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Ordinance No. 24-03
CITY OF TIGARD,OREGON TIGARD CITY COUNCIL ORDINANCE NO. 24- 03 AN ORDINANCE AMENDING THE COMPREHENSIVE PLAN TEXT AND MAP OF THE CITY OF TIGARD, FOR THE PURPOSE OF ADOPTING THE 2022 ECONOMIC OPPORTUNITIES ANALYSIS AND ASSOCIATED POLICIES (CPA2024-00002, CPA2024-00004). as amended on 4/23/2024 and shown in Exhibit C WHEREAS, the City has initiated an application to amend the Tigard Comprehensive Plan text and map; and WHEREAS, Goal 9 of the Tigard Comprehensive Plan is to provide opportunities for a variety of economic activity;and WHEREAS, the 2022 Economic Opportunities Analysis (EOA) demonstrates a significant employment land constraint,demand for higher density employment,and more mixed-use activity;and WHEREAS,the purpose of the amendments is to establish policies recommended by the EOA,to improve the code and encourage the development of more diverse and job-dense economic activity and to address minor deficiencies and conflicts in the code;and WHEREAS, notice was provided to the Department of Land Conservation and Development and Metro at least 35 days prior to the first evidentiary public hearing;and WHEREAS,notice to the public was provided in accordance with the Tigard Community Development Code; and WHEREAS, the Tigard Planning Commission held a public hearing on March 18, 2024 and recommended by unanimous vote that Council approve the proposed amendments;and WHEREAS, the Tigard City Council held a public hearing on April 23, 2024 to consider the proposed amendments;and WHEREAS, the Tigard City Council has considered the recommendation of the Planning Commission;and WHEREAS, the Tigard City Council has determined that the proposed amendments are consistent with the applicable review criteria as demonstrated in the City's findings. NOW,THEREFORE,THE CITY OF TIGARD ORDAINS AS FOLLOWS: SECTION 1: Tigard City Council adopts the findings contained in "Exhibit A" to this Ordinance. The findings and conclusions that are attached as Exhibit A are hereby adopted as the basis in support of this Ordinance. SECTION 2: Tigard City Council adopts the 2022 Economic Opportunities Analysis as an ancillary document to the Tigard Comprehensive Plan Goal 9 as shown in "Exhibit B". SECTION 3: The Tigard Comprehensive Plan Goal 9 is amended as shown in "Exhibit C". SECTION 4: The Tigard Comprehensive Plan Map is amended as shown in "Exhibit D". ORDINANCE No. 24- 03 Page 1 SECTION 5: This ordinance shall be effective 30 days after its passage by the council, signature by the mayor,and posting by the city recorder PASSED: By Cd ha vi 11VL(1(.1 vote of all council members present after being read by number and title only,this a3 'r' day of eip r!I ,2024. Jesse B. Raymundo,Deputy City Recorder rJ APPROVED: By Tigard City Council this 23 day of Al 6'1 ,2024. Heidi Lueb,Mayor Approved as to form: City Attorney 4/29/2024 D ate ORDINANCE No. 24-03 Page 2 Exhibit A RECOMMENDATION AND FINDINGS OF THE PLANNING COMMISSION II el: FOR THE CITY OF TIGARD, OREGON TIGARD SECTION I. APPLICATION SUMMARY FILE NAME: Economic Opportunities Analysis (EOA)Adoption CASE NO: Comprehensive Plan Map Amendments (CPA) CPA2024-00002 CPA2024-00004 APPLICANT: City of Tigard 13125 SW Hall Blvd. Tigard, OR 97223 PROPOSAL: The City is proposing adoption of an Economic Opportunities Analysis (EOA) and associated Comprehensive Plan amendments. LOCATIONS: Citywide. ZONES: Citywide. APPLICABLE Oregon Statewide Planning Goals: 1 (Citizen Involvement), 9 (Economic PROVISIONS: Development) Metro Urban Growth Management Functional Plan (Chapter 3.07) Title 8 (Compliance Procedures) Tigard Comprehensive Plan Goals: 1 (Citizen Involvement), 9 (Economic Development) Tigard Community Development Code Chapters: 18.710 and 18.790 SECTION II. PLANNING COMMISSION RECOMMENDATION The Planning Commission recommends the City Council adopt the proposed amendments, with any alterations as determined appropriate through the public hearing process. SECTION III. BACKGROUND INFORMATION Proposal Description: Statewide Planning Goal 9 requires the city to periodically review the economy through an Economic Opportunities Analysis (EOA), including whenever the city intends to make significant changes in the regulations affecting employment lands within the city. The City of Tigard's most recent EOA was completed in 2011. Many factors have come together to warrant a new analysis and a comprehensive Economic Opportunities Analysis(EOA)Adoption PAGE 1 OF 6 CPA2024-00002,CPA2024-00004 Exhibit A overhaul of the city's regulations for employment land. These factors include unanticipated changes in industrial and commercial development patterns and business operations and a highly constrained employment land supply. As part of the long range planning project Tigard MADE (Maintain,Advance,and Diversify Employment), the city hired Johnson Economics in 2021 to complete a new EOA. The new EOA was completed in 2022 and found that over the next 20 years, assuming employment in the city continues to grow at a rate of 1.8 percent annually,the demand for jobs in the City of Tigard will increase 45,517 to at least 55,766 employees by 2041. The 2022 EOA translates these employment projections into forecasts for land demand and built form. Inclusive of all industries, the City's employment is projected to grow by up to 18,971 new employees, necessitating up to 1,132.1 acres of developable land over the next 20 years (Attachment 1). There is currently an estimated 230.91 acres of vacant, partially vacant, or redevelopable land available to accommodate this projected growth.Therefore, the City is land-constrained,meaning there is not sufficient land supply available to accommodate the projected employment growth. Community Development staff worked with the Tigard City Council and Planning Commission to develop policy recommendations to address this serious shortfall. The policy recommendations include a new approach to land use regulations with a focus on promoting mixed-use development, preserving land for industrial users, and enhancing connectivity between employment uses. While these changes will not fully solve the problem presented by Tigard's land constrained situation, they will aid in promoting more job density within the limited land supply. Public Involvement Previous Tigard MADE briefings have introduced the extensive community outreach conducted over the course of this project since 2020 (Attachment 2). SECTION IV. APPLICABLE PROVISIONS, FINDINGS, AND CONCLUSIONS This section contains all applicable city, regional, and state provisions that apply to the proposed Comprehensive Plan Amendment and Development Code Amendment, and findings detailing how each provision is met. STATEWIDE PLANNING GOALS AND GUIDELINES State planning regulations require cities to adopt and amend Comprehensive Plans and land use regulations in compliance with the state land use goals. Because the proposed code amendments have a limited scope and the text amendments address only some of the topics in the Statewide Planning Goals, only applicable statewide goals are addressed below. Statewide Planning Goal 1—Citizen Involvement: This goal outlines the citizen involvement requirement for adoption of Comprehensive Plans and changes to the Comprehensive Plan and implementing documents. FINDING: Intensive community outreach was conducted as part of the Tigard MADE project (Attachment 2). Specifically related to the adoption process for the MADE project and 2022 EOA, the notice requirements set forth in Section 18.710.110 (Type IV Procedures) were met. A request for comments was sent to affected government agencies and interested parties on February 12,2024 and notice Economic Opportunities Analysis(EOA)Adoption PAGE 2 OF 6 CPA2024-00002,CPA2024-00004 Exhibit A of hearings was sent to these parties by email on February 27,2024.An additional notice was posted in three public locations on February 27, 2024 and published in the Tigard Times newspaper on February 29, 2024. A minimum of two public hearings will be held (one before the Planning Commission and the second before the City Council) at which an opportunity for public input is provided. This goal is satisfied. Statewide Planning Goal 9—Economic Development This goal outlines how cities and counties must plan to ensure that they have enough land available to realize economic growth and development opportunities. FINDING: The city's 2022 EOA found that the city would need an approximate 600-1100 acres of land in order to accommodate projected job growth in Tigard over the next 20 years.The 2022 EOA also found that Tigard has only approximately 230 acres of vacant or redevelopable land remaining. Therefore, an innovative approach to accommodating economic growth and development within the city's limited employment land supply is necessary. In response, the city is proposing Comprehensive Plan amendments and Development Code changes that will help the city promote job density using its remaining available land over the next 20 years. This goal is satisfied. CONCLUSION: Based on the findings above and the related findings below, the Planning Commission finds the proposed comprehensive plan amendments and BOA are consistent with applicable Statewide Planning Goals. METRO'S URBAN GROWTH MANAGEMENT FUNCTIONAL PLAN State planning regulations require cities within the Metro service area to adopt and amend Comprehensive Plans and land use regulations in compliance with Metro's Urban Growth Management Functional Plan. Because the proposed Code Amendments have a limited scope and the text amendments address only some of the topics in METRO's Urban Growth Management Functional Plan,only applicable Titles are addressed below. Title 8—Compliance Procedures A city or county proposing an amendment to a comprehensive plan or land use regulation shall submit the proposed amendment to the COO at least 35 days prior to the first evidentiary hearing on the amendment. The COO may request, and if so the city or county shall submit, an analysis of compliance of the amendment with the functional plan. If the COO submits comments on the proposed amendment to the city or county,the comment shall include analysis and conclusions on compliance and a recommendation with specific revisions to the proposed amendment,if any,that would bring it into compliance with the functional plan. The COO shall send a copy of comment to those persons who have requested a copy. FINDING: Notice and a copy of the proposed code amendments were provided to Metro on February 12, 2024. No comments on the EOA were received. This title is satisfied. CONCLUSION: Based on the findings above, the Planning Commission finds that the proposed comprehensive plan amendments and EOA are consistent with Metro's Urban Growth Management Functional Plan. TIGARD COMPREHENSIVE PLAN State planning regulations require cities to adopt and amend comprehensive plans and land use regulations in compliance with the state land use goals and consistent with their adopted comprehensive plan goals and policies. Because the development code amendments have a limited scope and the text amendments address Economic Opportunities Analysis(EOA)Adoption PAGE 3 OF 6 CPA2024-00002,CPA2024-00004 Exhibit A only some of the topics in the Tigard Comprehensive Plan, only applicable comprehensive plan goals and associated policies are addressed below. Comprehensive Plan Goal 1: Citizen Involvement Goal 1.1: Provide citizens, affected agencies, and other jurisdictions the opportunity to participate in all phases of the planning process. FINDING: The proposed amendments are the result of multi-year community planning and engagement efforts associated with the Tigard MADE (Maintain, Advance, and Diversify Employment) project (Attachment 2). Specifically related to the adoption process for the MADE project and 2022 EOA, the notice requirements set forth in Section 18.710.110 (Type IV Procedures) were met. A request for comments was sent to affected government agencies and interested parties on February 12,2024 and notice of hearings was sent to these parties by email on February 27,2024.An additional notice was posted in three public locations on February 27, 2024 and published in the Tigard Times newspaper on February 29, 2024. A minimum of two public hearings will be held (one before the Planning Commission and the second before the City Council) at which an opportunity for public input is provided. This policy is satisfied. Goal 9.1: Develop and maintain a strong, diversified, and sustainable economy. FINDING: Tigard MADE recognizes the redevelopment potential of the city's employment lands. While currently home to pockets of mixed-use activity and a host of small businesses, much of the city's employment land is also underutilized.The EOA and associated policies promote code solutions that allow for more businesses in more locations, more businesses with higher job density, and fewer barriers to innovative development.This policy is satisfied. CONCLUSION: Based on the findings above,the Planning Commission concludes that the proposed comprehensive plan amendments and EOA are consistent with applicable provisions of the Tigard Comprehensive Plan. APPLICABLE PROVISIONS OF THE TIGARD DEVELOPMENT CODE Section 18.790: Zoning Map and Text Amendments 18.790.020 Legislative Amendments A. Approval process. A legislative amendment application is processed through a Legislative procedure, as provided in Section 18.710.110. FINDING:The proposed amendments are legislative in nature.Therefore,the amendment will be reviewed under the Type IV legislative procedure as set forth in Section 18.710.110. This procedure requires public hearings by both the Planning Commission and City Council. Public hearings will be conducted on March 18, 2024 and April 23, 2024. This criterion is met. B. A recommendation or a decision for a legislative amendment application may be based on consideration of the applicable legal requirements. They may, but do not necessarily include: Oregon Revised Statutes, Oregon Administrative Rules, one or more Statewide Planning Goals, Metro's Urban Growth Management Functional Plan and any other regional plans. Economic Opportunities Analysis(EOA)Adoption PAGE 4 OF 6 CPA2024-00002,CPA2024-00004 Exhibit A FINDING: Findings and conclusions are provided throughout Section IV above, for the applicable listed factors on which the recommendation by the Commission and the decision by the Council must be based. This standard is satisfied. SECTION V. CITY STAFF AND AGENCY COMMENTS The following agencies, departments, and jurisdictions had an opportunity to review the proposed Development Code Amendment: • City of Tigard Public Works • City of Beaverton • City of Durham • City of King City • City of Lake Oswego • City of Portland • City of Tualatin • Metro • Oregon Department of Land Conservation and Development (DLCD) • Oregon Department of Transportation (ODOT) • Oregon Department of Energy • Oregon Department of Aviation • Oregon Department of Environmental Quality • Oregon Department of Fish and Wildlife • Oregon Department of Geology and Mineral Industries • Washington County Department of Land Use and Transportation • US Army Corps of Engineers • Clean Water Services • Beaverton School District #48 • Century Link • Comcast • NW Natural • Oregon Health Authority • Oregon Liquor Control Commission • Portland General Electric • Portland &Western Railroad • Pride Disposal Company • Tigard/Tualatin School District #23J • Tigard Water District • Tualatin Hills Parks and Recreation District • Tualatin Valley Fire and Rescue • Tualatin Valley Water District • Tri-Met Transit Development • Ziply Fiber Economic Opportunities Analysis (EOA)Adoption PAGE 5 OF 6 CPA2024-00002,CPA2024-00004 Exhibit A Metro provided a letter in support of adopting the EOA and associated policies. SECTION VI. PUBLIC COMMENTS No public comments on the BOA have been received to date. 4C\--4 March 25, 2024 PREPARED BY: Hope Pollard Associate Planner March 25, 2024 APPROVED BY: Tom McGuire Assistant Community Development Director 2'C&A. �- March 25, 2024 APPROVED BY: Nathan Jackson Planning Commission President Economic Opportunities Analysis(EOA)Adoption PAGE 6 OF 6 CPA2024-00002,CPA2024-00004 Exhibit B Irplii'i* * :Era 288 TIGARD MADE Maintain,Advance&Diversify Employment 1'i itir "41i ' tet 040. A 6 4M. .r * l'ib, .A ..._ 4 - - II . • i ,, ,,,, ,. ..„ 0. , , *111104 �,f I„ dam- ilk, z- _ J W. h itiv . ,-- , . ; ,,,,,, J.. Tv .. .«�', _ - is. i '.—. 9 .. Alm . ,,,. , f, . •, _ ".............„ t. I R p s i - X3 � �_ ,fes-� j ', . 1 ;I ' 4 1. Source:Agilyx recycling ECONOMIC OPPORTUNITIES ANALYSIS (OREGON STATEWIDE PLANNING GOAL 9) Prepared For: City of Tigard, Oregon June 2022 Exhibit B ®®■ AA I B I r TIGARD MADE Mountain,Advance&Diversity Employment Acknowledgments Johnson Economics prepared this report for the City of Tigard, with support and analysis by Mackenzie and Angelo Planning Group. The consulting partners and the City of Tigard thank the many people who helped to develop this document. City Staff Hope Pollard,Associate Planner Lloyd Purdy, Economic Development Manager Tom McGuire,Asst. Community Development Director Consultants Jerry Johnson,Johnson Economics Brendan Buckley,Johnson Economics Brian Varricchione, Mackenzie Sid Hariharan, Mackenzie Prepared by Johnson Economics LLC 621 SW Alder Avenue, Suite 605 Portland, OR 97205 (503) 295-7832 . � " JOHNSON MACKENZI E . ECONOMICS CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS ii Exhibit B B ®z AA I�I . ogo � oilan© TIGARD MADE Mountain,Advance&Diversity Employment Table of Contents INTRODUCTION 1 II. STATEMENT OF ECONOMIC OBJECTIVES 2 III. ECONOMIC TRENDS 4 NATIONAL TRENDS 4 WASHINGTON COUNTY ECONOMIC TRENDS 11 CITY OF TIGARD ECONOMIC TRENDS 17 Population and Workforce 20 IV. MAJOR INDUSTRIES ANALYSIS 24 LOCAL EMPLOYMENT SNAPSHOT 24 Characteristics of Local Firms 26 ECONOMIC SPECIALIZATION 29 ECONOMIC DRIVERS 33 PROJECTED EMPLOYMENT GROWTH 35 WORKFORCE CHARACTERISTICS OF MAJOR INDUSTRY SECTORS 37 Diversity 37 Job Skills 38 Average Wages by Industry 40 TIGARD INDUSTRIES COMPARISON 42 V. EMPLOYMENT LAND USE&DEVELOPMENT TRENDS 44 AVERAGE EMPLOYMENT DENSITY 44 LAND USE AND BUILDING EFFICIENCY 44 ADAPTIVE REUSE 47 SUSTAINABLE DEVELOPMENT 48 EQUITABLE DEVELOPMENT 50 VI. FORECAST OF EMPLOYMENT AND LAND NEED 54 CITY OF TIGARD EMPLOYMENT FORECASTS 54 Overview of Employment Forecast Methodology 54 Scenario 1:Safe Harbor Forecast 55 Scenario 2:Alternative Employment Forecast 56 Summary of Employment Forecast Scenarios 57 EMPLOYMENT LAND FORECAST 58 Land Demand Analysis—Baseline Forecast 58 EMPLOYMENT LAND NEED FORECAST—NEEDED SITE SIZES 62 Additional Considerations in Land Demand 62 VII. RECONCILIATION OF LAND NEED&SUPPLY 64 VIII. SUMMARY OF FINDINGS AND CONCLUSIONS 70 APPENDIX A:BUILDABLE LAND INVENTORY TECHNICAL MEMO CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS Hi Exhibit B I. INTRODUCTION This report introduces analytical research presenting an Economic Opportunities Analysis(EOA)for the City of Tigard,Oregon. Cities are required under the Oregon Statewide Land Use Planning system to periodically prepare estimates of future employment land demand with existing inventories of vacant and redevelopable employment land within their Urban Growth Boundary(UGB). These estimates and the associated analysis of the local economy and policy recommendations are collectively known as an Economic Opportunities Analysis(EOA) and are an adopted ancillary document to the city's Comprehensive Plan. The principal purpose of the analysis is to plan for an adequate land supply for economic development and employment growth in the community. Findings on forecasted land need and supply inform land use policies, infrastructure planning, community involvement,and coordination among local governments and the state. To this end,this report is organized into the following primary sections: ■ Statement of Economic Objectives: Lays out the primary economic objectives and assumptions underlying this analysis. This statement is derived from the City's Strategic Plan (2020-2025). ■ Economic Trends:Provides an overview of national,state,and local economic trends affecting Washington County and the City of Tigard, including population projections, employment growth and a demographic profile. ■ Major Industries:Analyzes current and projected representation of major industry sectors in Tigard,and implications for future growth and land need. ■ Employment Land Needs: Presents projections of demand for industrial and commercial land based on anticipated employment growth rates by sector. ■ Capacity: Summarizes the City's inventory of vacant, partially vacant, and redevelopable industrial and commercial land (employment land)within City of Tigard's corporate limits. ■ Reconciliation: Compares the projected short-and long-term demand for employment land to the existing land inventory to determine the adequacy and appropriateness of capacity over a five and twenty-year horizon. ■ Conclusions: Presents a summary of findings and policy implications. The prior Economic Opportunities Analysis for the City of Tigard was adopted in 2011. Since that time, the community,the region,and the country have all experienced changes in employment, land supply, and macro-economic trends. Two urban reserve areas are currently under planning as River Terrace 2.0 and will also include some employment land(not included in the current inventory). These changes are reflected in the following analysis and inventory of buildable lands. Oregon Statewide Planning Goal 9:Economic Development In addition to providing an analysis of the City's economic opportunities and needs,this report is intended to meet the requirements of Oregon Statewide Planning Goal 9 and the requirements for an EOA as specified in the administrative rules that implement Goal 9 (OAR 660-009). CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 1 Exhibit B I I• STATEMENT OF ECONOMIC OBJECTIVES The focus of the City of Tigard is on efficient use of its existing land supply and urban reserves, as the community approaches buildout of its existing land supply and has limited opportunities available for further expansion of the UGB. The City aspires to encourage efficient use of its available land through planning and land use policy.To achieve this goal, commercial and industrial land should be well-planned to accommodate high employment density of living wage jobs, and promote social equity, and environmental sustainability. The three objectives enumerated below were developed to align this employment land study with the City's forward-looking 2021 Strategic Plan. The Strategic Plan is the best and most recent representation of City goals and incorporates the community planning that went before it. The Strategic Plan includes the following objectives most relevant to this study: • Build a resilient local economy in which residents' health and the health of local businesses increase together. • Blend land uses to support a range of commercial and employment opportunities within and in proximity to residential neighborhoods. • Locate and grow businesses to support walkability, connectivity, and accessibility for all business location decisions. • Build mixed-use development that is inclusive of housing, shopping, employment, services and integrates transportation options. • Plan and create in a manner that reduces climate impacts to the maximum extent practicable, especially for those most vulnerable. • Advance equitable economic opportunity. Objective 1: A Vibrant,Diverse and Scalable Economic Base Tigard will: A. Foster efficient development and redevelopment of employment lands, leveraging existing infrastructure and local and regional transportation assets. B. Provide flexible zoning that allows for mixing of uses and building types, co-location of complementary businesses, and future growth on site. C. Encourage site availability to accommodate business growth and career advancement opportunities to medium-to-high-skilled jobs for local residents,with living wage (for individuals) and family wage jobs D. Discourage the use of remaining employment lands by industries that tend to have a low average employment density on site. E. Facilitate home-based businesses (a.k.a. home occupations), side businesses, and opportunities for self-employment,with assistance for transitions to brick-and-mortar locations. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 2 Exhibit B Objective 2: An Equitable Economy Tigard's economic development focused land use policy will: A. Foster new and existing entry-level living-wage jobs with opportunities for continued career advancement. B. Incent affordable commercial rents and business spaces. C. Simplify development code standards to promote growth of new,small, and local businesses and development. D. Identify and mitigate nuisances, hazards,and negative externalities near more affordable business districts and residences. Objective 3: Sustainable Development Tigard's economic development focused land use policy will: A. Encourage sustainable development by incenting strategies such as reduced energy consumption, higher energy efficiency, reduced greenhouse gas emissions, transportation management plans, and on-site renewable energy production and use. B. Incent and implement improvements to the pedestrian network,bicycle facilities,and recreational trails linking businesses and residences. C. Incent provision of publicly accessible open space and enhanced tree canopies. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 3 Exhibit B III. ECONOMIC TRENDS This section summarizes long and intermediate-term trends at the national,state, and local level that may influence economic conditions in the City of Tigard over the 20-year planning period. It also provides an economic context for growth projections and establishes a socioeconomic profile of the community.This report's national evaluation is focused on potential changes in structural socioeconomic conditions both nationally and globally. The analysis considers local growth trends, demographics, and economic performance. NATIONAL TRENDS Coming out of the prior recession,the United States enjoyed a sustained economic expansion beginning in 2011, which was sharply curtailed by the Covid-19 pandemic beginning in March 2020. The economic climate of 2020 and 2021 has been unusually volatile, with a great deal of uncertainty regarding the duration of the pandemic as well as the impact of policy responses to address it. However, as of the time of this report,widespread vaccination and the re-opening of the economy point toward recovery. Specific observed and anticipated impacts of the pandemic on the economy will be addressed later in this narrative. Because of the temporary and extreme nature of the pandemic, much of this discussion focuses on longer-term trends that were in place before this period of disruption. The extent to which the economy will revert to long-term trends, and on which economic measures, is still unresolved at the time of this study. At a national level there has been an on-going shift within the economy from consumption of domestically produced goods to consumption of services, especially services oriented around personal well-being (health, private education, finance). This is reflective of decreased costs of offshore production and increasing levels of wealth and discretionary income in the population. At the same time, growth in fixed investment (equipment and structures) and government defense spending is moderating — making manufactured goods a less-important part of the economy proportionally. A commonly used and reported measure of economic prosperity is real gross domestic product(GDP). Real GDP is essentially a measure of national wealth adjusted for inflation,and the increased purchasing power of the population translates into greater investment in health care, education, housing, leisure, and many other factors. U.S. real GDP expanded at an average annual rate of 2.3%from 2010 through 2019, before 3.5% in 2020 due to the pandemic. In comparison, the average growth rate over the 1970 to 1999 period was 3.2%. Potential GDP growth indicates future long-term growth at around 2.0% per year (correcting for volatility in inflation). Over the last century, the average annual growth rate has been 1.8%, despite considerable shifts in economic and social conditions. 2.0% growth would represent a reversion to this mean, after a period of stronger growth over the second half of the 20th Century. Long-term economic growth is more related to broad trends, such as population growth and investment in physical and human capital, than temporary economic fluctuations. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 4 Exhibit B FIGURE 3.01:NATIONAL GROSS DOMESTIC PRODUCT TRENDS PERCENT CHANGE IN REAL GROSS DOMESTIC PRODUCT 8 6 4III 111 I 2 I iiiiiIIII11iiiii IIII II I 2 -4 -6 e'00'L e'y�G�o'y�G'b'y�101�1'L'y�1Py0.O 1�1'by�g01�$'L'y0$P 1�$�O'YO$41��01��'L'y��P 1�� 'yO�W'L°00'L�'L°OA°OG�'b°,y0°,y'L°,yA°,y�o°,y'be ANNUAL PERCENT CHANGE IN GDP COMPONENTS -Personal consumption expenditures 30 -Gross private domestic investment - Imports 20 - Exports Government consumption 10 /OA 1 (r ��► , x,11 �� a. 1,14 \ ��Irig .• ,• IL41... ill Fr V1111111.._10 1 -20 -30 tie(9°ti°'iC°1tiP)° °3(''b eti° eti°'16tietie c,%1'ti���ti°°ti���ti°°ti`���ti���ti°,�ticpcti°°°titietietieti°ti°ti tietietietie SOURCE:US Bureau of Economic Analysis While the recent expansion cycle was expected to end in the next year or two, the pandemic brought growth to an unprecedented halt in March 2020. Real GDP at the national level declined 5%during the first quarter, and then 31.4% in the second quarter of 2020, before rebounding strongly for the remainder of the year. A strong rebound in personal consumption, private investment, and exports offset modest declines in consumption.An unusual characteristic of the current downturn is that incomes increased due to high levels of stimulus spending. Fiscal policy responses replaced a significant share of lost income for many working- CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 5 Exhibit B class households. Personal savings have also surged over the past year,as households were consuming less of some goods and services such as travel and dining. FIGURE 3.02:REAL GDP GROWTH BY CONTRIBUTING SECTOR 200% aw▪ 150% ra oc 3 100% c c -0• 50% ✓ 1 c -50% 0 eaV)• -100% -150% ti`' ti`' ti`' tic ti(o AAAA tiA tic ti'47 (1, ti0 ti0 ti0 ti0) ° ° ° ° 0- ° 1 ° o ° 00- 0- 0o ° 1 ° o ° 1 ° o ° ° ° odv , N, 0, 0, dv , 0, dv ) N, 1, dv3dtiti •Personal Consumption Gross Private Investment Net Exports ■Government Consumption U.S.Bureau of Economic Analysis Employment growth ranged between 1.4% and 2.2% (year-over-year) in the most recent expansion cycle from 2011 but declined an unprecedented 13.5%in Spring of 2020 as many businesses were forced to close. A significant amount of this loss has been recovered as the economy reopens,with recent growth of nearly 11%year-over-year compared to the lows. FIGURE 3.03:YEAR OVER YEAR EMPLOYMENT GROWTH,UNITED STATES 15% 10.9% 10% 5% 0% -5% -10% -13.5% -15% titi titi titi titi ti'' ti3 tiCK N. tih tih ti° ti° tiA tiA ti� N. N. ti° y° do '1, 4\ SOURCE:US Bureau of Labor Statistics,CES Data CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 6 Exhibit B At a national level, transportation and warehousing, professional services, tourism-related business, construction, and health care have seen some of the fastest growth over the last decade. Professional services and healthcare are now the sectors with the highest employment and are projected to provide the most new employment going forward, but at a more moderate growth rate. The aging of the population is expected to drive the healthcare sector over the next few decades. FIGURE 3.04:NATIONAL EMPLOYMENT GROWTH BY SECTOR,HISTORIC AND PROJECTED EMPLOYMENT BY INDUSTRY,HISTORIC AND PROJECTED AVERAGE ANNUAL GROWTH RATE Agriculture,forestry,fishing,and MI1.4% hunting(3) •2009 -0.2% Mining I 0.6% 1.3% • ■2019 Construction �� 2.2% • 2029 00.8% Manufacturing -0.4% Utilities I -0.2%■ -0.8% Wholesale trade 0.7% -0.2% Retail trade 0.7% -0.2%am Transportation and warehousing 2.9% Information •0.2% 0.0% HnancW activities 1.111 1.1% Professional and business services 2.5% M Educational services 2.0% 1.2 a Health care and social assistance 1111M1 2.1% Leisure and hospitality2.4% 0.79 Other services 11. 11 WM 0.9% Federal government 111.11 0.0% 0.7% •2009-2019 State and local government 111 . 13 0% Nonagriculture self-employed Ir= 11 -0.-04%.2%sI 2019-2029 0 5,000 10,000 15,000 20,000 25,000 -1.0% 0.0% 1.0% 2.0% 3.0% 4.0% THOUSANDS OF JOBS AAGR SOURCE:US Bureau of Economic Analysis Recent trends and current forecasts reflect a shift from a production-based economy, featuring domestic manufacturing and natural resource extraction, toward a service-based economy that emphasizes technological innovation, research,and design. E-Commerce Trends: A national trend that is expected to have significant implications for the commercial and industrial real estate market is the anticipated growth in e-commerce.Online shopping is rapidly taking market share from brick-and-mortar retailers, making up more than 11% of all retail sales before the pandemic. In 2020,the market share of e-commerce jumped dramatically to more than 16%of all sales as households more frequently shopped from home. It has since fallen to roughly 14% but is likely to remain higher than pre-pandemic levels and pose an ongoing challenge for brick-and-mortar retailers. In 2020 consumers spent$787.9 billion online with U.S. retailers, up 32%from 20191. This shift toward e-commerce is contributing to an increase in storage needs from retail stores to warehouses and distribution centers. At the same time, increased automation is driving consolidation 1 US Department of Commerce CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 7 Exhibit B within the warehousing and distribution industry and increasing the reliance on larger third-party operators able to make heavy investments in warehousing capital and expertise. Automation is also impacting the manufacturing industry, though to a lesser extent and primarily among large industry leaders. Increased productivity through automation continues to reduce the reliance on human labor over time. FIGURE 3.05:E-COMMERCE AS A PERCENT OF TOTAL RETAIL SALES,UNITED STATES 20% 18% 16% 14% 12% 10% 8% 6% 4% 2% 0% o r-1 N m v nLID r, CO rn o ri N m Cr U1 io CO (SI o O O O O O O O O O O ri ci c-I c I r-I r-I .--I c-I r-I .--I O O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N N SOURCE:Retail Indicators Branch,US Census Bureau,JOHNSON ECONOMICS FIGURE 3.06:RETAIL EMPLOYMENT CHANGE BY TYPE SINCE MARCH 2020,STATE OF OREGON OREGON EMPLOYMENT CHANGE SINCE MARCH 2020 10% 5% +1,800 +1600 0% -5% -10% -7,600 -15% -20% Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 -E-Commerce -Brick&Mortar -All Other Retail SOURCE:Oregon Office of Economic Analysis Finally, changes in the use of mobile devices and growth in online services have caused a shift in the tech sector, from hardware manufacturing to software development. This pattern has been reflected in the CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 8 Exhibit B State of Oregon, with e-commerce employment increasing at the expense of brick-and-mortar retail employment. Work from Home Trends: A major and sudden shift caused by the shutdown of many workplaces during the Covid-19 pandemic is that many employers and employees were forced to adapt quickly from a physical shared workplace to a work-from-home model. This trend differed greatly across industries and job classification. On-going trends towards increased e-commerce and automation also accelerated. A national poll conducted by Pew Research2 in October of 2020 found that those with higher incomes and educational attainment level reported being able to work from home at a much higher rate than those with less education and lower incomes. Sixty-two percent of those with a bachelor's degree or more education were able to work from home, compared to 23%without a college degree. Seventy-six percent of those identified as lower income, and 63% of those identified as middle income reported that they had job responsibilities that they could not do from home, while only 44% of upper income responders reported the same. As of the time of this study,great uncertainty remains on the continuing prevalence of the work-from-home trend after the abatement of pandemic shutdowns. Most economists seem to agree that remote work is unlikely to remain at the peak level seen during the pandemic and may even fall significantly. However, there is also widespread agreement that the nature of work for many workers has permanently changed, and many of the shifts seen since spring of 2020 will persist at much higher levels than seen before the pandemic. Fifty-four percent of remote workers in the Pew poll reported that they would like to continue to work remotely, and a larger majority of the respondents reported that most aspects of the transition were easy. The following are a few of the major trends and implications that are broadly predicted resulting from this unusual period: • Professional work that typically took place in an office environment is anticipated to maintain much more flexibility for many workers. The expectations of individual employers will matter greatly in whether workers remain remote, hybrid or return to the office full time. Many large tech employers such as Facebook and Amazon will allow some workers to work remote permanently. Some major firms in finance have announced that they expect a full return to the office. How this trend settles out in the long term is unknown, but it seems a near certainty that many more professional workers will be working remotely or in a hybrid remote/on-site schedule. • The difference between fully remote work and a hybrid schedule is important, because hybrid workers must still remain within a manageable commute distance from their external workplace. A large share of hybrid workers among the region's workforce can have the benefit of reducing traffic congestion. • These trends are expected to put downward pressure on office rents, as firms need less space going forward. More available space and depressed rents would likely translate into less production of new office space in coming years as the existing supply is reabsorbed. 2 Parker, Kim,Juliana Horowitz, and Rachel Minkin. "How the Coronavirus Outbreak Has-and Hasn't-Changed the Way Americans Work." Pew Research Center. 9 Dec.2020. