PORTLAND, Ore. (AP) — Boise Cascade says it may close a plywood mill in eastern Oregon at the end of the year and lay off all the 229 people who work there.

“We haven’t made a definite decision yet to curtail (production) at the facility, but we wanted to give the (regulatory) notice to our employees that it is a likely possibility,” spokeswoman Lisa Chapman wrote in an email Tuesday.

Wildfires have limited access to timber for the Elgin mill, according to Chapman, but she said the main factor threatening the plant is a restrictive order from the state Department of Environmental Quality regarding contamination in the plant’s wastewater.

Boise Cascade received a state water quality permit in 2018, according to Chapman, but she said the state issued an order this past April to restrict water use because of dioxin contaminants.

The Oregonian/OregonLive reports Boise Cascade has filed a lawsuit to overturn the order and Chapman said the company is having ongoing conversation with regulators.

Harry Esteve, communications manager for the Oregon Department of Environmental Quality, said the department sought to place limits on Boise Cascade after learning of contaminants in the water that originated at the company’s landfill.

“DEQ is working diligently and in good faith toward a settlement,” Esteve said.

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T.J. Sullivan couldn’t be happier with the market reaction to the office building he’s developing in downtown Salem.

With eight months to go before construction is completed, the 30,000-square-foot building is 100 percent leased at $2.40 per square foot. In addition to his own insurance company taking the ground floor, two stockbrokers and a legal practice have taken space in the four-story structure rising on an industrial lot.

The market was hungry for new office product, Sullivan said.

“It was underbuilt, underpriced and the market corrected,” he said. “I just got in before everybody else did.”

The development is on a former Boise Cascade site at 235 Front St. S.E. The new building replaces a vacant concrete structure that was demolished.

“It was a home to pigeons,” Sullivan said.

Office tenants are looking for quality spaces, he said.

“If you do something right and make it nice, you’ll find tenants,” Sullivan said. “If you try to make something cheap, you’ll have a tough time.”

The office building is part of a raft of developments coming to downtown Salem as Oregon’s capital finally sees the benefits of the state’s long economic expansion.

Historic homes are being snapped up, and more restaurants and boutique shops are cropping up.

“We do for the first time have a lot going on for us,” said Sheri Wahrgren, downtown revitalization manager for the city of Salem.

Salem is Oregon’s second-largest city, with a population of 161,637. It has long been a company town, with many jobs connected to state government or services such as the state hospital and prison. The downtown core can be quiet on nights and weekends, when offices are closed.

The dominance of state government in Salem has long capped the city’s tax rolls. Government property is exempt from local property taxes.

“We do have a lot of land in our central and core area that’s used for office and government uses that don’t generate any tax for the city,” said Lisa Anderson-Ogilvie, director of Salem’s Community Development Department.

But now more people who work in Salem are choosing to live there. Fewer state workers seem to be commuting in from bedroom communities such as Dallas and Woodburn.

“There’s vibrancy downtown, so that’s attracting more people,” Anderson-Ogilvie said.

Pacific Office Automation is moving from Beaverton to Salem. The firm will occupy an existing office building at 260 Liberty Street N.E., where renovations are under way.

The building is undergoing a $1.3 million makeover funded in part by urban renewal dollars, according to the Strategic Economic Development Corporation. The project involves seismic upgrades, a new elevator, façade improvements, electrical upgrades and a sprinkler system.

The downtown building has been vacant for more than eight years.

Doug Pitassi, president of Pacific Office Automation, did not return phone calls seeking comment.

In downtown Salem, several owners have added housing units to historic properties. Employers such as Marquis Companies, a home health-care business; and the Salem-Keizer Education Foundation are investing in new downtown offices.

The foundation purchased the Starkey-McCully Building, a two-story brick structure dating to 1865, for $480,000. The nonprofit plans to invest $2.5 million into modernizing the building at 223 Commercial St. N.E.

“It was left in disrepair,” said Krina Lee, the foundation’s executive director.

The building will be occupied by a regional college and career center named for Mike McLaran, who died in 2013 after leading the Salem Area Chamber of Commerce for 16 years.

Most of the foundation’s employees work in school buildings, but 20 to 30 administrative employees will move into the building, Lee said.

Downtown Salem is blessed with historic buildings, a central location and increasing numbers of restaurants and shops, Lee said.

Approval has been issued for construction of two new buildings on Front Street: a medical rehabilitation center and an office building.

Salem issued a request for proposals in May for a downtown streetscape project. The RFP closes Friday, July 14. The city of Salem plans to gather input on the streetscape project this fall.

