Business Pulse Magazine: Summer 2015

wba industry tour: bp cherry point, sept. 23

Richard Jefferson A man with a Marina on his mind

MAGAZINE Summer 2015 Ken Bell, CEO Best Recycling

Whatcom County

TOP 100

Erin & Andy Vitaljic, Owners Fat-Cat Fish Company and American Canadian Fisheries

Private Companies

Exceeds $4.4 billion and 16,000 employees

Room at the inn?

Plenty‌ with 8 new hotels and 1,000 new rooms

Time to come back home, Salmon

HB 1270 hatchery plan could create 500 new jobs, 500% more production, and boost rec/tourism The Publication of The Whatcom Business Alliance

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Table of Contents

Inspired by product launches for more than 200 visiting dealers, Cory Blackwood at the Kona Bike Shop thought retail would give a strong local presence to the Ferndale manufacturer. Kona World did $54 million in sales worldwide last year to rank in the Top 20 of the Whatcom Private 100 listing.

(Photo by Gabriel Knapp)

12

THE WHATCOM TOP 100: WHO’S WHO, WHO’S NEW, AND WHAT THEY’RE UP TO

14

COVER STORY: FISH, CATFOOD, AND FEEDING THE HUNGRY

30

broader HORIZONS FOR HAGGEN, KONA WORLD

62

PERSONALLY SPEAKING: RICHARD THE LUMMI-HEARTED

Every year we scour the business and commerce landscape of Whatcom County and ID the privately-owned companies that generated the highest gross sales revenues. Every time we find some new brands: Either, they had a banner year and met the $5 million minimum for listing, or they hadn’t surfaced in previous searches. This year we have ten new listings. Check out the highlights, from top (where the Alpha Group remained, reporting a $60M increase in 2014) to the bottom.

For the first time in our Private Top 100 listing a husband-wife tandem appeared with each running their own company. Andy Vitaljic’s American-Canadian Fisheries ($10M) has operated on a northeast patch of Bellingham for 30 years, and his story reaches back much further in the fishing industry. His wife, Erin, a former Start-Up of the Year winner, runs Fat-Cat Fish ($6.7M) that makes cat food from hubby’s leftover fish carcasses. And they have a penchant for feeding the hungry in a big way.

Gabriel Knapp, a local professional, shot that marvelous cover photo.

A familiar brand that rode the top of the Private Top 100 until last year, Haggen ($470M) might well return there in 2015 after purchasing a bushel of stores in California. Reporter Susan G. Cole tracked down the leadership to describe where that’s taking the hometown grocer. Meanwhile, Kona Bicycle Company of Ferndale had a milestone moment this summer – their first-ever storefront retail, in downtown Bellingham. Kona World extends to far reaches in bringing two-thirds of its $54M revenue from exports.

Richard Jefferson is a man on a mission—a new marina, Big Box real-estate development, and much, much more on behalf of his beloved Lummi Nation. He revealed a remarkable personal background, from birth on Portage Island, through boyhood thoughts of becoming an astronaut, to degrees in engineering, and now immersed in a brilliant era of community prosperity as CEO of Lummi Commercial Company. “He has an amazing capacity for work,” a colleague said. And the vision to work toward.

4 | BUSINESSPULSE.COM

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Table of Contents DOUBLING DOWN at the Silver Reef Hotel Casino Spa: The new expansion soon to open will basically double the overnightstay space to 205 (adding 98 deluxe rooms, 2 luxury suites, a 3,000 square foot meeting room, larger hotel lobby, and new bar). Appearing at No. 5 in the Private Top 100, the Silver Reef adds to the astonishing number of new hotel rooms available in Whatcom County this year.

(Photo by Mike McKenzie)

50

KEYS TO SUCCESS: HORIZON OF NEW HOTELS PROVIDE SUITE OUTLOOK FOR corporate TRAVEL AND TOURISM

68 74

KICKSTART BELLINGHAM – A SIT-DOWN WITH ENTREPRENEURS

88

GUEST COLUMNS

Rooms to stay in and work (wired stations). Rooms to stay in and play (swim, spa). Rooms to vacation (golf, water sports) or game and dine (casino). Every kind of new space a hotel or suites inn can design, you will find with the many new, refurbished, and expanded options around the county. We turned loose reporters Cheryl Stritzel McCarthy to assess how marketing will work with the glut of availability, especially with the airport traffic decline, and Sherri Huleatt to check on a historical rebuild in Lynden.

Red Rokk Interactive CEO Tyler Byrd has put together a series of video-taped interviews with start-up innovators of several young businesses. The viewer can hear the trials and a-ha! moments of entrepreneurs who have traversed the tough early years of beginning a business. Sign in for some insightful sharing.

THAT CHOKING SOUND YOU HEAR IS OVER-REGULATION STRANGULATION When are wetlands not really wetlands? Often, according to land-use consultant Roger Almskaar. He unloads in the first of a two-part series (Part 2, Fall Edition) about the disturbing infringement on personal and business owners’ rights by a morass of seemingly random bureaucratic regulations. The example he described has kept a properly-vetted developer from selling lots, let alone building houses on a land package in Birch Bay. We welcome some new voices intended to give you immediately practical insights into specialty areas: CJ Seitz from the Small Business Development Center, Jake Deschenes on personal investing, Lylene Johnson in the real estate market, and a special contribution from the CEO of the Washington Farm Bureau, John Stuhlmiller. Plus, our regular lineup on environmental free market, best practices in Lean and HR, and Life in the Tech Lane.

Publisher Tony Larson Managing Editor: Mike McKenzie

For editorial comments and suggestions, please write editor@businesspulse.com.

Graphic Designer/Layout Adam Wilbert Carson McDonagh

Business Pulse Magazine is the publication of the Whatcom Business Alliance. The magazine is published at 2423 E. Bakerview Rd., Bellingham, WA 98226. (360) 671-3933. Fax (360) 671-3934.

The yearly subscription rate is $20 in the USA, $48 in Canada. For a free digital subscription, go to businesspulse.com or whatcombusinessalliance.com. Entire contents copyrighted © 2015 – Business Pulse Magazine. All rights reserved.