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 9 Exhibit B • The pandemic has accelerated workplace automation as companies have adopted new technology and software to adapt to the new reality. Many of these adaptations have created permanent efficiencies and will change the job responsibilities for some workers and potentially eliminate some jobs. The adoption of new messaging, meeting and collaboration systems is likely to reduce the need for some in-person administrative functions. • Industries that were not amenable to remote work,such as dining,entertainment,and retail have faced a very challenging period during the occupancy and use restrictions stemming from the pandemic. These industries all lost businesses and the accompanying jobs over this period. The Federal Reserve estimates that over the first year of the Covid-19 pandemic(roughly April 2020 to April 2021) an additional 200,000 businesses closed over the expected rate. The Fed estimates that hair and nail salons, barbers, and other providers of personal services were the hardest hit making up half of the excess lost businesses. • As the economy reopens and recovers,there is expected to be more vacant commercial real estate available, including spaces that retain full tenant improvements such as those for restaurant use. The misfortune of some businesses over the prior year may provide affordable opportunities for new businesses to grow in their place. Some large-format spaces, such as big box stores, movie theaters and shopping centers may face long term vacancies as they are more difficult to re-tenant. Statewide Employment Projections: The economic context is more complicated and uncertain than typical due to the impact of the current pandemic and current and future policy responses.While the national and regional economy was expanding as late as February 2020, the pandemic triggered an unprecedented contraction of economic activity.While roughly 60%of employment losses in the state have been reversed, the short- and mid-term prospects for the economy will be heavily dependent upon the speed of the continuing recovery. As of late Spring 2021,trends in employment growth, consumer and travel spending, shrinking unemployment rolls,and vaccination rates point to a potentially robust reversal of the prior year's losses. FIGURE 3.07:EMPLOYMENT PROJECTIONS,STATE OF OREGON 2% -2% L -4% ▪ -6% a,• -8% m 10% Actual E -12% - - - Forecasted u -14% -16% do do do vo titi ti`• titi titi titi titi mac �J� �eQ OeG mac ,`� SOURCE:JOHNSON ECONOMICS CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 10 Exhibit B Our current employment forecast for the State of Oregon projects that a return to pre-pandemic employment levels will be achieved by Spring of 2022. Because of the unprecedented nature of the current economic swoon,there is increased uncertainty regarding this forecast. One potential scenario is that most of the prior employment is recovered relatively quickly,while restoring the final 5%to 10%takes longer. WASHINGTON COUNTY ECONOMIC TRENDS GDP: Washington County recorded strong growth during the recent expansion cycle,with the annual rate of GDP change in the County averaging nearly 5%since 2014. After rebounding strongly from the recession of 2009, the County experienced flat growth in 2012 and 2013. In general, the 2010's experienced more moderated GDP growth than the 2000's which experienced some years of double-digit expansion. FIGURE 3.08:ANNUAL RATE OF GDP CHANGE,WASHINGTON COUNTY ,,, ANNUAL RATE OF GDP CHANGE,WASHINGTON COUNTY 20% W 15% N 0 a o 10% rn kr, . o (» Lr1 LA u7 0 Lri ui 5% i . IiiII . _ ihuii 1 0% IM 0 M �? -5% O O'l O') Ot O� O0 0\ O% O°) y0 �y yl y) 'yR y� 0 til y00 ti0 O .O .0 .0 .0 .O .O .O .0 .0 .O .0 .O .0 0 O .LO O SOURCE:US Bureau of Economic Analysis These data do not yet reflect the recession of 2020, in which the County is presumed to have experienced highly negative GDP in keeping with the national trend. While the impacts of the prior year are important, there currently is no reason to assume that broad economic trends will not revert to prior trendlines as the recovery takes hold and returns the country to low unemployment and economic growth. Given the long- term planning horizon of this analysis,a longer-term focus is ultimately more appropriate. County Employment: Over the last two decades, Washington County has generally experienced a higher employment growth rate than the state or nation. The County also experienced a greater rate of job loss in the major recessions of 2001 and 2009, but the downtrends were short-lived. (Figure 3.09) CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 11 Exhibit B FIGURE 3.09:COMPARISON OF ANNUAL EMPLOYMENT GROWTH RATES (COUNTY,STATE,NATION) ANNUAL EMPLOYMENT GROWTH RATE 5% 4% 3% ,. I ,111111k\ 2% -frP\mik _ 1% 0% -1% -2% \I( - -3% -4% -5% Ol O c-I N m Ln lO N 00 Ol O .-I N M LO l0 N CO al at 0 0 0 0 0 0 0 0 0 0 r-1 rl <-I e-1 r-1 r-I r-1 <-1 al 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 N N N N N N N N N N N N N N N N N N N N -National -State of Oregon Washington County SOURCE:U.S.Bureau of Economic Analysis,JOHNSON ECONOMICS The cumulative impact of this growth is an over 50%expansion in the local employment base since 1998 in Washington County (from 246k jobs to nearly 400k jobs). The County's cumulative growth was twice the relative growth in state or national employment. FIGURE 3.10:CUMULATIVE EMPLOYMENT GROWTH(1998=100) (COUNTY,STATE,NATION) CUMMULATIVE GROWTH RATE 160 0 0 • 150 co a°1, 140 130 s 120 ° 110 E,, 100 E 0 90 W 80 00 Ol O cH N M V L!1 LO n oo Ol O N m V L!1 l0 n 00 al Ol m O O O O O O O O O O ,-1 r-1 ,-1 - al m O O O O O O O O O O O O O O O O O O O O .--1 ci N N N N N N N N N N N N N N N N N N N N —National —State of Oregon Washington County SOURCE:U.S.Bureau of Economic Analysis,JOHNSON ECONOMICS CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 12 Exhibit B The employment base in Washington County has a lower share of self-employed workers than the state and national averages, at roughly 20%, compared to 23%. The somewhat lower level of self-employment in Washington County is likely due to the number of large established employers in the county. Wage and salary employment accounts for roughly 80%of overall estimated employment in the county,compared to roughly 77%statewide and nationally. FIGURE 3.11:%OF TOTAL EMPLOYMENT REPRESENTED BY SELF-EMPLOYMENT (COUNTY,STATE,NATION) %OF SELF-EMPLOYMENT(NON-WAGE&SALARY EMPLOYMENT) 26% 24% 22% 20% 18% 16% 14% co Ol O N m N. CO 01 O V1 LO I- CO O1 01 Cr) 0 0 0 0 0 0 0 0 0 0 -1 01 O1 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 -1 ri N N N N N N N N N N N N N N N N N N N N —National —State of Oregon Washington County SOURCE:U.S.Bureau of Economic Analysis,JOHNSON ECONOMICS Countywide employment growth was robust over the last decade through 2019,with the county recovering the total job losses from the 2008 national financial crisis within three years (Figure 3.12). From 2011 through 2019, the County averaged 3% job growth per year, outpacing the average annual population growth in that period (1.2%). CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 13 Exhibit B FIGURE 3.12:WASHINGTON COUNTY EMPLOYMENT TRENDS PERCENTAGE CHANGE IN EMPLOYMENT BY YEAR,WASHINGTON COUNTY 5% 4% 3% - illi - o _ N 10% 0% ■ -1% -2% -3% -4% -5% 00 01 O i-i N M uf1 LO N CO Cn O %-1 N M u1 l0 N CO C Cn 01 O O O O O O O O O O 01 01 O O O O O O O O O O O O O O O O O O O O N N N N N N N N N N N N N N N N N N N TOTAL EMPLOYMENT LEVEL,WASHINGTON COUNTY 450,000 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 00 CT O a-I N M - N LO N CO 01 O rl N M IJ l0 N CO 01 01010000000000 ,-1 %-1 %-l %-1 %-1 ,-1 ,-1 %-1 ,-1 %-1 01 01 O O O O O O O O O O O O O O O O O O O O r-1 .--1 N N N N N N N N N N N N N N N N N N N N SOURCE:U.S.Bureau of Economic Analysis Monthly Current Employment Statistics(CES)data and unemployment data provide a more current picture of the economic impacts of the pandemic in Washington County. Following the national trend,the impacts on employment were pronounced. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 14 Exhibit B Initial estimates are that the county lost nearly 40,000 jobs(12.7%)from the high point in February 2020 to April 2020. Tepid job growth resumed the next month and has continued since, other than a small dip in December. (CES data excludes government,farm,and self-proprietor employment and therefore the total employment shown here differs from the total employment shown in the prior tables. Therefore, CES trends may best be seen as an indicator of the magnitude of employment trends, rather than quantity.) FIGURE 3.13:WASHINGTON COUNTY EMPLOYMENT LEVEL BY MONTH TOTAL EMPLOYMENT ESTIMATES FOR WASHINGTON COUNTY(CES) 350,000 300,000 0 250,000 200,000 150,000 C., `' `o oA 0, 0 ° titi titi ti0 ti°` ti`' ti( til ti� ti� 0 titi >'as �a �a �a �a bac bac �a �a >'as SOURCE:Oregon Employment Department,JOHNSON ECONOMICS FIGURE 3.14:COMPARISON OF UNEMPLOYMENT RATE TRENDS UNEMPLOYMENT RATE COMPARISON 18% 1 I I 1 1 —U.S. 16% — —Oregon 14% — Washington County 12% 1 10% cW 8% 0. a 2 6% 4% 2% 0% O a-1 (NI M d' V) l0 N 00 Cr) O a-I N M d' u l0 N CO Ol O c-1 0 0 0 0 0 0 0 0 0 0 ,-I c-1 ,-I ,-I ,-I ,-I ,-I 1-1 ,-I ,-I N N 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 N N N N N N N N N N N N N N N N N N N N N N SOURCE:St.Louis Federal Reserve,JOHNSON ECONOMICS CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 15 Exhibit B Unemployment: After climbing to nearly 10% in 2009,the unemployment rate in Washington County fell steadily to 2.7%by early 2020,lower than the statewide or national rates. The sudden economic impact of the pandemic caused the unemployment rate to suddenly spike in April 2020 to nearly 11%, still lower than the rate at the state (13%) and national level (15%). At the peak of unemployment, over 25,000 workers claimed unemployment benefits. Since then,unemployment has steadily fallen to an estimated at 5.3%(seasonally adjusted)by March 2021, with over 4,300 claimants. This is a swift recovery, and an unemployment rate of 5%, while nearly double the historically low pre-pandemic rate, is approaching what would be considered a healthy rate even in an economic expansion. As the economic recovery continues,this rate should be expected to continue falling, while the recently reported hiring woes of employers, indicate that many of these workers will return to employment at higher wage levels. Industry Growth Forecast: The State of Oregon produces employment forecasts by sector and by sub- regions, which groups Washington County with Multnomah and Clackamas Counties into the broader Metro area. The most recent forecast anticipates a gain of over 113k jobs from 2019 through 2029, reflecting an average annual growth rate of 1.0%during the period.While that forecasted rate would seem quite low considering recent growth in Washington County, a year of growth has been lost due to the pandemic. FIGURE 3.15:PROJECTED EMPLOYMENT GROWTH BY SECTOR WASHINGTON,MULTNOMAH&CLACKAMAS COUNTIES PROJECTED EMPLOYMENT CHANGE BY INDUSTRY,2019-2029 AVG.ANNUAL PROJECTED GROWTH RATE Natural resources and mining 1600 MEM 0.6% Construction 6,300 1.1% Manufacturing 5,900 0.5% Wholesale trade 4,600 0.9% Retail trade - 3,600 0.4% Transport.,warehousing,utilities 6,900 1.6% Information 2,900 1.2% Financial activities . 1,600 0.3% Professional and business services 28,400 1.6% Education and health 24,000 1.5% Leisure and hospitality 12,200 1.1% Other services - 3,600 0.9% Federal government 1200 0.1% State government 1 900 1.1% Local government 5,600 0.6% Self-employment 5,900 1.0% 0 10,000 20,000 30,000 0.0% 0.5% 1.0% 1.5% 2.0% Employment AAGR SOURCE:State of Oregon Employment Department,Workforce and Economic Research Division All industry sectors are forecast to expand over the next decade. Those forecast to grow at a higher-than- average rate are transportation, warehousing and utilities, professional services, education and health services, and information. Sectors projected to grow near the average rate of 1% are construction, government,and tourism-related industries. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 16 Exhibit B On an absolute basis,the greatest number of new jobs are forecast in professional services, education and health services,and tourism-related industries. CITY OF TIGARD ECONOMIC TRENDS Employment Distribution &Commuting(City): The distribution of employment in Washington County is concentrated within the UGB of the Portland Metro area. The greatest shares of county employment are found in Hillsboro (29%) and Beaverton (25%) which are home to the county's largest employers. Tigard has the third largest share at 16%of county employment. Within Tigard, employment tends to be concentrated along the I-5 and 217 corridors including the Washington Square Regional Center. FIGURE 3.16:DISTRIBUTION OF EMPLOYMENT,CITY OF TIGARD,2018 1_ ", % k Garden iHOnrle- rddford a'. .• Ji.3 c, . .r --..�Metzgea 1 c+ Road ® {7 . + p . ,2,`,,l',., , .. � , Rei 1 Qa 0 . ® — r, T 0 '------:-.7----. ': ' .i. .; ---'"3/4"...*-......' 5-633 Jobs/Sq.Mile i .. --' kr, 634-2,517 Jvbs/Sq.Mile IGNI C ty ".. + $• . "`« s° +v,. 2.518-5,657 JobsiSq,Mile .; .0 a 5.658-10,053 JobsfSq.Mile '-71:-.16:7* ,:; + • 10,054-15,706 Jobs/Sq.Mile ---\'- L 1 -4 Jobs o 5-64 Jogs 0..-311 a 65-324 Jobs ® 325.1,024 Jobs •1,025-2,500 Jobs SOURCE:Census Bureau,LEHD Data Figure 3.17 shows the inflow and outflow of commuters to Tigard according to the Census Employment Dynamics Database.These figures reflect"covered employment"as of 2018,the most recent year available. Covered employment refers to those jobs where the employee is covered by federal unemployment insurance.This category does not include many contract employees and self-employed and therefore is not CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 17 Exhibit B a complete picture of local employment. The figure discussed here is best understood as indicators of the general pattern of commuting and not exact figures. FIGURE 3.17:COMMUTING PATTERNS,CITY OF TIGARD,2018 SEXTONMOUNTAIN PI"?Fees P.- WEST PORTLAND W Ken.n.er q'^ SW Beard Rd :',r Metzge SOUTH BEAVERTON h1f1L Wa Rd CAPITOL HILL SW Weir SIN voinona Si VIII Ridge. G�0tt5Fe{rENOLEWOo� SN rQ rau6FrBUra - Greenberg _su SO THWEST • UM -RLAKE-SCHOLL• F °-- 41,600 0 3,800 arca 24,800 Work in Tigard, Live and work Live in Tigard, live elsewhere in Tigard work elsewhere Bu I Mounts tir/ Bryant COOK PARK Cook Li lea r • Park Durham "!Ceti 1 SOURCE:Census Bureau,LEHD Data As of 2018, the most recent year available, the Census estimated there were roughly 45,400 covered employment jobs located in Tigard. Of these,an estimated 3,800 or 8.4%,are held by local residents,while over 41,600 employees commute into the city from elsewhere. This general pattern is fairly common among many communities in the Metro area. The most common homes of local workers commuting into the city are Portland, Beaverton,and Hillsboro. Similarly, of the estimated 28,600 employed Tigard residents, 87% of them commute elsewhere to their employment. The most common destinations for Tigard commuters are also Portland, Beaverton, and Hillsboro,followed by Tualatin and Lake Oswego. Implications: Commuting patterns are an important element in the local economy. They are indicative of the labor shed companies can draw workers from,the extent to which job creation translates into increased demand for housing, goods, and services, and the overall balance of population and employment in the community. Tigard has an estimated 21,300 households as of 2019(Census)meaning that the city features a jobs/household ratio of 2.1 jobs per household,while local households hold an average of 1.3 jobs. This indicates that Tigard is a net-positive employment market that attracts workforce from around the region. This dynamic should present local job options for Tigard residents who would prefer to work closer to home and enjoy shorter commutes. In practice the types of local jobs available do not always match with the employment sectors of local residents. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 18 Exhibit B Figure 3.18 shows a comparison of the estimated distribution of locally available employment by industry sector, and the estimated distribution of jobs that local Tigard residents hold (inside and outside the community) by industry sector. The data show that the employment available locally exceeds the number of workers in the local workforce in those industry sectors. Only in the fields of education, manufacturing, health care, and government do the number of Tigard workers exceed the number of jobs in those fields available from local employers. As we've seen, it is most common for workers to commute to employment outside of the city. But this is an indication that local employment is available in most industry sectors if residents would like to work closer to home. FIGURE 3.18:COMPARISON OF NUMBER OF LOCAL JOBS TO LOCAL WORKFORCE,BY INDUSTRY Local Jobs vs. Local Workforce Construction Manufacturing t Wholesale Trade Retail Trade Transport.,Warehouse, Utilities Information Finance& Insurance Real Estate Professional &Technical Services Management&Admin. Services Education Health Care 1111111111 Leisure& Hospitality Other Services ■Local Tigard Jobs Government Working Tigard Residents 0 2,000 4,000 6,000 8,000 Employment SOURCE:Census Bureau,LEHD Data,Oregon Employment Department The characteristics of the workforce commuting into and out of Tigard were similar in terms of incomes and age(Figure 3.19). Working Tigard residents are slightly more likely to be 30 years or older,and more likely to earn more than$40,000. (These are the broad categories provided by this Census data set.) CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 19 Exhibit B FIGURE 3.19:NET INFLOW-OUTFLOW DETAIL,CITY OF TIGARD AND WASHINGTON COUNTY,2018 Age of Workers Income Groups General Sector Aged 55 or older $40,000 or more - In"All Other Services" In"Trade, Aged 30 to 54 $15,000 to$40,000 Transport.,and Utilities"Sector Aged 29 or younger $15,000 or less In"Goods ■ Producing"Sector 0% 20% 40% 60% 0% 20% 40% 60% 0% 20%40%60%80% ■Holders of Local Jobs ■Holders of Local Jobs ■Holders of Local Jobs Local Working Residents Local Working Residents Local Working Residents SOURCE:Census Bureau,LEHD Data As Tigard considers its broader economic development objectives, these commuting trends present a negative implication. Mobility and reducing vehicle miles are important elements of long-term sustainability that the widespread cross-commuting among Metro-area communities works against. A majority of both Tigard residents and employees at local businesses commute to work. The Census estimates that of 2019 75%of working local residents commuted to work in a single-occupancy vehicle,an additional 8%carpooled,6%used public transit,and 8%worked from home. Widespread cross-commuting also has equity implications,as lower income and some disabled workers are less likely to have access to a dependable car or may be unable to drive. This increases the importance of having a wide variety of locally available work at a range of wage and skill levels,to reduce commuting times for residents who wish to work closer to home. As noted above, Tigard does feature a pool of local employment larger than the number of working individuals,so fares well on this measure. POPULATION AND WORKFORCE The City of Tigard has an estimated population of 54,500 as of 2020 according to the PSU Population Research Center(Figure 3.20). Population growth has averaged just over 600 residents per year since 2000, but with significant year-to- year fluctuation during that time. Growth has accelerated since 2015, averaging nearly 900 new residents per year,and a growth rate of nearly 2%per year. A major driver of population increases at the local level are surges in housing development and new annexations to the city boundary. In Tigard, the addition of the River Terrace area has coincided with a surge in population as the area has built out with new housing. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 20 Exhibit B FIGURE 3.20:POPULATION GROWTH(RESIDENTS AND RATE),CITY OF TIGARD POPULATION GROWTH,TIGARD O 0 2000 00 c-1 0 1500 O 0 N I O m v4 N O O O 1-4 ciO c-1 0 LO O 1000 WOO W O V) 500 111111111 cu tx ' = 1 -500 I 0 0o a -1000 00 O'' 01' O') Off` 01 0O O1 Ob O°') ti0 titi 'y'L ti� ' ` 'yh 'yr° til tib y' 'LO 'V 'V "k, 'y0 1, ', 1, 1, 'LO 1, 1, 1, 1, 1, 'y0 ', 'LO 1, 'y0 1, ', ANNUAL RATE OF POPULATION GROWTH at 4.0% at ri 3.0% v a Ni N o N o 00 a, ° O 00 2.0% � ill ovMN H aiiiiIiI O w1 0% IN.- 2 0.0% -1.0% o I ■Tigard Washington County -2.0% 'Ci' o1' Ob Ob` 0) OHO 01 Ob 00 do titi til' tib tit)` ti`' ti° ti\ ti" ti� 1.O 1, 'y0 'y0 'y0 'y0 1'O 1'O 1'O 1., 1., 1'O 'y0 1'O 'y0 'y0 'y0 'y0 'y0 'y0 1'O SOURCE:Population Research Center,Portland State University Tigard's population skews younger than statewide figures, with a greater share of the population in the prime work years, and a greater share of children in the community. As with the national trend, and Portland region, the city's population is projected to become increasingly older in the coming decades, as the large Baby Boom generation continues to age into retirement. The long-term impact of this on the local labor force will be a concern moving forward, as the number of younger residents is expected to decline in percentage terms. As Tigard has a greater share of residents under the age of 50 relative to the state, including millennia's,these impacts may be somewhat mitigated. A robust local economy with stable, family-supportive employment and affordable housing options can continue to attract net migration of younger households. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 21 Exhibit B Figure 3.21 shows that Tigard has a greater share of the population in prime family-forming and child-raising years(25 to 50 years) relative to the state,and a smaller share of population 60 years and older. FIGURE 3.21:DISTRIBUTION OF POPULATION BY AGE COHORT,TIGARD AND OREGON POPULATON BY AGE COHORT 85+ 2.0% 8 ■Tigard 0-84 8% 75-79 2.3% ■Oregon 70-74 3.0% 65-69 5.5% 60-646.0°i° 55-59 6.3% 50-54 6.0% 4, 0 45-49 7.0% v 40-44 6.9% to 35-39 8.5% 30-34 7.9% 25-29 8.2% 20-24 5.5% 18-19 1.8% 15-17 3.4% 10-14 MEMM 6.6% 5-9 5.9% 0-4 5.5% 0% 2% 4% 6% 8% 10% POPULATION BY AGE COHORT 75+ M116.1% Tigard 65 74 Mi5% L Oregon 0 55-64 12.3% a, on < 18-54IMMIMMEME 51.8% Under 18 21.3% 0% 10% 20% 30% 40% 50% 60% SOURCE:Population Research Center,Portland State University The educational attainment level of residents in the City of Tigard varies from the statewide pattern, with a high level of residents having bachelor's or advanced degrees. Of an estimated 38,058 persons 25 years or older in the City of Tigard,as estimated 53%have an associate degree or higher.This compares to a 42% CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 22 Exhibit B rate for Oregon. This represents a likely competitive advantage for the city, as an educated population attracts employers, retail and services,and other economic activity. Working with community colleges and other partners on on-going education,workforce development and distance learning opportunities may be an important part of a local economic development strategy to train segments of the workforce with lower educational attainment in the skills that local industries need. FIGURE 3.21:EDUCATIONAL ATTAINMENT PROFILE,2018 Tigard State of Oregon Count % Count % Less Than High School Graduate 2,698 7.1% 274,182 9.6% High school graduate(includes equivalency) 6,444 16.9% 656,365 23.0% Some college, no degree 8,677 22.8% 732,477 25.7% Associate's degree 3,415 9.0% 249,852 8.8% Bachelors Degree 10,842 28.5% 583,144 20.5% Graduate or professional degree 5,982 15.7% 354,673 12.4% Total 38,058 2,850,693 DISTRIBUTION OF POPULATION BY EDUCATIONAL ATTAINMENT Graduate or professional degree 12.4% 15.7% r Bachelors Degree Associate's degree 8.8% 9.0% Some college, no degreeIMMEIN53 High school graduate(includes equivalency) 23.0% 16.9% Less Than High School Graduate 9.6% 7.1% •State of Oregon •Tigard SOURCE: U.S.Census Bureau, 2015-2019 American Community Survey 5-Year Estimates CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 23 Exhibit B IV. MAJOR INDUSTRIES ANALYSIS This element of the Economic Opportunities Analysis assesses the economic landscape in Washington County and the City of Tigard in major industry sectors.The objective of this process is to identify a range of industry types that provide current and potential economic opportunities over the planning period in alignment with economic development objectives. Elements of Industry Sector Analysis A range of analytical tools are used to assess the local and regional economic landscape to identify the sectors that are likely to drive growth over the planning period. Highly Represented -Current Industries LOCAL EMPLOYMENT SNAPSHOT -Location Quotient As discussed in more detail in the following section, Tigard features an estimated 45,500 jobs within its corporate boundaries as of 2021. This snapshot of current industry Gain Sharing Project Growth employment in the cityareaguide to thepast andpresent butRate Over Time maynot represent the types of and employment land uses -OR Emp. Dept. p Yp jobs -Momentum that will best meet the community's future objectives. -Shift Share -Rate and Magnitude The following table presents the major industry sectors ranked by estimated number of employees. The largest sectors are construction, retail,and professional services. FIGURE 4.01:LOCAL EMPLOYMENT BY INDUSTRY,CITY OF TIGARD(2021) Estimated Employment by Industry(2021) Construction 7,028 Retail Trade 6,854 Management&Admin.Services 5,285 Prof.and Tech.Services 4,476 Professional&Technical Services 4,465 Health Care 3,482 Leisure&Hospitality 3,026 Wholesale Trade 2,243 Manufacturing 2,153 Other Services 1,573 Education 1,454 Information 1,454 Real Estate 827 Transport.,Warehouse,Utilities 754 Government • 441 O 00 OO 00 00 LO �O (4), 00 No.of Employees Source: Johnson Economics,Oregon Employment Department,BEA CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 24 Exhibit B Figure 4.02 presents the growth in employment in Tigard by major industry sector since 2010 according to QCEW data provided by the Oregon Employment Department. This time period covers the recent economic expansion since the prior recession of 2008,and also the employment losses of the last year(2020). Since 2010,the greatest employment growth was seen in the construction,professional services,and health care industries. Many other sectors experienced falling employment over this period, led by the management and administrative services sectors. These shifts are partially due to the relocation of some large employers into and out of the city. FIGURE 4.02:EMPLOYMENT BY INDUSTRY SECTOR,TIGARD(2010-2021) QCEW Employment Employment Growth'00-'21 Major Industry Sector 2010 2021 New Employment Employment Jobs Growth Construction 3,752 7,028 3,276 119% Manufacturing 2,109 2,153 44 2% Wholesale Trade 2,795 2,243 (553) -20% Retail Trade 7,408 6,854 (553) -8% Transport.,Warehouse,Utilities 646 754 108 18% Information 1,648 1,454 (194) -12% Finance& Insurance 5,041 4,476 (565) -12% Real Estate 656 827 171 28% Professional &Technical Services 3,848 4,465 617 18% Management&Admin.Services 6,115 5,285 (830) -15% Education 1,855 1,454 (401) -23% Health Care 2,631 3,482 851 34% Leisure& Hospitality 3,421 3,026 (395) -12% Other Services 1,418 1,573 155 13% Government 392 441 49 13% TOTAL 43,735 45,517 1,781 4% Source: Oregon Employment Department In terms of total number of current jobs, the retail, finance and insurance, administrative services, and leisure and hospitality (tourism and dining) remain large employers in Tigard, despite job losses over the last decade. The success of both professional service and industrial/construction businesses in Tigard is likely due to the historical availability of land in these zones, with excellent regional transportation access. Tigard's employment areas are located along the 1-5 freeway, and the confluence of highways 99W and 217. This enables employers locating in Tigard access to a regionwide labor shed including all of the Metro area including SW Washington State as well as the Salem metro area to the south. This access is also an advantage for shipping, or industries such as construction that may have job sites located across the Metro area. Tigard's southeast industrial zones have provided large sites, with quick access for employees and shipping. The Tigard Triangle area is also an extension of the Kruse Way corridor which is established as one of the top suburban professional office locations in the Metro area. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 25 Exhibit B The network of regional access is also highly beneficial to retailers. The Washington Square Mall, big box retailers, and even some smaller stores rely on a regional customer base preferring access and visibility from high-traffic streets. The Highway 99 corridor is also a highly successful retail environment. These are the historical development patterns that have led to the current distribution of employment and industries in the city. As discussed in the following sections of this report,the makeup of new businesses in the community is likely to change due to decreasing land availability and policy choices on how to use it efficiently. CHARACTERISTICS OF LOCAL FIRMS The local employment base is largely dominated by small employers of 10 or fewer employees (75% of firms),which is a common pattern across most markets(see Figure 4.03). There are two employers of 500 or more employees, and 11 with 250 to 500 employees. Some of these may have employees spread over multiple locations. Relative to the national distribution, Tigard has a slightly smaller share of small firms, and slightly greater share of firms with 10 to 100 employees. However,the differences are not large. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 26 Exhibit B FIGURE 4.03:DISTRIBUTION OF CURRENT FIRMS BY SIZE,TIGARD OREGON Firms by Size(By Number of Employees) Industry <5 5-9 1049 20-49 50-99 100-249 250-499 >500 Total Agriculture,forestry,fishing,and hunting 3 0 2 1 0 0 0 0 6 Mining 0 0 0 0 0 0 0 0 0 Construction 166 44 41 26 12 7 1 2 299 Food Manufacturing 13 7 3 0 0 0 0 0 23 Wood Manufacturing 12 5 5 6 2 1 0 0 31 Metals Manufacturing 32 10 6 9 4 4 0 0 65 Utilities 0 0 0 0 1 0 0 0 1 Wholesale trade 209 60 28 17 3 3 0 0 320 Retail trade 86 54 61 23 6 7 1 0 238 Retail trade 46 17 22 10 7 4 2 0 108 Transportation 30 3 5 3 1 0 0 0 42 Delivery and warehousing 9 4 1 1 1 1 0 0 17 Information 61 8 8 9 5 2 1 0 94 Finance and Insurance 182 40 29 20 7 8 2 0 288 Real Estate and Rental 100 23 12 6 2 0 0 0 143 Professional,Scientific,and Technical Services 389 89 49 40 11 1 0 0 579 Management of Companies and Enterprises 20 10 10 7 7 1 0 0 55 Administrative and Wast Management 129 28 27 22 4 6 3 0 219 Educational services 33 10 9 15 5 3 0 0 75 Health care and social assistance 166 70 42 33 11 2 0 0 324 Arts,Entertainment,and Recreation 22 7 7 5 0 0 0 0 41 Accommodation and Food Services 64 44 50 43 7 4 0 0 212 Other services 303 50 20 10 5 0 0 0 388 Government 1 0 0 2 1 0 1 0 5 Unclassified 37 0 0 0 0 0 0 0 37 TOTAL 2,113 583 437 308 102 54 11 2 3,610 NUMBER OF FIRMS BY SIZE >500 2 250-499 11 a, i, 100-249 54 0 a E 50-99 102 W 20-49 308 `w s E 10-19 437 0 z 5-9 583 <5 2,113 0 500 1,000 1,500 2,000 2,500 Number of Firms DISTRIBUTION OF FIRMS BY SIZE(LOCAL AND NATIONAL) >500 10% •Tigard 0 250-499 10% •National(Private Sect cu i.c 100-249 ' 1% E 50-99 ! 3% W 0v 20-49 ! 9% E 10-19 12% z 5-9 16% <5 59% 0% 10% 20% 30% 40% 50% 60% 0' Number of Firms Source: Oregon Employment Department CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 27 Exhibit B Figure 4.04 presents the estimated number of employees in firms of the different size categories. While there are relatively few larger employers,they still represent a significant share of overall employment due to their high number of employees. FIGURE 4.04:DISTRIBUTION OF EMPLOYEES BY FIRM SIZE,TIGARD OREGON TOTAL NUMBER OF EMPLOYEES BY FIRM SIZE >500 1,186 250-499 3,841 .17 100-249 8,517 £ 50-99 6,977 0 20-49 111111=1 9,455 sc N 10-19 5,966 in £ 5-9 111== 3,844 LL <5 Millw3,227 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 8,000 9,000 10,000 Total Number of Employees Source: Johnson Economics,Oregon Employment Department Home Occupations: As of the time of this report, Tigard had 171 home occupation businesses registered in the city. The total number of employees was 230,for an average 1.3 employees per business. However, nearly 80%of home occupation businesses report just one employee. There are a range of home business types, with the most common being some form of contractor or tradesperson who likely travels to other locations to complete projects,or someone providing personal services which might include accounting or legal services, beauty,or repair services. FIGURE 4.05:DISTRIBUTION OF EMPLOYEES BY FIRM SIZE,TIGARD OREGON Category No.of Home Permits No.of Employees Landscape,General,Trade Contractors: 27 16% 47 20% Food Prep. and Products: 2 1% 3 1% Misc. Durable Goods Production(Apparel,Furniture,Crafts,etc.): 13 8% 14 6% Retail(Misc.Goods,Online&Mail): 30 18% 43 19% Personal and Property Service(Beauty,Repair,Real Estate,etc.): 44 26% 58 25% Professional Services(Accounting,Health,Legal,etc.): 54 32% 60 26% Unknown: 1 1% 5 2% TOTAL: 171 230 Roughly 18%report some sort of retail service which likely includes mostly online sales.The largest category is those who provide services. This includes many personal services such as beauty, massage, and alternative health practitioners who provide services in a client's home, also many self-occupied professionals such as accountants, lawyers and paralegals,and freelancers. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 28 Exhibit B At an estimated 230 employees,these home occupations represent a very modest share of employment in Tigard,roughly 0.5%. This only includes home occupation businesses that have registered with the City and there are also likely many such businesses that are unregistered. ECONOMIC SPECIALIZATION The most common analytical tool to evaluate economic specialization is a location quotient analysis.This metric compares the concentration of employment in an industry at the local level to a larger geography. All industry categories are assumed to have a quotient of 1.0 on the national level,and a locality's quotient indicates if the local share of employment in each industry is greater or less than the share seen nationwide. For instance, a quotient of 2.0 indicates that locally, that industry represents twice the share of total employment as seen nationwide. A quotient of 0.5 indicates that the local industry has half the expected employment. Industries with a high location quotient are likely to be bringing additional economic activity and employment into the community. City of Tigard: A location quotient analysis was completed for Tigard, which evaluated the distribution of local employment relative to national averages, as well as average annual wage levels by industry locally relative to national averages (Figure 4.06). The industries that are most highly represented relative to national averages were Construction, Retail, and Finance and Real Estate. FIGURE 4.06:INDUSTRY SECTOR SPECIALIZATION,CITY OF TIGARD,20193 Rank NAICS Sector Description Empl. Emp.L.Q. Average Wages Wage L.Q. 1 236 Construction Construction of Buildings 1,589 3.0 $72,873 0.9 2 448 Retail Clothing and Clothing Accessories Stores 1,269 2.6 $30,978 0.4 3 238 Construction Specialty Trade Contractors 3,745 2.4 $73,494 0.9 4 533 Real Estate Lessors of Nonfinancial Intangible Assets 20 2.4 $81,413 1.0 5 524 Financial Insurance Carriers and Related Activities 1,861 2.3 $79,908 1.0 6 525 Financial Funds,Trusts,and Other Financial Vehicles 10 2.3 $90,267 1.1 7 511 Information Publishing Industries(except Internet) 571 2.3 $137,411 1.7 8 453 Retail Miscellaneous Store Retailers 640 2.2 $34,158 0.4 9 442 Retial Furniture and Home Furnishings Stores 354 2.1 $42,811 0.5 10 523 Financial Securities,Commodity Contracts,etc. 658 2.0 $114,375 1.4 11 814 Other Services Private Households 176 1.8 $30,160 0.4 12 517 Information Telecommunications 474 1.8 $84,257 1.1 13 522 Financial Credit Intermediation and Related Activities 1,572 1.7 $97,091 1.2 14 611 Education Educational Services 1,560 1.6 $42,799 0.5 15 452 Retail General Merchandise Stores 1,721 1.6 $32,572 0.4 16 423 Wholesale Merchant Wholesalers,Durable Goods 1,507 1.5 $107,250 1.3 17 551 Prof.Services Management of Companies and Enterprises 1,153 1.5 $207,760 2.6 18 512 Information Motion Picture and Sound Recording Industries 207 1.4 $58,393 0.7 19 425 Wholesale Wholesale Electronic Markets and Agents and Brokers 430 1.4 $96,931 1.2 20 541 Prof.Services Professional,Scientific,and Technical Services 4,061 1.3 $87,669 1.1 SOURCE:Bureau of Labor Services NAICS: North American Industry Classification System;visit census.gov/eos/www/naics/to learn more about the specific industry types included in each code. 3 QCEW Data,Annual Average 2019 Data CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 29 Exhibit B These are not necessarily the subsectors with the highest overall employment levels. However, they are the subsectors with the highest representation relative to national levels, which indicates that the local economy may have competitive advantages in these industries. It may also indicate that the historic land use and zoning pattern in Tigard is amenable to certain industries over others. Figures 4.07 and 4.08 (following pages)show the local subsectors graphed by L.Q. and the overall number of employees in those subsectors. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 30 Exhibit B FIGURE 4.07:INDUSTRY SUBSECTOR SPECIALIZATION,LOCATION QUOTIENT VS.NUMBER OF EMPLOYEES,CITY OF TIGARD,2019 5.0 � • Construction 0 Financial Services • Manufacturing • Profession&Business Services • Wholesale Trade • Education&Health Retail Trade • Leisure&Hospitality • Transportation,Warehousing&Utilities(T.W.U.) • Other Services 4.0 • Information Construction of Buildings ar 3.0 • c 4:13 Construction- O Specialty Trades (f Clothing Retail Insurance • Publishing 0 O O_ .' fo 2.0 J Educational Finance • O Services O • Professional& Management • • General Merch. Scientific Services O • of Co.'s I Retail • • Wholesale- 1.0 • • O Durable Goods Admin.& p• Support • • Services • Ambulatory • Food Service& Health • Drinking Places M 4) • Services I 0.0 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 Industry Size (#of Employees) Source: QCEW Data,Annual Average 2019 Data CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 31 Exhibit B TIGARD MADE Mountain,Advance&Diversify Employment FIGURE 4.08:SUBSECTORS WITH HIGHEST LOCATION QUOTIENT,CITY OF TIGARD,2019 LOCATION QUOTIENT Construction of Buildings 3.0 Clothing and Clothing Accessories Stores 2.6 Specialty Trade Contractors 2.4 Lessors of Nonfinancial Intangible Assets(except... i 2.4 Insurance Carriers and Related Activities 12.3 Funds,Trusts,and Other Financial Vehicles 12.3 Publishing Industries(except Internet) i I 2.3 Miscellaneous Store Retailers 2.2 Furniture and Home Furnishings Stores j 2.1 Securities,Commodity Contracts,and Other Financial... 12.0 Private Households 111 1,8 Telecommunications l i 1.8 Credit Intermediation and Related Activities l 11.7 Educational Services 1.6 General Merchandise Stores 1.6 Merchant Wholesalers,Durable Goods 1.5 Management of Companies and Enterprises 1.5 Motion Picture and Sound Recording Industries S 1 1.4 Wholesale Electronic Markets and Agents and Brokers 1.4 Professional,Scientific,and Technical Services 1.3 TOTAL JOBS Professional,Scientific,and Technical Services 4,061 Specialty Trade Contractors ( 3,745 Insurance Carriers and Related Activities I I 1,861 General Merchandise Stores 1,721 Construction of Buildings _ 1,589 Credit Intermediation and Related Activities I 1,572 Educational Services _. III- 1,560 Merchant Wholesalers,Durable Goods _ 1,507 Clothing and Clothing Accessories Stores _ 1,269 Management of Companies and Enterprises 1,153 Securities,Commodity Contracts,and Other Financial..._ 1658 Miscellaneous Store Retailers 640 Publishing Industries(except Internet) 1571 Telecommunications l 1474 Wholesale Electronic Markets and Agents and Brokers 430 Furniture and Home Furnishings Stores 354 Motion Picture and Sound Recording Industries E 207 Private Households U 176 Lessors of Nonfinancial Intangible Assets(except...) 