Business Pulse magazine July | August 2020 by Business Pulse magazine

JULY/AUGUST 2020

Shining stars among Whatcom TOP companies Grizzly’s executive handoff is a company milestone and nod to their exciting future

PLUS:

Grizzly Industrial Inc. Founder and CEO Shiraz Balolia and President Robert McCoy

Whatcom County’s

TOP 100 Private Companies Why we shouldn’t raise taxes in a struggling economy Pivoting your business in the COVID era Business Pulse magazine 2423 E Bakerview Road Bellingham, WA 98226

There is optimism in the next six months The PULSE of Whatcom County

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PULSE B

VOL. 45 | NO. 4

PUBLISHER Tony Larson EDITOR Matthew Anderson

CONTRIBUTING Elisa Claassen

Largest Fleet in the PNW Locally & Woman Owned with National Capabilities, here for all your equipment and rental needs. Facilities throughout WA and AK, headquartered in Whatcom Co.

WRITERS Sherri Huleatt

Cheryl Stritzel McCarthy Mike McKenzie Dustin McKissen Mary Louise VanDyke

GUEST Tony Cook COLUMNISTS Kris Johnson

Adam Lervik Todd Myers

ART DIRECTOR Whitney Pearce

PHOTOGRAPHY Tiffany Brooks

CUSTOMER SERVICE Ashley Butenschoen ADMINISTRATION Danielle Larson

Cover Photo by Tiffany Brooks WBA BOARD OF DIRECTORS: BOARD CHAIR: John Huntley, President/CEO, Mills Electric Inc. EXECUTIVE COMMITTEE: Pam Brady, Director NW Gov’t & Public Affairs, BP Cherry Point; John Huntley, President/CEO, Mills Electric Inc.; Doug Thomas, President/CEO, Bellingham Cold Storage; Josh Turrell, Partner, Larson Gross PLLC; Josh Wright, VP/Broker, Bell-Anderson Insurance BOARD OF DIRECTORS: Tyler Byrd, CEO, Red Rokk Interactive; Jane Carten, President, Saturna Capital; Andy Enfield, Vice President, Enfield Farms; Bryant Engebretson, Managing Principal, Tradewinds Capital; Jon Ensch, Commercial Banking Officer, Peoples Bank; Mitch Faber, Partner, Adelstein Sharpe & Serka; Sandy Keathley, Former Owner, K & K Industries; Laura McKinney, NW Gov’t Affairs & Public Relations, AlcoaIntalco Works; Nicole Newton, Semiahmoo Resort/ Golf/Spa; Becky Raney, Former Owner, Print & Copy Factory; Andy Riddell, NW Business Banking Mgr, Wells Fargo; Sarah Rothenbuhler, Owner/CEO, Birch Equipment; Patti Rowlson, Founder/Marketing Director, PR Consulting Inc.; Galen Smith, Operations Manager/ Owner, Coldstream Farms; Billy VanZanten, CEO, Western Refinery Services For editorial comments and suggestions, write editor@businesspulse.com. The magazine is published bimonthly at 2423 E. Bakerview Rd., Bellingham WA 98226. 360.746.0418. The yearly subscription rate is $25 (US). For a digital subscription, visit businesspulse.com. Entire contents copyrighted ©2020 Business Pulse. All rights reserved. POSTMASTER: Send address changes to Business Pulse, 2423 E. Bakerview Rd., Bellingham WA 98226

JUL/AUG 2020 | BUSINESSPULSE.COM

IN THIS ISSUE 11

GRIZZLY’S GROWTH & TRANSITION

KEEPING OUR FOOD SUPPLY CHAIN INTACT

Depite the latest disruptions, we didn’t run out of food. Why not?

PERSONALLY SPEAKING

TOP 100 PRIVATE COMPANIES

A company milestone is a time to look at the evolution from a rented room behind a barber shop to 800,000 square feet of showroom and warehouse space across the country.

Don Goldberg, director of economic development at the Port of Bellingham, offers his take on economic life in Whatcom County.

This year’s results provide an important perspective this year: Given the nationwide economy shutdown during the first half of 2020, this list will give a clear picture of the effects on Whatcom County’s free-enterprise landscape.

32 SUMMER GOLF IN FULL SWING

Things are looking greener for Sudden Valley Golf & Country Club after recent reopening.

32 Look for additional content online at businesspulse. com

38 A LANDMARK RISES FROM THE ASHES

The Inn at Lynden brings life to one of Lynden’s historic landmark structures.

COLUMNS 35 A struggling

economy is no time to raise taxes

37 A guide to the

Paycheck Protection Program’s loan forgiveness

41 Reasons to be

optimistic about the next six months

44 How the pandemic has changed the future of local businesses

47 Removing regulatory friction to accelerate economic recovery

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Business Banking | Commercial Real Estate | Commercial & Residential Construction | Personal Banking | Mortgage Lending

BP PUBLISHER’S NOTE

Local visionary leaders helping drive our recovery Tony Larson The past few months have been among the most challenging in Whatcom County history. The curtailment of activity at the Alcoa Intalco Works facility in the Cherry Point Industrial Zone in April and the closure of multiple small businesses in the wake of the coronavirus pandemic have left the local business community and Whatcom County families reeling. However, while the first half of 2020 has been almost uniformly bad, there are bright spots— but before we get to those, Business Pulse would like to extend a specific thank you to someone who has served as an important partner over the past several months. Erika Lautenbach, director of the Whatcom County Health Department, has led our local public health team’s response to the coronavirus pandemic. Erika started in her position right before the outbreak and has had her hands full (and yet has still had time to serve as a panelist on several “Recovery Whatcom” webinars hosted by the Whatcom Business Alliance). Her steady leadership

BUSINESSPULSE.COM | JUL/AUG 2020

ty needed it. We are a better, safer and more prosperous community because of your hard work. This issue of Business Pulse profiles many of the business leaders who have stepped forward to help lead our county out of the current moment. While the local economy is not what it was when we last published our annual “Top 100” issue, our county is still full of dynamic companies and visionary leaders. They are an important part of our success and will be an even more important part of our recovery. We strongly encourage each of our readers to choose a Whatcom County business whenever possible. When you do that, you are not enriching distant CEOs and shareholders. You are putting food on the plates of local families. This issue also contains articles on the future of the agriculture sector in Whatcom County, a look ahead at what the rest of 2020 could look like for the local economy, and in-depth throughout this crisis has been an profiles of some our favorite local important part of the county’s health businesses. We also sit down with and economic recovery. Thank you, Don Goldberg, director of economic Erika, and thank you to all the health development with the Port of Bellcare providers, first responders, volun- ingham. While the news may seem teers and business leaders who have challenging, reading this issue of Busistepped forward right when our coun- ness Pulse should give you some sense

“I have never seen our community face so many challenges at

once—but I am as optimistic as ever about our longterm success.”

of optimism about our community’s future. We have published Business Pulse for over 40 years. I have never seen our community face so many challenges at once—but I am as optimistic as ever about our long-term success. The businesses and leaders profiled in this edition of our annual Top 100 issue are dynamic, innovative, resilient and committed to this community. Their success is our county’s success. If we have learned one thing from the tragic events of 2020, it is that we are all in this together. On that note, we strongly encourage readers to register for the WBA’s ongoing “Recovery Whatcom” series of webinars. Registration is free and the information presented should help you get a better sense of what we need to do to rebuild our county’s business community. For more information, visit whatcombusinessalliance.com/webinars. Finally, thank you to our readers and advertisers. We know this year has been rough for every one of you. The media, including local media, have been battered by the pandemic and the economic downturn. We know that your continued support is not always a simple or easy decision. From the bottom of my heart, I thank you for that support. It means the world to me and to our team. Stay safe, stay healthy and stay innovative.

JUL/AUG 2020 | BUSINESSPULSE.COM

BP NEWSMAKERS

Chris Pickering

Jim Baron

Northwest Washington Fair Appoints Pickering CEO

Every new leader of an organization expects challenges—just not the ones posed by a pandemic that, in the case of the Northwest Washington Fair in Lynden, has postponed the biggest annual event and canceled many others. However, Chris Pickering looks forward to happier days as chief executive officer of the fair. Pickering recently was appointed CEO by the fair’s board to succeed Jim Baron, who served more than 16 years as the fair’s manager. “We know that postponing this year’s fair is a blow to many in our community who pour their hearts into projects every year, as well as those who earn much of their income during the best week in August,” Pickering said. “We look forward to bringing everyone together again in celebration just as soon as it is deemed safe to do so.” Pickering served under Baron at the fair beginning in February 2019 as the assistant manager, helping to plan the annual six-day event in August and manage many of the other activities conducted year-round at the Northwest Washington Fair and Event Center. The leadership transition had been intended to take place in September, after the 2020 annual fair. With the postponement of this year’s event, Baron elected to step

BUSINESSPULSE.COM | JUL/AUG 2020

Kamyar Monsef

Ryan LeCocq

down early, remaining on staff as the director of capital campaigns. “It was always my goal to hire someone who could take the Northwest Washington Fair to the next level, and I am so excited to be able to leave with the full confidence that we found that person,” Baron said. Pickering previously was communications director for the Western Fairs Association in Sacramento. He earned a bachelor’s degree in management from the University of San Francisco and graduated from the Institute of Fair Management, a two-year course hosted by the International Association of Fairs & Expositions. Pickering is a lifetime member of Lynden Veterans of Foreign Wars Post 9301 and an active member of the Mount Baker Rotary Club. Beyond his years working in the fair industry, Pickering spent six years serving in the U.S. Army Reserve, including deployments to South Korea, Kuwait and Qatar.

Faber Construction moves to new Lynden headquarters

Faber Construction moved this month to a larger headquarters that will facilitate future growth. Faber Construction, owned by Rick and Debbie Faber, is now located at 6951 Hannegan Road, across from its equipment and staging yard just a

Sierra Schram

Kelsea Lagerwey

quarter mile north of East Pole Road. The company renovated the two-story, 7,200-square-foot building before moving in. “We’ve steadily evolved and expanded since our initial focus on agricultural construction,” said Rick Faber, company president. “With success building hotels, schools, apartments, roads and bridges, Faber Construction has become a fully integrated company and has more than doubled our number of employees in eight years to about 120.” The company’s notable projects nearing completion indicate its wide range of capabilities. The projects include a five-story, 116-room La Quinta hotel in Marysville, 14 townhome units in Burlington for the Housing Authority of Skagit County, and the 11,000-square-foot Salish Village Travel Center in Ferndale. “I attribute our success to our faith and an incredible team,” Faber said. “Many of our crew members have been with us for years, providing quality and stability for our clients.” The public will be invited to an open house at the new headquarters later this year. For more information, visit faberconstruction.com.