Feature Writers Roger Almskaar Susan G. Cole Sherri Huleatt Cheryl Stritzel McCarthy Tara Nelson

POSTMASTER: Send address changes to Business Pulse Magazine, 2423 E Bakerview Rd., Bellingham, WA 98226.

Guest Column Contributors Randall Benson

6 | BUSINESSPULSE.COM

Jacob Deschenes Farm Bureau/John Stuhlmiller Todd Myers Lylene Johnson Erin Shannon SBDC/CJ Seitz SHRM/Rose Vogel Tech Help/Big Fresh Cover Photo: Gabriel Knapp Photography Photography: Sherri Huleatt Gabriel Knapp Cheryl Stritzel McCarthy Mike McKenzie Katie Scott

Courtesy Photos: Lummi Indian Business Council Nooksack Tribe Randall Benson Red Rokk Interactive Ad Sales: Pat Draper Jon Strong Subscriptions: Janel Ernster Administration Danielle Larson

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John Huntley President / CEO Mills Electric Inc.

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Jane Carten President / Director Saturna Capital Corp.

Randi Axelsson, Sales Manager Silver Reef Hotel Casino Spa

Board Chair Jeff Kochman President / CEO Barkley Company

Pam Brady Director, NW Govt. & Public Affairs BP Cherry Point

Doug Thomas President / CEO Bellingham Cold Storage

Janelle Bruland President / CEO Management Services NW

Bruce Clawson Senior VP Commercial Banking Wells Fargo

Marv Tjoelker Partner / Chairman of the Board Larson Gross PLLC

Scott Corzine Major Accounts Executive Puget Sound Energy

Kevin DeVries CEO Exxel Pacific Inc.

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

‘A rising tide raises all boats’ Feeling the power of local business success

I

n this edition of Business Pulse we proudly highlight our annual list of the Top 100 Private Companies in Whatcom County. To make the list, these privateownership companies have their corporate office located in our community. We rank them by last year’s gross sales.

Whether or not you own or work for one of these companies, or do business with them, their success ought to be important to you.

When they are successful, the com-

munity prospers, and that rising tide raises all boats.

Our community depends on these businesses’ revenues to fund schools, to create new jobs, to add significantly to the tax base, and to strengthen our economic foundation. One of the many roles the Whatcom Business Alliance (WBA) plays is cheerleader for their success.

Cumulatively, these companies represent more than $4.4 billion in annual sales, and provide employment to more than 16,000 local families.

We’ve profiled a few of them in this edition and provided some pull-outs so you’ll get to know what they do better.

If you are not already part of

our growing leadership network, please join us as a WBA member to enhance our efforts.

WBA ACTIVITIES The WBA has worked hard this year to bring value and to engage its members. We seek members’ involvement in a number of our ongoing projects.

The Board’s advocacy committee, led by CEO Doug Thomas of Bellingham Cold Storage, has become involved in education and advocacy on several issues. On two occasions the WBA provided personal testimony in Olympia on behalf of Alcoa Intalco Works regarding HB 1381, which would make the local employer of 600plus high-paying jobs more competitive in a world marketplace.

I traveled by invitation to Washington, D.C. with members of the Washington Council on International Trade, including Boeing, Microsoft, Starbucks, the Ports of Seattle, Tacoma, and Portland, plus several other statewide Economic Development and Trade organizations. We all met with the entire Washington State Congressional Delegation to discuss BBA ATTRACTION: Tony Larson, WBA president (I.) visits with George Walther, a U.S. Speakers Hall of Fame presenter who attracted about 250 to Session 3 of our Bellingham Business Academy series.

(Staff photo)

10 | BUSINESSPULSE.COM

the importance of trade to our state and local economies.

We are informing our members on HB 1270, which would have a dramatically positive economic impact on the commercial and recreational fishing industries, processing and all other fish related industries. (Read in-depth about it starting on p. 52.)

On July 14, following our board meeting in the Encore Room at the Mount Baker Theatre, we invite our members and guests to join us at 8 a.m. for a presentation by the president of the Freedom Foundation, Tom McCabe. He will discuss the impact of the $15/hour minimum wage sweeping through our state. This issue will affect you even if you’re not a business owner.

This will be a great opportunity for you to learn how.

Thanks to our program committee, led by CEO Jane Carten at Saturna Capital and CEO Bob Pritchett at Faithlife, our Bellingham Business Academy has kicked off to very positive reviews.

More than 250 people joined us for our third Academy event in June.

Also, as we approach 2016, the mandated requirements of Obamacare kicks in for companies with 50 or more employees. The WBA Healthcare Committee, led by board chair Jeff Kochman, CEO of Barkley Company, is moving forward with new initiatives as part of the unique WBA employer healthcare program. It will likely include the building of healthcare clinics modeled after one of our board member’s company that has saved them millions of dollars over the last eight years, and has resulted in a decrease in healthcare costs while everyone else has experienced increases.

We’re pleased that so many of you could join our last two industry tours – the Alpha Group manufacturing facility, or the Semihamoo Resort tour and BBQ that attracted 350 business leaders. Save the date to take the tour of BP Cherry Point Refinery on Sept. 23.

We are collaborating with the Ferndale Chamber of Commerce to bring a cross-border element to our NW Business Expo and Conference in October and have secured our speakers for the Economic Forecast Breakfast in November.

To participate in these activities, or to get more involved with the aforementioned committees on advocacy and education, or the membership committee chaired

by CEO John Huntley of Mills

Electric, and the Technology Committee chaired by owner Becky Raney of Print and Copy Factory, give me a call directly at (360) 746-0411, or go to www.

WhatcomBusinessAlliance.com.

One last thing: If your business is facing any challenges that we might assist you with, or you are seeking resources of any kind and are not sure how to proceed, let us know. As always, we appreciate and value your input.

Enjoy this edition.

WHATCOMBUSINESSALLIANCE.COM | 11

Whatcom top 100 Kona Bicycle Company in Ferndale, listed at more than $50 million, opened its first retail store this summer in Bellingham.

The Top 100 Kona World will sell its 100 models.

