June 2017

June, 2017

Inside This Issue: Eagle Point Golf—pg 6 Reustle Wins 2017 Winery of the Year—pg 19 Elegance Restored - pg 29

Eagle Point Golf Club

Lifelong learning.

The paths taken to get to where we are can be an interesting conversation. Family tradition on Memorial Day took a few siblings and other family members to visit the final resting places of loved ones. A casual walk among the graves raises wonderment about what the stories were of each person buried there, some over a hundred years ago.

We noted before that all the markers tell us is the name, the date of birth, and the date of death. But the life of the person is a mystery. A hyphen, if there is one, is all that represents the life of the person buried there. If their hyphen could talk, what would it say? Amazing stories must be held like secrets there beneath our feet.

Interesting stories are everywhere if we will take the time to stop a few minutes and listen. I heard a few again this month.

Bob Hyer started his story in Southern California that led him to Walla Walla to go to school and play baseball. After six years in the Air Force he returned to SE Washington, sold insurance and he met Chana. He sold insurance for a while then moved to Vancouver, WA where he became a financial consultant who did well enough that he moved to Eagle Point, OR where he found a golf course with lots of potential and the answer to a dream.

Then there is Heidi Lael. Full of spunk and ambition she has something ticking in her that rarely stops to rest. She lost her husband suddenly and is raising her daughter alone. She passed by the old Victorian house in SE Roseburg hundreds of times thinking how she would like to own it, some day. With her convincing personality and salesmanship she found investors to help her make her dream come true. She found recyclable timbers and tracked down the original fireplace mantel of the Parrot house in an antique store in Aurora. The elegant 1891 masterpiece now is open for business, and all of Roseburg admires Heidi for what she has done.

Steve and Gloria Reustle came from Philadelphia where Steve was a successful CPA. What do you do when you’re a successful CPA from Philly? If you’re Steve and Gloria you close the business, sell your house and move three thousand miles where you eventually find the perfect place in Southern Oregon to make award winning wine. Today Reustle Vinyard is the 2017 Pacific Northwest Winery of the Year.

The lesson? Never let go of your dream. It may just be there with the next friend you make, or found on the vacation you didn’t know you were going to take.

Dream on,

Greg Henderson Greg Henderson, Publisher greg@southernoregonbusiness.com

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A JOURNAL FOR THE ECONOMICALLY CURIOUS, PROFESSIONALLY INSPIRED AND ACUTELY MOTIVATED

Table of Contents PUBLISHERS NOTE 2 Lifelong Learning

22 KCEDA gets Praise from Carriage Works 24 Amy’s Kitchen

ECONOMICS

26 Jackson County

4 The Sate of Small Business

Strong Towns & SMALL TOWNS AROUND THE REGION

28 The Parrot House

6 Eagle Point Golf 10 Property Taxation

33 Oregon Tech Foundation Move to Downtown KFalls

11 Oregon Tech Awards

34 Down to Business

13 America’s Housing

The Last Word

15 Rural Oregon Future

35 An Observation

17 Hospital’s Bright Future 18 ODA Director 19 PNW Winery of the Year

Cover Playing #16 at Eagle Point Golf Course

703 Divot Loop Sutherlin, Oregon 97479 www.southernoregonbusiness.com 541-315-6127

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Eagle Point’s par four 16th “The best golf course hole in Oregon”

Word needs to be spread that this is the best draining course in the northwest. In the beginning of construction Robert Trent Jones Jr spent nearly $1,000,000 on sand to make sure that golf could be played here every single day of the year. A rare snow might keep you from golfing, or a windy, rainy day may come, but you never have to worry about walking through water. You may have an umbrella sheltering your head in December, but your feet will remain dry. All of that sand makes sure of it.

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Eagle Point

Eagle Point Golf Course is a premier Robert Trent Jones Jr. designed golf facility located in picturesque Eagle Point, Oregon.

This is a top-tier golf club, featuring a worldclass, semi-private golf experience that is open to the public with a limited amount of memberships available. It is located just 10 miles east of Medford in the Rogue Valley.

The course and the design are the real stars of the show at Eagle Point Golf Club where you will find a spectacular layout created by Robert Trent Jones Jr. The course first

opened in 1996 featuring natural terrain and four sets of tees, with distances that range from 5,091 yards to 7,099, which makes this course perfect for all who visit, from the rookies to the seasoned pros.

The accolades have been many for Eagle Point Golf Club. Golf Magazine described the course as one of “The Top 10 Public Courses of 1996”, and Golf Digest has ranked it as one of the top-15 “Best Places to Play” in the state of Oregon, a very illustrious list.

The tee at the 16th hole – “The number one golf course hole in all of Oregon.”

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Bob and Chana Hyer – Owners, Eagle Point Golf A quiet perfectionist, Bob Hyer insists that things be done right. Hidden below the surface of his pleasant and friendly demeanor is a man determined to succeed as he did as a finance professional in Vancouver, Washington before opportunity came his way in Eagle Point.

repairing worn facilities, hiring an excellent staff and coordinating plans to move from golf course to golf resort. Bob knows golf and golf courses. Chana knows landscaping, customer service and how things should look and feel. Together they are an incredible team.

In the short span of 1 ½ years Bob and Chana Hyer grew the course membership from 150 to 320. Now there’s a waiting list.

In the peak summer season they may have 65 staff members working to provide unforgettable experiences for their guests. Every day is a new opportunity to be better than the day before. Perfection may be impossible but excellence is not.

More than doubling membership while upgrading,

Explaining why golf matters at all in a world rife with turmoil and tragedy, Jones says, “I believe that if we can play a sport together then we might not kill each other. It’s the Olympic ideal: get guys communicating by having a competition through sports. And what sport do older diplomats and generals play? Golf.”

Robert Trent Jones Jr Olympic Team, Rio De Janeiro 2016 Pintrest.com

Commenting on golf course architecture in general, Jones says, … For me the hallmark of a great course resides in a golfer’s ability to remember and visualize all the holes after playing the course once.”

