Vestas, which generated $1 billion in revenue last year, announced on Wednesday its Palm Springs, Calif.-based American subsidiary Vestas American Wind Technology Inc. is in final negotiations with the Port to lease the land and develop a 700,000-sf complex consisting of several manufacturing buildings, storage buildings and yards, and office buildings.

The project will be built on land across the street from the 23-acre Rivergate Corporate Center (circled in red in accompanying photo), a recently announced two-building, 488,000-sf distribution center under development by Kennedy Associates Real Estate Counsel, which in investing $20 million in the project on behalf of Multi-Employer Property Trust, a $3 billion union trades pension fund based in Delaware.

Assuming a lease of 50-plus years with extension options, the price tag Vestas will pay to lease the Port's land is expected to fall between $4 and $5 per sf, similar to its deal with Kennedy Associates. At $4.50, a 113-acre land lease would be worth more than $22.5 million to the Port.

Bill Bach, the Ports development manager, tells GlobeSt.com they've been talking with Vestas since last summer and are close to a deal. "We hope to have the agreement ready for our board meeting in May," says Bach.

Vestas has told its own stock market that the development is a $100 million project. Bach tells GlobeSt.com that subsequent additions to the project mean it will now exceed $100 million.

Vestas plans to have the complex substantially up and running and employing some 1,200 people by the end of 2003 and has hired Andersen Construction Company Inc. as the general contractor that will make it happen. Vestas is now close to securing around 55,000 sf of temporary office space in Downtown Portland near the offices of its designer for the project, Portland-based Industrial Design & Construction.

IDC is located in on the south side of Downtown in Parkside Center, located at 2020 SW Fourth Avenue. Jim Mark of Melvin Mark this week declined to comment on talk that Vestas was negotiating for the former Christensen Electric space in the company's Columbia Square building at 111 SW Columbia.

The company says it decided on Rivergate after an exhaustive West Coast search in part due to its size and access to local transportation networks including strong rail connections, good freeway access, and the Port's T-6 container and barge facilities. "Our hope is the company will both bring in components via air and sea, and will also use our transportation connections for exporting finished product," said Port of Portland Executive Director Bill Wyatt as part of the announcement.

Most importantly, Vestas says its decision to build in the Northwest hinged on the recent passage of the Energy Production Tax Credit which was signed into law March 9, 2002. The credit provides a 1.5 cent per kilowatt-hour benefit.

Vestas holds a 24 percent market share in the wind power manufacturing industry—an industry which is expected to grow 15% to 20% annually. It is estimated that alternative energy sources may optimistically make up 10% of the global energy market by 2010.

Vestas sales for 2001 were about $1.1 billion up from $792 million the year before. The company's largest current customer in the Northwest is Vansycle Ridge wind farm being developed in the Columbia River Gorge, with PGE as a participant. Vansycle Ridge, developed by Florida-based FPL Energy, ordered nearly 1,000 units from Vestas in 2001.

"With the nation's and the state's highest unemployment rate, these jobs could not have come to Portland at a better time—and, these are exactly the types of jobs we want to attract — family wage jobs in sustainable industries," says Portland Mayor Vera Katz.

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Vestas, Port in Final Lease Negotiations for $100M Headquarters Project

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