Green Machine

With economic stimulus dollars up for grabs, a gubernatorial strike force of Portland power players has a comeback plan.

By Ted Katauskas May 19, 2009 Published in the April 2009 issue of Portland Monthly

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Venture investor Dave Chen (from left), developer Mark Edlen, and Governor Ted Kulongoski

DURING A RECENT three-day business trip to washington, DC, Portland venture investor Dave Chen managed, through a series of rapid-fire e-mail exchanges with Governor Ted Kulongoski’s staff in Salem and a former Obama campaign official in Eugene, to broker a private meeting with a senior presidential adviser at the White House. Or more precisely, at the looming edifice adjacent, but not attached to, the West Wing. As Obama aide Greg Nelson escorted him down the long central corridor of the Old Executive Office Building on the afternoon of February 5, Chen couldn’t resist snapping a few digital pictures with his BlackBerry before arriving at an empty Room 158, the office of Carol Browner.

Browner was director of the Environmental Protection Agency under Bill Clinton and is now Obama’s assistant for energy and climate change. And she was running late. Accustomed to being the convener in Portland—where he is the one who calls and runs the important meetings, and where others often regard him not just as the smartest man in the room, but in the city, and, by some, in the state (he often acts as a consultant to the governor on matters of Oregon’s economic growth and leadership)—Chen found himself standing around in a formally appointed anteroom, feeling slightly humbled by his White House experience. Even he had to admit that this was really cool.

Five minutes later, Browner—tall, athletic, smartly coiffed, and dressed in a gray business suit—breezed in, shook Chen’s hand, and apologized for the delay. They moved to a couple of armchairs and a couch arranged around an end table.

The presidential adviser and the venture investor sized each other up by playing a very un-Oregon game of getting to know you, which, within the strictures of Beltway culture, means establishing who you know. For an Oregonian, the spiky-haired Chen—whose idea of a power suit, when he’s in Portland, is a chocolate wool sweater vest worn over a starched, white, open-collared oxford; brown corduroys; and stylish Sarah Palin–esque eyeglasses—is an incredibly well-connected guy. John Podesta, Clinton’s chief of staff and co-chairman of the Obama transition team, sits on the board of Chen’s Pearl District start-up, Equilibrium Capital, a private equity firm focused on funding the expansion of successful, midsize sustainability-oriented businesses such as Gerding/Edlen Development. Chen’s first strategic hire when he formed Equilibrium almost two years ago was DC attorney Anne McGuire, who, as it happens, occupied the office next door to Browner’s when she served in the Clinton administration as Special Assistant to the President for Cabinet Affairs. Chen is also good friends with Al Gore’s former chief of staff (and Bill Clinton’s former campaign manager), Peter Knight, a managing partner at Generation Investment Management, the London-based sustainability-focused investment firm Gore cofounded in 2004.

That game played, Chen segued to the message he had traveled 2,350 miles to deliver at the behest of his governor: Oregon, Chen told Browner, had a plan the White House could use as a template to realize the new president’s transformational vision.

The vision had taken root in the public consciousness during the waning days of the 2008 campaign. While Sarah Palin and John McCain preached their litany of “Drill, Baby, Drill,” Barack Obama galvanized the nation by talking about his plan to jump-start the economy with a metaphorical Apollo-moon-shot-meets-New-Deal idea, which would, among other things, wean the nation of its dependence on oil and natural gas and create legions of green-collar jobs by investing in alternative energy projects like wind, solar, and geothermal farms. In his inaugural address, the president had vowed to “harness the sun and the winds and the soil” to create new jobs and “lay a foundation for growth.” Senators debated the merits of the American Recovery and Reinvestment Act, which ultimately would allocate approximately $90 billion of its $787 billion for projects devoted to clean energy and energy conservation (the president signed the bill less than two weeks after Chen’s visit.)

For two weeks before and two weeks after the inauguration, Chen told Browner, he and the governor’s chief of staff, economic adviser, and twelve of Portland’s brightest greens had gathered in a Brewery Blocks conference room—LEED rated, of course—nights and weekends and hatched an audacious stimulus-spending plan. The plan would direct Oregon’s share of the $37 billion in grants for energy, transportation, and water conservation projects to a prescreened set of green initiatives that showcased the state’s sustainability know-how. They called the plan the Oregon Way.

