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FOR BUSINESS
VOLUME 14, ISSUE 1
USA $3.95
CANADA $6.95
Looking
ahead
Experts forecast trends and issues
facing local businesses in 2015
THIS ISSUE
David Hauser, CCE
Content editor
Tracy Illene Miller
Eugene Chamber
FEBRU A R Y / M A R C H 2 0 1 5 Executive Committee
Craig Wanichek
Chair
President & CEO,
Summit Bank
Cover story
FEBRUARY/MARCH 2015
Nigel Francisco
10
Chair-elect
Economists and market watchers FOR BUSINESS
CFO, Ninkasi Brewing
Company LLC
agree 2015 looks brighter, but VOLUME 14, ISSUE 1
USA $3.95
CANADA $6.95
Features PC
Looking Advertising
8 ahead
How will the local economy do in 2015? Eugene Area
The Eugene Area Chamber of Commerce Chamber of Commerce
Experts forecast trends and issues
541.484.1314
Economic Forecast features expert facing local businesses in 2015
speakers providing insights and economic The eugene AreA ChAmber Of COmmerCe: CelebrATing…PrOmOTing…infOrming business Design/Layout
prognostications for the coming year. Asbury Design
541.344.1633
18
$PAC-075_MENTOR-EugeneChamber_7.375x4.8126_FebMar2013.indd 1 1/11/13 1:57 PM It is time to gear up for changes in Columns/Departments www.asburydesign.net
5
Printing
workplace laws. We take a look at new
Chamber @ Work Shelton Turnbull
state and federal mandates, a voter-
What the Chamber is doing to support and 541.687.1214
approved initiative, and a controversial local
promote businesses in the Eugene area. Eugene Area
ordinance.
Chamber of
6
Four Questions 1401 Willamette St.
Eugene, OR 97401
Two businesses answer four questions
20
Eugene Area Chamber
Business News of Commerce
Promotions, new hires, and new (USPS-978-480).
members Open for Business is
published bimonthly
by the Eugene Area
26
Chamber of Commerce
Last Call in February, April, June,
Dave Hauser on August, October and
We’re business owners too.
December. Circulation:
aspirations for 2015 3,800.
Because business and personal needs are often intertwined,
Open For Business
we focus on integrated solutions—from assurance, tax, and © 2015
consulting to wealth services. The subscription price
is $25, included in
Put a century of experience to work for you. Because your ADVERTISER INDEX membership. Periodicals
Postage Paid at Eugene,
success is just as important as your company’s. Certified Public Accountants | Business Consultants 14 Carter and Carter Financial 4 Hershner Hunter LLP 2 Moss Adams 16 Summit Bank SBA Division OR.
17 City of Eugene - Bold Steps 28 Kernutt Stokes 2 Pacific Continental Bank 22 University of Oregon
27 Eugene Airport 25 Lane Transit District 21 Parr Lumber POSTMASTER: Send
(541) 686-1040 W W W. M O S S A D A M S . C O M Acumen. Agility. Answers. 21 Evergreen Roofing 13 McKenzie-Willamette Medical 19 The Register-Guard
9 Harrang Long Gary Rudnick PC Center 15 Summit Bank
address changes to
Eugene Area Chamber
of Commerce, P.O. Box
1107, Eugene, OR 97440-
1107
CHAMBER@WORK
Chamber recognized Chamber
for economic development offers workers
compensation
Mayor Kitty Piercy acknowledged development community in taking stock of discount
the work of the Chamber and other progress toward the goals outlined during
organizations in orchestrating the Regional the first Regional Prosperity Summit, which The Eugene
Prosperity Economic Development Summit. was held four years ago and resulted in a Area Chamber of
The two-day summit provided business and plan for the area. Panels focused on three Commerce and
community leaders with the opportunity to strategic industry clusters: Edu-Tech (or SAIF Corporation
discuss the community’s progress toward education and technology), food production, have partnered for
achieving regional economic development and advanced manufacturing. The second years to provide
goals. day of the summit was held in Springfield a group Worker’s
The first day of the summit was held at and served as a forum for federal and state Compensation
the UO Ford Alumni Center, and focused officials to hear about developments in the discount available for
on engaging the business and economic local economy. our eligible members.
