A $125M Portland project seeks to revitalize a historic community, U.S. manufacturing

As American industry fled to overseas locales in the chase for cheaper labor, it left communities like Portland, Oregon’s Old Town neighborhood struggling for survival. The oldest neighborhood in Portland, Old Town saw rising crime and homelessness but a reset in 2021 and a plan to revitalize the neighborhood is taking shape—and its focused around manufacturing.

Social services designed to assist residents are tackling the homelessness issue. And entrepreneurs are working to revitalize the business community. ECONorthwest prepared a report in May 2021 for Prosper Portland to help guide that business revitalization. The three-pronged approach called for reestablishing visibility, connectivity and safety as a priority of Old Town, supporting growth and development of business, and identifying opportunities for development and building out existing space in Old Town.

In March, the Old Town Community Association secured $2 million in funding from the Oregon State Legislature to develop nine mostly empty Old Town Chinatown buildings. The goal is to create a hub for the footwear and apparel industries, showing that Made in America is not just a slogan, but a reality. A reality that can help revitalize a historic community.

“We’ve got an incredible, once in a generation opportunity to build this 21st century supply chain both at the brand level and the factory level,” Elias Stahl, CEO and co-founder of Hilos, tells Supply Chain Management Review.

An artist's rendering of the Made in Old Town project in Portland's Old Town neighborhood. (Photo: Travis Dang, Sera Architects)

A future for local manufacturing

The Made in Old Town project is a “vision for the future of Portland’s Old Town neighborhood—to spark the future of clean, and environmentally sustainable footwear and apparel manufacturing, and transform our neighborhood for the better, grounded in high-quality urban design and inclusive wealth-building for Portland’s community,” the group’s website states.

The total project is estimated to cost $125 million.

The $2 million will go toward a 30,000-square-foot green manufacturing facility which will serve as the centerpiece of the Footwear and Manufacturing Innovation hub (FAMI). The hub will serve as the centerpiece of what developers hope turns into a 323,000-square-foot development across nine buildings, including 80,000 square feet of advanced manufacturing and 110,000 square feet of workforce housing.

At the center of the project is Stahl’s Hilos, an Old Town business offering a software and manufacturing platform for brands to launch 3D-printed footwear on demand.

The project includes former Adidas Brand President Eric Liedtke and former Nike Chief Sustainability Officer Noel Kinder. It’s goal: To prove that sustainable manufacturing can thrive in the United States and revitalize neighborhoods, giving the community and its people a viable future.

“There are hundreds of brands located in Portland. There has never really been a whole connection of that community. This is a way to harness that energy in a community where it has existed for a long time; to use what is here because so much of that critical mass exists in the Northwest. [And] there is a history of that area being a traditional manufacturing hub for Portland. This is an intention to use what is there … to use that energy and investment to [revitalize] that area of town.”

In many ways, the project is the ultimate reshoring project, complete with community redevelopment in a state known for its iconic footwear brands, with Nike, Adidas North America and Columbia Sportswear among the companies calling the state home.

Stahl says he and others involved in the project saw a “natural trend of suppliers wanting” to locate in the U.S. “Nowhere is the opportunity greater to bring manufacturing back to our urban cores than in Portland,” he says.

Kinder notes the effort would accelerate innovation in the footwear and apparel space. “There is a desire to go faster from an innovation standpoint,” he points out. “The closer you are to consumer trends, the less inventory you have to hold.”

Speed to market

Among the many reasons companies cite for nearshoring or reshoring factories is the ability to get items to the end consumer faster. When it comes to developing products, that speed is often lacking.

“Right now, Nike is probably the only brand in Oregon that has sample-making capabilities in-house,” Stahl says. “Most brands have to send their teams overseas for three weeks at a time and for most of that time, they are disconnected from their supply chain.”

Stahl adds that the ability to do small runs and samples “in market is a huge advantage.”

“Even a Nike, as big as Nike is, is still reliant on infrequent interaction with their suppliers,” Kinder adds. “One of the ideas from Old Town is to bring that [ecosystem] to life … so it helps everyone go faster. Having access to that in real time is a huge advantage.”

An artist's rendering of the incubator inside in the Made in Old Town project in Portland, Oregon. 3D printing will play a prominent role in the project, allowing manufacturers to quickly produce shoe and apparel items in small batches or limited product runs, and speeding the time to get the products to market. (Photo: Travis Dang, Sera Architects) 

3D printing is a key

Hilos enables 3D printing (additive manufacturing) and several brands are benefitting from the ability to produce shoes in small batches to take advantage of hot trends or test prototypes. Hilos enabled footwear brand Ancuta Sarca to launch the Luna Wedge in just 14 weeks. Stahl believes 3D printing can be a centerpiece of bringing footwear development, not only back to the U.S., but back to Old Town.

“3D printing is one technology that we are seeing move over the threshold in the next few months to where it is finally competitive with [traditional] footwear supply chains,” he says. “3D can allow companies to go from a sample to production.”

Hilos itself is core and material agnostic, meaning it can be utilized in shoes as well as other areas, such as clothing. The Made in Old Town campus, Stahl and Kinder believe, will attract not only innovative companies looking to benefit from quick design to production cycles, but also the tier 2 and 3 suppliers that will support those businesses.

“There are other opportunities that intersect craft and technology,” Stahl says.

Targeted opportunities

Part of the reason Kinder and Stahl believe the Old Town project will be successful is because of the recent trend in nearshoring/reshoring. New Balance, Kinder notes, has had some success recently with bringing components from Asia for finishing locally.

“You can make footwear in a really targeted [way] in select markets where you can take fewer risks,” he says.

Utilizing 3D printing can also reduce waste, which can be significant in the footwear industry, Kinder  mentions. Still, Stahl notes that Old Town is not going to replace the Asian footwear/apparel supply chains.

“The efficiencies of what exists in East Asia—the cost of labor—can not be duplicated here,” he says. “You have to develop new applications for footwear and we are starting to see that. Direct injection, for instance. We are already seeing factories in Portland doing direct injection.”

Why Old Town?

Old Town was chosen for the project for many reasons, but the primary one being that Portland, to this day, remains the center of the global footwear market. Stahl notes that 90% of U.S. footwear exports leave from Portland. Major brands call Oregon home, and the success rate for a project on this scale increases if it is located near the epicenter of the market.

“There are hundreds of brands located in Portland,” Kinder points out. “There has never really been a whole connection of that community. This is a way to harness that energy in a community where it has existed for a long time; to use what is here because so much of that critical mass exists in the Northwest. [And] there is a history of that area being a traditional manufacturing hub for Portland. This is an intention to use what is there … to use that energy and investment to [revitalize] that area of town.”

If successful, Old Town may become a focal point for the next great manufacturing shift—revitalizing the nation’s oldest manufacturing hubs into productive centers of business and residential activity for future generations.

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