(Photo by Gabriel Knapp/Business Pulse)

The Influencers:

Top 100

exceed $4.4 billion in sales, create about 16,000 jobs

By the Business Pulse Staff

12 | BUSINESSPULSE.COM

N

ew, and more. Those themes popped out as highlights of our annual Top 100 ranking of Whatcom County privately-owned businesses.

When we zeroed in our coverage commitment on Whatcom County-only three years ago, our annual listing of the highest revenue-producing companies showed a Top 50. That’s because we lost about half the listings from previous years located in our broader coverage areas of Skagit, San Juan, and Island counties.

That also challenged us to boost our radar and intensify our search for more qualifying Whatcom County companies. The second year of our county-only focus, we found a Top 75. And then we jumped last year to a Top 100.

This year we experienced a banner year for the number in our rankings who confirmed and shared sales and employee figures with us—95—and we welcomed several newcomers.

This year we had among the new entries production that exceeded high as over $100 million, and several who

came in between $50 million and $125 million. Altogether the new entries upped the total confirmed sales of our list more than $4.4 billion, and employee tally more than 16,000.

You’ll find feature articles on four companies in the Top 100: • The cover story on a wifeand-husband tandem that made it with businesses that blend in terms of product and services, American Canadian Fisheries and FatCat Fish, yet owned and operated separately.

• Haggen, a long-standing local name in grocery and drugstores, with a look at how, after closing many stores in the last couple of years, suddenly burst onto the California scene and scrambled to put together its new pieces.

• And, a manufacturer of fat-tire bikes that has been on the scene since the ‘80s, known as Kona World, that opened its first-ever retail store recently and for which the export market drives about two-thirds of its business.

New listings—ten this year— mostly appeared two ways: • A growing business enjoys an excellent surge, and exceeds our minimum standard for the list, $5 million, for the first time.

• We learned about an established business, or some contacted us when we put the word out about what we look for. The continued rise in membership in the Whatcom Business Alliance also alerts us to new (to us) businesses in the upper echelon.

A couple of companies dropped off because they sold to publiclytraded corporations, or moved out of the county.

We’re certain many more privately-held companies based in the

county (our other two criteria for qualification) would jump onto the list in a heartbeat, which is why we continue to comb with every resource we can think of. Perhaps next year we’ll go for a Top 150; help us out by letting us know if your company, or one you know about that is privately-held, tops $5 million during 2015, and headquarters here.

Most of the companies in our listing confirmed their 2014 sales

and employment numbers with us this year. But we always include some that we know from reliable sources belong on the list; they either declined to participate, or did not respond to requests for their confirmation. (Some companies prefer not to disclose their sales, even though we hold specific numbers in confidence and use roundedoff figures for the rankings within various ranges of sales.)

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Whatcom top 100: #77 American Canadian & #93 Fat-Cat Fish

Erin and Andy Vitaljic stand before the 10-acre garden from which American Canadian Seafoods delivered more 32,000 pounds of produce last year to the Christ the King Church Food Bank in Bellingham. Every Tuesday they send 400 pounds of salmon to that food bank. Also during 2014 they sent more than 2 million meals to food banks in regions where they do business.

14 | BUSINESSPULSE.COM

Feeding fish to the masses

Wholesale and in cat food around the world and to food banks, local couple take American Canadian and Fat-Cat brands to new heights

By Mike McKenzie, Managing Editor

T

his is a first. Our annual Whatcom Top 100 Private Companies listing features a husband and wife, Andy and Erin Vitaljic, with separate businesses.

Hers, Fat-Cat Fish, buys from his, American Canadian Fisheries, to process premium-protein ingredients from the heads, skin, and bones of salmon for the largest manufacturers of pet food in the world.

“Our business model is simple,” Erin Vitaljic said. “We turn an expense for American Canadian – disposal of waste – into a revenue stream for both companies.”

American Canadian deals internationally across a broad spectrum of wild salmon and salmon byproducts.

Her company, Fat-Cat Fish, is not new to our pages as an honoree.

The company was the 2010 StartUp of the Year Award recipient.

From its inception just 7 years ago, its premium-quality pet food ingre-

dients advanced to $6.7 million in sales last year.

American Canadian Fisheries and its subsidiaries reached about $10 million in sales during 2014. A significant part of that consisted of processing about 25 million pounds of salmon carcasses for Fat-Cat Fish (including 9 million at their local plant).

Andy Vitaljic’s company has grown for 43 years into a global

“Our business model is simple…we turn an expense for American Canadian into a revenue stream for both companies.”

– Erin Vitaljic, CEO of Fat-Cat Fish Company

wholesale provider of a variety of fish products – including mainstream consumer salmon and specialties such as smoked salmon, caviar, and smoked herring.

Erin and Andy, in a joint interview at their offices on Hannegan Road between Bellingham and Lynden, each said they are driven by one life passion: “Feeding the hungry.”

The mission applies to both humans, and to Erin’s strong love for animals.

Last year, one of the subsidiaries, 40-acre Hannegan Properties, delivered 32,000 pounds of produce from a 10-acre garden and adjacent corn field to the food bank at Christ the King Church in Bellingham. Andy Vitaljic’s sister, JoAnn Nelson, co-manages the farm, with a huge assist from the organizer of the church’s food bank, John Williams.

Additionally, the Vitaljiks make a delivery of 400 pounds of fish every Tuesday to that church’s food bank. Plus, last year they shipped more than 2 million meals to food banks in western states where they do business.

“We have a burning desire to feed people,” Andy said.

Erin said, “And I have a burning desire to make a difference in the animal world,” The owner of two WHATCOMBUSINESSALLIANCE.COM | 15

Whatcom top 100: #77 American Canadian & #93 Fat-Cat Fish

Garrett Reynolds has been manager of American Canadian Seafoods since its inception in 1985. (Photo by Gabriel Knapp)

cats and with an affinity for helping starving, scavenging, abandoned dogs (“I see them everywhere we travel”), she contributes to Dogs of the Desert Palm, a guide-dog provider.

If there’s a benevolence gene, figuratively, both she and Andy say they got theirs from their fathers.

