Newberg Graphic Online

2009 a tough year, but there is room for optimism

Year in review — Layoffs, closures mark changes in economy

• By: David Sale  
• Published: 12/29/2009 3:19:29 PM
• Last Updated: 12/30/2009 11:40:29 AM

Room to grow —
The opening of the Allison Inn was one of the few bright spots on Newberg’s business front in 2009.

   As the New Year approaches, area businesses are looking ahead to an uncertain future after one of the toughest years for the Oregon economy.
   2009 began with a harsh snowstorm that quashed Christmas sales for many retailers and caused millions of dollars worth of damages to plant nurseries throughout the Willamette Valley — and that was only the beginning.
   The year was marked by rapid rises in unemployment across the state, due in part to the expanding mortgage crisis and a consequent slowdown of the construction industry, where total employment has shrunk by 15 percent since 2008.
   However, the crisis quickly spread, with the number of out-of-work Oregonians rising an average of 10 percent per month throughout the spring, finally topping out at just more than 12 percent statewide and just more than 11 percent in the region of Washington, Yamhill and Marion counties.
   The unemployment rate matched that of the peak level of the 1982 recession — the highest since record keeping started in 1947 — according to figures from Work Source Oregon.
   Newberg’s manufacturing sector was also hit hard, with PPM Technologies (formerly FMC FoodTech) and A-dec Inc. announcing layoffs in the first quarter and the first of a series of furloughs at the White Birch paper mill (formerly SP Newsprint), as the companies faced declining revenues.
   In this respect, 2009 ended as it began, with the recent closure announcement by Suntron promising to add another 188 local workers to the unemployment rolls, already burdened by the loss of 560 jobs over the past 12 months.
   The past year was also marked by stress and uncertainty for the staff and residents of Chehalem Springs Assisted Living Center, after parent company Sunwest filed for Chapter 11 bankruptcy, unable to pay off investments after over-leveraging numerous mortgages and real estate loans.
   One of 47 Oregon facilities owned by the nation’s fourth-largest assisted living operator, the care home has remained open under a court-ordered conservatorship while the bankruptcy proceedings — and an associated securities fraud trial of former CEO Jon Harder — make their way through the courts.
   The mortgage industry shakeout also led to changes in the way that local developers did business, as the Newberg and Dundee city councils — like other municipal governments in Oregon — were approached by major firms with requests to defer system development charges on ongoing projects.
   These fees, which cover the costs of providing utility service to new buildings, are normally due in full before an occupancy permit can be issued. In Newberg, builder Coyote Homes was allowed to make discounted payments for the Orchard Lair subdivision due once the homes were sold to occupants; in Dundee, the proprietors of the Inn at Red Hills negotiated an interest-payment schedule for their SDCs instead of a lump sum.
   However, the past year was not marked by exclusively bad news among the business community. 2009 marked the long-awaited opening of the Allison Inn, which promises to become a magnet for out-of-state visitors as well as regional convention traffic, and a corresponding boost to the local retail economy and the wine industry, both feeling the effects of a consumer spending slowdown.
   The Inn at Red Hills, though smaller in size, marks the opening of a new market sector for Dundee, which formerly lacked both short-term rental accommodations and a financial services center. These two facilities, added as part of a redeveloped west end of the city’s downtown, promise better things to come for Newberg’s neighbor.
   The past year was also marked by a display of entrepreneurship in Newberg and Dundee, as new players entered the restaurant, equipment rental, retail and computer services markets — among others — replacing failed businesses or expanding the field.

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