Known as the father of environmental golf course design, Jones respects and embraces the land in

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his work. He describes his courses as “of the earth . . . for the spirit.” Jones has made it his signature to listen to the land. An article in Smithsonian Magazine once described his work as “a case study of how a golf course can have a surprisingly low impact on even a sensitive environmental area.” His focus is on shot values and fine aesthetic appearances.

Jones adds, “The very best courses are those where nature has provided the canvas and my job is to discover her secrets and reveal them. I try to design golf courses that will fascinate people so they’ll want to play them many times and learn the depths and meanings of the courses’ stories, their subtext, their poetry.”

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Seven new homes are under construction on lots adjacent to the golf course. Every sign of an improving economy is evident.

An optimistic confidence is in the air following the “Great Recession” America is trying to shake. The city of Eagle Point has a resident in the Golf Club that insures the future here will be very, very good.

In front of you is a fairway and the green you’re aiming for. On your left is a totem pole donated by Mr. Jones that he received in payment for designing a private nine-hole golf course for a friend in Canada.

Behind you the sound of construction nearly complete in the building of the resort lodging that will grow through three phases reaching a total of 44 rooms.

Weddings are already scheduled and reservations placed. A pavilion that will seat 200 guests is complete but being enhanced.

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Property Taxation: Farm Equipment, Business Personal Property, and Manufactured Housing Measures Move Forward The Senate Finance & Revenue Committee on May 17th moved a gutted and stuffed Senate Bill (SB) 596A to the floor with a do pass recommendation. Committee members concluded that the bill would provide a bright line to county assessors, who are giving varied treatment to certain farm personal property equipment.

In its current incarnation, SB 596A by expanding ORS 307.397 exempts from property taxation machinery and equipment used to compress and bale harvested straw, hay, grass or other plants, for the purpose of storage or shipment. The bill specifies that such equipment is tangible personal property, and unlike a previous amendment, does not apply retroactively. The equipment is still taxable if it is functioning to process the plants.

The committee responded positively to suggestions by Polk County Assessor Doug Schmidt to his suggested improvements to the initial set of amendments. Assessor Schmidt, representing the Oregon State Association of County Assessors, estimated the administrative cost to counties statewide to implement this bill at $8,640. Revenue impact to counties statewide is estimated at less than $100,000 per year.

Meanwhile, on May 17th the House Committee on Revenue amended and sent to the floor a bill with two distinct components, again improving the amendments at the request of Doug Schmidt and incorporating amendments presented by

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Washington County.

One part of House Bill (HB) 2573A attempts to make the process of reporting business personal property clearer and simpler, but the original bill would have required additional mailings, documents, and processing that may not be necessary for some assessor’s offices. Assessor Schmidt explained that because of budget and staffing constraints, some assessors are not mailing a personal property return to every business every year. For those assessors who do not mail to every business every year, the statute should make the mailing of the letter optional to the assessor.

This lets the assessor determine, based on knowledge of their taxpayers, if the letter is necessary.

This also cuts down on time and costs to the assessor’s office that also may not be needed. The committee agreed and incorporated the suggestion.

The other part of HB 2573A relates to increasing the personal property tax exemption from $12,500 to $25,000 on manufactured housing in counties where population exceeds 570,000. This change in value increases the exemption from a current level of $16,500 to $33,000. The effect of the change is confined to Multnomah and Washington counties. Both county commissions support this change and there is no opposition. Clackamas and Lane counties declined to be included, and will retain an exemption level of $16,500.

Contributed by: Gil Riddell | AOC Policy Director http://oregoncounties.org/contact

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Oregon Tech Student Entrepreneurs Wow Industry Judges with Highly Technical Business Products, Win $20k in Seed Money and Services

The winning project, called Helios Hive, is an invention

by Renewable Energy Engineering student Mathias Dean. Mathias went home with $10,000 Innovative, highly technical and eager student entrepreneurs at the Oregon Institute of Technology (Oregon Tech) came together on Thursday to compete for seed money to turn their product ideas and prototypes into real businesses. The winning project, called Helios Hive, is an invention by Renewable Energy Engineering student Mathias Dean. The project is a solar bee hive system which allows for the temperature regulation within a hive or set of hives, in order to assist with the elimination of a parasite currently leading to mass losses in bee populations.

judges determined which two runners up would receive $5,000 and $2,000, respectively for second and third places, and which winning plan and presentation would receive $7,000 to invest in start-up costs and ignite project development. Additionally, two teams were awarded $2,500 and presented the opportunity for the teams to continue on to the InventOR finals.

Projects presented at the Challenge included: •

Grey Tech 3D Scanner: Eric Pahl- Inventor, Nick Mitchell-Hooge and Josh Whitley

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Helios Hive: Mathias Dean- Inventor

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Oregon Tech Micro-Malter: Jennifer Berdyugin, Kelsey Sampson, Reece Ishihara, Miles Taylor, Jacob Thompson, Jimmy Finch, Keith Omogrosso and Eric Pahl

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Minimize Development, LLC: Joslyn Lindsey, Zanna Vetter, Josh Allan and Kevin Smith

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MOG Metalworks and Design: K.C. Crawford

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Wind Turbine: Colin Yoshinaga, Grant Gholston and Brandon Walker

The three winning projects were: 1.) Helios Hive, 1st Place: $7,000 prize for a Solar Bee This is the third annual Catalyze Challenge, which began with the concept of keeping Oregon Tech graduates in Klamath Falls to start entrepreneurial efforts after graduation, and help spur economic growth and stability in the region. Up from $9,000 in 2015, this year the competition had a total prize pool of $20,000, including donated space at the Gaucho Collective. With the theme of ‘Innovation Close to Home,’ six strong teams competed in the final round of judging on Thursday, May 18. Five volunteer judges, all from Oregon Tech’s business, community and university connections, watched the presentations, asked many probing questions, and decided on the top winner. The distinguished

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Hive which allows for the temperature regulation within a hive or set of hives, in order to assist with the elimination of the varroa mite. This device uses the concept that the varroa mite cannot survive in temperatures between 104 Fahrenheit to 116.6 Fahrenheit while the hive and bees remained unharmed. Using direct solar radiation to heat the hive, the Solar Bee Hive uses a solar panel to convert solar energy into electricity in order to power heating elements placed directly into the hive. Inventor Mathias Dean is a Renewable Energy Engineering student graduating this year.

