Business Pulse November | December 2023

BUSINESS PULSE

NOVEMBER / DECEMBER 2023

THE PULSE OF WHATCOM COUNTY

Chocolate Necessities going through sweet transition Founder Kevin Buck (left) working closely with new owners Rose Vogel and Michael Howell during ownership change

PLUS: Bellingham’s waterfront district going through exciting times A look at personal wealth and growth in Whatcom County One reason why ‘clean manufacturing’ isn’t choosing Washington

Business Pulse magazine 1225 Roeder Ave., Ste. 108 Bellingham, WA 98225

NOVEMBER/DECEMBER 2023 VOL. 48 NO. 6

Canadian business interest in Whatcom County is growing

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Your local business news brought to you by WHATCOM BUSINESS ALLIANCE

VOL. 48 | NO. 6 PUBLISHER Whatcom Business Alliance EXECUTIVE DIRECTOR Barbara Chase EDITOR Matthew Anderson,

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CONTRIBUTING Elisa Claassen Cheryl Stritzel McCarthy Tara Gilligan Reimer Lorraine Wilde GUEST COLUMNISTS Todd Myers Dann Mead Smith Josh Wright ART DIRECTOR Whitney Pearce PHOTOGRAPHY Sattva Photo Cover Photo by Sattva Photo WBA BOARD OF DIRECTORS: BOARD CHAIR: Pam Brady, Director NW Gov’t & Public Affairs, bp Cherry Point EXECUTIVE COMMITTEE: John Huntley, President/ CEO, Mills Electric Inc.; Doug Thomas, President/ CEO, Bellingham Cold Storage; Josh Turrell, Partner, Larson Gross PLLC; Josh Wright, VP/Broker, BellAnderson Insurance BOARD OF DIRECTORS: Tyler Byrd, CEO, Red Rokk Interactive; Jane Carten, President, Saturna Capital; Bryant Engebretson, Managing Principal, Tradewinds Capital; Jon Ensch, Commercial Banking Officer, Peoples Bank; Mitch Faber, Partner, Adelstein Sharpe & Serka, Jim Haupt, General Manager, Hotel Bellwether; Sandy Keathley, Former Owner, K & K Industries; Tony Larson, Founder, WBA; Sarah Rothenbuhler, Owner/CEO, Birch Equipment; Patrick Schuppert, Commercial Banking Relationship Manager, Wells Fargo; Billy VanZanten, CEO, Western Refinery Services For editorial comments and suggestions, write info@whatcombusinessalliance.com. The magazine is published bimonthly at 1225 Roeder Ave., Ste. 108, Bellingham WA 98225. (360) 746-0418. Yearly subscription rate is $25 (US). For digital subscription, visit businesspulse.com. Entire contents copyrighted ©2023 Business Pulse. All rights reserved.

POSTMASTER: Send address changes to Business Pulse, 2950 Newmarket St., #101-173, Bellingham WA 98226

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NOV/DEC 2023 | BUSINESSPULSE.COM

IN THIS ISSUE 13

BUILDING STRONG RELATIONSHIPS WITH OUR NEIGHBORS TO THE NORTH For Whatcom businesses, the Canada/U.S. border is a dotted line, not a barrier.

18

SOMETHING FOR EVERYONE AT BELLINGHAM’S WATERFRONT Many Bellingham neighborhoods have undergone changes lately—few as significant as the waterfront.

24 PERSONALLY SPEAKING

Chocolate Necessities owner remains involved in planned, handcrafted transition with new ownership.

13

30 WHATCOM COUNTY LISTED AS SIXTH WEALTHIEST COUNTY IN WASHINGTON

But few county residents may agree their personal wealth has increased.

38 TRIBUTE TO LOCAL RADIO LEGEND AND FRIEND

High school basketball and football meetups won’t be the same without Mark Scholten.

18

24 PHOTO: Sattva Photo

COLUMNS 41 Housing, agriculture

and other key issues addressed in fall policy roundup

45 Why does the southeast get most of the solar, wind and battery production growth?

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BUSINESSPULSE.COM | NOV/DEC 2023

48 Few employees opting

in to state’s Paid Family Medical Leave and WA Cares programs

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NOV/DEC 2023 | BUSINESSPULSE.COM

BP UP FRONT

Now is the time to stay engaged As this issue hits your mailbox, voters have cast their ballots in the November general election. On behalf of our business community, the Whatcom Business Alliance and the leaders working to create a prosperous Whatcom County, we need you to stay engaged!

It has been a busy year. We celebrated business success in March at our Whatcom Business Awards, discussed local issues at our recent Leaders of Industry forum and enjoyed all that makes Whatcom County community spectacular, including via networking events with the Bellingham Bells, Chuckanut Bay Distillery and San Juan Cruises. As this year comes to a close, join us at our Economic Forecast Breakfast Dec. 6 for critical economic insight into 2024.

Our country is facing enormous challenges, and those challenges are also present in Whatcom County.

Right now, our community is facing an

uphill climb. Businesses are required to consider as just a cost of doing business significant property loss and potential violence to their employees and customers. And it isn’t just crime.

Businesses face carbon taxes that make fuel — and, therefore, the cost of goods — even more expensive. They face water adjudication issues that will end up costing millions in legal fees.

They face a proposed hike in worker’s compensation rates and minimum wages beyond the increases the state sets every January. Across our county and state, working families — already ignored and stretched thin — will absorb the cost of this regulatory regime, pushing them further and further into financial duress.

Every year, we talk about the challenges facing business. Many of those challenges remain the same year in and year out. Specific initiatives come and go. Regardless of whether these initiatives pass, our community must change the way it views business. The genuine tragedy is that, for the most

part, these initiatives will harm smaller local companies while doing nothing at all to the large multinational corporations that operate here.

We are thankful for and honor our Business Pulse writers as we celebrate another successful year of bringing readers articles of interest and keeping you updated on issues of local importance. It is hard to believe that this is the last issue of the year! In Whatcom County, we are fortunate to have a business community that prioritizes the community and contributes to its long-term success. Not every county has that. On behalf of this publication, we are lucky to have you.

Most businesses here already have some connection to our northern neighbor. In this month’s issue, on Page 13, regular columnist Cheryl Stritzel McCarthy profiles how Canadian interest in Whatcom County is growing. On Page 18, Elisa Claassen dives into the changes on our waterfront, and Lorraine Wilde discusses what is fueling personal wealth in our

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BUSINESSPULSE.COM | NOV/DEC 2023

county on Page 30.

Their future is sweet! The change in ownership at Chocolate Necessities is showcased by Tara Gilligan Reimer on Page 24. Read that article to discover how Kevin Buck hands over the molds after 37 years in business.

You don’t want to miss our policy roundup and a peek into 2024 with Dann Mead Smith on Page 41. This issue also includes a surprising article from Todd Meyers on Page 45 that argues that counterproductive regulation is one reason ‘clean’ manufacturing isn’t choosing Washington state.

Our local sports community will never be the same. We are deeply saddened that, on Aug. 14, 2023, Whatcom County lost a radio legend when Mark Scholten passed away from natural causes. On Page 38, Josh Wright honors Mark and recounts his legacy of local sports coverage.

We hope you enjoy this issue. I look forward to spending the next year working with each of you, focusing on solutions that will make our businesses, our community and the families that live in Whatcom County prosperous and successful in 2024 and beyond. On behalf of the team here at Business Pulse, thank you to all our writers, advertisers and supporters for making this and every issue of Business Pulse possible. We could not do this without you. Happy holidays!

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BP NEWSMAKERS

Alice Clark

Lindsey Payne Johnstone Geoff Stodola

Downtown Bellingham Partnership announces departure of executive director The Downtown Bellingham Partnership will bid farewell Dec. 31 to its executive director, Alice Clark, who has served in the position for seven years.

Clark’s guidance and dedication, building upon her 25-year history of contribution to the community, have contributed to the recovery of downtown Bellingham.

As a founding member of the Pickford Film Center, she helped build a cultural hub that has become a downtown fixture. As executive director of the Downtown Bellingham Partnership, Clark continued her legacy of impactful leadership, navigating the organization through challenging times and building a tenured and skilled staff.

Under Clark’s guidance, the DBP has been instrumental in the city’s recovery, especially during and after the COVID-19 pandemic. The DBP shifted gears and became a small business recovery resource, brought back beloved community events like Downtown Sounds and stepped into business advocacy for continued safety and public health solutions.

“While my time as executive director is coming to a close, I am far from retiring,” Clark said. “I am excited to continue my community involve-

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Patti Goethals Rowlson

ment and contribute to its ongoing development in new and meaningful ways.”

Lindsey Payne Johnstone, DBP’s current program director, has 15 years of service at the organization and will step into the role of interim executive director. This will help ensure a seamless transition, continued stability and momentum as the board and staff search for a new leader.

For more about the Downtown Bellingham Partnership, visit www.downtownbellingham.com.

General contractor earns best workplace award Bellingham-based Exxel Pacific Inc. recently received the top rating among large companies (100 to 499 employees) in the 2023 ranking of Washington’s Best Workplaces.