“My father Joe couldn’t take his wallet out without helping somebody,” Andy said. “He was known as the most kind, generous man.”

Erin said she got her passion for her work from her father, Fred Ossewarde. “By the eighth grade he had started his own business in the logging industry,” she said. “It took me a lot longer to figure out how to ‘work’ at my passion, which is a love

for animals.”

The textbook-classic Vitaljic great American success story harkens back to the World War I era.

A family of three Croatian sons of Nikola Vitaljic immigrated from what then was Yugoslavia, and found the fishing waters of Puget Sound. A fourth brother, Andy, stayed behind – and when three male cousins were born to the brothers in the U.S., they named all three Andy.

American Canadian’s Andy grew up in Bellingham ingrained in all things fishing. “My grandfather tendered a trap off of Lummi Island,” he said. “My dad was a commercial fisherman who was the ‘Top Gun’ gill-netter at Alaska

Packers for 10 consecutive years.”

Andy was among the Top 10 himself for five of those years.

Over the years he’s been involved in many fishing businesses as manager, owner, or partner, in addition to several years of his youth when he fished for a living, and seven years as an industry consultant (“I hated that, every minute of it….”).

What he didn’t hate was the call of the salmon. “I started fishing for a living when I was 14,” he said. “I was the 11th Man on the crew, and I painted the bottom of our boat, the Red Feather, and slept on the floor of the engine room.

“That was 1946, and I made $1200 on half a share, and said, ‘This is for me!’”

He began fishing off Kodiak Island at 17, and several years into it his life on the water ended when he heard horrible news come across his boat’s radio. “I heard my uncle say, ‘Too bad about Joe.’ That was my dad. He was gill-netting off Smith Island. His boat capsized and he drowned. He was just 58; I was 25. I quit and we opened the Fisherman’s Market downtown.”

As an entrepreneur, Andy Vitaljic delved into numerous companies that tie into this multi-business business: American Canadian Fisheries, and its vertical operation of Hannegan Properties, Hannegan Express, Hannegan Seafoods, partnership with Quality Control Special Services at Bellingham

ANDY VITALJIC’S FISHING VENTURES American Canadian evolved out of a partnership with Myer Bornstein called North Pacific Ocean Products. Follow this bouncing ball: After four years Vitaljic then partnered with Howard Klein, the CEO of Ocean Beauty, and they formed Ocean Star Seafoods to make smoked lox. In 1985 they formed Ocean Star.

In a skirmish over an alleged trademark violation of the name, Vitaljic said they fought it a while, “then after $14,000, we quit and changed the name to American Canadian.

In 1985 it moved to the Bellingham headquarters where it has operated the last 30 years.

In the middle of all that, Andy managed Frosty Fish during the ‘60s, where they processed 3.5 million pounds of hali16 | BUSINESSPULSE.COM

but in a one-year period. He had already partnered during 1959 in an operation at Bellingham Cold Storage – in one of its oldest buildings, among four that Vitaljic’s company still owns – called QC for short. It stands for Quality Control Special Services. “None of this would work,” he said, “without QC.” It is now the oldest client at BCS. Vitaljic started buying fish on the Columia River in 1970 and he opened Allied Fisheries there in 1975. It is still going strong under management of Al Mitchell, a longtime friend and employee. He grew up with the Yakima, Nez Perce, Umatilla, and Warm Springs tribes who form the Columbia River Compact with fishing rights on the river.

The Fat-Cat Fish logo travels frequently throughout the area on the side of the business’s delivery trucks.

(Photo by Gabriel Knapp)

Cold Storage, and tenants who contract their services. Together they accomplish fish processing, fish smoking, fish purchasing, wholesale, retail, packaging, shipping, and distribution – enough to employ as many as 150 in local jobs during peak seasons.

They deal with the Yakima Nation, with 40 hatcheries in Washington plus seven in both California and Oregon, and five in Michigan. International sales go to Russia, Germany, France, and Japan. The company operates Hannegan Express for shipping, and Hannegan Seafoods for retail.

“We donate a pound to the church food bank for every pound of fish we sell in the store,” Andy said.

Except for the local retail (also available at the Green Barn in Lynden), featuring Spring Chinook, or King salmon from the Columbia River (“every bit as good as Copper River at one-third the price,” Andy said), all American Canadian sales take place outside of the state of Washington.

Pelican Packers is a tenant on the 40-acre spread and does all the canning. Sunny Foods is a tenant that grinds, smokes, and freezes product.

And now, American Canadian is poised to propel a pet food company into an international force. Andy

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Whatcom top 100: #77 American Canadian & #93 Fat-Cat Fish

From our files of the dinner celebrating our 2010 annual business award winners: Erin Vitaljic, with her husband Andy at her side, earned recognition of Start-Up of the Year for Fat-Cat Fish. It produces pet food from salmon carcasses left over from Andy’s American Canadian Seafoods. The company retails fish from its Hannegan Seafoods division where Justin Drumming stocks the case with Kings and a wide variety of selections. (Photos by Mike McKenzie)

Vitaljik came up with the idea for this new venture after losing his first wife to cancer 10 years ago.

“This all started,” Erin said of Fat-Cat Fish, “with Andy having a problem. He was processing salmon and roe for human consumption. They had all these byproducts left over. They stink. He had to pay to truck them

“At age 14 I was the 11th Man on the crew, and I painted the bottom of our boat, the Red Feather, and slept on the floor of the engine room. I made $1200 on half a share, and said, ‘This is for me!’”

– Andy Vitaljic, CEO of American Canadian Fisheries, on the start of his lifelong career in the fishing industry

away. So we started with lean pet food ingredients containing high protein and Omega 3 oil.”

Andy said, “It’s low-margin…makes pennies. But not when you sell millions and millions of pounds.”

Erin worked as the head financial analyst for the Port of Bellingham when Andy, a long-time friend of the family, approached her about the start-up. “Andy approached me with $80,000 (startup funds) and said, ‘I have the fish, and you love animals – let’s start a business.’ Neither of us has ‘worked’ a single day since. FatCat had it all paid back within 90 days.”

