Business Pulse Magazine Summer 2017 by Business Pulse magazine

AUGUST 24 – AGRIBUSINESS LUNCHEON & TOUR, P. 99

DEAN OUILETTE

Bellingham Yacht Sales ranks No. 81 on the Top 100

MAGAZINE SUMMER 2017

Top Private

100

5 billion reasons to feel good about Whatcom County business

MANY FACES OF AGRIBIZ Far more than just $350M ‘Farmgate’ Companies, services = value added (UN)AFFORDABLE HOUSING:

Pricing v. income – why the big gap?

Tim Koetje, Founder, Took Axiom from nearly closing to No. 32 at $40M last year.

$8.00

HOW HIRST AND THE NEW VOTING DISTRICTS IMPACT YOU

ACME Farms + Kitchen, Growing Veterans, Innotech, and more…. The Publication of The Whatcom Business Alliance

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The Lightcatcher Building at the Whatcom Museum, located in Bellingham, WA, is the first museum in Washington State to meet LEED Silver-Level specifications.

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TABLE OF CONTENTS

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COVER STORY: AXIOM CONSTRUCTION & CONSULTING AMONG THE ROOFS and siding, and much more, on 100s of projects, photographer and owner’s wife Sara Koetje captures the stylistic, architectural metal roof work performed by Axiom, a Top 100 newcomer in Lynden (No. 32) utilizing 140 workers as far away as the South Puget Sound area. (Photo courtesy of Axiom)Award. (Staff photo)

CONSTRUCTION RULES the TOP 100 PRIVATE WHATCOM COMPANIES THREE IN THE TOP SIX – Exxel Pacific, Dawson, and IMCO – and another dozen or so industrial contractors dominated this year’s Top 100 Private Companies list of Whatcom County. This list ranks from $7 million up to No. 1 Alpha Group’s $750+ million. Several changes took place in ownership, top execs, and brand names

LOTS ‘N’ LOTS OF YACHTS THAT’S WHAT NICK OUILETTE AND HIS BROTHER DEAN deal in with Bellingham Yacht Sales at the Squalicum Harbor waterfront in Bellingham, No. 81 on our Top 100. Sail away in a popular model, premium yacht or choose a cruise, or even charter a craft for your group of family and friends.

STEP UP ADVOCACY: RUMBLES IN THE BUILDING SECTOR AN INSIDE LOOK at concerns about the construction of local residences (p. 52), a look at the dearth of supply keeping up with demand (p. 57), and an interview with “The Planner” Rick Sepler highlight a three-part series by reporter/writer Cheryl Stritzel McCarthy. What’s going on is alarming, and most certainly costly.

GUEST COLUMNS: HOT TOPICS ABOUND AFFECTING DAILY LIVING WASHINGTON POLICY CENTER regulars and a couple of new editorial contributors offer viewpoints on lessons from bees, labor and property tax issues, healthcare and farmland stressors. Also, a case study from the WWU Small Business Development Center.

4 | BUSINESSPULSE.COM

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Come see the greatest and latest at DeWaard & Bode!

www.dewaardandbode.com • 360.733.5900 Main Showroom: 3944 Meridian St. • Bellingham, WA Outlet Center: 4175 Hannegan Rd. • Bellingham, WA NEW Retail & Outlet Center: 1611 S. Burlington Blvd. • Burlington, WA

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TABLE OF CONTENTS

THE WBA HAS UNDERTAKEN an in-depth research study on local agribusiness in order to better inform the public about outstanding achievements and major issues. Page 70.

70 82 88 92

SNAPSHOTS OF THE COUNTRYSIDE REPORTER/WRITER MARY LOUISE VAN DYKE compiled 11 vignettes of local farmland activity that give you a look and feel at what’s happening across the spectrum of agribusiness hereabouts. Check out the home food delivery Dandelion Organics, the Mt. Baker Winery, and other stops along the way around the fields.

LET ACME TAKE THE ACHE OUT OF GROCERY SHOPPING MEALS DIRECTLY FROM LOCAL FARMS TO YOUR HOME feed your family, and feed the passion of partners Joy Rubey and Cara Piscitello who deliver the goods from ACME Farm + Kitchen. It’s grown from a few friends to 1,000s of customers, and locations in Seattle and Portland.

AIN’T THAT THE BERRIES: TIM KAPTEIN INVENTS NEW PROCESSING EQUIPMENT CREATING AN OFFSHOOT OF HIS COMPANY Innotech Metal Designs in Lynden, this artisticallyinclined innovator moved another direction. Kaptein undertook industry-changing research and development and sold it to berry farmers.

DIRT THERAPY – DISENFRANCHISED VETERANS FIND REHAB AND A FUTURE UNCERTAINTY ABOUT WHERE TO TURN for becoming re-acclimated to life outside the military, scores of former armed services men and women have dug in at the Growing Veterans farms, based in Mount Vernon but operating a 40-acre outpost in Whatcom County.

For editorial comments and suggestions, please write editor@businesspulse.com. Business Pulse Magazine is the publication of the Whatcom Business Alliance. The magazine is published at 2423 E. Bakerview Rd., Bellingham, WA 98226. (360) 746-0418. The yearly subscription rate is $22 (US). For a free digital subscription, go to businesspulse.com or whatcombusinessalliance.com. Entire contents copyrighted © 2017– Business Pulse Magazine. All rights reserved. POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226.

6 | BUSINESSPULSE.COM

Publisher Tony Larson Managing Editor Laura McKinney Editor Mike McKenzie Feature Writers Tamara Anderson-Loucks Sherri Huleatt Cheryl Stritzel McCarthy Jim McKinney Mike McKenzie Mary Louise Van Dyke Guest Columns Madilynne Clark: Ag Policy Paul Guppy: Tax Laws

Todd Myers: Environmentalism C J Seitz: Small Business Development Erin Shannon: Small Business & Labor Dr. Roger Stark: Healthcare Cover Photo Mike McKenzie Photography Kevin Baier Tiffany Brooks Sara Koetje Cheryl Stritzel McCarthy Mike McKenzie Courtesy Photos Axiom

Growing Veterans Innotech Washington Policy Center Whatcom Family Farmers Graphic Design/Layout Kevin Baier Ad Sales Jon Strong Ad Sales/Support Maggie Stafford Administration Danielle Larson

Environmental stewardship is part of our business

BP Cherry Point Wetland Preserve

BP believes that we can balance providing energy with protecting the environment. That’s why we focus on being good stewards of the 2,500 acres of undeveloped property around our Cherry Point Refinery. Through our partnership with the Nooksack Salmon Enhancement Association, we’ve helped restore salmon habitat along Terrell Creek where we’re seeing coho salmon return for the first time since the 1940s. We regularly monitor for water quality and also sponsor Citizen Science, a program where our neighbors in the community work alongside us to survey amphibian populations, an important marker for wetland health. We’ve also constructed 220 acres of wetlands that provide critical habitat for a variety of species, including the great blue heron and the red-tailed hawk. For more on BP’s environmental stewardship efforts in Washington, go to bp.com/Washington

WHATCOMBUSINESSALLIANCE.COM | 7

The The Whatom Whatom Business Business Alliance Alliance isis aa member member organization organization created created to to enhance enhance Whatcom Whatcom County’s County’s quality quality of of life life through through the the preservation preservation The Whatom Business Alliance is a member organization created to and and creation creation of of healthy healthy businesses businesses and and good good jobs. jobs.the We Wepreservation encourage, encourage, enhance Whatcom County’s quality of life through support, support, facilitate facilitate and and advocate advocate on on behalf behalf of of local local companies companies in in and creation of healthy businesses and good jobs. We encourage, every every industry industry who who are are working working to to retain retain jobs; jobs; and and are are interested interested support, facilitate and advocate on behalf of local companies in in in expanding expanding their operations and and startup companies companies interested interested in in every industrytheir whooperations are working tostartup retain jobs; and are interested locating locating in inand our ourstartup community. community. in expanding their operations companies interested in locating in our community.

Whatcom WhatcomBusiness BusinessAlliance Alliance Whatcom Business Alliance

Facilitating FacilitatingBusiness BusinessSuccess Successand andCommunity CommunityProsperity Prosperity FacilitatingBusiness Business Success and Community Prosperity Facilitating Facilitating Business Prosperity Prosperity &&Community Community Prosperity Prosperity whatcombusinessalliance.com whatcombusinessalliance.com Facilitating Business Prosperity & Community Prosperity whatcombusinessalliance.com

EXECUTIVE EXECUTIVE COMMITTEE COMMITTEE EXECUTIVE COMMITTEE

Pam Pam Brady Brady Director Director Pam Brady Director NW NW Govt. Govt. and and Public Public Affairs Affairs BP BP Cherry Cherry Point Point NW Govt. and Public Affairs BP Cherry Point

John John Huntley Huntley President/CEO President/CEO John Huntley President/CEO Mills Mills Electric, Electric,Inc. Inc.

Board Board Chair Chair Jane Jane Carten Carten Board Chair President/Director President/Director Jane Carten President/Director Saturna Saturna Capital Capital

Mills Electric, Inc.

Doug DougThomas Thomas President/CEO President/CEO Doug Thomas

Bellingham Bellingham Cold Cold Storage Storage President/CEO

Marv MarvTjoelker Tjoelker Partner/Chairman Partner/Chairman Marv Tjoelker Larson Larson Gross Gross PLLC PLLC Partner/Chairman

Bellingham Cold Storage

Larson Gross PLLC

Jeremy Jeremy Carroll Carroll Vice Vice President President Jeremy Carroll

Andy Andy Enfield Enfield Vice Vice President President Andy Enfield

Dawson Dawson Construction Construction Vice President

Enfield Enfield Farms Farms Vice President

Dawson Construction

Enfield Farms

Jeff Jeff Kochman Kochman President President Jeff Kochman AMBK AMBK President

Tony Tony Larson Larson President President Tony Larson Whatcom WhatcomPresident Business BusinessAlliance Alliance

AMBK

Whatcom Business Alliance

Saturna Capital BOARD BOARD OF OF DIRECTORS DIRECTORS

BOARD OF DIRECTORS

Ken Ken Bell Bell President President Ken Bell Best Best Recycling Recycling President Best Recycling

Sandy Sandy Keathley Keathley Founder SandyFounder Keathley KK & & KK Industries Industries Founder K & K Industries

Janelle Janelle Bruland Bruland President/CEO President/CEO Janelle Bruland

Management Management Services Services NW NW President/CEO Management Services NW

Tom Tom Kenney Kenney Regional Regional President President Tom Kenney Washington Washington Federal Federal Regional President Washington Federal

Lynn Lynn Murphy Murphy Senior Senior Local Local Govt. Govt. Affairs Affairs Lynn Murphy Puget Puget Sound Sound Energy Senior Local Govt.Energy Affairs

Tyler Tyler Byrd Byrd President/CEO President/CEO Tyler Byrd Red Red Rokk Rokk Interactive Interactive President/CEO Red Rokk Interactive

Ben Ben Kinney Kinney President/CEO President/CEO Ben Kinney Keller Keller Williams, Williams,NVNTD NVNTD President/CEO Keller Williams, NVNTD

Bob Bob Pritchett Pritchett President President // CEO CEO Bob Pritchett Faithlife Faithlife/ Corp Corp President CEO

Puget Sound Energy

Faithlife Corp

Jon Jon Sitkin Sitkin Partner Partner Jon Sitkin

Becky Becky Raney Raney Owner/CO Owner/CO O O Becky Raney

Sarah Sarah Rothenbuhler Rothenbuhler Owner/CEO Owner/CEO Sarah Rothenbuhler

Print & Copy Factory

Birch Equipment

Print Print && Copy Copy Factory Factory Owner/CO O

Billy BillyVanZanten VanZanten CEO CEO Billy VanZanten Western Western Refinery Refinery Services CEO Services

Birch Birch Equipment Equipment Owner/CEO

Josh JoshWright Wright VP/Broker VP/Broker Josh Wright Bell BellAnderson Anderson Insurance Insurance Chmelik ChmelikPartner Sitkin Sitkin && Davis Davis P.S. P.S. VP/Broker Western Refinery Services BellInc. Anderson Insurance Chmelik Sitkin & Davis Not NotP.S. pictured: pictured:Guy GuyJansen, Jansen, Director Director Lynden LyndenTransport, Transport, Inc. 8 | BUSINESSPULSE.COM

Not pictured: Guy Jansen, Director Lynden Transport, Inc.

Business Banking Equipment Finance Treasury Management Multi-Family Income Property Home Builder Finance

“After 70 years with the same lending institution, Bellingham Cold Storage recently conducted a formal search for a new primary bank. Our CFO, Brad Flinn and I interviewed extensively several very qualified firms and ultimately selected Washington Federal primarily because their team was the most closely aligned with our core values.”

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Jonathan Ensch VP/Relationship Manager

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Nine for Nine

Frank J. Chmelik and Jonathan K. Sitkin have been selected to the 2016 Washington Super Lawyers list.

There is only one law firm north of Everett that has had multiple lawyers selected to the annual Super Lawyers list for nine years in a row and a lawyer, Frank Chmelik, selected every year since the list was started. That law firm is Chmelik Sitkin & Davis. Only five percent of Washington state lawyers are selected to the prestigious list. The team of lawyers at Chmelik Sitkin & Davis have quietly built a reputation for their commitment to responsive, professional and quality service for their clients in Northwest Washington.

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The WBA

Takes You Out to a

Bells Game! July 26th, 6:35pm

WBA Member Dale Zender and Dinger

WBA Member Appreciation Night Members receive free tickets and more. Contact WBA and reserve your tickets today! This season the Bells welcome a number of local boys to the team. Come out and show your support! Register for your Tickets at www.whatcombusinessalliance.com/events

Thank you to BCS for their sponsorship.

LEADING OFF Tony Larson | President, Whatcom Business Alliance The Whatcom Business Alliance is a member organization made up of businesses of every size and shape, from every industry. The WBA enhances the quality of life throughout Whatcom County by promoting a healthy business climate that preserves and creates good jobs.

Speak now, or forever hold your peace

’ve always been of the school that you should speak now, or forever hold your peace. I think speaking up for your beliefs is a positive thing, providing you do it respectfully. I’ve instilled that in my children, and I admire it when I see it in others, regardless of whether or not I agree with them.

Respectful, informative dialogue is imperative on issues of community importance. Respectful pushback is a good thing as well, and should be welcomed if your desired outcome is to make good decisions. One of the roles the Whatcom Business Alliance plays is sharing accurate and relevant data and information from industry experts on issues important to public policy, as it impacts local businesses and the families that work for them. Before the founding of the WBA in 2012, I received consistent feedback from many business leaders in Whatcom County relating to engagement in public policy matters, especially issues considered controversial to some. Business leaders would say, “our policy is to keep a low profile and say nothing. We love this community and support it in many ways, but we’re afraid that when we speak up, we’ll become a target.” 12 | BUSINESSPULSE.COM

A target of what? Perhaps a target of those with differing opinions? Many members of the WBA got a sense of how that works when they received a letter dated May 22nd of this year from a San Francisco-based organization called Stand.Earth, with offices in Vancouver and Bellingham. The letter requested that WBA members “…immediately cancel their membership in the WBA and withdraw their participation.” They assured our members that Stand.Earth would “…be working to daylight the deleterious role that the WBA is playing in local public policy”, and they should cancel their membership in order to “…avoid being caught up in this growing controversy.” They requested our members give them an answer by June 5. The letter was signed by Field Director Alex Ramel and Extreme Oil Campaign Director Matt Krogh, who operate an anti-fossil fuel campaign out of their Bellingham office. Apparently they take exception to WBA support of Cherry Point companies, which sell legal products that we all use – including Stand.Earth – and which directly and indirectly support more than 10,000 local families with jobs. The Cherry Point industries provide: • Jobs that pay more than twice the Whatcom County average; • $200 million in taxes that support local schools and essential local services; • Support local nonprofits, and • These organizations and their workers have specific programs

through which they have been outstanding environmental stewards and local community partners for the last half century. The attempted tactics by Stand. Earth to intimidate and bully our members are despicable, and their methods should be condemned by all reasonable-thinking people of good will. This instinct to try to shut down dialogue on important community matters by threatening those who are respectfully sharing their concerns seems to be growing around the country. It should not be welcomed in Whatcom County. The WBA is Whatcom County. We don’t claim to speak for everyone, or every business. But, like those who may have differing viewpoints, our members care deeply about this community. Their concerns are real, and their ideas and opinions are invaluable. The positions we’ve taken on local issues come after much measured dialogue and participation from our members. The first part is to gather information, to make sure it is accurate, to look at the data, and to get feedback from informed and experienced experts. In addition to the concern about the impact that recent policy decisions surely will have on economic development opportunities and on Cherry Point industry specifically, our members have genuine concern about the potential impact these decisions will have on shifting the tax burden to average local property owners.

To address that matter, we invited Whatcom County Tax Assessor Keith Willnauer to provide a detailed presentation to WBA members. (You can view the video on our website.) He shared how the property tax structure essentially is a closed system. Landowners’ assessed taxes are based on the needs of taxing jurisdictions; i.e., based on the value of their property, each property owner pays a portion of a total set amount. Willnauer pointed out the two biggest threats to the tax base most likely to raise the average person’s property taxes: • The Hirst decision by the Washington Supreme Court (see story on p. 64), and the county’s subsequent moratorium on construction; • The ability and desire of Cherry Point industries to keep doing business in Whatcom County. Willnauer sketched out the positive impacts that Cherry Point industries, in particular BP and Phillips 66 oil refineries, have on the county’s tax base. He said that during the recession, when other governments and taxing districts struggled mightily to cope with tax losses, Whatcom County did just fine. “That was simply due to the fact that both of these facilities were energized and were, in fact, expanding.” But expansion, and even operation of the refineries in Whatcom County is far from a guarantee. At the May 16 Whatcom County Council meeting, Bob Allendorfer, the refinery manager at BP Cherry Point Refinery, warned the council against taking actions that would discourage investment by BP at its county facilities. Allendorfer said BP America invested more than $100 million in 2004 to increase its ability to produce clean gasoline. And from 2006-‘11, BP America invested more than an additional $400 million to produce clean diesel products.

He warned that if BP is not allowed to adapt to a changing economic environment at Cherry Point, then Whatcom County would cease to be an attractive place for his company to invest. And without investment, Willnauer said in his presentation to the WBA , the value of the facilities at Cherry Point would decrease dramatically.

