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The Times They Are a-Changin' in Bend

Market transformation gains momentum



Bend-Redmond ranked eighth nationally overall in the small cities category of the "2015 Best Performing Cities," report by the Milken Institute, a national economic think tank. That represents a gain of 38 spots, up from 46th place in 2014, showing that the city is experiencing a rapid metamorphosis. In the category of high tech, Bend happens to be outperforming the top three cities in its peer group. Among the top 10 small cities, all but Bend have a four-year university, but that is soon to change as Oregon State University - Cascades will open its Bend campus in September.

Economic development goals are staying a step ahead of the population growth and demographic changes that the Oregon Office of Economic Analysis forecasts to continue in Deschutes County well into the future. Growth, along with tax policy, interest rates, market corrections and the national business cycle affect Bend, but for now, the Great Recession is fading into distant memory and optimism is gaining momentum.

Education and health employment up, manufacturing down

The Oregon Office of Economic Analysis shows Oregon's leading indicators of air freight, housing permits and new incorporations are improving, but manufacturing is declining, and this held true in Bend. Manufacturing employed 4,500 people here in 2015, losing 300 jobs between July and December, and dropping 2.2 percent in the 12-month period ending December 2015, according to the U.S. Department of Labor.

Other sectors are growing. Mining, logging, and construction grew 2.1 percent, employing 4,800 people. Professional and business services grew 1.3 percent, employing 8,000.

The Bureau of Labor counted 9,500 people in the Bend-Redmond area employed by the government, up 2.2 percent. This includes postal workers, law enforcement, fire protection, forest workers, and other federal, state and municipal employees.

Leisure and hospitality employed 10,100 people, with no significant growth or decline. The education and health services category grew the most, up 5.2 percent with 12,100 people employed in December 2015.

Property values rising

City Council member Victor Chudowsky says assessed values are going up higher than the city predicted and the value of real estate that the city is able to tax is skyrocketing. The City of Bend's Comprehensive Annual Financial report for the fiscal year ending June 30, 2015, shows property taxes increased by $3.4 million (13.0 percent) from the prior year due. This was due to an increase in property tax assessed values and an additional assessment for the Fire District Levy.

Ryan Anmerongen with ReMax Key Properties in Bend, says, "We're staying busy." He says they are seeing "much demand coming into town, both people retiring and younger folks who want to experience Central Oregon." Anmerongen says entry-level family homes in Bend, new construction with three bedrooms and two bathrooms, are selling for $300,000.

Higher wages, better jobs

Bend Economic Development Directory Carolyn Eagen foresees Bend heading in the direction of having a higher than average wage, growth in the non-service sector, and a talented workforce, as well as amenities that attract companies. Eagen's vision for the city includes more occupational diversity and social/economic mobility for Bend families. "My dream is that young people in Bend, whatever they choose, really have a career path and a lifetime of opportunities ahead," she says.

Last week, Economic Development of Central Oregon (EDCO) brought speakers from two national think tanks to Bend for the organization's annual luncheon. The Milken Institute economist concluded that a favorable business climate supports economic growth, a well-educated workforce attracts firms, and Oregon, perceived as a high-tech state, will continue toattract tech firms.

Challenges considered

EDCO's keynote speaker Nicole Kaeding, an economist with the Tax Foundation, one of the nation's oldest think tanks, shared that Oregon's rank for the state's business tax climate is 11th best in the country. However, the state's corporate tax rank is 37th. Tax strengths in Oregon include the lack of a sales tax, no marriage penalty and no capital stock tax or real estate transfer tax. Tax weaknesses here include a high personal income tax rate with multiple brackets, a high corporate income tax rate and the estate tax.

Roger Lee, executive director of EDCO, is aware of a few other challenges to the Oregon business climate. He says there is not enough venture capital in Oregon. "We've been a flyover state," he says. Taking a proactive stance, EDCO has formed a stable of 130 volunteer experts to help young companies succeed in Central Oregon. "Part of our ethos is helping creative people take it to the next level," Lee says.

Four sectors of business thriving in Central Oregon include "brew, bio, rec, and tech." These top performers include companies in the bio-science and biomedical industry, breweries, recreation and technology. Lee sees opportunity for small companies to move to Bend and then scale larger into the traded sector, which includes products traded internationally.

Bend is in the midst of a transformation into a top small city with advanced education and professional opportunities, higher wages, steady job growth, climbing real estate values and thoughtful economic development. Hundreds of people in town take the time to attend economic development and city council meetings, volunteer, mentor and share in the vision of making the city the best it can be.

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