Employees of Gravitate enter their downtown Vancouver workplace through a side-street door and climb wooden stairs to their second-floor loft space.
Open and airy, the upstairs office in the former Koplan’s Home Furnishings building includes groupings of desks that bask in the natural light coming in from floor-to-ceiling windows and unfiltered by walls and cubicle barriers. It’s precisely the kind of urban workplace today’s rising tech stars crave, in fact, demand, said William Roskowski, co-owner of Gravitate, a Web design, development and branding business.
Roskowski and partners, Michael Parker and Cyndi Parker, took advantage of Vancouver’s depressed real estate market and purchased the historic building at 1012 Washington St. in December for a bargain at $1.4 million. The company expects to shell out another $800,000 to $1 million to renovate the building’s first floor where it plans to offer incubator space to similar startups.
“We wanted to make this the creative hub of downtown Vancouver,” Roskowski said.
Downtown employer Bob Wallis had the same vision when he purchased his downtown building for $1.7 million in 2007 and renovated the space for his civil engineering firm and several like tenants. But Wallis learned in September that his two-story building is earmarked for demolition to make way for a parking garage to serve one of the biggest public works projects in Vancouver’s history, the approximately $3 billion Columbia River Crossing Interstate 5 bridge replacement.
“I don’t believe I will find another building like this in Vancouver,” said Wallis, owner of Wallis Engineering. He estimates he invested at least $1 million to renovate the building, a former warehouse for the Lucky Lager brewery at 215 W. Fourth St.
Experts say the disparate experiences of Gravitate and Wallis Engineering illustrate the paradox of downtown Vancouver. On the one hand, the CRC’s lengthy construction period will likely wreak havoc and disruption upon the city’s urban core for the next seven to nine years. But when the work is done, downtown Vancouver will be easier to access from Portland and still hold all of the advantages Washington has always had over Oregon.
Roskowski also called the absence of a state income tax in Washington a benefit, compared with Oregon, where the majority of income tax filers pay a rate of 9 percent on their taxable income.
“That’s huge, especially for a small business,” in terms of negotiating salaries, Roskowski said.
Gravitate employs about 30 people, most of whom are under the age of 30.
Called the Millennial Generation, the group, born roughly from 1981 to 2000, prefers city dwelling, said Alisa Pyszka, Vancouver’s business development manager.
“That generation really desires the urban lifestyle,” she said, adding that the city hopes to meet housing demand through programs such as a property tax abatement for apartment developers.
Despite the headaches years of I-5 construction will likely bring, the CRC project itself is going to improve the commute between Portland and Vancouver, making downtown a more appealing employment site for young, educated workers, said Kristin Hammond, a senior associate with the Portland office of Jones Lang LaSalle commercial real estate.
The project will also connect downtown Vancouver to an expected growth spurt in Portland, listed as one of the world’s top 20 cities expected to grow in population and real estate investment by 2020, according to a report published by Jones Lang LaSalle.
Leasing and sales of downtown office and retail space has seen an uptick since December, when the federal government announced its intent to move forward with the CRC project, Hammond said.
“We’re seeing a lot of movement from developers and major investors that are eyeing opportunities,” she said.
In the meantime, Pyszka said downtown advocates are working to keep redevelopment efforts alive despite the leaner, post-recession budget of city government.“We really have no incentive program to bring businesses here,” Pyszka said. But the city can make sure it is ready to receive businesses. After a decade of revitalization efforts that were focused on large commercial projects meant to attract big corporations, Pyszka said city officials are still moving forward with a strategy to accommodate midsized, knowledge-based businesses.
Companies such as Gravitate and Wallis Engineering both fit the bill: Staffed with educated employees who work with their heads to produce ideas and information, as opposed to working with their hands. Pyszka said some of the businesses are an outgrowth of Clark County tech firms, such as nLight.
“It’s more of a nerdy engineering group, as opposed to funky engineers. I think that’s where we need to focus,” she said.
An urban existence is part of the attraction, Pyszka explained.
“We’ve got to activate downtown if we’re going to bring this knowledge-based economy in,” she said.
Pyszka’s office helped provide information to downtown newcomer Panther Systems Inc.
“They talked about our concerns with transients and crime,” said Phil Farmer, chief executive officer of the 30-employee software firm.
His company moved into a suite in the Wallis Engineering building in October. Plans to demolish the building are now a source of frustration for Farmer.
“I’m trying to be optimistic, but it’s going to be difficult to move again,” Farmer said.
Options to the east
Other downtown challenges include a shortage of office space, which may have played a part in PeaceHealth rejecting the city center as a potential headquarters location. Employees of PeaceHealth, the new corporate parent of the former Southwest Washington Medical Center, chose the former Nautilus headquarters in east Vancouver over the 10-story Bank of America building in downtown Vancouver.
PeaceHealth’s office will employ approximately 467 workers who now will eat lunch, shop and go out for after-work drinks in another area.
But Elaine Dunda, the company’s senior vice president for shared services, said downtown dining and retail opportunities had nothing to do with PeaceHealth’s site selection, nor did concerns about bridge construction.
“Downtown met many of our criteria,” Dunda said. “There was just a preference (for east Vancouver) at the end of the day.”
That contrasts with leaders of companies that opted for a more central location, who say their employees prefer downtown for its walkable proximity to coffee shops, lunch spots and a night scene at the end of the work day. The urban setting also offers apartment living downtown and quaint bungalow housing in the nearby Hough neighborhood for bicycle commuters.
“We looked at Vancouver as an up-and-coming city with a central location,” said Roskowski, who resides in Portland and drives in the opposite direction of the majority of I-5 commuters each day.
He hopes to move his family to Vancouver in the near future. Bob Wallis recently moved to downtown Vancouver after selling his home in Battle Ground. His company employs 27 people, including 11 civil engineers.
“There are two types of people, those who want to live in the suburbs and go to Red Robin and drive everywhere, and those who want to take a walk at lunch,” Wallis said.
That segment of employers are in the market for so-called hip and trendy office space that often springs from the conversion of older structures, such as the former Koplan’s building, said Eric Fuller, a Vancouver commercial real estate broker.
He agreed there is a limited number of that type of “cool and hip” downtown building. Fuller pointed out that a community connector — a parklike freeway cap over I-5 that would border the existing Evergreen overpass — will re-establish a link between downtown and the Fort Vancouver National Historic Site.
That development would open up more than 1 million square feet of historic Army barracks for lease, just west of the downtown core.
In addition to the historic space, Fuller said new construction can also reproduce the look of office lofts.
“Isn’t the new downtown library a hip building?” Fuller asked. “The answer is, yes, new construction can create a hip building. It’s just not an old building.”