LTI Inc. drivers deliver groceries for WinCo

Hit with unprecedented demand for groceries due to stay-at-home

NEWSMAKERS BP

orders, daily freight volumes at WinCo Foods quickly grew from 2.4 million pounds of grocery products to 7 million pounds. LTI Inc., based in Lynden, decided to step in and help. “We agreed to help and sent out trucks and drivers from Caldwell and Jerome, Idaho to the Boise distribution center,” says LTI Inc. Operations Manager Gordy Sant. “Within the same day, drivers were hauling 400,000 pounds of groceries to several WinCo locations.” In all, LTI drivers hauled 3.4 million pounds of freight to various Idaho communities during the rush period. Drivers also hauled loads to Salt Lake City, Western Oregon or wherever products were needed. “Everyone at LTI pulled together to cover shifts for these drivers so we could assist in this emergency situation,” Sant said. “We continue to haul groceries for WinCo as needed. This is a great example of how Lynden and its people can quickly diversify and an opportunity to show our strength in an area outside of the milk industry.”

innovative projects were identified, including Lynden’s Edaleen Cow Power, to address improved energy efficiency in operations and the marketing of biogas, nutrients, fiber and other coproducts of the digesters. The $300,000 in grant money for Edaleen Cow Power will allow for the acquisition of new equipment and infrastructure to complete a new long-term offtake agreement and associated business plan. This plan can provide higher-value power purchase agreements when the power is used for electric vehicles. “Energy resilience is crucial to strengthening rural communities,” said Commerce Director Lisa Brown. “These new anaerobic digester projects, supported through the Washington Clean Energy Fund, have multiple potential benefits to the dairy industry, local residents and the environment.” All the grants for the proposed projects must be matched at least dollar-for-dollar with other sources of non-state funding.

Nugents Corner Market & Hardware opening soon

Commerce Department awards nearly $1M for dairy digester clean energy projects in Washington

The Washington State Department of Commerce has announced $970,000 in grants from the Clean Energy Fund under the Dairy Digester Enhancement Program. Four

Residents of the Mt. Baker Foothills will gain a more convenient shopping option with the late summer opening of Nugents Corner Market & Hardware, which will offer a broad variety of grocery and hardware products. Local residents Troy and Aubree Lozano of Everson purchased the historic grocery store property at 3705 Mount Baker Highway (State Route 542) in November 2018. The future store is located at the highway’s intersection with State Route 9, just 4 miles west of Deming and 9 miles

east of Bellingham. “Since we purchased the property, we have been asking the community what they wanted to see in a new grocery store, and we have included nearly all of the suggestions received, minus the bowling alley and movie theatre!” Aubree Lozano said. The independently owned store will include an in-house butcher and a newly designed deli, along with a well-stocked hardware department. Locally produced dairy, craft beers, spirits, fruits and vegetables will give the store a strong Whatcom County connection. The Lozanos currently are completing improvements and repairs to the 20,000-square-foot building, which was operated as Dodson’s IGA from 1964 until April 2017. They plan to open Nugents Corner Market & Hardware in August.

Peoples Bank announces several personnel changes in Whatcom County • Kamyar Monsef was appointed senior vice president and chief retail banking officer, based at the Barkley Financial Center. • Ryan LeCocq has been promoted to vice president, commercial banking officer in the Bellingham Commercial Banking Group. • Sierra Schram was promoted to service manager of the West Lynden Office at Safeway. • Kelsea Lagerwey, relationship manager for the Barkley Financial Center, is transferring to the Whatcom County Real Estate team.

JUL/AUG 2020 | BUSINESSPULSE.COM

BUSINESSPULSE.COM | JUL/AUG 2020

BUSINESS PROFILE BP

PHOTO: Tiffany Brooks

Customers drive Grizzly’s growth Founder looks back at the company he built Cheryl Stritzel McCarthy Shiraz Balolia made $6 on his first sale of a drill press. Now the sales of the company he founded in Bellingham in 1983 are in nine figures. Balolia recently transitioned to chairman and CEO of Grizzly Industrial Inc. He promoted to president Robert McCoy, who started with Grizzly 30 years ago at age 18 as a warehouse worker. Balolia’s son, Shabir Balolia, who’s been with the company more than 20 years, remains vice president of Grizzly’s parent company, S. Balolia Holdings Inc. This milestone transition is a time to look at the company’s evolution from a rented room behind a barber shop to the 800,000 square feet of showroom and warehouse space

it has today in Springfield, Missouri, and Bellingham, site of Grizzly headquarters. About that first drill press: After Balolia sold it, his customer said he had no way to get it home, so Balolia delivered it, no charge. When Balolia arrived, the customer added he couldn’t lift the machine onto his workbench, so Balolia did, no charge. “I didn’t think I was being taken advantage of,” Balolia said. “I thought, I have $6 more in my pocket than I had this morning.” In those early days, Balolia was mainly buying used metal lathes, fixing them, and selling them for a slim profit. His idea was to make enough money to buy a lathe for himself, but he soon realized he had an embryonic business. “I had

JUL/AUG 2020 | BUSINESSPULSE.COM

requests from people for new machines, and other types of machines. That was the start of what eventually became a very large business,” Balolia said. Today, Grizzly is a machinery and tools company with customers that include small, home-based shops and such companies as Boeing, Ford Motor Company, NASA and the U.S. military. Products include woodworking and metalworking machinery—from benchtop models to large, industrial machines used by oilfields—plus laser cutters and other specialty machines. “Drill presses were popular (in the early days) because I was selling them so cheap,” Balolia said. He’d use his Volkswagen van to deliver them, loading several machines at once. “Vans are not made for that kind of weight. I was almost scraping the bottom of the road, but I drove slowly.” When other dealers complained because Balolia was underselling them, the distributor stopped selling to him. So, in those pre-internet days, Balolia searched brochures, hoping to find contact information for a supplier. “Out of all the brochures from several

In the beginning...

BUSINESSPULSE.COM | JUL/AUG 2020

dealers, only one had the name and address of a factory, in Taiwan,” Balolia said. “That changed my life.” He began to order directly from that factory. Hence was born a foundation of Grizzly’s business model: eliminate middlemen and pass the savings on to customers. The usual path in this industry is manufacturer to distributor to dealer to end user. “My goal was to serve customers like myself,” said Balolia, who remains a hobbyist user of the machines his company sells. “I wanted to keep the price low, keep it affordable to buyers like me,” Balolia said. “Business took off.”

Customer requests continued, and Grizzly expanded. Balolia tells of an early customer who asked for a planer. Balolia didn’t know what it was, so he took an evening trade school course in woodworking. That sparked Grizzly’s expansion into woodworking machines. Personally, Balolia is an accomplished woodworker. “I was the first in North America to send a planer sample to Taiwan,” Balolia said. “Now all the planers come from Taiwan.” Grizzly rented space on Meridian street in 1983, outgrew that, purchased 10 acres on Valencia Street, and in 1987 built its headquarters there as its product line continued to expand. Grizzly has the largest selection of woodworking and metalworking machinery under one brand in the world, and it is the only direct-to-consumer industrial machinery company in the country. “Our goal was, you come to us, and whatever flavor you want, we have. That really works well for us.” In 1987, the company also acquired a warehouse in Williamsport, Penn-

It all started when Balolia couldn’t hit the target. Balolia, age 22, was practicing at a pistol range and met another gun enthusiast there. Balolia discovered the other guy, a hobbyist gunsmith, owned a metal lathe. Balolia wanted one but couldn’t afford it. He thought if he could buy used lathes and then fix and sell them, he’d eventually make enough to buy one for himself. He borrowed $500 from his sister and got started. “I learned how to fix machines: gears, motors, switches. I paid my

sister back within a couple of months. But instead of buying a lathe for myself, I realized I could make money doing this, so I kept doing what I was doing.” The endeavor grew into a Bellingham-based company, Grizzly Industrial Inc., with 300-plus employees in three locations and sales in nine figures. And his target practice? Balolia has shot in three world championships, captained the 2013 U.S. Team World Championships team, won national championships, and is training for the F-Class World Championships in South Africa in 2021.

sylvania, to lower shipping costs and delivery time to East Coast customers. As customer requests continued and the company sensed a larger potential market share, in 1999 Grizzly opened a larger facility in Springfield, Missouri, which became the major distribution center and call center. “We got exponential growth from that,” Balolia said. “We own 55 acres there. There’s plenty of room to add more space.” (An additional 60,000-square-foot building is now permitted for construction.) The Pennsylvania location eventually closed, with some employees moving to Springfield. Today, the company has 200 employees in Springfield, 100 in Bellingham and 15 in the China and Taiwan offices. In the early ’90s, with the internet starting, Balolia thought: “This is the future.” “We recognized opportunity and built a base for it,” Balolia said. “We have a large IT department and a great website. We bought domain names and own over 300 URLs.” The company produces a print catalog but makes all manuals available online. “We have the largest parts department in the machinery and tool industry,” Balolia said. “We keep most parts in stock and ship the same day.” The direct-to-consumer model enabled Grizzly to be ahead of the curve, Balolia said. In today’s online shopping climate, that’s the model customers want, he said. “Our customers are the reason we’re here. We have over 3 million customers who’ve helped our company grow, so we are loyal to them, too.” As for suppliers, the Taiwanese manufacturers were small at first, Balolia said. “They grew as we grew. The

PHOTO: Tiffany Brooks

In person with Shiraz Balolia Any business lessons to share? Pay your bills like clockwork (no matter how hard it is), be ethical in your dealings, and treat customers like you would like to be treated. What are you proudest of? My employees and their dedication. We have over 20 managers, and the average tenure of these managers is 19 years! We have dozens of employees who have been with the company more than 10 years. What has kept you going for over 37 years? My interest as a user of the products we sell. I maintain two personal shops, one at home and a large shop here at the warehouse. Why your transition now? I am 67 and have trusted employees who have been with the company a long time. I am spending more time enjoying my shops; I am an advanced user of woodworking and metalworking machines and have built everything from coffee tables to guitars. I am working on keepsake boxes for my grandkids. I am also a shooter on the U.S. team, training for the next world championships in South Africa in 2021. This transition allows me more time to focus on that. Why did Grizzly recently donate its entire stock of nitrile gloves and masks to hospitals? It was a need by local hospitals in Whatcom and Skagit counties and in Springfield, Missouri. We did not give it a second thought. We just shipped them everything we had! How else is COVID-19 affecting Grizzly? We sell to essential businesses. Also (competitors’ products) that are similar, sometimes identical, are sold through distributors and dealers, so their prices are higher. When bad times hit, those buyers gravitate toward us. Interview has been edited.