20 Funds,Trusts,and Other Financial Vehicles 1 10 III Construction 0 Financial Services • Manufacturing Profession&Business Services ▪ Wholesale Trade Education&Health Retail Trade • Leisure&Hospitality • Transportation,Warehousing&Utilities(T.W.U.) + Other Services Information Source: QCEW Data,Annual Average 2019 Data CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 32 Exhibit B B ®®■ AA Irff TIGARD MADE Maunlain,Advance&Diversity Employment ECONOMIC DRIVERS The identification of the economic drivers of a local or regional economy are helpful in informing the character and nature of future employment, and by extension land demand over a planning cycle.To this end,we employ a shift-share analysis of the local economy emerging out of the current expansion cycle4. A shift-share analysis measures the local effect of economic performance within a particular industry or occupation. The process considers local economic performance in the context of national economic trends—indicating the extent to which local growth can be attributed to unique regional context or is simply growth in line with broader national trends. For example, consider that widget manufacturing is growing at a 1.5% rate locally, about the same rate as the local economy.On the surface we would consider the widget manufacturing industry to be healthy and contributing soundly to local economic expansion. However, consider also that widget manufacturing is booming across the country,growing at a robust 4%annually. In this context, local widget manufacturing is not keeping pace with the broader growth in the industry. We can generally classify industries,groups of industries,or clusters into four groups: Growing, Outperforming: Industries that are growing locally at a rate faster than the national average.These industries have characteristics locally leading them to be particularly competitive. Growing, Underperforming: Industries that are growing locally but at a slower rate than the national average. These industries generally have a sound foundation, but some local factor is limiting growth. Contracting, Outperforming: Industries that are declining locally but slower than the national average. These industries have structural issues that are impacting growth industry-wide. However, local firms are leveraging some local or regional factor that is making them more competitive than other firms on average. Contracting, Underperforming: Industries that are declining locally at a rate faster than the national average.These industries have structural issues that are impacting growth industry wide. However,some local or regional factor is making it increasingly tough on local firms. The average annual growth rate by industry from 2010 through 2019 (the most recent year available) for Tigard was compared to the national rate.The observed local change was compared to a standardized level reflecting what would be expected if the local industry grew at a rate consistent with national rates for that industry. 4 Measured from the trough of recent recession to 2019, the most recent period available for local employment data. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 33 Exhibit B ' ne� -' tl'E aiP�R� TIGARD MADE Maintain,Advance&Diversity Employment As shown in Figure 4.09&4.10,some key industries showed growth exceeding national rates.These include construction, management of companies, and other services. Other sectors also experienced growth, but less than predicted if they had grown at the national rate. FIGURE 4.09:INDUSTRY SECTOR SHIFT SHARE ANALYSIS,CITY OF TIGARD(2010-2019) Average Employment Net Change Standardized Regional Industry 2010 2019 Total AAGR Level-2019* Shift Agriculture,Forestry,Fishing and Hunting 101 253 153 10.8% 104 150 Construction 3,752 7,273 3,521 7.6% 4,827 2,446 Manufacturing 2,109 2,186 77 0.4% 2,366 (181) Wholesale Trade 2,795 2,237 (558) -2.4% 3,026 (789) Retail Trade 7,408 7,210 (198) -0.3% 8,045 (836) Transportation,Warehousing&Utilities 646 692 46 0.8% 696 (4) Information 1,648 1,473 (174) -1.2% 1,963 (489) Finance and Insurance 5,041 4,479 (562) -1.3% 6,435 (1,957) Real Estate and Rental and Leasing 656 857 201 3.0% 823 35 Professional,Scientific,and Technical Services 3,848 4,591 743 2.0% 5,312 (721) Management of Companies and Enterprises 384 1,304 919 14.5% 465 838 Admin.Support&Waste Management 5,731 4,261 (1,470) -3.2% 6,722 (2,461) Educational Services 1,855 1,651 (204) -1.3% 2,245 (594) Health Care and Social Assistance 2,631 3,471 840 3.1% 3,379 91 Arts,Entertainment,and Recreation 230 362 132 5.2% 293 69 Accommodation and Food Services 3,191 3,536 344 1.1% 3,847 (311) Other Services(except Public Administration) 1,418 1,887 469 3.2% 1,433 454 Public Administration 392 468 76 2.0% 372 96 TOTAL 43,836 48,190 4,354 1.1% 52,353 (4,163) 4,000 •Predicted 3,000 •Observed L g 2,000 LI t 1,000 0 .. . . .. _. . . . _ .. . WD. O I __ _ .(1,000) (2,000) an o 5 m 5 iv o c 5 8 8 c -,.7,2 8 w c 2 I= E 9 w 5 a 5 5 o a o c 8 w n3 c v c v w m 2 ¢ u o •c 's 5 E 0 C o c _ c A c -c o rs 2 2 E v ro m a .c2 3 oo u = w m " f0 on m c Ti u v w u j m v os z 4c 5 c v c w c a t1 c -o a, W N 9 d 3 S ,n a o7j v c 'm a v - E 0 `m 'm II- ,,:i c :" 0 0 u t± o v e0 2 c V d L N E X 4 o o � c E 9 w 6 00. I2 2 a c = C O u o E E a .,, 'ttu w a . -c n <H a N L O *Employment level in each industry had it grown at the same rate as its counterparts at the national level over the same period. SOURCE:U.S.Department of Commerce,Bureau of Economic Analysis CITY OF TIGARD ECONOMIC OPPORTUNITIES ANALYSIS PAGE 34 Exhibit B B ®®■ AA �I � lip..=�© TIGARD MADE Maintain,Advance&Diversity Employment Figure 4.10 presents this data visually,comparing actual employment growth with the positive or negative shift based on national trends. This gives an indication of which sectors are outperforming, and which are contracting. In Tigard, some sectors have excelled as noted, while others are underperforming, or have even contracted. Finance and admin services are two sectors that have lost some major employers since 2010 and thus have fared worse than growing industries. Wholesale and retail trade, education and information have similarly contracted. FIGURE 4.10:INDUSTRY SECTOR SHIFT SHARE ANALYSIS,CITY OF TIGARD(2010—2019) 2,500 • Construction 2,000 Contracting, Growing, Outperforming Outperforming 1,500 Management of Companies and... 1,000 a) o Other Services(except Public N 500 Administration) Health Care and Social f ® • Assistance 0 O Information 0--Manufacturing (9 O -500 Educational Services Wholesale Tr Accommodation cu and Food w P Services t Professional,Scientific,and ts -1,000 Retail Trade Technical Services O Contracting, -1,500 Underperforming Growing, Finance and Insurance Underperforming -2,000 Admin.Support&Waste Management -2,500 -1,500 -1,000 -500 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Local Job Growth(Actual) SOURCE:U.S.Department of Commerce,Bureau of Economic Analysis PROJECTED EMPLOYMENT GROWTH As noted in Section III,the State of Oregon produces employment forecasts by sector by sub-regions,which groups Washington County with Multnomah and Clackamas Counties into the broader Metro area. This forecast is an indicator of how different industry sectors are expected to fare in the region in coming years, including Washington County and Tigard. It is represented here for reference. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 35 Exhibit B '�ne� tl'E aiP�A� TIGARD MADE Maintain,Advance&Diversity Employment FIGURE 4.11:PROJECTED EMPLOYMENT GROWTH BY SECTOR WASHINGTON,MULTNOMAH&CLACKAMAS COUNTIES PROJECTED EMPLOYMENT CHANGE BY INDUSTRY,2019-2029 AVG.ANNUAL PROJECTED GROWTH RATE Natural resources and mining 1600 0.6% Construction 6,300 1.1% Manufacturing 5,900 0.5% Wholesale trade 4,600 0.9% Retail trade 3,600 0.4% Transport.,warehousing,utilities 6,900 1.6% Information 2,900 1.2% Financial activities . 1,600 03%ll Professional and business services 28,400 1.6% Education and health 24,000 1.5% Leisure and hospitality 12,200 1.1% Other services 3,600 0.9% Federal government 1200 ■ 0.1% State government 1 900 1.1% Local government 5,600 0.6% Self-employment 5,900 1.0% 0 10,000 20,000 30,000 0.0% 0.5% 1.0% 1.5% 2.0% Employment AAGR SOURCE:State of Oregon Employment Department,Workforce and Economic Research Division The most recent forecast anticipates a gain of over 113,000 jobs from 2019 through 2029, reflecting an average annual growth rate of 1.0%during the period. All industry sectors are forecast to expand over the next decade. Those forecasted to grow at an above average rate are transportation, warehousing and information, reflecting the continuing growth of internet business, data centers, software and remote shopping. Other strong sectors are professional services due to the continuing evolution of the economy from good production towards services,and education and health services which continue to be a growing slice of the economy. Health care is expected to continue to grow with the aging of the large Baby Boomer cohort and this trend may be sustained for 20 years or more. Sectors projected to grow near the average rate of 1% are construction, government, and tourism-related industries. Of these, construction, and professional services,and health care have seen healthy growth in Tigard. On an absolute basis, the greatest number of new jobs are forecasted in professional services; education and health services, and tourism-related industries. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 36 Exhibit B 4.)..,1yle . , TIGARD MADE Mountain,Advance&Diversify Employment WORKFORCE CHARACTERISTICS OF MAJOR INDUSTRY SECTORS DIVERSITY The following figure shows diversity in major industry sectors in Oregon.5 Unfortunately, local data is not available. The data show that overall, the employed workforce in Oregon is an estimated 53% male, and 86%white. In contrast,the state population is estimated at 49%male, and 83%white. Women have below-average representation in fields like construction, manufacturing, information, and professional services. Women have above average representation in finance and real estate, education, health,and leisure and hospitality(dining, and tourism-related). The employed workforce identifies as 12% Latino compared to over 13% of the state population. Latinos have above average representation in agriculture,leisure and hospitality,and other services which includes many personal service businesses. Latinos have lower representation in sectors such as finance and information, relative to their share of the population. FIGURE 4.12:DIVERSITY IN EMPLOYMENT,BY INDUSTRY SECTOR,OREGON-2019 Gender Diversity Race/Ethnicity Diversity Industry Men Women White Black Asian Latino 11 Agriculture,Natural Resources 77% 92% 35%) 21 Mining 53% 86% 23 Construction 84% 92% 2% 14% 31-33 Manufacturing 74% 84% 2% 8% 13% 42 Wholesale trade 58% 43% 89% 1%- 10% 44-45 Retail trade 58% 43% 89% 1% 10% 48-49 Transportation,Warehousing,Utilities 71% 85% 5% 4% 10% 51 Information 62% 86% 7% 52 Finance and Insurance 46% 53% 88% 1% 8% 53 Real Estate and Rental 46% 53% 88% 1% 8% 54 Professional,Scientific,and Technical Services 60% 86% 2% 6% 14% 55 Management of Companies and Enterprises 60% 86% 2% 6% 14% 56 Administrative and Waste Management 60% 86% 2% 6% 14% 61 Educational services 27% 73% 83% 3% 7% 10% 62 Health care and social assistance 27% 73% 83% , 3% 7% 10% 71 Arts,Entertainment,and Recreation 44% 56% 84% 1% 8% 17% 72 Accommodation and Food Services 44% 56% 84% 1% 8% 17% 81 Other services 44% 56% 82%r 3% 7% 17% 92 Government 52% 48% 90% 1% 4% 99 Unclassified na na na na na na TOTAL: 53% 47% 86% 2% 6% 12% SOURCE:US Bureau of Labor Statistics In Tigard, some of the sectors of greatest employment tend to have an under-representation of some groups,such as construction and professional and administrative services which have a low share of women relative to the population. These fields tend to have the expected representation of racial minorities. The 5 U.S. Bureau of Labor Statistics,Geographic Profile of Employment and Unemployment,2019 CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 37 Exhibit B =VkikAA I�I Eiko TIGARD MADE Maunlain,Advance&Diversity Employment finance and real estate industries tend to have good representation of women, but poor representation of Latinos. JOB SKILLS The major industry sectors discussed here cover the full range of occupations, wage levels, and fields of work,other than self-employment. Typically,any field has occupation that range from entry-level or trainee to senior-level management. When discussing the skills any industry requires, there are those that are particular to an industry or field,and those that are transferable across many or all industries. Hard Skills vs. Soft Skills: Hard skills are those capabilities that can typically be defined and measured. These include knowledge-based skills that require specific education or on-the-job training to understand at least the basics of the field or business or run specific processes or machinery. These are capabilities that a newly recruited worker would not be expected to bring simply by being a bright, motivated person with the requisite "soft"skills. Depending on the occupational field, hard skills may come from prior experience, on-the-job training, technical school, or a college degree. These often require a commitment from a worker to pursue a particular field and invest time, energy, and perhaps money in to attaining these hard skills in order to progress. Hard skills are usually very particular to a specific industry. For instance,an accountant typically must have some accounting education, likely at the post-high school level. A heavy fork-lift driver must have specific training to do her job. Soft skills are often more difficult to define and measure. These are the interpersonal and professional skills that allow an employee to function well in a workplace,collaborate with coworkers,and adapt to company culture. These skills can be hard to train, but many employers value them highly,and developing soft skills can be more important to long term career success than having the best hard skills. Soft skills are often thought of as those that an employee brings with them,or perhaps learns after time in a professional environment. However, employees can be trained in soft skills, such as written and verbal communication, organization and time management, problem solving, giving and receiving feedback and others. The following is a summary of the some of the key categories of skills sought in different employment environments. Many skills, such as good communication, trainability, and attention to detail are valued across workplaces. The skills discussed below are generally soft skills,as each occupation has its particular hard skills and certification requirements. Skills for Professional and White-Collar Environments: Aside from the specific knowledge base required in specific fields (i.e., a certification for an electrician, legal degree for an attorney, etc.) office-based employers are generally looking for a set of soft skills in their employees that help the office function smoothly and meet the needs of coworkers, supervisors, and clients. Many office environments feature generalized administrative jobs that do not necessarily require a specialized education. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 38 Exhibit B B ®®■ AA I�I Nli� oio... lip..=�© TIGARD MADE Maunlain,Advance&Diversity Employment Some of the key skills that office-based employers seek are: 1. Basic computer literacy skills 2. Organizational skills 3. Strategic planning and scheduling skills 4. Time-management skills 5. Verbal and written communication skills 6. Professionalism 7. Critical thinking skills 8. Quick-learning skills 9. Attention to Detail These skills help employees complete assigned tasks while coordinating with s colleagues in a professional and collegial manner. Through the lens of workforce development, accepting a job in a professional office environment can offer a transition from blue collar or service industry employment into a white-collar environment,and perhaps a steppingstone into a new professional field. It should be noted that many jobs in manufacturing, construction trades and other blue-collar fields may actually offer better wage and benefits than administrative office employment. Skills for Industrial and Manufacturing Environments: There is a wide variety of jobs that take place in an industrial environment. Manufacturing/production is one important category of industrial employment, but warehousing, raw materials processing, equipment yards, repair facilities, and many other activities take place in an industrial environment. Some of the key skills that industrial employers seek are: 1. Attention to Detail 2. Critical Thinking 3. Communication 4. Computer-Aided Technology 5. Reliability 6. Trainability Industrial employers may also seek some of the following technical skills,or the ability to be trained in: 7. Lean Manufacturing 8. Fabrication 9. Welding 10. Machining 11. Machine Maintenance and Repair 12. Machinery and Vehicle Operation Jobs in industry often offer good wages to workers at a range of education levels and backgrounds. Technical training through educational programs or on-the-job allows industrial workers to build valuable capabilities in operating equipment and running processes. It is often time-consuming and expensive for employers to replicate these skills and experience, making dependable long-term workers valuable to industrial employers. Skills for Retail and Customer-Service Environments: Employers in the retail,hospitality,personal services, and other customer-facing environments seek a specific set of skills from employees who often serve as the public face of the business and main contact with customers. Not surprisingly,interpersonal skills are highly valued as well as the ability to understand the business and even run a store at times without supervision. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 39 Exhibit B iEikT®®■ I�I TIGARD MADE Maunlain,Advance&Diversity Employment Skills important for customer-service employees are: 1. Attention to Detail 2. Understanding of the Business 3. Communication 4. Customer Service 5. Interpersonal Skills 6. Basic Computer Skills 7. Numeracy 8. Sales 9. Product and/or Service Knowledge AVERAGE WAGES BY INDUSTRY The major industry sectors have differing average wage levels. Figure 4.13 presents the average wage levels in Tigard(2019)by sector. The best paying sectors on average are information,wholesale business,finance, construction trades,and professional services. Lower paying sectors are retail,food service,entertainment, and accommodations. FIGURE 4.13:AVERAGE WAGE LEVEL PER INDUSTRY SECTOR,CITY OF TIGARD Average Annual Wage Level Agriculture, Natural Resources Mining Construction Manufacturing Wholesale trade Retail trade Transportation,Warehousing, Utilities Information Finance and Insurance Real Estate and Rental Professional,Scientific,and Technical Services Management of Companies and Enterprises Administrative and Waste Management Educational services Health care and social assistance Arts, Entertainment,and Recreation Accommodation and Food Services Other services Government Unclassified $0 $20,000 $40,000 $60,000 $80,000 $100,000 SOURCE:Oregon Employment Department CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 40 Exhibit B B ®®■ AA r.:7- TIGARD �q, Iilr.r P=-=-- r. ogo... � lie,. © TIGARD MADE Maunlain,Advance&Diversity Employment Figure 4.14 presents the average wage levels in Tigard based on 2019 QCEW data,compared average wages in the Portland Metro area (Oregon side) and the state. Tigard generally offers wages within 10% of the Portland Metro average in most sectors. Exceptions are administrative services and real estate where local wages are well higher than the Metro average. In some sectors,most notably manufacturing and management of companies,average local wages are well below the Metro average. This is because some of Oregon's largest, most profitable, and well-paying companies are located elsewhere in the Metro area and pull up the regional average. The high-tech companies in the Hillsboro area pay high wages for skilled manufacturing that exceed wages for more typical kinds of manufacturing. However, manufacturing wages in Tigard also trail the statewide average. Tigard has nearly 120 manufacturing firms representing a wide variety of company size and wage levels. Local firms feature annual average wages ranging from a few thousand dollars for individual proprietors, to an average of$175,000/year. While Tigard has well-paying high-skilled manufacturing, it may be that the area simply has a greater share of lower-skilled, lower paying manufacturing employment than elsewhere in the Metro area. FIGURE 4.14:COMPARISON OF AVERAGE WAGE LEVEL PER INDUSTRY SECTOR CITY OF TIGARD,PORTLAND METRO,OREGON NAICS Industry 2019 Tigard/ Tigard Pdx Metro Oregon Metro 11 Agriculture,Natural Resources $35,500 $38,700 $36,700 92% 21 Mining na $69,000 $61,900 na 23 Construction $78,200 $70,600 $63,100 111% 31-33 Manufacturing $57,400 $85,400 $71,400 67% 42 Wholesale trade $91,400 $81,500 $75,600 112% 44-45 Retail trade $35,100 $35,000 $32,600 100% 48-49 Transportation,Warehousing,Utilities $49,300 $53,700 $53,300 92% 51 Information $92,300 $98,100 $89,600 94% 52 Finance and Insurance $87,700 $95,400 $85,700 92% 53 Real Estate and Rental $65,000 $55,900 $49,000 116% 54 Professional,Scientific,and Technical Services $76,000 $91,100 $82,900 83% 55 Management of Companies and Enterprises $62,800 $136,400 $123,700 46% 56 Administrative and Waste Management $51,100 $42,900 $39,800 119% 61 Educational services $46,000 $41,700 $39,800 110% 62 Health care and social assistance $45,600 $56,000 $53,300 81% 71 Arts,Entertainment,and Recreation $26,300 $37,700 $30,700 70% 72 Accommodation and Food Services $24,400 $24,900 $22,800 98% 81 Other services $42,100 $41,000 $35,500 103% 92 Government $72,300 $67,600 $61,300 107% 99 Unclassified $59,600 $79,000 $70,400 75% Average all Sectors: $59,100 $63,200 $55,000 94% SOURCE:Oregon Employment Department CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 41 Exhibit B Bf�l_ To TIGARD MADE Maln1,in,Advance&Diversify Employment TIGARD INDUSTRIES COMPARISON For reference, the table presented on the following page provides a comparison of the major industry sectors in Tigard based on the metrics discussed above. For each industry, the metrics are judged to be broadly Positive(green), Negative(red),or neutral. These metrics represent the current and long-term industry trends in Tigard, but do not necessarily reflect the future prospects of these industries, in particular given the specific limitations on remaining employment land discussed in later sections of this report. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 42 Exhibit B n Tli h^ ar q: 4. ti TIGARD MADE Maintain,Advance&Diversify Employment FIGURE 4.12:SUMMARY OF PERFORMANCE METRICS OF MAJOR INDUSTRY SECTORS,CITY OF TIGARD lerShare of Location 2019 Growth Metro Proj. Projected Sample Firm Types Employment Quotient Avg.Wage Since 2010 Growth Rate New Empl. (Annual) Growth(2041) 23 Construction Building,Infrastructure, 12. 1.1% Land,Contractors, HIGH Trades 31-33 Manufacturing Food Processing,Wood 5.0% $57,378 4% 247 Products,Metal Fab., MED. Machinary,Electronics 42 Wholesale trade Wholesalers of 5.1% 1.1 91,448 0.9% + 450 Auto,Durable Goods, MED. Food,Retail goods 44-45 Retail trade All retail categories [ 15.8% 1. 537 Autos,Durable,Groceries, HIGH Electronics,etc. 48-49 Transportation, Air,Rail,Water Transport, - - $49,301 7% 1.6. 1 280 Warehousing,Utilities Freight Storage&Movement, Energy Piping&Transmission 51 Information Paper&Software Publishers, 3.2% ® 1.2% 401 Movie and Sound Production, MED. Telecommunications 52 Finance and Insurance Banks,mLenders, eviInsurance, ,Pens ® ® ® 91 Investment Services,Pensions, Securities Brokers 53 Real Estate and Rental Property Management,Real 1.0 $64,961 31% t 1 122 • Estate Lease and Sale,Realtors, Auto and Equip.Rental 54-56 Professional,Scientific, Legal,Accounting,Technical, 20.91 Elp $63,887 2% and Technical Services Scientific,Admin.Services, HIG R&D,Advertising,Security 61 Educational services Elementary,Secondary,College, 3.6% 1.6 $46,008 1.0% II- 330 Trade and Specialty Schools MED. 62 Health care and social Medical and Dental,Hospitals - $45,618 32% 1.69 assistance Clinics,Laboratories,Home Care E Ell Nursing Homes,Family Services, Food and Housing Services 71 Arts,Entertainment,and Performing Arts,Theaters, - - - 58% A 1.2% 99 Recreation Sports,Venues,Artists,Promotion, Performers,Museums,Recreation 72 Acoommodesion and Hotels,Casinos,, aCampgrounds, ® 11% Food Services Restaurants,Bars,Caterers, Cafeterias,Food Carts 81 Other services Repair and Maintenance,Beauty 3.6% 1.0 $44136 292 Services,Personal Services, MED. 4 MO Civic,Religious,Social Orgs. 92 Government Local,u State,Federal,Military, na 19% ' 0.6% - Executive Offices,Legislatures, J TOTAL/AVERAGE: $59,086 8% 1.0% 10,250 CITY OF TIGARD ECONOMIC OPPORTUNITIES ANALYSIS PAGE 43 Exhibit B .1%110AA I�I ...B e� o1P. u TIGARD MADE Maunlain,Advance&Diversity Employment V. EMPLOYMENT LAND USE & DEVELOPMENT TRENDS AVERAGE EMPLOYMENT DENSITY Average employment density differs by land use and building type. In general, office space houses more employees per square foot, while industrial and warehousing house fewer employees per square foot on average. The employee/square foot averages used in this analysis were derived from Urban Land Institute data and have been periodically compared to recent trends in space usage. These averages are by the building typology, rather than the industry sector. (Sector employment is converted to building type in the next section.) FIGURE 5.01:ESTIMATED AVERAGE EMPLOYMENT DENSITY BY BUILDING TYPOLOGY Average Floor Area Vacancy Avg. Sq.Ft./Empl. Ratio Assumption Jobs/Acre Office 350 0.35 10% 39.2 Institutional 350 0.35 0% 43.6 Retail 500 0.25 10% 19.6 Flex/B.P 990 0.3 10% 11.9 Gen. Ind. 600 0.3 5% 20.7 Warehouse 1,000 0.35 5% 14.5 Data Center 8,000 0.35 5% 1.8 Total 1,680 0.32 6.4% 21.6 SOURCE:Johnson Economics,Urban Land Institute Implications for Employment Land Use Through the lens of efficient use of remaining employment lands in Tigard,traditional office uses are likely to accommodate the most employment per buildable acre,while retail and industrial less so. There is also variance among industrial users. Manufacturers tend to have greater average job density, while warehousing provides low density. Data centers, which have become a more common use in the region since 2010 offer very high taxable value, but low employment density. LAND USE AND BUILDING EFFICIENCY Aside from encouraging employment land uses that tend to have greater employment density, more efficient use of sites can increase the yield of real estate and jobs on available employment land. This can entail employers using smaller sites than they might have used in the past when land was more plentiful and less expensive. It can also include reducing the site space used for landscaping, buffers,and parking to allow more usable built space. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 44 Exhibit B =VkikAA I�I TIGARD MADE Maunlain,Advance&Diversity Employment Economics of New Development One challenge in the suburban environment where land prices are lower than an urban core is that the developers themselves may not feel financial pressure to maximize use of sites. The private real estate market tends to provide greater density in response to higher property values. This section provides a general discussion of factors which impact the density of development or redevelopment in a neighborhood. Cost of Construction: Cost to develop is a key determinant of final development forms. As a general rule, the higher-density development forms have a higher cost per square foot to construct. This is due to shifts in materials from wood and concrete to steel,the need for structured parking,and the need for more robust systems such as elevators,firewalls,and sprinklers. Higher costs can be offset by a greater achievable density of leasable space, which has value when the achievable price is higher than the cost of construction excluding land. However, when achievable pricing is below construction costs,such as in the suburban market where achievable rents are typically cheaper?, there is no marginal value associated with the increase in density and development forms; lower density building forms remain the best economic use for the land in terms of rate of return. Risk:At the most basic level the pace of development will be driven by perceived demand for real estate in a market and the achievable pricing. If demand and pricing are known to be strong, the perceived risk is reduced for developers, property owners, lenders and investors. There are many areas of risk in real estate development including the following: • Scale and Time—Most commercial development projects require a significant amount of capital to realize, often in the millions of dollars, and may take multiple years to complete, requiring upfront investment in a project that is unprofitable until completion, and entails carrying costs during the process. • Entitlement — Securing entitlements for development can be an uncertain and time-consuming portion of the development process. • Financing—Financial commitments can be fluid during the development process,with lenders and/or equity partners backing out of deals or renegotiating terms mid-development. These players can also limit flexibility. • Construction—There are many risk factors associated with construction. The cost of materials and labor can fluctuate significantly, timing delays can impact contractor availability windows, unforeseen problems may emerge during site-work,etc. • Market — Actual achievable rent levels and/or sales prices may be significantly different than assumed at the time development was initiated. In addition,capitalization rates(a measure of value set by the market)can shift significantly,which has a pronounced impact on income properties. Economics of Redevelopment In addition to being subject to the considerations discussed above for new development, redevelopment projects have additional factors impacting feasibility. Highest and Best Use.There are many considerations on whether a property or area is providing its "best use" in a general sense, including planning goals,social goals,equity, neighborhood fabric,etc. But for the CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 45 Exhibit B =VkikAA I�I TIGARD MADE Maunlain,Advance&Diversity Employment purposes of this discussion, a developer considering redevelopment of a property will usually seek to determine the"highest and best use" in the economic sense. This term has a particular meaning in real estate development, which is the use that provides the best economic return,which leads to the highest value for the underlying land. The value of the underlying land is referred to as the"residual land value". For instance, under an obsolete use,a parcel may have a value of X. However,for a new use with a higher achievable rent and perhaps increased density,the developer may be willing to pay 2X for the parcel (i.e., for the buildable land). Under the new,more productive use,the land itself is literally worth more than the existing property(land and building) is worth under its current use. Challenges to Redevelopment: Often a property or area may not be attracting redevelopment activity despite appearing to be a good candidate for new uses. What is often happening in these cases is that the existing property,while it may seem obsolete or in poor condition,still retains enough total value under its existing use(land and building)that it would cost too much to purchase as a building site for a new use. While the new use would be able to achieve higher rents and be more economically productive, it is not enough of an improvement to overcome the remaining value in the existing use. Another factor may be costs in addition to land purchase,which may mean site clean-up costs, liens, and entitlement issues. These costs should be, but are not always,reflected in the purchase price as a discount. The high cost and risk of preparing the site for redevelopment are why defunct gas stations, dry cleaners and other potentially contaminated sites often sit vacant for very long periods. For these reasons, areas which seem like good candidates for redevelopment can persist for some time if the underlying land has not become valuable enough to justify new uses. Implications for Employment Land Use There are usually market factors that explain why land is developing in the manner that it is. Where new development seems to be utilizing land less efficiently and producing buildings at lower densities, it is most often an indication that market rents and land values need more time to develop to where the market dictates greater efficiency. In the Metro area, given land constraints within the UGB and the controls on rapid growth at the urban fringes, many suburban regional and town centers are seeing this type of market pressure that is shifting achievable densities. Tigard's central city and Triangle areas are both showing signs that increased densities are becoming more feasible. In general, office development will be capable of achieving greater future densities than industrial lands. Tigard's business parks near the freeway offer examples of large four and five story professional office buildings. Commercial office and retail are also better suited for vertical mixed-use development as they can complement each other, as well as housing. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 46 Exhibit B B =Vkik I�I �q, Nli�.o . oio...o lip..=�© TIGARD MADE Maunlain,Advance&Diversity Employment Industrial users are less amenable to greatly increasing density. These sectors rarely utilize multi-story buildings,other than for ancillary office functions. They also often require large outdoor yard and storage space, and maneuvering space for trucks and equipment. Industrial is generally less suited for mixed use development because of the negative externalities of noise, traffic, dust, and fumes that might be associated with industrial businesses. There are examples that mix light industrial and traditional office park development in "flex"space. ADAPTIVE REUSE Adaptive reuse refers to the rethinking of obsolete, underused, or vacant properties for a new use. The need for this creative reuse is expected to be a growing trend due to changing commercial real estate market conditions such as closure of big box retail chains, challenges to indoor malls, and now the Covid- 19 induced blow to existing retailers and office buildings. What is Adaptive Reuse? The CCIM Institute,a commercial real estate industry group,proposed the following definition for adaptive reuse projects: 1. Existing structure: While adaptive reuse projects may involve some level of new construction or an expansion/addition of space,they always start with an existing structure. 2. Functional and/or economic obsolescence: All adaptive reuse projects commence with a property in a state of disrepair, high rate of vacancy,or with highest and best use in transition. In essence,the old use is no longer productive or economically viable, and the tenants have left. 3. Change of use:The project/property involves a repurposing of a prior structure and use, not a mere re-tenanting with tenant improvements. 4. Economic viability: Not only does the reuse need to be physically possible and legally permissible; it also must be economically viable. Local government incentives are sometimes necessary to make a project economically viable due to the cost of assemblage,higher repurposing costs with a greater cost- overrun risk than new construction,and speculative lease-up risks. In addition to market forces impacting traditional retail and office buildings, reuse may also be driven by rising cost and scarcity of land making reuse of existing properties more viable. Public efforts to reuse historic or notable buildings while preserving their character are also a driver of reuse projects that often involve a public/private partnership. Examples of Adaptive Reuse of Commercial Real Estate Adaptive reuse is highly specific to the unique qualities of the building and location, but a few examples are: • Reuse of a historic building(i.e.,train station)for new hotel, office,or housing. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 47 Exhibit B B =Vkik I�I �q, Nli�.o . oio.itTIT TIGARD MADE Maunlain,Advance&Diversity Employment • Conversion of a large-format retailer into multiple smaller retail spaces, an open multi-tenant marketplace, entertainment (indoor play structure, laser tag, etc.), gym, or warehouse/distribution space. • Conversion of office space into a school or municipal space. Conversion of office into multifamily housing(this is often proposed but expensive due to the differences in floor plate layout between office and residential buildings.) • Hotels can often make creative reuse of older and historic buildings in central locations, with the unusual building becoming a branding point for the business. • Reuse of indoor shopping malls for hospital, university,or other institutional space. Implications for Employment Land Use Each reuse development project is unique and difficult to predict. The main way that land use planners can facilitate reuse is by instituting flexible zoning that allows for a mix of uses so that properties can respond to changing market forces. The City can play a role in identifying large or key opportunities for reuse and perhaps participating in a public/private partnership to make them feasible. Tools like TIF can provide resources to participate in these projects. As a community with limited employment land, reuse and redevelopment may become increasingly common in the Tigard's existing employment zones. SUSTAINABLE DEVELOPMENT The commercial and industrial real estate industry have made significant bounds in adopting sustainable development measures over the last two decades. The U.S. Green Building Council introduced the Leadership in Energy and Environmental Design (LEED) designation in 1998, and the program introduced a clear route and set of best practices for developers to build more sustainable buildings. Now on version 4.1, LEED offers guidance and certification on building exteriors and interiors,operations and maintenance, transportation linkages, and other aspects of development. Commercial and industrial developers have adopted green building features both to meet the environmental goals of company management, employees and shareholders, but also because there is a strong economic case to be made that these spaces are more valuable and perform better over time. Sustainable Building Features The list of potential sustainable features is long and can include anything that improves energy and water use, use of more sustainable and recycled materials, health improvements for tenants, low impact landscaping, multi-modal transportation linkages and more. Commercial and industrial buildings can be more challenging for implementation due to features such as high ceilings and large rooms, extensive window cladding, and heating and cooling needs of specialized equipment. While the list of eligible LEED features is extensive,a few examples are: • Use of improved glass and daylighting to improve ambient light and reduce need for artificial light. • Use of efficient LED lighting. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 48 Exhibit B B =Vkik I�I �q, Nli�.o . oio...o lip..=�© TIGARD MADE Maunlain,Advance&Diversity Employment • Solar panels,and/or using renewable energy programs from local utilities. • Recycled materials throughout construction, including in interior finishes such as carpet. • Non-chemical-emitting materials, paints and finishes. • Modern,energy-efficient mechanical systems. • Water retaining landscaping such as bioswales and French drains. • Water-efficient indoor plantings for air quality. • Reflective, living,or cooling roof features. • Reduction of waste and pollution from building and operations. It is not necessary to obtain LEED certification to undertake green building or develop a sustainable property. Certification can add time and cost to a project, and many sustainable features are becoming industry standards as the benefits are understood and costs come down. LEED certification remains a valuable shorthand to indicate to tenants and investors that a property is sustainable. In addition,it should be noted that there are four levels of certification: certified,silver,gold &platinum. The Business Case for Sustainable Development There is a strong business case for sustainable building features that have helped improve adoption. These features are ultimately attractive to business tenants, investors, and long-term owners and operators of employment space as evidenced that LEED certification is shown to increase the value of these properties. • For property owners and investors,sustainable facilities are more attractive to prospective tenants who often pay a rent premium for having these features in their space. Happy tenants remain longer and reduce costs associated with vacancy and re-tenanting. Long-term operating costs are lower as energy,water, and waste costs are reduced. Low-maintenance features such as passive heating and cooling, reduced artificial lighting, self-sustaining landscaping, help reduce maintenance costs. Sustainable properties, particularly those with LEED certification will have higher resale values and are designed to last longer with less need for repair and renovation. • For tenants, a green workplace conforms to the environmental values of the company and individual employees while offering other advantages. The business'commitment to sustainability can help attract and keep talented employees and promote health and productivity in the workplace. Operating costs that are passed to the tenant are reduced. A green stance also often agrees with the branding of modern companies, and investors and stakeholders in the business increasingly expect a commitment to sustainability as well. Implications for Employment Land Use From a planning perspective,a city might choose to either require or incentivize sustainable features in new development. Sustainable features are often (but not always) more costly substitutes for older materials and techniques, so requiring them through zoning or building codes can run in to challenges from the building community and also have the perverse effect of disincentivizing new development by making it more expensive. Still, approaches such as requiring stormwater retention, encouraging density, public space,bike facilities,and reducing parking minimums are examples of statutory approaches to encouraging sustainability. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 49 Exhibit B =VkikAA I�I TIGARD MADE Maunlain,Advance&Diversity Employment Public incentives for sustainable development are those that either reduce costs or improve profitability for the developer. These are commonly incentives that reduce property taxes for some period or give a "bonus"to the developer in the form of height,density, reduced parking that will increase the profitability of the building. These bonus incentives work best in parts of the city where market forces are already leading to more dense use of land. This can be difficult in some suburban cities where dense development, vertical and mixed uses are not yet occurring. Without a market pressure to build denser land uses, bonus height and density are less attractive incentives. EQUITABLE DEVELOPMENT The potential impacts of land use and real estate development on equity is a growing concern in planning, transportation, and redevelopment projects. Major gentrification or redevelopment of neighborhoods have the potential to displace local households and businesses by directly disrupting their property or increasing land values and rents in an area making it difficult for current residents to remain. Marginalized people may include low-income renters, racial or ethnic minorities, those with disabilities, those with cultural or language barriers,small business owners, neighborhoods with traditionally low property values. The Southwest Corridor Plan recently completed by Metro and partner communities included an Equitable Development Strategy that considered the impacts of a new light rail line between central Portland and cities to the south, including Tigard. While this study was an early step in understanding this problem, it involved many stakeholders and provides some guidance on equitable development in the area. What is Equitable Development? The Southwest Equitable Development Strategy(SWEDS) defined equitable development as "an approach for meeting the needs of underserved communities through policies and programs that reduce disparities while fostering places that are healthy and vibrant."The approach seeks to understand the perspectives of those most directly impacted by potential public investments,and to take those into account when making transportation and land use decisions. This means engaging the public and taking their experiences into account when making decisions about a proposed project, about new housing to support the growing population,and about equitable economic development. Equitable development attempts to foresee and ameliorate such potential issues as: • Availability of affordable housing • Residential and business displacement/gentrification • Equitable economic opportunity and wealth creation • Multi-modal transportation accessibility • Community health and safety • Cultural and language barriers among marginalized residents and business owners How to Help Promote Equitable Development Metro partnered with community organizations, especially those created by and serving historically marginalized communities, in creating specific recommendations to help promote equitable development, which include: CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 50 Exhibit B =VkikAA I�I TIGARD MADE Mountain,Advance&Diversity Employment • Business education and job training • Development of affordable housing • Providing opportunities for affordable homeownership • Strengthening community capacity • Creating innovative pilot programs to directly address these issues Pilot grants from Metro to address some of these issues included business education and outreach to small businesses (Mercy Corps NW), specialized career training to historically marginalized individuals working lower-wage jobs at OHSU to increase economic opportunity (Immigrant and Refugee Community Organization),and multiple affordable housing projects for renters and owners. Gentrification and Displacement Displacement of residents and businesses can be one symptom of the process of gentrification. "Gentrification" is a charged term, which can have different definitions depending on the context. The process has multifaceted socio-economic drivers and impacts. For the sake of this discussion,the most important definition is that: Gentrification is a process which brings new households and businesses with greater financial resources into areas which have historically been occupied by households and businesses with fewer financial resources. The natural economic outcome of this process is the displacement of some of the households and businesses with fewer resources over time. However,typically displacement is not distributed evenly: • First and foremost, displacement is a much greater risk for renters than owners. By definition, renters are more susceptible to the whims of outside forces on their housing and business location, including from landlords and general market forces. While a renter may lock in stability with a 6 or 12 month lease, there is considerable uncertainly at the end of that period, particularly in a gentrifying market. • Property owners have often locked in their costs for many decades through a mortgage, while Oregon's property tax laws ensure that tax bills won't climb too quickly even if the neighborhood is greatly appreciating in value. If a neighborhood has been low cost for some time, many long- time owners have paid off their mortgage, or have small monthly payments based on a low purchase price. • Because of this dynamic,gentrification can be felt very differently by renters vs. property owners. Many owners have the ability to stay in the neighborhood even as prices rise around them. They also have the choice to sell their property and capitalize on the rising value. They may consider the increasing prices to be a positive trend. • Renting housing is correlated with lower income levels, and lower income levels are correlated with a range of demographic categories including young people, single parents, disabled, racial and ethnic minorities, and immigrants. Therefore these groups may be disproportionately impacted by displacement depending on the profile of the neighborhood. • Business displacement tends to lag residential gentrification, often by many years. In the early years of gentrification, there is often long-neglected and vacant commercial space in the neighborhood which can be used for new and pioneering businesses. Being underused,this type of space often represents a lower rent option compared to established neighborhoods. The CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 51 Exhibit B =VkikAA I�I TIGARD MADE Maunlain,Advance&Diversity Employment pioneering small businesses taking a chance on the neighborhoods in the early years may well suffer from rising rents in later years. Despite this, these pioneering businesses may actually be viewed as part of the problem, bringing change and attracting newcomers to the area. • Once residential gentrification progresses and the cache of the neighborhood and increased spending power of new residents is generally apparent,then the existing commercial space will be rehabbed and leased and business lease rates will begin to climb. When achievable lease rates get high enough, redevelopment of existing properties into new space becomes more feasible. • As with residents, businesses that own their property will be in a much more stable situation than businesses that lease. Small and emerging businesses are more likely to lease than established businesses. However,commercial property owners are more susceptible to rising property tax rates than homeowners. It is important to remember that gentrification and displacement are the cumulative result of thousands of choices being made by individuals in the marketplace. This is why gentrification can seem so difficult for communities to address, and why individuals can feel powerless to change the trend even as they buy or sell a home in the neighborhood for a new higher price. Implications for Employment Land Use Many aspects of equitable development cannot be addressed directly through land use initiatives but are better suited to be addressed through related measures such as economic development, TIF districts, affordable housing programs, and community outreach. The main lever that land use planning has is to consider in advance the potential impacts that large planning initiatives might have on established lower- income or lower-property-value neighborhoods where marginalized groups might live or operate businesses. Planning should include these groups directly during the process. In terms of spatial land use planning, an approach that prioritizes equitable multi-modal transportation access to neighborhoods for commuters and daily needs is important. The Metro 2040 Growth Concept that concentrates additional growth in town centers and transportation corridors aids with this, but paradoxically can lead to gentrification if centers of concentrated density successfully develop. As noted, renters are more vulnerable to displacement than property owners. Owners, though they may be unhappy with neighborhood changes,are at least able to participate in gentrification through increasing property values. Or if a property is taken for a project,such as a new transportation right-of-way,the owner is at least compensated. Renters do not benefit from disruption in this way. Rising property values in an area tend to lead to increased rents and selling or redevelopment of rental properties. When a naturally occurring affordable housing (NOAH) property is condemned for a public project, it often is not replaced with similarly low-rent units, if at all. For land use planners,permissive residential zoning that allows for a range of housing types,including multi- family,smaller and attached housing across the city can help alleviate the limited supply. Recent efforts on the state and local level to allow "middle housing"types in traditional single-family zones are an effort in this direction. One of the most important approaches to consider for protecting lower-cost neighborhoods that serve marginalized groups is a counterintuitive one: tread lightly. This can be difficult as communities often want to assist these populations and physically improve and beautify neighborhoods seen as neglected. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 52 Exhibit B Bf�l_ =�eT hTo le•.,y BBJd .�y^\ TIGARD MADE Mauniain,Advance&Diversify Employment However, successful efforts at renewal can lead to rising property values and exacerbate inequality and displacement. The stock of naturally occurring affordable housing and commercial real estate is far larger than the stock of subsidized affordable spaces. Reductions in the lower cost space that the market provides is difficult and expensive for non-profit agencies or the public to replace with formally subsidized space. The aging apartment complex or mobile home park can be an important source of low-income housing rather than a problem to "fix". The small storefront on the "bad" street can be a low-rent solution for an emerging business owner. Therefore, planning projects should carefully weigh how they will improve the lives of those living and working in an area,without incentivizing gentrification pressures. This may mean a more limited scope of improvements rather than an expansive scope. When displacement is projected, alternative housing or commercial real estate should be identified prior the changes whenever possible. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 53 Exhibit B TIGARD MADE Mountain,Advance t Diversify Employment VI. FORECAST OF EMPLOYMENT AND LAND NEED CITY OF TIGARD EMPLOYMENT FORECASTS Goal 9 requires that jurisdictions plan for a 20-year supply of commercial and industrial capacity. Because employment capacity is the physical space necessary to accommodate new workers in the production of goods and services, employment need forecasts typically begin with a forecast of employment growth in the community. The previous analysis of economic trends and major industries set the context for these estimates. This analysis translates those trends into estimates of employment growth by broad industry. Forecasts are produced at the sector or subsector level (depending on available information), and subsequently aggregated to two-digit NAICS sectors. Estimates in this analysis are intended for long-range land planning purposes and are not designed to predict or respond to shorter-term business cycle fluctuations. The projections in this analysis are built on an estimate of employment in 2021,the commencement year for the planning period. Employment growth will come as the result of net-expansion of businesses in the community, new business formation, or the relocation or recruitment of new firms. As explained in more detail below, two forecast scenarios are presented, one reflecting a slower baseline growth rate, and one reflecting a higher growth rate in keeping with the most recent Urban Growth Report adopted by Metro. The significant difference between these two growth rates results in a large difference in findings of job growth and land needs from the two forecasts as presented below. Long-range forecasts typically rely on a macroeconomic context for growth.The forecast does not consider the impact of a significant but unpredictable exogenous shift in employment such as recruitment of a major employer. OVERVIEW OF EMPLOYMENT FORECAST METHODOLOGY Our methodology starts with employment forecasts by major commercial and industrial sector. Forecasted employment is allocated to building type,and a space demand is a function of the assumed square footage per employee ratio multiplied by projected change.The need for space is then converted into land and site needs based on assumed development densities using floor area ratios(FARs). FIGURE 6.01:EMPLOYMENT PROJECTION TO LAND NEED FORECAST PROCESS 4111 tr3 EMPLOYMENT SPACE NEEDS REAL ESTATE LAND/SITE - FORECAST •SF per Employee PRODUCTS NEEDS •By Sector •Magnitude and •Office •Aggregate Need •Baseline and Character of Need •Industrial •Site Requirements Adjusted •Commercial •Hybrid Products CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 54 Exhibit B r®®■ �I �q, TIGARD MADE Maintain,Advance A Diversity Employment The first analytical step of the analysis is to update covered employment to the 2021 base year. The Quarterly Census of Employment and Wages (QCEW) data was used to determine the City of Tigard's covered employment by industry through 2019. To update these estimates, we use observed industry specific growth rates for Washington County between 2019 and 2021.This included a year of growth from 2019 to 2020,and a year of significant contraction from 2020 to 2021 due to the pandemic. The second step in the analysis is to convert "covered"6 employment to "total" employment. Covered employment only accounts for a share of overall employment in the economy. Specifically, it does not consider sole proprietors or commissioned workers. Covered employment was converted to total employment based on observed ratios at the national level derived from the Bureau of Economic Analysis from 2010 through 2018. The differential is the most significant in construction, professional, and administrative services.The adjusted 2021 total employment base for the City of Tigard is 45,500 jobs. FIGURE 6.02:UPDATE TO 2021 BASELINE AND CONVERSION OF COVERED TO TOTAL EMPLOYMENT QCEW Employment 2019 '19-'21 2021 Total Emp. 2021 Major Industry Sector Employment County Al Estimate Conversion2 Estimate Construction 5,344 -1.7% 5,164 73% 7,028 Manufacturing 2,133 -0.8% 2,101 98% 2,153 Wholesale Trade 2,177 0.1% 2,182 97% 2,243 Retail Trade 6,808 -2.5% 6,472 94% 6,854 Transport.,Warehouse,Utilities 632 4.4% 689 91% 754 Information 1,395 -0.7% 1,377 95% 1,454 Finance& Insurance 4,101 0.0% 4,099 92% 4,476 Real Estate 785 -1.8% 757 92% 827 Professional&Technical Services 4,061 -1.4% 3,950 88% 4,465 Management&Admin.Services 4,922 -2.5% 4,675 88% 5,285 Education 1,560 -6.1% 1,374 95% 1,454 Health Care 3,280 0.2% 3,290 95% 3,482 Leisure&Hospitality 3,679 -11.9% 2,856 94% 3,026 Other Services 1,561 -8.7% 1,301 83% 1,573 Government _ 468 -2.9% 441 100% 441 TOTAL 42,906 -2.6% 40,730 89% 45,517 1 Forecasted AAGR from 2019-2029 for the Portland Tri-County submarket.Oregon Employment Department 2 Bureau of Economic Analysis.Calculated as an eight-year average between 2010 and 2018 SCENARIO 1:SAFE HARBOR FORECAST The Goal 9 statute does not have a required method for employment forecasting. However,OAR 660-024- 0040(9)(a) outlines several safe harbor methods, which are intended to provide jurisdictions a methodological approach that will not be challenged.The most applicable for the City of Tigard is 660-024- 0040(9)(a)(A), which recommends reliance on the most recent regional forecast published by the Oregon Employment Department. This method applies industry specific growth rates for the Tri-County Metro 6 The Department of Labor's Quarterly Census of Employment and Wages(QCEW)tracks employment data through state employment departments. Employment in the QCEW survey is limited to firms with employees that are "covered" by unemployment insurance. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 55 Exhibit B ��eT IL TIGARD MADE Malniain,Advance&Diversity Employment Region (Clackamas, Multnomah, & Washington counties) to the City of Tigard's 2021 base. This method results in an average annual growth rate of 1.0%, with total job growth of 10,250 jobs over the 20-year forecast period. (See Figure 6.03) SCENARIO 2:ALTERNATIVE EMPLOYMENT FORECAST As a city in the Portland Metro region, Tigard also has growth projections for population, households and jobs prepared by the Metro regional government as part of its ongoing planning process. The latest adopted Urban Growth Report (UGR) for the region includes an estimate of Tigard employment in 2040 based on Metro's model of allocating forecasted growth across the region. In this case,the UGR included a forecast of just under 64,000 jobs in Tigard in 2040,which would translate into a growth rate from the 2021 baseline of 1.8%. The alternate Scenario 2 forecast presented here based on that growth rate results in a higher alternate forecast of nearly 19,000 new jobs over the planning period,or 85%greater than Scenario 1. FIGURE 6.03:COMPARISON OF ALTERNATIVE FORECASTS,CITY OF TIGARD Industry 2021 2041 Chg. AAGR 2021 2041 Chg. AAGR Construction 7,028 8,667 1,639 1.1% 7,028 10,007 2,980 1.8% Manufacturing 2,153 2,399 247 0.5% 2,153 2,586 433 0.9% Wholesale Trade 2,243 2,692 449 0.9% 2,243 3,052 809 1.6% Retail Trade 6,854 7,392 537 0.4% 6,854 7,787 932 0.6% Transport.,Warehousing,Utilities 754 1,035 280 1.6% 754 1,284 529 2.7% Information 1,454 1,855 401 1.2% 1,454 2,191 737 2.1% Finance&Insurance 4,476 4,567 90 0.1% 4,476 4,630 154 0.2% Real Estate 827 943 116 0.7% 827 1,032 205 1.1% Professional&Technical Services 4,465 6,452 1,987 1.9% 4,465 8,291 3,826 3.1% Management&Admin.Services 5,285 7,035 1,749 1.4% 5,285 8,553 3,268 2.4% Education 1,454 1,785 330 1.0% 1,454 2,054 599 1.7% Health Care 3,482 4,808 1,326 1.6% 3,482 5,992 2,511 2.8% Leisure&Hospitality 3,026 3,778 752 1.1% 3,026 4,399 1,372 1.9% Other Services 1,573 1,865 292 0.9% 1,573 2,097 524 1.4% Government 441 493 52 0.6% 441 533 92 0.9% TOTAL: 45,517 55,766 10,250 1.0% 45,517 64,487 18,971 1.8% Construction Manufacturing Wholesale Trade Retail Trade Transport.,Warehousing,Utilities Information Finance&Insurance In Real Estate Professional&Technical services Management&Admin.Services Education Health Care Leisure&Hospitality •Baseline Scenario Other Services Government Adjusted Scenario 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 4,500 20-Year Job Growth(#of Jobs) SOURCE:State of Oregon Employment Department,Metro,Johnson Economics CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 56 Exhibit B ®®■ I r�q, TIGARD MADE Maunlain,Advance&Diversity Employment SUMMARY OF EMPLOYMENT FORECAST SCENARIOS The two forecast scenarios in this analysis range from 1.0% to 1.8% average annual growth. Job growth estimates range from 10,250 to 18,971 jobs. The greatest number of jobs are forecasted in construction, professional services, and health care. The fastest percentage growth rates are projected for professional services, health care,transportation/warehousing, and leisure&hospitality. The estimates in the preceding analysis are useful for creating a baseline understanding of growth prospects by industry. These are common and accepted approaches when looking at large geographic regions. Forecasts grounded in broad-based economic variables do not always account for the realities of local businesses and trends among evolving industries.Any long-term forecast is inherently uncertain and should be updated on a regular basis to reflect more current information. The 20-year forecasts were broken down into five-year increments, assuming a consistent rate of growth over the period. However, a 20-year forecast will include multiple business cycles, and that growth will be variable in practice. FIGURE 6.04:SUMMARY OF PROJECTION SCENARIOS,CITY OF TIGARD Overall Employment Net Change by Period Total Industry 2021 2026 2031 2036 2041 21-26 26-31 31-36 36-41 21-41 SCENARIO I OED Forecast Construction 7,028 7,406 7,805 8,225 8,667 378 399 420 443 1,639 Manufacturing 2,153 2,212 2,273 2,335 2,399 59 61 62 64 247 Wholesale Trade 2,243 2,347 2,457 2,572 2,692 105 110 115 120 449 Retail Trade 6,854 6,985 7,118 7,253 7,392 131 133 136 138 537 T.W.U. 754 816 883 956 1,035 62 67 73 79 280 Information 1,454 1,545 1,642 1,745 1,855 91 97 103 110 401 Finance&Insurance 4,476 4,499 4,521 4,544 4,567 22 23 23 23 90 Real Estate 827 855 883 913 943 28 29 29 30 116 Professional&Technical Services 4,465 4,896 5,368 5,885 6,452 430 472 517 567 1,987 Management&Admin.Services 5,285 5,677 6,098 6,550 7,035 392 421 452 485 1,749 Education 1,454 1,531 1,611 1,696 1,785 76 80 85 89 330 Health Care 3,482 3,774 4,091 4,435 4,808 293 317 344 373 1,326 Leisure&Hospitality 3,026 3,199 3,382 3,574 3,778 173 182 193 204 752 Other Services 1,573 1,642 1,713 1,787 1,865 68 71 75 78 292 Government 441 454 467 480 493 13 13 13 14 52 TOTAL: 45,517 47,837 50,311 52,950 55,766 2,321 2,474 2,639 2,816 10,250 SCENARIO 2(Metro Taz Based) Construction 7,028 7,677 8,386 9,161 10,007 649 709 775 846 2,980 Manufacturing 2,153 2,254 2,359 2,470 2,586 101 106 111 116 433 Wholesale Trade 2,243 2,422 2,616 2,825 3,052 180 194 209 226 809 Retail Trade 6,854 7,076 7,306 7,542 7,787 222 229 237 244 932 T.W.U. 754 861 984 1,124 1,284 107 122 140 160 529 Information 1,454 1,611 1,785 1,978 2,191 157 174 193 214 737 Finance&Insurance 4,476 4,514 4,553 4,591 4,630 38 38 39 39 154 Real Estate 827 874 924 977 1,032 47 50 53 56 205 Professional&Technical Services 4,465 5,212 6,084 7,102 8,291 747 872 1,018 1,188 3,826 Management&Admin.Services 5,285 5,961 6,724 7,584 8,553 676 762 860 970 3,268 Education 1,454 1,585 1,728 1,884 2,054 131 143 156 170 599 Health Care 3,482 3,988 4,568 5,232 5,992 506 580 664 761 2,511 Leisure&Hospitality 3,026 3,323 3,649 4,006 4,399 297 326 357 393 1,372 Other Services 1,573 1,690 1,816 1,951 2,097 117 126 135 145 524 Government 441 463 485 508 533 21 22 23 25 92 TOTAL: 45,517 49,513 53,966 58,936 64,487 3,996 4,453 4,969 5,552 18,971 SOURCE:State of Oregon Employment Department,Metro,Johnson Economics CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 57 Exhibit B B ®®■ AA I�I �"t"1P-�r. ogo...e� lip..=�© TIGARD MADE Malnlain,Advance&Diversity Employment EMPLOYMENT LAND FORECAST The next step in the analysis is to convert projections of employment into forecasts of land demand over the planning period. The conversion begins by allocating employment by sector into a distribution of building typologies those economic activities usually utilize.As an example,insurance agents typically locate in traditional office space,usually along commercial corridors. However,a percentage of these firms locate in commercial retail space adjacent to retail anchors.Cross-tabulating this distribution provides an estimate of employment in each typology. The next step converts employment into space using estimates of the typical area per employee exhibited within each typology. Adjusting for a market vacancy assumption we arrive at an estimate of total space demand for each building type. Finally, the analysis considers the physical characteristics of individual building types and the amount of land they typically require for development. The site utilization metric commonly used is referred to as a "floor area ratio" or FAR. For example, assume a 25,000-square foot general industrial building requires roughly two acres to accommodate its structure,setbacks,parking,and necessary yard/storage space.This building would have a FAR of roughly 0.29.Demand for space is then converted to net acres using a standard FAR for each development form. LAND DEMAND ANALYSIS—BASELINE FORECAST In this step, projected employment growth is allocated into standard building typologies. The building typology matrix represents the share of sectoral employment that locates across various building types. The baseline forecast is used to demonstrate the methodology. FIGURE 6.05:DISTRIBUTION OF EMPLOYMENT BY SPACE TYPE,CITY OF TIGARD 20-year Job Forecast BUILDING TYPE MATRIX Industry Sector Number AAGR Office Institutional Flex/B.P Gen.ind. Warehouse Retail Construction 1,639 1.1% 14% 0% 18% 40% 18% 10% Manufacturing 247 0.5% 8% 0% 24% 60% 8% 0% Wholesale Trade 449 0.9% 8% 0% 22% 20% 40% 10% Retail Trade 537 0.4% 5% 1% 6% 0% 12% 76% T.W.U. 280 1.6% 15% 0% 12% 13% 55% 5% Information 401 1.2% 25% 0% 25% 40% 0% 10% Finance&Insurance 90 0.1% 72% 1% 5% 1% 1% 20% Real Estate 116 0.7% 72% 1% 5% 1% 1% 20% Professional&Technical Services 1,987 1.9% 72% 1% 5% 1% 1% 20% Management&Admin.Services 1,749 1.4% 72% 1% 5% 1% 1% 20% Education 330 1.0% 30% 53% 5% 1% 1% 10% Health Care 1,326 1.6% 30% 53% 2% 0% 0% 15% Leisure&Hospitality 752 1.1% 20% 1% 7% 1% 1% 70% Other Services 292 0.9% 72% 1% 5% 1% 1% 20% Government 52 0.6% 43% 35% 5% 1% 1% 15% TOTAL 10,250 1.0% 41% 9% 9% 11% 7% 22% Source:Johnson Economics CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 58 Exhibit B IL e TIGARD MADE Maunlain,Advance&Diversify Employment FIGURE 6.06:DISTRIBUTION OF SPACE BY BUILDING TYPE AND INDUSTRY SECTOR,CITY OF TIGARD Construction Manufacturing _ Wholesale Trade s Retail Trade T.W.U. Information Finance&Insurance Real Estate Professional&Technical Services Management&Admin.Services Education Health Care Leisure&Hospitality Other Services Government 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% •Office •Institutional Flex/B.P •Gen. ind. Warehouse Retail Source:Johnson Economics Under the employment forecast scenario, employment housed in office space and retail accounts for the greatest share of growth,followed by employment housed in general industrial, institutional,flex/business park, and warehouse/distribution space. FIGURE 6.07:NET CHANGE IN EMPLOYMENT ALLOCATED BY BUILDING TYPE,CITY OF TIGARD—2021-2041 20-year Job Forecast NET CHANGE IN EMPLOYMENT BY BUILDING TYPE-2021-2041 Industry Sector Number AAGR Office Institutional Flex/B.P Gen.Ind. Warehouse Retail Total Construction 1,639 1.1% 230 0 295 656 295 164 1,639 Manufacturing 247 0.5% 20 0 59 148 20 0 247 Wholesale Trade 449 0.9% 36 0 99 90 180 45 449 Retail Trade 537 0.4% 27 5 32 0 64 408 537 T.W.U. 280 1.6% 42 0 34 36 154 14 280 Information 401 1.2% 100 0 100 160 0 40 401 Finance&Insurance 90 0.1% 65 1 5 1 1 18 90 Real Estate 116 0.7% 84 1 6 1 1 23 116 Professional&Technical Services 1,987 1.9% 1,431 20 99 20 20 397 1,987 Management&Admin.Services 1,749 1.4% 1,260 17 87 17 17 350 1,749 Education 330 1.0% 99 175 17 3 3 33 330 Health Care 1,326 1.6% 398 703 27 0 0 199 1,326 Leisure&Hospitality 752 1.1% 150 8 53 8 8 526 752 Other Services 292 0.9% 210 3 15 3 3 58 292 Government 52 0.6% 22 18 3 1 1 8 52 TOTAL 10,250 1.0% 4,173 951 929 1,144 767 2,284 10,250 Source:Johnson Economics *Table shows figures for Scenario 1. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 59 Exhibit B P:=-=-34421 I B I� TIGARD MADE Maunlain,Advance&Diversity Employment Employment growth estimates by building type are then converted to demand for physical space. This conversion assumes the typical space needed per employee on average. This step also assumes a market vacancy rate, acknowledging that equilibrium in real estate markets is not 0%vacancy.We assume a 10% vacancy rate for office, retail, and flex uses, as these forms have high rates of speculative multi-tenant usage. A 5% rate is used for general industrial and warehouse-these uses have higher rates of owner occupancy that lead to lower overall vacancy. Institutional uses are assumed to have no vacancy. The demand for space is converted into an associated demand for acreage using an assumed FAR. The combined space and FAR assumptions provide estimates of job densities, determined on a per net- developable acre basis. FIGURE 6.08:NET ACRES REQUIRED BY BUILDING TYPOLOGY,CITY OF TIGARD-2021-2041 SCENARIO 1(BASELINE)AND SCENARIO 2(ADJUSTED) BASELINE SCENARIO DEMAND BY GENERAL USE TYPOLOGY,2021-2041 Office Institutional Flex/B.P Gen.Ind. Warehouse Retail Total Employment Growth 4,173 951 929 1,144 767 2,284 10,250 Avg.SF Per Employee 350 350 990 600 1,000 500 518 Demand for Space(SF) 1,461,000 333,000 920,000 686,000 767,000 1,142,000 5,309,000 Floor Area Ratio(FAR) 0.35 0.35 0.30 0.30 0.35 0.25 0.31 Market Vacancy 10.0% 0.0% 10.0% 5.0% 5.0% 10.0% 8.2% Implied Density(Jobs/Acre) 39.2 43.6 11.9 20.7 14.5 19.6 23.8 Net Acres Required 106.5 21.8 78.2 55.3 53.0 116.5 431.3 Gross Acres Required 133.1 27.3 97.8 69.1 66.2 145.6 539.1 ADJUSTED SCENARIO DEMAND BY GENERAL USE TYPOLOGY,2021-2041 Office Institutional Flex/B.P Gen.Ind. Warehouse Retail Total Employment Growth 7,817 1,783 1,702 2,077 1,398 4,194 18,971 Avg.SF Per Employee 350 350 990 600 1,000 500 516 Demand for Space(SF) 2,736,000 624,000 1,685,000 1,246,000 1,398,000 2,097,000 9,786,000 Floor Area Ratio(FAR) 0.35 0.35 0.30 0.30 0.35 0.25 0.31 Market Vacancy 10.0% 0.0% 10.0% 5.0% 5.0% 10.0% 100.0% Implied Density(Jobs/Acre) 39.2 43.6 11.9 20.7 14.5 19.6 23.9 Net Acres Required 199.4 40.9 143.3 100.4 96.5 214.0 794.4 Gross Acres Required 249.2 51.2 179.1 125.5 120.7 267.4 993.0 Source:Johnson Economics Commercial office and retail densities are 40 and 20 jobs per acre, respectively. Industrial uses range from 21 for general industrial to fewer than 15 jobs per acre for warehouse/distribution. The overall weighted employment density is 24 jobs per acre. • As shown in Figure 6.08,the projected 10,250 job expansion in the local employment base using the Scenario 1 would require an estimated 539 gross acres of employment land. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 60 Exhibit B P.=-=-34421 4 TIGARD MADE Maunlain,Advance&Diversity Employment • Under Scenario 1, there is an estimated need for 306 acres of land for commercial uses (office, institutional, retail) and an estimated need for 233 acres of land for industrial uses (industrial, warehouse, business park). • The greater projected 18,971 job expansion in the local employment base using alternative Scenario 2 would require an estimated 993 gross acres of employment land. • Under Scenario 2, there is an estimated need for 568 acres of land for commercial uses (office, institutional, retail) and an estimated need for 425 acres of land for industrial uses (industrial, warehouse, business park). • In each case, the distribution of projected demand is more weighted toward commercial land (57%)than industrial land (43%). In addition to ensuring adequate capacity for employment-driven land needs over a 20-year horizon, local jurisdictions are also required to demonstrate that they have an adequate capacity of readily available sites to meet their more immediate needs,which are defined as employment land needs over the next five years. As shown in the following table,that need is estimated at 125 gross acres under the slower-growth baseline scenario,and 215 gross acres under the higher-growth adjusted scenario. FIGURE 6.09:NET ACRES REQUIRED BY BUILDING TYPOLOGY,TIGARD-5-YEAR BASELINE SCENARIO DEMAND BY GENERAL USE TYPOLOGY,2021-2041 Office Institutional Flex/B.P Gen.Ind. Warehouse Retail Total Employment Growth 932 212 213 264 177 522 2,321 Avg.SF Per Employee 350 350 990 600 1,000 500 521 Demand for Space(SF) 326,000 74,000 211,000 159,000 177,000 261,000 1,208,000 Floor Area Ratio(FAR) 0.35 0.35 0.30 0.30 0.35 0.25 0.31 Market Vacancy 10.0% 0.0% 10.0% 5.0% 5.0% 5.0% 10.0% Implied Density(Jobs/Acre) 39.2 43.7 11.9 20.6 14.4 20.7 23.2 Net Acres Required 23.8 4.9 17.9 12.8 12.2 25.2 100.1 Gross Acres Required 29.7 6.1 22.4 16.0 15.3 31.5 125.2 ADJUSTED SCENARIO DEMAND BY GENERAL USE TYPOLOGY,2021-2041 Office Institutional Flex/B.P Gen.Ind. Warehouse Retail Total Employment Growth 1,610 367 366 454 303 898 3,996 Net Acres Required 41.0 8.4 30.8 21.9 20.9 43.4 172.2 Gross Acres Required 51.3 10.5 38.5 27.4 26.2 54.3 215.2 Source:Johnson Economics *Table shows figures for Scenario 1. There is a significant distinction between capacity and readily available site supply. The readily available inventory must currently have appropriate entitlements and infrastructure capacity to accommodate short- term development. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 61 Exhibit B B ®®■ AA I�I �"t"1P-�r. ogo... � lip..=�© TIGARD MADE Mountain,Advance&Diversity Employment EMPLOYMENT LAND NEED FORECAST—NEEDED SITE SIZES As discussed in Section IV, the local employment base is largely dominated by small employers of 10 or fewer employees(75%of firms),which is a common pattern across most markets. There are two employers of 500 or more employees,and 11 with 250 to 500 employees. Some of these may have employees spread over multiple locations. Figure 6.10 presents the projected need for new commercial and industrial sites by size based on the industry growth projections presented above(baseline forecast). These site needs are an estimate of future needs to aid comparison to available supply(see following section.) FIGURE 6.10:ESTIMATED NUMBER OF SITES NEEDED BY SIZE(ACRES),TIGARD OREGON BASELINE SCENARIO LAND USE OTO.9 lto4.9 5to9.9 10to19.9 20to29.9 30to49.9 50to99.9 100+acres TOTAL TOTAL acres acres acres acres acres acres acres (sites) (acres) Office 239 14 1 0 0 0 0 0 254 133 Institutional 47 12 1 0 0 0 0 0 60 47 Retail 103 25 2 1 0 0 0 0 131 146 Commercial Total: 389 51 4 1 0 0 0 0 445 326 Flex/B.P 38 6 3 1 0 0 0 0 48 98 Gen.Ind. 40 9 1 1 0 0 0 0 51 69 Warehouse 24 11 2 1 0 0 0 0 38 122 Industrial Total: 102 26 6 3 0 0 0 0 137 289 TOTAL: 491 77 10 4 0 0 0 0 582 615 Source: Johnson Economics,Oregon Employment Department The estimates presented in Figure 6.10 are based on the average firm sizes of businesses in the different industry subsectors in Tigard. However, economic development and job growth are dynamic, and this estimate of site needs is unlikely to match actual future needs exactly. Communities should maintain flexibility and ensure a supply of a variety of site types with short-term availability, as allowed through the Goal 9 EOA process. There will be a continued demand for real estate space and sites of all sizes to accommodate the full range of employers across sectors, but with a preponderance of sites for small to medium-sized firms. ADDITIONAL CONSIDERATIONS IN LAND DEMAND Beyond a consideration of gross acreage, there is a significantly broader range of site characteristics that industries would require to accommodate future growth. Some key findings are summarized here: ■ Industrial buildings are generally more susceptible to slope constraints due to larger building footprints. For a site to be competitive for most industrial uses, a 10% slope is the maximum preferred slope for development sites.Office and commercial uses are generally smaller and more CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 62 Exhibit B BMI ®®■ AA I si: Iilr�o TIGARD MADE Maunlain,Advance&Diversity Employment vertical, allowing for slopes up to 15%. Sites with slope of up to 25% are still considered developable, but with some challenges. Site users will prefer lesser slopes if available. • Most industrial users require some direct access to a major transportation route, particularly manufacturing and distribution industries that move goods throughout the region and beyond. 