PORTLAND, Ore. (KOIN) – The Port of Portland is leasing a former marine terminal to a mass timber company as part of an effort to spur housing development and job growth in the area.

On Wednesday, the Port of Portland approved a lease for Zaugg Timber Solutions to open a factory at the Port’s Mass Timber and Housing Innovation Campus at Terminal 2.

The Port described ZTS as a “key anchor tenant” on the campus, which the Port is transforming into a manufacturing hub.

“Our partnership with ZTS marks a major leap forward in developing the Mass Timber and Housing Innovation Campus at T2,” said Kimberly Branam, Port of Portland Chief Trade and Economic Development Officer. “Their new manufacturing facility will boost our region’s economy by promoting sustainable forestry practices, creating quality jobs, and increasing housing production.”

While the new 100,000-square-foot manufacturing facility is expected to open in 2028, ZTS will produce mass timber modular housing units, industrial and commercial buildings and other building components starting in 2026 in an interim manufacturing facility at the terminal, officials noted.

“Our investment plans are a recognition of the incredible work already done to build the mass timber economy of the Pacific Northwest. We hope we can be a small part of it by contributing our hard-won expertise around affordable modular and prefabricated mass timber elements,” said Stephan Zaugg, Chairman of the company.

ZTS is the North American affiliate of the ZAUGG group, a Swiss company that has made prefabricated buildings since 1936, and later built the first modular multi-family mass timber prototype in the United States in 2020.

According to the Port of Portland, the factory will be among the first of its kind in the U.S. to produce mass timber modular and prefab housing units at a large scale.

Officials said the facility will hire up to 60 employees while supporting about 135 jobs in the region, including jobs in mills and other suppliers.

The Port of Portland added that when complete, the 39-acre campus at Terminal 2 will be a hub for manufacturing companies, research and development, and business incubators to support the mass timber, housing and climate technology industries along with a University of Oregon research and development lab for mass timber products.

The Port of Portland is a member of the Oregon Mass Timber Coalition, which received a $41 million grant in 2022 from the U.S. Economic Development Administration to develop ways to expand the use of mass timber in the housing market. That grant included $10 million for the Port of Portland campus and $14.6 million for UO’s acoustics lab at the terminal.

The Port additionally received $4 million in federal Housing and Urban Development funding in 2024 along with $5 million from the Oregon Legislature to develop the campus.