JUL/AUG 2020 | BUSINESSPULSE.COM

owners are friends of mine. Some only make for us.” In 2011, Grizzly acquired South Bend Lathe Company, an industry icon founded in that city in Indiana in 1906. “Every United States Navy ship that rolls off the shipyard has a South Bend lathe on it for onboard maintenance,” Balolia said. “I’m very proud of that acquisition, as I had been after that company for many years.” The decisions Grizzly makes are

PHOTO: Tiffany Brooks

In person with Robert McCoy Robert McCoy, who’s been with Grizzly Industrial Inc. for three decades, was recently promoted to president of the company, as founder Shiraz Balolia transitioned to chairman and CEO.

based on what customers are looking for, Balolia said. That’s the perspective that has helped drive the company. “We are always looking for the next thing,” he said. “What does the consumer want? We keep expanding our lines. We offer CNC machines (computer-controlled machining tools), but manual machines remain. That’s our base. For consumers, this is the best time. They can get the best buys, best choices, and see that quickly... We can satisfy those goals easily. We want to bring good quality products and good choices at a low price. That’s what we do.” ■

BUSINESSPULSE.COM | JUL/AUG 2020

What do you see for Grizzly’s future? Grizzly has always been at the forefront: first to sell directly to consumers, first with a website, first tool company on Amazon. We will continue this trend of firsts by expanding products, increasing after-service offerings, and offering the best value in the industry. While we have grown tremendously since inception, we know there is untapped market share available. We’ll continue to expand domestically and globally. How might it be different, bigger, smaller? Bigger, both organically and through product line expansion, and possibly acquisitions. What’s coming that’s new? Greatly expanding our CNC and laser machinery lines. Expanding our outreach to schools and assisting with shop classes, as the U.S. sees a resurgence of training for skilled construction and fabrication trades. Increasing our video/media for customer support and marketing efforts. Other programs are in the works but are still confidential. Anything else? There will be no slowdown of growth and innovation. Shiraz’s legacy is engrained in our staff and our processes, and what he has built was built for the long term. I am excited and humbled by the opportunity to fill his shoes. Interview has been edited.

FEATURE BP

PHOTO: iStockphoto.com/YurolaitsAlbert

Despite disruptions, we didn’t run out of food. Why not? Dustin McKissen At the outset of the COVID-19 pandemic, the national media were quick to reassure the public that grocery stores would not run out of food and that the country’s food supply chain was secure. While the effort to provide comfort during a frightening moment is commendable, those reassurances did not last long. In April, meatpacking plants across the nation suffered outbreaks of COVID-19, causing closures of important facilities across America’s food supply chain. The reassurance that the country’s food supply would remain unaffected may stem from a fundamental misunderstanding of what a supply chain is. The term “supply chain” itself has gained an almost mythical quality during the past several decades as more Americans have learned that much of what we use and consume is manufactured or grown elsewhere. That is true of our smartphones, our automobiles— and our food. In reality, there is nothing mythical about a supply chain. They are not magic. A supply chain involves, at its most basic level, human beings moving an item from one place to another. Those human beings may need an extensive array of tools and technology to facilitate that movement, but

all supply chains depend on humans. And human beings can get sick, especially when they are working in close quarters with other human beings. “The reassurances that the food supply chain would be unaffected went a long way toward calming the public,” said Fred Likkel, executive director at Whatcom Family Farmers. “In the end, though, the food supply would always be affected. Anyone who argues otherwise has limited exposure to how a food supply chain works.” Human beings are a critical component of food supply chains, Likkel said. “This industry depends on our workforce,” he said. “Even the most mechanized farm still requires a healthy labor pool, and that doesn’t even address the workforce health and safety challenges that exist in processing facilities.” The impact on the food supply chain goes beyond worker health and safety. Mandatory restaurant, hospitality and school closures reduced demand locally and nationwide for milk and other dairy products, causing an already vulnerable industry to suffer potentially unsustainable losses. Since 2015,

JUL/AUG 2020 | BUSINESSPULSE.COM

America has lost nearly nine dairies per day. This year was supposed to see the industry turn around, with milk prices expected to rise for the first time in five years. However, the coronavirus-induced crash has caused some dairies to resort to dumping unwanted milk as processors deal with limited capacity and decimated demand. The resulting dichotomy of worried shoppers and farmers faced with the sudden disappearance of entire market sectors has stirred up images of the 1930s, when hungry families saw crops stored or destroyed to help maintain adequate prices. While 2020 has been difficult for Whatcom County’s dairy farmers, other crops have fared better. Blueberry

ty about the future could have a disproportionate impact on Whatcom County. In this community, there are over 1,700 farms that help generate more than $360 million in annual revenue. The county ranks in the top 3% of the most agriculturally productive counties in the nation. Given the importance of the industry, even a slight reduction in demand has a significant impact on the county’s economic health. The pandemic also has shined a spotlight on another vulnerable aspect of the county’s food supply chain. Even prior to the pandemic, too many county families faced challenges related to food security. Rapid increases in housing prices during the past decade, regulatory restrictions that have

and raspberry markets are still relatively healthy. Losing restaurants and institutional kitchens has had far less impact on the berry market. Still, farmers who have been spared the harshest effects of the pandemic still face significant uncertainty. “In Eastern Washington and Idaho, some farms have cut their acreage by 25% or more,” Likkel said. “Given that this is a global pandemic, looking for other markets for crops is hard. Even with reopening, fear about the disease will probably lead to reduced demand for restaurants and other foodservice options farmers rely on. While many farms began the pandemic in an already vulnerable position, no farmer could adequately plan for a near-total shutdown of the local, national and global economy.” Reduction in demand and uncertain-

increased the cost of food, and other market factors have meant that families often struggle to stock their fridges and pantries even in the best of times—and 2020 is certainly not the best of times. “One conversation that is picking up steam because of the pandemic is food security,” Likkel said. “Most of our local producers do not grow the staples typically distributed at food banks. As unemployment increases, demand on food banks also increases. Our local farmers have a difficult time growing vegetables, which typically fare better in the warmer, eastern parts of our state. That means that we can have a limited impact on food security issues—but we should still have the discussion, and we should still do everything we can to make sure everyone in our community has enough to eat.” PHOTO: iStockphoto. com/moore Like almost every other industry, the

BUSINESSPULSE.COM | JUL/AUG 2020

agriculture sector in Whatcom County is eager to help local government better understand the challenges and opportunities that stem from the pandemic. When asked how local government can help, Fred Likkel responded the same way most business leaders have responded: Government can try to understand our industry better. “Producing food that is safe to consume should absolutely be the No. 1 priority of every farmer and every regulator,” Likkel said. “After all, an unregulated or poorly regulated food market played an important role in starting the pandemic. That said, many local regulations often do little more than drive up production costs or restrict our ability to grow certain crops altogether. The results of regulations like these are not safer crops. Production simply moves to other locations. Shoppers buy the same food. That food is just produced somewhere else, and local families suffer.” While there are few bright sides to a global pandemic, the disruptions to the food supply chain have helped the public gain a better understanding that food security is not inevitable, and neither is it simply an issue for disadvantaged families to consider. Stocked shelves and fridges are not inevitable. We have food in our pantries and in our bellies because men and women across Whatcom County work hard in our fields, in our kitchens, in our restaurants and in our grocery stores and markets. Despite the outbreaks of COVID-19 in processing plants and on farms, the food supply has remained relatively steady. When future generations write the story of 2020, the heroism and hard work of the people keeping our food supply chains intact need to be recognized. And if this ever happens again, let’s ask those same folks to figure out a better supply chain for toilet paper. ■

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New normal calls for new thinking, new models

Don Goldberg offers his take on economic life in Whatcom County Cheryl Stritzel McCarthy Don Goldberg, director of economic development at the Port of Bellingham, is also the director of the Regional Economic Partnership, an organization for economic development funded by the Port of Bellingham, Whatcom County, the City of Bellingham, and the Washington State Department of Commerce. “Our focus is to retain and grow our companies here while keeping the highest standard and quality of life for citizens,” Goldberg said. Here’s his take on economic life in Whatcom County, before and after COVID-19:

ple earn. One of my tasks is to increase residents’ incomes by bringing in jobs that pay more.

BP: You are relatively new to Whatcom County, having been here not quite three years. What came before? DG: I was director of business development at the Port of Portland. Also, I had lived in Vancouver, British Columbia, for a while, used to visit Bellingham, and loved the community. I’d spent time as a youngster with my dad and grandfather boating on a lake in Milwaukee, and I missed being on the water. All the issues my job addresses here, I recently experienced: cost of housing, daycare, food. Whatcom County is disproportionately expensive for the incomes peo-

BP: How might this pandemic impact our economy over the next 12 months? DG: The pandemic is going to be extremely negative, with long-term effects. Until we find a solution to COVID-19, we’ll have to turn on and off the economy as COVID-19 cases rise and fall. We need to rethink how to grow during these difficult times.

BUSINESSPULSE.COM | JUL/AUG 2020

BP: Pre-COVID-19, what was your assessment of the Whatcom County economy? DG: The economy in the United States, Washington state and Whatcom County before COVID-19 was strong. Housing costs had been out of control here for a long time, but generally, we have a diverse and sustainable economy for Whatcom County’s relatively small size. Whatcom County usually receives about 11% of its sales tax from cross-border sales tax, which no longer exists with the closed border. A normal day, we’d see 12,000 people come across the border. Now it’s 150.

BP: Any specifics on that? DG: One is to continue to make large investments in broadband, so businesses as well as emergency and education systems have better access. The Regional Economic Partnership

at the Port of Bellingham has authority from the state to install broadband throughout the county. We’re working on an early phase, which would bring broadband out to Glacier. We need more funding so all Whatcom County residents, including our children, have high-quality broadband, as they’ll need this for the future. BP: What message would you share for struggling businesses? DG: Rethink how we occupy office and retail space. Rethink how restaurants and small businesses might work. As just one example, consider whether restaurants should have summer outdoor seating in areas that might normally have cars parked, which could help profitability in phase two that allows only 50% occupancy. Create a program where multiple restaurants might be able to deliver foods in an efficient and profitable way. Can we partner restaurants with people in need of food? Can we connect excess food from farmers with crops that can’t get to market to people in need? It’s a weird time—there is excess food and people who need it, but the connection is not there. Also, support the industries that are here and help them move to the next generation in a competitive way. I see my job as representing all the businesses here and helping them grow for themselves as well as for society.

