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more photosJack Pelton, chairman, president and CEO of Cessna Aircraft Co., answers questions in November at Columbia Aircraft in Bend. Cessna purchased Columbia at a Nov. 27 U.S. Bankruptcy Court auction in Portland.
Rob Kerr / The Bulletin file photo
Trepidation, progress in aviation and retail
Cessna purchases Columbia; numerous shops open in Bend
By Anna Sowa / The Bulletin
Published: December 30. 2007 4:00AM PSTWhen 2007 began, Central Oregon’s aviation industry was experiencing turbulence.
Throughout the year, Bend’s Columbia Aircraft Manufacturing Corp. endured layoffs, furloughs and slashed hours for its 400-odd workers.
In Redmond, the owner of Lancair International, which makes airplane kits for home assembly, said rising costs of labor and land in Central Oregon made relocation invitations from other states attractive. The company, though, has no plans to move, said CEO Joseph Bartels.
In March, the Malaysian government, which had majority ownership of Columbia Aircraft, reorganized the Bend facility to include members of a New York City-based restructuring company that would later move Columbia through bankruptcy.
“There were certainly periods of trepidation this year that came to the aviation/aerospace industry,” said Roger Lee, executive director of Economic Development for Central Oregon. “I felt happy about the conclusion.”
On Sept. 24, Columbia filed for Chapter 11 bankruptcy protection with the U.S. Bankruptcy Court in Portland. At a Nov. 27 bankruptcy court auction in Portland, the world’s largest general aviation company, Cessna Aircraft Co., purchased Columbia for $26.4 million, including certain liabilities.
Wichita, Kan.-based Cessna has promised to keep the Bend facility running, increasing production and employment. The company delivered its first Cessna-named single-piston aircraft Dec. 18.
Cessna’s financial stability will be a boon for Columbia, according to Cessna Chairman, President and CEO Jack Pelton. His company’s 2006 revenues totaled $4.2 billion and the company delivered more than 1,200 planes that year. Its revenues for the first half of 2007 were more than $2.1 billion.
Cessna’s parent company is Textron Inc., based in Providence, R.I. Textron produces Bell helicopters and has industrial and finance divisions.
It also makes E-Z-Go golf carts, Jacobsen lawn equipment and other specialty machine and engine parts, according to its Web site. Textron projects annual revenues of $13 billion for 2007, including Cessna. Textron operates in 32 countries with approximately 40,000 employees.
The aviation industry had another boost late this year — an East Indian billionaire invested nearly $200 million in Bend-based Epic Aircraft, whose parent company is Las Vegas-Based Aircraft Investor Resources LLC. Vijay Mallya, a flamboyant jet-setter with an estimated net worth of $1.5 billion, according to Forbes Magazine, formally announced his investment in Epic in late September.
Mallya is the chairman of Kingfisher Airlines in India and also has investments in the Indian beer and liquor industry and in real estate and pharmaceuticals.
With Mallya’s investment, Epic CEO Rick Schrameck said he will expand his production of experimental jets and turboprops in Bend, which could mean the addition of hundreds more workers.
The employment and production impacts from Cessna and Epic’s investment won’t be seen for another couple years, company officials have said.
From an economic development perspective, the movement in aviation is encouraging, EDCO’s Lee says.
“In light of how people look at the Central Oregon economy and say it’s really tourism and building houses here,” he said, “we have a lot more going on than those two things.”
Seaswirl
While aviation manufacturing had a boost this year, a major employer in Jefferson County left the region. After 35 years in Culver, Seaswirl Boats Inc. left for Little Falls, Minn., where its parent company, Genmar Holdings Inc., consolidated operations. The move meant a loss of roughly 200 jobs in Central Oregon.
Les Schwab
Les Schwab, founder of the nation’s third largest independent tire dealer, died at age 89 on May 18. In more than 50 years, Schwab built his small Prineville tire company from almost nothing into a family owned empire that posted $1.6 billion in sales in 2006 and has more than 7,000 employees — 1,500 of them in Central Oregon — and 400 locations throughout the West.
After Schwab’s death, the company named 17-year company veteran Dick Borgman as CEO. Borgman had been president of the Les Schwab Holding Company Division.
Retail
One year after a city planner said Trader Joe’s was planning to come to Bend’s Cascade Village Shopping Center, the popular California-based grocery store broke ground in 2007. The 13,000-square-foot neighborhood grocery store is located between Food 4 Less and U.S. Highway 97 in north Bend. The store, known for affordable gourmet fare, is expected to open sometime in the first quarter of 2008.
Bend saw a host of new restaurants and shops in other commercial areas. Downtown Bend added roughly two-dozen new restaurants and retailers in 2007, including Portland-based Thai restaurant Typhoon!. Others, including Kuishinbo Kitchen, moved out of downtown to make way for new retailers.
The Old Mill District also added more retailers as it continued to build out phase two of its development along the Deschutes River. The district added a dozen new restaurants and shops, including Ann Taylor Loft, White House Black Market and Greg’s Grill.
While Bend added dozens of new retailers and eateries, a large commercial development in Sunriver remained in the planning stage in 2007. Oregon investment group SilverStar Destinations LLC bought the aging Sunriver Village Mall in 2006 for an estimated $26 million, and has proposed to radically transform the mall into a thriving commercial and residential center.
Developers are proposing a mall with more than 150,000 square feet of commercial space, 583 residential units, buildings up to four stories tall, and underground and ground-level parking that would include a parking garage on the mall’s southeast corner. The mall currently has no housing.
Developers spent much of 2007 working with various Sunriver homeowners and business groups to gain support for the changes. Some residents, though, disapprove of adding housing and taller buildings.
Deschutes County planning commissioners will decide in January whether to approve a zone change for the mall area, which would allow housing. Construction would not begin until the zone change is granted, developers say, adding that the multimillion-dollar project won’t be financially feasible without a residential component.
Anna Sowa can be reached at 383-0304 or asowa@bendbulletin.com.
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