2.) MOG Metalworks and Design, 2nd Place: $5,000 prize to expand the current capabilities of an existing business that designs and fabricates top-of-the-line 11

Oregon Tech Student Entrepreneurs Wow Industry Judges (Cont.)

products, from roll cages to signs. Specializing in CNC plasma cutting, welding, and fabrication, the money will allow MOG Metalworks to increase efficiency and larger production volumes due to the larger operating window and no need to resize raw materials. K.C. Crawford is a Mechanical Engineering student.

3.) Micro-Malter, 3rd Place: $2,000 prize for an automated transportable machine that malts barley or other grain products, which can then be used to make other products, such as beer. The machine is small enough to transport place to place and has the ability to run off of renewable energy, whether it is solar thermal energy or geothermal energy. Team members include Jennifer Berdyugin (Renewable Energy), Kelsey Sampson (Renewable Energy), Reece Ishihara (Mechanical Engineering), Miles Taylor (Mechanical Engineering), Jacob Thompson (Mechanical Engineering), Jimmy Finch (Renewable Energy), Keith Omogrosso (Electrical Engineering), and Eric Pahl (Mechanical Engineering).

Throughout the event, finalists presented and defended their business plans to the panel of judges which included: John Lamy, Oregon Manufacturing Extension Partnership, Katie Klos, Oregon BEST, Janet Soto Rodriguez, Business Oregon, Rob Jellesed, Klamath Basin Brewing, and Andrew Stork, Klamath Economic Development Association.

Also in attendance were Juan Barraza from PSU Business Incubator and Rachel Brunette from the Lemelson Foundation, who collaborated with Business Oregon on the InventOR Program. They presented Helios Hive and Micro-Malter with InventOR awards of $2,500 each to build prototypes and present them at the InventOR competition in Portland in October. Oregon BEST presented an additional prize of $500 to Helios Hive for a Clean Tech award, and MOG Metalworks was winner of the Student Choice Award.

Kelley Minty Morris, Klamath County Commissioner and Oregon Tech Board of Trustees member, was the Master of Ceremonies and effectively led the teams and judges through the fast-paced, timed presentations.

The 2016-17 Catalyze Klamath Falls Challenge was sponsored by the Deans of Oregon Tech’s College of Engineering, Technology, and Management, the College of Health, Arts, and Sciences, and the Office of Strategic Partnerships. The event is made possible through generous sponsorship and donations from AVISTA, Business Oregon, Gaucho Collective, City of Klamath Falls, Oregon BEST, Klamath County, Klamath County Economic Development Association (KCEDA), and the Wendt Family Foundation.

Members of the Oregon Tech Innovation and Entrepreneurship Committee include: Hallie Neupert, Chair, Lita Colligan, Dan Peterson, SophiaLyn Nathenson, Tara Guthrie, Mason Terry, Don Lee, Franny Howes, Aja Bettencourt McCarthy, Jesse Chaney, Mark Ahalt, and Barbara Neal.

For more information regarding the Catalyze Klamath Falls Challenge, visit www.oit.edu/catalyze

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Why America can’t make up its mind about housing

By Joe Cortright Here are two ideas that, if you’re like most Americans, you probably mostly agree with: 1. Government policy should help keep housing broadly affordable, so as not to price out people of low or moderate incomes from entire neighborhoods, cities, or even metropolitan areas.

2. Government policy should protect residential neighborhoods from things that might negatively impact housing values, because homes are an important investment and wealth-building tool.

Having read them together like that, you’ve probably already jumped ahead to the big reveal, which is that these two ideas are almost entirely mutually exclusive.

The first essentially says, “Use housing policy to keep home prices down”; the second says, “Use housing policy to keep home prices up.”

It’s no wonder, then, that housing policy is a bit confused. The same municipal governments that require that housing on scarce urban land be taken up only with resource-intensive, high-building-cost single family homes; that use zoning to separate out unwanted apartments, shops, transit lines, and other uses on the grounds that they might hurt home values; and promote neighborhood beautification and other projects on the grounds that they will raise housing values, also issue affordable housing reports trying to understand why home prices aren’t lower, and levy “impact fees” on new development for the alleged crime of, you know, raising home values.

The problem is that, at least in certain contexts, both of these goals are legitimate and important. Of course, especially in the wake of the Great Recession’s housing market collapse, a number of people have expressed skepticism about homeownership as a wealth-building tool; surely there are less risky—that is to say, less potentially ruinous—ways to a retirement income or college fund than investing hundreds of thousands of dollars in a single asset whose appreciation, as we all now know, is far from guaranteed.

And perhaps, if we could go back to the New Deal and

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talk this over with President Roosevelt before he inaugurated the era of mass homeownership with a federally regulated and subsidized mortgage market, we would want to make that point. But today, some eighty years later, it’s a bit late. That’s because homeownership has already provided a route to middle-class stability for tens of millions of households—and those households are mostly white. As the Washington Post wrote in a fantastic series earlier this year, public and private housing discrimination has led to a situation where home prices in black neighborhoods—even ones where the vast majority of households have solidly middle-class incomes, or higher—are much, much more unstable than in white neighborhoods.

This inequality is buttressed by the fact that our homeownership subsidies have worked selectively to the benefit of higher-income homeowners: the mortgage interest tax deduction, for example, gives larger tax expenditures to people who own more expensive houses. The more your home appreciates in value, the more benefit you get from the exclusion of home sales from capital gains tax. Ditto the value of excluding imputed rent, and deducting property taxes. The net result, according to the University of Chicago’s Atif Mian and Amir Sufi, is that homeownership has significantly magnified wealth differentials in the US.

In 2013, the median white household held $126,000 in wealth from their home, while the figure for the median black household was just $31,000.

One result of all this is that many white families have built generations of wealth through homeownership, while black families have made barely any progress: In fact, The Atlantic reported on a study suggesting that homeownership has been a net financial loss to African Americans since 2000. In 2013, the median white household held $126,000 in wealth from their home, while the figure for the median black household was just $31,000.