“ Attempted tactics to intimidate and bully are despicable and should be condemned by all reasonable-thinking people of good will. This instinct to try to shut down dialogue on important community matters by threatening… seems to be growing around the country. It should not be welcomed in Whatcom County” “When investors are driven away from their facilities, then their facilities are not as valuable as they used to be,” he said, “assessed value would have to be corrected.” BP, Phillips 66, Alcoa Intalco Works, and Petrogas operating at Cherry Point all have a massive impact on the tax base of Whatcom County, and any negative shift in that impact could be devastating to the county as a whole, Willnauer said. Petrogas recently petitioned the County for a reduction in their property value assessment from $262 million to $42 million. They are the third of four major property owners at

Cherry Point to make a request. And Cherry Point is not even the only player right now. The potentially massive future impact of the Hirst decision, which essentially rendered many undeveloped lots unusable out in the county – not to mention what it has done to small farmers – is another major concern. Willnauer said that a conservative estimate of the loss of the value of properties affected by the Hirst decision is 60-70 percent, and it could be as high as 90 percent. “Those impacts are dramatic,” Willnauer said. “Hirst, right now, could create the most dynamic impact on property value I’ve seen in some time.” Sharing these facts and findings with citizens and our members, and discussing the potential impacts that public policy might have is vitally important. It is especially important to discuss these issues before decisions are rendered. The WBA will not be silenced or threatened by organizations with political agendas from San Francisco, or anywhere else. Important problems will not be solved with less dialogue; they will be solved with more. They will not be solved with less participation; they will be solved with more. During September last year, the WBA board of directors launched our Step Up for Business Advocacy, Research, and Education campaign. The idea is to provide an opportunity for local businesses of every size and from every industry to have input and to engage proactively on issues that impact their success and our community prosperity. I personally invite you to join us. All you have to do is go to our website, www. WhatcomBusinessAlliance.com, or give me a call at 360-746-0411. Speak now, or forever hold your peace. WHATCOMBUSINESSALLIANCE.COM | 13

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES

TIM KOETJE STANDS before the work his firm Axiom performed on all the roofing and siding on the remodeled exterior of Bellingham International Airport, both the terminal and the administration offices building, during the airport’s major makeover in 2015. They did work on some interior areas, too. (Photo by Mike McKenzie)

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From Despair to the

Top 100 How upstart Tim Koetje and Axiom rebounded from a high heap of failure ($600K of debt) to a $40M a year business venture By MIKE MCKENZIE

et’s begin this parable with NOW. It’s upbeat, an inspirational story of success and its moving parts. A pretty picture:

Axiom Construction & Consulting, specializing in architectural metal in Lynden, joins the Top 100 list of privately-owned companies in Whatcom County for the first time. With three operations under the parent organization, they did $40 million in sales last year and they employ about 140 workers. Tim Koetje started it in 2002 with a partner. That segues to THEN. The hard-edged phase of this allegorical tale. Not a pretty picture: Well, at first it was. A back story of rivers of sweat equity as a dairy farm kid and workplace laborer. Of large dreams for a teenager living fast and hard and carefree into his 20s. Of riding high (literally) on quick success and earning big bucks with a startup. “If you asked me,” he said, “I was a big deal.” …Until the bottom fell out. WHATCOMBUSINESSALLIANCE.COM | 15

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES Tim Koetje had started his company with a few dollars in the bank and a paycheck from Andgar Corporation, and a partner equally enthusiastic and equally skint. They had no jobs bid out, and only their ambition and their work experience in roofing to go on. They scored $300,000 in bids their first year, and hit $1 million by the next year. Then, kaboom. It all crumbled: Koetje’s business partnership, his family, his youthful positive spirit. He was ready to fold, and wasn’t sure where to turn or who to turn to. At one point, before a stunning encounter with his grandfather Howard “Squeak” Koetje. Tim was saddled with $600,000 owed on a tax bill and debt, and gross sales of $1.3 million. Koetje, burdened by demons from alcohol, drugs, divorce, and what he termed an “ugly” breakup of his startup partnership, tells a remarkable story of overcoming those obstacles and building a multifaceted business venture with a goal of reaching $100 million by 2020. The Axiom umbrella includes a company that manufactures panels, Phoenix, and another that performs flat roofing, Axiom Division 7. Halo, a real-state holding company co-owned with Tim’s business partner at Division 7, Jeremy Parriera, owns the Axiom HQ building. He learned roofing with Scholten Roofing, and after two years he went to work at Andgar Corporation and learned about commercial metal work. Along the way he leaned on many people who seemed to wear a halo. Bolstered by mentors, family, close friends, and his grandfather’s command, Koetje turned his life around by, he said, “doing things the right way….(and) getting remarried in 2016 and having our son have grounded me. Sara holds my feet to the fire, drives me to reach my full potential.”

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WEARING A CAMO JACKET OVER A T-SHIRT,

seated in a meeting room at Axiom’s new headquarters on the main drag heading toward downtown Lynden, Koetje amiably, comfortably, and frankly spelled out the rocky roads he traveled to get to this moment. “I was a troubled person,” he said of some dark years past. That was putting it mildly. He revealed details of a mixture of long hours at work by day, and long, short-sleep nights of getting high, or drunk, or some combination of the two. “I somehow knew how to draw the line between never letting the night life spill over and interfere with my work life,” he said. “Somehow, I was always ready to perform good work.” Koetje’s jarring exploits of addiction (“you name it, I’d try it”) poured out immediately, unexpectedly as startling openers to the conversation. “One thing I’ve found if I share openly, it’s always best to be right up front about what happened back then,” he said. Following this interview Tim read an article in Business Pulse about Sam Moncrieff, who founded Moncrieff Construction after overcoming addictions. Koetje reaffirmed: “What Sam did makes me proud. And if I can share my story like he did then possibly we can help keep somebody else from falling into the same problems. We were on the road to nowhere, and made life changes – people want to know, ‘How did you do it?’” Koetje reckoned that his upturn in life hung on steely self-discipline and determination, double-down hard work, and “the help of God and great counsel...(from) some amazing people who helped me.” This past year underscores his 180-degree makeover: Koetje began family anew with his bride, Sara, their new baby boy, Cassius, and started a new company in real estate development, called Rogue. (“I have six companies registered now.”)

Evolution of the main Halo Companies Axiom (founded 2002) Specializes in architectural metal for commercial projects: roofing, siding, “the whole spectrum of the exterior building envelope.” Recently they added the phenylalanine resin used in countertops. Phoenix (2005) Panel manufacturing. The only connection between Phoenix and Axiom is common ownership. “Totally different companies operating separately.” Axiom Division 7 (2007) Services in flat roofing, arch metal roofing, and arch metal siding. Rogue (2017) Property development. Rogue, Tim Koetje’s newest company, develops multi-family housing. “Something we as a family can work on together. We’re keeping it small and nimble.” Inspiration came from a personal project that closed out 2016 – remodeling the family home. “The house I grew up in on two acres – we completely gutted it.” He and one employee spent 270 hours on the site in 78 days. “At one point I’d put in 270 hours on site in a three-week period – equal to seven 40-hour work weeks,” Koetje said. “My motivation was high. We had a baby due in December, and I wanted the family settled before the arrival of our newborn (Cassius was born three days before Christmas). And we had to get done before hunting season. “I never miss elk hunting season. I go with buddies every winter to Idaho, and every year we have a family hunt.”

Tim Koetje, CEO Axiom Construction & Consulting WHATCOMBUSINESSALLIANCE.COM | 17

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES

IN RELAXED surroundings at Axiom Inc. in Lynden, founder/owner Tim Koetje told his personal and business story frankly and transparently, of how he overcame drug and alcohol addictions to turn both his life and the company onto a path to positive outcomes. He now owns all or part of six companies, and those under the Axiom umbrella, he said, are on their way to $100 million in sales throughout the industrial metals industry. (Photos by Mike McKenzie)

They have Paisley, 4, Sara’s daughter by a previous marriage, and Vance, 10, Tim’s son from his first marriage. The turnaround began in 2004 from a singular aha! moment. “I’d had it, and figured I’d go bankrupt and shut down,” he said. “I went to my Grandfather Squeak for advice. I looked to him to say, ‘Close it.’ “Instead, he said with every ounce of stern he could muster, ‘Tim, you promised all those families you were going to help them. You'd better figure it out.’ And he walked away, mad. I still get chills to this day when I think about that moment.” Tim knew what to do. He’d learned it toiling on the farm, and at Andgar, and in Axiom Year One. “I put my head down and went back to work – 80, 90, even 18 | BUSINESSPULSE.COM

100 hours a week. I cut myself off from my family and friends and jumped back into the grinder.”

ONLY A YEAR AFTER REDEDICATING HIMSELF,

Koetje expanded Axiom in 2005 by adding Phoenix, a manufacturing plant in the very barn where he grew up tending dairy cattle. (The phoenix, a bird in Greek mythology, regenerated by rising from the ashes of the one it replaced.) A couple of years later, services expanded with Division 7 flat roofing. Up on the roof – that’s where Koetje began his journey after all but flunking out of high school. He worked long hours on the farm alongside his parents and grandparents. “Loved the machinery,” he said. “The animals, not so much.” He foresaw no future in the

dairy barn, or in college. “I graduated (Lynden Christian) with a 1.6 grade point average,” he said. “I might still have the school record for D-minuses.” Scholten Roofing was hiring. “I immediately joined the workforce. Flat roofing – working with hot tar and rubber – and I worked my way up within the industry. I crushed it there.” Not long after leaving to dive headlong into business, life choices nearly crushed him. In his own words: “When I decided to start a business, with a partner who was a good friend, I was a troubled young man. I was deep into alcohol and drugs. You name it, I tried it. I had $65 cash, a paycheck for $1,100 coming in, and no work in roofing. “I knew only one way to deal with that – work more hours than

anybody else. We grew way too fast – $300,000 the first year. Within two years we had $1 million in sales, and 40 employees. But my troubles cost me in a big way. I was still partying, hard.

“The split of the business in the second year was an ugly one, really tough because we had been such good friends. When the partnership dissolved I was left with a mountain of debt. We had a million owed in

tax and vendor debt with $1.3 million in billings. I started thinking about how to get out.” Meeting the demons head-on, Tim stopped drinking, using, and losing. His vision for success and

VANCE, TIM, AND PUPPY REGGIE compose a team seen nearly every Thursday evening at Hannegan Raceway in Bellingham. Vance, Tim Koetje’s 10-year-old son, started on a small four-wheeler at 1 ½ years old, and now he races AMX Motocross in the age 10-11 division. Koetje has part ownership in an AMX Motocross company, continuing an avocation he started in his 20s. Axiom head Tim Koetje holds part ownership in a motocross company, and he’s active on the board of directors for Hannegan Raceway in Bellingham. He rarely misses a Thursday night at the track, an avocation he started in his late 20s. Vance, Tim’s son, now races in the 10-11 year old division. He was on a four-wheel AMX cycle at 18 months, and starting racing at age 4. Paisley, now 4, has begun riding at home. “It’s a great character-building activity,” Koetje said. For instance, he described how when anybody’s

bike breaks down at the start line, everybody chips in to get them running. “Other riders get off their bikes, and dads start rushing out to help to make sure everybody gets to run. You learn sportsmanship, and how to deal with losing, too, because you’re on your own, not a team, and only one person wins a race.” After the national anthem played on a recent Thursday, Koetje said, “Two things you see in people out here: hardcore patriots, and a lot of God-fearin’ folks, because it takes a lot of prayer to keep these racers safe.”

WHATCOMBUSINESSALLIANCE.COM | 19

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES One of Phoenix's specialties— industrial metal panels. (Photo by Sara Koetje)

20 | BUSINESSPULSE.COM

helping others become successful became clear again. “It looked like a cinch to me,” he said. “I studied all aspects of our competitors. The industry had become an entirely different beast with technology.” To keep up, he taught himself computer-aided design (CAD) and 3-D printing; bought a router and a sheet metal break and shear; learned to design and build some of his own equipment, and, he said emphatically “…brought in key people – like Jeremy Parriera as a longtime friend, now president of Axiom Division 7 .” Profitability rose quickly again. Axiom hit $1 million in sales again in 2005 and numbers climbed for five years before leveling off after 2010. Then another uptick began in 2013 when the comptroller, Megan Kalma, had an idea for taking the firm to next level and beyond. “She called for a meeting to examine operations,” Koetje said. “I said, ‘Why? I already know how the company works.’ She said, ‘How are we doing?’ and I said, ‘Great. We’re growing.’ “But we didn’t have a clear picture of how. I was in the way of that. “Megan suggested that we use a facilitator to help draw out my vision and provide the company a path to follow that vision. We brought the team into a meeting aimed at strategic alignment to look at the ‘Axiom Way’ of doing things. I started with one employee actually saying about me, ‘You’re a meddler.’ “We looked at every aspect of the company, and from there they pulled it from my brain, and she wrote everything on a white board. Then she organized it, and we reverse-engineered the company.” Next up, in progress, a company handbook. “Ethics, processes, systems, efficiencies, how to grow organically or through acquisitions, $10 million at a time,” Koetje said. “It’s not a ‘thou shalt and thou shalt not’ handbook.” Axiom does business on one foundational premise: Do things

right for the customer, he said. “You generate confidence through your history lessons. Ours are built on honesty and integrity. In taking on work we have to bid it right. If we can’t, we just won’t do it.” As the conversation wound toward an end in the Axiom meeting room, Koetje capsulized his story thus: “At 25 I took a look at the world around me. To get to

where I wanted to be I had to do something different. It took five years to get my feet under me. Then I planned it out – get married and settled down with kids by 35. Hit 40, step back from the work. Build a $100 million company by 2020. “Give or take here and there, that’s where I’ve been, and where I am, and where we’re going.”

Axiom Philosophies of Growth In leading his business Tim Koetje at Axiom draws from lessons learned at each stop of his own career path, even from early years on a dairy farm. (“In dairy, you’re always trying to get by on one less employee than you need…I had to learn how and when to hire.”) He pulled much from his early work years, and developed others out of his personality, out of advice from friends, and out of his view of how a happy employee makes a growing company. “As a business owner, you’re often perceived as wanting everything for your own,” Koetje said. “It’s why we’re in business, to make money. “But the greater good is the moving forward, to build a company that has no ceilings for anyone. If you can’t grow, you’re dying. “At Axiom, we create meaningful work that holds our employees’ interest and challenges every individual to grow. You lay it out for them on how to get there, wherever they want to be.” The “Our Dime, Your Time” program helps that along – devised by CEO Jeff Palmer. “It’s an ‘our dime, your time’ program,” Koetje said. “The company will pay for any employee's schooling that is applicable to our work. They have just two conditions: attend on their own time, and maintain a B grade average.” Koetje’s learning curve also included insights and advice from other close friend business owners. “One of the best things you can

receive and give somebody who owns a company is mentoring. Always seek counsel,” he said. “Andy Enfield at Enfield Farms, we’re third generation best friends, he’s helped me a ton. And, Virgil Stremler (at Stremler Gravel in Lynden) has been a longtime mentor and cornerstone of business advice in troubled times. He is a father figure and had the most influence on me other than my parents (Galen and Tami) and grandparents (Howard “Squeak” and Dalene “Pink” Koetje). “They taught me things like, ‘Always show up,’ and ‘do what you believe in.’” Takeaways for Koetje from his youthful years at Andgar Corp include hiring youngsters looking to learn a trade, perhaps even follow the path that he carved. “We’ve hired several great young men who have eventually gone out on their own. We even subcontract to some of our former workers,” Koetje said. He described one of his favorite scenarios: “I love watching kids at 18 coming to work for us. First thing they do is buy a diesel pickup. Then you see them cruise by with a girl in the passenger seat. Then you see them go by in a minivan, married, bought a house, infant car seats in the back. And, eventually, a new diesel truck pulling a boat behind it. It’s really rewarding seeing all that, one of the most satisfying things about work here.” WHATCOMBUSINESSALLIANCE.COM | 21

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES

E CO

Our annual Top 100 privately-owned companies in Whatcom County topped $4,927,600,000 in sales during 2016 – the highest total since this survey began over 20 years ago. That represents about $900 million more than 2016’s Top 100. In the past this listing of privately-owned companies also encompassed three other counties Skagit, Island, and San Juan). When we reorganized and formed the Whatcom Business Alliance in 2012, we narrowed the search for entries to Whatcom County only. Considering some other businesses in the county that we couldn’t officially verify, but have seen their sales figures printed elsewhere, the highest producers in the local free market push through the $5 billion milestone and provide in the neighborhood of 20,000 jobs. In an unexplainable 180-turnaround from last year, while sales figures rose substantially in our listings, employment figures dipped. That’s a sign of the times, most likely, in the age of automation ranging everywhere from berry-and-dairy farming to fast-food kiosks to robotics.

22 | BUSINESSPULSE.COM

For the fourth straight year the Alpha Group stood No. 1, reflecting about a 15 percent jump in sales to more than $750 million. They provide power solutions globally for broadband, telecommunications, and renewable energy with headquarters near the Bellingham International Airport entrance. Haggen, the perennial No. 1 for many years, surged back into the No. 2 position, citing outstanding support for local management and the Northwest Fresh brand from their new owners, Albertson’s. We introduce 10 new companies to the Top 100 this year: Axiom, Hollander Investments, SPIE, Yorkston Oil, DeWaard & Bode, Brim Tractor, Woodstock International, Morse Distribution, Seeking Health, Bellingham Yacht Sales. A few dropped off either because they moved or sold outside the county, or did not report/confirm their sales. Three of the top six companies reflect the most obvious major trend from 2016, the continuously flourishing construction industry, including contractors and subcontractors. Excel Pacific at No. 3, showed more than 10 percent increase to $300+ million. No. 4 Dawson and No. 6 IMCO also reported major gains year-over-year.

ast year in the local free-market economy was a very good year.

W WH H

0 0 1 Top2016 Y TTY

By Business Pulse Staff

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A P M

Others sprinkled throughout the Top 100: Diamond B, Haskell, Roosendahl-Honcoop, ALRT, Skeers, Faber, Western Refinery Services, Brooks, Moncrieff, Strider, and Tiger, plus numerous contracted support companies in sheet metal and other specialities. Another trend on the list, changes – ownership, company leadership, and brand. Haggen operates independently still, but under the Albertson group. Wilson Motors, upon longtime owner Rick Wilson’s retirement, sold to a large dealership, though Julian Greening remained top exec under the new name Toyota/Mercedes Benz of Bellingham. At Seafood Producers Cooperative, Tom McLaughlin retired and they brought in Joe Morelli as new CEO with a long background in management at three other companies. Specified Fittings reorganized under its holding company, North Star, and elevated former minority owner Tom Franzen to CEO; he’s been with the company more than 20 years in operations. DIS at No. 64 sold to a company out of the county, so our listing this year is based on its 2016 results under now-retired owner Randy McIntyre; they will not be listed going forward. And WBA board member Janelle Bruland’s growing company Management Services Northwest that has appeared on the list several years changed its brand; its official name is now MSNW. Also in trending, for the second straight post-recession year the fluctuating prices in sectors such as oil and gas, milk and other food products, and the deflated Canadian dollar continued a 2015 downturn of restricting growth in trade, retail, and travel sectors. The robust economic upturn overall pushed the minimum starting point on our list to $7 million for the first time, which included

101 companies, with another 15 we know to qualify (though unconfirmed by their management). You can read a featured cover article in this edition about Axiom, an industrial metal firm that incorporates two other companies under its $40 million umbrella, and a profile of Bellingham Yacht Sales. As always, to go on the list a company must (a.) operate its headquarters in Whatcom County and (b.) under private ownership.

We compile the list by contacting everybody on it the previous year, through personal contacts, discovery in reporting for Business Pulse, new members in the WBA, and public inquiry through our communications resources that includes a newsletter list in excess of 4,000.

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WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES

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0 0 1 Top2016 2016 Rank

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A P M

2015 Company Rank

Location

Founded

Employees: Region Total

Top Executive

Bellingham

1976

475

1,600

Grace Borsari/ Fred Kaiser

Bellingham

1933

575

2,000

John Clougher

Bellingham

1989

135

170

Kevin DeVries

Bellingham

1967

150

250

Pete Dawson

Bellingham

1983

110

280

Shiraz Balolia

MORE THAN $750 MILLION 1

The Alpha Group Power solutions for broadband, telecommunications and renewable energy sectors MORE THAN $450 MILLION

Haggen

Supermarkets and pharmacies MORE THAN $300 MILLION

Exxel Pacific Integrated design and construction general contractor $125-$130 MILLION

Dawson Construction Large-scale construction

Grizzly Industrial

Manufacture/sales of woodworking and metalworking machinery $105-$120 MILLION

IMCO General Construction Heavy construction

Bellingham

1978

200

Frank Imhof/ Tyler Kimberley

CHS Northwest Convenience stores, energy/propane and agronomy sales

Lynden

1941

200

300

Don Eucker

24 | BUSINESSPULSE.COM

# 2 Haggen

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Top20100 16 IV

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A rock in the community for 84 years, the company sold to Albertson’s. However, Haggen continues to operate independently out of Barkley Village under the same leadership. One top official stated that the new owners have “fully supported the success of Haggen” during a seamless transition in a banner 2016 when sales soared with the dedication to the Northwest Fresh brand.

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Shiraz Balolia, who owns two companies in the Top 100 (see Woodstock, No. 62), is an internationally-recognized F-Class rifle shooting competitor. He recently won his 3rd consecutive Canadian championship, he’s a 2-time U.S. champion, and he’s a member of the U.S. F-Class Team aiming at the quadrennial World Championships in the Canadian capital of Ottawa, Ontario.