The honored employers were determined through a survey conducted

by Quantum Workplace, a national research firm, for the Puget Sound Business Journal.

“We’re an employee-owned company,” said Geoff Stodola, president of Exxel Pacific. “The company and employees are devoted to our core values.

We’re focused on our dedication to shared success, taking ownership and leading by example, providing opportunities for a fulfilled life, taking care of each other like family and always doing the right thing even when no one is looking.”

Sharon Rouse

Danyel Cammon

Exxel Pacific, which has 177 employees and a second office in Bellevue, is the Puget Sound region’s 10th-largest general contractor, with 2022 revenue of $352 million. Founded in 1989, Exxel Pacific is recognized as an industry leader in commercial, mixed-use and residential construction throughout the Pacific Northwest. Its projects include large multiunit, midrise podium residential buildings; high-rise residential buildings; large-scale office buildings; retail facilities and many other building types. The company’s core values are centered on family, trust, honesty and integrity.

For more information, visit www.ExxelPacific.com.

All American Marine delivers unique ocean tour/dive vessel for Hawaii dolphin tours All American Marine has delivered a unique, highly customized vessel for Hawaii Dolphin Tours based in Honolulu, Hawaii. This vessel is a 50-by-17foot semi-displacement aluminum catamaran hull developed by Nic de Waal of Teknicraft Design in Auckland,

Don Gustafson

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New Zealand. It was constructed in AAM’s state-of-the-art facility on Bellingham Bay and is starting operations this week in Oahu.

This new vessel will add capacity to Hawaii Dolphin’s range of snorkel and tour vessel trips. The 70-passenger vessel Poseidon was constructed to U.S. Coast Guard Subchapter T regulations. The propulsion package includes twin Cummins QSB 6.7 SL-SW engines, rated at 355 metric horsepower at 3,000 revolutions per minute, driving fixed-pitch propellers.

The open-air concept vessel was carefully designed for efficient operations.

The vessel’s design offers all passengers and crew a smooth ride and optimal comfort, as the unique hull provides a cushioned effect when encountering waves. Onboard the vessel, guests have open-air views from all 70 seats, with wraparound views on the main and upper decks.

The unique built-in slide and customized boarding ladders allow guests to slide into the clear Hawaiian waters and quickly get back aboard. For more details, please visit www.allamericanmarine.com.

Rowlson earns WBE and DBE certification The founder and communications director of Bellingham PR & Communications, Patti Goethals Rowlson, recently completed a rigorous certification process through the Washington State Office of Minority and

Women’s Business Enterprises.

As of Aug. 9, when the process concluded, BPRC was one of just 15 businesses in Whatcom County to be certified as both a Women Business Enterprise and a Disadvantaged Business Enterprise.

WBE and DBE certification acknowledge businesses that are majority owned, operated and controlled by women or by socially and economically disadvantaged individuals.

The certification process, which took nine months to complete, involved a meticulous evaluation of BPRC’s ownership structure, financials and operational procedures.

“Bellingham PR & Communications has been 100% woman-owned since its inception in 2009, providing public relations consulting and communication services to large and small businesses in Whatcom County,” Rowlson said. “Achieving WBE and DBE certification is a significant milestone documenting that ownership and making it possible for us to serve the community in a new way.”

WBE and DBE designations provide small businesses like BPRC with increased visibility and access to education and networking opportunities.

The designations also can provide access to procurement opportunities that might not be available otherwise.

Many government agencies, corporations and large businesses have diversity and inclusion initiatives in place that encourage or require them to work with minority-owned and women-owned businesses.

“I’m excited to join the WBE and DBE communities and to learn and grow as a result,” Rowlson said.

For information about Bellingham PR & Communications, visit www.bellinghampr.com.

Bellingham Cold Storage executive assistant retires after 37 years Sharon Rouse retired Aug. 28 after an outstanding 37-year career with Bellingham Cold Storage.

Rouse’s journey with BCS began in 1986, and she rapidly became a versatile team member, seamlessly transitioning through roles such as traffic department assistant, accounts payable specialist, receptionist and inventory archiving.

In 1999, Rouse was promoted to the role of executive assistant to the president and CEO, the management team and the board of directors. That was the position she held until her retirement.

Rouse was with BCS during its best years and during its most challenging years. Through it all, she was solid, dependable, steady, organized and ready to assist. Her expertise in handling confidential documents and contracts and her role in organizing employee recognition events, customer parties and meetings with service partners, government officials and politicians further exemplified her value at BCS. “BCS is successful today largely due to Sharon’s dedication and efforts over the years,” said CEO Doug Thomas.

“There are only a couple of dozen former BCS employees that have this legacy, and Sharon is right there among the best of them over our 77year history.”

Learn more about BCS by visiting www.bellcold.com.

Promotion fills executive assistant role at Bellingham Cold Storage Bellingham Cold Storage recently announced the appointment of Danyel Cammon as its new executive assistant. Cammon assumes the role following an extensive training period

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NOV/DEC 2023 | BUSINESSPULSE.COM

with Sharon Rouse, who retired after 37 years of service.

Cammon, who joined BCS more than a year and a half ago as a member of the accounting team, quickly proved herself as a contributor to the department and the overall administrative team. She has demonstrated the necessary heightened sensitivity for financial, legal and employee confidentiality.

Cammon grew up in Anchorage, Alaska, and graduated from West Anchorage High School. She has earned multiple degrees from Bellingham Technical College, including an associate of applied science in business management and certified human resources specialist.

Since her arrival at BCS, Cammon has taken on a leadership role in the employee recognition team, orchestrating regular employee meals, appreciation parties and a new “back to school” project for the children of employees. Her commitment to

fostering a positive work environment aligns with company values, helping ensure a strong administrative and leadership team.

“Danyel’s wealth of experience and her commitment to our company’s values make her the perfect fit for the role of executive assistant,” said CEO Doug Thomas. “We are confident that she will play a crucial role in steering BCS toward continued success.”

Visit www.bellcold.com to learn more about BCS.

Appraisal firm announces change in ownership Gustafson & Associates has announced that Braden Gustafson, a seasoned industry professional and son of the founder, has purchased the company.

Braden Gustafson has been appraising commercial real estate for 20 years. He has a wide-ranging log of commercial experience and has earned the MAI designation from the

Appraisal Institute — the nation’s largest professional association of real estate appraisers — while being chair of the association’s North Sound Branch.

Founder Don Gustafson, who has been appraising real estate in Whatcom County for 45 years, looks forward to continuing his appraisal work for the firm for the next decade.

Gustafson & Associates offers a wide range of real estate appraisal services, including residential, commercial, industrial and agricultural properties. With a team of experienced appraisers and the only MAI-designated fee appraisers in Bellingham, the firm possesses in-depth knowledge of the local market. The company has established itself as a trusted partner since 1996 for individuals, businesses, financial institutions and legal professionals seeking accurate and reliable valuations.

For more information, visit www.gustafsonandassociates.com.

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FEATURE BP

Sunrise Kitchen_Belvedere by Square Nine (Sunrise Photo)

Let’s do business, eh?

Canadian interest in Whatcom is growing Cheryl Stritzel McCarthy Canadian businesses like Whatcom County. Most businesses here already have some connection to our northern neighbor, said John Michener, economic development project manager at Port of Bellingham.

“We saw interest pre-pandemic and throughout the pandemic,” Michener said. “We’re getting more inquiries now.

These decisions, these projects, take a long time — five or six years — as they study conditions. We’re definitely seeing more interest today.”

In September 2020, Marcon Metalfab of Delta, British Columbia, which makes parts for bridges and other major transportation projects, purchased property in Ferndale for its second manufacturing location. In October 2022, Alliance Freeze Dry Group, a Canadian pet food manufacturer with a facility in Langley, British Columbia, broke ground for a 220,000-square-foot manufacturing facility on nearly 10 acres in Lynden. The facility, called Cana-

ture Kitchen Lynden, is slated to be completed in 2024. In June 2023, Sunrise Kitchens of Surrey, British Columbia, which makes kitchen cabinets, expanded into Whatcom County with its purchase of Hertco Kitchens, a Ferndale cabinetmaker. (Hertco itself was founded in 1981 in Langley, British Columbia, and expanded in Delta. It moved to the U.S. in 1995, to Custer, and to Ferndale two years later.) In September 2023, Vicinity Motor Corp., an electric vehicle manufacturer based in Aldergrove, British Columbia, opened a

Paul Bhogal of Sunrise Kitchens and Harald Lincke of Hertco Kitchens, in Ferndale.

Sunrise acquired Hertco in June 2023. (Sunrise photo)

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“The more certain your process is, the more companies you will attract.”

John Michener, economic development project manager, Port of Bellingham

100,000-square-foot electric truck assembly facility on Labounty Drive in Ferndale.

More Canadian connections are in the works. “I talked to three companies today that are thinking of expanding here,” Michener said.

His job supports all Whatcom business, not just the port. With the goal of helping Canadian businesses locate here, in 2014 the port joined the 6,000-member Surrey Board of Trade.

Michener is the only American on its board of directors.

“Surrey is growing like nobody’s business,” Michener said. He expects Surrey to be larger than Vancouver by 2041. At least one Canadian online media source predicts that will happen years earlier.

