 3 will help expand opportunities for students in higher education across Oregon. Technical baccalaureate degrees provide excellence in vocational education for increasing needs of industry. It was good to have the support of Dr. Gutierrez and others on this bipartisan legislation,” said Rep. E. Werner Reschke (R-Klamath Falls), who co-sponsored the bill. Nationwide, 24 states allow community colleges to award bachelor’s degrees. Common applied baccalaureate degree areas are applied science, business, education, and technical fields. “Entering new nurses into the profession with, at a minimum, a bachelor’s degree in nursing, provides the foundation to meet future workforce needs,” said KCC Nursing Program Southern Oregon Business Journal February 2020 | 35
Port Responds to Charleston Ice Plant Fire
photo by Nick Edwards
December 20, 2019 Charleston, OR – At approximately 7:45 a.m. this morning as Port maintenance staff were making daily rounds of marina facilities, staff thought they saw flames within the Charleston Ice Plant building. Staff immediately followed all emergency response protocol to deenergize the electricity and evacuate the building and immediate area. The appropriate authorities and emergency response teams were promptly notified including the National Response Center, U.S. Coast Guard, Oregon Emergency Response System, and 911. The Charleston Fire Department was the first to arrive on scene followed by the Coos Bay Fire Department, North Bend Fire Department, and Regional Hazmat division. Authorities confirmed that the Charleston Ice Plant was on fire and releasing ammonia into surrounding areas. At 10 a.m., the Plant was declared a total constructive loss following the direction of local fire departments and the Regional Hazmat division. Under
the guidance of local authorities, Port staff determined that the best course of action was to let the Charleston Ice Plant fire run its course while first responders remained on standby. Fortunately, a strong south wind pushed smoke out over the bay and out to sea throughout the course of the fire. The Charleston Marina and RV park were evacuated at approximately 10:00 a.m., with Port staff going door to door and boat to boat to ensure the safety of individuals within the Marina complex. There have been no reported injuries. The Charleston Ice Plant fire has been extinguished and the fire marshal is investigating the incident. Access to the Charleston Marina has been reopened to the public following clearance from emergency responders. However, to ensure public safety no access by road or water will be allowed in and around the Charleston Ice Plant dock. The Port would like to thank and recognize the phenomenal efforts of the various responding units. Port staff are now working to secure the Charleston
36 | Southern Oregon Business Journal February 2020
Ice Plant property. The property will be inspected in partnership with all necessary authorities to ensure that all potential hazards are secured and removed. Port staff are working to create a short-term plan to obtain commercial grade ice to serve the Charleston fishing fleet while longer range planning is completed for the construction of a new ice plant facility. Further updates will be provided through the Port website and social media platforms. Publisher’s comment: The Ice Plant fire is a critical occurrence that can have a serious impact on the Charleston Harbor fishing fleet. The cooperation between local business, the Port of Coos Bay and the State of Orgon is fundamental. All parties are working to replace the supply of ice by the time the fishing season is in full swing. – Greg Henderson, Southern Oregon Business Journal.
IN DEFENSE OF DUMB CITIES (CONTINUED FROM PAGE 5)
people in the place move about, connect to each other and
congregate. Name the places you love to visit, and they probably have streets and public squares where lingering is the point. It’s a basic technology that people inherently love—time tested and resilient. Of course, great streets and public squares are surrounded by buildings so let’s talk about those. Roofs, Walls and Houses After the 2015 Nepal earthquake I was talking to a Nepalese friend and asked if
And until recent times, that was the way it’s been done by all people since, well, the dawn of people. Whether brick, timber, stone, mud, cloth, peat or palm frond, people instinctively create shelter. And with the barest of time and attention they become more than just enough, they become homes, which ascend to comfort, graciousness, beauty and in some cases
Bhakta
pur Dub
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re bein
g rebuil
t afte
r 2015 earthqu there ake. Im age cre dit. was a problem getting housing supplies into remote magnificence. regions. He looked at me like I was an idiot, and in my Somehow we have literally modern-culture-addled brain I made it illegal to satisfy this had an “aha” moment. Rural basic human need. You can’t Nepalese make homes out of just build shelter. We have a the materials near at hand. host of regulations telling
Southern Oregon Business Journal February 2020 | 37
people “no rooming houses, pitch a tent or build a tiny no backyard cottages, not too home until housing is available. many unrelated people living An app won’t solve the lack of together, no apartments—and housing, only homes will do if you can’t afford what is legal that. —tough luck. And if you dare pitch a tent somewhere—we’ll take it.” We need to re-legalize Mixed Use Buildings shelter. I’m not talking about When I was a kid, we just abandoning building codes—there are important health and safety reasons to ensure buildings don’t collapse, contribute to conflagration or generate disease through Mixed use buildings in Kirkland, Washington. Image credit. unsanitary conditions. bought “sneakers” and we But there is a clear path to used them for everything. Then ensure that one of our oldest came tennis shoes, jogging technologies, a roof over one’s shoes, basketball shoes, and head, is accessible to all. If you the final iteration—the “cross want to build a home, or many trainer” (sneakers, right?). The homes, in a city, you should be advent of zoning led to a able to do that without much similar phenomena, the discussion or argument. We increasing specialization of can tax the wealth a city buildings for specific uses, and creates to build for those a a restriction against building liberalized market can’t reach. another type in that zone. And we can leave places to There’s a reason to separate
38 | Southern Oregon Business Journal February 2020
truly noxious uses from other uses, but we separated offices from workshops from homes, and even different types of homes from each other. Financing rules reinforced the zoning and use restrictions. The traditional mixed use building —the store or workshop downstairs the residences beside or above, was now illegal. So was converting a single family into a duplex or triplex. What seems orderly and rational turns out to be highly restrictive and uneconomic. Buildings in such zones could not shift to meet changing times. Yet cities built before comprehensive zoning plans are full of buildings that were used again and again for different uses. Those are often the cities with walkable streets that we love. Mixed use buildings—can we make them cool like Converse All-Stars? Ok—I’m stopping here, before I get to insulation and windows that work. Or awnings and trees to regulate heat as opposed to high-tech thermostats. You’ve probably
In Defense (Continued)
figured out that I think traditional city design is pretty smart. But it’s smart because it is simple, durable, resilient, redundant, even antifragile (like muscles, it gets stronger with a little stress on it). Wringing some more efficiency out of our cities through tech is great, but efficiency is often complicated, fragile in the face of small disturbances, and prioritizes one thing at the expense of the diversity of things a city does. It takes incredible intelligence and diligence to invent the tech and keep it running. It has a “wow” factor and a place in our cities. But an even bigger wow is to realize that building a city upon walking, low-tech wheels, streets, many homes and mixed use buildings can create a city of complexity beyond our human comprehension. It’s an incredibly smart platform to make the most of our human potential and creativity. The dumb city stands the test of time. And that is the best prediction that the simple tech of traditional city building will be here for some time to come, if we’re smart enough to use it. Top image via Wikimedia Commons. Michael McGinn 52nd Mayor of Seattle January 1, 2010 – December 31, 2013 Originally from Long Island, New York, McGinn earned a B.A. in economics from Williams College and worked for Congressman Jim Weaver as a legislative aide. McGinn attended law school at the University of Washington School of Law.[3] After graduating, he practiced business law for the Seattle firm Stokes Lawrence, becoming a partner. He left Stokes Lawrence in 2005 and
started Great City Initiative, a non-profit advocacy group. From Wikipedia
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Photo by Jim Teece - Wall Art inside BP Media OďŹƒce, The Loft, Roseburg, Oregon