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Bellingham

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Grizzly Industrial

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WHATCOMBUSINESSALLIANCE.COM | 25

WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES 2016 Rank

2015 Company Rank

Location

Founded

Employees: Region Total

Top Executive

$90-$100 MILLION 8

LTI Transport of dry and liquid bulk commodities

Lynden

1906

110

609

Jason Jansen

Samson Rope Technologies Synthetic rope manufacturer

Ferndale

1878

240

330

Andrea Sturm

$80-$85 MILLION 10

The Markets Supermarkets (The Markets, Cost Cutter, Food Pavilion)

Bellingham

2008

298

475

Kevin Weatherill

Peoples Bank Independant community bank, personal and commercial lending

Bellingham

1921

272

410

Charles LeCocq

Bellingham

1909

225

375

Pete Chapman

Anvil Corporation Engineering and procurement solutions

Bellingham

1971

350

450

Gordy Lindell

Toyota/Mercedes Benz of Bellingham New and used car dealerships

Bellingham

1960

127

Julian Greening

Diamond B Constructors

Commercial and industrial contractors

$70-$75 MILLION 15

Haskell Corporation Large-scale construction

Bellingham

1890

300

Fred Haskell

Bornstein Seafoods Seafood sourcing, sales and distribution

Bellingham

1934

100

300

Colin Bornstein

Ferndale

1934

124

168

Richard Hempler/ Stephen Bates

Hempler Foods Group Meat processor

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B #12 Diamond Constructors

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Bellingham

An ever-evolving history: It all began 108 years ago selling wood scraps for home heating and cooking. The company evolved through 4 generations of Paul J. Johansen’s family, and through wood, coal, and oil fuel delivery exclusively for a lumber company. The ‘B’ comes from their Bloedel Donovan lumber brand of a letter B inside a diamond, and now Diamond B is one of the standout mechanical contractors in Washington. Recent major projects include a VA hospital, and schools in Issaquah, Sammamish, and Bellevue and on Orcas Island. Top exec Pete Chapman has been with the company since 1993.

Top 100 #17 MCCOO CCOOM UU AATT HH

For more details Contact Michelle at the WBA 360-746-0418

Hempler Foods Group Ferndale

2016

Members may register for two tickets

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The WBA Takes You Out to a Bells Game

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One of the top success stories of 2016 came out of this iconic meat producer that has been in the family since three years before Chairman of the Board Dick Hempler was born (he turns 80 in August, and still goes to the office most workdays). Hempler purchased Fletcher’s Fine Foods last September, which enabled a strong last quarter to boost sales by over 40% more than 2015 (when they bought Isernio in Kent, maker of Seattle Mariners’ franks). What team president Stephen Bates terms “extraordinary growth” will continue, he said, on the strength of expanded markets (e.g., Texas) and more acquisitions. “We expect to top $100 million this year.” Stephen Bates, daughter Kestin and Dick Hempler.

WHATCOMBUSINESSALLIANCE.COM | 27

WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES 2016 Rank 18

2015 Company Rank 37

Rice Insurance Full-service insurance agency

Location

Founded

Employees: Region Total

Top Executive

Bellingham

1946

James Fritts

$60-$65 MILLION 19

EPL Feed Ag feed and nutritions

Sumas

2011

Dennis Elenbaas

Smith Gardens Wholesale producer of garden plants, nursery, and garden center supplies

Bellingham

1901

160

1200

Eric Smith

Barlean's Organic Oils Creates/distributes flaxseed, Omega 3, and other supplements

Ferndale

1989

156

200

Bruce Barlean

Ferndale

1931

130

136

Ford Carothers

Walton Beverage

PepsiCo beverage distribution

$50-$55 MILLION 23

Healthy Pet Pet litter, bedding & food; spill cleanup & industrial products

Bellingham

1985

130

Ted Mischaikov

Hollander Investments Property development

Bellingham

1996

500

Mark Hollander

Bellingham

1944

120

Joe Morelli

Seafood Producers Cooperative

Fishery, processor and marketer of premium seafood

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Traditional T raditional Service Ser vice M tii M d N d Meeting Modern Needs.

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Mount Vernon 360-424-4471

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Product expansion continued in 2016 with the addition of food snacks, coffee, and more brands of wines in their alcohol and spirits line that they added 2 ½ years ago. The new snacks line ranges from protein bars to jerky, to Erin Baker’s Wholesome Baked Goods, to some fun brands (Hungry McGee, Moon Cheese, Smackers). Six brands fill out the coffee line, including Starbucks; Fidalgo Bay and Moka Joe in Skagit County, and Tony’s in Bellingham. Family-owned, Walton has operated 86 years through three generations.

Top20100 16 S

Bellingham

# 22 Walton Beverage

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Owner/President John Walton, Sr. Sales & Ops Analyst Jenn Franks and CEO Ford Carruthers.

# 25 Seafood Producers

MCCOO CCOOM UU AATT HH

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Cooperative

C O M PA

Bellingham

Long-time CEO Tom McLaughlin retired in 2016 and Joe Morelli accepted the position, moving from 8 years’ experience with another co-op in Seattle dealing in farmed mink. Previously, Morelli worked 11 years for Nike in Oregon. Before that he was with DuPont in his home state of Delaware. A goal this year for the co-op aims to replenish product throughout Europe, where they experienced a shortage in 2016. The co-op, which formed around halibut fishing 73 years ago, has about 575 members with a huge number fishing in Alaska. An SPC member shows off a catch.

WHATCOMBUSINESSALLIANCE.COM | 29

WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES 2016 Rank

2015 Company Rank

Location

Founded

Employees: Region Total

Top Executive

Faithlife Corporation Bible-content computer software

Bellingham

1992

249

284

Bob Pritchett

Mt. Baker Products Manufacturers of plywood lumber and plywood

Bellingham

1993

137

Rod Remington

$40-$45 MILLION 28

SPIE Advancing an interdisciplinary approach to the Bellingham science and application of light.

1955

175

Eugene Arthurs

Hardware Sales General hardware, cabinets, office furniture, and B-to-B industrial sales

Bellingham

1962

135

Jerry McClellan

Superfeet Insole designer, manufacturer, and wholesaler

Ferndale

1977

116

John Rauvola

Family Care Network Bellingham Family practice, clinics, community connections

1999

370

423

Dr. Marcy Hipskind

Axiom Construction Construction and consulting

Lynden

2002

140

Tim Koetje

Mills Electric Electrical contractor

Bellingham

1911

170

200

John Huntley

Kam-Way Transportation Full-service transportation brokerage

Blaine

2008

Kam Sihota

Strider Construction Heavy civic construction

Bellingham

1988

100

110

James A. Gebhardt

$30-$35 MILLION 36

Tiger Construction Excavating and commercial building contractor

Everson

1974

Scott Isenhart

Saturna Capital Mutual funds manager and investor

Bellingham

1989

Jane Carten

Keith Oil Co Wholesale petroleum bulk station

Ferndale

1959

Sam Boulos/ Yanolla Boulos

Cowden Gravel & Ready Mix Provider of gravel, concrete, and insulated concrete forms (ICFâ&#x20AC;&#x2122;s)

Bellingham

1945

130

Steve Cowden/ Brent Cowden

Farmers Equipment Company Berry harvesters, farm & construction equipment

Lynden

1935

Kevin Pawlowski

Dewey Griffin Subaru New and used car dealership

Bellingham

1967

Richard Meyer

Wood Stone Wood-and gas-fired pizza ovens/commerical and home-cooking equipment

Bellingham

1990

125

133

Kurt Eickmeyer

Sound Beverage Distributors Wholesale beer, wine, and distilled beverage

Bellingham

1950

210

Dean Shintaffer

Faber Construction General contractor

Lynden

1987

Rick Faber

30 | BUSINESSPULSE.COM

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WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES 2016 Rank

2015 Company Rank

DariTech Farm equipment supplier

Location

Founded

Employees: Region Total

Top Executive

Lynden

1990

Dave DeWaard/ Ryan DeWaard

$25-$30 MILLION 46

Western Refinery Services Industrial maintenance and construction

Ferndale

1990

180

Billy VanZanten/ Ryan Likkel

Cascade Dafo Design and manufacture dynamic ankle foot orthoses (DAFOs)

Ferndale

1997

287

289

Cheryl Persse

Bellingham

1996

130

155

Tom Franzen

Brooks Manufacturing Distribution Bellingham Crossarms and transmission framing components

1917

John Ferlin

Yorkston Oil Oil company

Bellingham

1939

David Yorkston

Specified Fittings

HDPE & PVC pipe-fitting manufacturer

$20-$25 MILLION 51

DeWaard and Bode Applicance and mattress sales

Bellingham

1946

Jerry Roorda

Andgar Corporation Residential heating/AC, metal fabrication, metal and biogas digester technology

Ferndale

1935/1973

134

Todd Kunzman

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A shift in ownership, under the umbrella of holding company North Star, and a new CEO – albeit a familiar face – marked a steady year for this firm based on Smith Road near the Guide Meridian intersection. Tom Franzen took the CEO position in his 20th year with the company “since day one,” he said. As a minority owner he served as manager of operations through the years with the original owners, and one other ownership change before last year’s. Franzen said that a few new contracts helped keep business on an even keel while withstanding the impact of the drop in oil prices that hurt their industry.

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Bellingham

#48 Specified Fittings

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WHATCOMBUSINESSALLIANCE.COM | 33

WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES 2016 Rank

2015 Company Rank

Location

Founded

Employees: Region Total

Top Executive

Scholten's Equipment Agriculture and construction equipment sales

Lynden

1980

Duane Scholten

Bellingham Cold Storage Full-service public refrigerated warehousing

Bellingham

1946

160

Doug Thomas

Moncrieff Construction Concrete construction

Lynden

1992

Sam Moncrieff III

Lynden

1966

Dan Brim

Ferndale

1992

Rick Anderson

Hoagland Pharmacy Retail pharmacy, medical equipment, and respiratory services

Bellingham

1981

Mike Hoagland

Diehl Ford New and used car dealership

Bellingham

1908

Bob Diehl

Mt. Baker Imaging

Bellingham

1965

150

Dr. Matthew Studley

Ferndale

2001

Randy Hartnell

Brim Tractor

Farm and garden machinery Anderson Paper & Packaging Co. Paper, boxes, supply chain, and packaging solutions

Radiology image interpretation, and imaging during low-invasive surgery $15-$20 MILLION 61

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A family affair, from day one, 2016 marked a milestone as the 50th year since Bill Brim started the company. He brought the first hydraulic-arm Bomford mower to the U.S. from England, leading to a transformation in roadside and highway maintenance. Bill sold to one son, Alan. Alan and two other sons, Bob and Dave, computerized Brim Tractor, and they created Dealer Information Systems (DIS), another Top 100 local company. Alan sold Brim Tractor to brother Dan and his wife, Teresa, who own and operate this diverse company of equipment sales, parts, service, and rental. New Holland and Stihl are core brands. In 2000 Dan began expansion to five other locations moving down into Oregon.

Bellingham

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#56 Brim Tractor

C O M PA

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WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES 2016 Rank

2015 Company Rank

Location

Founded

Employees: Region Total

Top Executive

Roosendaal-Honcoop Construction Bellingham Full-service general contractor providing construction and pre-construction services

1979

Gary Honcoop

Woodstock International Inc.

Bellingham

1989

Shiraz Balolia

Dealer Information Systems Corporation Producer of business info systems for agricultural equipment, construction equipment, and lift truck dealerships

Bellingham

1980

Randy McIntyre

ProPack Supply chain management

Blaine

1991

100

Alex Synder

CityMac Apple computer specialists

Bellingham

1992

Bill Molnar

Barron Heating & Air Conditioning HVAC, and ventilation sales and service

Ferndale

1972

John Barron

Granite Precast Producer of precast concrete products

Bellingham

1985

100

105

Matthew Vaughn

Birch Equipment Rental & Sales Equipment and tool rental

Bellingham

1972

Sarah Rothenbuhler

Bellingham

1998

Anne-Marie Faiola

Bramble Berry Soap-making supplies

MSNW

Ferndale

1995

137

380

Janelle Bruland

Morse Distribution Metal service centers

Bellingham

1884

Mike Morse

Seeking Health Nutrition and supplements

Bellingham

2010

Dr. Ben Lynch

Manufacturing/wholesale distribution

General building maintenance, landscaping, and groundskeeping

$12-$15 MILLION 74

Dickerson Distributors Wholesale distributors of beer, wine, and spirits

Bellingham

1984

Kevin Dickerson

Western Forest Products Commercial distributor of lumber products

Bellingham

1981

Jon Maulin

ALRT Corporation Logging and road construction

Everson

1990

Bill Westergreen

The Woods Coffee Coffee shops and bakery

Lynden

2002

220

250

Wes Herman

G.K. Knutson Drywall cold formed metal framing

Bellingham

1997

Greg Knutson

TriVan Truck Body Manufacturer of custom-designed, specialty commercial-use truck bodies

Ferndale

2003

100

Marty VanDriel

Bellingham

1949

Aaron Brown

$10-$12 MILLION 80

36 | BUSINESSPULSE.COM

Larson Gross Certified public accountants & consultants

# 63 Woodstock International Inc.

W W

Shiraz Balolia’s 2nd Top 100 firm operates from the same complex as Grizzly, but formed independently six years later as a wholesale model. Grizzly sells direct-to-consumer. Woodstock supplies the leading hardware stores and dealers in wood-working and metal-working accessories. At the turn of the century, Woodstock created its own brand – Shop Fox – with a variety of more than a dozen specialized tools for workshops.

C O M PA

MCCOO CCOOM UU AATT HH

W W

TTYY NN

Top20100 16 A

Bellingham

MSNW

Shortening its name (formerly Management Services Northwest), Janelle Bruland’s company added management and admin support at the corporate office in Ferndale that sent employee count closer to the 400 mark. Last year in their three-state market (Washington, Oregon, Idaho) MSNW expanded its market share, “mostly with new client partners,” Bruland said. “With the worst winter storm season in 32 years in Washington and Oregon, our teams worked around the clock to keep our clients’ properties clear and safe.” MSNW stands as one of just two nationally-certified winter service providers in the industry, and the largest of its kind in the state.

TTYY NN

Top20100 16

Bellingham

#71

MCCOO CCOOM UU AATT HH

C O M PA

Janelle Bruland

WHATCOMBUSINESSALLIANCE.COM | 37

WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES 2016 Rank

2015 Company Rank

Location

Founded

Employees: Region Total

Top Executive

Bellingham

1984

Nick Ouilette

Bellingham Yacht Sales Yacht brokerage and charter service

Edaleen Diary Lynden Processing and distrubuting milk and ice cream from 2500 Holsteins, plus three retail stores

1975

101

250

Mitch Moorlag

Bellair Charters & Airporter Shuttle Bus transportation for airports and charter

Ferndale

1985

146

Richard Johnson

Bellingham

1992

102

James Hall

Northwest Health Care Linen Health-care laundry management services

All American Marine

Bellingham

1987

Matt Mullett

WesSpur Tree Equipment International retail in arbor equipment (for tree climbing, rigging, cutting, safety)

Bellingham

2004

Ryan Aarstol

Barkley Company Developing and leasing properties

Bellingham

1990

Stowe Talbot

Builder of high-speed, passenger, aluminum catamarans, survey craft, research vessels

$7-$10 MILLION 88

Elenbaas Company Fertilizer and horse feed supplier

Lynden

1941

Dennis Elenbaas

Erin Baker's Wholesome Baked Goods Wholesale baker and distributor

Bellingham

1994

Erin Baker

38 | BUSINESSPULSE.COM

W W

Six vessels under construction, a vast expansion in facilities, and 25 new jobs – that’s how AAM has catapulted into a strong 2017 on the momentum created last year. Recently, the company moved from Fairhaven into 3 buildings on the downtown central waterfront totaling 57,000 square feet. They’re finishing a 125-foot, 3-deck, 500-passenger tour boat for Argosy in Seattle. Among contracts last year was one for the U.S. Corps of Engineers. Their most recent contract is for a $7 million, 600-passenger, hybrid electric vessel, The Enhydra, for the Red & White Fleet in San Francisco. “We’re having a strong year,” Owner Matt Mullett said.

Top20100 16 TTYY NN

Bellingham

# 85 All American Marine

MCCOO CCOOM UU AATT HH

C O M PA

The Argosy Cruises touring boat.

WHATCOMBUSINESSALLIANCE.COM | 39

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES

PROVIDING ENERGY. IMPROVING LIVES. We’re committed to improving lives in the communities where we live and work. That’s why we support safety, preparedness and relief initiatives to mitigate the effects of natural disasters. We also contribute to local nonprofit organizations, encourage employee volunteerism and invest in programs aimed at improving science, technology, engineering and math education. We are the Phillips 66 Ferndale Refinery, and we’ve been a proud member of this community since 1954.

40 | BUSINESSPULSE.COM

CM 17-0441

2016 Rank

2015 Company Rank

Location

Founded

Employees: Region Total

Top Executive

American Canadian Fisheries Salmon procurement, processing, shipping, & wholesale/retail

Bellingham

1985

Andy Vitaljic

Chuckanut Bay Foods Wholesale gourmet cheesecake bakery

Ferndale

2008

David Loeppky/ Matt Roth

Lister Chain & Forge Manufacturer of ships anchor chain, navigational buoy chain, anchors & fittings

Blaine

1911

Michael Stobbart

Totally Chocolate Manufacturer of custom molded chocolate

Blaine

1993

Ken Strong

ECX (ecigExpress) Web based retailer of vaping products

Bellingham

2009

Timothy Furre

Bellingham Travel & Cruise Full-service travel agency

Bellingham

1967

Frank Zurline

Comphy Company Luxury linens and bedding

Ferndale

2003

Mia Richardson

Skeers Construction Master plan community home building

Bellingham

1985

Dick Skeers

MGM Solutions Information technology

Bellingham

2001

Shad Malone

Infusion Solutions Healthcare treatment

Bellingham

2010

Rowena Birnel

100 (T)

Lyndale Glass Window and door replacement and repair

Bellingham

1992

Dan Haan/ Dennis Bosman

100 (T)

Lynden Sheet Metal HVAC and plumbing service and repair

Lynden

1940

Bobbi Kreider

Learn more on our website, or contact Jon Strong at 360-746-0407 WHATCOMBUSINESSALLIANCE.COM | 41

WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES

Business Pulse magazine believes that the following companies (listed alphabetically) are part of the Top 100, but we were unable to confirm their 2016 numbers at press time: Company

Location

Founded

Company

Location

Founded

Allsop Consumer Electronics

Bellingham

1964

Bellingham

1913

Lummi Reservation/ Bellingham

1986

Builders Alliance Building supplies

Lummi Commercial Company Overall, for-profit business entity of the Lummi Nation

Colacurcio Brothers Construction

Blaine

1984

Lynden Door Door manufacturer

Lynden

1978

Dick Bedlington Farms Potato farming

Lynden

1972

Maberry Packing LLC Berry harvesting and processing

Lynden

1945

Bellingham

2003

McEvoy Oil Wholesale oil distributors

Bellingham

1932

Enfield Farms Berry harvesting and processing

Lynden

1977

Pioneer Foods Fast food restaurants

Bellingham

1997

Fast Cap Inc. Woodworking product innovation

Bellingham

1997

Samuel's Furniture Retail and interior design services

Ferndale

1981

Kona Bicycle Company Mountain bike manufacturer, distribution and full service center

Ferndale

TC Trans Cross-border transportation for companies unable to enter Canada

Blaine

1993

Emergency Reporting

Software for firefighters and law enforcement

1988

ONE LOAD AT A TIME. FOR 72 YEARS.

