Portland’s Ongoing Upheaval Causing Further Financial Challenges for Area Businesses

After weeks of nightly clashes between federal officers and mostly peaceful, but some violent, protesters in Portland, Ore., the first phase of the federal officers removal started Wednesday, but that might not be enough to give an immediate boost to beleaguered local area businesses, which have been on increasingly unsteady financial ground for months.

Volatility in the city escalated after President Trump authorized U.S. militarized officers to guard the federal courthouse. The deal for their removal between the Trump administration and Oregon Gov. Kate Brown was revealed Wednesday.

Not only home to 2.15 million residents, the greater Portland area also houses headquarters for Nike, Adidas, Columbia Sportswear, Nautilus and other athletic industry companies. While many out-of-towners have been aghast about the explosive scenes spotlighted by the media, a few industry executives said the nightly unrest has been contained to a multiblock radius. Still reeling from the pandemic shutdown, a dried-up retail scene, substantial homelessness and a dearth of business travelers and tourists, Portland businesses are not expecting an upturn any time soon.

Executives were reluctant to pinpoint the current upheaval to any one organization, with some simply referring to the more violent protesters as anarchists. Beyond the economic strife Portland-based businesses are dealing with, the city is facing a serious image problem that could potentially deter other companies from setting up outposts, hosting events or having employees travel there.

Asked if recent news coverage will deter people from doing business in Portland, Columbia Sportswear’s president and chief executive officer Tim Boyle said, “Well, it doesn’t help us — that’s for sure. We’d rather have the reputation built on the fact that it has a significant industry base around apparel and footwear. And it’s proximate to the Pacific Coast and the mountains. It’s one of the few cities where you can actually ski and surf in the same day. We’d rather have it be known for that than for the site of a political protest with the federal government.”

Referring to the deployment of federal officers, Boyle said, “In my personal opinion, this is a political stunt by the [Trump] administration to change the narrative from the botching of the COVID-19 response to somehow get the news cycle to something different.”

Boyle declined to speculate about how long a turnaround may take.

With 63 nights of demonstrations and counting, Portland’s activism continues. A full-time nanny, who works for an activewear executive and requested anonymity, described the turmoil that occurred around midnight on July 21 near Portland’s courthouse. After two hours of participating in what she described as a peaceful Black Lives Matter protest, she said, “They started firing at us point blank. They started throwing tear gas grenades, they were shooting rubber bullets that looked like shotgun shells. They also had fireworks that were thrown at my legs. I don’t know what the proper terminology is but they looked like fireworks. Everyone was helping one another to get out of there. People were expecting it to some degree. Everyone fled…”

Walls of Moms, a group identified by their yellow shirts, goggles and bike helmets, and PDX Dad Pod, a collective known for their orange shirts and leaf blowers, have joined Black Lives Matter supporters in recent weeks, as have walls of veterans and walls of grandparents. The unidentified nanny said she plans to return once she feels well enough and equipped enough. “Luckily, I had goggles, a helmet and a face mask, but that doesn’t do a whole lot when you’re breathing in tear gas,” she said. “It’s easy for the media, or whoever is choosing to relay this information, to twist it to make it look like the protesters are the violent ones. When in fact, we are not. There are people who are angry, sure. But as far as any form of violence goes, all we’re doing is taking what they throw at us and trying to throw it back at them.”

Regarding the presence of federal officers, Boyle said, “There are areas of the world where we do a lot of business where the rule of law is not as strong as it otherwise would be here. Snatching people off the streets and using people in military uniforms that don’t have any insignias or names on them is a problem.“

Noting how there were “incredibly violent” incidents throughout the U.S. in the days that followed the police killing of George Floyd in Minneapolis, Boyle said, “That obviously included people who were just interested in causing damage, stealing or whatever. But it’s morphed today into various groups. Frankly, the level of activity — and unrest — was declining in the city until the federal forces showed up and it attracted many more people, who have been disenfranchised or have other reasons for being active.”

Officials at the Portland Police Department did not respond to requests for comment. As part of the new deal for the federal officers’ removal, Brown’s office has reportedly agreed to help guard the Mark O. Hatfield U.S. Courthouse with state resources along with the Federal Protective Service.

“Tens of millions” of dollars worth of damage was caused by looters in late May alone, according to the Portland Business Alliance. As one of the first U.S. cities to report an upswing in COVID-19 cases, Portland’s extended work-from-home policies have further dented downtown retailers’ sales. Despite that, Nike, Nordstrom, H&M, Adidas, Columbia and other companies are keeping their Portland stores open. While locals acknowledge that the upheaval is mostly limited to surrounding blocks around the federal courthouse, the repercussions have led to reduced vehicular and pedestrian traffic in other neighborhoods. As has become increasingly common with other businesses, Columbia has boarded up store windows at its two local locations.