The discount
for 2015 is 10%,
providing savings for
the members who
are participating
ranging from $100
to $3,500. To find
out if you qualify,
contact your workers
compensation
insurance agent or
Pat Morrill at SAIF
Corporation at
503.373.8827.
Members of the Economic Prosperity Summit planning and development
team accept a community award from the Mayor during the City of Eugene
2015 State of the City address.
Gallic &
We asked two local businesses to respond to four questions
that give insight into their companies and their predictions for 2015. Johnson
Financial
Gallic & Johnson Financial, now solely
operated by Kerrie Johnson, specializes in
loan solutions, providing private financing,
primarily in well-secured real estate loans.
Kerrie is taking ownership upon the retire-
ment of long-time industry leader Gordon
Gallic, whom she has worked for and with
for nearly a decade. Gordon began the
business approximately 25 years ago, with
his own mother as his first investor.
A powerhouse of information
The 2015 Economic Forecast Economic Forecast 2015
offers insights and intelligence n Monday, March 30
for local businesses n 2:30-5:00pm
n Hilton Eugene
The Eugene Chamber of Commerce Economic Forecast 2015 n Keynote address by
features expert speakers providing insights and economic prog-
Our Deep
Sean Robbins
nostications for the coming year and will take place on Monday, n Register at
March 30, from 2:30-5:00pm at the Hilton Eugene.
www.eugenechamber.com Sean Robbins
This year’s program features:
harrang.com
800.315.4172
info@harrang.com
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COVER STORY
What’s
ahead?
Local business leaders offer business
trends and predictions for 2015
by Tracy Ilene Miller
E
PHOTOS BY DAVID LOVEALL
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COVER STORY COVER STORY
trade sales, industrial production, nonfarm and by supporting the effort to bring afford- continue to increase as more units are added.”
payrolls and real personal income — saw able new home inventory to Lane County, we “Locally, the biggest Continued low supply. Locally, commer-
gains in 2014, with all except personal income
trending upward every year since 2010.
can significantly strengthen this community
for years to come.”
thing is the boom in cial market rent levels are too low to justify
new construction.
But what’s happening in Oregon and, in
Commercial Real Estate
student housing ... Outside of the campus apartment market,
particular, Lane County? How does activity “We haven’t seen new construction being fi-
compare with national trends? Looking at trends with a wide angle, things
are looking up for commercial real estate, and
All of these new units nancially feasible in most sectors. One excep-
To get a sense of what’s behind us and tion is downtown, but this has only occurred
what’s ahead, we asked area leaders the trends local activity parallels national trends. have come at a time with sizeable help from the city,” Dingman
and issues they anticipate we’ll see in our local Multifamily units are popular. For the says.
economy this year. first time in 10 years, nationally, multifamily when UO enrollment Investors follow the jobs and the
housing has outstripped office construction people. Nationally, investors are going to
Residential Real Estate because of shifting desires for housing by both is flat, so there is the where there is a combination of population, job
Housing is a big driver of jobs and the Millennials and aging baby boomers; funders
economy, and is a much-watched indicator of have been strongly backing projects in the question of whether it is growth and higher income levels — markets
such as San Francisco and Austin, and includ-
economic health.
Not unlike other indicators discussed
multifamily sector.
“Locally, the biggest thing is the boom in
sustainable.” ing Seattle and Portland, where technology
jobs and an influx of talent has accelerated job
here, Lane County residential real estate is in student housing,” says Corey Dingman, part- gains ahead of other areas of Oregon.
recovery, and is doing so despite challenges, ner at Duncan & Brown Real Estate Analysts. – Corey Dingman
P artner at Duncan & Brown Likewise, locally, new commercial de-
says Marcia Edwards, a residential real estate “It has been a popular investment, with good Real Estate Analysts velopment has been focused on areas with
broker with Windermere Real Estate Lane returns due to historically low interest rates the strongest rents, which justifies the costs
County. and strong rents. National companies special- developers coming to the area and building of construction. That’s been primarily in the
When comparing fourth quarter sales for izing in purpose-built student housing have 100+ unit complexes. University of Oregon and Coburg Road areas,
2014 and 2013, the number of single-family, now discovered our market and have made a “All of these new units have come at a time Dingman says. Similarly, redevelopment is
detached homes sold were up by 17 percent strong push to add units over the past three when UO enrollment is flat, so there is the concentrating in areas that draw people from
in Lane County (excluding Florence area) years.” question of whether it is sustainable,” Ding- a wider demographic, such as Valley River
and 2.1 percent nationally. At the same time, The trend is away from local developers man says. “We have seen school-year vacancy Center and Gateway Mall.