That gap, in turn, represents a massive difference in the ability of a family to withstand a big financial shock— unexpected unemployment, for example, or a serious medical crisis—that may go some way to explaining why black middle-class workers are much, much more likely than their white counterparts to fall back into poverty.

(And the resistance of many neighborhoods to growing property values is quite strong indeed: look at how much of central and southern Brooklyn has actually lost property value since 2004.)

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Why America can’t make up its mind about housing (Cont.)

Giving up entirely on the idea of homeownership as a path to wealth-building would essentially be saying that black Americans have just missed the boat on this one, and will have to remain behind forever. On the contrary, in the relatively few places where housing values finally do go up in mostly black neighborhoods, it represents— at least in part—a kind of justice: giving black homeowners the same access to financial gain that their white counterparts have enjoyed for the better part of a century.

Unfortunately, that gain also represents a loss for people, especially renters, who can’t afford to pay much more than they already do, and for whom artificially low prices in largely minority neighborhoods meant access to locations that they would not be able to afford in a normal market where race did not play such a major role in housing prices.

“protecting” or “promoting” property values is the same thing as “making housing more expensive.”

variety of incomes. My street in the Edgewater neighborhood of Chicago, for example, contains a handful of single family homes, whose value at this point probably reaches into the seven figures; expensive newer condo buildings; older multifamily buildings, some of which have large, luxuriously updated units, and others whose apartments are somewhat smaller, or have less up-todate finishes; and a few single room occupancy buildings, with minimal accommodations. As a result, there is market-rate housing for everyone from upper-middleclass professionals to working-class immigrant families to low-income elderly adults. Of course, that sort of diversity is typical of a pre-zoning “illegal neighborhood”: a vanishingly small proportion of American neighborhoods allow that sort of mix to be created today, which is a large part of the problem.

We are, in conclusion, profoundly conflicted as a nation when it comes to housing: we want it to be affordable, but we also want its prices to rise fast enough to be valuable as a financial investment. That’s a contradiction we need to acknowledge if our housing policy debate— and, ultimately, our housing policy—is going to be coherent and constructive.

So how to square that circle? Well, that’s basically the challenge of housing policy in a nutshell. Perhaps a start would be to acknowledge that there is, in fact, a tension here—that It’s somewhat discouraging, for example, when community organizations claim that “affordability doesn’t mean housing values have to remain stagnant,” without acknowledging that if housing values aren’t stagnant—ie, they’re growing—that means they’re also becoming less affordable.

But there is some hope. For one, robust production of housing that isn’t priced by the market, and therefore isn’t affected by rising market prices. That can be accomplished through public housing, privatelydeveloped affordable housing with programs like LIHTC, and housing vouchers. At the moment, few places produce non-market housing at anything close to a scale that would provide broad affordability, but there are encouraging examples: Portland, for instance, has created 2,300 units of affordable housing in its redeveloping Pearl District, adjacent to downtown, supported largely with funds from tax increment financing.

Joe Cortright is President and principal economist of Impresa, a consulting firm specializing in regional economic analysis, innovation and industry clusters. Joe’s work casts a light on the role of knowledge-based industries in shaping regional economies, Joe served for 12 years as the Executive Officer of the Oregon Legislature’s Trade and Economic Development Committee.

In many places, having a wide variety of housing types and sizes can also make room for people of a wide

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RURAL OREGON - Working Toward the

Economy of the Future Rural Oregon is made up of places with diverse economic histories and trends. In general, rural communities are trying to address issues such as a lack of industry diversity, an aging workforce, and an absence of critical infrastructure.

Local economies are often influenced by variables that are outside the control of many within the community. Luck plays a major role. For instance, Bend would not have developed into the thriving metro area it is today without the Cascades in its backyard or the Deschutes River winding through town. These natural amenities allowed outdoor-based tourism to fill the void left by the timber industry and eventually led to rapid economic expansion. Many communities do not have these amenities. Their vision for growing the economy of the future must be different than becoming the next Bend or Hood River. However, many residents of rural communities don’t want their town to become the next Bend. They simply want the community to maintain its character, job base, and values. A rural eastern Oregon resident summed it up well when she said, “I don’t want my community to become like the big city, but I want there to be enough opportunity for my children to live and work here if “In every instance, the part we can’t predict is around new partnerships and they so choose.” the learning that goes on locally.

Local leaders uncover opportunities for growth and the future.”

Growth doesn’t have to be the goal: a desire to thrive with the current level Mary Bosch, of population and business activity is Rural Development Initiatives, understandable. Whatever the local community’s goals, local people organizing and achieving the economy and community they aim for should be supported. An individual with an idea can have a major impact in a small rural economy. Rural success stories often highlight a single individual or organization that made a large difference and sent the community down a new path. But by working together, local communities can strategically move toward a future that everyone can be excited about.

Rural communities will always struggle to maintain a diverse economy. By their very nature rural areas are small on people and large on space. That does not bode well for developing a diverse economic base. However, rural areas can be more responsive to the changing economic landscape. For instance, there are efforts in Prineville to expand their existing mountain bike trail network. Focusing on these recreational amenities will benefit their tourism industry, but it may also lead to more workers at the hightech data centers deciding to live in Prineville instead of commuting from Bend.

How do rural economies overcome a declining labor force? In today’s economy many workers are drawn to lifestyle communities. These are areas known for quality of life, recreation, and health. Preliminary research by Damon Runberg with the Oregon Employment Department – in an article titled “Is Today’s Labor Force Drawn to Lifestyle Communities?” – shows more vibrant labor force and job growth in these lifestyle metro areas around the United States. As Runberg says, “Lifestyle communities tend to Southern Oregon Business Journal

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RURAL OREGON - Working Toward the Economy of the Future (Cont.)

be tourism destinations and they have a larger share of their workforce concentrated in tourism-related industries. However, these lifestyle communities are also experiencing significantly faster job growth than the average metro area.” He points out that both total nonfarm employment and the labor force are growing faster in these lifestyle communities than in the average metro area.

“Tourism is as strong as ever and we still need to work on models to help businesses survive for a 12-month cycle.”

