Ashland Community Hospital has been at its current location on Maple Street since it opened in 1961.

Ashland Community Hospital has been at its current location on Maple Street since it opened in 1961.

But because it was built in an area zoned for residential use, anyone who wanted to construct a medical office building or nursing home near the hospital had to win a special Conditional Use Permit. That made the planning process difficult and uncertain for those types of buildings that otherwise should have fit naturally around a hospital.

City officials recognized the problem when they adopted an Economic Element for the city's Comprehensive Plan in 1990. The Economic Element served as an economic development plan of sorts, identifying problem areas and proposing steps to boost the economy.

"Because projects were subject to the Conditional Use Permit process, they ran into neighborhood opposition and were appealed or drawn out. There was a decision that Ashland Community Hospital was not going away, and we should recognize that in the zoning to create more certainty and predictability," recalled Ashland Community Development Department Director Bill Molnar, a long-time city employee.

The city designated the area around the hospital as a Healthcare Services zone, spurring the construction of medical office buildings and a nursing home, he said.

Research done to prepare the 1990 Economic Element showed Ashland didn't have enough hotels, causing tourists to stay in outlying towns. More hotels have been built, expanded and renovated since then, although Molnar said that was more due to market forces than any single steps taken by the city to increase the number of hotel rooms in town.

In many ways, the Economic Element proved prescient with its predictions that the timber industry would continue to decline and new theaters and attractions could augment the Oregon Shakespeare Festival to appeal to a growing tourism sector.

The Economic Element's largest failure was its inability to foresee the drop in the number of school children that led to the closure of two elementary schools in the past several years. Instead, the Economic Element stated, "Ashland's retirement population is expected to decrease due to rising real-estate values."

Retirees who have sold their homes in expensive real estate markets like California are among the only people who can afford to buy houses in Ashland.

Some goals of the Economic Element remain incomplete, such as diversifying Ashland's economy to reduce its reliance on tourism, and promoting more light manufacturing firms.

The city of Ashland recently began an effort to create a new economic development strategy. That effort — which will tap into the expertise of the business, nonprofit, education, research and government sectors and use feedback from residents — will stretch into 2010.

Ashland joins the ranks of other cities around the state that are trying to plan for their economic futures, while also competing against each other for the high-wage jobs and diverse businesses they all want to attract through economic development efforts.

Bend and outlying towns banded together to craft their 2007-2009 Economic Development for Central Oregon Strategic Plan. Like Ashland, Central Oregon's economy is heavily influenced by tourism.

The plan calls for creating 1,500 family-wage jobs and $75 million in capital investment through such steps as linking businesses with venture capitalists and helping cities streamline their planning processes to attract businesses and jobs.

Central Oregon cities want to construct at least two new light industrial buildings per year in each community to create room for businesses. The cities want to become magnets for firms that specialize in aerospace and aviation, high technology, light industry, recreation equipment manufacturing, research and development and secondary wood products.

Corvallis and surrounding Benton County have their 2006 "Prosperity that Fits" economic development plan. Corvallis, like Ashland, is a university town.

Words in the plan echo values often expressed by Ashland residents.

"We understand people who live here place a premium on the extraordinary quality of life our region offers, and that they are not willing to sacrifice it just to 'get ahead,'" the plan states.

It goes on, "At the same time, we recognize that economic vitality does not happen by accident."

Corvallis created the plan in response to downsizing at a technology firm that was a major employer, declining school funding and shrinking tax revenues.

The Ashland School District and Southern Oregon University have been hard-hit by state budget cuts, and the city of Ashland has laid off workers for the past few years.

The Corvallis economic development plan's steps include creating and maintaining an Internet-based inventory of land and building space for businesses, hiring a business retention and recruitment staff person, providing affordable housing for workers, opening Oregon State University business classes to high schoolers and other residents and surveying businesses regularly to see what employment skills they need.

Among dozens of other steps, the plan also calls for fast-tracking permits for sustainably built projects and offering 60-day guaranteed permitting on pre-approved, shovel-ready sites.

Corvallis would like to become more like Ashland and be known as a tourist destination. While Ashland is an entertainment Mecca for the region, "entertainment dollars" are leaking out of Corvallis as residents there go elsewhere for recreation, according to the economic development plan.

Staff writer Vickie Aldous can be reached at 479-8199 or vlaldous@yahoo.com.