“

Our focus is to retain and grow our companies here while keeping the highest standard and quality of life for citizens. -Don Goldberg

BP: What did you learn when you were part of the Whatcom Unified Command response team, the umbrella organization for resources (such as grants, loans and unemployment benefits) related to COVID-19? DG: I learned that working together as partners is extremely important. I learned that the health department and the Regional Economic Partnership have to work hand in hand to open the economy safely. When we know cases will go up, how do we continue to open the economy and protect people? This is where we take the lead from the state health department and governor’s office on the four phases approach. BP: How might you do that? DG: By monitoring caseloads, increasing testing capabilities and having isolation facilities for affected individuals. Northwest Laboratory is now offering testing to residents with a prescription. In the national media, health and the economy seem pitted against each other, when we have to work together. Our economy is incredibly important, but the safety of our citizens takes precedence. BP: How will this change the way Whatcom County does business? DG: We’ll be looking at how we work with our neighbors to the north, since they’re an important part of our economy. We’ll continue to push for up-

grading infrastructure and technology, particularly broadband, so businesses can compete in the world market. We’ll continue to grow our partnerships with higher education so we can train our workforce for existing jobs as well as for jobs of the future. BP: What do local businesses need to know as they operate in this uncertain climate? DG: Companies need in-depth planning for profitability and the safety of customers and employees. They have to create a plan that will keep them in business while looking toward the future as we transition out of this pandemic, whenever that occurs. I suggest companies try to help each other with knowledge and resources. The Regional Economic Partnership is here to facilitate that. Companies need to look at potential funding through

the federal government as well as the state. Look at new models that show opportunities they didn’t see in their old model. For example, Superfeet is now procuring large-scale personal protective equipment, which keeps employees working and helps frontline workers, and companies including Chuckanut Bay Distillery and Bellewood Farms have converted some operations to making sanitizer. Goldberg leads the Whatcom County Business and Commerce Committee, which brings together leaders from large companies to advise the county on decisions regarding major employers. Public health and the economy depend on each other. As Goldberg said, “building a strong and sustainable economy is dependent on our business community taking proactive steps to prevent a spike in COVID-19.” ■

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BY THE NUMBERS BP

It’s All in the Numbers

Top 100 Private Companies in Whatcom County

Women in the top executive position

Companies headquartered outside of Bellingham city limits

122

Age of the oldest company on the list— Samson Rope Technologies

Changes to the top 5 over the past year

Age of the youngest company on the list— Seeking Health

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PRIVATE COMPANIES

IN WHATCOM COUNTY

PHOTO: iStockphoto.com/Ali Shahgholi

Based on 2019 sales.

The A’s have it. Alpha. Axiom. And, Andgar. In this annual ranking of the Top 100 Private-Owned Companies in Whatcom County, that trio stands out. To wit: Seven years ago, the Alpha Group—anchored by Alpha Technologies in Bellingham—started its run of seven years at No. 1. Three years ago, Axiom in Lynden and its founder/CEO Tim Koetje adorned the cover of the Top 100 issue. They’re both back in the brightest lights, Alpha because it transitioned to new ownership, and Axiom because it showed the most growth—over 30%. Andgar, ranked No. 37, enjoyed a gain of about 20%. The list reflects 2019 sales and employment figures that aggregately produced more than $5 billion and created more than 16,000 jobs—about 59% of them locally. Alpha Technologies went through its first full year under EnerSys (NYSE) in Reading, Pennsylvania, thereby joining two other local powers—Haggen and Hempler Foods Group—as still locally operated even though they have all become divisions of large conglomerates based elsewhere. Hempler in Ferndale operates independently under the umbrella of Premium Brands (TSX) in Richmond, British Columbia. (Last year, company patriarch Dick Hempler, a former Business Pulse Lifetime Achievement Award recipient, died at 82.) Haggen was sold in 2016 to Albertson’s (Boise, Idaho) but operates out of Barkley Village in Bellingham. Haggen, ranked No. 2, was the perennial leader before Alpha took the lead in 2013. The top producer with local ownership is construction giant Exxel Pacific. The newest accumulative results provide an added

important perspective this year: Given the nationwide economy shutdown during the first half of 2020, this listing will give a clear picture of the effects on Whatcom County’s free-enterprise landscape. The 2019 results indicate a consistent stability, with only a handful of companies showing a drop in revenues. Several companies, such as (alphabetically) Axiom, Barkley, Hardware Sales, Jansen, Roger Jobs Motors, and Skeers Contruction, gained enough to move up in category and ranking. Axiom made the largest gains in 2019—jumping into the $80-plus million range, catapulting it from No. 20 to No. 13 with over a 30% increase in business and 155 more employees than in ’18. When Axiom was a front-cover story, Koetje told Business Pulse that their goal was $100 million and 300 employees by the end of 2020. In June this year, on the rush of a continued rise in projects and constant hiring during the first quarter, he projected that they would meet or exceed that. Other items of significant interest: Drew Zogby assumed the president/CEO role at Alpha Technologies in Bellingham, while former top executive Fred Kaiser continues his career there on the board of directors and retains 3% stock ownership. Two prominent companies sold: Diehl Ford was rebranded as Bellingham Ford & Lincoln within an automobile group in Aberdeen owned by Rich Hartman of Olympia. And, Anderson Paper & Packaging similarly continues in Ferndale but is now under the brand of Walter E. Nelson Company (home office in Portland, Oregon).

JUL/AUG 2020 | BUSINESSPULSE.COM

EMPLOYEES REGION

TOTAL

TOP EXECUTIVE(S)

Alpha Technologies An EnerSys Company

Bellingham

1976

400+

1500+

David Shaffer Drew Zogby

Haggen Inc.

Bellingham

1933

754

1963

John Clougher

Exxel Pacific Inc.

Bellingham

1989

200

Kevin DeVries

Dawson Construction Inc.

Bellingham

1983

150

250

Pete Dawson

Grizzly Industrial Inc.

Bellingham

1983

100

275

Shiraz Balolia

LTI Inc.

Lynden

1906

650

Jason Jansen

CHS Inc.

Lynden

1941

130

270

Don Eucker

N/A

Peoples Bank

Bellingham

1921

295

441

Charles LeCocq

Hempler Foods Group LLC

Ferndale

1934

130

190

Stephen Bates

Samson Rope Technologies Inc.

Ferndale

1878

200

320

Christian Rheault

Anvil Corporation

Bellingham

1971

275

470

John Mohoney

The Markets LLC

Bellingham

2008

360

410

Kevin Weatherill

SALES $350M+ $450M+ $800M+

FOUNDED

$120 - $140M

LOCATION

$95 - $119M

COMPANY

$85 - $94M

2020 2019 RANK RANK

THE MARKETS LLC — Here’s a positive COVID-19 model: As 2019 gave way to a 2020 pandemic, Kevin Weatherill doubled down on his industry’s customary extreme sanitation and health measures—ahead of the curve. In January, The Markets, which includes local stores The Market at Birch Bay and DaVinci’s Market in Bellingham, bought a three-year supply of sanitary products.

stayed in good shape—no closings or quarantines. My team knows what to do.” Customer traffic dipped, but sales volume rose despite supply chain glitches. “We’re responsible for 300-plus (employee) lives and customers’ protection, so we’ve gone to school on this and developed a great game plan...done more than was required. And we’re holding up...”

Axiom Construction & Consulting LLC

Lynden

2001

275

Timothy Koetje

Harris Pacific NW (formerly Diamond B Constructors Inc.)

Bellingham

1909

175

Pete Chapman

BUSINESSPULSE.COM | JUL/AUG 2020

$80 - $84M

“Because of what the World Health Organization was saying, we got prepared before the first cases were announced (in the U.S.) ...planning sessions with store managers, procedural posters, gloves and masks, a process for no-contact curbside service. We’ve

TOTAL

TOP EXECUTIVE(S)

N/A

Dewey Griffin Subaru

Bellingham

1967

Dick Meyer

Smith Gardens

Bellingham

1901

185

1100

Eric Smith

N/A

Haskell Corporation

Bellingham

1890

125

200

Fred Haskell

IMCO General Construction Inc.

Ferndale

1978

160

Tyler Kimberly

Trans-Ocean Products

Bellingham

1985

241

246

Murry Park

Faithlife Corporation

Bellingham

1992

357

Bob Pritchett

Hardware Sales Inc.

Bellingham

1962

130

138

Jerry McClellan, Tye McClellan

Hollander Investments Inc.

Bellingham

1996

500

Mark Hollander

Alaskan Leader Fisheries

Lynden

1991

110

Rob Wurm

Roger Jobs Motors

Bellingham

1985

Roger Jobs

Tiger Construction, Ltd.

Everson

1974

Scott Isenhart

Superfeet Worldwide Inc.

Ferndale

1977

150

John Rauvola

Mills Electric

Bellingham

1911

200

John Huntley

Strider Construction Co. Inc.

Bellingham

1988

100

130

James A. Gebhardt

Faber Construction

Lynden

1987

100

125

Rick Faber

Mt. Baker Products Inc.

Bellingham

1993

135

Steve King

Blythe Plumbing & Heating

Bellingham

1904

David C. Morse III

Brim Tractor Company Inc.

Lynden

1966

Dan Brim

N/A

Walton Beverage Company

Ferndale

1931

130

Les Blouin

Farmers Equipment Company

Lynden

1935

Kevin Pawlowski

WRS (Western Refinery Services)

Ferndale

1990

215

225

Billy VanZanten

Cowden Gravel & Ready Mix

Bellingham

1945

145

Brent Cowden

SALES $80 $89M

REGION

$70 - $79M

EMPLOYEES

$60 - $69M

FOUNDED

$50 - $59M

LOCATION

$40 - $49M

COMPANY

$30 - $39M

2020 2019 RANK RANK

JUL/AUG 2020 | BUSINESSPULSE.COM

2020 2019 RANK RANK

COMPANY

Andgar Corporation

LOCATION

FOUNDED

Ferndale

1973

EMPLOYEES REGION

TOTAL

154

164

TOP EXECUTIVE(S)

SALES

Todd Kunzman

ANDGAR CORPORATION —An industry leader in sheet metal fabrication for nearly half a century, Andgar showed the second largest gain in revenues last year among the Top 100. One big announcement: Dave McCarty joined the Food Processing team as Director of Operations. Andgar’s diverse market includes agricultural waste solutions, berry processing, residential HVAC (heating, ventilation & air conditioning), and general contracting. They manufacture and distribute more than a dozen types of equipment specializing across the spectrum of strawberry, raspberry, blueberry, and blackberry production. The company renamed after Andy Mellema and Gary VanLoo, who bought a small Lynden sheet-metal shop and grew it with the stated goal of producing “the highest quality products and superior service at a fair cost….through the application of biblical

Saturna Capital Corp.

