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The hits keep coming for the Oregon Liquor and Cannabis Commission. Just last month, the interim director of the troubled agency, Craig Prins, sketched out a vision of the agency’s planned new warehouse and headquarters in Canby. But on July 28, that vision changed abruptly.
“The OLCC warehouse build will not include the headquarters,” Prins wrote. “The headquarters will move to Salem where the state has vacant office space.”
On Aug. 7, he provided a more thorough explanation in an email to his subordinates, some of whom felt the equivalent of whiplash, having just gone through the exercise of planning out how the agency’s administrative functions could best use what they anticipated would be a custom-built Canby headquarters.
“Our circumstances have changed since those initial conversations when you and your managers were asked to envision the OLCC’s new work place,” Prins wrote. “The bottom line is, we cannot afford to build an office-warehouse complex as it was originally planned and designed.”
The agency and its central warehouse are currently located in Milwaukie. Under the agency’s previous longtime director, Steve Marks, liquor sales soared and the agency made plans to build a new state-of-the art facility closer to major highways. It decided to move its headquarters, as well.
As WW reported last year, costs escalated dramatically from when the agency first decided to move, more than doubling from an initial estimate of $62.5 million to $145.8 million. A state panel of real estate experts, the Public Lands Advisory Committee, which reviews state property transactions scoffed at the price the OLCC paid, with the panel’s chairman calling it “egregious.”
Now, according to OLCC spokesman Mark Pettinger, the agency is pulling the plug on new office space in Canby. The economics the agency is looking at are compelling. OLCC estimates it would cost $19 million to build the new headquarters, compared to renting space from the Oregon Department of Administrative Services in Salem for about $250,000 a year.
“We have to plan to build what we can afford and have permission to spend,” Pettinger says. “And as good stewards of state funds, we have to think like the taxpayer and ask, why build HQ in Canby if space is available in Salem?”
The OLCC has been under scrutiny because of a scandal over the diversion of rare, high-priced bourbon. An internal investigation led a to a finding that six top executives had violated ethics rules. Gov. Tina Kotek asked for the resignation of one—former director Steve Marks—and the firing of five others. (Kotek says her decision to fire Marks preceded her learning about the bourbon scandal.) Kotek also demanded and got the resignation of former OLCC board chair Paul Rosenbaum.
In state agency circles, getting yanked to Salem is the ultimate punishment. Old-timers still remember the disruption when lawmakers fed up with mismanagement and bad press at the Oregon Department Fish & Wildlife forced that agency to move from Portland to Salem two decades ago. It’s not quite the same for OLCC employees (100 to 120 had offices at headquarters prior to the pandemic and another 50 work in the warehouse) because they were going to have to commute to Canby anyway.
In his written communication to agency staff, Prins offered some hope to people unexcited about relocating to Salem. “The reality of work and where we do our work has changed,” Prins wrote. “Oregon state government is making a commitment to a permanent remote work model.” That means two things: some workers won’t have to drive to Salem and the agency will need less office space than it anticipated pre-pandemic.
For those agency employees who will have to make the move, planned for the summer of 25, he offered a commuter carrot. “We are looking to lease space that is ‘off-mall’ [i.e., off the central green where many government offices are located] that will have free parking available.”