10 to 20 miles to a major interstate is generally acceptable for most manufacturing activities, but distribution activities require 5 miles or less and generally prefer a direct interstate linkage. Visibility and access are important to most commercial activities and site location with both attributes from a major commercial arterial is commonly required. • Retail users prefer locations with high visibility and high pass-by traffic, along with reasonable automobile access and on-site or nearby parking. Areas with high foot and bike traffic such as town centers can generally support small retailers and dining establishments if surrounding population density is sufficient. • Access and capacity for water,power,gas,and sewer infrastructure is more important to industrial than commercial operations. Water/sewer lines of up to 10" are commonly required for large manufacturers. • Fiber telecommunications networks are likely to be increasingly required in site selection criteria for many commercial office and manufacturing industries. Medical, high-tech, creative office, research & development, and most professional service industries will prefer or require strong fiber access in the coming business cycles. Appendix A provides detailed site preferences by land use and sub-sector typology. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 63 Exhibit B =VkikAA I�I TIGARD MADE Maunlain,Advance&Diversity Employment VII. RECONCILIATION OF LAND NEED & SUPPLY As outlined in the Buildable Lands Inventory (BLI), the City of Tigard has a modest inventory of available sites relative to anticipated employment growth. The available inventory for both commercial and industrial users is constrained by the prior build-out of most of the city's employment land, as well as the Urban Growth Boundary to the west. Roughly 69%of this buildable land is found in the city's existing commercial and mixed-use zones which are generally intended for a combination of office-based, retail and commercial service uses. Roughly 31%of the identified buildable lands are in industrial zones that are intended for a combination of light and heavy industrial uses. (See Figure 7.01). Roughly 43% of the remaining buildable acreage is in parcels identified as "vacant", 16% is in "partially vacant" sites, and 41% of the buildable acreage is in potential "redevelopment" sites. Similar amounts of the "redevelopable" acreage in the City are found in commercial vs. industrial zoning designations. In general, partially vacant and redevelopment sites will be considered less attractive to developers than vacant sites,due to the additional cost of dealing with existing uses on the site. In total, there are an estimated 112 vacant or partially vacant acres, and 78 acres of potential redevelopment sites. The total 196 buildable acres include 163 commercial acres,and 33 industrial acres. An additional 35 acres of buildable land are in the River Terrace planning areas in the city's urban reserves. This land is included in Figure 7.01 for reference but is not yet considered active inventory for the purposes of this EOA. (The future land use in these urban reserve areas is still under planning but are presumed to be some form of commercial or commercial mixed-use in the future. The most recent assumptions available for the size and position of the employment uses have been used in this analysis.) Figure 7.01(following page)provides a detailed summary of the estimated BLI of employment lands. Please see Appendix A for a detailed explanation of the BLI methodology and mapping. Comparing this inventory to the 20-year forecast of employment land need generated earlier in this analysis indicates that the projected demand exceeds the estimated remaining capacity for new employment development. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 64 Exhibit B ®®■ B .1''''s �"t" �reap.. © TIGARD MADE Maintain,Advance&Diversity Employment FIGURE 7.01:BUILDABLE LAND INVENTORY OF EMPLOYMENT LANDS,CITY OF TIGARD-2022 Vacant Land Partially Vacant Land Redevelopable Land TOTAL BUILDABLE LAND Net Net Net Net Number of Number of Number of Number of Zone Abbreviation Buildable Buildable Buildable Buildable Parcels Parcels Parcels Parcels Acreage Acreage Acreage Acreage Commercial Zones C-C(Community Commercial) 1 23.1 0 0.0 0 0.0 1 23.1 C-G(General Commercial) 3 0.5 17 9.3 6 10.4 26 20.1 C-N(Neighborhood Commercial) 0 0.0 0 0.0 0 0.0 0 0.0 C-P(Professional Commercial) 3 1.0 5 1.0 3 3.9 11 5.9 MU-CBD(Mixed Use Central Bus.) 1 0.2 18 5.9 2 1.1 21 7.2 MUC(Mixed Use Commercial) 3 2.4 2 1.3 4 11.3 9 15.0 MUC-1(Mixed Use Commercial) 0 0.0 0 0.0 1 1.1 1 1.1 MUE(Mixed Use Employment) 1 7.6 0 0.0 0 0.0 1 7.6 MUE-1(Mixed Use Employment) 10 11.8 4 1.5 2 2.8 16 16.1 MUE-2(Mixed Use Employment) 1 1.1 0 0.0 0 0.0 1 1.1 MUR-1*(Mixed Use Residential) 0 0.0 0 0.0 0 0.0 0 0.0 MUR-2*(Mixed Use Residential) 0 0.0 0 0.0 0 0.0 0 0.0 TMU(Triangle Mixed Use) 23 14.7 25 8.4 6 10.9 54 33.9 Commercial subtotal 46 I 62.4 71 I 27.3 24 I 41.4 141 I 131.2 Industrial Zones I-H(Heavy Industrial) 0 0 0 0 1 2.85 1 2.9 I-L(Light Industrial) 7 2.64 0 0 4 30.97 11 33.6 I-P(Industrial Park) 6 16.96 5 2.12 1 2.83 12 21.9 Industrial subtotal 13 19.6 5 2.1 6 36.7 24 58.4 City Total 59 82.0 76 29.5 30 78.1 165 189.6 Net Net Net Net Number of Buildable Number of Buildable Number of Buildable Number of Buildable Parcels Parcels Parcels Parcels Acreage Acreage Acreage Acreage River Terrace Westt 7 30.0 0 0.0 0 0.0 7 30 River Terrace Southt 2 5.0 0 0.0 0 0.0 2 5 Urban Reserve subtotal 9 35.0 0 0.0 0 0.0 I 9 35.0 Notes *Only those specific tax lots identified in footnote 12 of Tigard Community Development Code Table 18.120.1. t Only those areas identified for employment in the City's April 2021 River Terrace 2.0 Concept Plan Source:Mackenzie,Appendix A Figure 7.02(following page)presents the BLI broken down by presumed development typology(i.e.,office, retail,or industrial uses)most likely to be developed in each zone. For instance,the Community Commercial zone is likely to house mostly retail use, but with some small office users, while the General Commercial zone is assumed to house mostly retail use. These assumptions are generalized given the difficulty of predicting where future businesses will locate. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 65 Exhibit B ne� -' tl'E aiP�� i ale. BiBJi&..�C-�.ei', TIGARD MADE Maintain,Advance$Diversify Employment FIGURE 7.02:RECONCILIATION OF BLI CAPACITY AND PROJECTED DEMAND,CITY OF TIGARD-20 YEAR BUILDABLE LAND INVENTORY(SUPPLY) Total Net Zone Abbreviation Buildable Retail Office Industrial Flex Space Acreage Acreage Acreage Acreage Acreage Commercial Zones C-C(Community Commercial) 23.1 17.3 5.8 0.0 0.0 C-G(General Commercial) 20.1 20.1 0.0 0.0 0.0 C-P(Professional Commercial) 5.9 0.9 5.0 0.0 0.0 iviu-Lou fiviixea use ventral 7.2 3.6 3.6 0.0 0.0 MUC(Mixed Use Commercial) 15.0 11.2 3.7 0.0 0.0 lviuL.-i llvnxea use 1.1 0.8 0.3 0.0 0.0 MUE(Mixed Use Employment) 7.6 7.6 0.0 0.0 0.0 iviut-i uviixea use 16.1 16.1 0.0 0.0 0.0 iv-11A llvnxea use 1.1 1.1 0.0 0.0 0.0 TMU(Triangle Mixed Use) 33.9 25.4 8.5 0.0 0.0 Commercial subtotal 131.2 104.3 26.9 0.0 0.0 Industrial Zones I-H(Heavy Industrial) 2.9 0.0 0.0 2.9 0.0 I-L(Light Industrial) 33.6 0.0 0.0 33.6 0.0 I-P(Industrial Park) 21.9 0.0 0.0 5.5 16.4 Industrial subtotal 58.4 0.0 0.0 41.9 16.4 TOTAL CITY BUILDABLE 189.6 104.3 26.9 41.9 16.4 dfRFC• Urban Reserve Areas River Terrace Westt 30.0 22.5 7.5 0.0 0.0 River Terrace Southt 5.0 3.8 1.3 0.0 0.0 Urban Reserve subtotal 35 26.25 8.8 0.0 0.0 PROJECTED 20-YEAR DEMAND(BASELINE SCENARIO) Total Retail Office Industrial Flex Land Use Category Demand Demand Demand Demand Demand (Gross Acres) (Acres) (Acres) (Acres) (Acres) Commercial Uses: 306.0 145.6 160.4 Industrial Uses 233.0 135.3 97.8 TOTAL DEMAND(GROSS 539.1 145.6 160.4 135.3 97.8 ACR S1 RECONCILIATION Land Capacity-Surplus or(Deficit) Land Use Category Total Retail Office Industrial Flex Space Commercial Uses: (174.9) (41.3) (133.5) Industrial Uses (174.7) (93.3) (81 TOTAL NEED(GROSS ACRES): (349.5) (41.3) (133.5) (93.3) (81.3) Employment zones with no identified buildable parcels are excluded from table. t Only those areas identified for employment in the City's April 2021 River Terrace 2.0 Concept Plan Source:Mackenzie,Johnson Economics CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 66 Exhibit B B ®®■ AA I�I �"t"1P-�r. ogo... � lip..=�© TIGARD MADE Maunlain,Advance&Diversity Employment Land Supply and Demand (acres): The comparison of BLI (supply) to the forecasted 20-year need for employment lands (demand) show a probable deficit of land over the planning period if Tigard is to accommodate the growth in employment projected by this analysis. Under the slower-growth Scenario 1 presented in Figure 7.02,there is a projected short fall of 175 acres of commercial land,and a very similar 174 acres of industrial land. Under the higher-growth Scenario 2,there is a projected short fall of 437 acres of commercial land,and 367 acres of industrial land. Potential Future Land Supply: In addition to the currently available inventory of buildable land identified in Tigard,there are additional sources of potential future supply that might alleviate the projected shortfall of employment land somewhat. There are two main sources of potential future inventory: the urban reserve areas, known as River Terrace West and South,and potential redevelopment and intensification of uses in the Washington Square Mall Area. Combined, these areas are projected to potentially supply an additional 102 acres of commercial land for office and retail uses. These areas are not anticipated to include industrial capacity. This amount of additional buildable commercial land inventory is not sufficient to completely absorb the projected shortfall. Figure 7.03 summarizes the potential future land supply in these areas. (The acreage depicted in the Washington Square area are not literal. The acreage represents the potential square footage assumptions of new commercial real estate, converted to hypothetical equivalent acreage using the same assumptions of FAR used in the EOA methodology.) FIGURE 7.03:POTENTIAL FUTURE EMPLOYMENT LAND INVENTORY Land Capacity-Surplus or(Deficit) Land Use Category Total Retail Office Industrial Flex Space River Terrace Westt 30.0 22.5 7.5 River Terrace Southt 5.0 3.8 1.3 Wash. Sq. Area Redevelopment 67.4 12.8 54.7 TOTAL NEED(GROSS ACRES): 102.4 39.0 63.4 na na t Only those areas identified for employment in the City's April 2021 River Terrace 2.0 Concept Plan Source: Johnson Economics,Mackenzie,City of Tigard Land Supply and Demand (Site Size): The following table presents the BLI broken down by the estimated site sizes of buildable parcels in each zone. There are an estimated 198 sites in the city(excluding the urban reserve areas. Most of these sites are less than one acre(72%).Of the remainder 24%are between one and CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 67 Exhibit B ne� tl'E aiP�A� TIGARD MADE Maintain,Advance$Diversify Employment five acres, and only 5% are five acres or larger. Tigard has no truly large-lot development parcels in its remaining buildable employment land inventory. FIGURE 7.04:BUILDABLE LAND INVENTORY OF EMPLOYMENT LANDS,BY SIZE OF SITE CITY OF TIGARD-2022 Areas in Cit Limits 0 TO.9 1 to 4.9 5 to 9.9 10 to 19.9 20 to 29.9 30 or more Zone Abbreviation Total acres acres acres acres acres acres Commercial Zones C-C (Community Commercial) - - - - 1 - 1 C-G (General Commercial) 18 8_ - -, - -_ 26 C-P(Professional Commercial) 8 3 - - - - 11 MU-CBD (Mixed Use Central Bus.) 20 1 - - - - 21 MUC (Mixed Use Commercial) 4 5 - - - - 9 MUC-1 (Mixed Use Commercial) - 1 - - - - 1 MUE-1 (Mixed Use Employment) 11 5 - - - -_ 16 MUE-2 (Mixed Use Employment) - 1 - - - - 1 TMU (Triangle Mixed Use) 45 9 - - - - 54 Commercial subtotal 106 33 1 0 1 0 141 Industrial Zones I-H (Heavy Industrial) - 1 - - - - 1 I-L (Light Industrial) 7 - 4 - - - 11 I-P(Industrial Park) 6 5 1 - - - 12 Industrial subtotal 13 6 5 0 0 0 24 City Total1 1191 _a_391 61 01 11 01 165 Urban Reserve Are 0TO.9 1to4.9 5 to 9.9 10 to 19.9 20 to 29.9 30 to 49.9 Zone Abbreviation Total acres acres acres acres acres acres River Terrace Westt 0 7 0 0 0 0 7 River Terrace Southt 0 2 0 0 0 0 2 Urban Reserve subtotal 0 9 0 0 0 0 9 Notes t Only those areas identified for employment in the City's April 2021 River Terrace 2.0 Concept Plan Source:Mackenzie,Appendix A The following figure presents a comparison of supply and demand for employment sites over the 20-year planning period. As noted in the prior section,the greatest share of demand is expected to be for relatively small sites of under one acre. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 68 Exhibit B TIGARD MADE Maintain,Advance&Diversify Employment FIGURE 7.05:RECONCILIATION OF BLI CAPACITY AND PROJECTED DEMAND,BY SIZE OF SITE CITY OF TIGARD—20 YEAR Commercial Sites Industrial Sites 100+acres 0 Supply 100+acres 0 Supply •Est.Need •Est.Need 50 to 99.9 acres 0 50 to 99.9 acres 0 0 0 30 to 49.9 acres 0 30 to 49.9 acres 0 0 0 20 to 29.9 acres 1 20 to 29.9 acres 0 0 0 10 to 19.9 acres 0 10 to 19.9 acres 0 1 5 5 to 9.9 acres 14 5 to 9.9 acres 16 1 to 4.9 acres ■33 51 1 to 4.9 acres ,626 13 0 TO.9 acres 106 0 TO.9 acres 389 _ 102 0 100 200 300 400 0 100 200 300 400 No.of Sites No.of Sites Source: Johnson Economics,Mackenzie CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 69 Exhibit B B ®®■ AAb;Eikop7 TIGARD MADE Maunlain,Advance&Diversity Employment VIII. SUMMARY OF FINDINGS AND CONCLUSIONS Employment Growth Tigard is home to an estimated 45,500 jobs as of 2021. The largest sectors by number of jobs are professional and management services, construction, retail, and finance. This analysis projects an annual growth range between 1.0%(Baseline)and 1.8%(Adjusted).Based on this range,the city would be expected to add between 10,250 and 18,970 new jobs by 2041 (absent land constraints discussed below). The greatest growth in number of jobs is projected to be in the professional and management services, construction,and health care sectors based on the City of Tigard's existing land use and business mix,and on forecasts for sector growth in the Portland Metro area from the Oregon Employment Department. Broken down into broad categories of employment, it is projected that 50%of new employment will take place in a commercial or institutional office environment, 22% in a retail or storefront commercial service environment,and 28%in an industrial space environment. Employment Land Need At the lower end of the projected growth range,there is an estimated 20-year need for 306 acres of land for commercial uses(Office, Institutional, Retail)and an estimated need for 233 acres of land for industrial uses (Industrial, Warehouse, and Business Park), adding to demand for a 539 total gross acres of employment land.The distribution of land demand between commercial land and industrial land is 53%to 47%respectively. At the upper end of the projected growth range (adjusted growth scenario),there is a need for roughly 568 acres of land for commercial uses,and 425 acres for industrial uses,adding to demand for a 993 total gross acres of employment land. Site Size A range of site sizes will be needed ranging from less than an acre to 30-acres to accommodate the projected business expansion. Different commercial and industrial uses have different site requirements driven by the specific nature of their business operations, firm size, location and infrastructure requirements,and other factors. The local employment base is largely dominated by small employers of 10 or fewer employees (75% of firms),which is a common pattern across most markets. It is projected that a preponderance of the demand for employment sites over the plan period will continue to be for sites of less than 5 acres,with a majority being less than one acre. Multitenant spaces can also serve a collection of small firms. Adequacy of Employment Land Supply The Buildable Land Inventory (BLI) of employment lands completed in conjunction with the EOA found a total of 189 buildable acres in commercial, industrial, and mixed-use zones. The available inventory for both commercial and industrial uses is constrained by the prior build-out of most of the city's employment land,as well as the Urban Growth Boundary to the west. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 70 Exhibit B =VkikAA I�I TIGARD MADE Maunlain,Advance&Diversity Employment In total, there are an estimated 112 vacant or partially vacant acres, and 78 acres of potential redevelopment sites. The current inventory includes 131 commercial acres, and 58 industrial acres. In the future,there are expected to be additions to the inventory of employment land in areas that are currently under planning, including 35 acres in urban reserve areas,as well as additional redevelopment capacity in the Washington Square area. The comparison of land supply (189 acres) to the forecasted range of demand for employment lands (roughly 550 acres to 1,000 acres over 20 years) shows a likely deficit of land over the planning period if Tigard is to house the growth in employment projected by Metro, and in this analysis. Therefore,there is a significant projected short fall of employment land ranging from 350 acres to 800 acres. At the lower end of the growth range there is a projected short fall of 133 acres of commercial office land, 43 acres of retail land, and 175 acres of industrial land. At the high end of the growth range there is a projected short fall of 274 acres of commercial office land, 163 acres of retail land, and 367 acres of industrial land. Conclusion The EOA identifies a probable acute shortfall of employment land in Tigard over the planning period.The projected shortfall is worst for industrial land, but also likely in commercial office and retail land. These findings are the basis for the following discussion of potential policy approaches and strategies to meeting the need for employment growth going forward,to inform subsequent phases of this project. THREE POTENTIAL POLICY APPROACHES To address a projected acute shortfall of buildable employment land, Tigard faces three primary policy approaches,discussed below: 1) Maintain the Status Quo,Accept Growth Limitations 2) Seek Opportunities for Expansion 3) Use Remaining Employment Lands More Efficiently 1) Maintain the Status Quo: Tigard is reaching build-out of its land zoned for employment. While the expected addition of urban reserve areas in River Terrace will add some additional land, it is still expected to be far less than the projected need.The community might choose to maintain the status quo and accept that the city will likely achieve less employment growth than projected in this analysis. Build-out of remaining land,and redevelopment of existing employment areas would accommodate some additional growth and new businesses, largely in keeping with current development patterns. A shortage of land may also generate pressure to raise land and real estate prices,which could incent some greater employment density over time. However,large businesses and fast-growing businesses may face some constraints on where they can locate. One result might be a decreasing jobs-to-housing ratio, as new residential development outpaces new employment development over time.As noted in the EOA report,the city currently features an estimated jobs/household ratio of 2.1 jobs per household, while local households hold an CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 71 Exhibit B =VkikAA I�I TIGARD MADE Maunlain,Advance&Diversity Employment average of 1.3 jobs. This means that currently Tigard is a net importer of labor,which is beneficial to the community's economy and provides job choice to local households.Over time,with serious constraints on employment land, this ratio should decrease as the city has a greater supply of residential land relative to employment capacity. 2) Seek Opportunities for Expansion: For communities with boundaries that are not largely constrained by neighboring cities,a finding of land need in a Goal 9 EOA(or Goal 10 Housing Needs Analysis) would typically spur discussion over expanding that city's urban growth boundary in order to accommodate the 20-year-land need. In the case of Tigard and some other Metro communities,the city is largely hemmed in by neighboring cities on three sides. Opportunity for expansion remains on the west side of Tigard,as reflected in the on-going planning of the River Terrace urban reserve areas. However,there is a modest amount of employment land planned in these two areas relative to the 20-year need, and there are no prospects for further expansion to the west for the foreseeable future. Furthermore,the far-western edge of Tigard will not be a strong location for many types of businesses and employers given the distance from major transportation routes. Businesses are likely to be limited to those serving the immediate residential neighborhoods (retail/dining/commercial services), and perhaps some serving rural Washington County outside the UGB(farm and supply/equipment/services). After the annexation of River Terrace West and South, the remaining land to the west of Tigard will be a combination of protected rural reserves,and undesignated reserves. Before any planning or annexation of undesignated areas can occur,they must be designated for urban development by Metro and the state. This is a long-term political process that Tigard can advocate but cannot directly undertake on the local level. On a practical level,these areas might be designated,planned and annexed within the 20-year planning period. But given these complications,and the locational disadvantages of these undesignated areas for large-scale employment users,these areas do not seem to present a reliable opportunity for expansion of employment land on the scale of the finding of 20-year need. This conclusion supports the need to accommodate as much employment growth as possible within the City's current employment zones. 3) Use Remaining Employment Lands More Efficiently: This approach is recommended and the basis for the more detailed policy recommendations prepared in a subsequent phase of the Tigard Made project. Given the constraints on existing and future employment land in Tigard, the community should pursue a strategy that recognizes this reality and aims to make more efficient use of remaining vacant commercial and industrial land and properties that are potential candidates for redevelopment. To accommodate job growth on the remaining land supply, future development might feature increased job density, make better use of sites, and leverage transportation and other public infrastructure. This process of seeking "efficiency measures" is actually required prior to pursuing a UGB expansion for residential land. Cities are not required to take a similar approach for meeting employment land needs but doing so will be consistent with the City's Strategic Plan and the guiding objectives for the EOA process. It will help the City encourage development in areas that CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 72 Exhibit B Bf�l_ =tTTo TIGARD MADE Maun1,in,Advance&Diversity Employment already are served by infrastructure, are adjacent to other employment uses, and are close to residential areas where workers may live. Land efficiency measures are an important step to alleviate some of the shortfall of employment land in Tigard but may not accommodate all the potential employment growth found in the EOA. Market conditions and redevelopment pressures in existing employment zones will dictate the pace and scale of new land uses. But in the long term, implementing efficiency measures can reduce the cost to serve new employment uses, increase land efficiency,and potentially promote more synergy between nearby industrial,commercial,and residential land uses. Recommendation Given the practical challenges to expanding the city boundary to add sufficient new employment land, it is recommended that Tigard pursue a strategy of encouraging future development and redevelopment to make the most efficient use of existing employment land. These findings and recommendations form the basis of detailed recommendations on code language, zoning, and incentive programs in a subsequent phase of the Tigard Made project. CITY OF TIGARD I ECONOMIC OPPORTUNITIES ANALYSIS PAGE 73 Exhibit B Exhibit B ■ TABLE OF CONTENTS I. Introduction and Purpose 1 II. Employment Lands Buildable Lands Inventory 2 Study Area 2 Vacant, InfilI, and Redevelopable Parcels 6 Development Constraints 8 Buildable Employment Lands 10 Buildable Employment Lands Parcel Sizes 14 III. Site Suitability Analysis 15 Site Characteristics 15 Retail 15 Office 16 Industrial 17 Site Suitability Observations 18 Commercial 19 Industrial 19 Developer Comments 19 Sites Most Likely to Advance the Economic Development Objectives 20 LIST OF TABLES Table 1:Tigard BLI Employment Areas 4 Table 2:Tigard Employment Buildable Lands Inventory 10 Table 3: Redevelopable Land Cost Estimates 12 Table 4:Tigard Urban Reserves Potential Buildable Lands 13 Table 5:Tigard Employment NET Buildable Lands Inventory Parcel Sizes 14 Table 6: Retail Preferred Site Characteristics 16 Table 7: Office Park Preferred Site Characteristics 17 Table 8: Industrial Preferred Site Characteristics 18 Exhibit B ■ LIST OF FIGURES Figure 1: City Limits and Urban Reserves Map 3 Figure 2: Employment Land Zoning Map 5 Figure 3: Vacant, Infill, and Redevelopable Employment Land Map 7 Figure 4: Employment Land Development Constraints Map 9 Figure 5: Buildable Employment Land Inventory Map 11 APPENDIX A. Business Oregon Industrial Development Competitiveness Matrix ii Exhibit B ■ I. INTRODUCTION AND PURPOSE Tigard MADE is an endeavor by the City of Tigard, Oregon, to "Maintain, Advance, and Diversify Employment" in the City.As one component of this effort,the City has embarked upon the 2021 Economic Opportunities Analysis (EOA), which is being carried out by a consultant team led by Johnson Economics, with support from Mackenzie and from Angelo Planning Group. This technical memo describes Mackenzie's findings related to the employment areas buildable lands inventory and site suitability analysis. Information from this document will be incorporated into the EOA's reconciliation of employment land supply and demand in the main report by Johnson Economics. 1 Exhibit B ■ II. EMPLOYMENT LANDS BUILDABLE LANDS INVENTORY As part of this project,the City of Tigard requested a buildable lands inventory(BLI)for employment lands to identify those parcels available for and suitable for development by commercial and industrial users. Mackenzie has compiled information on buildable lands to further the City's economic development objectives and to satisfy provisions of Oregon Statewide Land Use Planning Goal 9, Economic Development, as codified at Oregon Administrative Rules (OAR) 660, Division 9 to implement Oregon Revised Statutes (ORS) 197.712(2). To determine the City's buildable lands, Mackenzie utilized geographic information systems (GIS) data from the City, Metro', the Federal Emergency Management Agency (FEMA), and Bing Maps to review information on parcels, zoning, assessed value, and topographic conditions to: ■ Categorize land zoned or planned for employment; ■ Screen out properties which are already developed; ■ Determine which properties are vacant, infill opportunities, or redevelopable; ■ Deduct areas with site constraints that preclude development; and ■ Identify the remaining buildable area of vacant, infill, and redevelopable sites after deducting for constraints. Following the GIS data processing,the resulting data were refined based on feedback from City of Tigard staff. The results of this analysis,which was based on OAR 660-009-0015(3), are described below. Study Area The City requested that the analysis include not only the City Limits but also Tigard's Urban Reserves located west of the City, as depicted in Figure 1. Areas in the Urban Reserves are outside Metro's urban growth boundary (UGB) and thus not currently available for development; however, as the City has identified portions of the urban reserves for future employment use, those areas have been included in this analysis on a speculative basis. 1 Metro compiles data from multiple sources,e.g.,Washington County Assessor data. 2 `SWRIGERTRDT ! 7- Cig.FXf}�bI B ' V �� �i, r �1ICI P J i ^,�Q k��� �0,�5° toe City of Tigard 44, o'NIv �,�� City Limits & ��� `'`� ` Urban Reserves x—SWBROCKMANST h� cl \ l \ SW TAYLORS FERRY RD Tigard, Oregon A V / SW KEMMER RD 0X �, a 2 t- DO Q < to N c° l LEGEND 3 Q 1,1 SW WEIR RD g 3 I of ��JO O��szo $ y Tigard City Limits Q o f QNJ 0 m ;1Q � �� Tigard Urban Reserves F. y h s '1 City of Tigard tip` ,���JQQ 3 LIJ > . Q 44'' ��.A y��oQP� _ P in v4 '9cy Q* �J in 3 P+ �1�5ti �' River Terrace 3 �`�o� 9�A SivaiRT S��Fs /�GLk y, _ MOUTy Sr <` West (Upper) 3�� ��o� , sC ��r � SW WALNUT ST S_.%Os r\i s� W Lu tivNL/r4-4, �2 W Ro �v\a 3 ° L---MELROSE ST ���sy s cc �...� 0 9 < {V< W J •• ?23%; p.� m D vO *'--—---—————----'- 3 — a SWGAARDEST '\ o N i SW MCDONALD ST `KRUSE WAYS 0� I I__I �Feet W MEADOWS RD�,_e ‘4 0 1,500 3,000 6,000 zq-._ L\a to z SW BULL MOUNTAIN RD SW BONITA RD N 2 BONITA RD LP 1 inch=3,000 feet IN ca 3 \� N / Lu �� Gcc SOURCE DATA: GEOGRAPHIC PROJECTION: ec Q Q 0� A Q City of Tigard 2021 NAD 83 HARN,Oregon North a' �A` I Metro 2021 Lambert Conformal Conic 44 / or RiverTerrace I Gr� Date:10/5/2021 Map Created By:SH h S� \\:::114. O f� File:City Limits and Urban Reserves Project No:2210073.00 West (Lower) I .� =' V/ �FST�� °R - / v F UQPgR _ 1 SW BEEF BEND RD SW DURHAM RD Q I J/ z z I ._ `' �� �0 ,WEST -\\Ancouver \ %� �� �0\ BAY RD Win. (��"�`' i Q` �J� BA Y:e"' DSIouEPark ' 14 _.amass 1' F \ _ Tu aha rl IVP C\�S �� 0V9 Hillsboro Port ands( ©�'o �` �0� �� Q'a+� iGresham��� River Terrace South 14"o SBOON s� �—o JEAN RD-1\-\72:A �J 7i ar, g 4N't 4 FERRY RD �o Cg + West LIO^we o 0 Oregon City / �� J N wberg Wilsonville J 3 ui I I I2021 Microsoft Corporation � r..._ �sr� I 3 ©2021 TomTom SW TUALATIN RD h \ Z 4e, 0- a Op��S��Q SW CHILDS RD—CHILDS RD i M A C K E N Z I E . 0 —SW LEBEgURD—W �'O� P 503.224.9560 • F 503.228.1285 • W MCKNZE.COM 3 S — to RiverEast Center,1515 SE Water Avenue,#100,Portland,OR 97214 W I D RD--SW NYBERG ST H SW TUALATIN 5NERWO� am= Portland,Oregon• Vancouver,Washington• wattle,Washington ©2014 MACKENZIE ALL RIGHTS RESERVED 3 Exhibit B ■ The areas noted in Table 1 were analyzed as part of this employment land BLI. The commercial and industrial zoning classifications were based on their categories identified in Chapters 18.120(Commercial Zones) and 18.130 (Industrial Zones) of the Tigard Community Development Code. TABLE 1:TIGARD BLI EMPLOYMENT AREAS Areas in City Limits one Abbreviation Zone Name Commercial Zones C-C Community Commercial C-G General Commercial C-N Neighborhood Commercial C-P Professional/Administrative Commercial MU-CBD Mixed-Use Central Business District MUC Mixed-Use Commercial MUC-1 Mixed-Use Commercial MUE Mixed-Use Employment MUE-1 Mixed-Use Employment MUE-2 Mixed-Use Employment MUR-1* Mixed-Use Residential MUR-2* Mixed-Use Residential TMU Triangle Mixed Use Industrial Zones I-H Heavy Industrial I-L Light Industrial I-P Industrial Park ir Urban Reserve Areas River Terrace Westt River Terrace Southt Notes * Only those specific tax lots identified in footnote 12 of Tigard Community Development Code Table 18.120.1. t Only those areas identified for employment in the City's April 2021 River Terrace 2.0 Concept Plan. Those employment areas listed in Table 1 are graphically depicted in Figure 2. 4 I SW RIGERT RD y--- —J C i g I f}F�l3 04 4441p,, I.1:5,4ii �QO r,1' City of Tigard 5� �,��� Employment Land G �`n cn Zoning Map f-SW BROCKMAN ST�,h 1 T SIV Ri eliM [ __SWTAYLORSFERRVRD Tigard, Oregon m '�4�nl 1SW KEMMER RD 0 to Atn-� elle � iJ x 17pQn -� ■�I� N 1 ! IN > LEGEND "'r 03ul SW WEIR RD 3 Z� wJ �� Tigard City Limits Lu Z Q 3 " G ■III■■■MITri II=I "1 A �J0 Q� OTigard Urban Reserves MUE-2 UE 1 �1Q ��P� ��Q ZONING FL,g 3S 1 I C-C Community Commercial 17 3 W GP QW C G General Commercial Q !y` � %0�Q 3QOC N Neighborhood Commercial �••` Q N J� ?7� h,�OQP "t =CPProfessional/Administrative Commercial ' 71 , 3PG _ �� �JI♦MU-CBD Mixed-Use Central Business District \ I•• ti1.1 0�P �'o LC MUE ml �F,Q I•MUC Mixed-Use Commercial �'•* ���0 4 � SwDAR s!y`� �kLy� MUC-1 Mixed Use Commercial 44- h� J CBD3. TMo... Sl� O MUE Mixed-Use Employment �� 'f'O MUE 1 Mixed Use Employment ? J .� 3 c' �� ', WALNUT ST �P`�5 U C•, ° r, MUE-2 Mixed-Use Employment .,,.t, 5 G 544 ? • Y IIM TMU Triangle Mixed Use �0 ■.�.,��� . / ; s�ti Z3 MI I-H Heavy Industrial ; � �r� '� i • yGN W I I-L Light Industrial 1 1.. � I,�S�'90 '—MELROSE ST I I-P Industrial Park II -P rn \ ; � =I M IE Aoc Wo I i �_ �- 3,o a� o �■ kka I-P 3.r L4 1 ti "'��'�'i"� SW GAARDEST SW MCDONALD ST ' / I I I I Feet i _, �r 1 KRUSE WAYS 0�Q� 0 1,500 3,000 6,000 li 51111"4 1 I L ,� BONITA RD GP� 1 inch=3,000 feet `�o "' SW BULL MOUNTAIN RD / I ` Q r I m Q N o tin�■■�uMu=n�ui W I �■rL^ ce 1- ■.✓. l roc Q ' e 1 I� ^ , G co SOURCE DATA: GEOGRAPHIC PROJECTION: Q = ■.8 - : - / I-P •' `0 A 0 Q City of Tigard 2021 NAD 83 HARN,Oregon North OC h 1 1 �11. �� CY I Metro 2021 lambert Conformal Conic l'...."'.'"......'\ h - ^ � r or IuS, •\Lr Date:10/5/2021 Map Created By:SH --- .-- h 40��� File:Zoning Map Project No:2210073.00 Fie 1F ER°R SN/BEEF BEND RD t !G 11 4 SW DURHAM RD 111. O yQ0 ) .D.10..... L � �afu I-p F��� JO WEST`" Vancouver . y' O�� �0‘ BAY RD ' Deaa Pars 1d Camas Tua\atin Rii �1J�� Slough rove Hillsboro 10 Pi. / �A Portland O Ei: � 'LOWER /` / �1 Gresham • MUC 1 5W LO RY RD Z v2 h�� 4 W BOONESFER O JEAN RD•(...1," Tigar Lake Oswego ,/ 4 = Z Cc ..Lll t;,, West Linn > V J 0 r I v Oregon City h is " m / at N caber Wilsorivillc 2021 Microsoft Corporation s�� N / c ©2021 TomTom SW TUALATIN RD H scti i'l 1 ss019. s�llit, SW PActF �C NWy °O��S��� SW CHILDS RD—CHILDS RD i MACKENZIE . —SWLEBEgURD—W �O� P503.224.9560 • F 503.228.1285 • W MCKNZE.COM 3 5 v+ RiverEast Center,1515 SE Water Avenue,#100,Portland,OR 97214 W I DRD—SWr NYBERGST—. i SW TUALptIN SI ERWO.-i �m i=co Portland,Oregon•• Vancouver,Washington• Seattle,Washington ©2014 MACKENZIE ALL RIGHTS RESERVED 5 Exhibit B ■ Vacant, Infill, and Redevelopable Parcels To identify parcels which may be available for economic development, Mackenzie utilized GIS software to determine which parcels with commercial or industrial zoning were vacant, infill, or redevelopable, as follows: ■ The vacant employment parcels were identified as being those parcels in the zones identified in Table 1 that Washington County Assessor data identify as having a building valuation of 0 and which had no visually identifiable development based on aerial photography. Parcels were reviewed on an individual basis without regard to ownership or proximity that could allow for aggregation by developers. ■ The redevelopable employment parcels were identified based on coordination with Johnson Economics staff's knowledge of the local economy and their assessment of conditions which would likely increase attractiveness for site redevelopment. Three distinct methodologies were used, depending on use category and location. For industrial employment areas, this included parcels over two acres with building values less than 30% of the total land value. For the Central Business District (CBD), this included parcels over 0.5 acres with building values less than 30% of the total land value. For all other Commercial employment areas,this included parcels larger than one acre with building values less than 30%of the total land value. ■ The infill employment parcels were identified as being those parcels in the zones identified in Table 1 with less than 2,000 SF developed and the developed area is under 10%of the tax lot area. This approach mirrors the methodology used by Metro in its 2018 Buildable Lands Inventory. Following GIS analysis to identify parcels in each of the three categories, Mackenzie refined the results as follows: ■ To incorporate direction provided by City of Tigard staff for specific parcels where staff had institutional knowledge of the employment land inventory; ■ To remove GIS irregularities such as small slivers of land that are likely a result of misaligned data sets provided by multiple sources; ■ To graphically display Washington Square as infill, in light of the operator's intentions to alter usage in the future. This acreage is not included in the tables below as the potential buildout is being addressed by Johnson Economics in its analysis of future employment rather than based on acreage in the BLI. A map of the vacant, infill, and redevelopable parcels is included as Figure 3. 6 ,~ "I ,..j SW-RIGER•T-RDFigure 3 N O Ha A y S tie vii City of Tigard Q 2 Washington 414 S /2 �Q9l Square Mall 3'yk Vacant, Infill and v aF scy 5 3 2j:,�°9/�o(e. (> Redevelopable Land �SW-BROGKMAN-ST y��G1• SWTAYLORS•FERRYRD 4Tigard, Oregon / (r,.•° ,..,,,,%. SW KE MME R•RD a. 0.a • '` N 3 x e 3�r�z �Q ��o a tal 3 ` a _" /� �� /���`�•� LEGEND q. cc N� SW-WEIR-RD03 ce 3 3 c ys' Tigard City Limits p kO aT��y 1 ( cg Commercial-Fully Vacant pT rt. C,'''''<;,,,k J� SW POMONA ST 3 H e q9 FFye m SW B .,,, • 4C•�\ NBr0 11* ® 0 Boo-‘5•01' ,,,,' x L> jjA C`h RAMP 449�„� ea Commercial-Infill 4. Vii, 1 aQ. �Q• \\ 'a Q a Commercial Redevelopable IT N m 3 C��P _2d CFkC y N a�o „74, 1,, a �� `,„ Industrial-Fully Vacant 4i r� '',1-, 0 i ' ,s`,,,, RPKLyY ---\ JQ,O 0 6 v v gSKr OARTMOUrH S�°' � SS / F�P� 0 �� � /7.<;:.4 q T ��o `� Industrial Infill �V SSP •-.,, n q �` ��yy �S`a0 SUJ.VdRLNHT'ST S44:4'''' o ® 42.,„X Ska7 F, �N ® ' u \\ /' eGy v HV4, ,2 5 Industrial Redevelopable 4. • y9 RRO �T,i�H sr �` RqM��,��Sj illy 3 Tigard Urban Reserves 0 zt �MELROSE41- ICELLI 9 \ • c 4 Q y �2 j • `y. y9T4g RT 2.0 Potential Employment Areas III ( 1,...4,1, N.4. 1-1 \tA9'tc.,,„......_____'?' �at3` J SW-GAARDE-ST / I I I I Feet lir SWMEDONAL•D-ST 4 KRUSE-WAY p: • _�� �c_ �4• 0 1,500 3,000 6,000 �"` ; D T MEgDOWS.RO^ ^� �� I ` \ / a 9 2 '� G \ SW-BULL-MOUNTAIN-RD SW-BONITA;D—N m BONITA•R„..----...jr.�J \\I 1 inch=3,000 feet 7 ^ h 3 , N Lu SOURCE DATA: GEOGRAPHIC PROJECTION: Q $ O. 0 City of Tigard 2021 NAD 83 HARN,Oregon North C F ��aa �pQ• oe Metro 2021 lambert Conformal Conic 7..**..'..W.'''''\ la O ■ q14.'" a Date:12/13/2021 Map Created 8y:SH Ce S TO S� File:Tigard Grosz Buildable Project No:2210073.00 5. ' i ic z' I c Fsre�9�F JQQBpp0. N $ SW-BEEF•BEND•RD v SW-DURHAM-RD >5' `� �.�^{ Ce 4s,:`f WASHINGTON C7 �` Vy J�� �eVJ9 WESTO FVaflCc .r satin R, �W�� �S���P ���� 2 sp��� X26, Delta ark � © a _.s .� a V z a Slou: h Tu Pf, 02 #0 o / Hillsboro 30 `ostat .I . x °° A 6resham 4, std NES 3 J ��O B�yRO ,7- SW-JEAN-RD JEAN TI of y=� y �Q0 �� FE 9 f! Lake IOswego ���� o3'z�` gra I,.t:..,(_ WestJinn h S `' e,s. Sherwood Oregon City le 00151,e_L, � 20Z1vIMicrosoft Corporation `ry SW TUALATIN-RD o rj a. ©20 1 TomTom �a ��� MACI< ENZI E . 