“With agricultural land reserved, they’re running out of space for industrial development,” Michener said.

“We’re going to see a large push from Canadians who will look this way to expand. Property is getting expensive there. It’s cheaper here.”

At a business park in south Surrey called Campbell Heights West, land is going for 7 million Canadian dollars ($5.15 million) per acre, Michener said.

“Campbell Heights is shovel-ready.

We don’t have quite that level of preparation (here). It’s $500,000 to $600,000 per acre for the better-prepared parcels here. We don’t have a big,

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BUSINESSPULSE.COM | NOV/DEC 2023

planned development like Campbell Heights. Here, it’s more one-off,” Michener said, adding that Whatcom’s smaller business parks are successful. “But nothing here is the scale of Campbell Heights. We don’t have the population base they have.”

Whatcom County’s population is roughly 229,000, according to a 2021 census. The city of Surrey in 2021 was 568,000. Nearly 1,000 people move to Surrey every month, according to a Surrey government website. Plus, lower mainland British Columbia in general is growing, Michener said.

“As businesses grow in Canada, and markets are good, they’ll want to expand,” he said. “They’ll look south.

If a company is growing and a lot of their product is exported into the U.S., why not manufacture here, to save issues with duties and tariffs?”

Jim Pettinger is the recently retired owner of UCanTrade, which provides office, warehouse, distribution and return/repair services for Canadian companies. A Canadian immigrant who became a U.S. citizen, Pettinger founded the company in 1984 and sold it in 2019. He had about 100 Canadian clients in the latter years.

“Whatcom is unique,” Pettinger said. “The border is more dotted line than barrier.”

Americans, even this close to the border, don’t know much about Can-

ada, Pettinger said. “They tend to wait for Canadians to come this way. Initiative and commerce are mostly one way.”

Mark Lervik, former manager of Copac on Grandview Road in Ferndale, concurred that cross-border business was mostly Canadians reaching out to Copac. In the mid-1990s, Copac, which was initially the timber company Coast Pacific Trading, purchased a share in Grandview Industrial Park. It became Copac Properties LLC and today is Copac Self-Storage.

“We started building buildings,” Lervik said. “Mostly Canadians contacted us about renting. We didn’t pursue Canada. They inquired about opening a U.S. facility or expanding.”

Pettinger, whose business rented space at Copac, sees two major categories of Canadian businesses in Whatcom: Canadian-owned businesses and Whatcom businesses that provide services for Canadians.

“Canadian businesses in Whatcom seem to be in pockets, or segments,” Pettinger said. “They don’t talk much to each other.”

The range includes retail, tourism, agriculture, transportation, warehousing, real estate (residential and commercial), legal and accounting services, religion, medical and more, Pettinger said.

How can Whatcom County attract more Canadian business? Offer prepared space, Michener said.

“If a Canadian wants to be in a business park here, the more ready it is, the better,” he said. “Certainty is what they’re looking for. No surprises. The more done ahead of time, the easier it will happen. The price of property, permitting … they want to know how, when, cost. That’s univer-

sal for business.

The more certain your process is, the more companies you will attract.”

Numbers on how many Canadian companies are here do not exist. That’s partly because Whatcom’s business ties to Canada are many and varied.

They include companies with beginnings in Canada, companies bought

by Canadians, Canadian companies with a U.S. branch that grew to stand alone, companies that sell to Canada, and local folks employed by Canadian companies who then establish similar businesses of their own, Michener said.

“Some Canadians got green cards and started here because it suited their market,” Michener said.

“The majority of businesses in Whatcom County have some tie to Canada. There’s not a number you can put on it.”

An example of one such tie is

Hempler Foods Group, started by a German immigrant to Bellingham in 1934 when he bought a little meat-and-sausage company here.

The business, operated ever since by the Hempler family, has been owned since 2006 by Premium Brands Holdings Corporation, a publicly held Canadian food manufacturing and

be manufactured in the United States, so expanding into close-by Whatcom made sense. At the same time, Marcon was running out of room in Delta.

“I stayed in touch,” Michener said.

“It’s building relationships. It sounds trite, but it’s true.”

As the port’s economic development project manager, Michener is not wait-

“The border is more dotted line than barrier.”

Jim Pettinger, retired founder and owner, UCanTrade

distribution outfit.

Michener remembers meeting the owner of Marcon Metalfab in 2014 or 2015 and staying in touch as conditions changed over the years. The owner saw the U.S. federal government gearing up to invest in infrastructure that had to

ing for Canadians to come to us.

“The more we grow our base, the more we improve our quality of life,” he said. “The population of Whatcom County is growing. Let’s be intentional and bring the growth we know will help us.” ■

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Strong ties

Border is no obstacle when synergy exists Cheryl Stritzel McCarthy drive from Sunrise, which allows the teams to collaborate on expanding both businesses.

Navjot Bhogal and Paul Bhogal (Sunrise photo)

Cabinetmakers Sunrise Kitchens of Surrey, British Columbia, and Hertco Kitchens of Ferndale offer one example of a Canadian business expanding into Whatcom County. Sunrise acquired Hertco in June 2023, and the Ferndale spot is now the second location for Sunrise.

The answers below are edited from conversations with Navjot Bhogal, Hertco Kitchens CEO, and Paul Bhogal, president and CEO of Sunrise.

Q. Sunrise acquired Hertco to expand its dealer network and tap the U.S. market. Comment?

A. This strategic move expands Sunrise Kitchens’ expertise into the western United States and establishes a strong presence through a network of dealers targeting large-scale projects.

The addition of Hertco aligns with our growth objectives and allows us to broaden our reach to serve a wider customer base. Ferndale is only a short

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Q. Why is this a good match?

A. Sunrise and Hertco share the same passion for the industry. Both have more than 40 years in business, are family owned and operated, have aligned corporate values, and believe in the significance of creating beautiful kitchens. The two companies complement each other, with Sunrise’s focus on multifamily kitchen cabinet projects and Hertco on the dealer network. Together, they can be leaders in the multifamily and residential markets in both countries. The companies are honored to continue the journey and success built by both families and are excited for future opportunities.

Q. Can you provide a sense of the company’s size and reach?

A. Sunrise and Hertco are leaders in the market serving residential and multifamily housing. Sunrise is the largest producer of kitchen cabinetry in western Canada for multifamily housing, manufacturing over 5,000 kitchens per year. Hertco supplies kitchen cabinets through more than 200 dealers within the western United States, Hawaii and Alaska, as well as western Canada.

The Surrey location employs

130. The Ferndale location, with 60,000 square feet, employs 35 in manufacturing only.

Sunrise recently added 35,000 square feet to the existing facility to create a total of 80,000 square feet in Surrey. The expansion includes a significant investment in automated equipment, allowing us to increase our production capacity to better serve the North American market with shorter lead times, high-quality products and overall greater value to our customers.

Q. What’s ahead?

A. Our goal is to continue synergy between Sunrise and Hertco by broadening our product offering to increase our reach in both markets and strengthen our relationships with dealers by providing more flexibility for their customers. We plan to continue to invest in our local communities and provide high-level labor. By offering training and employment to people in our area, we can help build a stronger workforce and contribute to the local economy. A longer-term goal is to expand our dealer network to more than 500 dealers in several new regions with streamlined processes, automated production and improved customer service. By focusing on these areas, we plan to continue to operate successful and sustainable businesses that are positioned for growth and modernization. ■

WASHINGTON

by the numbers

#1 – Best State Economy (WalletHub, 2022 & 2023) #1 – Best State to Make a Living (MoneyRates.com, 2022) #1 – Best Places for Business and Careers (Forbes 2018 & 2019) #1 – States with the lowest average retail cost per kilowatt-hour for industrial electricity (U.S. Department of Energy) #1 – Best Broadband Connectivity (Statista, 2020) #2 – Best States (U.S. News & World Report, 2023) #2 – Innovation Potential (WalletHub, 2022) #2 – America’s Top States for Business (CNBC, 2022) #3 – Infrastructure (U.S. News & World Report, 2021) #3 – Most Innovative U.S. State (WalletHub, 2023)

Data from: http://choosewashingtonstate.com/research-resources/about-washington/washington-by-the-numbers/

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An exciting time for

PHOTO: Sattva Photo

PHOTO: Sattva Photo

FEATURE BP

r Bellingham’s waterfront City increases public access to former industrial area Elisa Claassen

While Bellingham has undergone significant change in the past decade or two in all neighborhoods, the waterfront may undergoing the greatest changes of all. It has something now and something coming in the next decade for families, burgeoning industry, and eager tourists wanting to find something new.

Walk along the waterfront and pass boats carrying fresh fish to sell to stores or directly to customers.

Say hello to WECU employees taking breaks outside one of the credit union’s three buildings on the Bellwether space. Find luxury goods to purchase, festivals to attend and bike parks for outdoor enthusiasts young and old.

Pieces of the former industrial space have been retained to blend the old — big digester tanks — and the new. The past won’t be forgotten, but the future is beckoning.