Lane County has seen a consistent decline in building, say, 10-unit projects toward national for the first time in 10 years, and vacancy will The good news is: There is activity occur-
inventory since June 2014 from an already low
inventory of homes available for sale at that
“In the past two years,
time. Fewer houses are going on the market. we’ve started to see
Upcoming challenges, then, for residential
real estate are quantity of houses and price.
commercial land sales
things to do than
homes coming onto the market and not
enough new construction home starts.”
– Corey Dingman,
In addition, although there is sufficient partner at Duncan & Brown
inventory at higher price points for detached,
1 2 OP E N FO R BUSI N ESS | EUGEN E AREA CH AMB ER O F COM M ERC E F E B R U A R Y/ M A R C H 2 0 1 5 | OPEN FOR BUSINESS 13
78582_MWMC_ER_7_735x4_8125c.indd 1 9/5/14 2:51 PM
COVER STORY COVER STORY
ring now where five years ago there was none. comfortable with where the market is going. the significant trends reported in the widely invest in their homes and to feel that there
Lane County “tends to trail the region “We haven’t seen new But “lenders are lending again,” Dingman followed Global Powers of Retailing report “Generally speaking, is a better value,” Lindstrom says. “Oregon is
and country coming out of these recessionary says, and are looking for properties to fund. produced by Deloitte Touche Tohmatsu doing better than it has in a long time.”
periods, and many of the neighborhoods in construction being Terms are attractive and interest rates low. Limited: driving per person is decreasing for the last quarter of 2014, A drag on retail that will continue into
the Eugene-Springfield area won’t be seeing
redevelopment or new development in the
financially feasible “Coming out of this recession, we’ve seen a
lot more cash deals,” Dingman says, where inves-
the tenth year in a row due to telecommunica-
tions, online sales and other online activities.
almost everything in 2015 is lagging resident home construction, as
well as weak wage growth, underemployment
near future,” Dingman says. “But now we are
seeing, as would be expected, building in the
in most sectors. One tors where putting their own cash into property.
Investors are looking at all investment alter-
Retailers will increasingly need to focus on
mobile retailing, which is expected to explode
retail did well, with — workers who must settle for lower wages
or part-time over full-time work — and slow
premium areas, and that will spread as the exception is downtown, natives, including real estate, and “I think real in 2015, when an estimated 83 percent of the exception of home employment growth.
economy continues to rebound and average estate looks attractive and will continue to do Internet activity is expected to be conducted “Although the metrics are improving for
wages increase.” but this has only so,” he says. on handheld devices. electronics, computers, Oregon, Eugene is just slower than Portland,
Probably the strongest indicator of a Despite a disappointing Black Friday and a which has tech clusters. Eugene doesn’t have
rebound is sales of commercial and industrial occurred with sizeable Retail bit of a slump early in 2014, year-end sales has tablets and TVs.” much [industry], and it is trying to expand its
land. Duncan & Brown figures show com- Consumer spending accounts for about forecasters such as the National Retail Federa- urban growth boundary, but that is step one;
mercial and industrial land sales (not includ- help from the city.” two-thirds of the total GDP, so activity in the tion predicting sales growth in December of – Scott Lindstrom then we need to get manufacturing,” Lind-
ing distressed or government sales) dropping retail industry is an important indicator of 4.1 percent year-over-year and overall average Vice President of Operations,
strom says.