Mary Bosch, Rural Development Initiatives, rdiinc.org

What can rural locations take from this example? A dependence on tourism can be seen as negative because the jobs are often part time, seasonal, and pay relatively lower wages. But drawing new people to recreate in your small town can also introduce prospective workers to the local community, which could provide a competitive advantage as labor supply is constrained across the country by the aging and retirement of the baby boomer generation.

Two communities in Oregon, Bend and Hood River, each made the transition from a rural town with a traditional natural resource based economy to a small urban center with a more diverse economy. The turning point for both of those communities was expansion of the tourism industry and growth in recreational amenities (wind surfing, mountain biking, skiing, golfing, etc.).

Tourism introduced visitors to the community and some of those tourists eventually became residents – some even moved their businesses. Capitalizing on the lifestyle amenities of a rural community is one way to persuade young people from leaving and can be a tool for attracting young families to that community. Mary Bosch of Rural Development Initiatives notes, “These little clusters of entrepreneurial activity become magnets that give young people a glimpse…there’s something cool for me to do here.”

“Taking an idea and moving it forward doesn’t necessarily require a city – certain activities that can draw on agricultural or local products provide potential for young people to develop their own niches.”

Bruce Weber, Professor Emeritus, Oregon State University

Many workers, particularly millennials, are prioritizing work/life balance over career opportunities, according to the 2016 Deloitte Millennial Survey. The survey found that millennials ranked a “good work/life balance” as the single most important factor when evaluating a job opportunity. This trend bodes well for rural communities that often rank high on quality of life measures, such as access to recreation.

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The Deloitte study also found that “Millennials feel underutilized and believe they’re not being developed as leaders.” Also, “Millennials often put their personal values ahead of organizational goals.” Rural Oregon is in need of its next generation of leaders and could benefit from the aspirations of millennials if they can successfully introduce their local areas to this younger generation. Younger workers moving into rural Oregon – and potentially raising their families there – could alleviate the tendency toward aging that is a major challenge in parts of rural Oregon.

Article by: Mary Bosch Rural Development Initiatives Southern Oregon Business Journal

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Hospital Diagnoses Bright Energy Future Bay Area Hospital, a regional medical center located on Oregon’s south coast, gives top priority to patient care while investing in solutions to manage facilities efficiently and use energy wisely.

maintenance and repair costs.

“Our largest electrical cost per square foot is lighting,” explained Delzotti, “so we’ve moved to LEDs as the future of lighting in the facility. Since we’ve replaced our older bulbs with LED, we’ve cut energy use in half with each fixture.”

Since 2009, the hospital has saved more than 835,000 kilowatt hours of electricity and 48,000 therms of natural gas through a strategic effort to reduce its energy footprint. Bay Area Hospital has taken advantage of multiple Energy Trust of Oregon programs for help with its energy-saving investments.

Other energy-saving projects include daylighting strategies, condensing gas water heaters and gas-fired condensing boilers. Recently, they replaced an energyintensive electric oven in the hospital kitchen with an efficient natural gas fueled oven. They continue to study the merits of a solar electric system and look for ways to incorporate renewable power into their energy plan.

“The return on our investment has been remarkable,” said Karl Delzotti, director of facilities, Bay Area Hospital. “With 340,000 square feet of healthcare facilities spread across five buildings, we have a lot of light fixtures and building systems that have to stay on all the time. By using the most energy-efficient technologies, we’ve seen a significant reduction in our power consumption.”

For Bay Area Hospital, saving energy is a key part of tight financial control. “As a community-owned hospital, we face ongoing pressures that affect our bottom line,” Delzotti said. “From a facility standpoint, we must do everything we can to manage our costs, reduce where we can, and still provide the highest level of quality necessary to serve our community.”

The hospital has completed 15 energy efficiency projects and earned Energy Trust cash incentives of $227,657 toward its energy-saving improvements.

New building saves energy from the ground up In 2013, the hospital completed a four-story, 110,000 square foot expansion of its main hospital building.

Delzotti’s team worked closely with architects and engineers to design building systems that would minimize the facility’s impact on the hospital’s annual energy budget. A key feature of the building is a heat recovery system that captures energy generated by mechanical, electrical and computer systems and brings it back into the building’s heating system.

“When it comes to saving energy, hospitals don’t have the luxury of simply turning down the heat or turning off lights,” explained Delzotti. “We’re held to strict industry standards for facility management that put patient care first. While we make it a priority to search for new and innovative energy-saving ideas, the impact on patient care is the litmus test for any solution we consider.”

Energy-efficient technology reduces waste Recently, the hospital upgraded the air conditioning system by replacing two chillers. The friction-free design of the chillers uses one-third of the energy required by the previous equipment and places less wear and tear on the machines, reducing future

Southern Oregon Business Journal

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New ODA Director Appointed

Alexis Taylor ………... was appointed Director of the Oregon Department of Agriculture (ODA) by Governor Kate Brown in December 2016. As Director, she works with the governor and legislature as well as agricultural, conservation, and consumer groups to carry out the state’s agriculture policy.

Prior to Alexis’ appointment, she oversaw the US Department of Agriculture’s Farm and Foreign Agricultural Services (FFAS), which is comprised of the Farm Service Agency (FSA), Risk Management Agency (RMA), and Foreign Agricultural Service (FAS). Alexis worked to build new markets across the globe and improve the overall competitive position of US agricultural products in the marketplace.

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Alexis also led the Women in Ag Initiative that was a driving force in USDA's mission to support the growing and diverse next generation of farmers and ranchers.

Alexis is a graduate of Iowa State University and grew up on her family farm in Iowa, which has been in her family for more than 150 years.

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Umpqua Valley Winery 2017 Northwest Winery of the Year

Reustle (pronounced “rus’el”) Prayer Rock Vineyards

is a family owned and operated winery on Cal Henry Road outside Roseburg, Oregon. Established in 2001 it is a place where guests feel genuine warmth and are treated like old friends. Visit the winery where the conversation is engaging, the views are spectacular, and the wine… always exceptional!

US Judge Dan Berger lists Oregon's Umpqua Valley among other great cool climate regions for Syrah: New Zealand, Northern Victoria, and Northern Rhone. "Reustle has shown exemplary consistency in a cool climate style, and it has been obvious from the start that Stephen has a very special place for Syrah (and other cool climate varieties)."