American Canadian is searching for new markets in Scandinavia, France, and elsewhere in Europe.

Meanwhile, Andy and Erin plan to put more concentrated effort into Fat-Cat. “The pet food has taken off,” Andy said. Erin man18 | BUSINESSPULSE.COM

ages pricing, procurement, sales, and marketing. “When we started in October 2008 Erin sold everything we produced in less than three months. She asked me, ‘What do we do now until next season?’

“That was my cue to get busy and procure fish other than my own salmon production, and we have been growing and expanding every since.”

Erin said, “We never stop. Seven days, around the clock. And we love every minute of it. Ever since 7th grade I’ve always wanted to do something big and make a difference during my lifetime. I feel extremely blessed that Andy provided me this opportunity.”

Erin’s company has become a forerunner in a transformation of pet food that meets the requirements of the U.S. Food Safety Modernization Act. They trademarked “For Pets (and People).” She said, “Fat-Cat Fish Salmon pet treats, which will appear in retail chains and exports markets late this summer, literally are fit for human consumption.”

Now the couple seeks new horizons with initiatives of making other pet food products from human-quality, all-natural ingredients. An example: They signed an agreement recently with NutriDried Creations in Blaine and Canada to produce a cheese pet snack that is “shelf stable with human quality ingredients.”

“We want all kinds of pet food on the Fat-Cat label,” Erin said. Any excess ingredients that don’t meet the highest grade will be used as fertilizer.

Andy concluded, “We’re working with the Small Business Administration, and the U.S. Trade Authority to develop methods of providing protein at a reasonable cost to feed the masses.

“The world needs protein. We’re going to procure it, process it, and get it out there.”

Whatcom Top 100 2014 2013 Company Rank Rank

Location

Founded

Employees: Region Total

Bellingham

1976

475

1,600

Grace Borsari/Fred Kaiser

Bellingham

1933

1005

2,098

John Turley/Clements Stevens

Bellingham

1989

120

150

Kevin DeVries

Bellingham

1890

150

300

Fred Haskell

Lummi Reservation/ Ferndale

2002

685

685

Frank Cornett

Bellingham

1932

25

25

Tim McEvoy

Bellingham

2008

323

515

Kevin Weatherill

Bellingham

1967

75

145

Pete Dawson

Lynden

1947

110

570

Brad Williamson

Bellingham

1983

100

350

Shiraz Balolia

Ferndale

1878

200

320

Tony Bon

Lynden

1941

200

200

Don Eucker

Bellingham

1978

72

206

Frank Imhof/Tyler Kimberley

Bellingham

1934

100

300

Colin Bornstein

Sumas

2011

45

60

Rex Warolin

Lynden

1920

400

400

Charles LeCocq

Top Executive

MORE THAN $660 MILLION 1

1

The Alpha Group Power solutions for Broadband, Telecommunications and renewable energy sectors

MORE THAN $470 MILLION 2

2

Haggen Inc. Supermarkets and pharmacies

MORE THAN $175 MILLION 3

3

Exxel Pacific Integrated design and construction general contractor

$125-$150 MILLION 4

4

Haskell Corporation Large-scale construction

5

NL

Silver Reef Hotel Casino Spa Conventions/meetings/grade shows, gaming, dining, and theater entertainment

$100-$120 MILLION 6

5

McEvoy Oil Wholesale fuel distribution

7

6

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

8

7

Dawson Construction, Inc. Large-scale construction

9

8

LTI, Inc. Transport of dry and liquid bulk commodities

10

9

Grizzly Industrial, Inc. Manufacture and sell woodworking and metalworking machinery

$85-$90 MILLION 11

10

Samson Rope Technologies, Inc. Synthetic rope manufacturer

$65-$75 MILLION 12

11

Whatcom Farmers Coop Convenience stores, energy/propane and agronomy sales

13

12

IMCO General Construction Heavy construction

14

13

Bornstein Seafoods, Inc. Seafood sourcing, sales and distribution

15

14

ELP Feed, LLC Ag feed and nutrition

16

NL

People's Bank

20 | BUSINESSPULSE.COM

2014 2013 Company Rank Rank 17

15

Barlean's Organic Oils

Location

Founded

Employees: Region Total

Ferndale

1989

190

200

Bruce Barlean/John Puckett

Bellingham

1960

120

120

Rick Wilson/Julian Greening

Bellingham

1971

384

512

Gordy Lindell

Bellingham

1901

200

600

Eric Smith/Mark Smith

Bellingham

1992

412

440

Bob Pritchett

Bellingham

1993

130

130

Rod Remington

Ferndale

1988

Creates/distributes flaxseed, Omega 3, and other supplements

Top Executive

$60-$65 MILLION 18

16

Wilson Motors New and used car dealerships

19

17

Anvil Corporation Engineering and procurement solutions

20

24

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

21

22

Faithlife (formerly Logos) Bible-content computer software

$55-$60 MILLION 22

18

Mt. Baker Products, Inc. Manufacturers of plywood veneer, lumber and plywood

$50-$55 MILLION 23

NL

Kona Bicycle Company

Dan Gerhard/Jacob Heilbron

WHATCOMBUSINESSALLIANCE.COM | 21

2014 2013 Company Rank Rank 24

19

Keith Oil Co.

Location

Founded

Employees: Region Total

Top Executive

Ferndale

1980

7

7

Sam Boulos

Bellingham

1985

75

125

Ted Mischaikov

Bellingham

1909

225

325

Pete Chapman

Bellingham

1989

61

77

Jane Carten

Wholesale petrolium bulk station

25

20

Healthy Pet (formerly Absorption Corp.)