0F5��� Q —SW-CHIL•DS•RD--6HILDSRD� OO Y --SW-LE-BEAU-RD c �O i0 \ 00 Z P 503.224.9560 • F 503.228.1285 • W MCKNZE.COM S3� RiverEast Center,1515 SE Water Avenue,#100,Portland,OR 97214 WI OSWNYBERG•ST 3 /SW LATIN S)RWOOD-RD '?7/ ./, Portland,Oregon• Vancouver Washington• Seattle,Washington ` ? Z 0 2014 MACKENZIE ALL RIGHTS RESERVED Exhibit B ■ Development Constraints OAR 660, Division 9 allows for reduction of buildable area in a BLI based on site development constraints, as defined in OAR 660-009-0005(2): 'Development Constraints'means factors that temporarily or permanently limit or prevent the use of land for economic development. Development constraints include, but are not limited to, wetlands, environmentally sensitive areas such as habitat, environmental contamination, slope, topography, cultural and archeological resources, infrastructure deficiencies, parcel fragmentation, or natural hazard areas. Based on this definition, for the Tigard BLI, development constraints that render land undevelopable for employment uses were identified as land with any of the following characteristics:2 ■ Property within the 1%annual chance floodplain or floodway or 1996 flood inundation area; ■ Significant Wetlands identified in the Tigard Local Wetland Inventory, together with associated Vegetated Corridors as identified by Clean Water Services;3 ■ Areas with slopes of 10%or greater in areas with industrial zoning; or ■ Areas with slopes of 25% or greater in areas with commercial zoning (since commercial users generally don't need the large, flat sites that industrial users need). No deductions were made for areas in the National Wetland Inventory but not in the Local Wetland Inventory; for wetlands not identified as significant in the Local Wetland Inventory; for Significant Tree groves;or for Goal 5 significant Habitat Areas as the Tigard Community Development Code provides paths to development approval in those areas. The resulting site constraints on employment land are depicted in Figure 4. 2 The Conceptual Southwest Corridor Light Rail Alignment and associated service yard was graphically depicted as a constraint but not applied in this analysis due to its conceptual nature. Vegetated Corridors not associated with significant wetlands have not been identified as constraints. 8 I SW RIGERT RD --- / / Figure 4. P x ry1c ,��� °\. �Q� City of Tigard °�4�, y`�o� 5 �,0� Employment Land Development Constraints SW BROCKMAN ST—2h t - _ P,I 1.° SW TAYLORS FERRY RD Tigard, Oregon SW KEMMER RD � W a(;:;4,I � ri< nmax Ln v J x til„, ~ Q SW WEIR RD " 1 1 Z) ��JQ �� Q in `rr 1 y �� Q Tigard City Limits ^ \ °° « 3 a 5 il Q x Employment Areas `'ti 3#ti.._.._.�® t . _� 4, JQ my W_ .:, s T i-�1,, '^-9c14p IQ �yyJ�P��'P�S`Q 3 Q FEMA Floodway and 1% N - J� ��A ° _ D, - 4: @ Floodplain 1 ) e P ,..>c e9y�t `c� ��Q �- ® 3 + a1 •� e, .�' " -' (<, •,..> c.: y2GJ ( 'FFq 1996 Flood Inundation spy 1 • ; r��1,r.• .� m - t ARTMO t F5 ! yam, ,., g ,p,. .:�` UTySt F,p j Significant Wetlands and CWS ° %/moi g /I 0, .�a ; 3 ; ,. 9a Vegetative Buffer lt „I'- • w� �,%I ii j% W WALNUT 5T '/Ilk -•- 4P ° ^i!/,i o N Slope of 25%or greater 1'0 �--.•—•• .'I'+L��p ! +� S y.�`' ^ -4,. ../4_,,,,, :` \\\ (Commercial&Industrial Land) 1 ,.> F,P a �•• til �j: Ro_ �2a 3 Slope of 10%or greater 1 r-• „_! �' 'Lio 1---r (Industrial Land) k \ i1 ;I=' ) �. MELROSE ST c., ec 1 I t / ,„ ! ?,y�o i'. , Potential Light Rail Alignments 1.4 1 'b'� / 1'i Lu �a a v_ O .1 •.1 .o••r7�._•1.•� SWGAARDEST h:� i'••• _ �t�` / _ SW MCDONALD ST `KRUSE WAYS Q� I I I I Feet 1Lu }sP � / > MEADOWS RD Q+ 0 1,500 3,000 6,000 vt •°'�•1 SW BULL MOUNTAIN RD SW BONI�A RD-/^ CC cL BONITA RD `� 1 inch=3,000 feet Alej 0 4IL 0,.- >CC Q • r 1 rCc § • • / g' o !G SOURCE DATA: GEOGRAPHIC PROJECTION: ' ii Q A G, Q City of Tigard 2021,Metro 2021, NAD 83 HARD,Oregon North 1 1 1 `,.' 'I �P V g 1 FEMA2021 lambert Conformal Conic Ln fCY h _.._•\rifif � L ..it PQM 3 • - �'� If .\L Date:10/8/2021 Map Created By:10 SH ni.._.. = y, S 'c0�`r!Z File:Constraints Map Project No:2210073.00 1 �� �/ '= l Fs�9�F 6R°R FT SW BEEF BEND RD 4Q SW DURHAM RD aj� ¢ GO i\ > • r•,l( f� -,*4.)A. p 0 0 WEST Vancouver ' P. p ' �S���QL \(JJO BAY RD �, a P hr K ° Camas J DvoD „iii.,,‘ :..i,„„..,_. : J%�el� g to - Hillsboro � � .,,� i,.�/I�l.,I �, h °o�' �P'�` �, �ove Portland •.. ✓ 1�l ,r ,;r 4 __ / 0 z+ Gresham �Q ,.. r .>1/4, . SW LOWER 2 v ilz /SII: O JEANRDZaAOffrt / ,JøoONE5 " FERRY RD Z O t L ,,, West Linn TU � t' 0 Oregon City caber Wilsonvillc J?y� ��� `, ' 3tioN I/ 2021 Microsoft Corporation SW TUALATIN RD ©2021 TomTom \oee ��c'p Q0 o ���00 �/ � •� °OC S .• '` SW CHILDS RD CHILDS RD ► M A C I< E N Z I E ■ �'^ �~ P 503.224.9560 • F 503.228.1285 • W MCKNZE.COM .4, —SWLEBEAURD—W �O <3-__ LT S�0 W - —,r "� y 4 1 I , -D RD SWNYBERGST z. RiverEastCenter,1515SEWater Avenue,#100,Portland,OR97214 3 `3/4 � SHERW0�� "P 42' �_��J�� Portland,Oregon• Vancouver,Washington• Seattle,Washington I 0 • ! "" /SW TUALATI m / 0 2014 MACKENZIE ALL RIGHTS RESERVED Exhibit B M . Buildable Employment Lands The areas with constraints(Figure 4)were then deducted from the vacant,infill,and redevelopable parcels (Figure 3) to determine the net buildable portions of vacant, infill, and redevelopable parcels. Parcels resulting in less than 0.10 acres of net buildable land were removed since development of the small parcel less than 0.10 acres is not feasible. The results of this analysis for Tigard City Limits are summarized in Table 2 and shown graphically in Figure 5. TABLE 2:TIGARD EMPLOYMENT BUILDABLE LANDS INVENTORY Areas in City Limits Vacant Infill Redevelopable Total i Zone Number Net Number Net Number Potential Number Potential Abbreviation of Parcels Buildable of Buildable of Acreage of Acreage Acreage Parcels Acreage Parcels Parcels Commercial Zones C-C 1 23.09 0 0 0 0 1 23.09 C-G 3 0.47 17 9.27 6 10.39 26 20.13 C-N 0 0 0 0 0 0 0 0 C-P 3 0.99 5 1.01 3 3.85 11 5.85 MU-CBD 1 0.21 18 5.89 2 1.13 21 7.23 MUC 3 2.39 2 1.3 4 11.29 9 14.98 MUC-1 0 0 0 0 1 1.12 1 1.12 MUE 1 7.64 0 0 0 0 1 7.64 MUE-1 10 11.84 4 1.5 2 2.76 16 16.1 MUE-2 1 1.11 0 0 0 0 1 1.11 MUR-1* 0 0 0 0 0 0 0 0 MUR-2* 0 0 0 0 0 0 0 0 TM U 23 14.68 25 8.36 6 10.89 54 33.93 Commercial 46 62.42 71 27.33 24 41.43 141 131.18 subtotal Industrial Zones I-H 0 0 0 0 1 2.85 1 2.85 I-L 7 2.64 0 0 4 30.97 11 33.61 I-P 6 16.96 5 2.12 1 2.83 12 21.91 Industrial 13 19.6 5 2.12 6 36.65 24 58.37 subtotal City Summary Commercial 46 62.42 71 27.33 24 41.43 141 131.18 Zones Industrial 13 19.6 5 2.12 6 36.65 24 58.37 Zones Total 59 82.02 76 29.45 30 78.08 165 189.55 Note * Only those specific tax lots identified in footnote 12 of Tigard Community Development Code Table 18.120.1. 10 aiaj SW-RIGERT-RD Figutb' B N i ,~ viHa AyS ,$) �/ City of Tigard 2 Washington 5 t-e,: Square Mall �;a` Buildable 0 aF scy 5 3 ajA9�g<<5. (; Employment Land �SW-BROGKMAN-ST 9 A�� 4 Tigard Oregon SW TAYLORS•FERRY RO SW KEMMER•RO > D/,a �\ N 3 3< a F tqa N%W c° �� �,/��0� LEGEND SW-WEIR-RD / , S s 2 3 3 c Tigard City Limits A a 3 4.0 ,�h a�� g Commercial-Fully • ,•5Fr n SW POMONA ST 3 3 B 9y�F2<y . sW BAae jR , `ye•—a H o G,P 4 ce gLV0dI5 FWY Qsp' �/ 1 0 C .04 N ® RAMP �� JO e L>' Commercial- NA ;re* \\ Commercial- 4i-4k' � m 3 C��p �2t c7�tc 3 �``<, 99,;4r tic , /a Q Industrial-Fully ,n h� ' a .® 8 0 s� KFRR.AKwY 0 v� �-Sly RT ® ❑ <Fss �� ® \� y 1 11 R 7 A Industrial- O p 4,Z� 0A MOUTHS'\ Fjr —\ P�J 0 a® % CA rs` v y a� �S`aO�,`V SW.NIaLNOT sT `'��p f+� �•' �� N c 4 S /5 why, - ® I 5 \ Industrial eir ® 92,5, o G I<kFgR �2Np ?� I 9't/ 0 ?r�R y�y 3 1;7 s, qMA Tigard Urban Reserves 0 '?��- yt L_MELROSE 1 -5T BO7TICELLI :f.s . s 1 . ,, ® �j%_177�4, i� RT 2.0 Potential Employment 9v '%_17 Areas - 1-1 3 1A,-44-“is H A\ _A-C.(4 o SW-GAAROE-ST 'L SW -ST • "" KRUSE-WqY p lir �\U\t:: Feet �c_ �Q 0 1,500 3,000 6,000 Mil � I \ /9 z cg G \ SW-BULL-MOUNTAIN-RDSW-BONITA-�RO—N m BONITA•RD�J \\I r....--A/ 1 inch=3,000 feet 3 0 N \> 4 Lu PHIC ON: Q 2 y 0 City of Tigard 2021 NAD 83AHARN,OregonlNorth e 1 ¢�1 �pQ ay O Metro 2021 Lambert conformal Conic u S�F ��p O H _ Date:12/13/2021 Map Created 8y:SH /Ce L_- ,CO J'� File:Tigard Net Buildable Project No:2210073.00 7..................."‘ PG 5. z p c Fs�e<9,fn JQQBp�0. N ri $ sWBEEF•BENO•RD v SW-DURHAM-RD >y `� / I �' �.�{ Ce 4s 0 WASHINGTON CT 04.. p " � JVD/ �eVJ9 WESTO F VanCc .r satin R, �W�� �S���P ���� sp�� X26, Delta ark © a _.s .� a V z a Slou: h Tu Pf. 02 000 0 / .oeo Hillsboro 30 Q lS� `o�Ee ...1:.a x °° Acr Gresham Sva NES 3 . �eP g�yRO °- SW-JEAN-RD �R AN r I ofy=� y0Q0a 0� FE 9 f! LakeIOswego es`,OG o3'z�` gra :..,( WestJinn F4 S 0e4 Sherwood Oregon City n3 t� boNbterigg3w2iloso2,.rivilleMcrosoft Corporation `ry SW TUAM•ATIN-RU I% a ©20 1 Tom Tom ---\ 4[� 9LF �a ��� MACI< ENZI E . 0F5��� -SW-CHIL•DS•RD--6HILDSRO� OO !:-NyBERG-ST SWL•EBEAU-RO 0 �O 00\ 00 P 503.224.9560 F 503.228.7285 W MCKNZE.COM 0 RiverEast Center,1515 SE Water Avenue,#100,Portland,OR 97214 WI 3 /SW LATIN S I RWOOO-RO '7/p0e m Portland,Oregon• Vancouver Washington• Seattle,Washington is ` ? Z 0 2014 MACKENZIE ALL RIGHTS RESERVED Exhibit B M . Analysis of the data in Table 2 reveals the following: • The commercial zones have 62.42 acres (76%) of vacant buildable land and the industrial zones have 19.6 acres (24%) of vacant buildable land, for a total of approximately 82.02 net acres of vacant buildable land. ■ The commercial zones have 27.33 acres (93%) of infill land and the industrial zones have 2.12 acres (7%) of infill land, for a total of approximately 29.45 net acres of infill buildable land. • The commercial zones have 41.43 acres (53%) of redevelopable buildable land and the industrial zones have 36.65 acres (47%) of redevelopable buildable land, for a total of approximately 78.08 net acres of redevelopable buildable land. • In total,the commercial zones have 131.18 acres (69%) of buildable land and the industrial zones have 58.37 acres(31%)of buildable land,for a total of approximately 189.55 net acres of buildable land. For those sites identified as redevelopable, Mackenzie prepared a high-level estimate of the cost to prepare the site for further development (e.g., building demolition, limited site grading, paving, landscaping, and on-site utilities), utilizing an average cost of$15 to $20 per square foot, excluding costs of a building itself since those costs vary greatly depending on usage, construction type, etc. Based on an assumption that buildings occupy an average of 40% of the buildable land, the resulting site preparation cost estimates are denoted in Table 3. TABLE 3: REDEVELOPABLE LAND COST ESTIMATES Areas in City Limits Zone Number of Redevelopment Abbreviation Parcels Potential Acreage Site Preparation Cost Estimate Commercial Zones C-C 0 0 0 C-G 6 10.39 $4.1-5.4 million C-N 0 0 0 C-P 3 3.85 $1.5-2.0 million MU-CBD 2 1.13 $0.4-0.6 million MUC 4 11.29 $4.4-5.9 million MUC-1 1 1.12 $0.4-0.6 million MUE 0 0 0 MUE-1 2 2.76 $1.1-1.4 million MUE-2 0 0 0 MUR-1* 0 0 0 MUR-2* 0 0 0 TMU 6 10.89 $4.3-5.7 million Commercial subtotal 24 41.43 $16.2-21.7 million 12 Exhibit B M . Industrial Zones I-H 1 2.85 $1.1-1.5 million I-L 4 30.97 $12.1-16.2 million I-P 1 2.83 $1.1-1.5 million Industrial 6 36.65 $14.4-19.2 million subtotal _ City Summary Commercial 24 41.43 $16.2-21.7 million Zones Industrial Zones 6 36.65 $14.4-19.2 million Total 30 78.08 $30.6-40.8 million Note * Only those specific tax lots identified in footnote 12 of Tigard Community Development Code Table 18.120.1. Table 4 identifies the potential employment area within the Tigard Urban Reserves, as projected in the City's April 2021 River Terrace 2.0 Concept Plan. These areas are also depicted in Figure 5. TABLE 4:ITAULURBAN RESERVES POTENTIAL BUILDABLE LANDS - Urban Reserve Areas MIL Vacant Infill Redevelopable Total Number Net Number Net Number Net Numbe otential of Buildable of Buildable of Buildable Parcels Acreage Parcels Acreage Parcels Acreage Acreage River Terrace 7 30 0 0 0 0 7 30 Westt River Terrace 54P 0 0 ' 0 2 111 Southt Urban Reserve 9 35 0 0 0 0 9 35 subtotal Note t Only those areas identified for employment in the City's April 2021 River Terrace 2.0 Concept Plan As the urban reserves are not within the Metro UGB, the City cannot rely upon these lands to satisfy its employment land needs at this time. 13 Exhibit B M . Buildable Employment Lands Parcel Sizes Based on the buildable parcels in City Limits shown in Figure 5 and tabulated in Table 2, Mackenzie has sorted the net buildable land supply by parcel size for each zone, the results of which are in Table 5. As noted in the table, available commercial sites largely fall into the 0 to 0.99 acre category, while available industrial sites largely fall into a mix of the 0 to 0.99 acre and 1 to 4.99 acre categories. TABLE 5:TIGARD EMPLOYMENT NET BUILDABLE LANDS INVENTORY PARCEL SIZES Areas in City Limits Zone 0 to 1 to 5 to 10 to 20 to 30 to 50 to 100+ 0.99 4.99 9.99 19.99 29.99 49.99 99.99 TOTAL Abbreviation acres acres acres acres acres acres acres acres Commercial Zones C-C - - - - 1 - - MILE 1 C-G 18 8 - - - - - - 26 C-N - - - - - - - - - C-P 8 3 - - - - - - 11 MU-CBD 20 1 - - - - - - 21 MUC 4 5 - - - - - - 9 MUC-1 - 1 - - - - - - 1 MUE - - 1 - - - - - 1 MUE-1 11 5 - - - - - - 16 MUE-2 - 1 - - - - - - 1 MUR-1* - - - - - - - - - MUR-2* - - - - - - - - - TMU 45 9 - - - - - - 54 Commercial 106 33 1 1 - - 141 subtotal Industrial Zones I-H 1 - - - 1 I-L 7 - 4 - - - - - 11 I-P 6 5 1 - - 12 Industrial 13 6 5 - - - - - 24 subtotal City Total 119 39 6 - 1 - - - 165 Notes * Only those specific tax lots identified in footnote 12 of Tigard Community Development Code Table 18.120.1. 14 Exhibit B ■ III. SITE SUITABILITY ANALYSIS To supplement Section II,which analyzed the quantity of building employment lands in the City and in its urban reserves,this section provides information on the types of sites that are most likely to be attractive for development. The relative attractiveness of sites varies by user type, so information is provided for three broad user categories identified by Johnson Economics: retail, office park, and industrial. Based on the preferred site characteristics for each of the three categories, Mackenzie performed a qualitative assessment of the City's available vacant, infill, and redevelopable land using available data to evaluate whether the available land supply satisfies some or all of the preferred factors.Some factors are not able to be analyzed as part of this project due to data limitations(e.g., neither the City nor Mackenzie have access to geographic data sets regarding locations or capacity of franchise utilities such as power, gas, or telecommunications). Other factors were examined on a qualitative level (e.g., utility sizes for industrial users) but are not mapped as such analysis and display is beyond the scope of the project. In the tables below, some of the factors utilize the word "competitive." This term does not denote an absolute standard which cannot be disregarded, but rather suggests that given the choice between two equal sites, if one of them meets the competitive factor and one does not, a developer will likely select the site that satisfies the competitive factor. Site Characteristics Retail Retail Preferred Site Characteristics Retail users fall into multiple subcategories, including the following: ■ Regional malls ■ Lifestyle centers ■ Power centers ■ Neighborhood centers ■ Downtown areas Table 6 identifies preferred site characteristics for each of these subcategories. However, it should be noted that retailers' site selection is also based on factors outside the site itself, such as the area population, income levels of nearby residents, and the location of competitors. 15 Exhibit B TABLE 6:'RETAIL PIS TICS , tor Regional Malls Lifestyle' eighborhood Centers Centers Clusters of large well-known Convenience- retailers such as oriented, ty Example or Washington Old Mill District electronics conssting of a Walkable areas s description Square in Bend stories, arts and with a variety of grocer or craft stores, retailers office supply pharmacy and stores, or home associated goods stores smaller retailers Competitive site 40- 100 10 -40 25 -80 3 -5 Varies acreage Proximity to Required Required Required Preferred Not Required Arterial/Collector Access to signalized Required Preferred Preferred Preferred Not Required intersection Visibility/street Required Required Required Required Preferred presence On-site parking Required Required Required Required Not Required Source:Mackenzie, International Council of Shopping Centers Mackenzie utilized these characteristics to evaluate the available retail commercial sites identified in Section II. Retail Suitability Assessment ■ Roughly 22% of the buildable commercial land is between 1 and 5 acres, while only about 4% of buildable commercial area is above 5 acres. ■ In the CBD, there are a few redevelopable areas which may have competitive site acreage. The advantage with redevelopable land in the CBD is that on-site parking may not be necessary. Office Office Park Preferred Site Characteristics Two subcategories of office parks include the following: • Business/Administrative Services • Speculative Office Park Table 7 identifies preferred characteristics for each of these subcategories, based on Business Oregon's Industrial Development Competitiveness Matrix included in Appendix A. In general terms, the requirements for a speculative development are stricter than for a known user since the developer of a speculative project needs to ensure that the site can accommodate a variety of users with varying demands. 16 Exhibit B M . TABLE 7: OFFICE PARK PREFERRECHARACTERISTICS Business/ Speculative Office Administrative park Services Competitive site 5 - 15+ acreage Competitive 0- 12% 0-7% maximum slope Minimum water 4" 6" 8" 10" service diameter Minimum sanitary sewer 6" -8" 8" - 10" service diameter Preferred natural gas service 2" 4" diameter Minimum electrical service 0.5 MW 0.5-1 MW demand (megawatts) Fiber optic Required Required communications Source:Mackenzie, Business Oregon Industrial Development Competitive Matrix Office Park Suitability Assessment ■ There are few contiguous parcels under common ownership,which could hamper the opportunity for developers to assemble multiple smaller parcels into larger development sites. ■ There are a handful parcels in commercially or Industrial Park (I-P) zoned areas which have acreage between 5 and 15 acres. Most of these parcels have adequate access to suitable water and sewer connections while not exceeding a maximum 10%slope. Industrial Industrial Preferred Site Characteristics The following industrial subcategories are representative of user types which may be attracted to the City of Tigard given its location in the Metro region: • Heavy Industrial/Manufacturing • Food Processing • Advanced Manufacturing and Assembly • General Manufacturing • Industrial Business Park and Research & Development Campus • Local Warehouse/Distribution Table 8 identifies preferred characteristics for each of these subcategories, based on Business Oregon's Industrial Development Competitiveness Matrix included in Appendix A. 17 Exhibit B M . -= TABL DUSTRI EFERRED SI CTERISTI Industrial eavy Food Advanced Genera. Business Local Facto ndustrial Manufacturing Park and Warehouse/ Manufacturing Processing and Assembly Manufacturing R&D Distribution Campus Competitive site 10- 100+ 5 -25+ 20- 100+ 10-25+ acreage Competitive 5% 5% o a o 0 maximum slope 0- 0- 0-7/0 0-5/ 0-7/0 0-5/0 Railroad Access Preferred Preferred Not Required Preferred Preferred Preferred Minimum water 8" - 12" 12"-16" 8" - 12" 6" - 10" 8" - 12" 4" -6" service diameter Minimum sanitary sewer 6" -8" 10"-12" 10"-12" 6" -8" 10"-12" 4" service diameter Preferred natural gas service 4" -6" 4" 6" 4" 6" 2" diameter Minimum electrical service 2 MW 2-6 MW 1 MW 0.5 MW 0.5 MW 1 MW demand (megawatts) Fiber optic Preferred Preferred Required Preferred Required Preferred communications Source:Mackenzie, Business Oregon Industrial Development Competitive Matrix Industrial Suitability Assessment • Some of the buildable industrial land has slopes between 10 and 25%,which could limit the types of development that occur on those sites(e.g.,these sites could accommodate a multi-story office building but not typical industrial users that need large, flat sites for single-level floor plates). • Water, sanitary sewer, and storm drainage pipes generally appear adequate for additional industrial development(note that there may be a need for system-wide improvements identified in utility master plans, but analysis of those plans is beyond the scope of this project). • In the industrial zones (I-P, I-L, and I-H) there are no sites exceeding 10 acres, but there are four sites between five and ten acres which is the lower end of competitive acreage for Food Processing,Advanced Manufacturing and Assembly,and General Manufacturing as noted in Table 8. Site Suitability Observations While the above analysis compares Tigard's buildable employment lands to preferred site characteristics for retail, office park, and industrial uses, Mackenzie has also performed a more qualitative assessment of allowable uses and standards specified in the Community Development Code. Commentary from this evaluation is outlined below. 18 Exhibit B ■ Commercial Based on the range of allowable commercial use categories, the C-G and MU-CBD zones would be most attractive to commercial developers, while C-N, C-C, MUR-1, and MUR-2 would be least attractive to traditional commercial developers(though MUR-1 and MUR-2 would retain some attractiveness for mixed use developers).The other commercial zones (C-P, MUE, MUC-1, MUC, MUE-1, MUE-2,TMU) are roughly equivalent in the number of uses they allow, and fall within the middle of the range.' Industrial The I-H zone is the most permissive for industrial uses, while the I-P zone is the most restrictive. As a result, the I-H zone may be the most attractive to speculative industrial developers, while the I-P zone would be the least attractive, particularly due to its prohibition on General Industrial and Warehouse/Freight Movement uses. By contrast,for industrial users that may not wish to be located near heavy industrial uses, then the I-P and I-L zones may be more attractive. The I-P zone would also be attractive to commercial users since it allows office, entertainment, and some retail uses. Developer Comments The following comments represent feedback typical of commercial and industrial clients as provided to Mackenzie in the course of work throughout the region. ■ Parking standards Developers would prefer more flexibility on setting parking ratios based on their understanding of market dynamics, rather than tied to strict standards detailed in the Community Development Code.Some users may wish to provide fewer spaces than the minimum allowable ratio and other users may wish to provide more spaces than the maximum allowable ratio. While the maximum ratios have been established pursuant to Metro's Regional Transportation Functional Plan, they have the side effect of making sites within Metro boundaries less attractive to some users compared to sites outside Metro. ■ Minimum landscape percentage Metro area jurisdictions typically specify minimum landscape areas of 15% of the site for commercial and industrial zones. Tigard largely aligns with that trend, with a few exceptions, namely the I-P zone which requires 25%landscaping(with the option for 20%if certain conditions are met) and the MUE, MUE-2, MUR-1, and MUR-2 zones which require 20% landscaping.'Some developers may choose to locate elsewhere rather than purchase and develop sites requiring over 15% landscaping. ■ Urban forestry and canopy requirements Tigard's urban forestry standards demonstrate a level of commitment to providing and maintaining the urban forest, as recognized by the Arbor Day Foundation for 20 years with the designation of Tigard as a Tree City USA community. However, as a result of stricter canopy standards (e.g., 30% parking lot coverage, 33% site coverage for most employment zones, and 4 Given the size of the community, having thirteen separate commercial zones may be more than needed and would certainly complicate site selectors' ability to narrow in on specific zones to target for development. 5 For the purposes of discussion,this report does not detail those plan districts which may allow lower landscape percentages. 19 Exhibit B ■ 25% site coverage for MU-CBD, MUC-1, I-L, and I-H zones) some industrial developers may avoid Tigard sites due to concerns about the cost of installing trees or concerns that the required tree canopy will interfere with vehicle movement (especially for large trucks). Sites Most Likely to Advance the Economic Development Objectives Finally, in general terms, the types of sites most likely to advance the study's Economic Development Objectives are those that fall within several general categories: ■ Sites with flexible development standards with respect to allowable uses, parking ratios, and landscape minimum area; ■ Sites located in areas with fully-improved transportation facilities and public utilities that do not require significant investments by the developer; ■ Sites with proximity to transit and existing public amenities that can draw employees; or ■ Sites within reasonable distance of housing to increase transportation options for employees. Furthermore, to the extent that the City can provide incentives rather than additional development regulations,those approaches are more likely to be well-received by developers and job creators. 20 Exhibit B APPENDIX A BUSINESS OREGON INDUSTRIAL DEVELOPMENT COMPETITIVENESS MATRIX Source: Mackenzie, Business Oregon Exhibit B STATE OF OREGON - Infrastructure Finance Authority iiie n Industrial Development Competitiveness Matrix Inrrastructurc IhI:inunce�'r_Auchaeixy Value-Added Manufacturing Production Manufacturing and Assembly Light/Flex Industrial Warehousing&Distribuiton Specialized PROFILE A B C D E F G I H J K L Industrial High-Tech/ Advanced Regional Local UVA Heavy Industrial General Business Park Business/ Rural Clean-Tech Food Processing Manufacturing Warehouse/ Warehouse/ Manufacturing/ Data Center CRITERIA /Manufacturing Manufacturing &Assembly Manufacturing and R&D Admin Services Distribution Distribution Research Industrial Campus 1 GENERAL REQUIREMENTS Use is permitted outright,located in UGB or equivalent and outside flood plain;and site(NCDA)does not contain contaminants,wetlands,protected species, or cultural resources or has mitigation plan(s)that can be implemented in 180 days or less. PHYSICAL SITE 2 TOTAL SITE SIZE** Competitive 10-100+ 5-100+ 5-25+ 5-25+ 5-15+ 20-100+ 5-15+ 20-100+ 10.25+ 10.25+ 10.25+ 5-25+ Acreage* 3 COMPETITIVE SLOPE: Maximum Slope 0 to 5% 0 to 5% 0 to 5% Oto7% 0 to 5% 0 to 7% 0 to 12% 0 to 5% 0 to 5% 0 to 7% 0 to 7% Otos% TRANSPORTATION 1 Average Daily Trips 40 to 60 40 to 60 50 to 60 40 to 60 40 to 50 60 to 150 170 to 180 40 to 80 40 to 80 40 to 80 20 to 30 40 to 50 5 TRIP GENERATION: per Acre (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) (ADT/acre) MILES TO INTERSTATE w/in 5 w/in 5 6 OR OTHER PRINCIPAL Miles w/in 10 w/in 10 w/in 30 w/in 15 w/in 20 N/A N/A (only interstate or(only interstate or N/A w/in 30 N/A ARTERIAL: equivalent) equivalent) 7 RAILROAD ACCESS: Dependency Preferred Preferred Preferred Not Required Preferred Preferred Not Required Preferred Preferred Not Required Avoid N/A PROXIMITY TO MARINE 8 PORT: Dependency Preferred Preferred Preferred Not Required Preferred Preferred Not Required Preferred Preferred Not Required Not Required N/A 9 PROXIMITY TO Dependency Preferred Competitive Preferred Competitive Preferred Required Preferred Preferred Preferred Preferred Competitive N/A REGIONAL COMMERCIAL AIRPORT: Distance(Miles) w/in 60 w/in 60 w/in 60 w/in 30 w/in 60 w/in 30 w/in 60 w/in 60 w/in 60 w/in 30 w/in 60 N/A 10 PROXIMITY TO Dependency Preferred Competitive Preferred Competitive Preferred Competitive Preferred Preferred Preferred Competitive Preferred N/A INTERNATIONAL AIRPORT: Distance(Miles) w/in 300 w/in 300 w/in 300 w/in 100 w/in 300 w/in 100 w/in 300 w/in 300 w/in 300 w/in 100 w/in 300 N/A UTILITIES 11 WATER: Min. Line Size 8„-12" 1r-16" 12"-16" 8"-12" 6"-30" 8"-12" 4"-6" 4"-8" 4"-6" 4"-8" 16" (Inches/Dmtr) 6" Min.Fire Line Size 10"-12" 12"-18" 10"-12" 10"-12" 8"-30" 8"-12" 6"-10" 10"-12" 6"-8" 6"-10" 10"-12" (or alternate (Inches/Dmtr) source) High Pressure Preferred Required Required Preferred Not Required Preferred Not Required Not Required Not Required Not Required Required Not Required Water Dependency F 0 Gallons per Day 1per 1600 5200 3150 2700 1850 2450 1600 500 500 1600 (G Ionow s per 1200 Acre) (GPD/Acre) (GPD/Acre) (GPO/Acre) (GPD/Acre) (GPD/Acre) (GPO/Acre) (GPD/Acre) (GPO/Acre) (GPO/Acre) (GPD/Acre) MWh)t (GPD/Acre) Min.Service Line 12 SEWER: Size(Inches/Dmtr) 12"-18" 10"-12" 10"-12" 6"-8" 10"-12" 6"-8" 4" 4" 6" 8"-10" (or on-site source) Flow 1500 4700 2600 2500 1700 2000 1600 500 500 1300 1000 1000 (Gallons per Day (GPD/Acre) (GPD/Acre) (GPO/Acre) (GPO/Acre) (GPD/Acre) (GPD/Acre) (GPO/Acre) (GPO/Acre) (GPD/Acre) (GPD/Acre) (GPD/Acre)S (GPO/Acre) per Acre) Preferred Min. 13 NATURAL GAS: Service Line Size 4"-6" 6" 4" 6" 4" 6" 2" 2" 2" 2" 4" N/A (Inches/Dmtr) On Site Competitive Competitive Preferred Competitive Competitive Competitive Preferred Preferred Preferred Preferred Preferred Preferred Minimum Service 14 ELECTRICITY: 2 MW 4-6 MW 2-6 MW 1MW 0.5 MW 0.5 MW 0.5 MW 1MW 1 MW 0.5 MW 5-25 MW 1 MW Demand Close Proximity to Required,could Competitive Competitive Not Required Competitive Preferred Competitive Preferred Not Required Not Required Not Required Not Required Substation be on site Redundancy Required Preferred Not Required Required Not Required Competitive Required Not Required Not Required Not Required Required Not Required Dependency Major 15 TELECOMMUNICATIONS: Communications Preferred Required Preferred Required Required Required Required Preferred Preferred Required Required Preferred Dependency Route Diversity DependencyNot Required Required Not Required Required Not Required Preferred Required Not Required Not Required Not Required Required Not Required Fiber Optic Preferred Required Preferred Required Preferred Required Required Preferred Preferred Required Required Not Required Dependency Surrounding environment of Transportation Larger sites may Adequate distance great concern routing and be needed.The from sensitive (vibration,noise, proximity to/from 25 acre site Acreage allotment air quality,etc.). major highways is requirement land uses includes May require high High diversity of Relatively higher Increased setbacks Adequate distance crucial. represents the (residential,parks, expansion space volume/supply of may be required. from sensitive facilities within parking ratios may Expansion options Must be located more typical site. Located in more large retail water and sanitary business parks. be necessary. (often an Onsite utility land uses required. Transportation witihn or near FAA- Power delivery, remote locations centers) sewer treatment. R&D facilities Will be very exercisable service areas. (residential,parks) Truck staging infrastructure regulated UAV water supply,and in the state. necessary. Often needs benefit from close sensitive to labor option). Avoid sites close necessary. requirements such as roads and testing sites. security are Usually without SPECIAL High throughput substantial proximity to force and the 16 Very high utility to wastewater Moderate demand mandatory. bridges to/from Moderate utility critical. direct access CONSIDERATIONS: of materials. storage/yard higher education location of other demands in one or treatment plants, for water and Minimal route major highways is demands. Surrounding (within 50 miles) Large yard spaces space for input facilities. similar centers in more areas landfills,sewage sewer. obstructions most competitive Low reliance on environment of Interstate or and/or buffering storage. Moderate demand the region. required. common. Onsite water pre- lagoons,and Higher demand for on all High reliance on between the site factor. transportation (vibration,air City of more than Sensitive to similar land uses. electricity,gas, and interstate infrastructure. quality,etc.)is 50,000 people. Often treatment needed infrastructure telecom transportation vibration from in many instances. Lower demands and telecom. systems. infrastructure. highway such as crucial. nearby uses. for water and rail crossings, May require high related requiring sewer treatment drawbridges, volume/supply of marine/rail links. than Production school zones,or water and sanitary High-Tech similar obstacles. sewer treatment. Manufacturing. Mackenzie;Business Oregon Terms: More Critical 'Required'factors are seen as mandatory in a vast majority of cases and have become industry standards T 'Competitive'significantly increases marketability and is highly recommended by Business Oregon.May also be linked to financing in order to enhance the potential reuse of the asset in case of default. Less Critical 'Preferred'increases the feasibility of the subject property and its future reuse.Other factors may,however,prove more critical. *Competitive Acreage:Acreage that would meet the site selection requirements of the majority of industries in this sector. **Total Site:Building footprint,including buffers,setbacks,parking,mitigation,and expansion space t Data Center Water Requirements:Water requirement is reported as gallons per MWh to more closely align with the Data Center industry standard reporting of Water Usage Effectiveness(WUE). S Data Center Sewer Requirements:Sewer requirement is reported as 200%of the domestic usage at the Data Center facility. Water and sewer requirements for Data Centers are highly variable based on new technologies and should be reviewed on a case-by-case basis for specific development requirements. MACKENZI E . DESIGN DRIVEN I CLIENT FOCUSED Current Revision Date: 7/22/2015 Exhibit B B ®�®9;■ AA I -4 TIGARD MADE Mountain,Advance&Diversity Employment MEMORANDUM Tigard Economic Opportunities Analysis Land Use Feasibility Analysis Date: 4/18/2022 To: Hope Pollard,City of Tigard From: Jerry Johnson & Brendan Buckley,Johnson Economics C C: Lloyd Purdy,City of Tigard TIGARD MADE: PHASE II RECOMMENDATIONS CONTENTS I. Introduction 1 II. Incentive Program 2 A. Development Incentives 2 Findings on Proposed Incentives 5 Recommended Incentives 6 B. Community Benefits 7 III. Standards for secondary uses and mixed uses 10 IV. Standards for Warehouse and Distribution 12 V. Suggestions on Zone Boundary Changes 13 I. INTRODUCTION As part of the Tigard MADE project,the City is considering a range of potential revisions to the development code and zoning map to reflect the findings of the analysis and a new vision for how the City's main employment zones will function. Phase II of this project has involved analysis of proposed code language and standards, as well as development feasibility analysis to determine how these potential changes might impact future development in these zones. This memo is intended to address several specific remaining topic areas that will assist the City in finalizing its proposed code standards. This memo offers some recommendations arising from the Phase II analysis on these topics,which include: • Development incentive program and structure Tigard MADE—Phase II Recommendations 1 Exhibit B B �I ®®■ AA I =VkikEik TIGARD MADE Maintain,Advance E,Diversity Employment • Standards for secondary uses and mixed uses • Location and standards for warehouse and distribution • Suggested zone boundary changes II. INCENTIVE PROGRAM Draft code language for a program has been drafted by the City that lays out a number of incentives for development,that they can earn in return for providing a wide variety of community benefits with their project. In general,the incentives are designed to offer the developer greater flexibility in how they design their project, by adjusting the normal code standards to allow greater density, height, less parking,and other enticements.To earn these incentives,the developer would choose from a number of community benefits to provide,each with a point value that allows the developer to earn a certain level of incentive,from low to high.The following discussion addresses the proposed development incentives,and then the public benefits. A. Development Incentives The following table presents the draft code language for incentives in a newly designed section 18.460.040 of the Tigard development code.This language is preliminary and in very rough draft but is an indicator of the types of incentive structure being considered. This section discusses these preliminary options and provides feedback on how effective they are likely to be,given the analysis of this project. The proposed incentives take a unique approach towards incentives in two main ways: 1) The code sets up a set of development standards that might be considered tight or restrictive to what the developer might want to propose as the most profitable use and building form they would like to build. Then the code proposes an incentive structure that provides flexibility to build a product more reflective of the market, in return for providing some community benefits. 2) The community benefits provided by the development project are given a score, which are applied to different levels of incentive. The following table summarizes the draft incentive options and provides notes. This is followed by additional discussion and recommendations for a revised incentive structure. Tigard MADE—Phase II Recommendations 2 Exhibit B e � ➢i y TIGARD MADE Maintain,Advance&Diversity Employment Code Chapter 18.060.040 Strength of Language Incentive Notes/Recommendation Tier 1: Low Threshold (5 points) 1. A reduction of the minimum street side setback by five feet. Low Setback flexibility is not expected to be a strong incentive for developers in general. However, in cases where it solves a specific site planning issue,the trade-off with a lower-cost community benefit should be worth it. a. If lot coverage also needs to be increased,that will require additional points. A reduction in setback would apply to industrial use,as commercial has no minimum in CG or MUE zone. Increase could apply to either. 2. An increase in the maximum street side setback by five feet. Low a. Must provide a landscaping-or pedestrian-focused incentive. 3. A reduction in upper-story floor plate coverage by 15 percent. No Once a second floor plate is included,there will be little or no a. May be repeated only up to 50 percent for one floor. incentive to reduce it to less than the ground floor, as this will not save development cost and may well increase it. Eliminating the b. Additional floors reduced by up to 50 percent require additional second floor altogether is a much stronger incentive. Recommend points. removing this incentive. Tier 2: Med Threshold(10 points) 1. An increase in the maximum allowed height by 1 story. High A change in height(measured in stories) is expected to be a strong (eventually) incentive. In the current market, analysis points to little incentive to *increase*the number of stories, however in some locations over a planning period of 20-years,this should become an incentive as development gets denser. Recommend keeping this as a forward- looking incentive. 