Bellingham

1989

Jane Carten

N/A

Sanitary Service Company Inc.

Bellingham

1926

Paul Razore

Scholten’s Equipment Inc.

Lynden

1980

Duane Scholten

Brooks Manufacturing Company

Bellingham

1935

John Ferlin

Bellingham Cold Storage

Bellingham

1946

200

Doug Thomas

Morse Steel Service Center

Bellingham

2001

Mike Morse

Vital Choice Wild Seafood & Organics

Bellingham

2001

Randy Hartnell

DeWaard and Bode

Bellingham

1946

Jerry Roorda

Sound Beverage Distributors Inc.

Bellingham

1950

Dean Shintaffer

Jansen Inc.

Bellingham

1952

Grant Jansen

All American Marine Inc.

Bellingham

1987

Matt Mullett

Bellingham Yacht Sales Inc.

Bellingham

1984

Nick Ouilette Dean Ouilette

Hoagland Pharmacy

Bellingham

1981

Carson Huntoon

Seeking Health

Bellingham

2010

Dr. Ben Lynch

Bramble Berry Inc.

Bellingham

1998

Anne-Marie Faiola

BUSINESSPULSE.COM | JUL/AUG 2020

$20 - $29M

$30 - $39M

principles in our daily business activities.”

2020 2019 RANK RANK

COMPANY

LOCATION

FOUNDED

EMPLOYEES REGION

TOTAL

TOP EXECUTIVE(S)

Mt. Baker Imaging/Northwest Radiologists

Bellingham

1965

160

Dr. David Cahalan

Barron Heating & Air Conditioning

Ferndale

1973

143

147

John Barron

N/A

Wood Stone Corporation

Bellingham

1990

100

Chris Trout

MSNW Group LLC

Ferndale

1995

104

410

Janelle Bruland

Walter E. Nelson Company (formerly Anderson Paper & Packaging Co. - sold 4/1/20)

Ferndale

1992

Rick Anderson

SALES

WALTER E. NELSON COMPANY — Founder and former Owner/President Rick Anderson sold the paper & packaging distributing company he started 28 years ago to this Portland group that is the largest family-owned janitorial, chemical , and paper distributor in the Pacific Northwest. The buyer took over Anderson’s Portland division in April 2019 and then on April 1 this year the new owners assumed reins of the Washington division, which also includes a paper manufacturing facility on the Ferndale site. Inslee, was CEO of AP&P and also stayed in the company as Director of Human Resources for Nelson. Their customer base extends into Lower British Columbia for paper and packaging, plus office, janitorial and safety products. and supply chain optimization programs. Business has remained steady in the transition.

Birch Equipment Rental & Sales

Bellingham

1972

DariTech Inc.

Lynden

1990

Ryan DeWaard

Woods Coffee

Lynden

2002

200

350

Wes Herman

Allsop Inc.

Bellingham

1964

Ryan Allsop

City Mac

Bellingham

1992

Troy Curran

Express Electric

Ferndale

1992

Roger Anderson

G.K. Knutson Inc.

Bellingham

1997

Greg Knutson

Woodstock International Inc.

Bellingham

1989

Shiraz Balolia

Louws Truss Inc.

Ferndale

1952

135

B. J. Louws

$20 - $29M

Anderson contracted to remain aboard as President of Nelson’s Coordinated Division (Ferndale & Kent). His stepson, Chandler

Sara Rothenbuhler

JUL/AUG 2020 | BUSINESSPULSE.COM

2020 2019 RANK RANK

COMPANY

LOCATION

FOUNDED

EMPLOYEES REGION

TOP EXECUTIVE(S)

SALES

TOTAL

Barkley Company/Talbot Real Estate

Bellingham

1990

Stowe Talbot Michael Bayless

Bellingham Ford Lincoln (formerly Diehl Ford)

Bellingham

1908

Julian Greening

BELLINGHAM FORD LINCOLN — A seamless transition took place last August. New ownership, new name, new management. Rich Hartman—owner of two dealerships in Aberdeen—bought and rebranded the Diehl Ford Bellingham. The 2019 numbers reflect a combined sales range and employee count. New general manager Julian Greening led Bellingham Toyota/Mercedes-Benz for 17 years. “(Diehl) obviously has an incredible history to build on as the 12th oldest in America,” Greening said. Mike Diehl kept the family tradition going by becoming Finance Manager. He had headed the operation for 11 years after his father, Bob, ran it 28 years. Rounding out the management team: Shawn Gregory (sales) and Joe Smith (service). The dealership overhauled the inventory, facility, service department, website to enhance Internet sales, and hours of operation to 7 days a week. “We’re super excited,” Greening said, “to grow this historical company on the full-service automobile landscape in

Infusion Solutions Inc.

Bellingham

2009

Rowena Birnel

Larson Gross CPAs & Consultants

Bellingham

1949

100

104

Kelli Visser

A.L.R.T. Corporation

Everson

1990

William Westergreen

Bellingham Millwork Supply

Bellingham

1993

Dick Campbell

Totally Chocolate Inc.

Blaine

1993

Ken Strong

TriVan Truck Body

Ferndale

2003

Marty VanDriel

Chuckanut Bay Foods

Bellingham

2008

David Loeppky Matt Roth

Emergency Reporting

Bellingham

2003

105

David Nokes

Lister Chain & Forge Inc.

Blaine

1911

Michael Stobbart

WesSpur Tree Equipment Inc.

Bellingham

2004

Ryan Aarstol

Lynden Sheet Metal Inc.

Lynden

1940

Bobbi Kreider

Airporter Shuttle/Bellair Charters

Ferndale

1985

145

Richard Johnson

BUSINESSPULSE.COM | JUL/AUG 2020

$10 - $14M

$15 - $19M

Bellingham and Whatcom County.”

LOCATION

FOUNDED

EMPLOYEES REGION

TOTAL

TOP EXECUTIVE(S)

Skeers Construction

Bellingham

1985

Dick Skeers

The Comphy Company

Ferndale

2003

Mia Richardson

Whatcom Land Title

Bellingham

1982

Colleen Baldwin

Hytech Roofing

Bellingham

1952

Dan Gross

Credo Construction

Bellingham

2001

Todd Lapinsky

N/A

Natural Way Chiropractic

Bellingham

1995

Dr. Eddie Hansen

N/A

Simple Box Storage

Lynden

1997

Ross Black

N/A

Signs Plus

Bellingham

1992

Jim Sutterfield

N/A

Reichhardt & Ebe Engineering Inc.

Lynden

1993

Luis Ponce

SALES $10 - $14M

COMPANY

$5 - $9M

2020 2019 RANK RANK

We at Business Pulse magazine believe the following companies qualify for the list but were unable to confirm their numbers as of press time. 13

Bornstein Seafoods Inc.

Bellingham

1934

100

350

Colin Bornstein

Coleman Oil (formerly McEvoy Oil)

Bellingham

1932

Tim McEvoy

Healthy Pet LP

Bellingham

1985

158

Ted Mischaikov

Barleanâ&#x20AC;&#x2122;s Organic Oils

Ferndale

1989

155

165

Bruce Barlean

Keith Oil

Ferndale

1959

Sam Boulos Yanolla Boulos

Family Care Network

Bellingham

1999

425

485

Dr. Marcy Hipskind

Seafood Producers Co-op

Bellingham

1944

250

Joe Morelli

SPIE - The International Society for Optical Engineering

Bellingham

1955

175

Kent Rochford

Specified Fittings LLC

Bellingham

1996

180

Tom Franzen

ProPack Inc.

Blaine

1991

200

Alex Snyder

Western Forest Products

Bellingham

1981

Jon Maulin

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CONGRAT

BUSINESSPULSE.COM | JUL/AUG 2020

ULATIONS to all the companies for their contributions to our local community!

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BP BUSINESS PROFILE

PHOTO: Tiffany Brooks

Golf in full swing in Sudden Valley Reopening “felt like Christmas morning” to many Mary Louise VanDyke

Brian Kruhlak, Sudden Valley’s director of golf

This summer, the fairways at Sudden Valley Golf & Country Club are dotted with golfers playing the game on the scenic 18hole course that borders Lake Whatcom and a wooded ridge. Brian Kruhlak, the director of golf, and his staff aren’t taking the current activity— the thwack of clubs against golf balls, the rumble of golf carts, people’s smiles at the end of a positive round of golf—for granted. Usually, the course is played throughout the year, even in the worst of weather, Kruhlak said. He had no reason to think 2020 would bring in negative new realities. Mother Nature dumped a lot of snow in February, but that closure didn’t pose as great a challenge as what was coming, he