current economic conditions. Jerry’s Home Improvement Center
76 percent between 2007 and 2010, and now – Corey Dingman growth in 2015 of 4.1 percent nationally. According to the Oregon Office of Eco-
slowly bouncing back to 66 percent of pre- Partner at Duncan & Brown The nationwide drop in gasoline, averaging Locally, “generally speaking, the last retail, nationally and locally, severe winter nomic Analysis, “Currently, wages in Oregon
Real Estate Analysts $2.13 per gallon in January (the cheapest in
recession levels, and rising. Commercial-only quarter of 2014, almost everything in retail weather stifled results, which is not the case are increasing at nearly 7 percent per year,
sales bottomed out in 2010 and have doubled has passed, with sustained growth and ris- six years, according to AAA), has bolstered did well, with the exception of home electron- this year. The first-quarter lows of 2014 were which is on par with the mid-2000s expansion
since. ing comfort levels by investors and financial a strengthening job market and provided an ics, computers, tablets and TVs,” says Scott inconsistent with the stronger signs of recov- but below the 1990s gains of 8 percent per year.
“In the past two years, we’ve started to see institutions. increase in discretionary income to consumers, Lindstrom, vice president of operations, Jerry’s ery for the rest of the year. Average wages per worker are currently increas-
commercial land sales happening,” Dingman “People are now willing to invest in them- which is expected to boost retail sales nation- Home Improvement Center, and a member of “Interest rates have remained low, un- ing over 3 percent per year, which is slightly
says. “That is a good indicator we are returning selves and their business, with expansion and ally and locally. the Chamber of Commerce board. employment has decreased and home values above the rate of inflation. However, real wages
to normal market conditions.” construction of new facilities,” Dingman says. However, a drop in gas prices may still not Last year, in home improvement and other started improving, leading people to want to have increased less than one half of one percent
Another year of the post-recession period People don’t want to invest when they are un- be enough for retailers to overcome some of
Securities are offered through Raymond JameS Financial SeRviceS, inc. Joyce Colley
VP Business Client Advisor
member FinRa/SiPc.
1 4 OP E N FO R BUSI N ESS | EUGEN E AREA CH AMB ER O F COM M ERC E F E B R U A R Y/ M A R C H 2 0 1 5 | OPEN FOR BUSINESS 15
COVER STORY
per year since 2000. As economic conditions “Community businesses manufacturing and traded sector, particularly
continue to improve, expectations are that real in the Coburg area, Wanichek says, and multi-
average wages will pick up as well.” are back to making family housing units have also experienced
Real average wages picking up affects con- growth over the past couple of years.
sumer confidence and can drive up consumer investments in their But “we have yet to see the market rebound
spending. for single family houses to pre-recession levels,
facilities, equipment and so I think that has the potential to be a tail-
Finance
“In the financial sector, we’re finally emerg- people as they grow their wind as the economy continues to improve.”
As well, across the region, the manufactur-
ing from one of the worst periods banks have
ever faced,” says Craig Wanichek, president &
companies.” ing job base has shrunk, even though it has
improved since the recession. Companies tied
CEO of Summit Bank. to the national economy have seen improve-
– Craig Wanichek
It’s taken Oregon banks nearly five years president & CEO of Summit Bank ment ahead of the West Coast or locally tied
to recover from the challenges arising from businesses, which tend to lag behind the rest
the 2008–09 massive U.S. economic recession. of the country.
Banks rely on sound asset quality, which is economy has improved, and more financing “It is important to have those higher-pay-
reflected in the quality of their loans and the options are now available for businesses than ing jobs to help the rest of the local economy,”
credit risk associated with these loans. just two years ago. Wanichek says.
Compared with other communities, the “Community businesses are back to mak- “The GDP for the last quarter was very
Eugene-Springfield financial sector was more ing investments in their facilities, equipment strong. With an improved local economy and
fortunate and not as affected by nonperform- and people as they grow their companies, and stronger credit quality, the financial sector will
ing commercial real estate or development part of those investments will be financed reflect the overall community and should have
loans during the recession — in part, because with loans,” Wanichek says. a solid 2015. Ultimately, we are a reflection of
of land use restrictions and lack of available Recently, there has been local growth in the the business community.”
land to develop, Wanichek says.
