Port board aims to ensure steel deal beneficial

When Port of Vancouver commissioners meet Tuesday to vote on whether to free up a key industrial property for eventual sale to a company specializing in steel products, they’ll not only ponder a unique land-use decision but also consider laying the groundwork for creating jobs in a county that badly needs them.

But at least two important questions loom for Clark County, where the jobless rate is 13.7 percent: How many new jobs are we talking about and what are the assurances, if any, that they will come?

The answers aren’t as easy as you might think, although port leaders say their plan with Farwest Steel could directly generate up to 225 jobs and is strong, comprehensive and includes clauses to protect both the port and the community’s interests.

“Can you guarantee 225 jobs? No,” said Larry Paulson, executive director of the port. However, Paulson said, the port has done its due diligence in helping create the opportunity for Farwest to generate new employment. “They appear to be very financially sound and well-funded,” Paulson said. “They’re a good company.”

Eugene, Ore.-based Farwest would pay the port roughly $5 million to purchase up to 22 acres of industrial property on the south side of Lower River Road. Farwest — a distributor, processor and fabricator of specialty steel products — would then invest up to $30 million to construct a facility of more than 300,000 square feet. Construction of the facility, which would include distribution, processing, fabrication and office space, could begin in the second quarter of 2011, according to port officials.

The port’s plans will follow a two-step process with officials first proposing to take steps necessary to make the property available for sale and then following that action by securing an agreement with Farwest.

Port commissioners have the final say on both actions. The board is slated to hold a public hearing on the first step — freeing up the property so it may be sold — at 9:30 a.m. Tuesday at the port administrative office, 3103 N.W. Lower River Road.

100 workers relocated

Under plans for the property, Farwest would relocate 100 jobs to the port — with plans to add another 125 workers for a total of 225 jobs at full build-out, according to the port. Thirty of the relocated jobs would come from the company’s facility at Vancouver’s Columbia Business Center, and the rest would come from the company’s facilities in Tualatin, Ore., and Eugene, Ore. What is unclear is how the company plans to generate the additional 125 positions. Farwest on Friday declined to comment for this story.

Paulson said the port has visited several of the company’s facilities and talked to company officials “for at least six months or so.” And Farwest, founded in 1956, views locating at the port as a strategic business decision, Paulson said, that will give the company access to national and global distribution systems, both by rail and road. Port officials have also said the site will require little preparation for Farwest to build, a feature that was attractive to the company.

Focusing on jobs

Nevertheless, the deal is not without risks. Paulson said the port could make more money by leasing, instead of selling, the land to Farwest but the company “would not do a lease, and believe me we tried. They would not go there. I just think it’s their philosophy. They wish to be the owner. If they couldn’t purchase, they weren’t going to come. It was as simple as that for us.” Still, Paulson said, selling the land so Farwest may build is the right move because it paves the way for jobs to be created in Clark County and for larger economic development goals to be achieved in the region.

And the port is taking steps to protect its and the community’s interests, port officials said. Commissioners are expected to review the details of a purchase and sale agreement with Farwest sometime in July. While the details are still being worked out, the port plans to include a requirement that Farwest keep a minimum of 100 jobs at the site. Other protective clauses are in the offing. Those include giving the port the option to buy back the land if Farwest fails to maintain 100 jobs or if the company decides to sell, according to Theresa Wagner, communications manager for the port.

Port officials say there are other good reasons for striking the land deal with Farwest. The jobs generated by the company will pay annual average wages of about $40,000 with benefits. Moreover, port officials point to the potential ripple effects of having Farwest set up shop on the site. The deal could create another 900 jobs by way of what the port describes as “induced” or “indirect” impacts. Jobs created indirectly might include, for example, truck drivers or suppliers that crop up to serve Farwest’s new operation at the port. Any induced jobs would be more loosely connected to the company’s planned new operations at the port. Those might include, say, new hires at a bank or grocery store to serve new workers at Farwest. Induced jobs, Paulson said, are “all of those things that are secondary but important to consider in terms of the larger picture.”

Paulson said the port certainly isn’t going it alone in aiming to ink the land proposal with Farwest. Other backers include the city of Vancouver and the Columbia River Economic Development Council. “A number of people,” Paulson said, “have been supportive of our effort.”

If the commissioners approve the two-step process to sell the land to Farwest, then the company would proceed with obtaining a permit to build from Vancouver city officials. Farwest has lines of business in steel distribution, processing and fabrication. The company has locations in Washington, Oregon, California, Idaho and Utah.

Aaron Corvin: 360-735-4518; aaron.corvin@columbian.com.