2. A decrease in the minimum required height by 1 story. High A*decrease* in story height(from two stories where required,to a single story) is expected to be a strong incentive currently for many commercial uses(see further discussion after this table). Tigard MADE—Phase II Recommendations 3 Exhibit B e � TIGARD MADE Maunlain,Advance&Diversity Employment This is expected to be a very weak incentive.A 5%change in glazing 3. A decrease in the required window coverage of 5 percent. will not be seen as significant enough to induce community benefits. Allowed only above the first story. No Recommend removing this incentive or considering a more significant reduction of at least 10%. A reduction in parking requirements can be a strong incentive when the required minimum is higher than what the market would typically provide.This is often the case for multi-family development,where developers can often achieve greater density in units by reducing their parking ratio. They will still resist reducing to a level that makes their units unmarketable. Commercial users,such 4. A reduction in required parking by 5 percent. Med as office, and especially retail,want ample parking for their users, and reduction is a weak incentive for them, unless the minimum required is very high,which isn't the case in Tigard's employment zones.A dual structure that allows reduction for residential/mixed use but increase for commercial might be most effective. Furthermore, an increase from 5%alteration to 10%will likely be more effective (see further discussion after this table). a. Must provide an alternative-transportation-focused incentive. Tier 3: High Threshold(15 points) For ped and bike improvements This might be a strong incentive depending on the restricted use. 1. Expansion beyond the allowed square footage of a use listed as The danger is incentivizing uses that the City actually does want to Restricted in Table 18.X. Med limit in those zones. Unclear why this is in return for ped and bike 2. Allowance of a use listed as Restricted in Table 18.X,which is improvements. Is there a nexus? How to prioritize the types of not allowed unless a benefit is provided. High community benefits to emphasize is ultimately a policy choice. For eco-roof improvement 1. An increase in lot coverage by 5 percent(allowed only with the Med This is a good incentive with a strong nexus between the community provision of an eco-roof). benefit and incentive.As discussed in the following section the eco- a. If setback also needs to be adjusted,that will require additional roof is a high-cost addition,so the incentive needs to be points. commensurately high. b. Lot coverage can only be increased with the provision of an eco-roof. The increase in lot coverage could be a strong incentive,except that c. For every percentage the lot coverage is expanded beyond the Tigard currently has very generous lot coverage standards in its gross square footage,the associated square footage must translate employment zones,typically greater than 80%. Outside of the Tigard MADE—Phase II Recommendations 4 Exhibit B e � TIGARD MADE Mainlair,Advance&Diversity Employment to eco-roof(i.e. 7 percent increase in lot coverage on a one-acre lot: central urban core,there will be little incentive to exceed this lot reduces impermeable ground surface by 3049.2 square feet. coverage,even with multi-story buildings. To create an incentive Therefore,3049.2 square feet of eco-roof must be provided). out of increased site coverage,the current standards in employment i. OR should it be lot coverage can be increased to 100%only with zones would likely have to be reduced dramatically. the provision of an eco-roof. Findings on Proposed Incentives • The Phase II feasibility analysis found that currently the strongest incentive for employment uses (retail,office, industrial)will be to allow for building of single-story structures in most cases/locations in the employment zones. There will likely be many multi-story structures as well, particularly professional office space as examples already exist through the Tigard Triangle and south of Triangle areas. However, retail and many types of industrial uses are almost exclusively single story. Multi-story retail is very rare outside of intentionally designed mall atmosphere,and upper floor retail can struggle even there due to lower foot-traffic and visibility. Many industrial uses are single-story due to the functioning and operations of the space; manufacturing products,storage,distribution,and other functions work best on a single floorplate for mobility and order of operations. • Multi-family residential uses would be the "highest and best use" in most of the study area,where they are allowed,according to the feasibility analysis. This land use and development type would provide the greatest economic return and support the highest land value(i.e. residential developers would be willing to pay more for available sites then commercial or industrial developers.)Therefore,the feasibility analysis estimates that,all else being equal, residential use would "outcompete"other uses in the current market conditions. (For this reason, it is recommended that residential be limited to secondary uses,as discussed more in a following section.) • The greatest incentives for residential will be different from most employment uses in the current market environment. The ability to build over two stories will be an incentive for residential development, as well as increasing allowed FAR,and reducing parking requirements.This will allow more units to be built in a given project.Currently,employment zones have no maximum FAR, and generous site coverage,so increasing these will not be an impactful incentive. Tigard MADE—Phase II Recommendations 5 Exhibit B B �I ®®■ AA I =VkikEik TIGARD MADE &taunlain,Advance&Diversity Employment Recommended Incentives Based on the analysis conducted over the course of this project,the most effective incentives for employment uses will be those connected to providing flexibility in number of stories, and maximum parking. Residential,as a secondary use in mixed use buildings,would benefit from additional stories, and reduced parking. An additional powerful incentive would be SDC waivers for employment uses. Based on the feasibility analysis,a reduction of the City's portion of SDC's can reduce overall construction costs by 2.5%to 5%. This reduction in costs increases the economic performance of the building,and makes the employment uses more competitive with residential uses in the employment zones. We recommend incentives with the following basic structure,though parameters are flexible: Tier 1: Low-Threshold Incentive(5 points) [Our analysis is that the reduction of setbacks will not be a particularly strong incentive, though for some particular site design challenges it may utilized. Our analysis does not point to any mild incentives that would be well suited for the low threshold, and few number of points. The incentives identified are likely to be commensurate with more points and greater community benefit. This section has been left here because it may provide an additional option that is utilized occasionally.] For every five points,the applicant may request... 1. A reduction of the minimum street side setback by five feet. a. If lot coverage also needs to be increased,that will require additional points. 2. An increase in the maximum street side setback by five feet. a. Must provide a landscaping-or pedestrian-focused incentive. 3. A reduction in upper story floor plate coverage by 15 percent. a. May be repeated only up to 50 percent for one floor. b. Additional floors reduced by up to 50 percent require additional points. Tier 2:Medium-Threshold Incentive(20 points) [We recommend medium threshold incentives tied to number of stories and parking requirements. We recommend increasing the point total needed to qualify for these incentives, as they have the potential to substantially improve the feasibility or profitability of a development. We recommend keeping the 2-story minimum but allowing a maximum of three stories. This will allow greater density in office and mixed-use buildings. As noted, the reduction in stories and increase in parking are likely to appeal to employment users, while an increase in stories and reduction in parking is likely to appeal to development that includes residential.] For every ten points,the applicant may request... 1. An increase in the maximum allowed height by 1 story(measured by stories). 2. A decrease in the minimum required height by 1 story. 3. A decrclase in the required window coverage by 5 percent.Allowed only above the first story. 4. An increase in the maximum allowed parking by 10 percent. a. Must provide an alternative-transportation-focused incentive. Tigard MADE—Phase II Recommendations 6 Exhibit B B ®®■ AA I�I =VkikEik TIGARD MADE Maintain,Advance&Diversity Employment 5. A reduction in required parking by 10 percent. a. Must provide an alternative-transportation-focused incentive. Tier 3:High-Threshold Incentive(30 points) [We recommend using SDC waivers as a high-threshold incentive. This would be for the City portion of SDC's (transportation,parks, water), but for a large commercial development this can be a substantial incentive. We recommend setting an upward bound for waiver amount of$300,000 so that the incentive doesn't far outstrip the cost of providing the community benefit. We also include some recommendations on what types of benefits might qualify for this incentive, but City will discuss.] 1. A reduction of City portion of System Development Charges, up to a maximum of$300,000. a. Project must include a solar roof,eco-roof,energy co-generation, LEED certification,or vertical mixed uses of at least 3 stories. b. Project must also provide at least one alternative-transportation-focused incentive and one pedestrian-focused incentive to offset waived transportation and parks SDCs. B. Community Benefits The following table presents the list of community benefits included in the draft code with the draft point system for earning incentives. The list has been resorted by estimated cost to provide those benefits,and the point system has been adjusted to reflect those costs such that the community benefits that are least costly for the developer to provide are awarded the fewest points, and the most expensive benefits are awarded the most points. The cost of benefits is estimated as rough order of magnitude,and not based on detailed costing of each. Definitions of these benefits are provided in the draft code language which has been reviewed and edited in a separate document. This table simply presents a reordering of the benefits,and edited point system, meant to better correspond with the recommended incentive structure presented above. • The community benefits are grouped into several categories reflecting community priorities.Other than ranking by the anticipated costs,the emphasis placed on these categories in their own right,and relative to each other is a public policy decision. • The number of options offered will provide flexibility to developers which will be appreciated. Experience with other incentive programs is that over time, applicants may coalesce around a few of these options that provide the greatest return for lowest additional cost.This project has made an attempt to identify scale of cost beforehand, but the program should be monitored over time to track which options developers are choosing, if they are focused on a few to the inclusion of others, and whether or not that is meeting public objectives. Tigard MADE—Phase II Recommendations 7 Exhibit B A ,11 q nil,: ".11iEl].:::; TIGARD MADE Maintain,Advance&Diversify Employment Draft Code Chapter 18.460.050 Community Benefits: Points Awarded Original Sorted Points Points Order Order Category Developer Supplied Benefit Est.Cost (Draft) (Recommended) (Draft) 1 1 1)Sustainability 5%EV parking/charging spaces $ low 5 5 2 2 1)Sustainability 3%SEV parking/charging spaces $ low 5 5 3 3 1)Sustainability Shared parking agreement resulting in fewer physical parking spaces $ low 5 5 4 7 1)Sustainability Existing tree protection $ low 10 5 5 8 1)Sustainability Enhanced site tree canopy coverage $ low 10 5 6 9 1)Sustainability Enhanced parking lot tree canopy coverage $ low 20 5 7 1.5 1)Sustainability 5%EV parking/charging spaces+1 shared EV vehicle $$ med 10 10 8 2.5 1)Sustainability 3%SEV parking/charging spaces+1 shared SEV vehicle $$ med 10 10 9 5 1)Sustainability Solar-covered parking $$$ high 5 15 10 4 1)Sustainability Solar roof $$$$ highest 5 30 11 6 1)Sustainability Eco-roof $$$$ highest 10 30 12 10 2)Green Building Energy Trust:Early Design Assistance Meeting $ low 10 5 13 11 2)Green Building Energy Trust:Energy Use Intensity(EUI)number and/or zero tool $$$ high 30 20 14 12 2)Green Building LEED Gold or equivalent $$$ high 25 20 15 13 2)Green Building LEED Platinum or equivalent $$$$ highest 45 30 16 14 3)Resilience Air conditioning in all residential units $$$ high 10 10 17 15 3)Resilience Co-generation and storage of renewable power $$$$ highest 15 30 18 16 4)Enhanced Ped.Experience %1 Contribution to Public art Fund $ low 5 5 19 17 4)Enhanced Ped. Experience Benches $ low 0.5 5 20 21 4)Enhanced Ped.Experience Fill in trail gaps $ low 15 10 21 22 4)Enhanced Ped.Experience Open space $ 1 low 15 10 22 18 4)Enhanced Ped.Experience Enhanced transit stops $$ med 5 10 23 19 4)Enhanced Ped. Experience Fill in sidewalk gaps $$ med 15 15 24 20 4)Enhanced Ped.Experience Fill in bike lane gaps $$ med 15 15 25 23 5)Affordability Mixed-income housing $$ med 15 10 26 25 6)Emp.&Community Mobility hub $$ med 15 15 Amenities Tigard MADE—Phase II Recommendations 8 Exhibit B . . B� TA L ® TIGARD MADE Malnlain,Advance&Diversity Employment 27 24 6)Emp.&Community Community Services (?) ??? 10 Amenities 28 28 7)Density and Mixed Use Residential above ground floor in C-G zone $$ med 10 20 29 29 7)Density and Mixed Use Redevelopment of existing parking lots $$ med 10 10 30 30 7)Density and Mixed Use Building in X part of the City(?) $$ ??? 10 31 27 7)Density and Mixed Use Vertical vs horizontal density (?) $$$ high 10 32 31 7)Density and Mixed Use Building height in X part of the City $$$ high 10 33 26 7)Density and Mixed Use Structured parking $$$$ highest 5 50 Tigard MADE—Phase II Recommendations 9 Exhibit B ryBA o®■ tlo ofdMI - rpt.: q eI� •© TIGARD MADE Meallain.dance&Diversify Employment III. STANDARDS FOR SECONDARY USES AND MIXED USES The draft code language (revised Chapter 18.120,and 18.130)allows for some secondary uses in the employment zones, including secondary residential use in the CG and MUE zone,and secondary residential or commercial sales use in the light industrial (I-L)zone. This project has considered how to define secondary uses and what standards to apply based on code review,site- needs and feasibility analysis.A key issue identified in the Phase I Tigard EOA is the dwindling supply of buildable employment land and need to use remaining sites wisely. The feasibility analysis found the following hierarchy of land use based on market returns to the developer: 1) Residential 2) Traditional retail 3) Office 4) Industrial In a hypothetical zone where each of these uses is allowed outright,and all else being equal,one would expect a residential development to be the top bidder for land over the other uses,and retail over office,etc. (This is based on current market conditions and is subject to changing future real estate cycles.) Therefore, in this situation, it makes sense to establish the primary uses in a zone and restrict other uses that are not envisioned as the primary use of the zone but may outcompete it if allowed outright. We recommend the following standards for secondary uses: Definitions Vertical Mixed-Use: A development containing two or more of the major categories of land use(Residential, Commercial Retail,Commercial Office, Industrial) located within the same building of at least two floors. Horizontal Mixed-Use: A development containing two or more of the major categories of land use(Residential, Commercial Retail,Commercial Office, Industrial) all located on the same tax lot(or assembled adjacent lots being developed concurrently as part of a single planned development). May take the form of multiple single-use buildings,attached or detached from each other, and may be combined with some vertical mixed use in the same development. Secondary Use:One or more of the major categories of land use(Residential, Commercial Retail,Commercial Office, Industrial)that is not the primary intended land use of the applicable zone.A secondary use may be conditionally permitted as part of a mixed-use development, if the development includes the primary intended land use of the zone, and the secondary use meets criteria specified in the code.A use identified as a secondary use may not be the sole use in a newly proposed development. CG and MUE zone 1. Residential uses a. CG: i. A single detached house is allowed where it is located on the same site with an allowed, restricted, or conditional use and is occupied exclusively by a caretaker or superintendent of the allowed or Tigard MADE—Phase II Recommendations 10 Exhibit B TIGARD MADE Maintain,Advance&Diversity Employment conditional use. ii. Other residential uses are only allowed on or above the second story of a development where the first story is completely occupied by an allowed or restricted commercial, industrial, or civic primary use. Ground floor non-living space that primarily serves the residential uses, such as entryway, lobby,elevator, or any other common or mechanical space dedicated to the residential uses may not exceed 500 s.f. in area or 10%of the ground floor space whichever is less. iii. Residential in the CG zone is allowed as a secondary use to an allowed or restricted commercial, industrial, or civic primary use as part of a horizontal mixed-use development. The primary use may be existing or developed concurrently with the secondary use. The total gross floor area of a secondary use in a horizontal mixed-use development, inclusive of any vertical mixed uses, is limited to 35%of the gross floor area of the total development. b. Applicants may apply for an adjustment to allow residential on the first floor if employment already exists and will remain on site.MUE: i. A single detached house is allowed where it is located on the same site with an allowed,restricted, or conditional use and is occupied exclusively by a caretaker or superintendent of the allowed or conditional use. H. Other residential uses are only allowed on or above the second story of a development where the first story is completely occupied by an allowed or restricted commercial, industrial, or civic primary use. Ground floor non-living space that primarily serves the residential uses, such as entryway, lobby,elevator,or any other common or mechanical space dedicated to the residential uses may not exceed 500 s.f. in area or 10%of the ground floor space whichever is less. iii. Residential in the MUE zone is allowed as a secondary use to an allowed or restricted commercial, industrial, or civic primary use as part of a horizontal mixed-use development.The primary use may be existing or developed concurrently with the secondary use. The total gross floor area of a secondary use in a horizontal mixed-use development, inclusive of any vertical mixed uses, is limited to 35%of the gross floor area of the total development. iv. Residential in the MUE zone is allowed only as a secondary use to an allowed or restricted commercial, industrial,or civic primary use. I-L zone 1. Residential: a. Residential is allowed only as a secondary use activity to an allowed or restricted industrial primary use as part of a vertical or horizontal mixed-use development.The primary use may be existing or developed concurrently with the secondary use. The total gross floor area of a residential secondary use in a mixed- use development is limited to 20%of the gross floor area of the total development. b. A single detached house is allowed where it is located on the same site with an allowed or restricted industrial use and is occupied exclusively by a caretaker or superintendent of the industrial use. c. Other residential uses arc only allowed on or above the second story of a development where the first story contains an allowed or restricted industrial use. d. Applicants may apply for an adjustment to allow residential on the first floor if employment alr ady exists and will remain on site. 2. Commercial Sales and Services a. Uses with drive-through services are prohibited. b. Commercial Sales and Services is allowed only as a secondary or accessory use to an allowed or restricted industrial use. c. The maximum allowed gross floor area for Commercial Sales and Services is 5,000 square feet per outlet. Additional outlets of Commercial Sales and Services may be authorized with the provision of community benefits totaling at least 30 points per Chapter 18.460, but the total area for all outlets shall not exceed Tigard MADE—Phase II Recommendations 11 Exhibit B B =Vkik I�I �9; Nli�.o -- p t gio o oIP.,=�© TIGARD MADE Mahntai,.Atluance&Diversify Employment 20,000 square feet within the same development project. d. The gross floor area for Commercial Sales and Services may not exceed 35%of the total gross floor area of the property. IV. STANDARDS FOR WAREHOUSE AND DISTRIBUTION The draft code language (revised Chapter 18.120,and 18.130) proposes changes to standards that are applied to warehouse and distribution uses in the commercial and industrial zones. Under current zoning,these uses are prohibited in commercial zones,and very restricted in the MUE zone. They are allowed in the I-L zone, and prohibited in the I-P zone. Trends in the real estate market have led to the increasing development of increasingly large distribution and fulfillment facilities for the largest e-commerce retailers and big-box stores. Recently built facilities are feature hundreds of thousands or over one million square feet and consume tens or hundreds of acres of land.The findings of this project point to very limited remaining land in the industrial zones, while the City's identified economic development objectives call for emphasis on manufacturing,flex,and creative space that provides job density and living wages. Because of this,the identified approach is to limit future development of distribution centers in the I-L and MUE zones,and instead allow them in the CG zone, limited to smaller facilities that serve a local need and growing"last mile"distribution sector, but will not accommodate the modern very large distribution facilities that Tigard no longer has the buildable sites to house near the major transportation corridors. To achieve these goals,we recommend the following standards for warehouse and distribution facilities: CG and MUE zone (18.120.030) 11. Warehouse/Freight/Distribution a. Warehouse/freight/distribution is allowed as an accessory use to an allowed or restricted commercial or industrial use.The gross floor area of the accessory use may not exceed 50%of the total gross floor area of the property,or 10,000 square feet,whichever is smaller. b. As a non-accessory use,Warehouse/freight/distribution may not exceed 20,000 square feet in size and is allowed only with the provision of community benefits totaling at least 30 points per Chapter 18.460. c. A request to expand this use beyond 20,000 square feet will be considered through a discretionary Type II Site Development Review and will require provision of an additional 30-points worth of community benefits for every additional 20,000 square feet. Industrial zones (18.130.030) 6. Warehouse/Freight/Distribution a. Warehouse/freight/distribution is allowed as an accessory use to an allowed or restricted commercial or industrial use.The gross floor area of the accessory use may not exceed 50%of the total gross floor area of the property, or 20,000 square feet,whichever is smaller. Tigard MADE—Phase II Recommendations 12 Exhibit B =VkikAA I�I TIGARD MADE Mountain,Advance&Diversity Employment V. SUGGESTIONS ON ZONE BOUNDARY CHANGES One goal of this project is to consolidate the number of commercial and industrial zones into a smaller number of more flexible zones. This includes consideration of where the new zones might be located,as some zones are retired. The City has produced a preliminary draft concept of how the zones might be simplified into a one main retail focused commercial zone(CG),two industrial zones(I-L and I-H), and one mixed employment zone(MUE)that would apply generally over most of the City. (The City also includes multiple special purpose zones in specific plan areas such as the Downtown and Triangle which will remain,and are outside the scope of this project.) In simplifying the zones, a number of other commercial and industrial zones would be consolidated into these newly revised zones. The draft zoning concept(see next page)does a few main things: • Maintains the CG zone along the retail-heavy Highway 99 corridor. • Applies the MUE zone to areas that are currently zoned for industrial, in particular the replaced I-P zone, but also smaller areas that are currently zoned I-L or I-H,or with commercial zoning. After reviewing the proposed draft zoning concept,the consulting team have few major recommendations. • The notion to simplify and rezone areas is sound and should ease with administration and simplify the code for developers and employers.This project has revealed no strong reason to avoid this approach. • The rezoning will likely have the effect of creating some non-conforming uses that no longer meet the standards of the new zone.As the rezoning plan is a long-term plan,the prospect of gradually transitioning from some existing land uses and development character to a new mix of uses and character may be desired,or at least an acceptable trade-off. • One approach to limit non-conforming uses would be to apply the new generalized zones to areas where the existing uses and character seem to match the intention of the new zone (e.g. applying the revised CG zone to retail commercial areas, the revised I-L zone to manufacturing and light industrial areas, and the MUE zone to areas of mixed office and industrial employment.)The division of the current I-P zone may be the biggest challenge in that regard. • Most of the area identified for rezoning, particularly to MUE,seems appropriate based on current uses and market considerations of location and adjacent uses. Exceptions are noted on the following map. • We recommend that most of the highway corridor remain under C-G zone as it is largely built out, and highway retail will remain the strongest use along this corridor, based on market preferences. • The two neighborhood centers in the western part of the city are proposed for MUE zoning. We recommend that they be considered for the CG zone instead. The CG zone already matches the shopping center at the corner of SW Barrows Road and SW Walnut Street. The parcel of employment land in River Terrace 1.0 was originally planned to be "commercial" and is currently zoned Community Commercial. Rezoning these areas to MUE may limit the size of commercial operations in these areas, including mid- sized grocery stores or other users that might be natural fit for these neighborhood-centric nodes. The map on the following page notes a few comments to consider on the draft zoning concept.These comments mostly address the types of considerations listed above. Tigard MADE—Phase II Recommendations 13 Exhibit B e TIGARD MADE Mountain,Advance&Diversity Employment Draft Zoning Concept with Comments f r These areas seem hwy commercial MUE in charaincter. Marea ay bemakes tough sense.to L-1Changing these to MUE will limit size change the character. Other new of retail to 25k under proposed this rules. This would limit modest , grocers or shopping centers. Would I II V4%,,, the new CG be more appropriate? r_Agill.• rpoe -Fr z-----------\*---; I r IV 41 1,klOOPPOill } ____\___/ _ _L . t__, ---)\--io., OP . 441k . _, #4-6„ ,,, I . is. I . Is :7_, )i I .7 <,,,c,„--i _ _ A. ' � MLIIIIIMMNI j-1 r Mt These areas(red)are largely big box retail in '`} MEI (7 • -t nature. If changed to ��I 7 ( I`,, MUE, is the thought _-'y ,---L they will transition I I - ji _ I iif These areas(orange) are largely light L-4, industrial in nature. They might be /i--------17 I good candidates for the more LI zone,to keep those fir' / uses conforming, and ensure future ' L' ll use is industrial. Illpir , � . Tigard MADE—Phase II Recommendations 14 Comprehensive Plan Text Amendments Exhibit C q •• • TIGARD City of Tigard Proposed Comprehensive Plan Amendments (CPA2024-00002) Tigard Comprehensive Plan Text Amendments City Council — April 23, 2024 Please contact Hope Pollard, Associate Planner, at 503-718-2435 or hopep@tigard-or.gov with questions or comments about the proposed code amendments or the code adoption process. Comprehensive Plan Text Amendments Exhibit C This page left intentionally blank. Comprehensive Plan Text Amendments Exhibit C [note—the following sections modify the existing Comprehensive Plan text of Goal 9 beginning with page 9-1. Text shown in strikcthrough is to be removed. Text shown in bold, italic, and underlined is to be added.] Economic activity is the lifeblood of any community: providing jobs, creating wealth, and generating tax revenue. Tigard's economy is intertwined with the economy of the region, the nation, and the world. GOAL 9: Economic Development "To provide adequate opportunities throughout the state for a variety of economic activities vital to the health,welfare, and prosperity of Oregon's citizens." Tigard's location at the crossroads of several transportation routes has proven to be a major advantage. Other advantages include the relatively high educational attainment level of its citizens and its proximity to the high technology centers in Washington County and major educational institutions such as Portland State University and Portland Community College. A recent study found that Tigard was a "hub for . granted to individuals and small business. Tigard residents envision a future economy that builds on these strengths and with varying encourages more economic mobility for those with --- --'-- `�o al bac grional backgrounds attainment levels, Tigard shall have a strong and resilient local economy with a diverse portfolio of economic activity: retail, professional service, and industrial jobs. The local economy shall provide for goods and services for local resident and business needs but also have the goal of promoting industries that typically have a higher density of on-site career pathway jobs,provide community or connectivity benefits to Tigard, or advance climate resilience. It should be noted that many jobs in manufacturing, construction trades, and other blue- collar fields may offer better wages and benefits than administrative office employment.Jobs in industry often offer good wages to workers at a range of education levels and backgrounds. Technical training through educational programs or on-the-job training allows industrial workers to build valuable capabilities in operating equipment and running processes. _expanding the "traded sector." This sector sells goods and services outside the region to the broader state, national, and international markets and/or produces goods and services that normally would have to be imported to the community. These businesses bring income into the community or region and keep local income from going elsewhere. Tigard's future economy may include activities whose characteristics are not foreseeable at this time such as live-work arrangements; light manufacturing combined with research and development; creative crafts and arts such as film, advertising, communications, etc. Therefore, the City's land use and other regulatory Comprehensive Plan Text Amendments Exhibit C practices shall be flexible and adaptive so as not to preclude desirable economic development opportunities. Tigard is sometimes perceived as a bedroom community for nearby cities. This is not accurate. Tigard businesses provided 41,422 full and part time jobs in 2008 (State of Oregon Employment Department). This number is greater than the number of Tigard residents over the age of 16 in the workforce: 25,537 (O.E.D, 2006). Seventy percent of Tigard residents work outside the City, so thousands of workers from throughout the region regularly commute to Tigard jobs (2000 Census). According to the 2024 Economic Opportunities Analysis (discussed further below), in 2018 the Census estimated there were roughly 45,400 covered employment jobs located in Tigard. Of these, an estimated 3,800 or 8.4 percent are held by local residents, while over 41,600 employees commute into the city from elsewhere. Similarly, of the estimated 28,600 employed Tigard residents, 87percent of them commute elsewhere to their employment. This indicates that Tigard is a net positive employment market that attracts workforce from around the region.The City shall seek to expand the opportunities for residents to work closer to where they live. This will require promoting a mix of high quality housing opportunities for households with varying incomes. Quality of life factors shall be promoted to attract economic investments and a skilled work force. Among these factors are an attractive and well-maintained community; high levels of public safety; accessible and responsive local government; availability of a variety of housing, good public schools; access to nature, high quality parks, leisure and recreation activities, safe and convenient multimodal transportation opportunities, and smoothly running essential infrastructure. State and Regional Policies: The Department of Land Conservation and Development (DLCD) and Metro have developed policies that address economic opportunities,which are based on Statewide Planning Goal 9. A major emphasis of the Goal 9 policies is to preserve and protect land for industrial and employment uses. Metro has sought to implement this on a regional basis. Title 4 of the Metro Urban Growth Management Functional Plan identifies Industrial and Other Employment Areas that are important to the region. Goal 9 also requires cities to complete an Economic Opportunities Analysis as part of State Periodic Review. The Tigard 2011 Economic Opportunities Analysis (EOA) was adopted in May 2011. The EOA analysis showed that the land efficient need strategy is appropriate to supply adequate vacant land to accommodate projected employment and industrial uses over the next 20 years. This required no rezoning of property at the time. The Tigard 2024 EOA analysis showed that the land efficient need strategy is still the appropriate approach to accommodating job growth in the city. However, the city now has insufficient land supply to accommodate job growth. The 2024 EOA recommends rezoning to encourage Comprehensive Plan Text Amendments Exhibit C more job-dense industries with a focus on protecting land suitable for industrial and manufacturing uses. The land efficient need strategy is based on findings that Tigard has a limited supply of vacant industrial and employment lands; the City is currently limited in its ability to expand its boundaries to increase its industrial/employment land base; the City has a good supply of properties that meet the definition of"high redevelopment potential"; the City's strategy is to redevelop Downtown Tigard, the Tigard Triangle, the Washington Square Regional Center, and the Pacific Highway Corridor; and the City has an opportunity to jump-start redevelopment with the arrival of high capacity transit. a formal economic development program. In the near term the Downtown Urban Renewal District has the potential to redevelop and attract additional employment and economic activity. KEY FINDINGS: • Tigard is home to a wide range of economic activity. • Tigard does not have a formal city wide economic development strategy. • Tigard's location at the crossroads of important transportation corridors I-5, Hwy 217, and Hwy 99W is a major advantage in attracting economic activity. • Following the pandemic in 2020, the nature of work for many workers changed,potentially permanently. This shift is expected to continue putting downward pressure on office rents. • Those with higher incomes and educational attainment level report being able to work from home at a much higher rate than those with less education and lower incomes. • Industrial and manufacturing businesses often offer a higher density of entry-level career pathway jobs with living wages. • Tigard has little vacant industrial land available to attract new large- scale industrial development. Without restrictions on the available land supply, industrial users will be outcompeted by higher market-value tenants. The current market demands residential and warehouse development, with other development being less predictable in the wake of the 2020 pandemic. • Encouraging more dense and mixed-use development creates more opportunities for Tigard residents to work in Tigard and reduce transportation pollution associated with commuting outside the city. • While allowing for a broader mix of employment uses in most of the City's employment areas will be consistent with the City's economic development objectives, it also may be beneficial to establish areas dedicated to industrial uses to ensure that the City continues to maintain a supply of sites suitable for those uses. Without such limitations in place, land suitable for those uses could be consumed by Comprehensive Plan Text Amendments Exhibit C other employment uses to the point that no suitable industrial or manufacturing sites remain. • Where new development seems to be utilizing land less efficiently and producing buildings at lower densities, it is most often an indication that market rents and land values need more time to develop to where the market dictates greater efficiency. This may mean, in some cases, that the City will need to encourage incremental development or be willing to wait to see more dense development. • Approximately 31% of Tigard's land arca is zoned for commercial, industrial, and mixed use purposes. These properties represent about 31% of the total assessed property value. • The major commercial and mixed use areas of the City arc Washington Square, Tigard Triangle, Downtown Tigard, and the Hwy 99W corridor. Industrially zoned properties arc generally located along the freight rail line, in between Fanno Creek and I 5. • In Tigard, there arc more jobs than people in the workforce living within the City boundaries. Seventy percent of residents commute outside the City; therefore, Tigard is a net attractor of commuters. • In Tigard, the Wholesale Trade sector has the largest amount of sales. The Retail sector has the largest annual aggregate payroll and largest number of workers. • The Tigard 2011 EOA identified existing and emerging business clusters that pay above average wages a = G. _ _- : : - - Si: _ _ . . -- _ -::;:- . • Metro has designated approximately 1,100 acres of Industrial and Commercial • There has been no large sc. - - - :: - - -- - I• : - areas in Tigard. • Tigard has little vacant industrial land available to attract new large scale industrial development. • The Tigard 2011 EOA found the supply of vacant industrial/employment lands could accommodate the 20 year needs of the efficient land growth scenario. • A recent study found that Tigard was a "hub for innovation." A study of patents and communities by the research firm iPiQ found that in 2005, Tigard had a high percentage of patents granted to individuals and small business (29). The study attributed this to Tigard's lower rents and taxes attracting professionals from Portland and Beaverton. GOAL: 9.1 Develop and maintain a strong, diversified, and sustainable local economy connected by a comfortable and attractive system of streets and alternative transportation facilities. POLICIES: Comprehensive Plan Text Amendments Exhibit C 1. The City shall establish strategies to retain and encourage the growth of existing businesses. 2. The City shall actively encourage businesses that provide family-wage jobs and job-dense industries to start up, expand, or locate in Tigard. 3. The City's land use and other regulatory practices shall be flexible and adaptive to promote economic development opportunities, provided that required infrastructure is made available. 