Subaru of America Inc. wanted ground that was ready to be broken and built on.

The Port of Portland had it.

The Port of Vancouver did not.

Nevertheless, the deal that landed a new 413,000-square-foot Subaru auto parts distribution facility at the port across the river should not be taken as a lost opportunity for Clark County, according to Larry Paulson, executive director of the Port of Vancouver. That’s because Vancouver’s port — already the West Coast point of entry for Subaru vehicles — is focusing its time and resources on building up its rail facilities to pump up jobs. And a strategic decision like that means that the port’s been slower to develop its Centennial Industrial Park, which would have been the logical location for the new Subaru facility.

“They needed a shovel-ready situation where they could either move into an existing building or build one to their specifications,” Paulson said of the new Subaru facility slated to break ground in Portland this month. “We couldn’t meet their needs in a timely fashion.”

In fact, Subaru knew the port likely wasn’t going to be able to accommodate the project, Paulson said, because the company’s real estate representative personally told him so. But the company included the port in the bidding process for the auto parts distribution facility as a courtesy, Paulson said.

Under the deal it struck with the Port of Portland, Subaru will build a 413,000-square-foot complex housing auto parts distribution, a training center and regional offices for the company on a 19-acre site at Rivergate Corporate Center III. The company will relocate its distribution operations to this new location from its current 175,000-square-foot building at 158th Commerce Park in Portland. The move will more than double Subaru’s space in that city.

Josh Thomas, a spokesman for the Port of Portland, said Subaru was outgrowing its current location in Portland, which drove the company to seek more space. Michael McHale, director of communications for Subaru of America, said the bigger facility in Portland won’t add new jobs because it involves moving existing workers to a new location. However, he added, “it’s a good investment, and it’s demonstrating our commitment to the area for the future.”

Multi-Employer Property Trust, which owns and manages real estate in a variety of metro areas in the U.S., has a master development agreement with the Port of Portland for the 114-acre Rivergate Corporate Center III, where Subaru’s new facility will rise. Under the development agreement, MEPT will enter into a 55-year ground lease with the Port of Portland. Trammell Crow Company, a national real estate development and investment firm, will develop the $20 million Subaru project for MEPT. Subaru will then sublease the building for an initial term of 10 years.

The ground lease that’s part of the deal is valued at $4.1 million, Thomas said, with the Port of Portland receiving $500,000 of that upfront and the rest — $3.6 million — in 18 months.

Brad Fletcher, executive vice president and managing director for Grubb & Ellis Company, who represented Subaru in the deal, said the company wants the facility to be constructed according to green-building standards.

Both Port of Portland and Port of Vancouver officials said Portland’s win in the Subaru deal does not mean the company plans to shift import activities away from Vancouver’s port. In July 2010, Subaru, a long-standing tenant at the Port of Vancouver, inked a deal with the port to renew its current lease, which was scheduled to expire in August. The port’s Board of Commissioners unanimously approved the deal, which extended the company’s lease from September 2010 to August 2020.

Paulson, the Port of Vancouver’s executive director, said Subaru is a “first-rate” company to work with. The port handled an estimated 60,000 Subaru vehicles last year. The company accounts for roughly 8 to 9 percent of the port’s revenue, according to Theresa Wagner, port communications manager. In an e-mail to The Columbian on Tuesday, Wagner said Subaru plays an important role in diversifying the port’s cargo. “That diversity of cargo has helped us weather the economic difficulties fairly well,” Wagner said.

Paulson said it disappoints him when people take a deal like the new Subaru project and turn it into a reason to believe that Portland got the better of Vancouver. “That’s a zero-sum game that doesn’t work if you think about the economic interconnections of our regions,” he said. He said the Subaru deal represents a “gained opportunity for our region and our community.”

Thomas, the Port of Portland spokesman, said the ports have a joint marketing agreement under which they work together to boost the region’s economy as a whole. That includes everything from sharing space at trade booths to collaborating on the Columbia River channel-deepening project.

The Port of Vancouver site that might have worked for Subaru, had it been ready, is the 108-acre, light-industrial-zoned Centennial Industrial Park, located southeast of Vancouver Lake. A major reason why the property wasn’t ready is because the port is still filling it in with dirt and sand to prepare it for development. About 812,000 cubic yards of fill have been placed on 58 acres of the 108-acre site, and the port needs to dump an additional 100,000 cubic yards to finish it. By contrast, the other 50 acres of the parcel does not have any fill on it.

Paulson said if the port found a customer who wanted to develop the site — and who wasn’t in a hurry — “we’d talk to them.” In any case, Paulson said, the port’s emphasis on its signature rail project, the $150 million West Vancouver Freight Access project, is the right focus because it will boost numerous port operations and aid port tenants in expanding their businesses.

Port officials expect the rail expansion, to be completed in 2017, to create between 1,000 and 2,000 new, permanent jobs and roughly 4,000 construction jobs over the life of the project.

Print this article