“It has a little of something for everybody,” said Mike Hogan, public affairs administrator for the Port of Bellingham. “It has that really strong marines trade kind of merit — the maritime community, like the dockside market and the commer-

cial fishermen, the boatbuilders and about 6,000 jobs with about 7% of the workforce.”

Plus, he added, there are beautiful parks and plenty of public access.

Driving along the waterfront,

waterfront park, about three times the size of Boulevard Park).

The waterfront planning really began in 2001, when Georgia-Pacific shut down, Hogan said. The pulp mill’s closure initially resulted in

PHOTO: Sattva Photo

Hogan pointed out the various sections, referencing a port map. Eventually, the waterfront and downtown Bellingham will fully connect, as will trails to Boulevard Park and the Fairhaven district. The Salish Landing Park will take up a section currently outside of the public purview, behind a fence where Cornwall Avenue ends (this will one day be the city’s largest

many job losses.

“The writing was on the wall that they were going to close operations altogether,” Hogan said, noting that the chemical plant had already closed in 1999.

He referenced a visioning effort led by appointed citizens — The Waterfront Futures Group — that looked not only at the downtown portion

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Pictured: Abigail Bruno, Chris Wilson and son, Cooper

PHOTO: Elisa Claassen

of the waterfront but also at Bellingham’s entire waterfront.

“For over 100 years, we had been heavily industrial (at this location),” Hogan said.

In this process, the visioning group “spoke loudly in favor of rebuilding the waterfront economy, but they also wanted increased public access to the water,” Hogan said. “They wanted to restore the health of the land and water. There had been a lot of historic contamination that was preventing redevelopment of the property.”

By 2004, the port was looking seriously at potentially acquiring the GP site of approximately 137 acres.

This acquisition also involved some environmental cleanup. (The cost of the property and the cost of cleanup were assessed and calculated, and liability was discussed in the involved exchange.) By January 2005, the port had signed a purchase and sale agreement. Behind-the-scenes activities included working with the Depart-

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ment of Ecology on the project, as it was one of the largest contaminated property redevelopments in the nation, Hogan said.

Fast forward a few years, and now the port says the behind-the-scenes legwork is producing more for the public to see and enjoy.

“The activity is really picking up,” Hogan said. “We’ve put in a lot of the core infrastructure, and we are seeing jobs coming down here. It’s an exciting time.”

Marine and maritime Hogan pointed toward a shipping terminal and an area reserved for marine industrial uses. About 60 longshoremen were unloading a ship at the time. This sector provides good family-wage jobs without the need for college degrees and makes home ownership more available.

LFS Marine Inc., part of Trident Seafoods, has been a mainstay of Bellingham’s waterfront for more than 50

years. Nick Beattie, manager of the Bellingham branch, highlighted the company’s longevity in an email.

“Over this time, we have grown from a single tiny net shack to a large retail store at Squalicum Harbor with corporate offices upstairs, a net production shop in the Fairhaven waterfront area, and a large distribution center warehouse on the waterfront near downtown Bellingham,” he wrote. “In the span of more than half a century, LFS has grown from two employees to 200, including 12 retail locations across Western Washington and Alaska.”

The growth of the waterfront can be a boon to companies like his, Beattie said.

“As more people are drawn to the unique culture that makes Bellingham such an incredible place to live, we are excited to see the rise of recreational opportunities that our waterfront has to offer while maintaining the rich history of hard-working commercial

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industries it was built on,” he wrote.

ect is being done in phases, Hogan said, with some of the building for Bikes and condos high-end condos and some for lowSome of what the public accesses er-income housing. Harcourt Develnow is a bit on the temporary side, opments of Ireland is using blu.ink built to provide immediate access to Real Estate as a local sales office. The the area on the way to what it will affordable housing component is part become. of Sea Mar Mercy Housing, with help The bike pump track is one example. from the Bellingham Community “Rather than wait for the perma- Foundation. nent park to be built, which could have Hogan pointed to an older structure been 10 years or more, it’s a first step,” salvaged from the past — the BoardHogan said. “It’s a way to get the pub- mill Block, on just over 5 acres. The lic down here to get them to use it. … property was put out to bid in 2022, It will probably undergo changes over with Faber Construction of Lynden time. When we give the property to winning the nod as part of the Boardthe city, they’ll work with the commu- Mill Group. nity on what the permanent park will The plans for the old building call look like; for the foreseeable future, it for a 107-room hotel and banquet will stay a bike park.” hall, with a nearby seven-story resiNear the bike park, more construc- dential project with 160 housing units tion is obviously underway. The proj- and commercial and restaurant space.

In addition, the repurposed property will have a parking structure with commercial space, approximately 80 residential units wrapping the structure, and publicly accessible park space on the top floor.

The Portal Container Village, a hip concept at 298 W. Laurel St., features six local businesses and one rotating retail shop operating out of metal shipping containers, per the Port of Bellingham. A second rotating space is planned for 2024. Sun-E-Land Bikes rents bicycles for use on the pump track and around town. DISH Foundation, which has a mission to employ persons with intellectual and developmental disabilities, is partnering with Our Kitchen to offer up coffee and baked goods. The Peter Paulson Stage, named for the noted businessman who donated to many local causes, can be rented for concerts and events. The port invites public input via email to Carey Hansen at careyh@portofbellingham.com.

Luxury at the Bellwether Neeter House of Luxury occupies about 1,200 square feet near the water in the Bellwether complex, near Lombardi’s Restaurant.

“You can’t really beat the view, that’s for sure,” founder John Neeter said.

“It’s just a nice part of town.”

As of Nov. 1, Neeter has been open for one year on the waterfront.

“I’ve been doing this since I was 12,” he said. “I started out in my mom’s stores in Seattle after school.”

Neeter relocated in 1988 to Bellingham. He was in the family business — Bayside Coin and Jewelry — for 30 years and left a year and a half ago to start Neeter House of Luxury.

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PHOTO: Sattva Photo

“I decided to take my own ideas into my own realm,” he said. “I knew Bellingham was lacking a higher-end jewelry store.”

The store not only has custom jewelry and in-house jewelry repair, but also other items of luxury, such as Rolex and Cartier watches, Louis Vuitton and Gucci handbags, luxury knives and custom pieces.

“I love this location,” he said. “The biggest thing my clients say is, ‘We don’t have to go to Seattle, Vancouver, or California anymore for jewelry.’”

While Neeter may be new to the waterfront, a long-time mainstay is just nearby.

Hotel Bellwether was built in 2000.

“At that time, it was bringing some luxury into Bellingham, which really did not have a lot at that time,” said Jim Haupt, the hotel’s general manager. “At the same time, Bellingham was emerging on the market of what is this little city up north on the waterfront.”

After years of waiting for something to happen, Haupt is excited to see things happening, such as the Harcourt project.

“They have a history of taking old industrial areas and turning them into really unique developments with reconstruction of abandoned sites,” he said, recalling a luxury hotel project, Carlisle Bay, in Antigua. “I was

excited when they came, absolutely, because their history and their track record is very good.”

Christine Jenkins, director of sales and marketing at Hotel Bellwether, has seen Bellingham becoming more of a destination location, where once people would merely pass by on the freeway.

“Our main base,” Jenkins said, “is really Seattle people getting out of town and discovering what is up here

in this corner of the Pacific Northwest and being really quite amazed at what they find here — the friendliness of the people and that they are genuine, as well as the funky restaurants and the recreation.”

The new term that comes up often is “geotourism.”

“Tourists won’t want the trendy anymore — the malls, strip malls and corporate chain restaurants,” Jenkins said. “They want authentic, locally sourced and locally grown. They want entrepreneurs who are doing their own style and putting their own stamp on it. And that’s what a good hotel represents, too — kind of an extension of that community. We are independent, and so we have the ability to mold in with the luxury element but also keep in the warmth.” ■



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PHOTOS: Sattva Photo

PERSONALLY SPEAKING BP

A recipe for deep, rich success Change in ownership at Chocolate Necessities showcases open collaboration and careful craftsmanship Tara Gilligan Reimer

Never underestimate the power of your custodian. The person who is making your building clean, safe and operable also may be sourcing world-class ingredients for use in creating the finest chocolates and truffles for Whatcom County. That’s exactly what Kevin Buck did 37 years ago.

After long workdays of swabbing floors and cleaning classrooms for the Ferndale School District, Buck meticulously built his business — after school hours — and named it Chocolate Necessities.

In the same way he carefully built up his esteemed business, Buck is easing out in a planned transition. He sold his iconic Bellingham-based business to new owners Rose Vogel and Michael Howell, but Buck remains involved, in person and daily, during this transitional stage. Together, to date, these three entrepreneurs have invested five months of study, information-sharing, training and collaboration.

Their careful attention to detail and mutual regard for each other reveal leaders — one exiting and two coming up — committed to deep, rich success in business and personal relationships.

The handcrafting facility of Chocolate Necessities is sited at 4600 Guide Meridian, the highway that cuts north/ south, connecting Bellingham to Lynden and the Canadian border. On the Guide, a large cocoa-colored sign with

the truffle logo beckons Whatcom residents, Canadian friends and travelers to chocolate inside the charming, European-style shop and tasting room.

Behind the storefront and tasting room for customers at the Guide Meridian location is the handcrafting facility.

