Among local economic gurus trying to bring new business into the state, the buzz is that companies are getting interested in Oregon again. "There are definitely more leads coming in now," says Larry Holzgang, a regional economic development officer in Klamath Falls. He cites recent comments by state officials about a spike in calls from relocation specialists around the country.

Holzgang and a feisty group of boosters in K Falls have learned -- through timber's decline, tech's crash and now the exodus of jobs offshore -- just how fickle these economic turns can be. Still, the word on the street brings hope that their two-month dash late last year to fill a call center emptied by offshoring may be the beginning of a recruiting uptick that the Klamath Basin badly needs.

Nine years ago, Team Klamath, as the group calls itself, celebrated Sykes Enterprises' opening of a 430-seat call center with special home-brewed beer and a street named after the company. Last summer, Sykes scaled back its local work force to 80 employees, sending many jobs to Costa Rica. Realizing Sykes was on the way out, Trey Senn, the Klamath County economic development director, approached company officials and got them to agree to sell the building. He put out the word about available real estate with site selection companies on the East Coast

Then, a week before Thanksgiving, he got a tip that Klamath Falls was among the final six cities being considered by an expanding company. Senn jumped on a plane immediately -- "That empty building just haunted me," he says in his native Clemson, S.C., drawl.

Klamath Falls has its share of attractive features for relocation or expansion suitors. Its sweeping views of Mt. Shasta and Upper Klamath Lake come at bargain prices, Oregon Institute of Technology (OIT) churns out tech-savvy workers locally and there are still daily flights to Portland.

But Team Klamath has decided that what will set them apart most is speed. As the group looks to draw down Klamath County's 12.8% unemployment rate, it is counting on its knack for cooperating across institutional lines to deliver whatever a company needs -- land, utility lines, building permits, even pledges to keep out competitors -- in a flash.

"We're desperate for new jobs, and necessity is the mother of invention," says John Day, a Team Klamath member who runs a local Ford dealership. "People realized that if we don't get along, nothing's going to happen."

TEAM KLAMATH'S SPEED wooed Silicon Forest's Electro Scientific Industries to site a 70-employee production plant in the area in the spring of 2000, after Larry Rapp, then ESI's VP for administration and an OIT alum, found most West Coast metro areas at under 3% unemployment, and building permits backlogged up to two years.

Klamath Falls officials code-named the ESI project "Whatever it takes," and promised Rapp permit approvals in three days. When he signed on, they delivered. Contractors were leveling the hilltop plant site while ESI was still designing the new building. Team Klamath members gathered with Rapp weekly and challenged each other to get him what he needed. "We would taunt each other, 'The rock's in your pocket today; go get it done,'" says Senn.

Rapp recalls that a building permit for a new headquarters in Washington County, filed well before the Southern Oregon move, was issued after ESI moved into K Falls.

"In Washington County, the planning agencies do everything serially -- Metro, Tri-Met, then the county," Rapp says. "In

K Falls, they called all the agencies together in one room. If every city did that we'd be attracting industry, not losing it in Oregon."

ESI's announcement in May 2000 prompted a wave of inquiries from the West Coast tech community.

"Half of California wanted to relocate here," Senn says. "It was 'Oh, wow, what's OIT?' People were desperate for workers. We were going to be a high-tech mecca." Senn even coined a new moniker for the nascent hot spot -- "the Silicon Basin."

But in less than two months, Nasdaq's bubble burst."People wouldn't even return your calls," Senn says. "The same people who were desperate to get hold of you earlier."

SENN LAUGHS NOW WHEN he remembers the brief Silicon Basin days. "I guess we'll just be Diversified Klamath County now," he says.

"In recruiting, you don't even do as well as baseball players," says Holzgang, who has worked for the state in K Falls since '95. "You don't even bat .300."

In the last three years, Team Klamath helped bring in, among others, Home Depot and IFA Nurseries, which grows saplings using geothermal heating sources.

But by the end of 2003, the city needed a home run. In addition to the loss of Sykes jobs, Sterling Savings' purchase of Klamath First moved the bank's headquarters out of town, and a consolidation of the Medford and Klamath Falls offices of Regence BlueCross

BlueShield bled more jobs from K Falls.

That put the rock in Senn's pocket on his East Coast trip to talk with consultants for the mystery company interested in the call center. He pushed for a visit, presenting K Falls as a sophisticated area and touting Gov. Ted Kulongoski's pro-business attitude.

"I figured if we could make the final three and get a visit, we'd turn it in our favor," Senn says.

Just after Thanksgiving, K Falls officials heard they would get a visit. The company was Dulles, Va.-based National Electronic Warranty Corp., which supports extended warranty and service agreements for everything from diamond rings to weed whackers and was looking to expand in the Pacific time zone.

NEW Corp. vice president Ray Zukowski sent seven company reps to K Falls on Dec. 5, to figure out if the area could quickly supply up to 450 qualified workers and if competing call centers might come into town and poach staff from NEW in the future.

At a breakfast meeting on Dec. 6, OIT president Martha Anne Dow, Klamath Community College president Fred Smith, and state work force reps assured NEW they'd find highly skilled grads to fill the new posts, in addition to a host of recently laid-off Sykes workers.

Local officials also promised to only have one call center in town. "We didn't want to strangle the goose that laid the golden egg," Senn says.

John Day also explained to NEW's staffers that Oregon's workers' compensation costs were low and that unions hardly existed in Southern Oregon.

Toward the end of the trip, NEW officials suggested they could guarantee 10 years in town if Team Klamath could organize a lease of the call center. Holzgang, Klamath Falls mayor Todd Kellstrom and city manager Jeff Ball spun into action, with Holzgang working for a $4.5 million loan from the state to purchase the building from Sykes and Kellstrom organizing a unanimous vote of the City Council to buy it.

By the time Zukowski and NEW president Tony Nader arrived for a second visit just before Christmas, the 10-year lease from the city was beginning to pencil out. The pair flew in at 7 p.m. one night in a snowstorm, met with Team Klamath members late into the night, toured the Sykes building at 4:30 the next morning and flew out by 7 a.m. "I never felt like I was imposing on them," Zukowski says.

By New Year's Day, Zukowski and Nader decided they would open in Klamath Falls this spring and begin ramping up to 400 employees.

"It wasn't the best incentive package out there," Zukowski says. (In addition to the lease deal, NEW will receive state work force training funds.) "What Klamath Falls did a great job on is driving a stake in the ground on ownership and partnering with us."

Senn figures he'll have a batch of newly brewed beer in time for the official NEW opening ceremony in July. The old Sykes street sign has been changed to read NEW Way. But he's already looking past the call center's opening. NEW works with a host of credit card companies and retailers such as Best Buy, which Klamath Falls doesn't have. "I don't mind saying we've already talked about getting some of those companies in here," Senn says.

"Now there's a rock for your pocket."

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Copyright 2004 Oregon Business magazine