ECONOMIC TECHNICAL ADVISORY COMMITTEE MEETING RECORD

June 17, 2002 – 2:00 p.m.

Metro Regional Center, Council Annex

Committee Members Present: Chair Andy Cotugno, Robert Anderson, Dae Baek (for Tom Potiowsky), Al Burns, Cindy Catto, Brent Curtis, Rob Degraff, Greg Jenks, Tom Kelly,
Gene Leverton, Patti McCoy, Terry Morlan, Shelly Parini, Kelly Ross, Dick Sheehy, Dennis Yee

Also Present: Steve Kountz, Portland Planning; Elissa Gertler, Portland Development Commission; Mary Gibson, Port of Portland

Metro Staff Present: Mark Turpel, Malu Wilkinson, Carol Krigger, Karen Withrow

Chair Andy Cotugno, Metro Planning Director, called the meeting to order at 2:00 p.m. and reviewed the agenda.

Mark Turpel, Manager, Metro Long-Range Planning, stated that the purpose of the meeting was for the committee to comment on the methodology shown in the request for proposals (RFP) to see if it is adequately described, complete and if it will meet the need.

Malu Wilkinson, Metro Associate Regional Planner, reviewed Metro’s overall approach to the economic, social, energy and environmental (ESEE) analysis. She explained committee roles and responsibilities as part of the process. She noted the possibility of developing local criteria for certain sites. She reviewed the 2040 design types hierarchy for economic development and mentioned key points that the consultant proposal will cover (see pages 13-14 of the RFP). The Metro RFP for ESEE work was modeled after other proposals, most of which were more qualitative than quantitative due to cost.

Al Burns, City of Portland Planning Bureau, said a parallel construction (such as low, medium, high) is needed to talk about economic and environmental impacts.

Mike Houck, Audubon Society of Portland, asked about the chart on page 11, as it relates to item 1 under Data Analysis on page 14 addresses unbuildable lands. When this process started, 200 feet of land on all sides of water structures were taken out as unbuildable. What is the status now? He felt the ESEE analysis had been done already, in the 2040 Growth Concept. Protection of natural resources is a part of that.

Chair Cotugno reviewed the basics of the 2040 Growth Concept, which is the fundamental direction for growth, especially in centers, main streets and corridors. He noted the relationship between the 2040 Growth Concept and urbanization, resource protection and industrial development. In response to Mr. Houck’s question, Chair Cotugno said Metro has identified key areas for development and protection and is now looking at specific details and the tradeoffs between competing uses for the same land. He agreed that ESEE is not just about development; resource protection is equally importance.

Mr. Houck said when looking at relative priority, design type areas such as centers, corridors and main streets are more highly competitive for the same uses.

Chair Cotugno said that if all things were equal, it would seem logical that there would be less preservation in centers and more in other places. The committee will have to determine if this is true and to what degree.

Terry Morlan, Northwest Power Planning Council, asked how the rest of the ESEE will be done, and how the process will keep duplication to a minimum in terms of what impacts are classified as environmental, social, economic or energy.

Mr. Turpel said that a continuous effort would need to be made to minimize duplication.

Ms. Wilkinson said Metro staff is doing the environmental, social and energy analysis. ETAC and others will comment the economic and on how the four factors relate.

Greg Jenks, Clackamas County, said the approach seems to put resource protection up against development. He wondered if there was a way to look for middle ground.

Chair Cotugno said there are three options: allow, limit and prohibit. “Limit” would be the “middle ground” in that it would allow for special circumstances.

Dick Sheehy, IDC, asked how the current limitations will be taken into account. Chair Cotugno said it will be the base standard.

Mr. Turpel reviewed the consultant proposal, beginning with the overall approach on page B3, which describes four key categories of competing uses for watershed resources. The consultant expects to complete eight tasks, which will result in four products as shown on pages B6-9 of the proposal.

Cindy Catto, Associated General Contractors, said the original timeline required the consultant to be finished by now; however the pre-work has not yet been done. She asked if a new timeline has been established and whether it still only allows eight weeks to work.

Mr. Turpel said the Metro Council is waiting for an ETAC analysis of the methodology before establishing a new timeline. The timeline is short, but the Council clearly wants an economic analysis that is as detailed and deliberate as the environmental analysis. The consultant has said the work can be completed in eight weeks once the approval to begin is received.

Ms. Catto asked about the status of peer review. Mr. Turpel said funding is being solicited to put together a panel for peer review. About $15,000 has been raised so far but if more does not come soon, ETAC may be asked to do peer review on the final report alone rather than the methodology and final report.

Mr. Burns asked if the consultant will be solely responsible for creating the list of competing uses. Mr. Turpel said no, staff will draft the list and ETAC and others will review it.