"We will not grow beyond our ability to handcraft wines of finesse, balance and length. There is no substitute for low yields, careful clonal selection, and viticultural and enological best practices. We are sensitive to high alcohol levels and overripe fruit flavors, preferring instead to target balanced ripeness and expression of our unique terroir. We make wine we most like to drink at home around the dinner table with family and friends."

Stephen M. Reustle Owner/Winemaker Southern Oregon Business Journal

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And yes, there really is a “Prayer Rock� at the vineyard -- at the top of the south-facing slope is a large rock that was the meeting place for Stephen and his son in the mornings to pray to God for blessing over their vineyard. Not only did this family practice establish the name of the vineyard, but it has kept the Reustle's very busy. Since then, they have bottled approximately 6,000 cases of wine annually, selling out every year.

A foggy morning in May 2017 displays the steep hillside of the Reustle vineyard. Hillside steepness helps to create micro climates and soil differences by changing soil depth and moisture content that grape varietals depend on.

An evening breeze carries lower temperatures from the nearby Umpqua River through the vineyard rapidly lowering air temperatures by 10 degrees or more in a matter of minutes. The breeze is caused by the rising warm air from 200 acre pastures two miles away pulling the cooler air from the river as the day moves into sunset .

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The mixture of mountains and valleys with rolling hills and mountain borne rivers creates as many as 30 different micro climates in the Umpqua Valley. In an area of twenty miles in diameter as many micro climates exist as it takes half of Europe to create.

These micro climates make it possible to grow more varieties of wine grapes than perhaps any other place on earth.

2017 NW Winery of the Year Since 2009, Reustle - Prayer Rock Vineyards has received over 460 Awards in National and International Wine Competitions.

In addition to multple medals for individual wines ReustlePrayer Rock Vineyards won the 2015 Riverside Wine Competition the "Terroir Trophy" for the winery with the best regional character in its wines.

The Highlight for 2015 came when Resutle-Prayer Rock Vineyards 2012 Syrah was chosen as the Top Syrah at the 6 Nations Wine Challenge in Australia.

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The Carriage Works moves into new facility, praises KCEDA for assistance in locating new site Klamath Falls, Oregon (May 22, 2017) – Klamath Fallsbased The Carriage Works has recently completed the expansion of their business and the move into their new 42,000 square-foot facility. The new site almost doubles the work space of their previous location and owner Brian Dunham couldn’t be happier.

“We now feel like we’re pretty much moved in,” commented Dunham in a recent interview. “It was a two to three month move-in process but we didn’t really miss a beat. We continued to operate while moving and we were only totally shut down three or four days.

“We’re newcomers to Klamath Falls. The Klamath County Economic Development Association (KCEDA) was very helpful with introductions in town to facilitate

Southern Oregon Business Journal

getting to the right people. They organized a meeting with representatives of the city and county even before we had committed to the new site. Moving the business was a major accomplishment and we’re delightful with how it worked.”

The Carriage Works has a client base throughout the country but Denham proudly shares that some of their customers are in their own back yard. The Klamath County School District recently purchased a coffee cart from The Carriage Works and The Running Y resort recently purchased their third unit, an outside server stand, from Dunham’s business.

The Carriage Works’ client list continues to grow. New clients include notables such as the San Diego Zoo, the MGM Las Vegas and Travel X, the currency exchange centers located in airports and various other travel site.

Two of Carriage Works’ newest clients are on the east coast: The Congressional Golf Course in Maryland

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recently contracted for a carriage to use a s a retail merchandising unit at their facility and a new museum in Washington, D.C. – The Museum of the Bible – has purchased a half dozen units.

“KCEDA was at the ready to assist The Carriage Works in not only staying in, but expanding their operations, in Klamath County,” said KCEDA President Lauren Jespersen. “We assisted them with site and building services, business retention, expansion services and have worked together since 2016 in identifying a suitable business in which to expand their workforce and further invest in Klamath County. It’s been a privilege, an honor really, to see them grow, thrive and expand their business. Brian Dunham and his team should be proud of what they’ve built and how they have been such a positive addition to our community.”

Dunham shared that he has targeted hiring 10 more employees in the foreseeable future, business permitting. In the meantime, The Carriage Works held an Open House to debut their new site on Wednesday, May 24, 5:30 to 8:00 p.m. at 6600 Arnold Ave. in Klamath Falls.

About the Klamath County Economic Development Association (KCEDA) Since 1975, KCEDA has reflected the best of private enterprise, responsibility and dedication. Its mission is to provide tailored recruitment and retention/expansion programs, new opportunities for jobs, and a diversified, value-added industrial base/expanded economic development climate in southern Oregon. Learn more at www.ChooseKlamath.com.

About The Carriage Works More than 10,000 carts, kiosks and RMUs (retail merchandising units) have been designed and manufactured by The Carriage Works over the last four decades. Their manufacturing facility is located in Klamath Falls, Oregon, with employees drawn from a small town environment with a great history in wood products. Visit www.carriageworks.com for more information.

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Construction, Housing, and Related Employment in Jackson County

by Guy Tauer

The lack of recovery in the construction and housing sectors in Jackson County is creating true hardships for many people looking for affordable or even any shelter in the local area. Symptoms of the ill health in the housing sector include rising home and rental prices, low vacancy rates, and reduced affordability compared with incomes. Of course if you are a landlord of property owner, this is not a threat but an opportunity to raise rental rates or the asking price of property you may be putting on the market. A recent forum was held in Medford that was sponsored by the American Association of Retired Persons (AARP), “2017 Livability Solutions Forum: The Future of Housing.” Topics included “missing middle” housing and multigenerational communities; local opportunities and Southern Oregon Business Journal

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Construction, Housing, and Related Employment in Jackson County (Cont.)

challenges; and state housing policies.