Here, slabs of chocolate are received from overseas suppliers. Tempering machines are calibrated to slowly meld ingredients. The chocolatier and her assistants artfully concoct truffles. Hundreds of finished chocolates rest on stainless steel trays, slotted into specially made chocolatier carts.

A second retail location is at 1408 Commercial St. in downtown Bellingham. Across from Mount Baker Theatre, a just-right-sized shop features cases of chocolates and rows of truffles, individually nestled in crinkly wrap or available for bundling in gorgeous, luxe packaging. The owner and chocolatier, true aficionados, offer seasonal creations — rich cups of hot chocolate in winter and scoops of gelato in summertime. This winter, a new blackberry passion truffle debuts, with a passion fruit chocolate center and Samson Estates blackberry wine inside of a dark chocolate shell with yellow stripes. For seasonal giving, there is a Mexican hot chocolate truffle — a new combination of milk and dark chocolates with cinnamon and Fireball cinnamon whisky in dark or milk chocolate shells and topped

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with cocoa nibs.

All these delicacies, a rich and topsourced array imagined by Buck, will continue. And new owners Vogel and Howell are especially passionate about being part of thriving downtown Bellingham. Business Pulse talked to all three owners — the selling partner and the two new owners. Here is their story of transition.

New ownership Business Pulse: Rose Vogel and Michael Howell are the new owners of Chocolate Necessities. Can you tell the story of how they identified your business and how you came to the decision to sell?

Kevin Buck: Their daughter had capably worked for me, pulling espresso shots and describing the different kinds of chocolates for customers. So, we knew each other through their family. Rose and Michael called me up, asking, “Are you interested in selling the business?” With 37 years of ownership, I had begun exploring how to do that. For me, the most challenging part of selling was figuring out how to value every piece — from the handcrafting facility to the marketing.

I sought outside help to do that valuation, which was a great benefit.

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BP: You differentiate between what might be described as flat-tasting American chocolate candy and the handcrafted, high-end-sourced chocolates at Chocolate Necessities. Can you describe your difference?

KB: We are an ingredient-driven company. I started sourcing chocolate from the finest places: the Barry Callebaut factory, north of Brussels, Belgium. I visited, and it was a cultural moment for me. Those chocolatiers are perfectionists. It was there that I found my culinary focus.

BP: What makes your chocolate taste different?

KB: With chocolate from the world’s best sources, it’s important to understand the precise balance of sugar, cocoa butter and cocoa beans.

The marketplace has promoted profitable sugar, so the chocolate you choose at the store probably has too much sugar and not enough of the high-quality ingredients. I wanted to arrive at the top of the quality mountain. What are the kings and queens enjoying that we don’t know about?

BP: What other attributes attracted you as new owners to this business?

Michael Howell: This is an iconic, local, Bellingham business. We share Kevin’s same passion for quality and community. We would have been disappointed if Kevin retired or sold to a large conglomerate. We’re grateful to continue his legacy.

BP: In this transition, you described working side-by-side — new owners with selling proprietor. Can you describe what must be the immense value here?

KB: I would describe this side-byside training as almost perfect. Michael has absorbed every detail. Already, he comprehends almost everything and has a deep understanding of the process. Each day, a couple of excellent questions will pop out.

The value created by Kevin Buck BP: Central to any business plan is an exit strategy. For the benefit of other Whatcom business owners, how has your strategy worked?

KB: Three years ago, when COVID19 came along, we didn’t overreact, and we became super-efficient. We closed the downtown store for six months but stayed at the location. And our customers were amazing. One woman

picked up a box of almond bark every week; she gave it away to friends and helped me keep in business, too.

My workload had become six days a week, so I began thinking about selling. I analyzed each step and moved slowly. But I had the opposite strategy in finances, where I directed a fastbuying-and-paying-on-time rhythm.

I was careful about not going into debt.

BP: You started this business with savings from your school district job.

Did you set out to create a signature chocolate in Whatcom?

KB: For 10 years, I worked as a custodian at an elementary school in Ferndale. When I started Chocolate Necessities, I only invested $200, and I paid as I went.

No, I didn’t set out to make a signature chocolate. I wanted to make something that I really liked — no shortcuts. I found my source chocolate in Europe. I used different grades of the Belgian Callebaut, and I tasted my way into our current offerings. We now offer many different chocolates, in milk, dark and white.

Years ago, I took a personality work profile assessment. My interest was not in making money so much as serving

our community. That’s how I see my work at Chocolate Necessities. I found a way to give our community what you might never discover: European-inspired, high-end chocolates.

BP: Looking back on 37 years — what could be described as one generation in your business — what have been the keys to your success?

KB: I’m an information guy. I enjoyed the complexity of creating a world-class chocolate. Cocoa butter is the most expensive ingredient, and I never skimp on this important component that melts. Friends tasted what I was concocting, and they said, “You could sell this.” Getting good equipment was important, too.

BP: As a longtime owner of an established business, what are the benefits of doing business in Whatcom County?

KB: Customer loyalty to our small business has been emotionally fulfilling and almost overwhelming. Across all economic strata, customers enjoy our chocolates. I’ll never forget the day the president of a locally owned bank pulled up in his fancy car to purchase chocolates from us.

Our chocolate can be found at the

Community Food Co-op, San Juan Island Roasters in Friday Harbor, Skagit’s Own Fish Market and under private label for several area organizations — Samuel’s Furniture, PeaceHealth and many nonprofits.

Continuing the legacy BP: What would you like readers to know about your experience or connections to the area?

Rose Vogel: I was born in Bellingham, and I was raised in Guadalajara, considered to be the cultural center of Mexico, with its museums, galleries and cuisine. I’m well travelled, so I’ve tasted chocolate throughout the world, and I’m quite proud of the selection at Chocolate Necessities.

I work in Bellingham, support local businesses, and didn’t want to see Chocolate Necessities close. Michael, my husband and business partner, and I reached out to Kevin because we want to keep the business alive, keep downtown vibrant and colorful, and offer quality for our community.

MH: I received my ecology degree at the University of Georgia. After traveling the country for a year, I found it difficult to leave Bellingham. That was in 2004.

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I have a lot of experience in residential construction and remodeling, designing and building custom spaces.

My science background led me to a specific strength: I always put function before form. After getting to know Kevin, I found that we shared that same value. The quality of the ingredients is the primary function and cannot be compromised.

I am extremely thankful to Kevin for guiding us so we can avoid errors moving from understanding to commercial application.

BP: What is the role of the chocolatier?

RV: For almost a year, our chocolatier, Valentyna, has worked with Kevin, learning his recipes and the nuances of commercial equipment. Valentyna is from Ukraine and has an extensive background in confection, baking,

chocolate, ganache, desserts and aesthetics. She is a flavor confection connoisseur, constantly creating new flavor profiles that wow our customers. This week, she made caramel and hazelnut cashew bites that are amazing! I ate six — not sure that was good for business, but it certainly made me happy.

BP: Can you describe the business model?

RV: Provide exquisite chocolates and gelato, be the employer of choice, serve downtown by helping to keep it vibrant, and support local business.

BP: What has your learning curve been like?

RV: Michael has a background in science, while my experience is in business. Currently, I’m taking an intensive chocolate course in Vancouver

KEEP OUR WORKING LANDS WORKING

Working agricultural and forestry lands in Whatcom County are increasingly being converted to other uses.

Help us save working lands and be compensated for the value of your unused development rights.

Help keep our local agricultural and forestry industry working! Contact us today!

www.whatcomcounty.us/cep Lauren Templeton, CEP Program Administrator ltemplet@whatcomcounty.us | 360-778-5956

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BUSINESSPULSE.COM | NOV/DEC 2023

so I can support staff and have fun with chocolate! I’m taking another chocolate course in Chicago.

MH: Applying knowledge and understanding during this initial training phase, especially for a commercial production, is critical. We don’t have the liberty to come in and make mistakes.

We’re enjoying this intensive learning process.

BP: Will you keep both of your current locations (handcrafting/production on the Guide and retail store in downtown Bellingham, on Commercial Street, across from Mount Baker Theatre)?

RV: Chocolate Necessities began at the Guide Meridian location. That handcrafting facility is the heart of the business, and we have no plans to leave any time soon. For our Commercial Street location, which opened in 2018,

we just signed a long lease, and we are working with a local architect to create a fun, lively outdoor area — coming soon!

BP: Will you be hiring in the coming year? What kind of employees are you looking for?

RV: Yes! We will hire for our busy season — Christmas, Valentine’s Day and Easter. We are looking for good humans who love people, chocolate and good coffee and who are proud to be part of our downtown Bellingham community.

BP: What kind of event and marketing presence are you planning?

RV: We plan to offer wine and chocolate wafer pairings as well as charcuterie plates with wine and chocolate before and after Mount Baker Theatre shows. Chocolate wafer tast-

ings are in the works. We have a myriad of chocolate chips — Ecuadorian, Colombian, Arriba Martini, Dulcey blond, ruby chocolate — all for melting, baking or snacking. In October, our gelato supplier will teach our staff how to elevate one of our favorite desserts to be an authentic Italian gelato.