Steve Kountz, Portland Planning, asked if staff will be drafting and/or clarifying consistent uses for the consultant. He felt definitions would help the consultant in their analysis.

Ms. Wilkinson said staff had not considered this yet but it was a good idea. She added that staff has considered three categories within the “limit” category, such as “strict,” “moderate,” and “light.”

Mr. Jenks agreed that further defining categories within “limit” may help allow some development where it can be beneficial.

Mr. Houck said most people probably agree that integrating natural and built environment is the goal. However, in reality it may be necessary to “prohibit” more than expected.

Shelly Parini, City of Gresham, said she sees a real opportunity between keeping quality of life and a good economy. She suggested asking, “What new economic opportunities can we find that create environment and social benefits?” This takes the focus off regulation and asks how the region can build centers, protect resources and make it all an economic success. For example, she suggested looking for incentives to encourage “green industries” over others in a “limit” situation.

Mr. Burns agreed that there will need to be more than regulations.

Mr. Houck said when funding this kind of development in urban areas, any incentives need to be real.

Mr. Jenks said there are funding opportunities with federal or state programs as well as private opportunities for restoration and “green” development.

Ms. Parini said that the Columbia Corridor is a great example of an area where restoration could occur.

Mr. Houck agreed, but said there are limited opportunities for this type of cooperation.

Chair Cotugno said greenspaces acquisition is equally important but takes time; restoration can sometimes happen faster.

Gene Leverton, Gene Leverton and Associates, said ETAC should look at the business and economic factors related to Goal 5. After reading the proposal he did not see a request for knowledge of the local business community as a basis for the analysis, and he is not sure the literature search will address the necessary level of needs. He would like to see questions like these added to the scope of work in the proposal: 1) What are the key business areas in Portland? 2) What is the interaction between them? 3) How does interaction relate to other infrastructure needs? and 4) What are their needs?

Chair Cotugno said the 2040 Growth Concept hierarchy is a place-oriented model, not something that shows economic drivers for the local economy. He said Metro has a lot of economic data that could be used to look at where the various environmental factors intersect with the business community.

Mr. Burns agreed but noted that while there is an environmental and growth strategy, there is not a regional economic plan, such as a definition of success for the region as a whole and a goal.

Dennis Yee, Metro Chief Economist, said a scoring system based on values would help to determine which industry types are winners or losers for the region.

Mr. Jenks said that there are local economic plans with goals such as Mr. Burns described. He said he disagrees with the idea of trying to just look for winners and losers. Instead he looks for primary and secondary industries because a mix is needed for a successful economic sector.

A number of committee members agreed that there are many plans that could be found in a literature review. However, Chair Cotugno said he will look for opportunities to incorporate the questions suggested by Mr. Leverton.

Ms. Catto cautioned against focusing on models that are not relevant to the region.

Mr. Leverton said it is all about how much one relies on the literature. The proposal makes it seem like it is the key input.

Chair Cotugno said Metro will supply data that they can add to their analysis beyond the literature.

Mr. Leverton reiterated that they will not learn more about interactions among the different business types within an area from literature review. Those interaction are key to analysis.

Kelly Ross, HomeBuilders Association of Metropolitan Portland, asked if the consultant will look at how to address competing, primary uses in a single area.

Ms. Parini suggested asking the consultant to propose target industries for key areas that are not already fully loaded with regulations, so that new industry can still come in. In the Columbia Corridor, for instance, many industrial properties are high risk for development. That creates a huge economic impact that needs to be considered when choosing whether it will be “allow,” “limit” or “prohibit.” A balance of types of jobs and taxes is needed in any given industrial area.

Mr. Turpel said that this issue could be addressed when more information about industrial lands and job demand is made available.

Mr. Morlan said the EcoNorthwest model usually integrates social and environmental factors, so ETAC need to specifically ask the consultants to focus on economic factors. This way the components will not be counted multiple times.

Patti McCoy, Columbia Corridor Association, asked about incentives - what we will or will not get from them. She requested a written summary or presentation on this topic.

Mr. Leverton asked what “focusing on economic consequences (tasks 5-6)” means?

Ms. Wilkinson said that Goal 5 legislation uses this terminology and that is why they used it. It relates to the consequences of “allow, limit, prohibit.”

Chair Cotugno stated that the economic consequences of restoring existing areas versus developing new areas would need to be considered.

Mr. Leverton said there are consequences of infill and redevelopment in “existing” areas, too. He said they need a working definition of consequences and an understanding of how the consultant will measure it.

Mr. Curtis asked about the literature search and peer review, given limited funds. He wondered about spending so much time on a literature review and was unsure what “peers” can tell us in this case.