Symptoms of imbalances in the housing and rental markets are not just a local issue. Many areas in Oregon and across the country are also in a housing squeeze – too much demand is chasing too little supply. Here’s a recent headline from the 4-20-17 issue of The Wall Street Journal: “Housing Crunch Threatens Reno’s Tech Boom – The supply of houses and apartments is strapped amid a permitting bottleneck as firms pour in.” Desirable places to move to, lifestyle communities where amenities attract businesses, and in-migrants are feeling the greatest pinch. Slower-growing areas of the state are feeling the effects of the slow rebound in construction following the Great Recession of 2007 to 2009. Along Oregon’s South Coast, a recent headline from the 4-16-17 issue of The World newspaper sums it up: “State economist: South Coast needs to build – In order for the South Coast economy to recover from the crippling blows dealt by the Great Recession, its residents must build.”

Statistics that point to the housing challenges in Jackson County are bountiful. Median home values reached nearly $255,000 in February 2017, an increase of 9 percent over the year. A rental index figure published by Zillow showed average rent of $1,441 in Jackson County, up nearly 6 percent over the year.

Prices are being driven up by the declining inventory of properties for sale. In spring 2011, there were about 1,800 homes for sale in Jackson County. By fall 2015 the number fell to about 1,000. As of February 2017, there were only 520 homes for sale in the county.

The lack of housing starts and home building is compounding the issue of declining inventory. From 1988 through 2007, there were at least 1,000 residential unit permits issued annually . During the peak housing boom years, between 2003 and 2005, the number spiked above 2,000. When the Great Recession struck and the housing bubble burst, the total declined to just above 300 per year. However during subsequent years, housing permit activity has failed to reach that 20-year average, and has hovered around 700 units each year during the 2014 to 2016 period.

Construction employment generally follows the trend of building permit activity. Of course, public works, commercial, remodeling, and other non-residential construction activity also affect construction industry employment. Total construction employment peaked in 2006 with about 5,770 jobs. During the next few years, construction employment declined by more than onehalf to just 2,770 jobs by 2012.

Since then, overall construction employment grew by about 42 percent from 2012 to 2016 to reach almost 4,000 payroll jobs, adding back 1,160 jobs of the 3,000 jobs lost. Despite the gain, construction employment remains about 1,800 jobs below the pre-recession peak.

The employment recovery has been a little uneven looking at the components within construction. Both construction of buildings and specialty trade contractors are back to more than 70 percent of their pre-recession peak. However, heavy and civil engineering construction only gained about 70 jobs from 2012 to 2016 and stands at about 50 percent of its pre-recession employment total in 2006.

The Oregon Office of Economic Analysis (OEA) has been digging into this issue in many of their recent blog posts. Those can be found at: https://oregoneconomicanalysis.com/ category/housing/

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THE PARROTT HOUSE

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Elegance Restored 1891 Parrot House Provides Exceptional Dining Experience in 19th Century Atmosphere.

Roseburg has a gem The Parrot House had fallen in disrepair over years of abuse by vandalism and neglect. Some thought it looked haunted and stories were invented to make them sound plausible.

Heidi Lael had always thought it would be an excellent building to restore into a dining experience.

Her pluck and personal determination eventually led her to investors willing to support her convincing vision. It’s a lot of work to turn a clock back a hundred years, but that is exactly what Heidi had in mind.

Today the Parrot House demands attention in the most positive way. In fact, it is possible it looks better than it did when it was new..

Heidi Lael has made the Parrot House a “Bucket List” kind of experience for everyone. Don’t stop with a single room, ask to see it all. It will impress you.

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In 1870 an attempt was made to establish steamboat service on the Umpqua in an effort to link Roseburg with the busy coastal seaport of Gardiner. A sternwheeler named the “Swan” ascended the Umpqua in 1870 as far as Roseburg and although government funds were acquired to improve the channel between Scottsburg and Roseburg, this was the only voyage of a steamboat on this section of the river.

Local industry and agriculture have experienced a wide variety of operations. Following the pioneer years of grain and cattle ranching, the progressive farmers successfully produced hops, prunes, broccoli, melons, grapes and numerous other specialty crops. The rich soil and mild climate earned the title of Garden Valley for the alluvial bottomlands west of the city and the county became unofficially known as “The Banana Belt.”

Cinnabar mines produced mercury, silver and copper deposits were located and in the 1890’s an effort was made to mine the vast deposits of nickel ore in the adjacent Riddle area, south of Roseburg. Improved smelting methods resulted in operation of the Hanna Company, a pioneer mine which was the sole producing nickel mine in the United States. Deposits of local marble were once quarried on a small scale, and cement rock was shipped by carloads from workings in the Glengarry region southeast of Roseburg. A woolen mill on the South Umpqua once promised a rosy industrial operation for the City, but this mill was destroyed in the great flood of 1890. The county still leads Oregon in the production of sheep per capita.

Other industries such as brickyards, breweries, canning plants, woodworking, furniture making and electronics have flourished and declined over the years.

125 years changes a place. Roseburg in 2017 is nothing like Roseburg of 1891. But, the Parrot House remains.

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Tourism will draw people to wineries, hiking, cycling trails and fishing. New lodging is under construction with modernization to rooms providing greater comfort to visitors convincing them to stay a day or two longer.

Main Bar

Bourbon Bar

A stop by the bar will convince the novice and the expert that there is someone who knows how to select the best in variety and quality of spirits. A wine selection that is sure to satisfy the most sensitive pallet is also available.

Move on to the Bourbon Bar located in its own hideaway to discover the effort made to make this stop one that could become the only reason you want to stay. Some bottles cannot be found in Oregon so the staff of the Parrot House has located sources of special bourbons in places like Las Vegas.

The Parrot House is more than a place to eat a fine meal. It is an experience to share with friends and family or the most important of your business associates who come from faraway places to see what a small town in rural Oregon might have to share Southern Oregon Business Journal

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Exquisite dining and a comfortable setting gives guests an atmosphere of relaxation.

The house chickens are a novelty for Heidi and entertain the visitors.

Adam Joseph Ruplinger is the Executive Chef.

Baked breads make the mouth water and outdoor dining by the fire keeps the conversation going.

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The Oregon Tech Development office—which encompasses the Foundation and Alumni Relations—has moved from campus to Downtown Klamath Falls The Oregon Tech Foundation has a new home this month in Downtown Klamath Falls.

ties on behalf of the university, and create stronger relationships with our Klamath Falls partners and friends.”