A community group, Salem Community Vision, is pushing an idea to remove a lane of automobile traffic through downtown Salem in favor of wider sidewalks and bike lanes. In this scenario, Riverfront Park would connect to the Capital Mall and Willamette University in one linear park. The city has not endorsed that plan.

Like Oregon’s other population centers, Salem has a thriving and increasingly expensive multifamily housing market. Salem had a 3.78 percent vacancy rate, according to the Multifamily NW Spring 2017 Apartment Report, which surveyed Salem-area properties totaling nearly 6,000 units.

Rents averaged $1.19 per square foot. That was 4 percent higher than in fall 2016, but still cheaper than averages for Portland, Bend-Redmond and Eugene-Springfield. Portland rents averaged $1.50 per square foot, according to the survey.

“Compared to Portland, it’s cheap to live in Salem,” Sullivan said. “People are looking at Salem as a viable alternative.”

Sullivan also owns apartment complexes totaling 240 units. The properties have no vacancies, he said.

“You can’t charge enough,” he said. “Right now, we’re at 100 percent occupancy.”

The new growth has started to put pressure on the residential real-estate market.

The average price of Salem homes jumped 9 percent to $239,500 during the 12 months ending in February, according to a U.S. Department of Housing and Urban Development report. That was still the most affordable price point among metro areas in the Northwest.

Home sales in Salem grew 5 percent, according to the report.

Attention is turning to the mid-Willamette Valley as costs soar in the Portland area.

“People are being priced out of other markets,” Wahrgren said.

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The story is a familiar one in Oregon – technology advances and workers in the timber industry are displaced. Mill operators scale down, slowly at first, and ultimately sell their assets and leave. Industrial sites with lingering environmental issues sit abandoned in the heart of town.

It’s the story of tiny St. Helens, 28 miles downriver from Portland. But there, backers of a long-percolating redevelopment plan have a unique opportunity to reimagine their entire waterfront and restore a vibrancy missing since the loss of heavy industry.

The plan involves a long-shot idea that could aid two environmental cleanup efforts at once.

Essentially, the Portland Harbor Superfund Site needs to find a permanent facility to take its dredged spoils, and the city of St. Helens needs to fill a giant hole that now is a wastewater lagoon.

“The opportunity that they have is to fill a hole and make money,” said Kevin Parrett, cleanup section manager for the Oregon Department of Environmental Quality.

The high-end estimate of potential income is around $150 million.

“It’s really up to the city of St. Helens whether they’re able to pull this off.”

Mayberry vs. Beirut

Boise Cascade still operates two paper machines in St. Helens, but the company’s presence here is much diminished from the town’s heyday. Four mills ran in the 1960s, when about 5,000 people lived here. The population now is nearly three times that.

About three-quarters of St. Helenians commute each day outside the county. Most take the relatively gridlock-free drive to Portland.

Many new residents are young with small children and, thus, less disposable income, according to City Administrator John Walsh. But in St. Helens, unlike Portland, they can live in a nice three- or four-bedroom house with a yard and driveway, he said.

“They like it here; it’s that rural way of life, but it’s changing,” he said. “We have a lot of development pressure, and not just on the water. All our properties are seeing pressure.”

About four years ago, Boise Cascade Wood Products announced it would finally close its veneer plant after years of ramping down. The city jumped at the chance to negotiate to purchase the 25-acre property, hoping to beat the large developers to the table.

The city today controls it as well as an adjacent 200-acre property where Boise Cascade operates its two remaining paper machines, and formerly ran much more.

A big-picture vision to redevelop this prime land – sections of which today resemble “Beirut,” according to Walsh – has taken shape. Plans call for Portland-style mixed-use buildings – i.e., ground-floor retail space below offices and residential units. And because the city is made up of several cities that grew into each other long ago, the town’s disjointed road system will have to be addressed before it can any handle additional volume.

To pay for it, an urban renewal district has been created. Development on the site would help too. The city wants to soon start looking for a developer.

Like most growing small towns, there’s a contingent in St. Helens resistant to change, said Roni Bartlett, co-owner of the Klondike Restaurant & Bar, a classic steak-and-seafood American eatery located near the veneer property. When she moved here 20 years ago, the city resembled Andy Griffith’s “Mayberry,” she said. It was nice, but new energy is nice too.

Bartlett supports the redevelopment plan, especially if it includes live-work space and more retail.

“Getting people to change their minds about growth is a challenge, but I do see things swinging that way,” she said.