Chair Cotugno said the ESEE analysis might be specific to Oregon, but it is very much like an EIS or the environmental reviews done in other places. In his opinion, there are many experts whose experiences dealing with development versus environmental protection could be beneficial to Metro.

Mr. Houck agreed.

Mr. Turpel dialed EcoNorthwest and initiated a conference call with Ed Whitelaw and Ed MacMullen. A series of questions were asked and answered:

1.  How will EcoNorthwest integrate data on regional economic drivers with the place-based hierarchy (2040 Growth Concept) that was in the request for proposals (RFP)?

Mr. Whitelaw said doing this would impact budget and timeline. There would be short- and long-run economic drivers. They have a short run, four to eight quarters, economic forecasting model and others have long-run models that are aggregate at the regional level. Trying to tie the model results to site-specific or sub-watershed areas would be very difficult, especially depending on detail.

Mr. Yee asked if his data profiling employment by SIC code with firms and numbers of jobs are a starting point? Would a regional industry forecast showing approximately where those jobs would locate over the next 20 years help?

Mr. Whitelaw said it would be useful but he still hesitates to commit because the issue of economic drivers is very broad and so the type of questions Metro wants answered and the degree of specificity would impact output.

Mr. Burns said we have a good idea of what is good, better, and best in terms of the environment and we know how it fits with sense of place (the 2040 Growth Concept), but we do not know what is good, better, or best in terms of economic impact.

Mr. Whitelaw said determining this requires good definitions of “allow, limit, prohibit.” Without those definitions, it is hard to respond to the question.

Mr. MacMullen said their current focus is on qualitative rather than quantitative measurement. Qualitative is the sign or direction of the impact versus measuring the magnitude of the impact (quantitative). Their literature review is a means of integrating economic concerns with environmental or other criteria by exploiting findings from other areas. Doing this requires applying what was learned in other studies, under different circumstances, to Metro’s situation. Referring to the current request to integrate economic analysis in the land uses (table 5, page 15 in the RFP).

Mr. Turpel asked if factors can be added regarding the metropolitan area economy.

Mr. Whitelaw said it is possible but would require work with Mr. Yee’s data and interpretation of the literature review to a very specific situation (metro region with growth concept overlay).

2.  Mr. Houck asked if they think the last row in table 5 (openspaces) accounts for unbuildable land?

Chair Cotugno clarified the question, saying that if land is already not available for development, is there an economic impact?

Mr. Whitelaw said there could be an economic impact. It would be very easy, in that case, to calculate a numeric loss. It is harder when there are competing uses.

Mr. Houck said some lands are theoretically unbuildable, but in fact development occurs.

Mr. MacMullen said they would depend on Metro to define “unbuildable.”

3.  Mr. Turpel asked whether there is potential, especially in types 3 and 4 competing uses, to double count impacts across the environmental, social and economic categories.

Mr. Whitelaw said they think the environmental analysis stops before placing a value on environmental services so that there will not be double counting. If values are assigned to the environmental factors, they will use professional judgment and experience to avoid double-counting on either side of the ledger.

Mr. Turpel asked if their decisions would be transparent enough for Metro and/or ETAC to ensure that they agree with the decision.

Mr. MacMullen said further definition will be required in a kick-off meeting with Metro and ETAC, and then it will be easier for everyone to understand the process.

Mr. Whitelaw said there will be many times when they will get a result and Metro will say “Oh, that’s interesting. What does that mean? We should have studied that in the first place.” He wondered how to deal with the pre-analysis in order to get to the analysis? Will Metro and/or ETAC work these out with them?

Chair Cotugno said that if it is a big enough issue, the Metro Council will have to decide if Metro can spend more time and money and if not, how to handle it.

4.  Mr. Turpel asked Mr. Whitelaw and Mr. MacMullen to define “economic consequences” as used in their proposal.

Mr. Whitelaw said it means positive and negative impacts, constrained somewhat by what they will find in the literature. Generally there are three categories of consequences:

1.  changes of values – cost/benefit analysis, gross product

2.  impacts – changes in land uses, acreages, etc.

3.  equity - changes across income brackets, geographic sectors, etc.

They define their work under #2, impacts.

Mr. Turpel asked if this includes ripple effects of the impacts such as those related to tax revenue.

Mr. Whitelaw said they can imagine several ripple effect factors that could be considered based on the study, but not within this budget and timeframe.

5.  Ms. Catto asked how the literature review relates to identifying impacts on jobs, and what they plan to study.

Mr. MacMullen said that jobs would be the ideal way to do this, but the scope of work, budget and timeframe do not allow for that. Therefore, they will look for other studies as close to Metro’s situation as possible. Studies that deal with job impacts may or may not relate closely to Portland’s circumstances.

