Daimler's public incentives

Daimler Trucks North America announced plans today to build a new, $150 million Swan Island headquarters and add 400 new Portland jobs. It will receive nearly $20 million in public help for the project. Here are the incentives:

An $8 million forgivable loan

from Portland urban renewal funds. The loan will be forgiven if Daimler creates at least 400 jobs and invests $135 million.

"Enterprise zone" property tax breaks worth an estimated $7 million

over five years.

A $1.8 million forgivable loan

from a state business expansion fund. The loan becomes a grant if Daimler adds at least 220 jobs paying an average wage of $66,410. The jobs must stay for at least two years.

A $1 million grant

from a state strategic reserve fund.

A $1 million grant

to the Port of Portland, which will build a new parking garage for the facility.

"E-Zone Workforce training funds,"

up to $5,000 per new employee, for a maximum of $500,000.

Daimler Trucks North America confirmed this afternoon that it plans a massive new waterfront headquarters on Swan Island, a $150 million project that the German-owned company says will result in 400 new, high-wage, white-collar jobs.

The decision removes years of uncertainty over Daimler's long-term plans for its Portland headquarters and represents a major economic boost for the city and region. It comes at some financial cost, though: The state and city provided nearly $20 million in public support to win the project.

Daimler already employs about 2,000 white-collar workers in Portland -- 1,200 at Swan Island and hundreds more scattered in offices across the city -- plus 750 workers who turn out as many as 30 Western Star trucks a day. The new headquarters will bring all workers to Swan Island.

While Daimler has a Portland heritage extending more than 70 years to the birth of Freightliner, the company's commitment to the city has seemed to waver several times. Just four years ago Daimler said it would shutter its Swan Island factory, only to reverse course in 2009 and expand instead.

In an interview today, DTNA chief executive Martin Daum said the new headquarters represents a 25-year commitment to the city. He said he always hoped to stay in Portland, but said the company seriously considered sites in the Carolinas, where the truck maker also has operations.

Daimler and Portland worked together to design a new, 265,000-square-foot facility that would fit in with city permitting requirements and could be finished by the company's 2016 target date, Daum said. He described the state and city incentives, which would cover more than 10 percent of the project's cost, as being in line with what public agencies offer in similar deals.

Ultimately, Daum said, Daimler didn't want to leave its Portland roots.

"I think a place forms a company, and a person in a place forms a company. If you move a company away, you lose stuff," he said. "You lose a lot of highly experienced people, and I didn't want that."

Daimler told reporters earlier this week that it would have "major announcement" today, and the Portland Business Journal first reported that the company planned a new headquarters. The company made the formal announcement at Jeld-Wen Field, flanked by Gov. John Kitzhaber and Portland Mayor Charlie Hales.

State officials have been working for more than a year to land the Daimler project, known until now by the code name Project Nova. Kitzhaber said he visited Daimler AG's headquarters in Germany last March and discussed the new headquarters.

"I'm very, very proud that Oregon continues to be one of the best places for advanced manufacturing in the country," Kitzhaber said at Daimler's event.

At a time when a lot of the buzz is around software and apps, Hales said, "We're still a real manufacturing city. We make steel and make things out of steel."

A rendering of Daimler Trucks North America's new, $150 million Swan Island headquarters.

Portland is providing $8 million in urban renewal funds to finance the project, plus an estimated $7 million in property tax breaks.

Daimler's decision erases doubts about the city's receptiveness to large businesses, said Patrick Quinton, director of the Portland Development Commission.

"It sends a really strong message about where the economy is going here in Portland and how large companies, with global operations, view the city as a place to do business," Quinton said.

Daimler Trucks North America

Founded

: 1942

Headquarters

: Swan Island, Portland

Employees

: 21,000 worldwide, including 2,800 in Portland.

Products

: Commercial transportation vehicles

Brands

: Freightliner Trucks, Western Star Trucks, Thomas Built Buses, Freightliner Custom Chassis, Detroit engines and axles, Alliance Parts, SelecTrucks

Annual production

: 141,000 vehicles

Parent company

: Germany's Daimler AG had sales of more than $150 billion last year.

Also today, Daimler said it has donated $330,000 to 34 metro-area high schools to promote science, engineering and math education.

"The key to our company is innovation," said Daum, the CEO. "The key to innovation is knowledge and education."

The new Daimler jobs are positions in engineering, research and other fields. They must pay 150 percent of the average state wage, at least $66,410 annually, to qualify for the state subsidy.

The headquarters decision should not be read as a signal one way or another about growth in Portland manufacturing, Daum said, noting that decisions about headquarters and manufacturing are made independently.

Daimler will not be transferring departments from other sites to the new headquarters, Daum said. However, future growth is more likely to occur in Portland -- if for no other reason than this site will have the space to accommodate more personnel, he added.

And he said he does anticipate more growth as Daimler introduces new technologies and strives to take market share.

More

New automatic transmissions, innovations to identify mechanical trouble before a breakdown and other new technologies will generate demand for more engineers, logistics experts and information technology professionals at the new headquarters, Daum said. He said Daimler will have no trouble meeting its target of 400 new Portland jobs.

Daimler's existing Swan Island headquarters will remain open, he said, and will join a larger "campus" when the new building opens. Daimler said it will seek LEED Platinum Certification for the new facility from the U.S. Green Building Council, and will open a greenway on the property for public access to the river.

Daimler has yet to select a general contractor for the project. Nonetheless, the company said it expects to break ground by the middle of next year and that it will work diligently to have the facility open as early in 2016 as possible.

"I could fill it tomorrow, right, if it would be ready," Daum said.

-- Mike Rogoway; twitter: @rogoway; phone: 503-294-7699