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

26

21

Diamond B Constructors Commercial and industrial contractors

$40-$45 MILLION 27

23

Saturna Capital Mutual funds manager and investor

28

NL

Strider Construction

Bellingham

1988

100

110

James A. Gebhardt

29

25

Seafood Producers Cooperative

Bellingham

1944

9

120

Tom McLaughlin

Ferndale

1931

135

135

Ford Carothers

Ferndale

1977

68

116

Scott Dohner

Bellingham

1962

131

131

Jerry McClellan/Ty McClellan/LaDonna George

Bellingham

1999

338

406

Dr. Marcy Hipskind

Lynden

1935

35

74

Ken Stremler

Bellingham

1946

85

85

Steve Cowden/Brent Cowden

Ferndale

1934

80

80

Richard Hempler/ Stephen Bates

Bellingham

1959

55

158

Randy Chiabai

Bellingham

1911

150

250

John Huntley

Bellingham

1967

50

50

Dick Meyer

Blaine

2008

29

35

Kam Sihota

E verson

1974

30

35

Ken Isenhart

Bellingham

1946

49

53

Greg Gudbranson

Fishery, processor and marketer of premium seafood

$35-$40 MILLION 30

26

Walton Beverage PepsiCo beverage distribution

31

27

Superfeet Premium insole designer, manufacturer, and wholesaler

32

28

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

33

38

Family Care Network Family practice, clinics, community connections

$30-$35 MILLION 34

29

Farmers Equipment Company Berry harvesters, farm & construction equipment

35

30

Cowden Gravel & Ready Mix Provider of gravel, concrete, and insulated concrete forms (ICF’s)

36

31

Hempler Foods Group Meat processor

37

32

Redden Marine Supply Marine and commercial fishing supplies

38

42

Mills Electric Co. Electrical contractor

39

33

Dewey Griffin Subaru New and used car dealership

40

35

Kam Way Full-service transportation brokerage

41

36

Tiger Construction, Ltd. Excavating and commercial building contractor

42

37

Rice Insurance Full-service insurance agency

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2014 2013 Company Rank Rank

Location

Founded

Employees: Region Total

Top Executive

Ferndale

1990

225

250

Bill VanZanten

Bellingham

1935

55

55

John Ferlin

Bellingham

1950

80

85

Dean Shintaffer

Bellingham

1997

130

170

Jon Weintraub

Bellingham

1990

130

130

Kurt Eickmeyer/Wade Bobb

Bellingham

1946

185

310

Doug Thomas

Ferndale

2001

32

32

Randy Hartnell

Bellingham

1992

28

42

Troy Curran

Blaine

1984

76

76

Daniel N. Colacurcio Jr.

$25-$30 MILLION 43

39

Western Refinery Services Industrial maintenance and construction

44

44

Brooks Manufacturing Distribution crossarms and transmission framing components

45

40

Sound Beverage Distributors, Inc. Wholesale beer, wine, and distilled beverage

46

48

Specified Fittings HDPE & PVC pipe fitting manufacturer

47

43

Wood Stone Corp.

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

48

41

Bellingham Cold Storage Full-service public refrigerated warehousing

49

53

Vital Choice Wild Seafood Web-based wild seafood and organic products

50

45

TD Curran Apple specialists

$20-$25 MILLION 51

NL

Colacurcio Brothers Construction

24 | BUSINESSPULSE.COM

2014 2013 Company Rank Rank 52

47

Edaleen Dairy

Location

Founded

Employees: Region Total

Top Executive

Lynden

1975

125

125

Mitch Moorlag

Ferndale

1982

260

262

Cheryl Persse

Ferndale

1973

102

121

Todd Kunzman

Bellingham

1908

60

60

Mike Diehl

Bellingham

1992

75

78

Scott Renne

Bellingham

1965

100

100

Dr. Peter Buetow

Bellingham

1981

72

76

Mike Hoagland

Lynden

1987

65

70

Rick Faber

Processing and distributing milk and ice cream from 2500 Holsteins, plus three retail stores

53

46

Cascade Dafo, Inc. Designer, manufacturer of dynamic orthoses and pediatric bracing

54

49

Andgar Corporation Residential heating/AC; metal fabrication;architectural metal; biogas digester technology

55

50

Diehl Ford New and used car dealership

56

51

Blue Sea Systems Design and manufacturer AC/DC electrical products for marine and specialized vehicles

57

52

Mt. Baker Imaging Radiology, image interpretation, and imaging during low-invasive surgery

58

57

Hoagland Pharmacy Retail pharmacy, medical equipment, and special services

59

NL

Faber Construction General contractor

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Whatcom Top 100 2014 2013 Company Rank Rank

Location

Founded

Employees: Region Total

Top Executive

Ferndale

1991

50

60

Rick Anderson

Lynden

1980

31

31

Duane Scholten

Ferndale

2006

100

100

Cason VanDriel/Marty VanDriel

Lynden

1992

22

100

Sam Moncrieff

Everson

1990

60

60

Bill Westergreen

Bellingham

1980

87

115

Bob Brim

Bellingham

1972

48

80

Sarah Rothenbuhler

$15-$20 MILLION 60

59

Anderson Paper & Packaging Paper, boxes, supply chain, and packaging solutions

61

54

Scholten's Equipment Agriculture and construction equipment sales

62

56

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

63

58

Moncrieff Construction Concrete construction

64

60

ALRT Corporation Logging and road construction

65

55

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

$12-$15 MILLION 66

61

Birch Equipment Rental & Sales Equipment and tool rental

26 | BUSINESSPULSE.COM

2014 2013 Company Rank Rank 67

62

Barron Heating and Air Conditioning

Location

Founded

Employees: Region Total

Top Executive

Ferndale

1972

75

77

John Barron/Bill Pinkey

Bellingham

1979

25

25

Gary Honcoop

Bellingham

1984

39

47

Kevin Dickerson

Lynden

1951

22

22

Dennis Elenbaas

Bellingham

1993

125

125

James Hall

Ferndale

1995

121

347

Janelle Bruland

Bellingham

1981

18

25

Jon Maulin

Bellingham

1997

15

15

Wes Aarstol

Heating, air conditioning, and ventilation sales and service

68

63

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

$10-$12 MILLION 69

64

Dickerson Distributors, Inc. Distributors of beer, wine, and spirits

70

65

Elenbaas Company Fertilizer and horse feed supplier

71

66

Northwest Health Care Linen Health-care laundry management services

72

68

Management Services Northwest, Inc. General building maintenance, landscaping, and groundskeeping