BUSINESSPULSE.COM | JUL/AUG 2020

said. Eventually snow melts away. The coronavirus showed up. Thousands of business managers and owners around the state learned they would have to stay closed due to the pandemic. Spring arrived, bringing long, grueling weeks of uncertainty. The golf course took a big hit in terms of membership renewals, and the club was forced to lay off several employees, Kruhlak said. The pandemic and stay-at-home order “was an impact like we never expected or anticipated,” he said. Meanwhile, the golf course needed to be kept up to par. Kevin LeDuc, the course’s head golf professional, moved over from managing the golf shop to working on the maintenance crew full time during the closure, and Kruhlak took turns mowing the turf. Volunteers from among the members contributed many hours to helping keep the course in good repair during the closure, he said. With other business leaders, he waited to hear when the

course could reopen, albeit with safeguards for social distancing. Kruhlak said it was difficult to describe how enjoyable the May 5 opening day was. “My daughter, Kylie, who was checking players in on the first tee,

told (me) that she couldn’t believe how many grown men and women told her that it felt like Christmas morning,” he said. Once again, golf was in full swing at Sudden Valley. Kruhlak is no stranger to the extensive work needed to care for the golf course and its various equipment. His first job involved working at Sudden Valley golf course while he was in high school. His parents owned property in Sudden Valley, and the family traveled there on weekends from Vancouver, British Columbia. Kruhlak kept working at the golf course while studying at the University of British Columbia. He entered the Professional Golfers’ Association of America Apprentice Program in 1990, and that led to his becoming a full PGA member. In 1992, Kruhlak accepted a position with Avalon Golf Links in Burlington. Kruhlak returned to Sudden Valley as the director of golf in February 2011. The course was developed by Ken Sanwick of Sudden Valley Inc. It opened in 1971 and was purchased

several years later by the Community Association of Sudden Valley, Kruhlak said. The course has remained substantially in the original layout, with the front nine and back nine hole portions

differing radically from each other. Golfers feel as if they are playing two different experiences, Kruhlak said. “Sudden Valley really is a stunning piece of property,” he said. “A course like this wouldn’t get developed today, almost certainly.” The front nine looks out onto Lake Whatcom and Stewart Mountain, and the fairways are relatively open and flat, according to the golf course’s website. Golfers experience a different type of play when entering the back nine, with its elevation challenges. People need to keep their shots tight in that area so golf balls don’t disappear into the evergreens, Kruhlak said. Sudden Valley features more than 50 bunkers (depressions topped with sand), and 13 of the 18 holes (including every hole on the front nine) has a water hazard, he said. Although the back nine has five holes without water hazards, the trees make up for that. Sudden Valley is a private golf community with over 400 active members,

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Kruhlak said. The course is one of the reasons people move to Sudden Valley, he added. The community offers a variety of amenities, including parks, hiking trails, waterfront access and a marina. Although the course is owned by the association, people who live outside Sudden Valley golf there, with golf enthusiasts driving from Bellingham, Seattle and Vancouver, British Columbia. Tournaments and events held at Sudden Valley include the 2019 Washington State Women’s Amateur, the 2019 U.S. Senior Open Qualifier, men’s and women’s invitationals, junior club championship events, and events held by local charities and business associations. Events that occur from October to March are played in all types of weather with an average of 100 participants, Kruhlak said. Golfers choose from different options to traverse the course. If foot power isn’t their choice, traditional golf carts are available for use. The facility also offers GolfBoards, four-wheeled vehicles that resemble motorized skateboards. Kruhlak said he often hears riders say how much fun they have on the GolfBoards. “You ride them kind of like a snowboard, with a spot up front designed for carrying the golf bag,” he said. The golf course also offers FootGolf, a sport that combines soccer and golf, on the front nine. Participants kick the ball along an 18-hole FootGolf course, with each hole designed as a par 3, 4 or 5. Kruhlak hopes the coronavirus crisis is past. “The demand for golf has been pretty strong once we opened,” he said. “That makes us hopeful we can carve out a decent year.” Sudden Valley Golf & Country Club is located at 4 Clubhouse Circle in Bellingham. For more information, visit suddenvalleygolfcourse.com. ■

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A struggling economy is no time to raise taxes Kris Johnson Hundreds of our fellow citizens stepped up to run for elected office during the recent candidate filing week. From local to federal positions, this is an example of our representative democracy at its finest. It’s also a reminder that there are real problems facing us right now, and many of the people solving them will be relatively new to elected office. The state Legislature already has a lot of new faces, and this November’s election will bring even more newcomers to Olympia. Newcomers and veterans alike will be looking at an unprecedented drop in state revenue. After years of record growth, policymakers will be looking at a $7.1 billion budget shortfall, ac-

cording to unofficial figures released last month. In fact, lawmakers might be called back to the Capitol even before the 2021 session begins in January, possibly as early as this summer. There is talk of a special session to address the budget hole after the next official budget and revenue forecast. Whenever they come back, legislators will face hard choices. Cutting programs is hard, so there are already calls for tax increases to help sustain state spending. That would be a mistake. There’s a great degree of fragility in our economy and in communities across the state. With approximately 1.2 million unemployment claims in Washington as of mid-May—and thousands of businesses forced to close their doors, some never to reopen—putting additional burdens on

our state’s employers, employees and communities would not be helpful. Businesses pay more than half of all state and local taxes in Washington, so if they aren’t able to succeed, the state’s tax revenue will continue to fall. And those same private-sector employers pay the wages that sustain the other two major pillars of state tax revenue: sales and property taxes. As dire as the state’s budget situation might be, our state’s small businesses and other private-sector employers are in far too fragile a position to handle a bigger tax burden. Let’s be clear: We need to double down on our commitment to grow jobs and help restart the economy. Now is the time to give employers and employees every possible tool to recover, not to add new burdens. Help employees and workers receive

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training to move into new industries. Invest in infrastructure, including broadband. Pause new rulemaking, as the state did in 2010 during the recession. The economy is going to look different on the back end. Now is the time to come together as Washingtonians to give the economy the confidence it needs to be strong and dynamic. You can’t tax your way out of a recession. But you can grow and build your way out. Fortunately, that’s exactly what our state’s private-sector employers do. They are creative, dedicated and reliable. As Washington safely gets back to work, businesses will be there to welcome back employees and customers. As Main Street tries to recover from the pandemic, employers will need help from lawmakers and policymakers at every level. Legislators will need to do all they can to work within the tax revenues that our struggling economy can provide to shore up the budget and help rebuild the economy. It will take creative thinking and an “everything plus the kitchen sink” approach. Like everyone else, lawmakers and political candidates are just beginning to grapple with the consequences of the COVID-19 pandemic. Businesses are starting to reopen in parts of the state, with new guidelines in place. That’s a good start. The next step will be for lawmakers, whether they have been in office for decades or just stepped up this year, to do everything in their power to help Main Street businesses not only survive the pandemic, but also make a full recovery. ■ Kris Johnson is president of the Association of Washington Business, the state’s chamber of commerce and manufacturers association.

FINANCE BP

A guide to Paycheck Protection Program loan forgiveness Adam Lervik (Updated July 2, 2020) The Paycheck Protection Program (PPP) launched by the Small Business Administration (SBA) has provided over $518 billion in loans to more than five million small businesses impacted by the coronavirus pandemic nationwide. In Washington, approximately $12 billion in PPP loans have been disbursed. Peoples Bank – like many banks – spent the past several months working overtime to process a large volume of loan applications. As of July 1, we helped over 1,700 local businesses obtain over $225 million in PPP loans, which will be used to protect over 20,000 jobs. Businesses that received a PPP loan must now begin the process of obtaining loan forgiveness. We have received many questions on this topic and are implementing a streamlined system to help our borrowers initiate forgiveness requests. The SBA released a Loan Forgiveness Application that helps clarify the process. Here are important points borrowers should keep in mind. • 60% Payroll Requirement. Payroll expenses must comprise at least 60% of the amount requested for forgiveness. This has been reduced from the original 75% requirement. • Expense Accounting. Both payroll costs paid and incurred are eligible for forgiveness. Payroll costs are considered paid on the date that paychecks are distributed or the date the applicant business originates payroll direct deposit. Payroll costs are considered incurred on the date the employee’s pay is earned. Any accrued,

unpaid payroll expenses through the last day of the covered period are eligible for forgiveness if they are paid out on or before the next payroll date. Similarly, non-payroll expenses that accrue during the covered period are eligible if they are paid on or before the next regular billing date. • Loan Forgiveness Timeline. Borrowers who received approval for their PPP loan prior to June 5 may opt to utilize either an 8-week or a 24-week covered period. Loans approved on or after June 5 must utilize a 24-week covered period. All borrowers have 10-months from the last date of their covered period to submit the completed application for forgiveness to their PPP lender. Borrowers may apply for forgiveness prior to the end of their covered period, provided they have documented eligible expenses greater than or equal to the amount requested for forgiveness. • Salary/Wage or FTE Reductions. Applicants are asked to compare payroll expenses during the “Covered Period” or “Alternative Covered Period” to actual payroll expenses during the period from January 1, 2020, to March 31, 2020. Any reductions to employee pay of 25% or more may reduce the level of forgiveness. Similarly, applicants must calculate average FTE during their chosen covered period and compare that to average FTE between the period (i) February 15, 2019, to June 30, 2019, or (ii) January 1, 2020, to February 29, 2020.

Seasonal employers may compare using either of those periods or any 12-week period between May 1, 2019, and September 15, 2019. No employee may be considered greater than 1.0 FTE for this calculation. Exceptions are granted where: (1) Employee rejected a good faith offer to rehire (2) Employee was terminated for cause or voluntarily resigned (3) Employee voluntarily requested and received a reduction of their hours during the covered period (4) Employer was unable to find qualified employees to restore full FTE (5) Employer was unable to restore business operations to February 15, 2020 levels due to COVID-19 related operating restrictions. Any business that was closed due to state mandate at any time during their covered period is eligible to claim this exception. Borrowers who restore FTE and salary/wage levels by December 31, 2020, are generally exempt from a reduction in forgiveness. As a community bank, we are here for our customers and the communities we serve. This means doing all we can to be a resource for families and local businesses. We understand that everyone’s situation is unique, and we encourage anyone with questions or concerns to contact us for additional guidance. ■ Adam Lervik is the lending programs manager at Peoples Bank. He was born and raised in Whatcom County and lives in Bellingham with his wife and three children.

