What Works: Cross-City, State Collaboration Fuels Metro Portland’s Economic Growth

Objective: This What Works for Cities case study highlights how a number of cities and counties across two states have come together in a unique public-private partnership to promote the economic growth of their region through the establishment of Greater Portland, Inc.

Major Participants: City of Portland, OR; Portland Development Commission; Portland Regional Partners for Business, Greenlight Greater Portland; Greater Portland, Inc.; seven counties; 20+ municipalities and dozens of private sector businesses, colleges/universities and related stakeholder organizations (over 150 partners total).

Background: For many years, the City of Portland, through the Portland Development Commission (PDC), was leading economic development efforts for both the city and the surrounding region. In many ways, this presented a challenge: the PCD is a city-focused organization, funded by city taxpayers; regional economic development is not necessarily its mission. Yet regional economic development was becoming increasingly important. Cities and towns within the region were no longer competing against each other for business; as its output grew, the region was competing with other regions both nationally and internationally. Collaboration among city agencies within the Portland-Vancouver metro had traditionally been weak, and communication with business groups was limited.

Complicating matters, the metro area is split between both Washington and Oregon. In Oregon, state government and utility companies have an unusually strong role in local economic development. Because of tax incentives and other programs, many economic development decisions are made at the state level, often bypassing city or county economic development plans.

How it Happened: To address the gap in regional economic development coordination, the Portland Regional Partners for Business (Regional Partners) formed. This public-private partnership focused on shared economic priorities for the six-county region. One of the Regional Partners’ first efforts was to create a comprehensive economic development strategy that was led by the public sector and included strategies and specific actions to grow the regional economy.

Regional Partners began to function more a like a regional public agency rather than a public-private partnership, and many in the business community expressed frustration that the private sector was underrepresented in regional economic development strategies. In response, Greenlight Greater Portland (Greenlight) was established. Greenlight launched in 2008 as the region’s first business-led, business-funded regional economic development effort. Greenlight’s mission was to support business attraction, retention and expansion within the greater Portland Vancouver MSA. Through its private-sector led marketing efforts, Greenlight was intended to supplement the economic development strategies at the city, county and state levels. Greenlight’s annual budget of $1 million was funded entirely by major businesses in the region.

Ultimately, there became great overlap between the efforts of Regional Partners and Greenlight. Making matters worse, Greenlight was founded just as the Great Recession began. Fundraising became increasingly difficult, and there were concerns about the sustainability of each organization. The diffusion of resources made it difficult for each organization to capitalize on the other’s efforts. In December 2010, the two organizations signed a letter of intent to merge. In 2011, Regional Partners and Greenlight official merged in to Greater Portland, Inc. (GPI), a truly public-private regional economic development entity.

GPI serves seven counties in Washington and Oregon. The organization’s mission is similar to that of its disparate predecessors, and includes the recruitment and nurturing of local businesses in an effort to improve the local economy, promote long-term job growth and grow the commercial tax base. In addition to traditional business development, GPI prepares market analyses and assists companies in site location, permitting and talent attraction. GPI is specifically focused on supporting four clusters: software and technology, clean tech, athletic apparel and advanced manufacturing. To ensure continued growth within these clusters, GPI heavily promotes export strategies, including global trade and attracting foreign direct investment.

Results for Local Economy: From 2011 to 2014, GPI has helped to attract and retain more than 1,000 jobs. In 2014, GPI helped to bring 275 new jobs to the region through its pursuit of more than 450 leads, which resulted in 35 active prospects, four of which relocated to the region that year. The new companies included Airbnb, the internet platform that allows users to rent out homes, apartments and private rooms who are looking for lodging alternatives around the globe. Airbnb opened its North American operational headquarters in Portland—bringing 160 new jobs to the region.

Through the support of GPI’s export initiatives, the region’s exports are expected to increase from $33.9 billion in 2013 to $42 billion in 2017. GPI launched its Global Trade and Investment Plan in the summer of 2015 to continue moving the needle on export and FDI efforts.

GPI has also spearheaded the development of a five-year regional action plan called Greater Portland 2020. GPI has brought together a coalition of more than 40 public, private and nonprofit stakeholders to align the region’s economic development priorities into one unified vision.

Remaining Challenges: Despite the region’s best efforts at public and private sector collaboration, the reality is that the partnership spans multiple cities, counties and states. There is still some inherent competition among geographies, which are all eager to grow their own commercial tax base. This is particularly true given that GPI’s efforts tend to focus on the inner four counties because the remaining three are farther from the urban core and have more rural landscapes. Most business attraction and retention efforts are concentrated within the four more urbanized counties because the businesses’ targeted workforce is increasingly opting to live closer to downtown. The nature of the regional partnership has also meant that sometimes, individual cities or counties have not always been as willing or able to invest directly at the same level as others.

Furthermore, GPI can only usher in so much change in a climate where the state government and utility companies retain such control and influence over local economic development.

Lessons Learned: Early on, it became evident that having two agencies, one led by the public sector and one led by the private sector, was not sustainable. The two were not in regular communication, and as a result were duplicating each other’s efforts. Having two agencies was not financially sustainable, either. Creating a true public-private partnership diversified the effort and helps to ensure its sustainability over time, when budgets may become more or less constrained based upon financial markets.

To learn more about Greater Portland, Inc., and how it’s helped to grow the Portland-Vancouver economy, visit www.greaterportlandinc.com.