42 | BUSINESSPULSE.COM

ASPHALT PAVING • Grading • Parking Lots • Patching/Repairs • Recycled Asphalt • Porous Asphalt • Driveways/Roads

 CIVIL CONSTRUCTION • Scraping/Land Leveling • Underground Utilities • Structural Concrete

• Site Prep/Clearing • Environmental Cleanup • Excavation/Demolition

2380 Grandview Rd., Ferndale, WA 98248 360.366.3303 www.wrsweb.com

WHATCOMBUSINESSALLIANCE.COM | 43

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES

Navigating Successful waters

Allure of water runs deep for Bellingham Yacht founders By Tamara Anderson-Loucks

hat started as a small, three-person yacht brokerage in Bellingham over three decades ago is today a thriving fullservice, family-owned yacht brokerage and charter service. Owners Dean and Donna Ouilette and Dean’s brother Nick Ouilette have successfully navigated Bellingham Yachts through the sometimeschoppy waters of the pleasure boating industry, attributing success to hard work, perseverance, and a focus on their customers. Dean Ouilette said Bellingham Yachts is in the business of “facilitating fun on the 44 | BUSINESSPULSE.COM

Photos by Kevin Baier

water.” While Ouilette has had a love of the outdoors since childhood, his interest in pleasure boating was not seeded in his youth in Maine. The allure of the water and traveling the world drew him to the Merchant Marine Academy in Kings Point, N.Y. Following graduation in 1979 he joined the Merchant Marines. He and Donna moved to Bellingham, and he accepted a position as 3rd Mate aboard ARCO tankers (Atlantic Richfield Company). While he loved his time on the water, he grew tired of being away from his family.

WHATCOMBUSINESSALLIANCE.COM | 45

WHATCOM COUNTY’S TOP 100 PRIVATE COMPANIES

Bellingham Yacht Sales owners Dean (left) and Nick Ouliette.

With extensive commercial boating experience and a passion for spending time on the water, Dean and his wife Donna purchased Bellingham Yachts in June, 1984. Two weeks later Nick Ouliette, also a Merchant Marine Academy graduate and professional seafarer and engineer, moved to Bellingham and joined them. Dean Ouilette said, “We came into the business as professional mariners and had zero experience in the pleasure boat industry. But it’s worked out – that was 33 years ago.” Initially the company subsisted as a three-person brokerage operation selling used boats and as a bareboat charter service renting privatelyowned boats to persons qualified to operate a vessel on their own. Ouilette compared the bareboat charter service to “property management, but with boats.” In 1986 an opportunity came up for Bellingham Yachts to become 46 | BUSINESSPULSE.COM

a dealer for a unique yacht built in Delta, B.C., called West Bay SonShip. Four years later the team at Bellingham Yachts went in

“We came into the business as professional mariners and had zero experience in the pleasure boat industry. But it’s worked out – that was 33 years ago.” – Dean Ouilette, Co-Owner, Bellingham Yachts

search of additional quality lines to represent, and in 1991 they became a dealer for Sabre Yachts of Raymond, Maine. Bellingham Yachts now ranks as the second oldest dealer in Sabre’s domestic and international dealer

network. Bellingham Yachts has earned Outstanding Dealer of the Year five times, and Dean Ouilette was awarded the prestigious Sabre Yachts Broker of the Year for top sales achievement in 1996 and 2006. In ‘96, Bellingham Yachts became a dealer for Back Cove Yachts, a sister company to Sabre in Rockland, Maine, and most recently for Cutwater Boats, a family-owned boat manufacturer located in Monroe, Wash. “It’s no coincidence we offer two lines manufactured in Maine. We grew up in Maine, and wanted to introduce the quality of Mainemanufactured boats to the Pacific Northwest,” Ouilette said. “All the boat lines we offer have great synergy. They complement each other, and it’s been really helpful to have a variety of sizes and price ranges for people to look at.” Bellingham Yachts has 12 fulltime employees, plus some part-

One of the many boats available for purchase from Bellingham Yacht Sales, the Cutwater series.

time employees and contractors. This past February they opened a second location – at the Port of Everett – to better serve their large client base in the greater Seattle area. “People are busy,” Dean Ouilette said. “If they’re going to buy a boat or need to service their boat, it’s difficult to make the time to drive to Bellingham. We wanted to make it easier for our customers. Since we opened we’ve sold four boats we may not have sold otherwise, so the Port of Everett proved to be a great choice of locations. The Port was very welcoming, and it’s encouraging to be welcomed by a public port in that way.” While Bellingham Yachts has prospered during its three decades in business, it wasn’t always easy. The Ouilettes had to manage economic downturns that severely impacted the viability of the pleasure boating industry. Many brokerages shuttered.

“The luxury tax years in the early ‘90s almost single-handedly destroyed the boating business, with 45,000 jobs listed in an 18-month period,” Dean Ouilette said. “That,

“We also recognize that there are lots of options for discretionary spending, so we strived to take great care of our customers and their boats.” – Dean Ouilette, Co-Owner, Bellingham Yachts

plus the recession after 9/11 and the most recent recession – it’s a challenging business.” Ouilette attributed their survival to his faith, his experience in the Merchant Marine Academy, the company’s conservative fiscal man-

agement, and their relationships with their customers. “I believed God would take care of us, and going through the academy is very difficult,” he said. “You develop the ability to persevere. We also recognize that there are lots of options for discretionary spending, so we strived to take great care of our customers and their boats.” He said that during the latest recession “we had many customers call to ask if we were okay. That says the world to me, because they didn’t have to take the time to do that. It’s those relationships that sustain us.” After 33 year of relationship building, the Ouilettes have helped to create fond memories for many generations of families in Bellingham and throughout the Pacific Northwest.

WHATCOMBUSINESSALLIANCE.COM | 47

WHATCOM COUNTYâ&#x20AC;&#x2122;S TOP 100 PRIVATE COMPANIES

CONGRATULATIONS TO THE Privately-held Companies Privately-held Companies

PRIVATE BUSINESSES

NORTHWEST Energy | Agronomy | Retail

48 | BUSINESSPULSE.COM

Driving Economic Prosperity in Whatcom Country

WHATCOMBUSINESSALLIANCE.COM | 49

STEP UP ADVOCACY : INTRODUCTION

By BUSINESS PULSE & WBA STAFF

n September 2016 the Board of Directors of the Whatcom Business Alliance (WBA) launched its “Step Up for Business” campaign, a commitment to one of the WBA’s core missions – advocacy on behalf of Whatcom County business in public policy issues.

The ongoing campaign provides local companies of all sizes, from single proprietors to the largest employers, an opportunity to participate in the vitally important process of engaging proactively in matters that impact their welfare. The campaign raises funds specifically to support projects and initiatives in the areas of business advocacy, research, and education. Local policy issues center largely around government regulations at the local, state, and national level. The WBA and Business Pulse magazine are committed to raising awareness and informing everyone of the 50 | BUSINESSPULSE.COM

potential impacts of activity taking place in the halls of government. The impact of water rights, land use, taxation, permitting, etc., shape the success of the business climate and economy permeating Whatcom County. The health of our business climate affects our entire community prosperity. The WBA works with its membership and with other organizations to support policy decisions that are good for the business community. The WBA board and membership believe in making well informed recommendations to business leaders and policy makers, and therefore works closely with Western Washington University researchers at the Center for Economic and Business Research. We commission studies on issues that most influence our business community. Results to date include an economic impact study on Cherry Point heavy industrial area and a contribution analysis of the agribusiness sector in Whatcom County. Another key element to the health and well-being of Whatcom

County’s business climate is the quality of the education system – from K-12 to post-secondary. In September this year the WBA will hold a Youth Engagement Initiative kickoff event, bringing together more than 400 high school students from around the county to hear from a group of dynamic local business leaders about what it takes to be a successful employer and employee. The Initiative will continue throughout the year with the inclusion of a Junior Achievement “Job Shadow” curriculum and on-site industry tours for participating high school students. The following articles give you a sense of the range of issues with which the WBA is engaged and the level of importance they have in the health of our economy. These analyses and features support the WBA’s and Business Pulse magazine’s commitment to providing documented, keen insights for advocacy on behalf of business to the benefit of a civic-minded citizenry.

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WHATCOMBUSINESSALLIANCE.COM | 51

STEP UP ADVOCACY : ANALYSIS OF HOUSING IN WHATCOM COUNTY

Do local policies constrain local housing? Developers, realtors say yes Article and photos by Cheryl Stritzel McCarthy

Bellingham ranks among the least affordable cities in the nation, comparing housing costs to local incomes. Are local governments’ policies contributing to that? The median home in Bellingham costs 7.3 times more than the median income here. Nationally, a typical home costs 3.4 times the annual household income (reference: 24/7 Wall St., June 2016). That’s a big reason why Bellingham landed on this financial news organization’s list of 50 worst cities to live in. Housing (and would-be buyers) suffers needlessly due to local governments’ growth-management policies, contends R. Perry Eskridge, executive officer and government affairs director of Whatcom County Association of Realtors. One reason is the decision to disallow some land just outside Bellingham into the urban growth areas (UGAs), a first step to getting into the city limits. “This has prevented a large portion of developable land from being brought 52 | BUSINESSPULSE.COM

into city limits,” Eskridge said. The city does not extend services, such as water and sewer, to areas not marked for annexation into the city. An example: the South Yew Street area (south of the Whatcom Falls neighborhood and east of Samish Way, around Wade King Elementary School). This area was

“Sprawl must be contained through planning based on reality, not hope.” – R. Perry Eskridge, executive officer and government affairs director, Whatcom County Association of Realtors

in the UGA in the 1995 comprehensive plan, but in 2009 the area was taken out—after other entities had made financial inputs. “They’ve gerrymandered our area out of the UGA,” said Cal Leenstra, a developer and realtor who’s been trying to develop that parcel 20 years since it was reclassified in 1997. “Look at

the map. There’s a bite out of the apple.” When South Yew Street was in the UGA, Leenstra and others spent thousands on legal, planning, and engineering preparation work that included wetlands studies. “We even did a study to see if there are any bats around there. Those are upfront costs. You can’t borrow for that. You spend your own cash.” The County Council removed the South Yew Street area from the UGA, though both city and county planning commissions voted to keep South Yew Street in. The county determines UGAs, Leenstra said, but “the cities have a lot of input into where they want their UGA. We were hosed big-time, along with every potential purchaser of a moderately priced home, by the City Council.” Before the shift South Yew Street was zoned for about 4-6 housing units per acre. Now it is one unit per 10 acres. “It’s ridiculous,” Leenstra said. “You can’t

R. Perry Eskridge, executive officer and government affairs director, Whatcom County Association of Realtors, in the South Yew Street area. Wade King Elementary School is behind and to the right of Eskridge.

WHATCOMBUSINESSALLIANCE.COM | 53

STEP UP ADVOCACY : ANALYSIS OF HOUSING IN WHATCOM COUNTY

“We were hosed bigtime, along with every potential purchaser of a moderately priced home. It’s ridiculous. You can’t develop land at low, low density. It’s a designation to prevent development….” -- Cal Leenstra, developer and realtor

develop land at the low, low density. It’s a designation to prevent development, as far as we’re concerned.” He said he views the zoning change as government taking property without giving any compensation. Leenstra, with others, previously developed Samish Highlands, which he termed “arguably one of the finest residential areas in

Bellingham.” That South Yew Street area would have offered less expensive houses. “This area is adjacent to city limits and surrounded by public facilities, such as Wade King School and the golf course. There are a hundred lots adjacent to our area. This is an urban area,” Leenstra said. “We could have built 300 homes there, a good thing for middle-income families. But they’re getting more expensive as the government delays (development).” Bellingham home prices rose 8 percent from 2014 to 2015, and another 11.4 percent over the last year, with a 2.3 percent rise predicted this year (reference: Zillow). Rents reflect this, too, with Zillow and apartmentlist.com studies reporting that local rents rose 5 percent over the last year. Among new apartment buildings going up, many are pegged for age 55-plus, students, or low-income, government-assisted renters,

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Eskridge pointed out. Bellingham’s inventory of single-family homes for sale is painfully low, according to realtor reports, pushing prices ever higher. During March this year Bellingham had only 95 homes for sale, which translates into two months’ of inventory. A balanced market typically shows six months’ inventory.

“Bellingham’s potential homebuyers don’t want what the city says they should have.” – Cal Leenstra, developer and realtor

In March all of Whatcom County, including Bellingham, had 515 active listings – down 40 percent compared to the same time last year (reference: Northwest Multiple Listing Service). For Whatcom County the median house price was $200,000 five years ago, and $304,000 one year ago, more than a 50 percent rise across just four years. “(Local governments) are exacerbating the problem,” Leenstra said. “Instead of making more land available for moderate housing, they’re restricting the supply. They tell people to live downtown, but people don’t want to.” National studies show three out of four potential homebuyers want a single-family house. Local government policies try to route Bellingham’s expected growth into multi-family units. If that’s the only alternative, people will move out of town, which is the current trend according to the Building Industry Association of Whatcom County. Eskridge agrees local governments’ push toward multi-family units in the city core is forcing single-family housing into rural areas. “This sprawl must be contained through planning based on reality, not hope,” he wrote in an August 2016 document to the city council.

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WHATCOMBUSINESSALLIANCE.COM | 55

STEP UP ADVOCACY : ANALYSIS OF HOUSING IN WHATCOM COUNTY Leenstra pointed out that longer commutes to work requiring more gas, tires, and roads are the antithesis of the Washington State Growth Management Act. The GMA, enacted in 1990, aimed to protect natural lands while designating urban growth areas. The GMA was a great idea 27 years ago but its implementation today by various counties leaves much to be desired, Eskridge said. One problem is “concurrency,” the idea that infrastructure and utilities should keep pace where development is to occur. The cost of infrastructure within a development is borne by the developer, but the city must first ensure existing infrastructure can accommodate new additions.

“Housing—and wouldbe buyers—suffer needlessly.” – R. Perry Eskridge, executive officer and government affairs director, Whatcom County Association of Realtors

Eskridge said the city is currently facing a deficit between $93 million-$130 million in existing infrastructure. “Before the city could declare that existing water, sewer, streets, etc., were ready to be connected to potential development in South Yew Street and the Caitac property (just north of city limits),” he said, “the city would have to invest that amount in existing systems to even be able to work with anticipated improvements.” Bellingham can’t meet its population projection under current circumstances with the existing, limited UGAs, Eskridge said. Hence local government’s reliance on future multi-family units in Bellingham’s “urban villages.” 56 | BUSINESSPULSE.COM

Positive examples are Fairhaven and Barkley Village. But he said economics don’t support it elsewhere in the city, such as the Fountain District, Sehome, Cordata, or Sunnyland. Older areas won’t command the high rents that make the model work, and too many present landowners make cohesive development problematic. Urban villages succeed when highly paid, millennial tech workers or affluent retirees pay for proximi-

ty to abundant neighborhood amenities. In Bellingham this perceived urban hipster is largely fictional, Eskridge said. “Bellingham’s potential homebuyers want a single family home,” Leenstra said. “They don’t want what the city says they should have.”

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Builders need

SUPPLY By Cheryl Stritzel McCarthy

ity, county, and state policies are cinching a noose tighter around Bellingham’s supply of buildable land, forcing higher home prices.

“We have to have more supply, so the market can function,” said Dick Skeers, owner of Skeers Construction Inc. Policies, including from Department of Ecology and the Growth Management Act, set up a scenario where citizens appear likely to become either rent-paying tenants or owners of very expensive single-family homes, according to Dave Monks, senior vice president at Skeers Construction. “If you want to build a hundred houses, it takes an incredible amount of resources just to get your application: civil engineers, geologists, storm water specialists,” Monks said. “In the city of Bellingham the easy lots are gone. Now there’s hillsides and heavy rock. It’s not for the faint of heart.” A consistent message from builders is that it takes years to get permitted for a subdivision. Monks said, “You have to go through an incredible number of hoops. It costs so much time and money just to get an answer of yes or no.” One huge change has taken place in permit fees, Skeers said. Twelve years ago, when his company built The Highlands Phase One (southwest of Lakeway Drive and Yew Street), the permit package for a house cost $5,800. The average permit package for a house now is $25,000 to $35,000 – a 500-600 percent increase, give or take. That permit package includes a certain size of meter service, based on the amount of plumbing in the house. If plumbing increases, so does the fee. For example, add two hose bibs to a 2.5-bath home, and you get charged another $7,000 in fees, by Monks’ calculations.

Dave Monks (left), senior vice president, and Dick Skeers, owner of Skeers Construction, Inc., are building the company's Hannah Creek subdivision in phases. The project is south of Lakeway Drive and north of Galbraith Mountain Park. (Photo by Cheryl Stritzel McCarthy)

“The more environment-driven regulations, the higher the price of the new home,” Skeers said. Meanwhile, the price of once affordable existing homes spirals ever higher. Monkss said that the public generally doesn’t realize that developers incur all costs for land they develop, including storm water, sewer, water, roads, sidewalks, rockeries, street trees, and all utilities. The developer pays to annex a new subdivision into the city. To concentrate density, city policy promotes a 70 to 30 percent ratio of multi-family to single-family dwellings, Monkss said. “The irony to this approach is they’re pushing people to the fringes, which is what the Growth Management Act didn’t want. Lynden, Ferndale, and Blaine are all at record levels of building.” Of Skeers’ company’s 19 employees, just three live in Bellingham. “No one can afford to live here,” he said. “Instead of city apartments, our employees go to Ferndale. The majority of our (Bellingham) new-house customers are empty nesters who bring equity from someplace else.” Monkss said, “We need balance between environmental regulation and single-family housing needs. Right now it’s out of balance. Home ownership is an overall economic benefit, important for the stability of the country. When people are invested in the community, as with a mortgage, it shows.” Skeers reiterated, “The lower the homeownership rate, the worse for the community. I take pride in creating nice communities.” WHATCOMBUSINESSALLIANCE.COM | 57

STEP UP ADVOCACY : ANALYSIS OF HOUSING IN WHATCOM COUNTY

The Planner By Cheryl Stritzel McCarthy

ick Sepler, planning and community development director, city of Bellingham, addresses concerns. Q. Why are South Yew Street and (a portion of) the Caitec areas not in the Urban Growth Area (UGA)? We didn’t need them to accommodate population growth projections. I understand a number of folks have asserted that our numbers are wrong. If growth is greater than we anticipate, or if we can’t get other areas, that’s the first place we’d look. Q. Didn’t the planning commission recommend them? They did. The planning commission used the high population forecast. Our council went with the medium forecast. Q. What would it cost the city to bring its existing infrastructure up to standards, so development in South Yew and Caitec could proceed? It would cost from $76 million to $113 million over 20 years. Urban services are greater than rural services. If we annex, we in the city have to extend our level of service – such as sewer, water, and fire service – throughout the area. We have faster response for fire service than in the county. Yew Street would need to be rebuilt to match its northern part, with shoulders, bike lanes, sidewalks, and curbs. We can’t ask new development to pay for preexisting deficiency. Will the city as a whole carry the cost for that area? Or will we find another device to allocate that fairly? Areas characterized by urban growth but without urban services are common throughout the state. It’s not just Bellingham. We’re committed to find a way to bring them in. Yew Street and Caitec are first on deck. There aren’t other places for us to expand. Q. Why the zoning change in South Yew Street area to one house per 10 acres? When Whatcom County took it out of the UGA, the County zoned it rural. If it’s not part of the UGA, it is zoned for larger parcels. That’s what growth management requires. It was previously six to 10 dwellings per acre. I wasn’t here when that decision was made. Q. Wasn’t Wade King School built with the expectation of higher density? Yes. They assumed there’d be six-to-10 dwelling units per acre. 58 | BUSINESSPULSE.COM

Rick Sepler, planning and community development director, City of Bellingham

Q. It’s been said urban villages won’t succeed in many areas of Bellingham because they’re unlikely to command high rents. Your view? Our urban villages are Waterfront, Old Town, Fountain District, Samish Way, Downtown, and Fairhaven. We think urban villages are working just fine. Since 2006 about 45 percent of all new units in Bellingham have been in urban villages. They won’t all develop at the same rate, but we have had some profound successes. To be fair, we’ve also had some (urban villages) that haven’t seen much activity at all. The city is focusing its efforts to jump-start those. Q. Some sources say the city contends that a majority of new residents want apartment living. How does this jibe with studies showing that most people want a single-family home? Desires and economic reality are two different things. We see an increase in property values but not in incomes. By 2036 Bellingham will have 50 percent multifamily and 50 percent single family homes. The former include duplexes, triplexes, and townhouses. It’s not the notion that everyone’s living in a tower. We’re seeing increasing numbers of folks who are willing to change their house form.