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BP BUSINESS PROFILE PHOTO: Tiffany Brooks

From left to right: Maricel Florenosos, partner Teri Treat and Hailyn Jorgensen

A landmark rises from the ashes Elisa Claassen It’s not the first time that Teri Treat has encountered difficult times in the course of doing business. She started a successful Bellingham restaurant in her 20s, and she’s been involved in numerous real estate projects in both the commercial and private sectors. Today, as a partner at The Inn at Lynden, Teri is in a position to protect and preserve a boutique hotel in one of Lynden’s historic landmark structures. The Waples building is much like the proverbial phoenix that rose from the ashes— figuratively and literally.

department store west of the Mississippi River, according to Lynden Chamber of Commerce records, and it is on both the state and national historic registers. Waples himself retired in 1960, and the store—which by then had become the Lynden Department Store, a place to buy anything and everything, even wagons and coffins in its earlier days—had its final sale in 1979. After a period of stagnation, downtown Lynden eventually underwent a “Dutch” makeover along Front Street during the late 1980s. The reimaging included vibrant flower baskets, workers in Dutch-inspired garb, and an empty drug Looking back: The building store becoming a Dutch-themed restaurant. The building may be historic, but modern, clean-lined inThe Lynden Department Store building at the corner at teriors greet guests in the lobby. Abstract paintings by Barba- Front and Fifth streets began its second life under contractor ra Sternberger, on loan from the nearby Jansen Art Center, Leonard Vander Velden, who renamed it Delft Square and provide a cosmopolitan edge that contrasts with a vintage divided it internally into a series of small stores and eateries. bike rack loaded with touring bikes for guests. As recession hit the economy in 2008, another disaster The building’s founder was businessman W.H. “Billy” Wa- struck the 43,000-square-foot building. A four-alarm fire ples, who opened a general store on the corner of Fifth and caused sizable damage, caving in the roof. But the building’s Front streets in downtown Lynden on Nov. 1, 1897. That history would not end there. building would burn in 1913, but in 1914 Waples constructLocal developer Jeff Johnson and his wife, Suzanne, pured a new building on the site, according to an essay for His- chased the shell of the building for $210,000 in the fall of torylink.org by Phil Dougherty. 2008. Along with Jeff and Debra McClure and Pete DawThe new Waples building at one point housed the largest son, from Dawson Construction, they proceeded to clean

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out the interior of the building. Things came to a halt, however, as they waited for the depressed real estate market to improve. According to the essay by Dougherty, ideas for the site were plentiful and included a public market, a climbing wall, a six-lane bowling alley, a movie theater, retail kiosks and a 42-room hotel. Both the City of Lynden and the local YMCA had ideas in the mix. None of those came to fruition. Instead, the McClures and Teri and Matt Treat bought out the Johnsons and Dawson in 2013. Their decision to pursue the project had come while they were having dinner together across the street from the Jansen Art Center and became encouraged by that development and reuse of space. The historic building itself gave the four partners inspiration for the design. They worked closely with RMC Architects in Bellingham, where Jeff McClure works as an architect, on the design and details of The Inn. Dawson Construction was hired to do the buildout. While one option was to demolish the heavily damaged building and fully restart, the team decided to carefully protect and preserve what they could while retaining room to be creative. They salvaged Douglas fir, for example, and used it to line some of the floors. They also moved the inn’s entrance to Fifth Street to preserve Front Street for retail. Someday, when the market indicates a need for more space downtown, the partners plan to renovate the 4,500-square-foot basement space. Back in 2010, the City of Lynden

had put together a comprehensive plan to look particularly at the city’s retail needs. One discussion focused on hospitality. At that time, there were few options along Guide Meridian for visitors to stay. Homestead Resort had a small hotel, and there had been a bed and breakfast or two in town. Later, The Mill closed its small boutique to house a local Youth with a Mission group and to focus on the building owner’s primary business, Elements Hospitality. A need did exist for visitors who wanted to stay the night in Lynden—and to spend their days and evenings around town. “Our guests come, eat and shop,” Teri Treat said. “They come, have a good time and go home.” The Inn opens The Inn opened on Dec. 28, 2015. The charming hotel has 35 rooms of various sizes. One extended stay suite

has a generous 509 square feet with a bed outfitted in linens and blankets from The Comphy Company in Ferndale. Amenities at The Inn include free parking, free WiFi everywhere, air conditioning, shops and restaurants onsite and nearby, and a shared lounge/TV area. A meeting room, overlooking Village Books, seats 25. “We are blessed with staff who have been with us from the very beginning, and they are our greatest asset,” Treat said. She pointed to the front desk, where Kira Florenosos, The Inn’s assistant manager, was working. Retail offerings The Inn occupies just one part of the building. Putting together the tenancy of the building was also vital in bringing it back to life. Most of the tenants have been there since it reopened, with Overflow Taps and clothing boutique Cheeks having moved in later. Cheeks moved within weeks of Christmas just over a year and a half ago from a smaller location further down Front Street. The larger space allowed Cheeks to expand its offerings beyond jeans to a full selection of women’s attire. “She’s an amazing entrepreneur,” Treat said. During the COVID-19 pandemic, the occupants have been much quieter than usual. Village Books, Cheeks and Bellingham Baby Company have been doing online sales, with the latter also selling face masks. Customers can

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come to The Inn’s front desk to pick up their online purchases. Avenue Bread, which faces Front Street, closed for a time before reopening for pickup orders. Overflow Taps has added pizza to its lineup. “Each year the Inn has grown in occupancy and revenues,” Treat said. “January and February we were beating our forecasts, then COVID-19 came and revenues dropped. Obviously, 2020 will be different for everyone.” Looking forward Teri Treat stays in close contact with Bellingham Whatcom County Tourism. Regional research indicates that travel will pick up in the fall, she said. Research also suggests that folks will travel closer to home and may choose to travel by car instead of flying, a trend that could benefit the Pacific Northwest. Treat said she is looking forward to

the state progressing toward phases in which businesses can reopen. Like many other residents and businesspeople, she is eager to move forward faster than slower—but safely at the same time. While some in the community might be focused on the difficulties surrounding the coronavirus, Treat is opting for positive, long-term thinking. It’s important to discover just how special the community is, she said—and to be resilient, like Waples. “Commit to hard work,” she said. “Collaborate and be self-reliant.” The Inn is considered an “essential business” and has been open to travelers and workers from near and far. Some guests arrived to retrieve their children from college when schools were closing campuses on both sides of the border. Some came from California, she said, and hurried to meet their children at the Canadian border to bring them home. While travelers have been fewer,

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some guests are still passing through and others are staying at The Inn longer term while they work nearby. The Inn has not lost any staff during the pandemic. “We are doing our absolute best,” Treat said. Like many businesses, The Inn has implemented extra safety measures— cleaning high-touch surfaces, laundering linens at high temperatures and offering no-touch check-in. Eventually, the impacts of the coronavirus will diminish. Treat and The Inn’s other partners are planning to move ahead. They have been holding online meetings with a locally organized, 20-member lodging association that has existed for two and a half years under the guidance of Keith Coleman of the Marriott SpringHill and TownePlace Suites in Bellingham. Though in some ways they are competitors, these businesses also are helping each other out. They share knowledge, learn what is happening in the community and collaborate. The Inn also is involved with the Lynden Chamber of Commerce and the Downtown Lynden Business Association. “Lynden businesses are not dying,” Treat wrote in a follow-up email. “We are trying! Our hope is for more commerce soon, while keeping everyone safe and healthy. We continue to pick up a bit every week. Our sanitation and extra cleaning protocol is working, and we feel confident we will serve our guests well.” While some days have not been easy, Treat said she remains optimistic, full of faith and even excited. Throughout the crisis, she has noticed others in the community with positive outlooks, such as those who developed the Whatcom Arts Project, an online collaboration of more than 30 performing and visual arts organizations. Every day, Treat asks herself, “How can I do my part?” ■

OP-ED BP

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A rough start for local businesses... but there’s reason to be optimistic about the rest of the year WBA Staff The first six months of 2020 have taken their toll on Whatcom County. The coronavirus pandemic and the resulting stay-at-home orders and mandatory closures have led to event cancellations, business failures, border restrictions, limited travel and ongoing concerns about the health and safety of employees and customers. And while the pandemic has been the main story, it isn’t the only reason for a battered local economy. In late April, Alcoa announced the curtailment of activity at its Intalco Works aluminum smelter in Ferndale. That is the bad news. The good news? Local governments can still take action that will help the county’s business community better weather the ongoing storm. “Sometimes it’s the little things,” said Mark Harmsworth, director of the Center for Small Business at the Washington Policy Center. “Local governments can provide some aid to small businesses by doing something as easy as relaxing local sign ordinances. Allowing retailers and restaurants to put up temporary signage advertising new options like takeout and curb-

side pickup will help make shoppers and diners aware of options they might otherwise ignore.” Local and state governments can also do more than such relatively simple changes. Harmsworth, who served two terms as a state representative from Mill Creek, argues that local and state governments need to take a longterm view of revenue. “The business and occupation taxes levied by the state and many local governments here in Washington will slow the recovery,” Harmsworth said. “The state and municipalities will face budget shortfalls because of the pandemic. No one is arguing otherwise. However, a failure to consider B&O and other tax relief risks the state getting its money now—only to find that the number of businesses able to keep their doors open immediately decreases, leading to less tax revenue, which will put pressure on the government to tax the businesses that survive at an even higher rate. If cities and the state of Washington do not take a longterm view of the budget crisis, they could create a downward economic spiral that could last far longer than

the pandemic.” While that doesn’t sound like good news, it highlights a specific opportunity for Whatcom County’s business community. Over the next six months, the county’s private sector needs to make its voice heard. Policymakers listened to the systemic challenges facing one sector of the economy: health care. As a result, they took appropriate action to avoid the worst-case scenario for an industry that plays an important role in the county’s physical and economic health. The next six months could give private businesses and whole industry sectors the chance to better educate policymakers on both the short- and long-term challenges facing other important economic sectors.The next six months could also see Whatcom County recover faster than comparable counties in other states. Economic projections from the Wharton School of the University of Pennsylvania show that Washington’s economy could recover faster than all but five other states. According to the school’s Penn Wharton Budget Model, the state’s gross domestic product could have a year-over-year decline

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of 1.8%—if the governor continues to open the economy with social distancing still in place. While any decline in GDP is bad news, earlier predictions called for far heavier declines in economic output. Even though Whatcom County’s tourism-heavy economy and border proximity present unique challenges, the forecast for the rest of the year does not appear to be a worst-case scenario. There are other reasons to be relatively optimistic about the rest of 2020. While this pandemic has taken a historic toll, the county has faced and survived other economic downturns.“Over the past 40 years I have watched this county and our businesses weather occasional economic setbacks,” said Tony Larson, president of the Whatcom Business Alliance. “Some of those setbacks were severe. But each time, the economy has come back stronger than before. It may be hard to believe right

now, but individuals and companies respond to crisis with innovation. They have to. That crisis-based innovation helps create economic opportunities no one has even thought of.” Economic resiliency is not just a talking point. Throughout American history, economic downturns have happened for a wide variety of reasons. The Panic of 1893—which was the country’s worst recession until the Great Depression—traced its roots to the failure of a wheat crop in Argentina. Economists still debate the cause(s) of the Great Depression to this day. The failure of overvalued internet companies caused the recession at the beginning of this century. The Great Recession, which started in 2007, resulted from a distorted housing market and questionable banking practices. While each of these downturns was different, the years and decades that followed share a common feature: sus-

tained, explosive growth. In fact, some of the most productive economic eras in U.S. history have followed sharp downturns. Many of Whatcom County’s companies have experienced their darkest moments during the first six months of 2020, but the economy will eventually rebound. Our business community is simply too talented for any other outcome. While there will be a “new normal,” the new normal quickly becomes just “normal”—and within that normal, Whatcom County’s entrepreneurs and business leaders will do what they have always done. They will innovate, rebuild and figure out a way to deliver value to their consumers. Need an example? The food service sector has been one of the industries hit hardest by the pandemic. But across Whatcom County, many restaurants and food service providers have found fresh ways to serve customers and at-