Eugene Area
Chamber of
Commerce
2 0 OP E N FO R BUSI N ESS | EUGEN E AREA CH AMB ER O F COM M ERC E F E B R U A R Y/ M A R C H 2 0 1 5 | OPEN FOR BUSINESS 21
BUSINESSNEWS BUSINESSNEWS
Lane Community
College Small
Business
Development Center
(Lane SBDC) has
received a rural
business outreach grant from the Small
Business Administration (SBA). The year-
long $47,000 grant awarded on October
1 will help businesses in distressed
communities start, stabilize, grow, and
create jobs. “With this funding, we will be
able to focus efforts in rural communities,
where chambers have been asking for
assistance,”says Megan O’Connor, Lane
SBDC Advisor/Instructor
www.LaneSBDC.com
2 2 OP E N FO R BUSI N ESS | EUGEN E AREA CH AMB ER O F COM M ERC E F E B R U A R Y/ M A R C H 2 0 1 5 | OPEN FOR BUSINESS 23
BUSINESSNEWS
LiveAble Home Solutions Capitello Wines LLC
New Members www.liveablehomedesign.com www.capitellowines.com
When you join the Eugene Area Willamette Valley Video Tours Edgewater Home Furnishings
Chamber of Commerce, you become www.willamettevalleyvideotours.com www.edgewaterfurniture.com
part of a vibrant and prosperous
community of creative entrepreneurs, Oregon Electric Station NCM Media Networks
Join
forward-thinking innovators and
visionary business leaders. We’re
pleased to welcome these new
members who have chosen to take
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opportunity to build relationships with Heritage Meadows Apartments IDX Business News covers promotions,
other businesses. We’re committed www.heritagemeadowapartments.com www.idxbroker.com hires, awards, business giving and
business news. Email items to
in our partnership with the Chamber Farmers Insurance – Carie L. Allstate-Bart Swanson businessnews@eugenechamber.
in making this region a great place to Majors Insurance www.allstateagencies.com/bartswanson com.
http://www.farmersagent.com/cmajors
live and work. After all, a community
worth living in is a community worth
improving. Wouldn’t you agree?
– Sheryl Balthrop
Gaydos, Churnside & Balthrop, P.C.
541-484-1314
www.eugenechamber.com
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LAST CALL BY DAVE HAUSER
T
his is the time of year when economists offer their insights into the economic future.
Based on what I’ve been reading, most predict that 2015 will continue to build on the
solid economic progress established in 2014. That’s good, but here at the Chamber, our
focus is local. And therefore, I have pondered: What would make 2015 a great year for
Eugene-Springfield? What would dramatically contribute to the growth of our regional economy and
consequently enhance the livability of our region?
Here are seven news stories I would 4. Construction of the West Eugene bring direct air service from San Jose,
like to read in the coming year: EmX moves ahead toward a 2017 creating connections that support a
1. EWEB and the University of completion date, and business impacts burgeoning technology and start-up
Oregon Foundation complete negotia- are considered negligible. community.
tions that will enable the foundation to 5. After a decade-long growth study, William Shakespeare said, “It is not
move forward with the redevelopment elected officials move ahead with modest in the stars to hold our destiny but in
in the riverfront district. Urban Growth Boundary expansions to ourselves.”
2. RAIN Eugene moves forward increase supplies of job-producing We can make 2015 a great year for
with the development of an entre- lands. our region by working together, focusing
preneurial and innovation hub in 6. Whole Foods moves briskly on accomplishments and making this
downtown. toward the opening of its downtown great place even better.
Eugene Area
sick leave and minimum wage legisla- positive transformation of downtown Dave Hauser is president of the
tion, supporting Oregon workers while Eugene. Eugene Area Chamber of Commerce, a
restricting burdensome local regulations 7. The Chamber and Eugene Airport 1,100-member organization dedicated to
that impede economic progress. construct a package of inducements to promoting a healthy local economy.
Strategic
Empowering your business through
knowledge and innovation
At Kernutt Stokes, we don’t just look at one aspect of
your business when determining how to reach your goals.
Warren Barnes and the team at Kernutt Stokes conduct a
detailed analysis of the challenges and opportunities your
business may face, so we can provide you with strategic
insight and effective services. We invite you to work with
advisors who know the right moves to make, even when
the pressure is on.