Mr. Whitelaw asked if Mr. Yee’s SIC data has been forecasted out over time and distributed spatially so that they could use it with good definitions of land uses for the job analysis? He asked if constrained areas have been assigned to this data?

Mr. Yee said no, but agreed with them that this intersection of data is what would lead to results on jobs. He said this is key to the study and he is willing to help make it happen.

Ms. Catto said this is key to comparing economic loss versus the value of preservation.

Robert Anderson, Bonneville Power Administration (BPA) Economist, asked if they can do a qualitative jobs analysis.

Mr. Whitelaw said they cannot guarantee their ability to do this based on the studies available. It depends on finding other areas like the Portland region, looking at how they measured things and having definitions for “allow, limit and prohibit.”

Mr. Anderson asked if the qualitative review will include overall aspects of the economy?

Mr. Whitelaw said it will generally judge areas neutral, positive or negative with the qualifying assumptions.

Mr. Burns asked if we can have big negative, medium negative and small negative?

Mr. Whitelaw and Mr. MacMullen said they will do this as the data allows.

Mr. Turpel referred EcoNorthwest to the questions faxed to them from Noelwah Netusil, PhD, Reed College, and asked them to respond.

Mr. Whitelaw said he interprets these questions as asking how deep the analysis will go. He felt that it will not really provide a complete picture but they will do their best based on the data. As far as comments on the value of literature review, they see the value in not re-inventing the wheel.

Chair Cotugno asked about external research and how they judge what is relevant and whether they can include local literature (studies done for this region).

Mr. Whitelaw said more is better and articles done closer to home or closer to the issue are better and will be emphasized.

Mr. MacMullen said part of the professional challenge is tailoring benefits from elsewhere to particulars of issues at hand. There are professional practices brought to bear and they will make this transparent. They will look for studies of good rigor and quality that are also applicable to the situation.

Mr. Turpel then referred everyone to the questions faxed from Eric Hovee, ED Hovee and Company, about an externalities model versus a more transparent process.

Mr. MacMullen said some of this could be clarified and discussed in a kick-off meeting so everyone can understand and agree on expectations and outcomes. Frequent communication and a detailed work plan will make a huge difference in how well everyone works together and understands the process.

Mr. Leverton asked about economic significance issues as related to the 2040 Growth Concept designation of commercial and industrial areas. He said a literature review could look at these areas generally across the region but it would not look at sub-watersheds or economic interactions between areas.

Mr. MacMullen said this is true, the studies will be more regional. Site-specific analysis, as he understands it, looks for differences so significant that “rules” need to change in those areas.

Mr. Leverton said that where the lands are within the Metro area and how close they are to transportation services is economically significant to business. A regional analysis may not identify the real friction points and therefore it will not get to the key information.

Mr. MacMullen said there are lots of details and challenges to be worked out. It is not accidental that the results we are looking for do not already exist. They are glad to keep talking.

Ms. Catto asked about timing.

Mr. Whitelaw said they can still commit to do what they have proposed in eight weeks, but it will require definitions of “allow, limit, prohibit.” In addition, they need to look at how and if to use Mr. Yee’s data.

Chair Cotugno said we need to refine the methodology, do more scoping, and then think about whether eight weeks is really the right thing to do.

The conference call ended.

Chair Cotugno asked the group if they want to spend the time to see and understand Mr. Yee’s forecast information and other methods of environmental protection, as well as review the City of Portland’s ESEE analysis. This could be the focus of the next meeting, allowing staff a month to do more review and scoping.

Mr. Burns said he would like to see data on a map as it relates to commercial/industrial.

Members agreed to receive as much information by email as possible and to ask questions at next meeting in four weeks.

Mr. Leverton said they need further clarification of regional versus subregional focus. The business community will need information at the subregional level to meet real needs.

Mr. Morlan said he thinks some impacts may be on the aggregate level while other questions are more locally oriented.

Chair Cotugno said we can and will do the aggregation, but we need to decide what the multiplier effect is. For instance, if we take land out for a 20-year supply, what is the impact on the urban growth boundary expansion and what is the cost of providing services?

Mr. Burns said that it is likely that we will be able to find a win-win solution for the regional or maybe sub-watershed level, but not at the jurisdiction level or the tax lot level.

Chair Cotugno agreed with Mr. Leverton that we will have to go to some lower levels to meet business community needs.

Mr. Curtis expressed concerned about waiting a month with so much work ahead (implementation, application, etc.) and only $50,000 to spend. He said it is clear we will have to accept a second- or third-best choice based on the terms of the study and available funding, so we need to just make decisions and get the work done.

There being no further business before the committee, Chair Cotugno adjourned the meeting at 5:15 p.m.