For forty-five minutes, Browner listened. Although she declined to comment about Chen’s visit, a Democratic strategist with close ties to the Obama administration says the unconventional emissary from Oregon made an impression on the energy czar: “Several people in the White House I talked to were saying, ‘This is great!’ This is exactly the kind of thing that they want to engender. Oregon may be a small state, but it’s well positioned [to lead]. The White House is looking to cities like Portland to show how this can be done.”

As is the State House, in Salem.

TWO WEEKS LATER, Chen is back in Portland and waiting for an elevator outside the office suite he shares with Ater Wynne, on the eighth floor of a freshly minted LEED-rated tower at NW Lovejoy Street and 14th Avenue, a building so new the vestibule smells of drying plaster and curing low-VOC paint. It’s precisely 5 p.m., the end of another productive yet dispiriting workday that, as anyone with a deflated 401(k) can understand, had seen Equilibrium’s once-substantial pool of capital continue to evaporate. Chen, who often commutes from his home on NW Thurman Street on a Ducati, is carrying his motorcycle helmet by its chin strap and wearing a black-padded leather racing jacket, his well-worn ThinkPad cocooned in a Timbuk2 messenger bag and slung over a shoulder. “For us to execute this program, we have lots of steps to go through,” he is saying. “This was a very, very small move along the way, part of generating awareness of the strength of the expertise we’ve built here in Oregon. What we’re trying to do is use federal stimulus dollars to try to accomplish something important. It’s not to negate the need to patch roads—those are very real, very critical things to do. But we can use this once-in-a-lifetime opportunity in funding to leave behind key foundational components of a new sustainable economy, to create a few transformational examples that can be replicated nationwide.”

He pauses before crossing the street to BridgePort Brewpub, where he’ll initiate one last round of networking over a pint of IPA before straddling his muscle bike and goosing the throttle to get home in time to cook dinner for his wife and sons, ages seven and four. “The governor is saying, ‘Let’s go for it, let’s really make something out of this,’” he continues. “Whether I think it’s wasteful that the federal government is spending this money, that’s arguing about angels on a pin. The train is moving, and the money is coming, and it’s only prudent to do something really important with it. What’d we get with the last New Deal? We got the Hoover Dam, which fundamentally reshaped the power and water grid of the western United States.”

Ted Kulongoski and his team of Portland and Eugene sustainability wonks want to use Obama’s stimulus dollars to lay the foundation for someday unbuilding the Hoover Dam, metaphorically speaking, by retrofitting the city’s skyscrapers, one day perhaps taking the state’s entire university system off the grid, and then doing the same with home after home, neighborhood after neighborhood, city after city, state after state, so that the energy saved might one day equal the harnessed and networked power of a thousand Hoover Dams.

NANCY J. HAMILTON resembles Jamie Lee Curtis both in looks and wit: when she served as chief of staff for former Mayor Tom Potter, she kept a nameplate on her desk that read “Passionate about Her Beliefs” on one side and “Pushy Bitch” on the other. In October 2007, she signed on as Kulongoski’s director of strategic development, and last spring she became his senior policy adviser for workforce and economic development, a weighty role considering Oregon’s current $800 million budget shortfall and high rate of unemployment—more than 212,000 Oregonians, nearly 10 percent of the population, are out of work. “Oregon is not alone in this; states in general are in such a fiscal crisis right now,” says Hamilton, who lives in Irvington and divides her time between Salem and a satellite office in Portland. “I hear the governor say this all the time: this recession will end, and when it ends we need to be in a lead position, in a role to help other states and other countries do what we already know how to do. This is an economic opportunity for the state of Oregon.”

Kulongoski’s optimism has rubbed off on Hamilton. Oregon’s thirty-sixth governor seems to be at his best when the world around him has gone to hell. Soon after he was born, in rural Missouri in 1940, his father died. Four years later, unable to make ends meet, his mother left him at a Catholic orphanage in St. Louis, where he was raised by nuns. From the orphanage, Kulongoski joined the Marines, serving as a field artillery officer in Thailand; after transitioning to civilian life, he put himself through college and law school at the University of Missouri by working as a truck driver, bricklayer, and steelworker, practical experience that one imagines prepared him for the entrenched mess he’d have to dig his way out of as governor.