4. The City shall address the public facility needs of business and economic development through identifying and programming needed public facilities and services within the Public Facility and Capital Improvement Plans. 5. The City shall promote well-designed and efficient development and redevelopment of vacant and underutilized industrial and commercial lands. 6. The City shall promote actions that result in greater, more efficient, utilization of its Metro-designated Employment and Industrial Areas. 7. The City shall limit the development of retail and service land uses and other industries with lower job densities in Metro designated industrial areas and land suitable for industrial development, especially on lots of 10 or more acres, to preserve the potential of these lands for industrial jobs. 8. The City shall participate and represent Tigard's interests in economic development activities and organizations at the regional, state, and federal levels. 9. The City shall strongly represent its interests at the regional, state, and federal levels to acquire transportation funding, including truck and rail freight movement needed to support existing business activity, attract new business, and improve general transportation mobility throughout the community. 10. The City shall strongly support, as essential to the region's economic future, the development of efficient regional multi-modal transportation systems throughout the Portland Metropolitan area. 11. The City shall develop industry clusters by encouraging the retention, expansion, and recruitment of industries that already have a presence in Tigard. 11. The City shall promote a vibrant mixture of business activity throughout Tigard, encouraging mixed-use development with walkable access to services for employees and residents alike. Comprehensive Plan Text Amendments Exhibit C 12. The City shall assure economic development promotes other community qualities, such as livability and environmental quality that are necessary for a sustainable economic future. 13. The City shall monitor and update its buildable lands inventory to ensure adequate short and long-term supplies of buildable employment land. RECOMMENDED ACTION MEASURES: i. Develop a formal City of Tigard economic development program and strategy to the creation of an economic development director position to develop and implement the program. i. Develop an incentives structure that allows business and property owners a degree of flexibility•in Development Code implementation in exchange for public benefits in the areas of job density and economic equity,, environmental sustainability and climate resilience, or connectivity and community. ii. Develop and periodically update Comprehensive Economic Opportunities Analyses and other employment and economic development studies to determine the status of Tigard's economy including strengths, deficiencies, and trends. ill. Coordinate economic development activities with Metro, Washington County, Greenlight Greater Portland, Portland Regional Partners for Business, the Westside Economic Alliance, state agencies and other entities. iv. Investigate the potential of an "Economic Gardening" program in Tigard that provides information, infrastructure, and connections to local businesses with the potential for growth. v. Improve data collection on local economic trends by gathering up-to-date and accurate information from local, regional, state, and federal sources. vi. Support redevelopment of existing vacant and underutilized industrial and commercial lands rather than designating additional lands for these purposes. vii. Research strategies to inventory, assess, clean-up, and redevelop brownfields. viii. In view of the limits imposed on Tigard's ability to expand its City limits by surrounding jurisdictions, develop strategies to increase employment growth through more intense and efficient use of existing lands. ix. Maintain updated land use inventories and associated characteristics of commercial, industrial, and other employment related land uses to assist in economic development planning and coordination with other jurisdictions/agencies. x. Consider implementing additional Urban Renewal Districts where feasible. Comprehensive Plan Text Amendments Exhibit C xi. Develop a comprehensive "Arca Plan" for the Tigard Triangle to promote its full development. xi. Ensure that most employment zones allow for a relatively broad mix of employment uses and do not create barriers for existing businesses, including those that may not conform to existing land use standards. Review specific site development and architectural design standards to ensure that they do not act as barriers to specific types of employment uses or expansion of existing uses. xii. Increase opportunities for higher density housing and employment development in the Downtown Urban Renewal District, Washington Square Regional Center, Tigard Triangle, and designated Corridors to enable more intense housing and employment uses to be located in close proximity to transit and other urban uses. xiii. Prioritize support for businesses identified as being able to develop into regional industry clusters. xii. Prioritize job-dense industries with career pathways,particularly in Tigard's industrial zones, and allow a broad mixture of job-dense activity in all employment zones. xiv. Improve media contacts and develop a branding / marketing effort to promote Tigard as a place to live and do business. xv. Assist property owners with the Oregon Industrial Site Certification process to help preserve and market the City's inventory of industrial lands. xvi. Work with state and regional partners to develop alternative mobility standards that will benefit the community and its economic development efforts. xvii. Explore an economic development marketing and incentives program targeting strategic business clusters. GOAL: 9.2 Make Tigard a center and incubator for innovative businesses, including those that focus on environmental sustainability. POLICIES: 1. The City shall institute appropriate land use regulations to accommodate a contemporary mix of economic activities. 2. The City shall periodically review and update its policies,land use regulations, and other efforts to ensure the City's land use program is responsive to changes in the economic structure, and is adaptable to businesses changing development needs. Comprehensive Plan Text Amendments Exhibit C 3. The City shall engage with state and regional economical development organizations and agencies to sustain and expand its current economic activities and be prepared for future economic trends. 4. The City shall encourage businesses that are environmentally and economically econonically sustainable. 5. The City shall encourage mixed-use development forms, where appropriate, to increase intensity of development and connectivity between services, employment, and residences. RECOMMENDED ACTION MEASURES: i. Develop a strategy to increase the number of knowledge based and traded sector jobs that pay higher than national average wages. ii. Investigate ways to support local innovative businesses and economic activities, as evidenced by the relatively high number of patents granted to individuals and small business in Tigard. iii. Investigate the potential for a business incubator or innovation center that fosters the start-up of new innovative businesses and connects regional economic partners, businesses, higher education and venture capitalists. iv. Improve connections with major universities to promote research connections, and access to innovative business practices. v. Promote Downtown Tigard as a place for innovative and emerging business to expand or relocate. vi. Encourage programs that promote sustainable business practices (e.g., recycling, green building or other sustainable design features, the use of green or alternative energy, commute trip reduction programs). vii. Monitor local and regional economic development initiatives to assess their effectiveness related to cost and outcome. GOAL: 9.3 Make Tigard a prosperous and desirable place to live and do business. POLICIES: 1. The City shall focus a significant portion of future employment growth and high- density housing development in its Metro-designated Town Center; Regional Center (Washington Square); High Capacity Transit Corridor (Hwy 99W); and the Tigard Triangle. Comprehensive Plan Text Amendments Exhibit C 2. The City shall adopt land use regulations and standards to ensure a well designed and attractive urban environment that supports/protects public and private sector investments. 3. The City shall commit to improving and maintaining the quality of community life (public safety, education, transportation, community design, housing, parks and recreation, etc.) to promote a vibrant and sustainable economy. 4. The City shall allow opportunities for home based businesses that arc compatible with existing and planned residential living environments. The City shall ensure that home occupations are allowed, encouraged, supported, and compatible with residential living environments. 5. The City shall encourage neighborhood commercial uses that support economic opportunities, multi-modal transportation options, neighborhood vitality, and the goals of efficient land use patterns. RECOMMENDED ACTION MEASURES: i. Consider instituting design regulations to ensure that new commercial, mixed-use, and industrial development are well designed and make an aesthetic contribution to the community. H. Increase Tigard's supply of open space and recreational opportunities as an amenity to attract new businesses and their employees. iii. Promote Tigard's cultural, historic, recreational, educational, and environmental assets as important marketing tools for the City's business areas and neighborhoods. iv. Support environmental conservation and wildlife enhancement activities for their contribution to the local economy as quality of life amenities for residents, business owners, and their employees. v. Investigate ways to improve the appearance and function of Hwy 99W and other transportation corridors. vi. Develop high quality work force housing to increase the opportunity for employees who work in Tigard to also live in the community. vii. Streamline the City processes required to start or expand a business by techniques such as online permits and business tax applications. viii. Develop long-term and active working relationships between business organizations (such as the Tigard Area Chamber of Commerce), community groups, public agencies, and elected leadership. Comprehensive Plan Text Amendments Exhibit C ix. Product a "Doing Busincss in Tigard" packct for busincsscs. ix. Allow and encourage more mixed-use development to minimize distances between residences, employment opportunities, and services. Incentivize off- site street and active transportation improvements to make routes between these destinations more attractive. x. Support catalyst projects outlined in the Tigard Downtown Improvement Plan and make public investments in infrastructure such as streets, sidewalks, and public areas to leverage desirable development in the Downtown Urban Renewal District. xi. Attract new businesses and retain existing ones that will assist in creating an Urban Village in the Downtown Urban Renewal District. xii. Work with Work Systems, Inc.,Tigard-Tualatin School District, and Portland Community College on ensuring business employment needs and trends are in line with educational curriculums. xiii. Consider joining an international "Sister Cities" program to develop reciprocal cultural, educational, municipal, business, professional, and technical exchanges and projects with foreign cities. xiv. Monitor emerging wireless and high-speed internet technologies to ensure competitively priced access for Tigard residents and businesses. xv. Recognize and promote community events as having potential for positive economic impacts and as important for community identity. Comprehensive Plan Text Amendments Exhibit C [note–the following sections modify the existing Comprehensive Plan text of the Glossary beginning with page G-15. Text shown in is to be removed. Text shown in bold, italic, and underlined is to be added.] Glossary. Comprehensive Plan Map Legend RESIDENTIAL USE DESIGNATIONS Low-Density Residential—These areas will provide low-density residences (1 to 5 units to the net acre) and necessary urban services to maintain single-family residential neighborhoods. This designation includes the R-1, R-2, R-3.5, and R-4.5 zones. Medium-Density Residential—These areas will provide medium-density residences (6 to 12 units to the net acre) and necessary urban services to maintain a stable mixture of single-family and multi-family neighborhoods. This designation includes the R-7 and R-12 zones. Medium-High Density Residential—These areas will provide medium-high-density residences (13 to 25 units to the net acre) and necessary urban services to allow housing of all types, but focused primarily on multiple-family neighborhoods. This designation includes the R-25 zone. High-Density Residential—These areas will provide high-density residences (26 to 40+ units to the net acre) and the necessary urban services to allow multiple-family neighborhoods. This designation includes the R-40 zone. COMMERCIAL USE DESIGNATIONS Commercial— These areas are intended to provide locations for retail and service uses throughout the city and may also include business,professional office, and low-impact industrial uses. Commercial areas provide services for the traveling public and are generally located along major traffic ways. Central BusineGs Dis-i.et The arca dccmcd appropriatc for high intensity mixcd use development allowing commercial and office, as well as higher density residential uses of a minimum of 40 units per acre. This designation includes the CBD zone. Community Commercial These areas arc intended to provide locations for retail and service uses,which primarily have a neighborhood orientation. Medium density residential uses will also be accommodated on or above the second story. This designation includes the C C zone. Comprehensive Plan Text Amendments Exhibit C ervices, gcncrally for the traveling public, and be located along major traffic ways. This designation includes the C C zone. • commercial and personal service activities and related uses necessary to satisfy the daily shopping and rclatcd needs of nearby residents. This designation includes the C N zone. Professional Commercial These areas are deemed appropriate for business and professional offices and rclatcd uses. This designation includes the C P zone. MIXED USE DESIGNATIONS Mixed-Use — These areas are intended to accommodate a broad mixture of activity including office, retail, and service uses as well as mixed-use developments and, in some cases, residential or industrial uses. Mixed-use areas provide services in a denser environment when compared with commercial areas and prioritize active modes of transportation and pedestrian friendly development. Depending on the location, mixed-use designations may prioritize commercial, employment, or residential activity. office buildings, retail, and service uses, as well as mixed use developments and medium high and high density (25 to 50 units to the net acre) residential uses. Larger buildings with parking under, behind, or alongside the structures will be encouraged. The -- „ _ concepts characterized by retail, office, and commercial services use, with business park and research facilities. High density residential development will be encouraged. The designation includes the MUE zone. Mixed Usc Employment 1 and Mixed Use Employmcnt 2 These areas are intended to accommodate office, research and development, and light manufacturing. Limited commercial and retail services arc allowed, as well as residential uses compatible MUE 2 zones. Mixed Use Residential 1 and Mixed Use-Recidential 2 These areas arc intended to accommodate mixed uses with medium high and high density residential development. Limited commercial and retail services that provide benefits and amenities to the residents arc allowed. Thcsc areas should have a high degree of pedestrian amenities, recreation opportunities, and access to transit. The designation includes the MUR 1 and MUR 2 zones. Comprehensive Plan Text Amendments Exhibit C INDUSTRIAL USE DESIGNATIONS Industrial— These areas are appropriate for light or heavy industrial uses with nuisance factors. Industrial areas may include zones that prioritize manufacturing activity over other uses or mixed-use zones that prioritizes employment activity. processing, or assembly of semi finished or finished products, including fabrication, and whose operating characteristics arc potentially incompatible with most other land uses. The designation includes the I H zone. Light Industrial Thcsc areas arc deemed appropriate for industrial activities which include manufacturing, processing, assembling, packaging, or treatment of products from previously prepared materials and which arc devoid of nuisance factors that would adversely affect other properties. The designation includes the I L and I P zone. OTHER DESIGNATIONS Open Space These areas are designated for retention in a natural state and for development of recreational uses. Public Institution These areas are designated for municipal uses, school uses, or other public uses. Comprehensive Plan Text Amendments Exhibit C Comprehensive Plan Text Amendments Exhibit C This page left intentionally blank. Comprehensive Plan Text Amendments Exhibit C Economic activity is the lifeblood of any community: providing jobs, creating wealth, and generating tax revenue. Tigard's economy is intertwined with the economy of the region, the nation, and the world. GOAL 9: Economic Development "To provide adequate opportunities throughout the state for a variety of economic activities vital to the health,welfare, and prosperity of Oregon's citizens." Tigard's location at the crossroads of several transportation routes has proven to be a major advantage. Other advantages include the relatively high educational attainment level of its citizens and its proximity to the high technology centers in Washington County and major educational institutions such as Portland State University and Portland Community College. Tigard residents envision a future economy that builds on these strengths and encourages more economic mobility for those with lower educational attainment levels. Tigard shall have a strong and resilient local economy with a diverse portfolio of economic activity: retail, professional service, and industrial jobs. The local economy shall provide for goods and services for local resident and business needs but also have the goal of promoting industries that typically have a higher density of on-site career-pathway jobs, provide community or connectivity benefits to Tigard, or advance climate resilience. It should be noted that many jobs in manufacturing, construction trades, and other blue-collar fields may offer better wages and benefits than administrative office employment.Jobs in industry often offer good wages to workers at a range of education levels and backgrounds. Technical training through educational programs or on-the-job allows industrial workers to build valuable capabilities in operating equipment and running processes. Tigard's future economy may include activities whose characteristics are not foreseeable at this time such as live-work arrangements; light manufacturing combined with research and development; creative crafts and arts such as film, advertising, communications, etc. Therefore, the City's land use and other regulatory practices shall be flexible and adaptive so as not to preclude desirable economic development opportunities. Tigard is sometimes perceived as a bedroom community for nearby cities. This is not accurate. According to the 2024 Economic Opportunities Analysis (discussed further below), in 2018 the Census estimated there were roughly 45,400 covered employment jobs located in Tigard. Of these, an estimated 3,800 or 8.4 percent are held by local residents,while over 41,600 employees commute into the city from elsewhere. Similarly, of the estimated 28,600 employed Tigard residents, 87 percent of them commute elsewhere to their employment. This indicates that Tigard is a net-positive employment market that attracts workforce from around the region. The City shall seek to expand the opportunities for residents to work closer to where they live. This Comprehensive Plan Text Amendments Exhibit C will require promoting a mix of high quality housing opportunities for households with varying incomes. Quality of life factors shall be promoted to attract economic investments and a skilled work force. Among these factors are an attractive and well-maintained community; high levels of public safety; accessible and responsive local government; availability of a variety of housing, good public schools; access to nature, high quality parks, leisure and recreation activities, safe and convenient multimodal transportation opportunities, and smoothly running essential infrastructure. State and Regional Policies: The Department of Land Conservation and Development (DLCD) and Metro have developed policies that address economic opportunities,which are based on Statewide Planning Goal 9. A major emphasis of the Goal 9 policies is to preserve and protect land for industrial and employment uses. Metro has sought to implement this on a regional basis. Title 4 of the Metro Urban Growth Management Functional Plan identifies Industrial and Other Employment Areas that are important to the region. Goal 9 also requires cities to complete an Economic Opportunities Analysis as part of State Periodic Review. The Tigard 2011 Economic Opportunities Analysis (EOA) was adopted in May 2011. The EOA analysis showed that the land efficient need strategy is appropriate to supply adequate vacant land to accommodate projected employment and industrial uses over the next 20 years. This required no rezoning of property at the time. The Tigard 2024 EOA analysis showed that the land efficient need strategy is still the appropriate approach to accommodating job growth in the city. However, the city now has insufficient land supply to accommodate job growth. The 2024 EOA recommends rezoning to encourage more job-dense industries with a focus on protecting land suitable for industrial and manufacturing uses. The land efficient need strategy is based on findings that Tigard has a limited supply of vacant industrial and employment lands; the City is currently limited in its ability to expand its boundaries to increase its industrial/employment land base; the City has a good supply of properties that meet the definition of"high redevelopment potential"; the City's strategy is to redevelop Downtown Tigard, the Tigard Triangle, the Washington Square Regional Center, and the Pacific Highway Corridor; and the City has an opportunity to jump-start redevelopment with the arrival of high capacity transit. KEY FINDINGS: • Tigard is home to a wide range of economic activity. • Tigard's location at the crossroads of important transportation corridors 1-5, Hwy 217, and Hwy 99W is a major advantage in attracting economic activity. Comprehensive Plan Text Amendments Exhibit C • Following the pandemic in 2020, the nature of work for many workers changed, potentially permanently. This shift is expected to continue putting downward pressure on office rents. • Those with higher incomes and educational attainment level report being able to work from home at a much higher rate than those with less education and lower incomes. • Industrial and manufacturing businesses often offer a higher density of entry- level career-pathway jobs with living wages. • Tigard has little vacant industrial land available to attract new large-scale industrial development. Without restrictions on the available land supply, industrial users will be outcompeted by higher market-value tenants. The current market demands residential and warehouse development,with other development being less predictable in the wake of the 2020 pandemic. • Encouraging more dense and mixed-use development creates more opportunities for Tigard residents to work in Tigard and reduce transportation pollution associated with commuting outside the city. • While allowing for a broader mix of employment uses in most of the City's employment areas will be consistent with the City's economic development objectives, it also may be beneficial to establish areas dedicated to industrial uses to ensure that the City continues to maintain a supply of sites suitable for those uses. Without such limitations in place,land suitable for those uses could be consumed by other employment uses to the point that no suitable industrial or manufacturing sites remain. • Where new development seems to be utilizing land less efficiently and producing buildings at lower densities, it is most often an indication that market rents and land values need more time to develop to where the market dictates greater efficiency. This may mean, in some cases, that the City will need to encourage incremental development or be willing to wait to see more dense development. GOAL: 9.1 Develop and maintain a strong, diversified, and sustainable local economy connected by a comfortable and attractive system of streets and alternative transportation facilities. POLICIES: 1. The City shall establish strategies to retain and encourage the growth of existing businesses. 2. The City shall actively encourage businesses that provide family-wage jobs and job- dense industries to start up, expand, or locate in Tigard. 3. The City's land use and other regulatory practices shall be flexible and adaptive to promote economic development opportunities, provided that required infrastructure is made available. Comprehensive Plan Text Amendments Exhibit C 4. The City shall address the public facility needs of business and economic development through identifying and programming needed public facilities and services within the Public Facility and Capital Improvement Plans. 5. The City shall promote well-designed and efficient development and redevelopment of vacant and underutilized industrial and commercial lands. 6. The City shall promote actions that result in greater, more efficient, utilization of its Metro-designated Employment and Industrial Areas. 7. The City shall limit the development of retail and service land uses and other industries with lower job densities in Metro designated industrial areas and land suitable for industrial development, especially on lots of 10 or more acres, to preserve the potential of these lands for industrial jobs. 8. The City shall participate and represent Tigard's interests in economic development activities and organizations at the regional, state, and federal levels. 9. The City shall strongly represent its interests at the regional, state, and federal levels to acquire transportation funding, including truck and rail freight movement needed to support existing business activity, attract new business, and improve general transportation mobility throughout the community. 10. The City shall strongly support, as essential to the region's economic future, the development of efficient regional multi-modal transportation systems throughout the Portland Metropolitan area. 11. The City shall promote a vibrant mixture of business activity throughout Tigard, encouraging mixed-use development with walkable access to services for employees and residents alike. 12. The City shall assure economic development promotes other community qualities, such as livability and environmental quality that are necessary for a sustainable economic future. 13. The City shall monitor and update its buildable lands inventory to ensure adequate short and long-term supplies of buildable employment land. RECOMMENDED ACTION MEASURES: i. Develop an incentives structure that allows business and property owners a degree of flexibility in Development Code implementation in exchange for public benefits in the areas of job density and economic equity, environmental sustainability and climate resilience, or connectivity and community. Comprehensive Plan Text Amendments Exhibit C ii. Develop and periodically update Comprehensive Economic Opportunities Analyses and other employment and economic development studies to determine the status of Tigard's economy including strengths, deficiencies, and trends. iii. Coordinate economic development activities with Metro, Washington County, Greenlight Greater Portland, Portland Regional Partners for Business, the Westside Economic Alliance, state agencies and other entities. iv. Investigate the potential of an "Economic Gardening" program in Tigard that provides information, infrastructure, and connections to local businesses with the potential for growth. v. Improve data collection on local economic trends by gathering up-to-date and accurate information from local, regional, state, and federal sources. vi. Support redevelopment of existing vacant and underutilized industrial and commercial lands rather than designating additional lands for these purposes. vii. Research strategies to inventory, assess, clean-up, and redevelop brownfields. viii. In view of the limits imposed on Tigard's ability to expand its City limits by surrounding jurisdictions, develop strategies to increase employment growth through more intense and efficient use of existing lands. ix. Maintain updated land use inventories and associated characteristics of commercial, industrial, and other employment related land uses to assist in economic development planning and coordination with other jurisdictions/agencies. x. Consider implementing additional Urban Renewal Districts where feasible. xi. Ensure that most employment zones allow for a relatively broad mix of employment uses and do not create barriers for existing businesses,including those that may not conform to existing land use standards. Review specific site development and architectural design standards to ensure that they do not act as barriers to specific types of employment uses or expansion of existing uses. xii. Increase opportunities for higher density housing and employment development in the Downtown Urban Renewal District, Washington Square Regional Center, Tigard Triangle, and designated Corridors to enable more intense housing and employment uses to be located in close proximity to transit and other urban uses. xiii. Prioritize job-dense industries with career pathways, particularly in Tigard's industrial zones, and allow a broad mixture of job-dense activity in all employment zones. Comprehensive Plan Text Amendments Exhibit C xiv. Improve media contacts and develop a branding / marketing effort to promote Tigard as a place to live and do business. xv. Assist property owners with the Oregon Industrial Site Certification process to help preserve and market the City's inventory of industrial lands. xvi. Work with state and regional partners to develop alternative mobility standards that will benefit the community and its economic development efforts. xvii. Explore an economic development marketing and incentives program targeting strategic business clusters. GOAL: 9.2 Make Tigard a center and incubator for innovative businesses, including those that focus on environmental sustainability. POLICIES: 1. The City shall institute appropriate land use regulations to accommodate a contemporary mix of economic activities. 2. The City shall periodically review and update its policies, land use regulations, and other efforts to ensure the City's land use program is responsive to changes in the economic structure, and is adaptable to businesses changing development needs. 3. The City shall engage with state and regional economical development organizations and agencies to sustain and expand its current economic activities and be prepared for future economic trends. 4. The City shall encourage businesses that are environmentally and economically sustainable. 5. The City shall encourage mixed-use development forms,where appropriate, to increase intensity of development and connectivity between services, employment, and residences. RECOMMENDED ACTION MEASURES: i. Develop a strategy to increase the number of knowledge based and traded sector jobs that pay higher than national average wages. ii. Investigate ways to support local innovative businesses and economic activities, as evidenced by the relatively high number of patents granted to individuals and small business in Tigard. iii. Investigate the potential for a business incubator or innovation center that fosters the start-up of new innovative businesses and connects regional economic partners, businesses, higher education and venture capitalists. Comprehensive Plan Text Amendments Exhibit C iv. Improve connections with major universities to promote research connections, and access to innovative business practices. v. Promote Downtown Tigard as a place for innovative and emerging business to expand or relocate. vi. Encourage programs that promote sustainable business practices (e.g., recycling, green building or other sustainable design features, the use of green or alternative energy, commute trip reduction programs). vii. Monitor local and regional economic development initiatives to assess their effectiveness related to cost and outcome. GOAL: 9.3 Make Tigard a prosperous and desirable place to live and do business. POLICIES: 1. The City shall focus a significant portion of future employment growth and high- density housing development in its Metro-designated Town Center; Regional Center (Washington Square); High Capacity Transit Corridor (Hwy 99W); and the Tigard Triangle. 2. The City shall adopt land use regulations and standards to ensure a well designed and attractive urban environment that supports/protects public and private sector investments. 3. The City shall commit to improving and maintaining the quality of community life (public safety, education, transportation, community design, housing, parks and recreation, etc.) to promote a vibrant and sustainable economy. 4. _The City shall ensure that home occupations are allowed, encouraged, supported, and compatible with residential living environments. 5. The City shall encourage neighborhood commercial uses that support economic opportunities, multi-modal transportation options, neighborhood vitality, and the goals of efficient land use patterns. RECOMMENDED ACTION MEASURES: i. Consider instituting design regulations to ensure that new commercial, mixed-use, and industrial development are well designed and make an aesthetic contribution to the community. ii. Increase Tigard's supply of open space and recreational opportunities as an amenity to attract new businesses and their employees. Comprehensive Plan Text Amendments Exhibit C iii. Promote Tigard's cultural, historic, recreational, educational, and environmental assets as important marketing tools for the City's business areas and neighborhoods. iv. Support environmental conservation and wildlife enhancement activities for their contribution to the local economy as quality of life amenities for residents, business owners, and their employees. v. Investigate ways to improve the appearance and function of Hwy 99W and other transportation corridors. vi. Develop high quality work force housing to increase the opportunity for employees who work in Tigard to also live in the community. vii. Streamline the City processes required to start or expand a business by techniques such as online permits and business tax applications. viii. Develop long-term and active working relationships between business organizations (such as the Tigard Area Chamber of Commerce), community groups, public agencies, and elected leadership. ix. Allow and encourage more mixed-use development to minimize distances between residences, employment opportunities, and services. Incentivize off-site street and active transportation improvements to make routes between these destinations more attractive. x. Support catalyst projects outlined in the Tigard Downtown Improvement Plan and make public investments in infrastructure such as streets, sidewalks, and public areas to leverage desirable development in the Downtown Urban Renewal District. xi. Attract new businesses and retain existing ones that will assist in creating an Urban Village in the Downtown Urban Renewal District. xii. Work with Work Systems, Inc.,Tigard-Tualatin School District, and Portland Community College on ensuring business employment needs and trends are in line with educational curriculums. xiii. Consider joining an international "Sister Cities" program to develop reciprocal cultural, educational, municipal, business, professional, and technical exchanges and projects with foreign cities. xiv. Monitor emerging wireless and high-speed internet technologies to ensure competitively priced access for Tigard residents and businesses. xv. Recognize and promote community events as having potential for positive economic impacts and as important for community identity. Comprehensive Plan Text Amendments Exhibit C Glossary. Comprehensive Plan Map Legend RESIDENTIAL USE DESIGNATIONS Low-Density Residential—These areas will provide low-density residences (1 to 5 units to the net acre) and necessary urban services to maintain single-family residential neighborhoods. This designation includes the R-1, R-2, R-3.5, and R-4.5 zones. Medium-Density Residential—These areas will provide medium-density residences (6 to 12 units to the net acre) and necessary urban services to maintain a stable mixture of single-family and multi-family neighborhoods. This designation includes the R-7 and R-12 zones. Medium-High Density Residential—These areas will provide medium-high-density residences (13 to 25 units to the net acre) and necessary urban services to allow housing of all types, but focused primarily on multiple-family neighborhoods. This designation includes the R-25 zone. High-Density Residential—These areas will provide high-density residences (26 to 40+ units to the net acre) and the necessary urban services to allow multiple-family neighborhoods. This designation includes the R-40 zone. COMMERCIAL USE DESIGNATIONS Commercial—These areas are intended to provide locations for retail and service uses throughout the city and may also include business, professional office, and low-impact industrial uses. Commercial areas provide services for the traveling public and are generally located along major traffic ways. MIXED USE DESIGNATIONS Mixed-Use —These areas are intended to accommodate a broad mixture of activity including office, retail, and service uses as well as mixed-use developments and, in some cases, residential or industrial uses. Mixed-use areas provide services in a denser environment when compared with commercial areas and prioritize active modes of transportation and pedestrian friendly development. Depending on the location, mixed- use designations may prioritize commercial, employment, or residential activity. INDUSTRIAL USE DESIGNATIONS Industrial—These areas are appropriate for light or heavy industrial uses with nuisance factors. Industrial areas may include zones that prioritize manufacturing activity over other uses or mixed-use zones that prioritize employment activity. Comprehensive Plan Text Amendments Exhibit C OTHER DESIGNATIONS Open Space —These areas are designated for retention in a natural state and for development of recreational uses. Public Institution—These areas are designated for municipal uses, school uses, or other public uses. W.���ISIPII Jc 7mg 111- MADE and WSRC Plan District: BR.00KMAN6ST GR�2 ov�5°J ,� . 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