Working plan

Because it’s been an industrial site for more than 100 years, environmental remediation is expected to be needed at spots on the ground around both parcels. But a far larger issue is the old Boise lagoon, a 40-acre, 35-foot-deep log pond between the two parcels that the city uses as a backup sewage storage facility.

But it’s far larger than the city needs (the primary pond is only 2 acres). Beyond that, at the bottom is about 8 feet of toxic material that must be addressed before the land can be dedicated to public use.

A plan hatched by consultants along with Walsh’s office and the city council would repurpose the lagoon by adding a liner, filling it in and capping it to create developable land.

The city’s options are either buy fill (but such an amount probably wouldn’t be affordable because the pond is so big) or seek a state permit to accept solid waste.

The city has proposed to seek a permit to accept dredged spoils from the Portland Harbor cleanup, but it won’t be easy. For one thing, residents who’ve already complained about being left in the dark have expressed reservation about their city taking Portland’s toxic waste.

“I hear people say, ‘We don’t want toxic waste,’” Commissioner Doug Morten said. “Well, we have it. We have it right now. The question is: What do we do about it?”

The harbor cleanup, in the works for more than a decade, is a whole other can of worms. The metal-impacted soils in the channel of the Willamette River in Portland are categorized according to the danger they pose. The sort of material St. Helens would accept is not the most contaminated option. That sort of permit would likely be too difficult to obtain. The spoils eyed by St. Helens tend to be pretty clean, and often are reused by the Army Corps of Engineers for beach replenishment projects, Parrett said.

Another hitch in the idea is the fact that filling the lagoon would require relocation of the city’s wastewater plant. This would likely be paid for with some of the money St. Helens receives to accept the waste.

A bill currently in the Oregon Senate’s Ways and Means Committee would direct $1.5 million toward an all-important engineering study that’s the next step in getting the lagoon certified as a landfill site.

Not many good, cost-effective locations exist to accept the harbor’s waste, Parrett said. The Hillsboro Landfill, for example, wouldn’t be feasible because a near-constant stream of trucks would be required to haul the material.

The only feasible way to move so much material is by rail or by barge. The other option would be to transport the material upriver to landfill sites in the Columbia River Gorge.

Leaders of the harbor cleanup have puzzled over this piece for years.

“In my mind,” Parrett said, “this is such a perfect solution for Portland Harbor dredge spoils, and it’s such a perfect solution for the city of St. Helens. The city of St. Helens has a need. The Portland Harbor has a need. This really could be a perfect marriage.”

But standing in the way is the public engagement process.

Changing of the guard

Randy Peterson, 61, is a lifelong St. Helens resident – a retired firefighter who served half of his life on the city commission, half that time as mayor.

For years Peterson championed the waterfront redevelopment, including the idea to fill the lagoon with dredged spoils. He pushed for a waterfront boardwalk, in part so that views could be protected, and for mixed-use buildings, so developers could immediately start recouping costs with the residential units.

“It’s beautiful out there,” he said. “I just want everybody to be able to go down and enjoy the river.”

Peterson was ousted as mayor in November when a virtual unknown received 51 percent of the vote. He had run into trouble when he tried to sell some of his privately-owned land to the city, according to Morten. That didn’t look good.

His opponent, landscaping company owner Rick Scholl, used an active Facebook presence and a stockpile of yard signs to ride an anti-establishment mood into office.

“He ran a campaign that nobody took seriously,” Morten said. “And now he’s mayor.”

St. Helens has a unique, hybrid weak-mayor form for government. It’s similar to Portland’s in that commissioners oversee various bureaus. But St. Helens has a fully empowered city manager and professional department heads who are overseen by citizen-commissioners. The mayor’s role can be as strong or as weak as that mayor makes it.

So far, things have been harmonious with Scholl helming meetings, according to Morten.

“It’s really hard to tell because he’s never held office before, and everything about this, all this stuff, is brand-new to him,” Morten said. “But he is enthusiastic.”

Scholl said he’s still worried about how much of the development process is occurring behind closed doors and out of view of the public. But he likes a plan that includes a waterfront park, and he likes what he’s heard about the waste the town would accept at its lagoon, especially if it lowers sewer rates.

“I’m not an expert on this stuff,” he said. “That’s why I’ve been trying to educate myself, and that’s what I tell members of the public: educate yourself about what is going on down here.”

For the moment, the council unanimously supports the lagoon plan. But the public is fickle, and the clock is ticking.

“Government is very slow,” Scholl said. “And there’s a lot that has to be done.”

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