73

67

Western Forest Products Commercial distributor of lumber products

74

67

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

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Whatcom Top 100 2014 2013 Company Rank Rank 75

70

Barkley Company

Location

Founded

Employees: Region Total

Top Executive

Bellingham

1990

10

10

Jeff Kochman

Bellingham

1998

43

75

Anne-Marie Faiola

Bellingham

1985

Bellingham

1987

45

45

Matt Mullett

Lynden

1989

12

12

Bryan Vander Yacht

Ferndale

1985

65

140

Richard Johnson

Blaine

1911

28

28

Michael Stobbart

Lynden

2002

170

170

Wes Herman

Bellingham

1949

69

74

Aaron Brown

Developing and leasing commercial and residential properties

76

71

Bramble Berry Inc. Soap-making supplies

77

NL

American Canadian Fisheries

Andy Vitaljic

Salmon procurement, processing, shipping, & wholesale/retail

78

74

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

$8-$10 MILLION 79

72

Vander Yacht Propane, Inc. Commercial and Residential Propane

80

73

Bellair Charters & Airporter Shuttle Bus transportation for airports and charter

81

75

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

82

76

The Woods Coffee Coffee shops and bakery

83

77

Larson Gross PLLC Certified public accountants & consultants

Porsche Bellingham

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28 | BUSINESSPULSE.COM

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www.rogerjobsaudi.com

2014 2013 Company Rank Rank

Location

Founded

Employees: Region Total

Top Executive

84

NL

Totally Chocolate

Blaine

1993

45

98

Ken Strong/Jeff Robinson

85

84

ECX, LLC (E-Cig Express)

Ferndale

2009

34

34

Timothy Furre

Bellingham

1958

11

11

Frank Zurline

Lynden

1972

35

35

Scott Bedlington

Ferndale

1981

34

34

Elie Samuel

Bellingham

1997

15

45

Greg Knutson

Ferndale

2004

22

25

Pamela "Mia" Richardson

Bellingham

1994

40

40

Erin Baker

Bellingham

1992

28

28

Jim Sutterfield

Bellingham

2008

5

5

Erin Vitaljic

Web based retailer of smoke products

86

78

Bellingham Travel and Cruise Full-service travel agency

87

79

Dick Bedlington Farms Potato farming

88

80

Samuel's Furniture Retail and interior design services

89

81

G.K.Knutson, Inc. Drywall, cold formed metal framing

90

82

Comphey Co. Home bedding products

91

83

Erin Baker's Wholesome Baked Goods Wholesale baker and distributor

92

85

Signs Plus, Inc. Full-service sign manufacturer, installation and maintenance

$5-$8 MILLION 93

NL

Fat-Cat Fish Company Mfg, sales, distribution of cat food

94

NL

Lyndale Glass

Bellingham

1992

30

30

Dennis Bosman/Don Haan

95

NL

Lynden Sheet Metal

Lynden

1940

32

32

Bobbi & Cory Kreider

95 – 104 At the time of publication our staff had not confirmed sales numbers or groupings for these companies. Through information from other sources, we believe they meet our criteria for the Top 100 Private Companies —privately-owned and headquartered in Whatcom County. We list them alphabetically. If you are aware of any company not listed that you think meets our criteria, please email your tip to info@businesspulse.com.

Company

Location

Unconfirmed Allsop, Inc.

Bellingham

Builders Alliance

Bellingham

Enfield Farms

Lynden

Fast Cap, Inc.

Bellingham

Maberry Packing, LLC

Lynden

Nuova Simonelli

Ferndale

Pioneer Foods, Inc.

Bellingham

Sanitary Service Company

Bellingham

Westside Building Supply

Lynden

WHATCOMBUSINESSALLIANCE.COM | 29

Whatcom Top 100: #2 Haggen northwest fresh

Haggen Barkley Store Manager Chris Sharick (l.) and NW Division CEO John Clougher (Photo by Gabriel Knapp) 30 | BUSINESSPULSE.COM

Hungry Haggen has a big appetite for growth Local grocer grows from 18 to 164 stores

By Susan G. Cole

L

ast September when grocery industry veteran John Clougher joined Haggen, the Bellingham-based regional supermarket chain, it was a “direct sign that the past was the past,” he said. “How lucky I was when I entered the company. The hard financial work was done.

“Haggen had had a tough couple of years. The three co-presidents and the ownership group made the hard decisions, cleaned the company up, closed (eight) stores that were losing money. We were looking towards the future, reinvesting in who Haggen has always been – committed to customer service and good food.”

With fresh eyes Clougher took charge, launching new programs under the Haggen banner, such as Northwest Fresh, its moniker for fresh, local products.

“Our customers rewarded us, and sales grew from Labor Day to New Year’s,” he said. But Haggen was hungry for more. During December, in a move that stunned industry observers, Haggen announced the purchase of 146 stores.

The mega-merger of Albertson’s and Safeway triggered a

Comvest Partners added 146 stores to the Haggen chain at a purchase price estimated in excess of $1 billion. “We had 120 days to convert them to the Haggen format.”

– John Clougher, CEO/NW Division

WHATCOMBUSINESSALLIANCE.COM | 31

Whatcom Top 100: #2 Haggen Northwest fresh federal antitrust review, resulting in the required divestment of their 168 stores.

Haggen’s owners, Comvest Partners in Florida, who bought the family-owned company in 2011, spent what some guess at more than $1 billion to acquire the bulk of those stores. Locations include Washington and Oregon, where Haggen already does business, as well as new markets in Arizona, Nevada, and California. It was a big bite for the small grocer.

“In some ways, it was the dog chasing the mail truck, and the dog caught it,” Clougher said. “We were 18 stores getting ready to purchase 146. We had 120 days to convert the stores to the Haggen format.” That included adding new inventory, training new employees, aligning computer and other backroom systems, developing its own signage, and partnering with a new wholesaler supplier, SuperValu.

“We absolutely knew we needed third-party support to convert and help manage these stores,” Clougher said. “SuperValu is a great partner.