In an exciting move that better connects the university with the community, the Oregon Tech Development office—which encompasses the Foundation and Alumni Relations—has moved from campus to the second floor of the renovated Hoss Business Center on Commercial Street in Downtown Klamath Falls.

This new space will provide increased community visibility for the Foundation and Oregon Tech, and allow for more staff engagement in community meetings and activities. The move also created much needed space on-campus for growing operations such as enrollment management.

The opportunity to move is in line with new president Dr. Nagi Naganathan’s goals for Oregon Tech to have a more visible presence within the Klamath Falls community.

This is a sentiment which has been shared by many in the city over the years—to more closely bond the university’s work and mission into the downtown core. The new, more centrally located space provides ample parking and easy access for Foundation visitors, who sometimes faced limited parking on campus during busy times. Additionally, visitors to the Foundation will have the opportunity to conveniently support other stores, restaurants and services located along or near Main Street.

“A unique opportunity emerged for the Foundation to help our new President accomplish one of his goals and better serve donors and community members,” said Tracy Ricketts, associate vice president of Development & Alumni Relations for the Oregon Tech Foundation.

“The new office is a great location for our operations as we continue to expand and upgrade our outreach activi-

The University Development office currently employs eight people, six in Klamath Falls and two at Oregon Tech’s PortlandMetro campus in Wilsonville.

The department also has student workers, who will be working both on-campus and downtown.

Contact information for the Foundation, including mailing address and phone numbers, remain the same.

The Oregon Tech Foundation is governed by a volunteer Board of Directors which includes community and business leaders who have experience in finance, education, real estate, agriculture, medical sciences, and other fields. Many of these volunteers are also Oregon Tech alumni. At this time, the Foundation currently provides more than $550,000 in scholarships for Oregon Tech students each year.

The physical address is 735 Commercial Street, 2nd floor of the Hoss Business Center, located above Winema Electric. Questions may be directed to the Foundation at 541.885.1130.

The Oregon Tech Foundation is a 501(c)(3) organization that promotes and funds the educational, cultural, charitable, and service functions of the Oregon Institute of Technology.

About Oregon Tech Founded in Klamath Falls in 1947, Oregon Institute of Technology is the premier public polytechnic university the Pacific Northwest.

Oregon Tech provides degree programs in engineering, technology health technologies, management, communication, and applied sciences that prepare students to be effective participants in their professional, public, and international communities through hands-on, applied learning. Oregon Tech has a full-service, residential campus in Klamath Falls, an urban, industry-focused campus in Wilsonville, an Online campus, as well as other degree delivery sites. Visit www.oit.edu to learn more about Oregon Institute of Technology.

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DOWN TO BUSINESS A look at small business questions from the Southwestern Oregon Community College Small Business Development Center (SBDC).

I’m thinking about retiring soon and I’m wondering how difficult it would be to start a business in retirement to earn a little extra income and stay engaged in the community?

Many people are choosing to start businesses after retiring, so many in fact they have a name, encore entrepreneurs. According to the U.S. Small Business Administration (SBA) “For more than 70 million Americans over 50, business ownership is a practical option. One in four individuals ages 44 to 70 is interested in becoming an entrepreneur and 63 percent of Americans plan to work during retirement.” Lots of options exist for businesses to get started without risking retirement savings.

A good starting place for learning more about starting a business is the Oregon Small Business Development Center network (SBDC) www.BizCenter.org. Local offices have training programs and business advisors to guide business owners and answer questions about the best way to proceed with a business concept. Another option is the book “Better, Smarter, Richer” by Jackie B. Peterson http:// www.bettersmarterricher.com/. Ms. Peterson uses lessons she has learned in life to guide others into “solopreneurship” in ways that are profitable and productive. According to Ms. Peterson, “Being a solo business does not mean you’re alone.”

Establishing a business correctly to protect personal assets is very important especially in retirement. The State of Oregon has a good resource for getting started at http://sos.oregon.gov/business/Documents/ business-guides/start-business-guide.pdf. Asset protection includes choosing the right legal form of business, the right funding strategy, the right product mix and having a good business plan to follow. Business plan training is available through the local SBDC office. Business plan templates are available online. Here are a couple options to consider: https:// www.score.org/resource/business-plan-template-startup-business or https://www.score.org/resource/business-plan-template-startupbusiness.

The SBA www.sba.gov has many tools, articles and resources that are helpful in starting and operating a business. Other good resources are Inc. Magazine www.inc.com and www.entrepreneur.com. Both these publications have articles about business trends and ideas about types of businesses being started successfully.

Starting a retirement business is a wonderful opportunity to create extra income and stay engaged in the community. So many resources exist to help with the process, there’s no reason not to explore the possibilities.

By: Arlene M. Soto CMA, Southwestern SBDC Director

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An Observation Are organizational charts helpful? To anyone? They come is so many shapes and sizes we must believe the creators of them are the only people who really understand them.

In a chaotic world they do give an impression of having all your ducks in a row. You know what you’re doing when you know where to go for an answer to a question. Besides everyone wants to feel important to the organization. Or not; they may be a filtering system to make it easier to decide who should be invited to the next VERY IMPORTANT MEETING. If your name is on the company organization chart it’s a given the boss knows who you are and what you can do.

In some places you may prefer anonymity but if you have an office or a business card chances are you have responsibilities important to the organization. Your name should be on the Company Organization Chart in the boss’ office.

The names on the org chart should have Velcro on the back. That way changes are easier to make: up, down, in or out.

I like football. You know where each player belongs by looking at him. If a player is 6’5” and weighs 320 pounds he is not a running back. Wide receivers are tall and can catch anything. Defensive backs can run backwards faster than most people can run forward.

That’s an org chart I think I could understand.

GH

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OUR MISSION “To provide a reliable business information tool for the economically curious, professionally inspired, and acutely motivated.”

PROVIDING IMPORTANT INFORMATION TO BUSINESSES IN THE SIX COUNTIES OF SOUTHWEST OREGON www.southernoregonbusiness.com

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