In January, Obama’s transition team talked about a New Deal stimulus package and urged governors to prepare their lists of “shovel-ready” make-work projects. Although states would divide $144 billion to reduce budget deficits and prevent cuts in essential government services (Oregon’s share is $570 million), another $37 billion would be available in the form of grants. While other governors left it up to legislators or appointed stimulus czars to apply for grants with laundry lists of WPA-style infrastructure projects, Kulongoski, who’s made reducing the state’s carbon footprint a touchstone of his administration, told his senior staff that he believed Oregon should do more with the federal stimulus than fill potholes. Since the state has more LEED-rated buildings per capita than anywhere else in the nation, plus dozens of businesses specializing in alternative-energy production, why not leverage that expertise to give the state an advantage in landing stimulus grant money?

To figure out how best to do that, Hamilton and chief of staff Chip Terhune, with Dave Chen and Mark Edlen (the Gerding/Edlen developer of the Brewery Blocks and the South Waterfront), recruited a think tank of mostly Portland-based green gurus that also included Dan Heagerty, chief strategic officer at David Evans & Associates, the firm involved in every streetcar and light-rail project in metro Portland and in other cities across the country; Steven Straus of Glumac, an engineering firm that specializes in green retrofits of skyscrapers; and Dan Carol, a Eugene-based political consultant who worked in Chicago as the Obama campaign’s director of content and issues and who cofounded the Apollo Alliance, a San Francisco–based green-energy advocacy group. “[The Oregon Way plan] happened everywhere—in Portland, in Salem, around coffee tables and conference tables,” Hamilton says. “We all sat down and said, ‘How do we seize this opportunity? As we look at carbon-reduction strategies and energy-reduction strategies, we’re better at this stuff than anyone.’ It was really exciting. We finally have this moment in time to show how we can really work together.”

The planners decided a public/private project would work best: the governor would appoint an advisory board to serve as the state’s stimulus clearinghouse and vet proposals for whether they met Oregon Way standards. For more than a month, the team hashed out those standards—the project must be started within sixty days of receiving grant money and be completed within twelve months, for instance; it must use locally sourced materials; and it must yield quantifiable environmental results. Ideally, each project could serve as a pilot project, replicable across the nation.

One possibility was Oregon’s Solar Highway, a demonstration project that uses a bank of 594 solar panels (made by SolarWorld in Hillsboro) and an inverter (manufactured at PV Powered in Bend) to power streetlights along the I-5/I-205 interchange in Tualatin. Scaling up the pilot project to outfit the state highway system with four sites (including one in metro Portland) would result in the world’s largest solar highway project and could send more than $30 million in stimulus funding to companies like SolarWorld and PV Powered, not to mention hundreds of third-party installers and consultants.

With $1 billion, the state could retrofit the equivalent of thirty Big Pinks with low-flow toilets, solar panels by SolarWorld, and energy-efficient insulated windows (by Jeld-Wen, perhaps, of Klamath Falls). According to Edlen, this scenario alone would create twelve thousand construction jobs, six thousand manufacturing jobs (at said companies), and require the services of 450 architects and consultants. Meanwhile, the energy saved could power fourteen thousand homes while scrubbing the atmosphere of eighteen metric tons of carbon dioxide and keeping ninety-one million gallons of water from leaving Bull Run.

The team PowerPointed the Oregon Way for the governor on January 30. Less than a week later, Chen unveiled the plan to Browner. And six days after that, at a press conference at Portland State University, Kulongoski issued Executive Order No. 09-06, “Using Oregon’s Green Advantage to Maximize the Federal Economic Recovery Package,” creating the framework for cities, organizations, and private companies to partner with state agencies and submit proposals to the Oregon Way Advisory Group and, ultimately, to the federal agencies responsible for doling out stimulus dollars. So, while elected officials in other states were fighting over what to do with the anticipated influx of grants, Oregon already had its strategy in place and had achieved a private audience with one of Obama’s top advisers.