“Anybody you talk to here may say, ‘Yes, it’s not as bad as the news makes it out to be. But I am not going downtown until this gets fixed,’” said longtime resident and Nautilus executive John Fread.

Another deterrent to shoppers is the block-after-block of homeless camps that have cropped up, with some individuals grilling food on the sidewalks and lounging in plastic furniture in front of Pottery Barn and Williams Sonoma, Fread said. Combined with the nightly discourse and pandemic-related problems, Portland is struggling, he said. “The side of the story that is not being told is the impact on the business community. If you look at what Portland was six months ago versus what Portland is today…nobody is stopping and saying, ‘Who is looking out for the business owners?’“

An increasing number of store owners are installing metal grates to protect their property, Fread said. The nightly unrest has spanned between four and eight blocks around the federal courthouse, according to a few local residents. Portland Mayor Ted Wheeler was tear gassed by federal agents near there last week.

A PBA spokeswoman noted that much of the plywood on stores has been covered with paintings commemorating messages of racial justice that stores and others have created. After initially acknowledging earlier this month that “the overall safety and security is something many of our businesses are struggling with,” the PBA issued a more pointed statement Tuesday night. Standing unified with regional and state leaders, the PBA called for peace and “the departure of a heightened federal presence in Portland.”

“The presence of federal agents in a single block of downtown Portland has led to a near-universal upset and a worsening of conditions on our streets over the last two weeks. In response, some individuals have engaged in criminal acts — including significant property damage — on a nightly basis. These activities detract from the ongoing movement against racism,” the statement said. “Their presence is overshadowing our strategic goals: economic equity for our Black residents, regional prosperity for all and stopping the spread of COVID-19 so that our economy can begin to recover.”

In closing, the PBA said, “The people of Portland can accomplish amazing things by working together. It is time to act locally and show our community what it means to be part of this beautiful region.”

Downtown Portland’s base of major retailers was already dwindling in recent years, according to former Adidas America president and ceo Steve Wynne. Saks Fifth Avenue, Abercrombie & Fitch and Macy’s are some of the companies that have exited the downtown area in recent years. “The core of retail was already financially challenging. The pandemic has taken away virtually all of their traffic, then you have these riots. That comes in the wake of all this [looting and theft]. The Apple store was wiped out, smaller jewelry stores were, too, and the stores are boarded up,” he said. “You’ve got this intensely difficult climate for all of these retailers.”

Still, having lived in the city for most of the past 43 years, Wynne said, “When you watch it on TV, you would think the whole city is going up in flames. That’s just not the case.”

Whether large companies will have workers return to their offices post-COVID-19 and the homeless problem are other factors that will affect the city’s financial recovery. “If you were willing to look past the news about Portland and come here to take a look at it as a place to have something, you still have the issues of boarded-up storefronts and excessive homelessness. I think it’s going to be a long recovery for the city,” Wynne said. “It’s less impeded by the riots and more impeded by the coronavirus, the homeless issue and the new-found revelation that businesses can be more dispersed and don’t need to be centrally managed.”

Describing the general amount of business being done among downtown retailers as “minimal at best,” Boyle said some one-store operations and other small business will not survive.

Nike’s Portland store is operating under slightly reduced hours. A Nike spokesman declined comment, as did a spokesman for Adidas.

A spokesman for Wheeler said last week, “The mayor is encouraged by the resiliency, activism and response coming from area retailers and business entities.“ Wheeler is among five U.S. mayors who have appealed to Congress to make it illegal for the federal government to deploy military agents where they are not wanted.

Wheeler has encouraged retailers and businesses to continue to adhere to safety concerns and COVID-19 guidelines, to be in touch with local safety officers to maintain a safe environment and to connect with business associations like Prosper Portland, which is “undertaking a task Wheeler has dubbed our ‘business renaissance,’” his spokeswoman said.

Fread said, “People are trying to paint this pretty picture of, ‘Oh, the downtown stores are business-as-usual’ to offset the negative images of the thugs. The offices are all closed because of COVID-19. Most of the retail is closed. It’s not business as usual. No one is going to say that because they are afraid they’re going to get beat up for not saying that social justice issues should be the number-one priority.”