Q. Some charge that the city’s reliance on urban villages is forcing development out, contributing to sprawl. Your take? The community vision is to preserve diversity of housing types in our neighborhoods, thus to avoid all of us paying to subsidize less efficient development on our outskirts. That doesn’t contribute to sprawl. It’s anti-sprawl. We see neighborhoods with a judicious blend of single-family homes, duplexes, maybe row houses. The comprehensive plan is for vibrant development. Reporter’s Note: Answers edited for brevity.

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STEP UP ADVOCACY: OPINION ON GROWTH

Growth in Whatcom County under attack? By Jim McKinney

re Whatcom County residents under attack by our elected government officials over farms, jobs, and property rights?

Does collusion exist among environmental activists, progressive ideologues, and local and state government to stop county growth? Do local and state leaders not care about rural residents and local businesses? To many who feel under siege, these are rhetorical questions with a resounding answer, “Yes!” Still, consider some interesting points before you decide: During the last year the Whatcom County Council, the regional Growth Management Hearings Board (GMHB), the Washington State Supreme Court, and Gov. Jay Inslee made decisions that directly hurt local farmers, key job providers, property owners, and working families in our little corner of paradise. Those bureaucratic leaders’ weapons of choice are water, planning, infrastructure vetoes, and progressive environmental activism and threats. Several major decisions contributed to negative outcomes and backlash. 60 | BUSINESSPULSE.COM

The first major blow: • The Whatcom County Council hurriedly enacted a building moratorium in October 2016 immediately after they lost the Hirst decision in the State Supreme Court, and renewed the moratorium once this year. Centered on water wells, the decision almost completely halted Whatcom rural development. The moratorium rendered as many as 3,400 lots that are dependent on new domestic wells as nearly useless. That reduces property values by as much as 70 percent, according to the County tax assessor – nearly a $200 million loss to owners. • The regional GMHB ruled in favor of Futurewise/Hirst. But, a state Appeals Court found no legal basis and ruled against the GMHB. According to the state Department of Ecology (DOE) experts and their statistics, to numerous hydrologists, and to water rights lawyers domestic-use wells account for less than 1 percent of total County water usage. No credible study supports claims that Whatcom domestic-use wells impact “instream flows.”

• The Washington State Supreme Court overturned the Appeals Court. The Whatcom County Council had seven months - until May 2017 - to find a solution. Instead, most members of the Council voted quickly for a halt in building permits in October 2016 and stifled rural development with no financially reasonable solutions. The Council punted the problem to the State legislature. However, no sitting County Council member has testified in Olympia to support a simple, bipartisan-approved solution. Senate Bill 5239, co-sponsored by Sen. Doug Erikson (R., Ferndale) sets the clock back to pre-Hirst, a simple fix. Gov. Inslee and House leaders have said the bill is not a priority. It seems the County Council, the progressive-controlled House, and the governor don’t care about the thousands of innocent people affected. Some distressed families and many small businesses are squeezed in the middle of this political power struggle between progressive environmentalists and rural development. Many reportedly have lost their life savings and/or life-long investments.

The second strike stifling growth: • On May 16, 2017, the County Council adopted amendments and finalized the County Comprehensive Plan (CCP). The plan, like the Hirst moratorium, attacks growth, but this time specifically in the designated heavy industrial zone at Cherry Point. In a 6-1 vote, council members voted to restrict developing a new, already approved export pier, to restrict growth of the existing refineries, and to fund a study to review alternatives to the County’s largest and highest-paying wage providers. The council continued to seek ways to transition away from energy job providers. Following the County Council’s vote to approve the amendments, the environmental group RE Sources for Sustainable Communities claimed victory in a fund-raising memo. Strike three (but not out): • On May 17, just one day after the County Council approved the growth-killing Comp Plan, Gov. Inslee announced his veto over a $12 million interchange project in Blaine. The I-5 Exit 274 represents a critical requirement for future development in the economically-challenged small town of Blaine. The governor claimed that the veto was due to an information technicality, though back in 2015 he approved a $45 million project at the same location with the same information. Why? Yet another strike: • Activists had success with Hirst. Now, with the County Council and County Planning assistance, activists have turned their efforts toward increased regulation on water-quality standards for local farms. Existing regulations are so restrictive that many farmers have been struggling. Even tighter restrictions will force many out of business.

Seasonal wetland buffers have been an issue; buffers reduce usable farmland. In farming, land equals production. Less production means lower yields, and thus less income. The County Council is considering making seasonal buffers permanent. Other areas of pending regulation cover animal natural waste flow, and non-permeable surfaces. Many farmers are speaking out loudly about new rules that could bankrupt them.

The governor, the state Supreme Court, GMHB, and our elected County Council have sided with environmental lobbyists such as Futurewise and RE Sources. In each above cases, they sided against local, protesting people. Progressive activists – not voters – appear to control elected officials. Activists and their political hacks keep attacking small and large business growth, farmers, and family wage jobs. Shortsighted agendas

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STEP UP ADVOCACY: OPINION ON GROWTH and fear tactics will make Whatcom County less appealing to new businesses and will continue to hurt property values, affordable housing, farms, and the local economy. People who love this county want to protect it. They want to balance the environment and economic vitality. They want to protect our quality of life. Local business owners understand this, but many are silenced by aggressive media, political rhetoric, and threats. Business leaders fear that activists will target their businesses. Some have spoken of threats. Stand.Earth (formerly ForestEthics. com) recently took aim at Whatcom Business Alliance members. All of this is unacceptable in a civil society, and disturbing. How do businesses and average citizens fight back? Unify, and vote. Tell friends and neighbors to vote. Become informed; know what is happening before ideologues cost you your livelihood. Become part of the counter-movement Wake Up Whatcom County! The fight is on. Whether you like it or not, believe it or not, you are under attack.

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WBA UP STEP ADVOCACY ADVOCACY : ANALYSIS : HIRST DECISION/PROPERTY TAX IMPACTS

State Supreme Court ruling results in multimillion-dollar property tax loss By Tamara Anderson-Loucks

he majority of Whatcom County property owners can thank the Washington State Supreme Court for causing a rise in property taxes as fallout from devaluation of some rural properties. Those rural properties may be deemed undevelopable because of lack of access to water.

UNDERSTANDING THE HIRST DECISION

According to official documents, on October, 2016, the Washington State Supreme Court ruled in Whatcom County v. Hirst, Futurewise, et al., that Whatcom County’s comprehensive plan failed to protect water resources adequately, as required under the state’s Growth Management Act (GMA). The ruling basically eliminates the category of permit-exempt wells – the classification for personal-use wells. The ruling makes it nearly impossible for landowners This all took root in what’s commonly referred to as to dig wells. In order to receive a permit to dig a well on the Hirst decision (October, 2016) that the high court their property the owners must prove that not a single rendered against Whatcom County and the Western drop of water would be diverted from instream flows. Washington Growth Management Hearings Board. An instream flow is a water right applicable to Because some landowners can’t develop their property streams and rivers that preserves instream resources, without access to water, they will incur a significant loss e.g., a fish habitat. In short: No proof of avoiding water in market value, therefore decreasing the assessed value from instream flows, for purposes of deterno well. No well, no mining property taxes. “Unfortunately, many representatives who water access, no buildThe amount of proping permit. represent urban areas believe the Hirst decision erty taxes collected by Since the Hirst the county’s districts is simply a water rights issue. By not passing decision in which it and from approved was the respondent, legislation to mitigate the Hirst decision, many levies will not decline Whatcom County with a loss in assessed once-developable properties are now basically the Council has passed value. Rather, the tax several temporary no more than recreational properties, because burden is shifted onto moratoboth developed and property owners cannot dig a well. They don’t short-term riums on issuance of developable properties, permits for new private understand it will impact property values, then both residential and the latest ordicommercial, to generate ultimately property taxes, causing a tax shift.” wells; nance for a six-month the established tax base moratorium passed on for that year. --State Rep. John Koster (R., Arlington) April 18, 2017. The In other words, ordinance does not property owners lose all offer vesting for people the way around. Some who began the building permit application process prior by devaluation. Some by assuming more tax burden to to the effective date of the Supreme Court ruling. make up for the hit on devalued property (hence lower Banks will not issue loans to develop and build on taxes paid). a property with no available water, rendering that land 64 | BUSINESSPULSE.COM

This photo by Whatcom Family Farmers shows typical farmland that could be impacted by new water restrictions.

nearly worthless and resulting in a significant loss in market value. And here’s the rub – yearly property tax rates are established and cannot decrease.

DAUNTING TASK AHEAD FOR COUNTY ASSESSOR County Assessor Keith Willnauer has addressed this situation often in public and group appearances. He said in an interview with Business Pulse, “People need to understand that something’s happened that affects the highest and best use of some properties, which will affect market value. From the perspective of assessed value and property taxa-

tion, this is the basic connection to the Hirst decision.” According to Willnauer, the role of the assessor is to discover, to list, and to appraise property and determine true and fair market value, creating a property’s legally-assessed value. The question then becomes how does he arrive at a true and fair market value for properties now deemed undevelopable by the restrictions of the Hirst decision? “When being evaluated, every property is affected by a myriad of considerations,” Willnauer explained. “When something changes dramatically it can severely impact the property. The assessor has the statutory

responsibility to represent that in its best analysis – taking into consideration all factors that impact true and fair market value.” The court’s decision 21 months ago affected the county’s target date to complete valuation this year for 115,000 properties. It takes considerable time to assess properties; the process must consider the usual impacts to valuation, plus the added impacts from the Hirst decision. The assessor’s office is training appraisers, collecting information, and gathering all the data needed for market evaluations. The local government and real estate and building industries are working on WHATCOMBUSINESSALLIANCE.COM | 65

WBA UP STEP ADVOCACY ADVOCACY : ANALYSIS : HIRST DECISION/PROPERTY TAX IMPACTS impact people feel immediately upon discovering their property may be affected,” Willnauer said. “We ask that everyone be patient with us. We are committed to analyzing circumstances and determining and applying impact to market value correctly.” Valuation started at noon on Jan. 1, 2017, and will carry on through October, when the Assessor’s office will email revaluation notices to property owners.

A SHIFT IN TAX BURDEN LOOMS AHEAD

Whatcom County Assessor Keith Willnauer

economic studies and sharing findings with the assessor’s office. “Unfortunately, the time to adequately assess the impacts of Hirst can’t compare to the emotional

Concerned politicians at both the County Council and state levels asked Willnauer for an estimated accounting of residential property valuation loss and property tax shift. He doesn’t yet have enough concrete data in Whatcom County to make a full analysis. So Willnauer contacted Skagit and Kittitas County assessors, who have worked on revaluations for similar

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“Unfortunately, the time to adequately assess the impacts of Hirst (decision) can’t compare to the emotional impact people feel immediately upon discovering their property may be affected…. Be patient with us. We are…applying impact to market value correctly.” --Keith Willnauer, Whatcom County Assessor circumstances during the last yearand-a-half, to discuss their interpretation of market impacts in their areas. Skagit and Kittitas data, combined with Whatcom County assessor analysis, showed that conservatively, 2,300 properties in Whatcom County may be devalued up to 70 percent. An additional 1,170 properties on acreage that may already have a residence could be devalued just up to 30 percent because zoning requirements indicate the potential for future development, yet the property might not be developable under Hirst. “We saw plunging prices after the moratorium, and a lot of real estate listings were pulled. People can’t take that kind of bath,” Willnauer said. “Many have chosen to hold on to their properties in hopes of mitigation. We do not have a lot of recent market data to compare price points with between developable and undevelopable properties. We need to find comparables – valuation is not a dart board.” The total assessed residential property values in Whatcom County is estimated at approximately $271 million, with an estimated assessed value loss of

between $152–186 million. This equates to an estimated $2,197,161 million loss in property tax revenues that must now be shifted onto other property owners. Residential homeowners in rural Whatcom County may see an added $21.54-26.54 per $250,000 of assessed value for 2018 property taxes. City taxpayers may see an additional increase of $14.17-18.09 per $250,000 of assessed value. “While this may not seem like a lot, this is in addition to any tax increase due to increased assessed value of a property, plus any increases from applicable levies,” Willnauer said. “For some, the increase in taxes may be difficult to absorb.” Willnauer suggests that anyone who feels their property might be affected by the Hirst decision, or who has additional information that should be considered in revaluing their properties should contact the assessor’s office as soon as possible. His staff wants all applicable information affecting property valuation. The Assessor has not estimated impacts to commercial property valuations.

received any applications for permit-exempt wells with mitigation plans.

LEGISLATIVE RELIEF STALLED IN THE HOUSE Unfortunately, the Hirst decision does not affect only Whatcom County; rather, the ruling has potential impacts throughout the state. Two legislative fixes have been proposed, though both are held up in the House.

The Hirst decision puts the burden on homeowners to prove water availability before the County will issue a building permit. State Rep. John Koster (R-Arlington) said that under Senate Bill 5239, the onus to prove water availability would fall solely on the Washington Department of Ecology, effectively reverting back to pre-Hirst decision status quo. The bill stalled in the House Agriculture and Natural Resources Committee.

MITIGATION OPTIONS FOR AFFECTED PROPERTY HOLDERS Two mitigation options are available for property owners in limbo because of Hirst: • Conduct a hydrological study to prove zero impact on minimum instream flows. • Build a rainwater catchment system. Both options are expensive, and Willnauer indicated that even with those options it is difficult to prove that property development would have no impact on instream flows. Skagit County recently had a case where a hydrological study was successful, and the property was changed to developable status. According to Whatcom County Environmental Health Supervisor Mike Kim, the county has not

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Earlier this year, Rep. Koster and Rep. Jacquelin Maycumber (R-Republic) co-sponsored House Bill 2195, which would provide property tax relief to Hirst-affected property owners. The bill would require that, in determining true and fair market value, reassessment take place within one year of a federal or state appellate court ruling that impacts water rights for any real property. If taxes were paid at a higher rate, then under Bill 2195 those taxes must be refunded to the property owner. Koster said the bill went to committee and has not had a hearing. “It’s breathing slowly,” he said, “but it’s not dead.” “Unfortunately, I feel many representatives who represent urban areas believe the Hirst decision is simply a water rights issue,” Koster said. “By not passing legislation to mitigate the Hirst decision, many once-developable properties are now basically no more than recreational properties because owners cannot dig a well. They don’t understand that it will impact property values, then ultimately property taxes, causing a tax shift.” If legislation passes – HB 2195 and SB 5239 – the impacts from the Hirst decision could be rendered moot. However, the County Assessor’s office must proceed based on valuation impacts in place currently. Koster said the biggest issues in the legislature during the last year were driven by the Supreme Court. “I feel that the Hirst decision was politically-based, more than factbased,” he said. “Because it was estimated that permit-exempt wells at a maximum use would represent .09 percent of groundwater. The Supreme Court looks at what is in front of them, but does not consider the unintended consequences of their rulings. If we don’t get this fixed, the economic impact will get bigger a lot faster.”.

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WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE VIGNETTES

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arms sprawl across the landscape, especially dairy and berry, scattered throughout Whatcom County. And venues such as the Northwest Washington Fair in Lynden and annual farm tours offer residents brief snapshots of lowing cattle, produce growing in fields, and sweet samples of fresh blueberries, raspberries,strawberries, milk, and ice cream.

Rural scenes. But underneath them lurks the question: “What is the role and importance of agriculture in the regional economy?”Hart Hodges poses that query within his work as co-director of Western Washington University’s Center for Economic and Business Research (CEBR). He has found that the occupations needed to produce and sell food operate year-round, and involve diverse services from transportation, to storage and machinery, to financial and insurance services, to education, to agencies that oversee compliance with governmental regulations, land sales, and employment. In short, the agriculture sector locally is more vast economically than its acreage. WHATCOMBUSINESSALLIANCE.COM | 71

WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE VIGNETTES

Seed potato farming thrives among the varied crops of Whatcom County. (Photo courtesy of WFF.)

CURRENT FARM STATUS “We see the numbers of farms increasing, but the size of the farms shrinking,” James McCafferty said. He joins Hodges in directing the CEBR. Figures from Whatcom County’s 2012 Census for Agriculture showed the number of farms increased from 1,483 (2007) to 1,702 (2012). However, the average size of a farm dropped from 69 acres to 68 acres, and farmers saw the average market value of products they sold decrease from $220,128 (2007) to $209,937 (2012). That represents roughly a 4-5 percent drop. Hodges wonders how the local economy would fare if, say, 10 farms ceased to exist, and if that 72 | BUSINESSPULSE.COM

loss would pose a difference to the agriculture-related industries who support farming. Hodges and McCafferty are currently researching and compiling data to answer to those questions.

“We see the numbers of farms increasing, but the size of the farms shrinking.” -- James McCafferty, Co-Director, Western Washington University Center for Economic and Business Research

FARMING HISTORY European-descended immigrants who settled in Whatcom County in the mid-to-late 1800s hewed out

farms on newly-logged land, growing produce such as potatoes, hops, sugar beets, lettuce, and celery for retail markets, according to Janet Oakley’s online “Whatcom County – Thumbnail History.” Transporting those products to market involved a jolting ride by wagon over dirt and, later, plank roads, or taking a boat down the Nooksack River.

TODAY In 2017 motorized vehicles haul feed, seed and hay, and transport produce, dairy, and meat from farms to canneries and food processors and retailers. Mark Ruiter is general manager for Martin’s Feed, the Lynden-based company founded by his father, Martin Ruiter in 1971.

DandelionOrganics.com in action on packing day (Photo by Kevin Baier.)

“Our business is almost completely agriculture-related,”Mark Ruiter said. “We have a significant customer base in Whatcom (County), particularly in the dairy industry.” The equipment includes hopper trailers and a fleet of various trucks to haul locally- and regionally-grown foods in bulk. Martin’s also delivers silage and compost products in Whatcom County and to customers around Washington, Oregon, Idaho, and across the U.S.-Canadian border to British Columbia. Drivers deliver milk to Darigold dairy cooperative in Lynden and haul seed potatoes to customers in Washington and Oregon. During blueberry sea-

son, Martin’s rigs transport fresh produce to a customer in Eastern Washington.

EATING LOCAL Sustainable Connections food and farming program focuses on supporting local farmers and encouraging county residents to eat local first. “Our goal is to get more of the food that is produced in Whatcom County consumed in Whatcom County,” said Sara Southerland, Food & Farming Manager. This nonprofit organization offers The Farm Fresh Workplace where companies purchase subscriptions to local farms and receive

a weekly share of the harvest. New farmers participate in business planning education and provide fresh products to area food banks through Sustainable Connections. Area residents can visit local farms during the Whatcom County Farm Tour, slated for Sept. 9-10 this year. “One trend we’re definitely seeing is convenience modes of buying food, such as a meal kit,” Southerland said.

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WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE VIGNETTES chasing a bunker silo with asphalt f loors for storing crops. Using asphalt, he said, is preferable because it resists silage acids that eat into concrete. In 2014, when milk prices rose, WRS delivered to about 20 silos. In 2016 they did only one. Crews in Andgar Corporation’s food processing manufacturing unit turn out the machinery that allows berry and other processing plants to accomplish the job more efficiently. “More and more, all the farmers and processors are looking to automate,” said Project Manager Keith Hovdesven.

“Over the course of 25 years, I’ve watched the volume of our business go up and down with the berry or milk prices.” -- Loren VanderYacht, Asphalt Manager, WRS

DandelionOrganics.com owners Jonny Lane and Maria Stavrakas. (Photo: Kevin Baier)

weekly deliveries of vegetables and fruits to 26 customers. Currently, this family business delivers fruit and vegetable bins to about 300 residents in Sudden Valley, Bellingham, Ferndale, and Lynden, Stavrakas said. “Paperwork creates our biggest challenges in running a business and educating customers that some items aren’t available year-round,” she said. A new menu each week features about 50 different items, with foods grown by Whatcom County and Skagit County farms, plus some other locations by necessity in Washington and California to meet demand. “This is a really good, established growing area. It’s not difficult to find growers,” Stavrakas said.

