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Central Eastside industrial tenants are concerned that future growth in the district could force them out.

At issue is a planning process in which Portland city officials are forecasting the kinds of jobs that will comprise the district, which historically has been an industrial sanctuary. The effort is in response to big changes sweeping through the district: light rail and streetcar lines are arriving, and in 2015 the new transit bridge will open to connect the Central Eastside to the South Waterfront District.

According to data from the Bureau of Planning and Sustainability, approximately 17,000 jobs are in the Central Eastside – and about half of them are industrial-related. But since 2008, the number of knowledge-based and creative jobs (such as those with software, digital and apparel design firms) has increased while the number of manufacturing, construction and warehouse jobs has decreased slightly. Tenants have filled the Ford Building, the Olympic Mills Commerce Center and the Eastbank Commerce Center while some industrial parcels sit empty.

“There is a desire for increased employment density,” said Troy Doss, a senior planner for the city. “The question is how to do that with a mix of industrial and other employment uses.”

Doss joined other city planners and Mayor Charlie Hales last week to meet with a group of about 30 stakeholders at Multnomah County offices to discuss the Southeast Quadrant Plan. The district stretches west to east from the Willamette River to 12th Avenue and north to south from the Banfield Expressway to Powell Boulevard. Two light rail stations are planned at the district’s southern end, near the Oregon Museum of Science and Industry and Southeast 12th Avenue and Clinton Street.

“We have been talking to the same folks for a year; it’s good for them to start talking,” Doss said. “The question is about whether to allow housing. That’s where I heard the most tension.”

At the meeting, Dan Yates, president of Portland Spirit Cruises, said future growth should complement the employment base that already exists in the district.

“Somewhere in the city, you have to provide a place to work where it doesn’t require a master’s in graphic design,” Yates said. “We drove them out of the Pearl. Now the Central Eastside is very concerned that we’re going to drive them out to the suburbs. There are a lot of blue collar workers, fabricators and other trades here.”

Developers see the need for greater density, expanded height limits and housing for young workers who want to ride their bike or walk to work, said Michael Tevis, owner of Intrinsic Ventures and a Central Eastside stakeholder.

“I understand the need to protect the industrial sector,” he said. “Many of my tenants are industrial users, but they want a place to live.”

The arguments between the two disparate groups echoed what the city had experienced in the Pearl District, where gentrification pushed up rent prices and drove industrial users and small businesses across the river, Hales said.

“It’s an issue where government and business can come together – not some theoretical conversation about the future,” he said. “The government’s tough job is balancing the different visions of what that future is supposed to be. It’s not a new conversation either. We’ve been having this conversation for decades.”

At the meeting, David Lorati, owner of School Specialty Co., a manufacturer that has operated in the Central Eastside for several decades, also opposed development that could eventually force businesses out of the district.

“The industrial community needs certainty,” Lorati said. “For them, it’s about business development, not real estate development.”

The impact of transportation changes should not alter the district’s nature, he said. Rather, it should allow employees who live in the South Waterfront District or downtown to reach work easily.

“We should let South Waterfront be successful for at least 10 years before planning that kind of development in the Central Eastside,” he said.

Jonathan Malsin, president of Beam Development, disagreed with the idea that allowing industrial office users would drive existing businesses out of the district.

“I don’t see how expanding opportunities for new companies in the district and allowing the flexibility within zoning to allow future unknown industries will displace existing business,” he said.

Two of Beam’s Central Eastside developments, the Eastbank Commerce Center and the Olympic Mills Commerce Center, increased jobs during the downturn, Malsin said.

“We’re not actively trying to push out blue collar jobs,” he said. “We are renting buildings that were primarily empty. I don’t think any of our development has pushed any of the businesses out.”

Tevis, who acquired and renovated the Ford Building, a 104,000-square-foot structure where startups and small businesses now flourish, said he would like to see more flexibility in key pockets of the district.

“Zoning should allow for investors and property owners to develop high-employment, high-density residential within a quarter-mile of the train stations,” Tevis said after the meeting. “We should allow software companies, more creative type of users and even venture-backed tech companies.”

The Central Eastside Industrial Council does not oppose residential, office and retail development, but would like to see it occur in areas currently zoned for it, said Debbie Kitchin, who in January will become board president of the CEIC.

“There is a lot of acreage that is undeveloped in the MLK-Grand corridor, on Burnside and Morrison (streets),” she said. “We’d like to see the more intensive development happen along those corridors.”

Doss agreed that protecting the industrial land supply would be a critical planning goal.

“We have decades’ worth of zoned capacity to build condos, apartments, offices and retail throughout the central city,” Doss said. “We have a finite supply of industrial land.”

The stakeholders’ group will meet at least monthly over the next 12 months to resolve different issues. The next meeting is Jan. 16, at 5:30 p.m., at Multnomah County offices.

Additionally, a team of six land use and planning experts from the Urban Land Institute will study the district and its planning challenges, Doss said.

Final recommendation on land use and transportation direction will be made to the city’s Planning Sustainability Commission by fall 2014, Doss said. The plan could be adopted by Portland City Council by early 2015.