With 76,000 global employees, Nike is a leading employer in the city, but a spokesman declined to say how many employees work there. Like other apparel companies around the globe, the $39 billion athletic juggernaut is planning for job cuts worldwide, although the spokesman declined to provide details. As for whether Columbia will reduce its team, Boyle said, “We’ve got decisions that will be made over the course of time. There are levers that we can pull, whether that’s reducing marketing or other expenses. But we haven’t made any announcements.”

As an epicenter for the sporting goods industry, Portland has prospered as an independent, vibrant and outdoorsy city thanks largely to these athletic companies. Many of the area’s design-minded and sports-minded locals work at Nike, Adidas, Columbia and Under Armour, which has a Portland outpost. About 1,800 of Adidas’ 60,000 global employees work in the city.

Another key employer and imagemaker is Wieden + Kennedy, which has less than 500 employees in its Portland headquarters. Last week the company revealed that it was handing out pink slips to 11 percent of its staff, without specifying how many in Portland would be affected. Executives at Wieden + Kennedy declined to comment.

Over time, entrepreneurs and start-ups should return to Portland once escalating rents come down, but the larger question is whether major companies will keep their commercial real estate foothold and bring workers back to their offices, Wynne said.

The Oregon Culinary Institute, which has trained some of the chefs who helped create Portland’s pre-pandemic thriving foodie scene, said last week that it will close permanently. Fread questioned whether major retailers may also take a that’s-it approach and exit the city. Asked if Nordstrom is considering closing its Portland store in the months ahead due to the ongoing unrest and COVID-19, a spokeswoman cited the health and well-being of employees, customers and communities as a priority. Following local and state COVID-19 guidelines, she said, “We’ll continue that approach to determine if we have to close any stores in the future.”

A spokesperson for H&M said no stores have been closed temporarily or permanently in Portland in relation to the protests. It declined to respond when asked if that is being considered.

Last year, visitors to Portland spent $5.6 billion, generating $277.8 million in state and local tax revenue. The city’s travel industry supports 36,930 jobs in the area, accounting for $1.6 billion in employment earnings, according to Marcus Hibbon, a spokesman for Travel Portland. Speculating about the potential long-term brand damage to the city of Portland coupled with the effects of COVID-19, Fread said that poses the question, “Can cities like Portland ever recover?”

One of the major sporting goods and apparel events that has been postponed due to the current situation is the inaugural Première Vision Sport. Originally slated for late August at the Oregon Convention Center, the trade show may be held in February instead. But organizers have yet to confirm dates. Geared for performance and active sports, Première Vision Sport was scheduled as a companion show to The Materials Show.

With gatherings in Oregon capped at 100 people as per order of the governor, the OCC is not being used for any business-related events at this time. About 20 percent of the 255,000-square-foot exhibition space is being used for a temporary 140-bed homeless shelter. Those individuals are being transitioned by city officials into temporary housing in area hotels and motels — another indicator that travelers aren’t expected to return to the city any time soon.

As of now, 40 events — what used to be the monthly norm — are tentatively booked at the OCC through the end of the year. While many trade shows, conventions and other events have rescheduled for future years, the lost revenue has financial repercussions for area businesses. The OCC’s national and international base accounts for $655 million in direct, indirect and induced spending, OCC spokeswoman Heather Back said. Attendees spend an average of $404 a day.

When and to what degree a significant number of business travelers take flight again to Portland remains a question mark. Brad Tilden, ceo of Alaska Air, the largest carrier at Portland International Airport, recently said it will take at least two years until the airline resumes 2019 levels. That is in line with forecasts by other major airlines. Planning to scale back operations by 35 percent, Tilden cited spikes in coronavirus cases, delayed return-to-office plans, extended quarantines and schools preparing for remote learning as some of “the negative news of late.”

Last year, Alaska Air ferried nearly 5 million passengers at Portland’s airport. Employees at Nike, Adidas, Columbia, Under Armour and other athletic companies with Portland outposts are frequent fliers. So much so, that athletic industry travelers have been known to check out the athletic footwear of their nearby passengers for competitive purposes before talking shop.

Portland started an outdoor shopping initiative to try to woo shoppers who have COVID-19-related concerns about shopping indoors. The city’s “Healthy Businesses” permit-required program allows businesses to set up shop on city sidewalks or vacant parking spaces in front of their stores. Launched at the end of May, 11 women’s apparel stores have taken advantage of the program, but none are located downtown, said Portland Bureau of Transportation spokeswoman Hannah Schafer.

Healthy Businesses is part of the city’s now seemingly unfortunately named “Safe Streets” initiative, which encompasses “Slow Streets,” a program to designate residential streets for socially distanced walking, biking and rollerblading, and the upcoming “Busy Streets,” a plan to use markings to expand curb-tight sidewalks.

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