After the Christmas rush, we’ll host tours at the factory. And Valentyna is working on a monthly chocolate truffle feature.

BP: How do you want to maintain current clients?

RV: We’ll upgrade the website and online inventory for intuitive experiences, and we’ll be active on social media. At our downtown location, we plan to offer outdoor seating, change store hours to serve morning coffees, partner with local brewers and bak-

ers, and host special tastings/hours to coincide with Mount Baker Theatre and downtown events. We want to partner with local businesses to offer our chocolate for their baking, desserts and custom gelato flavors.

BP: How are you thinking about planned growth?

RV: We want customer feedback.

We plan to offer the same experience for current customers and share that with new customers: locally roasted espresso, handmade gelato, Italian sodas, affogatos (espresso, gelato, liqueur), traditional European handrolled truffles, Dutch-process cocoa powder, cocoa nibs, housemade trail mix, local and regional beers, excellent wine varieties, and the largest selection of curated chocolates in North America. ■

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BP FEATURE

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Money come, money go...

A look at personal wealth and growth in Whatcom County Lorraine Wilde According to a recent study by SmartAsset Advisors LLC, Whatcom County is the sixth wealthiest county in Washington state based on investment income, property values and median income — just behind King, San Juan, Snohomish, Island and Kitsap counties. Those values have changed over the past decade

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or more and are affected by population growth and shifting community demographics in the county and by out-of-town and local investment. To gain a better understanding of how personal wealth in Whatcom County has changed over time and what factors could affect it down the road, we looked at economic trends

and spoke with local financial advisers and real estate brokers.

Income by the numbers Personal income and its resultant wealth includes earned income, investment income and government payments such as Social Security and veterans’ benefits. No matter whose numbers you look at, it’s clear that income has not kept up with the pace of inflation or the cost of living in Whatcom County over the past several decades.

Numbers vary depending on the source and how you look at the data (median versus average, for example). Investment income includes income obtained from pension funds and from owning a home. Per capita personal income equals total personal income divided by the resident population. Here are a few values for comparison.

According to U.S. Census Bureau data, Whatcom County’s 2019 median household income (the one right in the middle, with equal numbers of households making more and less) was $65,712, less than the median for Washington state ($78,687) and the United States as a whole ($69,372). This trend is also reflected in hourly wages. In 2019, 12.9% of Whatcom

County’s resident population were living below the official poverty line, more than the state average (9.8%) and similar to the national average (12.3%), according to data published by the Washington State Employment Security Department.

According to the Bureau of Economic Analysis, average per capita personal income ($59,510) is lower in Whatcom County than the state average ($67,126) but higher than the U.S. average ($52,787). Whatcom County ranked 14th among the 39 counties in the state for per capita income, according to the U.S. Census Bureau.

Although the Washington State Employment Security Department reports slightly different numbers, the trends are similar. In 2020, Whatcom County’s average annual wage was $53,325, well below the statewide annual average wage of $73,504 and above the national average wage of $50,834.

What is influencing personal wealth in Whatcom County?

Of course, changes in income values mean little without considering changes in the cost of living — which includes the cost of goods and services, real estate values and

rental rates — over the same period.

An increase in income isn’t felt at home when the costs of rent, food, gas and utilities have all gone up at the same time.

The pandemic, supply chain issues and inflation have all contributed to a higher cost of living in Whatcom County and across the nation.

So, although wages also have gone up — Whatcom County’s median income had grown to $70,011 in 2021, according to a 2023 report from The Bellingham Herald — when asked, few county residents are likely to say they’ve been able to feel their personal wealth increase over that time.

Your outlook on whether your personal wealth has grown depends a lot on whether you’ve had extra money available to invest. A large portion of Whatcom County’s personal wealth is tied to the rate at which real estate values have increased over the past several decades.

“Everyone can see that their house has gone up in value, and the last five years we’ve had ridiculous appreciation due to the pandemic,” said Kathy Stauffer, managing real estate broker at Windermere Real Estate, “but long-term, owning versus renting is a better idea, even with higher mortgage Nominate your favorite Whatcom County business here!

Scan QR code to take the survey.

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interest rates.”

A lot of wealth also has been moving to Whatcom County from elsewhere, said Bryant Engebretson, fiduciary investment adviser and managing principal of Tradewinds Capital Management.

“I’m a capital markets guy — the stock market and financial planning — but I hear from my clients and neighbors,” Engebretson said.

“There are a lot of wealthy retired people moving to Whatcom County that have created that wealth elsewhere.”

Financial adviser Paul Twedt, of Northwestern Mutual, agrees.

“From what I hear, the wealth that is moving into town has come from the sale of real estate in places like California and Seattle, and with their equity they are able to buy a nice place up here without a mortgage payment,” Twedt said.

“Most of the clients we work with are self-employed professionals from all different kinds of industries that have some control over their compensation.”

Many people coming to Whatcom County are doing so with cash to spend from other places. This in turn has affected businesses and real estate values here.

“They want to go to nice restaurants, and there is some trickle down,” Engebretson said.

Other businesses also are profiting, Twedt said. Bellingham Golf and Country Club, for example, has full membership and a long wait list, which was not the case a de-

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...the wealth that is moving into town has come from the sale of real estate in places like California and Seattle, and with their equity they are able to buy a nice place up here without a mortgage payment.

Paul Twedt, Northwestern Mutual financial adviser

cade ago.

“People are wanting to spend more,” Twedt said. “Our clients are focused on getting and keeping good workers on board.”

But the current environment also has made it harder for service people to live near where they work in Whatcom County.

“A lot of people who have wanted to buy homes have been forced to pay up for that privilege,” Engebretson said. “One disturbing trend I’ve observed is how much Wall Streettype money has moved into the residential housing market, driving up the prices and forcing those that really wanted to buy here to pay over market value. That’s great if you’re selling, but it also forced people who were outbid to become renters. It’s disturbing that we’ve al-

lowed this to happen to the middle class, because home ownership has traditionally been a bedrock of the American dream.”

Those with fewer means, including young families trying to establish themselves here, have been priced out of the local real estate and rental markets by older Americans with accumulated wealth.

While those with enough income to own their home (who bought at the right time) have increased their personal wealth significantly, that benefit has impacted those who cannot afford to buy and so must rent.

For renters, rising real estate values have significantly increased the cost of living in Whatcom County and therefore have decreased the portion of their incomes available for savings and investments.

The county’s median home value in 2019 was $569,207 — the fourth-highest median home value in the state, according to census data reported in The Bellingham Herald. And according to the U.S. Department of Housing and Urban Development, the fair market rent — the cost to rent a moderately priced home or apartment, adjusted for the local market — in Whatcom County is $1,355 this year and $1,571 in 2024 for a two-bedroom home.

If you live in Whatcom County, it’s probably been obvious that the population has been growing steadily. Perhaps you’ve noticed increased traffic on our roads and Interstate 5 or longer waits for services across a range of sectors, including restau-

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rants, home maintenance, medicine and mental health. According to U.S. Census data, the population of Whatcom County in 2022 was estimated at 230,677, up 14.7% from 2010.

The demographics of Whatcom County’s population also have continued to shift. While the county’s age distribution has remained relatively similar for many age groups in the past decade, overall, our population is aging. While most age groups saw growth in total numbers from 2010 to 2021, the 65-plus age group was the only one to have increased its proportion of the total population — from 13.3% in 2010 to 18.3% in 2021, according to census data published at usafacts.org.

This is mostly due to the huge jump in population among older people, with the segment growing by 56% from 2010 to 41,938 in 2021.

Those seniors also have felt the crunch of increasing living costs.

A study published in 2022 by advocacy group The Senior Citizens League showed that even with 2023’s historic Social Security cost of living adjustment of 8.7%, rising inflation and changes in the cost of food, medication and other common goods and services used by retirees means they won’t feel the increase in their wallets due to a loss in buying power. According to the study, increases in the costs of typical expenses for seniors have been more than double the Social Security increases since 2000. The cost-of-living adjustment for 2024 was just announced as 3.2%, less

than half the increase from the previous year.

Citizens and business owners alike are finding it more difficult to find and move to affordable locations or to facilitate needed expansions.

“People who want to move from their first home to their second can’t,” Engebretson said. Both prices and interest rates are high, so people are opting to stay with their lower rates.

Stauffer agrees. “Nobody wants to sell if their mortgage is 3%, so that is going to dampen supply,” she said. “The number of people in Whatcom County with full equity in their homes is over 50%, which is much higher than other parts of the state and country.”

In the end, people are hanging on

to their homes longer.

“The average person stays in a home for seven years, but that’s going to become closer to 10 years due to the rising interest rates,” Stauffer said. “So you have to get creative, and we’re working hard to get prices to be more appealing. A generation of homeowners thinks 3% is a normal mortgage rate. But that’s not normal. The average over a 50-year history is actually 7%.”

Twedt has observed higher interest rates affecting real estate investors and developers.

“More projects are being said ‘no’ to because it’s harder to make the math pencil out,” he said. “Housing is not keeping up with our population. So rent rates go up, housing prices go up; the cost to get in is

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a higher barrier to entry. Their monthly payments aren’t going to allow them to buy the home they want or need. Those coming from more expensive places like California who have cash and don’t need to borrow are getting the benefit of the recent drop in real estate value caused by higher lending rates.”