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tract new market segments. “Throughout the state, we are seeing some restaurants learn that alternative business models can lead to unexpected growth,” said Karen Malody, a Seattle-based food service and restaurant consultant. “While this is an existential crisis for many operators, others have figured out a way to make it work and even thrive. Whatcom County has reopened with restrictions still in place, and we are still seeing even more innovation.” More than anything, though, Whatcom County’s economic recovery over the next six months will depend on the engagement of business leaders who are willing to roll up their sleeves and take part in the rebuilding process. Occasionally, that will require giving policymakers a better sense of how relief from taxes and fees lead directly to job creation and eventual recovery. Rebuilding will also require a willing-

ness to share best practices with other executives who may have developed creative ways to keep employees and customers safe while still keeping the company’s lights on.Whatcom County faces unique challenges over the next six months. The region depends heavily on tourism and cross-border travel, especially in retail. The pandemic has also dramatically affected other important sectors, including agriculture and construction. Western Washington University and other critical local economic engines face an unknown path, at least for the rest of 2020. Nearly every business leader in Whatcom County would trade the last six months of 2019 for the last six months of 2020, regardless of how it turns out—and that is before we even consider challenges facing the public sector. “We haven’t even seen the full impact on state and local budgets,” Harmsworth said. “The state of Wash-

ington and her cities and counties cannot just tax their way out of this downturn. Unlike prior recent recessions, this one is far more widespread. Even health care has seen mass layoffs and facility closures. State and local governments will have to figure out how to reduce shortfalls without further burdening already fragile businesses.” The next six months will see Whatcom County take a wobbly walk down the road to recovery—but we will all take that walk together. Business, local governments, education, health care, agriculture and every other aspect of the county’s economy will need to collaborate. That has not always been the case, which means that the rest of 2020 could be an opportunity to strengthen relationships and put the county economy in a position to thrive—and work for everyone—long after the first six months of 2020 are just a tragic memory. ■

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Adjusting to the “new norm” How the pandemic has changed local businesses Sherri Huleatt Change is an essential part of business. However, nothing ushered in change as drastically or quickly as the COVID19 pandemic, which forced businesses big and small to ask themselves how they would keep their employees and customers safe during a pandemic—and beyond that, how they would stay profitable. Brick and mortar retail stores were one of the few places where large groups still gathered, which meant that implementing new social distancing standards—such as new signage and barriers that keep people 6 feet apart—was key to keeping people safe. Sam Crawford, sales manager of Westside Building Supply in Lynden, said that after rolling out new social distancing standards, his team has a heightened awareness of how much contact they have with the public, as well as how aisle widths, counter depths and in-store traffic flow can increase that contact and help spread germs and illness. Since enacting new standards, Crawford said his team has never been healthier, without so much as a cold among them. “This may be a silver lining to this pandemic—that we may have less workplace illness due to being more diligent about virus spread,” Crawford said. Westside also had to quickly adjust the store’s operating hours to accommodate employees who suddenly couldn’t work, such as those particularly vulnerable to COVID-19

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because of health issues or parents whose child care had become unavailable due to the pandemic. The food industry also has made major changes. Matt Brawner, owner and managing partner of Övn, a wood-fired pizza restaurant in Fairhaven, said ensuring his staff feel safe at work and treating them like active stakeholders have been paramount. “When determining what services we will offer, how we will offer them, and what our production and service environments look like, we are prioritizing what our employees want by asking them, rather than first asking our guests,” Brawner said. “Usually it is the other way around.” This is one of the reasons Övn isn’t offering “curbside” pickup. Instead, the restaurant is offering “contact-free” pickup, in which employees leave orders on a table for customers to retrieve. Brawner also has supported his wait staff by implementing a new service fee that ensures they get tipped. And while food deliveries were already popular through national services such as Uber Eats and Grubhub, as well as local services such as VikingFood, they’ve skyrocketed since the start of the pandemic. In fact, as soon as Brawner heard restaurant dining rooms might close in Washington state, he started training frontline staff to offer in-house deliveries—a way for Övn to remain competitive without cutting into profits from pay-

ing third-party delivery fees, he said. Brawner said the pandemic’s impact goes beyond delivery options, though. “Restaurant owners need to take the reins and figure out what the new ‘hospitality’ looks like,” he said. “Customers will be yearning for familiar experiences, but that’s not exactly on the table.” Brawner said restaurants will need to weigh public safety with profitability to ensure their staff and customers stay safe and healthy—even if it means going against the expected restaurant experience.Technology also has changed the way local businesses operate during the pandemic. A “Zoom Happy Hour,” for example, was relatively unheard of at the beginning of 2020, but now such events are staples of stay-at-home socializing. For some businesses, technological

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team.” Beyond technology, help also has come in the form of the Coronavirus change was inevitable; the virus just Aid, Relief, and Economic Security spurred the change sooner than ex- Act—or CARES Act—which includpected.“Our industry is and has always ed $349 billion in federal funds for the been changing rapidly,” said Mike Paycheck Protection Program. Parry, co-owner and general manager Both Bellwether Real Estate and at Bellwether Real Estate. “Brick and Övn were approved for the PPP. Threemortar models were already starting fourths of the loan covers employee to fade a bit pre-COVID-19, so that wages for eight weeks, with the remainmade more virtual and remote options ing quarter covering other operating more accessible.” expenses, such as utilities and rent. Video calls have helped Bellwether Regardless of the hardships faced maintain a sense of community with its by local businesses, they seem to be on customers and camaraderie with its em- the same page about one thing: “Like ployees. “Utilizing Zoom has been fun,” everyone else, we want to keep our emsaid Jordan Hedlof, managing broker at ployees and customers safe and hopeBellwether Real Estate. “We’ve incor- fully move on from this pandemic as porated virtual Mastermind sessions, soon as possible,” Crawford said. ■ happy hours and sales meetings for our

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Remove regulatory friction to accelerate economic recovery Todd Myers The coronavirus quarantine is causing an unparalleled economic shock, creating a record number of unemployment claims in Washington state. During the first months of 2020, the unemployment rate skyrocketed, with the state receiving 1.9 million initial unemployment claims by the end of May. This represents an unprecedented loss of jobs. Some of these jobs may reappear when the quarantine is relaxed, but many of the jobs—and the small businesses that created them—will simply be gone. To find a new economic equilibrium, people will have to search for new business opportunities and new jobs, and consumers will have to change how they spend their money. In his book “Specialization and Trade: A Re-introduction to Economics,” Economist Arnold Kling provides a useful way to think about shocks to the economy, pointing to the disruption of “patterns of specialization and trade.” In a market economy, businesses and consumers can predict to some degree what they will purchase and what needs to be supplied. Prior to the coronavirus hitting us in February, restaurants knew how much food they needed to buy, and supermarkets knew how much toilet paper to stock. One month later, those patterns were completely disrupted.

Once that disruption occurs, it takes time to discover a new, sustainable pattern of specialization and trade. Patterns of specialization and trade in the market, Kling explains, “emerge from the actions of countless individuals, not from the minds of a few designers. And the factors that affect the value of market production or Internet resources are many, complex, and not all quantifiable.” There will be a reshuffling of jobs and businesses, requiring experimentation on the part of millions of people who have been displaced. Will people want the flexibility of working from home or other remote locations as

answers more quickly. To speed up our response to the virus, some regulatory barriers are already being torn down. The governor has issued a significant number of emergency orders affecting the economy and health care. Rather than adding restrictions, however, the executive orders waive regulations. For example, cities are waiving rules about using paper and plastic bags, acknowledging the health risks associated with reusable bags. At the federal level, the Food and Drug Administration is (slowly) waiving restrictions, such as one that limited the availability of sterilized protective gear. It took a public scolding from the governor of Ohio,

People will disagree about the role of financial support from government and taxpayers, but at the very least, government should not hinder the process of creating and finding new work. independent workers in the gig economy? Or will they want the security— but constraints—that come with being employees? How much more will people be willing to spend on iPhones, prescription drugs and other products made in the U.S.? Will more of us be working from home and ordering from Grubhub? The answers to these questions will emerge over time. Reducing friction in the economy by eliminating costly regulation will help entrepreneurs and workers find these

but the FDA finally backtracked. The once-hidden costs of these regulations have now become obvious. Each regulation adds friction to the process of putting resources where they are most needed. As more quarantine-related restrictions are lifted, hundreds of thousands of people will begin searching for new jobs, putting their skills to use where they are most needed. We need to reduce friction in the economy and allow businesses to create jobs without regulatory barriers.

JUL/AUG 2020 | BUSINESSPULSE.COM

One place to start greasing the skids of job creation is to reduce licensing requirements for people who have proven skills. Earlier this year, House Bill 2355 passed unanimously out of the House Consumer Protection & Business Committee. It died in the House Appropriations Committee after the Washington State Labor Council testified against it. The bill would have allowed people who demonstrate competence in certain areas to be licensed for those activities. Imagine, for example, a restaurant worker who has skill at being a manicurist or a dietician. Should that person have to sit through 600 or 900 hours of classes to get a license in a skill they already have? By way of comparison, if you want to be an escrow officer— dealing with people’s money and trust funds—you only have to apply and pass a test. These sorts of barriers will need to be removed to help people adjust to the new pattern of specialization and trade that develops after COVID-19 is controlled. As the economy recovers, the attention of policymakers will be on tax relief and financial support for workers and businesses. Much of that is important, but those efforts are mostly about providing a safety net for the many people who need it. To get the economy going, we need to let people innovate and take advantage of the full range of their skills. People will disagree about the role of financial support from government and taxpayers, but at the very least, government should not hinder the process of creating and finding new work. ■

BUSINESSPULSE.COM | JUL/AUG 2020

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

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Business Pulse magazine July | August 2020

Articles inside

A struggling economy is no time to raise taxes

How the pandemic has changed the future of local businesses

Removing regulatory friction to accelerate economic recovery

Reasons to be optimistic about the next six months