Suddenly, the governor’s receptionist was fielding 202-prefixed calls from an alphabet soup of federal agencies, including the US Department of Housing and Urban Development and the departments of energy and transportation, not to mention a certain address on Pennsylvania Avenue. “It’s that aggregated collective buzz that’s starting to happen that’s really exciting,” Hamilton says.

TWO DAYS LATER, after the governor has suffered through a press conference outlining the state’s dire economic forecast, Chen is lounging on a sofa in his guesthouse, which doubles as his home office—a two-story aerie of exposed-concrete walls, recessed halogen lights, a gas fireplace, and massive windows overlooking the Northwest industrial district.

Chen, who sits on the board of the Portland branch of the Federal Reserve Bank of San Francisco, says he’s just seen the government’s latest official economic forecast, which he summarizes in two words: oh, crap. “I feel for any government elected official these days,” he says. “I’m grateful that the governor had enough bandwidth to look to the future of this whole federal stimulus thing and not be so depressed by the ugly realities that he couldn’t grab hold of a positive and spend time and energy on that executive order. He just said, ‘Get this thing done,’ and in two weeks, it was. … We moved faster on this than any other state in America.”

On the surface, the Oregon Way doesn’t seem all that transformational. The slides that the Oregon Way drafting team presented to the governor are replete with platitudes from Kulongoski’s recent state-of-the-state address (“There is a green revolution stirring in America, and Oregon is the beating heart … ,” and so forth), and the language used to frame the criteria for judging the merits of proposals is disconcertingly vague.

But that ambiguity, insists Chen, is the Oregon Way’s intuitive brilliance. “I want to unleash creativity,” he explains. “I’m not telling you what to do, I’m just telling you what the rules are. I’m not telling you how to create … I’m just telling you what it takes to win.”

Few things excite Chen more than the prospect of watching Oregon emerge from the long shadow of its much-ballyhooed Bottle Bill (redeeming bottles for recycling), Beach Bill (making the coast off-limits to developers), and urban growth boundary, and do something truly audacious: help lead a nation out of a recession.

But can we?

Dan Carol, the Obama campaign veteran who helped arrange Chen’s face-to-face with Browner, thinks so. “If things go well, we’re hoping to be Obama’s teacher’s pet,” says Carol, who jokes that his main contribution to the Oregon Way effort has been leveraging what he calls his “Obama-ness.”

“We certainly have a reputation in this area, but lots of folks will be chasing us,” he says, “so it’ll be a lot like a Prefontaine race: you have to keep running hard.”

Even more critical, says Chen: Oregon needs to get used to staying in the lead. “Oregon is comfortable with being first at things, but it’s very uncomfortable leading. The travesty would be if we weren’t able to fully take advantage of this opportunity for our region, our companies. People want to make sustainability our issue—our contribution at a time when people care about this stuff at a global level.” He gazes out at the city, at the lights winking on, animating the dusk. “You can be so grandiose about this, but at a time when our state needs it, when the audience is ready to receive it, when the nation needs it, when the government is ready to receive it, support it, catalyze it, pay for it, prompt it … It’s the scariest of times.”

But the way he sees it, it’s now our time.

And perhaps it is.

Another Oregonian made a recent trip East. On February 27, Mark Edlen traveled to Philadelphia. He had been called to appear, along with John Podesta, at the vice president’s Middle Class Task Force, which convened a green-jobs summit at the University of Pennsylvania. Edlen took the podium in a packed auditorium, where the luminaries included not just Joe Biden but also the secretaries of energy, transportation, labor, education, and much of the president’s senior staff. “I want to thank you for the opportunity to speak about the biggest economic development of our lifetime … ,” Edlen began.

Over the next fifteen minutes, he told the story of the Oregon Way, no doubt making more than a few union officials salivate as he talked about all the skyscrapers that could be retrofitted with a billion dollars from the stimulus package. Within three months, he told the crowd, architects could begin surveying buildings, preparing drawings, and pulling the required permits; soon after that they could start hiring construction workers.

“Now is the time to work together, arm in arm, to walk through this storm toward a more sustainable tomorrow, creating tens of thousands of high-skilled jobs that will not only lift this economy but will create a new foundation for our nation—a foundation that is good for the economy, good for the environment, and good for the people of this great country,” Edlen told the audience, as the spotlight on Oregon grew just a little bit brighter.

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