Whatcom County business owners are feeling the demand of this increasing population. Whatcom County’s rental vacancy rates have hovered around 2% for the past decade and were second only to Skagit County in 2022. So while property owners and managers are able to earn top rents with little loss, residential and commercial rent is eating up larger and larger portions of individual incomes.

That has long-term impacts on generational wealth down the line as well. The current real estate market has caused some to rethink their future retirement plans.

“Some are choosing to invest in a second home or condo in a less expensive location with a more favorable tax structure and a political environment that more closely matches their own, such as Texas, Idaho or Mexico,” Twedt said.

Engebretson has similar observations.

“They plan to sell their largest asset, which for a lot of people is their home in Whatcom County, and live off the liquidated equity,” Engebretson said. “Moving to an area with lower real estate costs can completely change your economic situation for the better. Overall,

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People love the Pacific Northwest, but they haven’t appreciated what’s happened to Seattle, so they are coming here instead.

Kathy Stauffer, managing real estate broker at Windermere Real Estate

everybody has a different economic reality based on their actions up to that point, which then determines their choices beyond that point.”

What continues to draw people to Whatcom County?

“There is a lot of literature out there about the type of communities folks like to retire to,” Engebretson said. “Cultural activities that colleges bring have a real influence. It’s all relative based on where you’re moving from.”

Stauffer agrees.

“When you compare us to other places, our proximity to the I-5 corridor and Vancouver is definitely a draw,” she said. “People love the Pacific Northwest, but they haven’t appreciated what’s happened to Seattle, so they are coming here instead.”

Both Stauffer and Twedt noted that sprawl, crowding, homelessness, drugs and crime are driving

those with the means to escape further from our biggest cities.

“We have a core group of people, perhaps a third of the market, that know, love and trust Whatcom County and want to be here,” Stauffer said. “They might start in the Columbia neighborhood and then move to acreage as their family grows. Later they might downsize to a condo. Another 30% are coming out of King County, Eastern Washington or other parts of Washington, and another 30% are coming from out of the area — from Texas, California and the East Coast.”

Engebretson believes we’ll see some correction and shift in the current financial and real estate situation as baby boomers pass their wealth to younger generations.

“The millennial generation doesn’t seem to be as interested in material wealth as their parents and grandparents, but partly because they had to adjust their dream because they are realizing that they had desires that they could never achieve,” he said. “You have to reformat your thinking. They are realizing that they are just as happy taking a hike versus owning Harleys or other material things. That is causing them to move to cities, where the opportunities and quality of life are.”

It’s better for the community when a broader range of people — not just the wealthy — can afford to live here, Stauffer said.

“Hopefully, Whatcom County is being responsible to try to make this a nice place to live and work,

but there is some price point where our economy doesn’t support the cost of our houses,” she said. “I admire employers that make a point to pay their service workers a rate that enables them to live here. If they can’t live here, then you don’t have an amenity base of people to take care of your services. It’s a delicate balance for the city and county to manage long-term.”

While the factors that influence personal wealth in Whatcom County are certainly complex, making the future hard to predict, Whatcom County continues to rank among the top counties in the state for wealth and quality of life. We’ll need to work together to ensure that those in lower income brackets can continue to afford to live where they work. ■

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BP SPECIAL TRIBUTE

From left: Josh and Mark calling one of several Lynden vs Lynden Christian rivalry basketball games at Jake Maberry Gym in Lynden.

Mark’s post-game interview with Jeremiah Wright, following back-to-back state championships for Lynden Christian. Josh, Mark and Rick Todd at the Tacoma Dome for the 2018 2A state championship game featuring Lynden and Hockinson. (Courtesy photos)

Whatcom loses radio legend Our local sports community will never be the same Josh Wright On Aug. 14, 2023, Whatcom County lost a radio legend.

Mark Scholten passed away unexpectedly, and our local sports community will never be the same. I first met Mark Scholten while he was roaming the sidelines with a microphone at Western Washington University football games and I was a player. He always had an affinity for offensive linemen, and we immediately had a connection.

Mark called me and said he was looking for a color guy for local high school football games and he thought I might be a good fit. He invited me a football jamboree at Ferndale High School to see whether we were compatible. After an hour of practice, he said, “You’re my guy, if you’re interested.” The pay was less than a tank of gas, but being part of high school sports was invaluable. I learned how incredibly hard radio personalities work for very little compensation.

It also became very clear that Mark had a love for sports — more specifically, Whatcom County sports — that you could not place a value on.

Following that first time on the mics in Ferndale, Mark and I called countless high school football and basketball games together over the better part of 10 years. His play-by-play talent was exceptional, and I found ways to get in and get out with the color commentating. The regular season games where fun, but the postseason was when we

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really got to be fans of our local teams. We made multiple trips to Yakima and the Tacoma Dome and many towns in between. The road trips were filled with many foods stops and Hair Nation on SiriusXM radio. Mark was a hair band fanatic and could name many songs within seconds.

We would drive out of our way for burgers at Dick’s DriveIn, and championships were are always marked by a trip to Miner’s Drive-In Restaurant in Yakima.

Mark had an affinity for Whatcom County athletics, and his historical knowledge of athletes spanned more than 30 years. His size 8 baseball cap was filled with more local sports knowledge than anyone I have ever met. His passion came out with every touchdown, slam dunk and pregame or postgame interview. His relationships with coaches and former athletes were authentic and real.

Whatcom County lost a true radio legend, and it is hard to think about a big high school football or basketball matchup without him on the headset broadcasting into our homes. For our athletes and coaches who won a championship or big game, it’s hard to cement that victory without a postgame interview with Mark.

Mark, you ran the race well, you left your mark (pun intended), and we are forever thankful for your life of service to our local sports community. Rest in peace, big fella! ■

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POLICY ROUNDUP BP

“Over the last two years, workers’ comp rates have increased nearly 10% in Washington, while other states continue to lower their rates.”

- Kris Johnson, president of the Association of Washington Business

PHOTO: iStockphoto.com/valiantsin suprunovich

Fall policy roundup What to look for in the next legislative session in January Dann Mead Smith Coming soon: voting scorecards Here’s something to look forward to next year: Whatcom Business Alliance will be publishing the forthcoming voter scorecard from Future 42, a new way to track how local elected officials vote and whether they support or oppose business-related issues. This much-needed new tool aims to hold local elected officials accountable as they decide on a variety of important business issues. For example, Future 42 tracks how Whatcom County Council members vote on issues that

impact individual citizens, their businesses and their employees. Look for the voter scorecard in future issues of Business Pulse magazine.

Business costs on the rise Business costs will be increasing in January, and not just because the state’s minimum wage will rise to $16.28 on Jan. 1. The Washington State Department of Labor and Industries has proposed a 4.9% average rate increase for workers’ compensation that would take effect in 2024. Several business groups, including the Association of Washington Business, have warned that the proposed rate increase “will only add to the rising list of expenses for employers.” According to the

AWB, the proposal is an average rate increase across industry sectors; some businesses may see a rate increase as high as 20%, and others may get no increase. Washington has the country’s highest workers’ comp benefits per worker. If adopted, the new rates would take effect on Jan. 1. According to the Washington Retail Association, the new rates would add an average of $65 per year to the cost of workers’ compensation. Employers in Washington state pay about 75% of workers’ compensation premiums, with workers paying about 25%. According to the Department of Labor and Industries, average rates would need to increase by about 10% to cover new claims in 2024. However, the department is pro-

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posing to use earnings from the workers’ compensation reserve accounts to assist in meeting anticipated costs to avoid larger increases in rates.

“This may seem like a small increase when viewed alone, but it follows multiple years of rate hikes,” said Kris Johnson, president of the AWB. “Over the last two years, workers’ comp rates have increased nearly 10% in Washington, while other states continue to lower their rates.”

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2024 legislative session The Whatcom Business Alliance and Business Pulse are getting ready for the 2024 legislative session — the second of the two-year legislative cycle. The 60-day session starts in January (in even-numbered years, legislative sessions are 60 days long, while in odd-numbered years sessions are 105 days). All bills from the 2023 session are all technically still alive and can be considered in committee hearings and voted on during the 2024 session. This also will be Gov. Jay Inslee’s last legislative session as governor, as he is not running for a third term in 2024.

Some key issues include: • Agriculture and water issues, including the issue of agricultural overtime.

• Housing. Some bills passed this year to attempt to deal with housing, and additional bills will be introduced in the coming year to address affordable housing and get more housing built.

• Gas prices. The state’s new cap and trade/carbon tax went into effect this year, and Gov. Inslee has promised to investigate “oil

company profits.”

• Let’s Go Washington ballot initiatives. Any of the initiatives that qualify (with 325,000 valid signatures turned in by the end of December) will exist as bills before the legislature, where they can be debated and even passed before being sent to voters if the majority of the legislature ignores them during the session. These initiatives cover repealing the capital gains tax, banning future state/ local income taxes, requiring parental notification on K-12 school curricula and medical procedures for minors, restoring the ability of police to purse dangerous criminals, repealing the cap and trade mentioned above, and making the long-term care payroll tax voluntary by allowing workers to opt out of the new system.