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INFRASTRUCTURE AND MACHINERY Successful farming and food processing call for facilities equipped for the particular requirements posed by berries, potatoes, dairy, and meat. Paving is an unusual business with ties to agriculture. Loren VanderYacht, asphalt manager for the Ferndalebased paving contractor WRS, said agricultural-based customers play a major role in his business. “Over the course of 25 years I’ve watched the volume of our business go up and down with the berry or milk prices,” VanderYacht said. When berry and milk prices slump, his business lessens. Farmers, for example, will put off having a driveway paved or pur-

He joined the Ferndale-based company 11 years ago. He said that over the last 3-4 years automation has become the big pushthrough. Local berry industries – particularly raspberries – keep expanding. And automated equipment, such as stackers, help processing facilities meet their goal of getting the harvest processed in a timely fashion. The bulk of the manufacturing end of food processing business at Andgar lies with local processors, Hovdesven said. A shop crew of 16 manufactures all products offered by the food processing unit, from box fillers to conveyors and dumpers. Andgar’s services include custom design and builds, installation, and servicing and maintenance. “The biggest challenge is just keeping up with the changing demands of our customers,” Hovdesven said.

MONEY, MONEY, MONEY Farmers need access to cash to purchase equipment, seed, and to keep themselves and their families going through the growing season. Northwest Farm Credit Services (NFCS) offers financial services such as lines of credit and crop insurance programs to farmers in Whatcom County and throughout the Northwest. Tim Van Hofwegen, a senior vice president for NFCS’s

Burlington office, said about half of their business at that location comes from Whatcom County. The company makes all kinds of loans for agriculture, ranging from short-term loans for purchasing dairy cows to long-term loans for land ownership, he said. The company’s Young Beginning Producers financing makes it possible for qualifying farmers to purchase equipment, livestock and real estate, and to cover leases and operating expenses, Van Hofwegen said.

INCREASING PRODUCT VALUE Another part of the challenge for farmers to stay open is finding ways to increase the value of their products beyond the original value of the raw product. Data from the 2012 Census for Agriculture shows the market value (a.k.a. “Farmgate”) of Whatcom County’s agricultural products sold in 2012 was $357 million. That figure includes the value of crops, whether grown in a nursery, greenhouse,

Mount Baker Vineyards owner Randy Finley. (Photo by Kevin Baier)

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WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE VIGNETTES or out in the field, and the value of livestock, poultry, and their byproducts, including milk, meat, and eggs. Grapes grown at Mount Baker Vineyards & Winery in Everson, get turned into wine by Randy Finley, company president, working with five employees and a dog named Blue. In a good year, the vineyard produces about 2,500 cases of wine, and about 500 in bad years, Finley said.

“When God gives us a good grape, we potentially have the opportunity to make a good wine” -- Randy Finley, President, Mount Baker Vineyards & Winery

The vineyard property features a tasting room, vineyard, and production area. The staff is crosstrained to work in the different areas. “We do everything here except make the corks and the bottles,” Finley said. He decided to focus on six varieties of grapes, or varietals, after taking ownership of the 11-acre vineyard from the original owner in 1988-89. “Hot-climate grapes don’t thrive in Whatcom county’s cool climate,”Finley said. “These varietals also grow in the Alsace region of France and Switzerland.” He purchases grapes from Yakima as needed to supplement the crops grown in Everson. Seeing the grapes ripen on the estate and making the wine is satisfying, Finley said. “When God gives us a good grape, we potentially have the opportunity to make a good wine.” Selling wines with names that are difficult to pronounce, presents a marketing challenge, such as Siegerrebe, a white wine pronounced “seeGARE-eh-beh”with notes of 76 | BUSINESSPULSE.COM

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WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE VIGNETTES lemon verbena and tropical fruit. “If people can’t pronounce the names, they think the wine can’t be any good,” Finley said.

AFTER THE HARVEST Bellingham Cold Storage, launched in 1946, operates 16 warehouses with chill and dry storage at two locations – 2825 Roeder Avenue and 600 Orchard Drive in Bellingham. The company also leases space to 11 food companies, including a cheesemaker, at those

campuses. “Agriculture in general is probably 40-45 percent of our business,” said President/CEO Doug Thomas, the recently-awarded Business Person of the Year by the Whatcom Business Alliance and Business Pulse. Foods transported to those locations, from berries to meat and seafood, are frozen, stored, and shipped out by rail and truck. Employment varies between 12,000 (year-round) to 14,000 when seasonal workers are added, Thomas said. Bellingham Cold Storage’s community outreach includes providing free cold storage and other services

Baby grapes at Mount Baker Winery's vineyards. (Photo by Kevin Baier)

78 | BUSINESSPULSE.COM

for local food banks. Thomas said his biggest concern, or the biggest opportunity, “...is to educate folks in the county about the impacts of agriculture and how far-reaching the positive impacts are” of agriculture in Whatcom County resources and employment.

CHALLENGES FOR WHATCOM AGRICULTURE Thomas said about 15 percent of Bellingham Cold Storage costs involve complying with govern-

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WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE VIGNETTES mental regulations. Regulations aren’t the only roadblock to maintaining a strong agricultural base: The 2015 Whatcom County Comprehensive Economic Development Strategy, known commonly as The Comp Plan, states that productive agricultural lands are an important resource. However, these parcels may be divided into smaller units and sold for uses potentially incompatible with agriculture. James McCafferty at the Center for Economic & Business Research cited, for example, that people living in a housing development adjacent to farms might complain about smelling manure after fields are sprayed.

FOR THE FUTURE Whatcom County offers plenty of pastureland and conditions that allow for growing cabbages and kale and berries, according to Hodges at the Center. Certainly some crops wouldn’t thrive here, such as citrus and bananas. The area provides a positive climate for continued growing of crops and raising dairy and livestock. However, farmers and agriculture-related businesses are concerned about Whatcom County’s long-term viability as a food producer. Regulations on water rights, for example, pose a serious concern. Farmers in Whatcom County and across the nation are concerned about possible changes to the North American Free Trade Agreement (NAFTA), and remaining able to export their products and earn a living, McCafferty said. In the end, farmers and agriculture businesses require a climate – both in the physical world and the political world - that allows them to flourish.“Your economy does better if you focus on what you do well,” Hodges said. 80 | BUSINESSPULSE.COM

Farmland Statistics Statistics from the US Department of Agriculture detail the differences in numbers of farms in Whatcom County between 2007-2012: Land use figures for 2012 show that cropland accounts for about 68 percent, pasture land for 21 percent, woodland for 11.5 percent, and other uses, 8.6 percent. The numbers of farms rose from 1,483 (2007) to 1,702 (2012), with corresponding growth in the number of acres farmed from 102,584 (2007) to 115,831 (2012), for a growth rate of approximately 13 percent. The average size of farms dropped slightly from 69 acres (2007) to 68 acres (2012). Overall market value of crop and livestock sales rose from $326 million (2007) to $357 million (2012), or about 9 percent. However, farms saw about a five percent drop in average value of products sold from $220,128 (2007) to $209,937 (2012). Whatcom County is the largest producer of raspberries of any county in the United States, according to the department’s website. AGRICULTURE EMPLOYMENT Figures from the Employment Security Department of Washington State show Whatcom’s agriculture sector employees about 3,322 individuals at 322 establishments with $88.6 million in wages.

Farmland photo courtesy of Whatcom Family Farmers. WHATCOMBUSINESSALLIANCE.COM | 81

Farmto-Table WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE BUSINESS PROFILE

at its finest ACMEâ&#x20AC;&#x2122;s weekly food delivery box brings local food straight to your doorstep

By Sherri Huleatt

Photos by Tiffany Brooks 82 | BUSINESSPULSE.COM

everal years before “local” food was a staple and brand of Pacific Northwest grocery stores, and before subscription boxes popped up for nearly everything (clothes, cosmetics, and books, et al), two architects had a novel idea:

Instead of searching for local food themselves and bouncing from farm to co-op to grocer, and then juggling the responsibilities of a mom, wife, architect, and homeowner . . . what if local food came to you? This was the pioneering idea of Joy Rubey and Cara Piscitello, co-founders of ACME Farms + Kitchen, a weekly subscription food box company that delivers locally-sourced,

“We just started with this idea to feed our little girls healthy food, and now it’s a full production,” – Joy Rubey, ACME Farms + Kitchen co-founder non-GMO, and almost entirely organic food straight to shoppers’ front doors. Despite having zero knowledge of the agricultural business when they got started in 2011, Rubey and Piscitello’s business has grown 625 percent in the last five years and now brings in $2.5 million in annual revenue. They have 23 employees, 18 living in Whatcom County. “When we got started, we were overwhelmed with logistics,” Rubey said. “We just started with this idea to feed our little girls healthy food, and now it’s a full production.

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STEP UP RESEARCH: AGRICULTURE BUSINESS PROFILE

ACME Farms + Kitchen, headquartered in Bellingham’s Irongate community, has grown 625 percent in the last five years.

I literally went from being an architect to doing every step of the food delivery process. Now I own a food company, which I never expected.” ACME Farms + Kitchen grew quickly because it filled an immediate need. Parents, like Rubey and Piscitello, wanted to feed their families safe and healthy food, but didn’t have the time or knowledge to source it themselves. “We started with a mission to make access to local food simple, fun, and delicious,” Rubey said. “At the time, we were both working moms with toddlers, and we wanted someone to make it easy for us to feed our families real food without hauling our kids to the farmer’s market and co-op, trying to mealplan on the fly.” Their solution: curated Locavore boxes that include fresh, local, and seasonal food, along with a meal plan and recipes. They also use minimal packaging to reduce waste. 84 | BUSINESSPULSE.COM

Their large box includes four meals (16 servings) for $84; by comparison, national competitors like Blue Apron and Sun Basket charge about $175—nearly double the price of ACME Farms + Kitchen. In addition to filling a need for

“We’ve really wanted to embed ourselves in the community, helping producers grow more food and helping families eat more local food.” – Joy Rubey, ACME Farms + Kitchen co-founder

parents, participating farmers were eager to have a more predictable customer base. Instead of sporadic sales at farmer’s markets or piece-

meal orders—50 pounds of potatoes here and 20 heads of kale there— working with ACME Farms + Kitchen allowed them to know exactly what bulk orders they would fill each week. “We define ‘local’ as Whatcom and Skagit Counties, although sometimes we reach a little further for the items we can’t grow here,” Rubey said. “We’ve really wanted to embed ourselves in the community, helping producers grow more food and helping families eat more local food.” ACME Farms + Kitchen partners with dozens of farmers, ranchers, fishers, and artisan food producers throughout the community. They’ve expanded their services to Seattle, and they opened a facility in Portland in the spring of 2016 that sources its food from Portland-area producers. Rubey and Piscitello take their services to local schools, too, offering

Haley, head of distribution, prepares a box of tomatoes for delivery. ACME Farms + Kitchen sources nearly all their food from Whatcom and Skagit Counties. WHATCOMBUSINESSALLIANCE.COM | 85

STEP UP RESEARCH: AGRICULTURE BUSINESS PROFILE

Joy Rubey, co-founder of ACME Farms + Kitchen. (Photo by Mike McKenzie) 86 | BUSINESSPULSE.COM

organic lunches at three elementary schools for $5 each. “We feel pretty passionate about kids and their relationship to real food, so any opportunity we find to get kids to eat more local food, we go for it,” Rubey said. “Today, I dropped off what we call a ‘confetti sandwich’ to about 300 kids at Parkview Elementary. It’s a focaccia sandwich with shredded veggies and Fromage Blanc (“white cheese” in French). May sound a little fancy for kids, but they love it.” Rubey and Piscitello started two charities that support children and farmers. ACME School Days donates 10 percent of ACME Farms + Kitchen purchases to local schools during certain periods throughout the year, and SCRIP donates 5 percent of discounted gift card purchases to local schools. Going forward Rubey and Piscitello want to expand their idea of helping families and farmers by starting a franchise. “We want to find people who are really rooted in their communities, and split the profits with them,” Rubey said. Their plan is to partner with people who are passionate about local food and have who have boots on the ground; their franchise owners would be in charge of sourcing seasonal food and sharing it with their communities. Establishing this model could help farmers all over the country establish a more sustainable business, while also creating healthy and viable food communities. “It’s been a crazy ride, without a doubt. I never thought I would fail so much,” Rubey said. “You have to have a sense of humor, so you can laugh at your mistakes.” Next on the list for Rubey and Piscitello is more community involvement. Now that their business is stable, and they have more staffing, they’re hoping to get more involved with kid’s programs, local schools, and agricultural groups.

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WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS BUSINESS PROFILE

Catalyst to success:

confidence in capabilities Design-based solutions put Innotech Processing Equipment on the map By Tamara Anderson-Loucks Photos courtesy of Innotech Processing Equipment

Construction on the new 12,000 sf building broke ground in April, 2017.

88 | BUSINESSPULSE.COM

hen breaking into a new industry, Tim Kaptein said it’s never easy to be the ‘new guy on the block’ - particularly when you’re young with no industryspecific experience. However, that didn’t stop him from chasing his dream to fabricate custom equipment for the food processing industry. Kaptein, backed by skills acquired over 20 years in metal fabrication and design, set his sights on the local berry processing market in 2013. With confidence in tow, he made his pitch to local farmers, signed his first sale and established the company’s presence in the food processing equipment marketplace. “Tim knew he could build great equipment, so he approached some local berry farmers and sold himself,” his wife Tracy said. “He explained his capabilities, his belief in sound design and quality of product and his commitment to customer service. His confidence got him our first customer with Innotech Processing Equipment.” Berries are delicate, and must be processed carefully. Equipment for the industry is not generally mass-produced, as every processing facility is unique, with different needs both in function and size. Getting farmers to trust in the capabilities of the f ledgling startup was key. “Tim needed to know the ins and outs of how to treat the product, so he would hang out at the farm and processing plant to gauge how to best build the equipment to solve the farmer’s problems,” Tracy Kapstein said. Innotech’s ability to troubleshoot issues when designing equipment helped the company land a contract to build food processing equipment for Lynden’s Maberry Packing, a berry grower and processor. “With food processing, cleaning is important. They came to us with WHATCOMBUSINESSALLIANCE.COM | 89

WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS BUSINESS PROFILE

Tracy and Tim Kapstein have doubled revenues since startup in 2012.

90 | BUSINESSPULSE.COM

ideas to make our conveyor equipment more sanitary,” said Aaron Kurashige, production manager for Maberry Packing. “When choosing to work with Innotech, it boiled down to the quality of work and craftsmanship and their innovative solutions to problems.” Kurashige added that in addition to Innotech’s designs and reliability, the company’s prompt response to customer service helped solidify their relationship over the past three years. “Tim and the Innotech staff really understand the seasonality of our business," he said. "We can call them 24/7 during our season if we have an issue. It’s nice to have someone who is responsive at all hours when you need a hand. In our business, downtime is a serious issue.” With berries being a seasonal commodity the Kapteins needed to ensure the manufacturing line was busy year-round, so they expanded their business to fabricate equipment for other produce as well as seafood, meat, and dairy products. Through word of mouth and a couple of initial trade show appearances, the company grew. They now serve customers throughout the West Coast, from Alaska down to California.

Success Breeds Expansion Innotech Processing Equipment is a trade name registered to Innotech Metal Designs, a company the Kapteins founded in 2012. Innotech Metal Designs focuses on the design, fabrication, and installation of industrial, commercial, and residential metalwork, from small kitchen accents to large-scale commercial projects. Since its inception five years ago, overall sales have doubled and the company now employs 11 people, including administrative staff, designers, and fabricators. To accommodate the growth of Innotech Processing Equipment the Kapteins recently broke ground on

a new 12,000 square foot facility on Guide Meridian. The larger building will provide more production space, making it much more efficient to fabricate larger equipment and will have space to offer additional services. While the new facility may be the largest outlay of capital for Innotech, the Kapteins have always understood the value of investing resources back into the company. Tim Kaptein said, “To maintain a high level of professionalism,

we continually invest in new fabrication, design and engineering equipment. We’re able to provide our customers with detailed 3-D drawings, so they can see exactly what they are getting upfront and be confident in our capabilities to provide them exactly what they need.”

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WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE PHILANTHROPY

Former servicemen and women sort and stack crops Caption TK from the Growing Veterans farm in Lynden. (Photos courtesy of Growing Veterans)

92 | BUSINESSPULSE.COM

DIRT Therapy helps reintegration from the military at Growing Veterans farms By Mary Louise Van Dyke

arm manager Joel Swenson keeps sentry watch on organic hop plants that rapidly shoot up on the Growing Veterans farm in rural Whatcom County. Last spring Swenson, a U.S. Army veteran, planted seeds in large pots and devised an irrigation system to ensure that the young plants get watered frequently. These hops are trained to grow up around the top of the farm’s hoop building, a structure that features a fabric covering over metal arches. “It’s a lot less work to take care of these hops than the tomatoes we grew last year,” Swenson said. The three-acre property on Martin Place near Lynden is leased by Growing Veterans, a nonprofit organization headquartered in Mount Vernon. Their mission is to help former members of military service transition into civilian life through growing crops and a vision of possibly pursuing farming as a career. “We provide an opportunity to learn how to communicate and how to grow crops sustainably,” said Executive Director Kenny Holzemer, a U.S. Navy combat veteran. WHATCOMBUSINESSALLIANCE.COM | 93

WBA UP STEP ADVOCACY RESEARCH: : ANALYSIS AGRICULTURE PHILANTHROPY Veterans – some who are battling frustration and anxiety from post-traumatic stress disorder (PTSD) or suicidal thoughts and traumatic brain injuries – venture here for what the organization calls “dirt therapy.” They sink hands into the soil, Holzemer said, and yank weeds and help with other details, while sharing details of their military and returning-home experiences. In 2014 an average of 20 veterans died from suicide each day, according to statistics from the U.S. Department of Veterans Affairs. “We really focus on peer support for veterans and on forming thoughtful interpersonal relationships with all of the lives our organization touches,” Volunteer Coordinator Erin Hendrix said.

“We really focus on peer support for veterans and on forming thoughtful interpersonal relationships with all of the lives our organization touches.” -- Volunteer Coordinator Erin Hendrix The organization offers training in peer support and suicide intervention skills. Participants pay a modest fee, and scholarships are available. The group also leases a 40-acre property in Mount Vernon for growing crops and as grassland.

They sell grass to farmers who are raising grass-fed cows, and the farmed produce is sold at a Skagit County farm stand on Starbird Road near Mount Vernon. Produce sales provide about 10 percent of the operating costs, and the remainder comes from donations and grants, Holzemer said. Growing Veterans is in the process of establishing an additional outpost farm in central Washington to reach veterans who live in that area. Until this year, Growing Veterans operated a third farm in the Seattle area but lacked the manpower to keep that outpost going, Hendrix said. Both the Whatcom and Skagit properties hold certification for organic crops through the U.S. Department of Agriculture (USDA). They plan to sell this

Camaraderie is a major component of the re-acclimation mission of Growing Veterans farms. (Photos courtesy of Growing Veterans)

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year’s crop of hops to local breweries and to increase those sales as the plants mature. Holzemer said he met Growing Veterans co-founder Chris Brown when both were studying for master’s degrees at Western Washington University in Bellingham. “Through our conversations I got the feeling Brown was going to do something important,” Holzemer said. Brown, a Marine combat veteran of three deployments, wanted to help other veterans with the challenging task of reintegrating into civilian life. In 2015 Holzemer was asked to help the group write grants to fund training programs and defray operating costs. He became executive director in May 2016. He said he appreciates viewing the crops that grow at both farms, though he doesn’t participate in dirt therapy. “I have a black thumb, not green,” Holzemer said. “It’s wonderful to see veterans and volunteers there (at the farms),” Holzemer said. He estimated that 432 volunteers worked at the Lynden property in 2016, and administrative costs averaged about $480 a week. Their equipment was enhanced recently with a donation of Kawasaki Side X Side Mules for transportation around the farm. Hendrix, a combat veteran who served in the U.S. Army/ Washington State National Guard, began volunteering at Growing Veterans about four years ago. She oversees volunteers at the Whatcom and Skagit farms, schedules volunteer days, and reaches out to organizations and individuals. Veterans and other volunteers aren’t required to be experienced gardeners, and they can socialize with others as much or as little as they feel the need to, Hendrix said. “We have had more than one veteran come out not knowing anything about farming. Soon they fell in love with it, and now they’re working for us, or are working on their own farms.”

