SALEM — Bend’s outdoor industry is strongly backing a bill to create a $500,000 state fund to accelerate the early growth of outdoors-oriented manufacturing businesses across the state.
House Bill 3251 would direct the Oregon Business Development Department — better known as Business Oregon — to provide matching grants to entities such as Bend-based Oregon Outdoor Alliance and Bend Outdoor Worx. The money would go to support the growth of companies in the early stages of their development.
“The funding would not go to the big brands — they don’t need it,” said Sen. Tim Knopp, R-Bend, one of the chief co-sponsors of the bill.
Knopp said the “public-private partnership” was “intended for the little guy.”
Under the plan, the groups could tap into the state’s Industry Competitiveness Fund to provide technical assistance and help increase capacity to better compete in the marketplace.
The bill has bipartisan support, led by Rep. Ken Helm, D-Beaverton. In addition to Knopp, the bill’s sponsors include Rep. Cheri Helt, R-Bend, and Rep. Jack Zika, R-Redmond.
The bill had a short public hearing Monday in the House Committee on Economic Development and took written testimony afterward. The next step for the bill is an as-yet unscheduled committee vote. If approved, the next stop would be the Joint Committee on Ways & Means, which would debate its budget impact.
According to the Outdoor Industry Association, outdoor recreation in Oregon generates 172,000 jobs, $5.1 billion in wages and salaries, $16.4 billion in consumer spending and $749 million in state and local tax revenue.
Helt testified that the outdoor industry is one of the key areas that has given Bend a better mix of businesses than a decade ago.
“During the recession, our economy was not very diverse,” Helt said. “It was a very bleak situation. One of the things I think is very important is that we diversify our economy before the next recession and we make sure to invest in things that can bring about change.”
Gary Bracelin, the founder of business accelerator Bend Outdoor Worx and co-founder of the Oregon Outdoor Alliance, said the growth of the outdoor industry in Central Oregon has caught the eye of others.
“The outdoor ecosystem that has swelled in Bend has attracted attention from other states focusing on the outdoor sector, including Colorado, Alaska and Utah,” Bracelin said. “We now need your help to compete with these states to stay competitive in the development of the next generation of successful outdoor companies based in Oregon.”
Bracelin said there is a high desire to use the funds to make significant advances in the outdoor industry.
“The commitment is proven, the momentum is contagious ,and the passion is authentic,” he said.
Mike Wallenfels, president of the Oregon Outdoor Alliance and vice-president for global sales at Bend-based Hydro Flask, said the alliance originally started working with Central Oregon startups, but now is establishing chapters in Southern Oregon and Portland.
Wallenfels said it is hard for startups to find the money to expand into viable businesses. When money can be found, it is usually from outside “angel investors” who take equity in the company.
“You don’t have ownership anymore,” Wallenfels said.
Wallenfels said funding would allow the innovative original owners to reap more of the return on their ideas, instead of losing a large share to outsiders.
Chris Kratsch, co-founder of Bend-based The Robert Axle Project, a manufacturer of bicycle components, submitted testimony praising the Bend Outdoor Worx for helping him take a hobby and turn it into a successful business.
“I can tell you with no reservations that their six-month program of intense mentoring is the reason our business is thriving today,” Kratsch wrote.
Rep. Christine Drazan, R-Canby, asked at the hearing why the program shouldn’t be run by the state’s Office of Outdoor Recreation.
In a written response, Kratsch said having business-savvy mentors do the vetting of competing proposals was crucial to the success of the proposal — and getting a return on investment for the state.
“Outdoor product companies are different than other product companies,” Kratsch wrote. “Our customers demand authenticity in our brands. Our customers can smell a fake from miles away. Our products require real world testing and a passion for our chosen markets. This program cannot be run by The Office of Outdoor Recreation as those are not business owners. They will not see which brands have real opportunity in front of them vs those that will unfortunately not succeed.”
The Industry Competitiveness Fund gets its money from Oregon Lottery funds and uses it to bolster Oregon companies to better compete in the national and global markets. It has previously been used to help industries such a forestry products and technology.
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