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Klamath County hopes tech firms fill 'Silicon Basin' Technical school's presence helps draw software company From wire and staff reports Klamath Falls has taken a step toward becoming a high-tech haven. Escend Technologies, a Southern California software firm, has opened a software development center in Klamath Falls, the company announced Wednesday. About 20 employees have started work at a 5,000-square-foot office, and Escend plans to add a dozen more by the end of May. The company expects to employ more than 60 people by year's end and 200 in five years at a 30,000- to 50,000-square-foot facility that economic development officials plan to help finance. Civic leaders hope Escend will start a stream of tech companies wanting to cluster around Oregon Institute of Technology. Like many other communities dreaming of dot-coms, the area already has a tech-inspired marketing nickname: the "Silicon Basin." "This is a chance to not only create jobs, but bring the economy in Klamath County to a point where it can start catching up with the vibrant economy in other parts of the state," says Larry Holzgang, regional officer for the Oregon Economic and Community Development department. "It is absolutely critical, and we want more." Klamath's coup deals at least an indirect blow the "Silicon Orchard," the name Rogue Valley technology promoters have pitched. Gordon Safley of Southern Oregon Regional Economic Development Inc. says the Rogue Valley wasn't even considered, as far as he knows. "Didn't hear a thing," he says. But Rogue Valley officials weren't crying sour grapes over the company's choice. "That's good for them," Safley says. "We'll get the next one." "Good for Klamath County," says Charlie McHenry of the Southern Oregon Technology and Telecommunication Council. He says the presence of OIT promises to be a boon for that area, one Southern Oregon University hopes to share in by working with the technology school. "We love stuff coming to Jackson County, but we're all Southern Oregon," McHenry said. "They'll be plenty for us." Escend, founded by Keith Coble, designs business-to-business software, which helps companies do business with each other over the Internet. The presence of OIT played a leading role in getting Escend to Klamath Falls. An associate professor and OIT graduate, Calvin Caldwell, became Escend's chief technology officer when the company purchased his consulting firm. His influence drew the company -- as did the 400 students with degrees in computer science, engineering and related fields that OIT graduates a year. "(Coble) agreed to set up the company's technical center in Klamath Falls because he saw the quality of graduates coming out of OIT," Caldwell said. The catch is a crucial one for Klamath County, which has long been desperate for new companies to fill the void left by the shrinking timber industry. Five Klamath County cities are deemed "economically distressed" by the state, and the county's March jobless rate of 10 percent is nearly double the state average. So, how did Klamath lure Escend? Economic development officials have a one-word answer: luck. "They literally called one morning and we about fell over," says Trey Senn, executive director of the Klamath County Economic Development Association in Klamath Falls. He doesn't mind that fortune, not strategy, was the key. Caldwell introduced Escend to Klamath County last year while his software consulting firm was doing work for the company as a contractor. Coble, Escend's president, says the company was so pleased with Caldwell's work that it wanted to buy his consulting firm and incorporate it into Escend. Caldwell, who has lived in Klamath Falls on and off since 1976, agreed to the sale, imposing one condition: Escend's software-development arm had to be in Klamath. At first, Coble was skeptical. "Working with the venture-capital community, I had always heard there was a strong desire to be located in the Silicon Valley area," he says. Klamath County leaders, state officials and college representatives quickly mobilized. The prospect of $50,000-plus paychecks in the area was so appealing that everyone from the county's arts group to Gov. John Kitzhaber had a hand in laying out the welcome mat. They showed Escend executives around the area, including Crater Lake National Park. They promoted the area's affordable housing, and talked up the fiber-optic cable installed in 1996 after Sykes Enterprises Inc. of Tampa, Fla., opened a technical-support call center in Klamath Falls. There were also financial incentives: County officials promised to line up millions of dollars in federal, state and local funds to buy land and construct a building for Escend to lease. The low-interest loans will be repaid by Escend as a 10-year lease to buy. Coble says he began to see the business sense of moving outside of the technology-saturated center where real estate and labor are expensive. In Silicon Valley, $50,000 won't buy employees much, he says, while in Oregon, they can enjoy a quality of life that's hard to find in California. Today's Edition : News | Sports | Business | Weather | Tempo | Classifieds Mail Tribune Copyright � The Mail Tribune 2000, Medford, Oregon USA