• For more information about Growing Veterans visit GrowingVeterans.org • Growing Veterans also has an online store: https://www.barn2door.com/ store/97qmQ/growing-veterans featuring items such as tea and T-shirts and food items. Every dollar raised helps Growing Veterans continue its mission.

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WBA UP STEP ADVOCACY EDUCATION: : ANALYSIS YOUTH ENGAGEMENT INTIATIVE

Education Initiative Putting Whatcom County students on the pathway to success By BUSINESS PULSE & WBA STAFF

e gauge our success or failure by many measures in the education system, but the most widely-used statistic is on-time graduation rates.

While an 80 per cent graduation rate for Whatcom County in the 2015-2016 school year was above the national average, we still lost 20 percent of our children who did not complete high school. And only 30 percent of our graduating students go on to earn some type of post-secondary credential. It is that second statistic that is most alarming and that is reflected in the median earnings for Whatcom County in 2013 (latest year available) – $25,559. Partnership for Learning, the education foundation of the business organization Washington Roundtable, cites a study by Boston Consulting Group, Pathways to Great Jobs in Washington State, projecting 740,000 job openings over the next five years: “The majority of job opportunities—particularly those that will support upward mobility and good quality of life—will be filled with workers who have post-secondary education or training.” The Whatcom Business Alliance (WBA) recognizes the impact of an unprepared workforce on the Whatcom business community not only from the business perspective but also – and more importantly – from the community perspective. We need our young people to be college, career, and citizenship ready, equipped with the skills and knowledge that lead to success in life. 96 | BUSINESSPULSE.COM

With that vision in mind, the WBA is launching a Youth Engagement Initiative to reach out to high school students across Whatcom County. The goal of the Youth Engagement Initiative is to educate Whatcom County high school students on the opportunities for employment and entrepreneurship and to offer mentorship through the career decision-making process. The WBA is partnering with Junior Achievement (JA) to introduce the Job Shadow curriculum to Whatcom County high schools. In conjunction with the curriculum, the WBA will coordinate site tours of local businesses and provide opportunities for the students to engage in mock interviews and resumé review with human resource professionals. David Moore serves as president and CEO of Junior Achievement of Washington. He said of this new program: “Junior Achievement of Washington is thrilled to partner with the WBA to provide Job Shadow opportunities to Whatcom county youth. This partnership will provide juniors and seniors in local high schools with critical work readiness education, hands-on experience, and exposure to community business leaders who can answer their entrepreneurial and career questions.” This three-pronged approach of education, experience, and exposure is designed to inspire and educate young people to make smart academic and economic choices. “We do this while preparing our next generation for business success,” Moore said. The Youth Engagement Initiative begins with a kickoff event at Bellingham Technical College on September 28th. The program features successful local business leaders and video introductions to employment

opportunities in Whatcom County with local, national, and international companies. The lineup of program speakers: Mike Andes (Augusta Lawn Care/ Business Boot Camp), Erin Baker (Erin Baker’s Wholesome Baked Goods), Tyler Byrd (Red Rokk Interactive/Invent Co-working), and Anne-Marie Faiola (Bramble Berry Soap Making Supplies). The ongoing activities of the Youth Engagement Initiative will build on member involvement. The WBA is forming an Education/ Workforce Readiness Task Force made up of business people, educators, and community leaders to guide the vision and activities. Ultimately, the K-12 education initiative will connect with a post-secondary education element to ensure that the young people of Whatcom County are career, college and citizenship ready for the 21st Century.

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GUEST COLUMN: ENVIRONMENT Todd Myers | Environmental Director Washington Policy Center The Washington Policy Center is an independent, non-partisan think tank promoting sound public policy based on free-market solutions. Todd Myers is one of the nation’s leading experts on free-market environmental policy and is the author of the 2011 landmark book Eco-Fads: How the Rise of Trendy Environmentalism is Harming the Environment. His in-depth research on the failure of the state’s 2005 “green” building mandate receives national attention. He contributes to The Wall Street Journal.

To bee, or not to bee? Reality check of beehive survival trend answers the activists’ cries of alarm

oneybees have become one of the regular talking points among environmental activists who believe we are destroying the planet. Honeybees, they argue, are dying in huge numbers and it puts our entire agricultural system at risk.

Although hive mortality is higher, beekeepers rapidly replace those hives, ensuring they have the hives they need to pollinate crops.

Despite those facts, the dying honeybee has become a useful symbol for environmental activists. They push a number of policies they claim will help protect honeybees. As a beekeeper I find listening to these claims both amusing and annoying. Environmental This is a particular worry in Washington state activists make basic errors, talking about the number where we have the second highest number of pollinatof bees (which is essentially meaningless) rather than ed acres in the U.S. the number of hives, which is the only This talking point, however, not meaningful metric. only is fundamentally misleading, it is Their ignorance comes with a cost. Environmental activists talk likely to do more harm than good for For example, many environmental both honeybees and agriculture. Let’s about the number of bees activists advocate banning a particular start with some facts: (essentially meaningless) type of pesticide, known as neonicot•Every year, the U.S. Department of a.k.a. neonic. Even though the rather than the number inoid, Agriculture surveys beekeepers across evidence about the effect of neonics the country (I am one) to determine of hives, which is the only on honeybees is inconclusive, activists how many hives are lost each year. For that it is better to be safe than meaningful metric. Their argue 2016, the number of lost hives fell to sorry. That simplistic thinking, howev33 percent from over 40 percent the ignorance comes with a cost. er, actually brings harm to honeybees. previous two years. This is still higher Policymakers in Europe took this than the traditional level of about 20 approach and banned neonics in order percent that was the norm two decades ago, but it is a to help honeybees. After a couple years, the results are significant improvement over previous years. in – and they are not good for agriculture or honeybees. • Second, the total number of hives in the United First, the ban had such a negative impact on farmStates actually stands higher today than 20 years ago. ers that the United Kingdom government actually sus98 | BUSINESSPULSE.COM

pended the ban during the summer months – the very period of time when honeybees might be impacted. The ban in the U.K., therefore, is largely symbolic. Second, farmers in Europe did not stop using pesticides – for obvious reasons. Farmers simply moved to other types of pesticides. In the U.K., farmers moved to pyrethroids and significantly increased their use. Therein lies a problem. Pyrethroids are known to harm honeybees. The ban on neonics moved farmers from a pesticide with possibly no impact on honeybees to a pesticide that is known to harm honeybees. The sad irony is that banning neonics out of precaution will probably do much more harm than good. Farmers work very closely with beekeepers. Indeed, farmers often pay beekeepers to provide pollination services, and the last thing they want is to apply pesticides that will kill the honeybees they are paying for. Having worked in environmental policy for 17 years, I have seen many such examples of how the “precautionary” approach ends up hurting the environment. Examples: We have stopped timber harvests on federal lands, which not only killed jobs but also left us with unhealthy, fire-prone forests. We subsidize corn-based ethanol even though we know ethanol production does more environmental harm than burning gasoline. A simplistic approach to environmental science and economics often leaves the environment worse off. Let’s hope the recent improvement in the survival of honeybee hives continues as a trend. Beekeepers, who have the knowledge and incentive to protect the hives, keep working to make that happen. Let us also hope simplistic political thinking doesn’t intervene, making it more difficult, and doing more harm than good.

SaveAugust the24th Date! Farm Tour & Agribusiness Study Presentation Join the WBA and the Whatcom Family Farmers as we present the findings from our Agribusiness Study conducted by Western Washington University’s Center for Economic and Business Research. Learn about the impact of the agriculture industry and its unique linkages with a number of other keys sectors of our economy. Following the study presentation, we will tour a variety of farming operations and see first hand the bounty the land. Register at whatcombusinessalliance.com/events

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GUEST COLUMN: TAX POLICY Paul Guppy | Vice President for Research Washington Policy Center Guppy is a graduate of Seattle University and holds advanced degrees from Claremont Graduate University and the London School of Economics. He worked for 12 years in the U.S. Congress as a Chief of Staff and Legislative Director. As the Vice President for Research, he writes extensively on tax policy, public finance, and other issues.

Some lawmakers want to take away popular property tax limit

ith so much commotion in our national government, it is reassuring to know one effective policy in our state is working every day, quietly and effectively, exactly as planned.

Opponents of the 1 percent limit predicted the sky would fall. They said police and fire services would go unfunded, health centers would close, roads and bridges would fall apart, crime would surge. The opposite happened. Today, funding for local budgets is at record highs, and elected officials take more money That policy is based on the wise decius than at any time in history. Opponents of the 1 percent from sion that voters made in 2001 to enact a The 1 percent cap works well because 1 percent limit on how much state and limit predicted the sky it applies to only one kind of tax: the local officials can increase the regular or base, property tax. Other fees would fall….Police and fire regular, property tax each year. This modest and taxes remain unaffected, and the tax relief idea was so popular it passed services would go unfunded, law even lets officials increase the reguwith over 57 percent of the vote. Later, property tax as much as they want if health centers would close, lar in 2007, the policy was confirmed in a they ask voters first. bill passed by most lawmakers of both roads and bridges would fall WHEN??? Now some lawmakers parties and signed by Democratic Gov. want to take away a policy that is workapart, crime would surge. ing well. Christine Gregoire. One bill, HB 1764, was introThe policy applies equally to all The opposite happened. duced to repeal the 1 percent limit and 1,200-plus sets of taxing officials in replace it with a 5 percent limit – a 500 Today, funding for local our state. That’s a good thing, because percent increase in how much officials every home and business is taxed by budgets is at record highs, could raise taxes. several jurisdictions at once. Some That bill didn’t pass, but Democrats and elected officials take in the properties get hit by 10 different sets State House of Representatives more money from us than at incorporated it into their budget proof officials – from the state, county, and city to so-called junior tax districts posal. Democrats say they think regular any time in history. for schools, parks, and transit. property tax collections should go up It all adds up to the heaviest property by more than 1 percent a year because tax burden Washington residents have ever paid, and that they believe local and state revenues are not increasing burden continues to go up every year. fast enough. The budget proposal by Republicans in the 100 | BUSINESSPULSE.COM

Senate retained the popular 1 percent limit for existing taxes. Why is it that when elected officials feel they are short on money their first instinct is to increase taxes on the people? They seem to think cutting household incomes is more important than making hard decisions about how to spend existing, rising revenue. They want to make their public work easier by taking more money from their constituents. In the next two years state revenues are slated to increase by $2.6 billion, or more than 6 percent, from all sources. Most working families would be delighted with yearly income increases of 6 percent. The property tax limit works as a modest brake on some state and local officials, who, in their incessant quest for more money, act as if the public never pays them enough. If the property tax limit is pulled back, the resulting burden

will fall hardest on the poor, on immigrant families, on hourly workers, and on elderly people living on fixed incomes. What some officials don’t seem to realize is that whenever they raise taxes they make their jobs easier by making life harder for everyone else. Washington’s 1 percent property tax limit is one of the most successful homeowner protection policies in the country. Without starving government, it helps elderly people stay in their homes, helps young couples afford a home, and helps keep at least some housing stock affordable in many communities. Modest property tax limitation serves the public interest because it shows respect for a clear decision made by the people of our state, one that is proven by experience and was confirmed by a majority of lawmakers of both parties. The 1 percent property tax limit works. Why not leave it alone.

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GUEST COLUMN: SMALL BUSINESS Erin Shannon | Director, Center for Small Business & Labor Reform Erin Shannon became director of the Washington Policy Center for Small Business during January 2012. She has an extensive background in small business issues and public affairs. The Center improves the state’s small business climate by working with owners and policymakers toward positives solutions.

Harvard study finds increased minimum wages in California not good for workers, restaurants, and dine-out customers

s employers in Washington struggle with the state’s new increased minimum wage law mandating that every worker earn $13.50 an hour and receive paid sick leave benefits, the chickens keep coming home to roost in California cities that have passed earlier minimum wage hikes.

higher minimum wages caused fewer new restaurants to open. Harvard’s study, "Survival of the Fittest: The Impact of the Minimum Wage on Firm Exit,” examined the effect of high minimum wages on the thousands of full- and limited-service restaurants in the cities surrounding the San Francisco Bay, including major cities like San Francisco, San Jose, and Oakland. Cities in that region have led the nation in passing laws to increase local minimum wages. Since 2012, In January 2016 San Diego among the 41 cities and counties that increased its minimum wage from $10 increased minimum wages, 15 are San Francisco Bay cities to $11.50 an hour. Fast forward one in the Bay Area. And, 21 Bay Area year, and the number of food service have led the nation in laws minimum wages increased during the jobs in San Diego has dropped sharply. sample period of 2008-‘16. to increase local minimum study’s Reports say as many as 4,000 jobs have Since restaurants are one of the been estimated lost or never created. wages. Results: increased largest employers of minimum wage According to Lynn Reaser, chief workers, one would logically expect restaurant closures (a economist of the Fermanian Business the damage of an artificially high and Economic Institute at Point Loma minimum wage in that industry before “death march” says a Nazarene University: "If job growth In a national survey of restaufoodie publication), fewer others. in the restaurant sector had just kept rant owners, 24 percent said higher pace with the state’s performance….the openings, and troubles for minimum wages represent their bigindustry could have created 5,200 jobs challenge for 2017. low-skill and new workers. gestThe instead of the 1,300 that took place.” data from the Harvard study A new study by the Harvard bears this out. High minimum wages Business School finds that higher minimum wages have increased overall failure rates for Bay Area in California’s Bay Area have resulted in an increase restaurants. The study found that a $1 increase in the in overall restaurant closures in the region. In San minimum wage increases the overall likelihood of a Francisco, where the minimum wage is set at $15, restaurant going out of business by 4-to-10 percent. things have gotten so bad that online food publication Those numbers stand significantly higher for San Francisco Eater has called the string of restaurant less-expensive and lower-ranked restaurants (as defined closures in the Bay Area a “death march.” by ratings denoted by the number of stars awarded on The less expensive and lower rated the restaurant, the review platform Yelp), which the study revealed get the greater the negative impact. The study also found disproportionately hurt by increases to the minimum 102 | BUSINESSPULSE.COM

wage. After accounting for the fact that a less-expensive, lower-quality restaurant already operates closer to the margin of failure, the study found a higher minimum wage further increases the likelihood of that restaurant failing. According to the Harvard study data, a $1.00 increase in the minimum wage leads to an alarming 14 percent increase in the likelihood of closure for a 3.5-star restaurant (the median rating), but had no discernible effect on a top-rated 5-star restaurant. Therefore, restaurants that are affordable for low-income customers have a hard time surviving the increased labor costs of a high minimum wage. Just as worrying is the study’s finding that the entry rate of restaurants declined as minimum wages increased—a $1 increase in the minimum wage corresponds to a 4-to-6 percent reduction in the number of new restaurants opened. As the lead researcher of the University of Washington study on Seattle’s minimum wage law reported, increasing the minimum wage is a double-edged sword that “creates winners and losers.” In the Bay Area study the winners are the expensive, 4-star and 5-star restaurants and their employees. Those establishments typically pay workers more (without a mandate) and are not as likely to get hurt by the increased labor costs. Even if they are affected, their patrons are willing to pay top dollar for a 5-star rated meal and service, so increasing menu prices don’t do the same damage as they do to a restaurant that caters to a lower price point. Since high-end restaurants pay workers more, and wealthy diners tip more generously, making those jobs more valuable, managers can choose to hire only workers with experience and proven skills. The losers are the less-expensive and lower-ranked restaurants and their employees who increasingly find themselves at risk of losing

their jobs. That makes it even more difficult for workers to garner the experience and skills they need to compete for the better paying jobs at the higher quality restaurants (which, according to the Harvard study, have the added benefit of much greater job security). Others who lose: customers who find fewer low-cost dining choices, and new workers trying to enter the job market with little or no

skills or experience who have fewer job opportunities because new restaurants were not opened at all. Last year, before signing California’s landmark $15 minimum wage bill, Gov. Jerry Brown acknowledged, “Economically, minimum wages may not make sense.” The results of the Harvard study prove him right.

WHATCOMBUSINESSALLIANCE.COM | 103

GUEST COLUMN: SMALL BUSINESS DEVELOPMENT CJ SEITZ | Executive Director Small Business Development Center, WWU For 33 years the SBDC has enabled Western Washington University to give back to the business community and has helped to shape the economic future of Whatcom County. The SBDC provides free, confidential advising, technical assistance, and research to business owners and managers in an effort to help businesses thrive throughout Whatcom County.

How to realize your business dream of expanding with help from SBDC, and an SBA 504 loan

client we’ll call Sally has owned her business for more than five years and, thanks to Sally’s commitment to making her customers happy, the business has grown to the point of looking for new, larger space.

investments to harvest the last few dollars of revenue from a fading market)? • How long she would likely want to run her business? • An SBDC graduate student performed an analysis on Sally’s financials to assess the stability of cash flow and the ability to meet a larger lease payment or to service the debt on a commercial loan. • Finally, Sally and her adviser had a frank converSally came to the Small Business Development sation about whether or not investing up-front cash in Center (SBDC) at Western Washington University this long-term investment would fit into her family’s with several questions about expanding – questions financial goals. like you might be wrestling with, too. After reviewing her opportuniHow can Sally make a good Many benefits and considerations ties with the assistance from the decision about relocating? What Sally decided that purcome with purchasing commercial SBDC, factors might a forward-looking chasing her own commercial real business owner consider? Should real estate for your business. One estate would constitute a good she lease the new location space, strategy. or purchase a building? Sally espe- of my favorite advantages is that We have seen many clients cially expressed interest in learning you will have a solid tenant for like Sally enjoying steady growth if owning her building was sometheir businesses. They have your building: your own business. in thing she could do successfully. proven their concept and have Sally’s certified business advisremained profitable throughout er at the SBDC walked Sally the early stages of their growth through a strategic analysis of Sally’s future opportucycle. In many cases, this can be a time to evaluate nities. Some of the issues Sally reviewed at the SBDC the long-term strategy of investing in commercial real included: estate to house your business. While many benefits and considerations come with • The regional and national prospects for businesses purchasing commercial real estate for your business, like hers. Specifically, is Sally in a growing market or one of my favorite advantages is that you will have a should Sally be in “harvest mode” (minimizing future 104 | BUSINESSPULSE.COM

solid tenant for your building: your own business. One small dark cloud hovers on this otherwise sunny horizon, however. Due to the high owner cash required to purchase real estate, buying a building and funding any needed improvements can prove difficult. Typically, commercial real estate loans require 20-35 percent down payment in addition to a stellar credit rating and outstanding financial statements. Whatcom County businesses that fall just a bit short of those requirements, and that seek owner-occupied commercial real estate, have found a path to ownership through the Small Business Administration’s 504 real estate and fixed equipment loan program. The SBA 504 loan program offers down payment options as low as 10 percent for experienced business operators and usually features a 20-25 year repayment term. One challenge: This program uses two lenders – a commercial bank and a community capital development institution, so the application process and fee structure vary somewhat differently from a standard commercial loan. Whatcom County and Bellingham businesses seeking an SBA 504 loan have found the free assistance of the SBDC invaluable in helping these business owners realize the dream of ownership. We work with seven companies at this time that are either building a new space or purchasing an existing building. Without the advantage of the SBA’s 504 loan program, owning a facility would remain merely a dream. The SBA 504 program also provides funds for new equipment and refinancing of real estate or equipment debt. If you are thinking of purchasing commercial real estate, have interest in a fixed equipment purchase, or want to explore refinancing options please call the WWU Small Business Development Center for assistance (360.778.1762).