2023 election forum At the end of this past summer, the Whatcom Business Alliance teamed with Project 42’s new Whatcom County Future 42 Project to present a forum with some of the candidates running for local office. This breakfast meeting for WBA board members and Future 42’s Whatcom County advisory committee members featured candidates for county executive (both Dan Purdy and incumbent Satpal Sidhu), mayor of Bellingham (both Kim Lund and incumbent Seth Fleetwood), Whatcom County Council (Hannah Ordos, who is running for an at-large position, but not her opponent, Jon Scanlon) and Whatcom County sheriff (Doug Chadwick, but

not his opponent, Donnell Tanksley).

The candidates answered questions on the key issues facing Whatcom County and the city of Bellingham during

this “off the record” session. Many of the issues had not been covered in other election forums. ■

Above, pictured from left to right: Simon Sefzik, Dann Mead Smith, Hannah Ordos, Seth Fleetwood, Kim Lund, Doug Chadwick, Dan Purdy, Satpal Sidhu, Barbara Chase.

Below, Dan Purdy addresses the forum audience. (Courtesy photos)

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The Whatcom Business Alliance is the ears, eyes, and voice for the Whatcom County business community. We believe success is the single largest driver of community prosperity, which is why we focus our efforts on facilitating that success through advocacy, research and education and job opportunities. We bring business leaders together to encourage, acknowledge and share the best and most ethical business practices. Our members improve their respective businesses and work closely with community leaders to promote public policy that supports a healthy business climate and a vibrant economy.

To learn more and become a member, visit whatcombusinessalliance.com/joinus or call Barbara Chase at 360.746.0418.

ENVIRONMENT BP

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No green economy for the Evergreen State Counterproductive regulation is one reason ‘clean’ manufacturing isn’t choosing Washington Todd Myers Climate policy is one of the most divisive political issues in the United States, but one thing people agree on is that innovation will be key to addressing the problem. According to local elected officials and agency staff, Washington state is a leader in environmental innovation. However, the evidence is growing that the biggest obstacle to that sector is the government itself.

“Despite the rhetoric from the governor and state agencies about building a green economy in Washington state, most of the growth in the production of wind, solar and battery technology has been in the southeast United States — where there are no aggressive climate laws and the business environment is better.”

Writing in The Seattle Times, environmental innovator Makoto Eyre highlighted the potential of carbon capture technology to remove carbon dioxide from the atmosphere and turn it into valuable products. His company, Homeostasis, aims to do just that.

“Recent findings from the United

Nation’s Intergovernmental Panel on Climate Change demonstrate that we will need to build up the global capacity to remove 10 billion tons of greenhouse gas annually by 2050 to keep global temperatures from rising to dangerous levels,” he wrote, “even if humanity substantially

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reduces emissions.”

To that end, Washington taxpayers are chipping in with a $12 million grant program for climate tech.

Ironically, if Eyre’s company is successful, the state’s climate law puts severe restrictions on using it to meet Washington’s climate goals.

The technology would have to go through a rigorous assessment by the Washington State Department of Ecology to certify that it achieved verifiable CO2 reductions. But there is an even more severe barrier facing the company.

Carbon capture is still relatively expensive, but if the technology Eyre’s company is developing could remove atmospheric CO2 for a low price, the state’s climate law would limit how

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much it could be used by organizations covered by the law — the University of Washington and BP, for example — to help reach the state’s carbon goals.

The Homeostasis technology could be used to reach 5% of the goal, and the other 95% would have to be through a tax paid to Washington state.

State taxpayers would subsidize an industry the Department of Ecology certifies is effective while state law would severely limit the market for that same industry. And yet, that is what Washington state is doing.

It is just one example of how rhetoric about growing the green economy is at odds with the state’s regulatory environment.

The Washington State Department of Commerce targets “clean technolo-

gy” as one of its “key sectors” for economic growth. The agency’s website claims that Washington “is leading the way in developing and adopting a clean, affordable and sustainable energy portfolio.”

Despite the rhetoric from the governor and state agencies about building a green economy in Washington state, most of the growth in the production of wind, solar and battery technology has been in the southeast United States — where there are no aggressive climate laws and the business environment is better.

The American Clean Power Association tracks announced plans to build solar, wind and battery plants. Notably, in the year since the federal government announced massive new spend-

ing on those industries, the only plant in Washington is not new but one that is restarting production. Meanwhile, South Carolina, Tennessee and Georgia each have six new manufacturing plants.

The American Clean Power Association and others argue that these announcements show that the huge spending proves the federal government can drive the green economy. I don’t doubt that if the federal government spent $1 trillion on the pet rock industry, there would be a dramatic increase in the production of geologic companions. The issues are whether this spending is productive and what these announcements indicate about what is important to businesses.

Companies are indicating where

they think they can be successful, and it isn’t Washington state. When Washington state utilities are required by law to buy batteries to keep the lights on, those batteries likely will have been manufactured in the southeastern United States. Even in the socalled “clean power” sector, a favorable business climate is more important than state politicians’ commitment to fighting climate change.

Fundamentally, having politicians target particular industries for growth is unlikely to be successful. When Booth Gardner was governor in the 1980s, he didn’t plan to make Washington the world leader in online book sales, software and coffee. And yet, 15 years later, Washington state was the leader in all those areas.

The fact that the industries that Gov. Jay Inslee covets are locating far from Washington is more evidence that business climate matters more than environmental happy talk and government planning.

Unless elected officials and agency leaders in Washington recognize that government restrictions and regulation are hindering industry growth, Washington will continue to lag behind states where climate policy isn’t a priority.

Todd Myers is the director of the Center for the Environment at Washington Policy Center. He is one of the nation’s leading experts on free-market environmental policy. Todd is an author and researcher. He formerly served on the executive team at the Washington State Department of Natural Resources.

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BP COMMENTARY

Workers have little interest in state ‘solutions,’ few opt into PFML, WA Cares

By Elizabeth Hovde Wa s h i n g t o n state’s Employment Security Department reports that just 4,163 self-employed workers want to be included in the state’s Paid Family and Medical Leave program.

That’s among around 362,000 self-employed workers. State lawmakers imposed PFML on W2 workers in 2017, allowing self-employed people to opt in.

That low number — a little more than 1 percent — is not surprising.

The program now comes with a tax rate of 0.8% of an employee’s gross wages. Employers with 50-plus employees pay up to 27.24% of this and employees pay 72.76%. That means a person earning $50,000 each year loses nearly $300 of income, and his or her employer pays more than $100 on their behalf, for a program the worker may never need. Even worse, low-income workers’ wages are often going to people with more resources.

The PFML payroll tax began in January 2019, and the state began giving benefits to some Washingtonians, regardless of need or income, in January 2020.

Having your own money to spend on, save for and invest in possible life needs is a more efficient use of earnings. Adverse selection — knowing you have a pregnancy or the poten-

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tial of needing time off work to care for yourself or a loved one — is likely prompting a self-employed person to choose this tax.

A similarly low uptake should be expected for self-employed workers wanting to be part of WA Cares, the state’s new program related to services for long-term care. The required tax for W2 workers is 58 cents of every $100 they make. That’s not attractive for another benefit a Washington worker might never need or qualify for, especially with WA Cares’ vestment and health criteria.

Fewer than 400 self-employed people have opted into WA Cares as of Sept. 27. That’s a lot less than the PFML uptake, but WA Cares is just four months into its tax assessment.

We’ll see how things go, but it doesn’t look to me like the 40,000 first-year uptake that ESD budgeted for in 2021 will be reached. In its defense, PFML was in its infancy. The agency told me it budgeted administration costs to accommodate WA Cares’ opt-ins using an actuarial firm’s low estimate of interested self-employed workers.

Whether the uptake number for WA Cares rises or doesn’t, it should be clear to lawmakers and the public that this is an unwanted social program.

When people have a choice to opt in, they don’t.

These payroll taxes make Washington state a less attractive place to live and work. Between PFML

and WA Cares, that worker making $50,000 has nearly $700 taken for the programs each year. The price goes up with income. (Calculate your income loss at paidleave.wa.gov/ estimate-your-paid-leave-payments/.)

These decreases in take-home pay, compliments of state lawmakers, need to end. Repealing both programs would help workers in Washington state.

What about people in true need with no assets, savings, family help or other resources? Public safety nets funded by taxpayers are appropriate and should be protected by lawmakers. Instead, the state’s majority party has chosen to create “safety” nets for people not in need.

In the case of WA Cares, doing so also cost-shifts part of the state’s Medicaid budget onto the backs of workers, both low- and high-income ones, allowing the state to spend more money on other needs and wants.

We need more lawmakers committed to priority-based budgeting, something every individual knows helps keep them safe.

We can protect the elderly and vulnerable without costly programs that create benefits for only some people, regardless of actual need, and make it harder for families to make ends meet.

Elizabeth Hovde is a policy analyst and director of the Centers for Health Care and Worker Rights at the Washington Policy Center.