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GUEST COLUMN: AGRICULTURE POLICY Madilynne Clark | Agriculture Policy Research Director, Washington Policy Center Madilynne holds a Master’s Degree in Agricultural and Resource Economics from Colorado State University as well as a B.S. in Environmental Economics, Policy and Management from Oregon State University.

Rural America needs more than empty promises

f farmers don’t live on the “preserved” farm, is it still farmland? If rural communities lose their populations, do we still have rural towns? These questions reflect a growing trend in our national and state politics purportedly to protect farmland and rural towns, but without caring for the people.

Economic and personal consequences of decreased development due to the Whatcom v. Hirst decision in October 2016 by the Washington State Supreme Court, a constant attack on local farmers, increasing minimum wage statewide, and growing environmental regulations with little benefit – these all impact Whatcom county. Distant bureaucrats’ disconnect with rural communities is evident from a quick tour of the Environmental Protection Agency’s website regarding smart growth. Attention on rural America has increased dramaticalClaiming smart growth is good for rural communities, ly since Election Day 2016. one of the three listed strategies for smart growth in The plight of rural America rural areas includes “policies that in this scenario, forgotten by support walking, biking, and pubmany in cities, underwent some lic transit [to] help reduce air polThe crux of the issue centers on consciousness raising from one of lution from vehicles while saving the largest presidential upsets in a steady stream of regulations people money.” history. It forced the rest of the The naïveté of that notion is and programs, often from urban country to acknowledge what’s almost laughable. Many rural comhappening. legislators, without benefit to our munities have no sidewalks availWith almost three-quarters for walking, or road shoulders rural communities or understanding of able of the United States land mass wide enough for multiple bikers, considered rural, just 14 percent the U.S. and local economy. or funds to finance public transit. of the population resides in these Not to mention that the distances areas. Youth leave small towns would force many rural citizens to and relatively few return. The lack of economic growth spend excessively long times commuting. since the 2008 recession left many rural communities Similar disconnect is evident in Whatcom County. behind, burdened with high unemployment, poor eduAs local citizens, farmers, and businesses fight for their cation, and decreasing populations. rural communities, special interest politics continue to The crux of the issue, though, centers on a steady play out to support detrimental policies like the Hirst stream of regulations and programs, often from urban decision. The consequences will continue to ripple legislators, without benefit to our rural communities or through rural Whatcom County and harm the future of understanding of the U.S. and local economy. Whatcom rural areas many claim to love. County has been the target of many of these harmful Earlier this year, the “Wake Up Whatcom County” policies. rally detailed the regulatory burdens that Whatcom 106 | BUSINESSPULSE.COM

County faces regarding agriculture and manufacturing development. Two-thirds of local family dairy farms are likely operating on their last generation because of county regulations. Due to the Hirst decision, property value reductions on more than 3,400 parcels in Whatcom County could drop property values by $186 million. The county’s continuation of a six-month moratorium on new shipments of unrefined fossil fuels through Cherry Point not only threatens jobs, but also discourages local industry from giving back to the community. With all of these threats, do rural America and rural Whatcom County have a desirable future? The answer is, conditionally, yes. Rural America has a future if, and only if, local governments are allowed to govern instead of facing repeated policy directives from courts, the state legislature, and state and federal agencies. Additionally, local governments must step away from partisan and special interest politics and remember those in rural communities who add so much to our county and whose lifestyles we should respect and support. If urbanites claim to care for rural America while continuing to add regulation and burdens, have we actually protected and saved our rural communities and farmers? No. It is time to take a cue from the 2016 elections and truly listen to rural families, not just “protect” the symbols of rural life.

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GUEST COLUMN: HEALTHCARE Roger Stark MD (ret.) | Healthcare Policy Analyst Washington Policy Center Dr. Stark is a retired cardiothoracic surgeon. He is the author of two books on national healthcare issues, including Our Health Care Crisis, How It Happened, and How We Can Fix It, and an in-depth study on the impact of the Affordable Care Act (ACA) in Washington state. He has testified before three Congressional committees on the ACA. He graduated from the University of Nebraska College of Medicine, served residencies in Seattle and the University of Utah, practiced in Tacoma, and became a co-founder of the open-heart surgery program at Overlake Hospital in Bellevue.

Choice-based health care reform underway in Congress

n May 4 the U.S. House of Representatives passed the American Health Care Act (AHCA) by a narrow 217213 vote. No Democrat voted for the bill, and a number of mostly-moderate Republicans voted against it. The bill represents the first phase of a three-part strategy by Republican leaders to repeal and replace the Affordable Care Act (ACA), also known as Obamacare.

The original AHCA bill, introduced in March, was not acceptable to some Republican moderates and some conservatives in the House. Consequently, the bill was amended. The original bill retained some features of the ACA, but more importantly repealed many of the fundamental parts of Obamacare. The basics of the original AHCA bill: • Repeals the individual and employer mandate. • Eliminates virtually all of the ACA taxes and defers the “Cadillac Tax” on high-cost health insurance plans until 2025. • Provides a refundable tax credit based on age, Republicans have but a simple majority of 52 seats in not income. The credit starts at $2,000 a person for the U.S. Senate, so the measure passed by the House 18-year-olds and older, and gradually increases to drafted stands as a reconciliation bill. This deals only $4,000 as people age. The maximum for a family is with the financial and budget $14,000. aspects of the ACA, and thus • People purchasing catThe basics of the original, new AHCA bill avoids the Senate’s 60-vote astrophic health insurance repeals the individual and employer supermajority requirement to plans, without the ACA benefit pass broader policy bills. mandates, can receive the tax mandate requiring them to purchase Phase Two of the health government-controlled health care. The credits. care reform strategy involves • Expands health savings Health and Human Services seven-year-old Obamacare has failed at account (HSA) contributions Secretary Tom Price overrul$6,550 a year for individuals reaching its goals (and) has not come close to ing the 1,440 discreet reguand $13,000 a year for families. latory measures in the ACA. to universal health. insurance, as promised. • Reforms Medicaid. States Repealing many costly health would receive per capita federal care regulations can take place without Congress. grants. States that did not expand Medicaid under the Phase Three will require bipartisan votes in Congress ACA would receive more federal money for disproporto overturn the remaining policy features of the ACA. tionate share hospitals (those that have a higher share The seven-year-old ACA has failed at reaching its of low-income patients), and possibly even more funds goals. Obamacare has not come close to providing because of changes in the federal match. universal health insurance as promised; it has not held • States would receive federal money through a $100 health care costs down, and it has forced millions of billion grant over the next decade which could be used people out of insurance they liked and into governfor such things as high-risk pools to cover people with ment-controlled plans. pre-existing conditions. 108 | BUSINESSPULSE.COM

• Retains several ACA provisions. Children can stay on their parents’ health insurance plans until age 26. The bill addresses the pre-existing condition mandate. The House-passed bill includes all of these provisions, plus changes made by the MacArthur Amendment, including: • States could receive waivers to change community rating from 1:3 to 1:5 in 2020, allowing health insurance companies to charge older patients higher premiums; to opt out of the ACA’s essential health benefit mandates in 2018, and to replace the original bill’s penalty for not maintaining continuous health insurance coverage provided that the insured’s state participates in a high-risk pool. To receive a waiver a state must show that doing so would: Decrease insurance premiums; Increase the number of insured; Stabilize the insurance market; Stabilize premiums for people with pre-existing conditions, and Increase the number of plan choices in the state. The state grant money also increased to $138 billion for highrisk pools and insurance market stabilization. The Congressional Budget Office (CBO) did not score the bill as passed by the House. The CBO did score the original bill, however, which provides a good indication of how the new House-passed bill would work. For example, the AHCA would eliminate the ACA taxes on drug companies, medical device manufacturers, insurance companies, and insurance plans. Further, over a 10-year period: • Cut $337 billion from the federal deficit. • Lower taxes by $883 billion for everyone who uses health care. • Lower insurance premiums ultimately by 10 percent. • Place a limit on Medicaid spending for the first time in the history of the entitlement, saving $880 billion. ■

• Decrease overall federal spending by $1.2 trillion. The bill is now in the U.S. Senate. Early indications suggest that the Senate will craft its own repeal-and-replace bill and will do so over a much longer time period. Undoubtedly, most, if not all Democrats in the Senate will oppose the new bill. And moderate and conservative Republicans will find that they need to compromise, as happened in the House.

For now, Obamacare remains the law of the land. However, passage of the AHCA is a good start at meaningful health care reform. Once the House and Senate agree and pass a compromise version, it is a near-certainty that President Trump will sign it. All Americans should soon gain access to more flexible and affordable choices in health care coverage.

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WBA NEWS & NOTES

News & Notes PEACE HEALTH: NEW CFO, GRANT, DOCTORS OF EXCELLENCE BRETTNER TAKES CFO POSITION

Eric Brettner accepted the position of chief financial officer for PeaceHealth’s communities in NW Washington and SE Alaska, overseeing all aspects of financial management and financial operations for the four PeaceHealth medical centers in the Northwest network. Brettner joined PeaceHealth after working in healthcare finance for more than 23 years, including 11 with Dignity Health’s four hospital facilities in the San Francisco Bay Area. He earned an from Saint Mary’s College of California after completing a BA in business from the University of California, Berkeley. Brettner will be based at PeaceHealth St. Joseph in Bellingham.

LOCAL PEDIATRICIAN HONORED

Bellingham pediatrician Thomas Rand, MD, PhD, has been recognized as the Idaho Chapter of the American Academy of Pediatrics’ Pediatrician of the Year. The award was presented to him during the Idaho Perinatal Project Conference in Boise, Idaho. Dr. Rand joined PeaceHealth Medical Group’s Bellingham Pediatrics team this year 2017 after a 24-year span in Boise. Award presenters reported that he’d left behind a legacy of pediatric infectious disease care in Idaho and credited him with having the vision and foresight to merge pediatric infectious disease and immunodeficiency care into general pediatric practice. Dr. Rand’s new practice is located at 4545 Cordata Parkway in Bellingham.

TWO RECEIVE EXCELLENCE AWARDS

Doug Madsen, MD, OB hospitalist/medical director at the PeaceHealth St. Joseph Childbirth Center, and Dave Cahalan, MD, radiologist with Northwest Radiologists, have been Dr. Cahalan (left), Dr. Madsen selected as the PeaceHealth Medical Staff 2017 Physicians of Excellence. The annual award solicits nominations from Bellingham area providers to recognize their medical peers for providing exceptional health care. Dr. Madsen’s nominators described him as, “an outstanding leader with a wonderful bedside manner with patients,” “instrumental in implementing current practice guidelines and safety standards for the Childbirth Center,” “always willing to help” and “hard-working.” His significant role in decreasing the departmental C-section rate and improving patient flow through labor and delivery was also noted. Dr. Cahalan’s nominators described him as, “a true artist in the field of interventional radiology,” “very precise, detailed-oriented, “a true master in what he does,” “always available” and “always able to see the human in the patient.” He was commended for his clinical and technical skills, and one contributor reported, “When I watch him perform an examination, I am watching a true art form.”

GRANT FROM MARCH OF DIMES

The PeaceHealth St. Joseph Medical Center Foundation has been awarded a 2017 March of Dimes Community Grant to support the implementation of the CenteringPregnancy® program at PeaceHealth Medical Group. The Community Grant recognizes the shared goals of the March of Dimes, PeaceHealth Medical Group, and the CenteringPregnancy program of reducing preterm births and improving the health of mothers and babies. Anne Rasmussen, chief development officer for PeaceHealth’s Northwest network, said in a news release: “We are grateful for this valuable support from the March of Dimes. It will make a difference in our efforts to reduce preterm and low birth weight births while empowering new moms.”

VSH CPAS CELEBRATES 20TH ANNIVERSARY Recently, this second-largest locally-owned accounting firm in the area celebrated its 20th year since Kathy Varner founded it in April 1997. Varner said in a news release: "One of my highest priorities was to allow certified public accountants and staff to have a balanced life, and make tax season work for their lives. We didn't want rigidness or rules." In Year Two, Bob Sytsma joined the firm as a partner, followed by Kathy Herndon three years later when the firm became known as Varner Sytsma Herndon. As the firm grew, Chris 110 | BUSINESSPULSE.COM

Sullivan and Mark Roetcisoender joined as partners and VSH opened a second location in Skagit County. Last year Jessica Waggoner, who has been with VSH since 2002, joined the partner group as the only non-CPA in the group. VSH employs more than 40 staff members and the firm has been recognized multiple times in listings such as "Washington's Best Workplaces" and "Best U.S Accounting Firms to Work For,” city to the unique work environment and focus on employee engagement and life-balance.

NEW HOTEL RESTAURANTS OPEN B-TOWN KITCHEN & RAW BAR

The Holiday Inn & Suites Bellingham and the Four Points by Sheraton Bellingham Hotel & Conference Center both recently opened new and unique restaurant concepts. At Four Points by Sheraton on Lakeway, the B-Town Kitchen & Raw Bar took over the former Poppes 360 space, offering what it termed in a news release “a fresh, fun, urban dining experience….” The menu features a fusion of northwest coastal dishes and a mod twist—Pacific Northwest, Asian, and Mediterranean influences. One of the only raw bar destinations in the area, they serve oysters, clams, crab, and other seasonal selections. GM John Burns, with 30+ years in the hotel and restaurant industry, and Chef Evan Morrison headed the opening. B-Town sources seasonally from both local and international waters and sources from Pacific Seafood, Barlean’s Fisheries, Avenue Bread, and Charlie’s Produce, and craft beer brewers Aslan Brewing, Boundary Bay Brewery, Chuckanut Brewery, Kulshan Brewing and Wander Brewing and wine from Vartanyan Estate for local connections.

NORTHWATER

Previously, the new Holiday Inn at the Bellingham International Airport unveiled northwater (with an intentional small ‘n’), its 184-seat showcase of a theme that permeates the entire inn. GM Ragan Humphrey had a long background as a restaurateur before taking the lead on the new Intercontinental Hotels Group (IHG) property. He led the development of the hotel and suites around the theme of the restaurant, which was designed by his wife around a Salish Sea theme of wavy glass (even the plates and drinkware) and aqua-toned color schemes and artwork. Chef Christy Fox created a menu with unusual entrees and touches drawn from her 25+ years’ experience, such as roasted beet carpaccio and seasonal Ginger Shrimp Louie, Stuffed Rib Cap Steak, and Saffron Shrimp Risotto. Northwater, too, focuses on locally-sourced ingredients.

Save the Date!

October 25, 2017

Holiday Inn & Suites Bellingham

The Value of Employee Engagement: Company Culture and the Bottom Line For more details visit whatcombusinessalliance.com/events

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SCENE ON THE STREET

Scene on the Street A hull of a sight after midnight….

MAGINE THIS scenario: You’re walking along Roeder Avenue down by the central waterfront at 2 a.m. on a week night. Now, you’re rubbing your bleary eyes and doing a double-take, and pinching yourself to see if you’re dreaming – because you see a giant hull of a boat, a passenger touring boat, as it turns out – rolling along the city street.

It was real. All 125 feet of it. All American Marine, No. 85 on our Top 100 Private Companies list in this edition, moved the boat by land to the new waterfront facility they took over earlier this year on Hilton Avenue. The boat, soon ready for delivery to Argosy Tours in Seattle, was too big to finish in their old facility in Fairhaven.

112 | BUSINESSPULSE.COM

They towed it first by tug across Squalicum Harbor, then loaded it onto a transport vehicle, and hauled it to the new environs where All American Marine will complete the threedecker for delivery soon to Argosy Cruises on the Seattle Waterfront. Read more about AllAmerican Marine on page 31.

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ADVERTISER INDEX 2020 ENGINEERING . . . . . . . . . . . . . . . . . . . 105 AMS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 Banner Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Barkley Company . . . . . . . . . . . . . . . . . . . . . . . 67 Barkley Company . . . . . . . . . . . . . . . . . . . . . 114 Bellingham Cold Storage . . . . . . . . . . . . . 103 Birch Equipment . . . . . . . . . . . . . . . . . . . . . . . . 76 BP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Care Medical Group . . . . . . . . . . . . . . . . . . . 107 Chmelik, Sitkin & Davis . . . . . . . . . . . . . . . . . . 10 Chocolate Necessities . . . . . . . . . . . . . . . . . . . 87 Choose Whatcom . . . . . . . . . . . . . . . . . . . . . . . 99 Chrysalis Inn & Spa . . . . . . . . . . . . . . . . . . . . . 54 Cowden Gravel & Ready Mix . . . . . . . . . . . . 42 DeWaard & Bode . . . . . . . . . . . . . . . . . . . . . . . . 4 Four Points Sheraton . . . . . . . . . . . . . . . . . . . 87 Haggen Market Street Catering . . . . . . . . . 51 Hardware Sales . . . . . . . . . . . . . . . . . . . . . . . . . 59 Heritage Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Holiday Inn & Suites . . . . . . . . . . . . . . . . . . . . 35

Hometown Reminders.com . . . . . . . . . . . 101 House Ad- Bells Game Member Event . . . 11 House Ad- Economic Forecast Event . . 101 House Ad- Membership . . . . . . . . . . . . . . . . . 26 House Ad- Membership . . . . . . . . . . . . . . . . . 41 House Ad- WBA Conference . . . . . . . . . . . . . 55 House Ad- WBA Conference . . . . . . . . . . . 111 House Ad-Ag Tour . . . . . . . . . . . . . . . . . . . . . . 99 House- Bells Game . . . . . . . . . . . . . . . . . . . . . . 62 Larson Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59 Laser Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Ludtke Pacific Trucking . . . . . . . . . . . . . . . . . 97 Lynden Sheet Metal . . . . . . . . . . . . . . . . . . 107 Lynden Transport (LTI) . . . . . . . . . . . . . . . . . . 23 Mills Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 MSNW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Natural Way Chiropractic . . . . . . . . . . . . . . . . 32 Northwest Propane . . . . . . . . . . . . . . . . . . . . . 28 Peace Health . . . . . . . . . . . . . . . . . . . . . . . . Back Perry Pallet . . . . . . . . . . . . . . . . . . . . . . . . . . . 105

Peter James Photography . . . . . . . . . . . . . . . 76 Phillips 66 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 Praise 106.5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 Print & Copy Factory . . . . . . . . . . . . . . . . . . . . 34 Roger Jobs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Samson Rope . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Saturna Capital . . . . . . . . . . . . . . . . . . . . . . . . IFC Savi Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 Scholten's Equipment . . . . . . . . . . . . . . . . . . 66 SeaFeast . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 ServiceMaster . . . . . . . . . . . . . . . . . . . . . . . . . . 68 Skagit Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . IBC Skagit Valley Casino & Resort . . . . . . . . . . 109 Top 100 Congratulations . . . . . . . . . . . . 48-49 VSH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 Washington Federal . . . . . . . . . . . . . . . . . . . . . 9 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 Whatcom Family Farmers . . . . . . . . . . . . . . . 69 Whirlwind Services . . . . . . . . . . . . . . . . . . . . . 97 WRS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 Yorkston Oil . . . . . . . . . . . . . . . . . . . . . . . . . . 111 WHATCOMBUSINESSALLIANCE.COM | 113

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You work hard to serve your customers. At Skagit Bank, we believe great banking relationships are built on great services and products. Skagit Bank business products have been developed to help you make the most of your money. Call today. One of our team members will meet with you to customize a financial package to serve you and your business.

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Your Whatcom Commercial Banking Staff: Megan Watt • Erik Vanerstrom • John Cruikshank • LuAnn Kobus • Peter Cutbill • Jill Dobson • Brenton Turner • Drew Smith

Right Care. Right Here. CARE THAT KEEPS YOU WORKING When it comes to caring for you and your employees, PeaceHealth Medical Group has the expertise to help you and your team feel your best. Our annual physicals, immunizations and screenings are designed to keep you healthy and on the job. When illness invades, our primary care providers and specialists are here with the diagnosis and treatment you and your employees need, right when you need it.

Find the care you need at peacehealth.org/phmg/bellingham