We outsourced backroom functions, like IT (information technology), POS (point of sale), accounting, and some of the other things the customer doesn’t see.” The buying power of SuperValu coupled with ongoing operational support eased the quick transition, he said.

Haggen spent over $25 million to convert 46 new stores in the Pacific Northwest division.

Clougher was named CEO of Pacific Northwest, which includes Washington and Oregon. Another grocery veteran, Bill Shaner, heads the Pacific Southwest division. The $100 million spent to convert all 146 stores was money well-spent, according to Clougher. “We’re investing to make them great grocery stores.”

Haggen’s former wholesaler, Unified Grocers, provides products to Haggen in the Northwest as a secondary supplier. “From a consumer perspective, customers 32 | BUSINESSPULSE.COM

have access to more products. We can analyze the right mix for each store, and offer them an incredible amount of SKUs (stock keeping units, or individual items),” Clougher said.

"In some ways it was the dog chasing the mail truck, and the dog caught it. We’re getting to know 4400 new employees" – John Clougher, CEO/Pacific NW Division

As the rapid conversion of all the stores finished in June, Haggen became more determined to feature local products and improve its sustainability. “We have an internal culture compass that helps drive our

decision making,” Clougher said.

“We want to become better, we want to continue to motivate our managers and store crews to do the things customers want us to do. We don’t want to stand still.

“We’re trying to stay focused on connecting with a very large workforce. We’re getting to know over 4,400 employees (in the Pacific Northwest division). We want our employees to feel supported and empowered, and give them the training to deliver great service. We want the best employees, educated on the products we sell, and given the opportunity to grow.”

New stores need new employees.

“We’ve been on a hiring rampage from a corporate perspective,” Clougher said. “As our stores grow, we are continuing to hire.”

In Whatcom County, Haggen has 1,005 employees, including 152 at its corporate headquarters in the Dorothy Haggen Building at Barkley Village, with more hires on

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Clougher doesn’t flinch at the hyper-competitive Whatcom County grocery scene.

“Competition inspires action: Look in the mirror and see what we can do better. Grocery is a very simple business in some ways, but a lot of hard things go into being a great grocery.”

The supermarket business is a game of big numbers: hundreds of thousands of items for sale, large numbers of employees, and cutting edge technology to oversee every aspect of the business.

As a former executive with Whole Foods (a national brand scheduled to arrive in Whatcom County sometime in the next 18 months), Clougher said, “Haggen is different from Whole Foods. We’re going to compete with them by offering differentiated products, as we do now. We’re deeply committed to organics, and that’s not an exclusive Whole Foods thing whatsoever.

It’s a national and populist trend.

We’re capable of doing that as well as Whole Foods. And the size of our stores allows us to carry a great amount of regular groceries, too.

We have the ability to be the best neighborhood grocery store, with organic, fresh, local, made-fromscratch foods.

“A whole new generation of stores and a new generation of crews inspire us to do the work that will separate us from other grocery stores on the West Coast.”

He views Haggen’s legacy in the community as a plus. “Since 1933, it has created great roots in the community we serve with the products we sell,” he said. “We remain committed to local buying, supporting local producers, focusing on great service, and improving the sustainability of our food chain and the way we do business.”

The Haggen family retains minority ownership. “Rick (Haggen) keeps his eye on the busi-

ness,” Clougher said, and other family members work in the company.

With the commitment to those deep community roots, Haggen ramped up its support for local organizations and events, like Ski to Sea. He heralds store managers who have opened their facilities for local blood drives, Scout troop fundraising, even dog washes. “It’s not necessarily a cash donation, but it’s how you participate in the community.”

Haggen claims a 32 percent share of the crowded Whatcom County grocery market in 2015.

“We’re committed to how we go to market, and we’ll continue to do it better,” Clougher said. With five Haggen stores plus the company’s headquarters in Whatcom County, he said, “We’re staying here in Bellingham: we love being based here. It’s a great supportive community.”

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WHATCOMBUSINESSALLIANCE.COM | 33

Whatcom Top 100 #23: Kona Bicycle company

Racing from the start, a passionate pastime has raced to

$54 million

in sales out of Ferndale

By Tara Nelson Kona World Photos by Gabriel Knapp/Business Pulse 34 | BUSINESSPULSE.COM

The crew at the new Kona World retail shop in downtown Bellingham (from left): store manager Matt Hoffmeyer, Cory Blackwood, Brandon Weekly, and Amanda Bryan.

WHATCOMBUSINESSALLIANCE.COM | 35

Whatcom Top 100 #23: Kona Bicycle company

Kona Bicycle Shop will carry all of the company’s models—more than 100.

I

n 1988 bicycle enthusiasts Dan Gerhard and Jacob Heilbron founded Cascade Bicycles in Blaine with the intent on creating the best mountain bike for their grassroots racing program.

children’s bikes to $7,300 models for professional downhill racers. Demo bikes will also be available so customers can take a test ride first.

The co-founders were not available for interviewing. Gerhard was traveling in Europe at deadline time, and Heilbron was absorbed in preparation of the release of 2016 models. Kona spokesperson Cory Blackwood spoke to Business Pulse about the new move and goal of the retail store.

“We want to create a local presence and also a space where distributors can see first-hand how the company displays their bikes,” Blackwood said.

He said that his favorite part of the business is selling an entry-level commuter bike to a beginning cyclist because it’s an opportunity to create a life-long customer.

That has turned into a $54 million company, now named Kona Bicycle Company, and a new entry into the Business Pulse Top 100 privately-owned businesses in Whatcom County. Headquarters moved to Ferndale in 1995, and remain there while about two-thirds of sales take place abroad – led by the Europe Division based in Monaco.

Recently, the company made its most recent transition, opening its first-ever retail store on State Street in downtown Bellingham.

In the beginning, Dave Turner designed the The company reported its sales last company’s first bicycles to race, along with Joe year at about $18 million in the U.S., Murray, who would later be inducted into the Mountain Biking Hall of Fame. and about twice that in Canada, Kona World, as the business refers to itself, Europe, South America, and China. moved into a 15,000-square-foot warehouse, and then doubled their space three years later.

Their Kona Europe division in Monaco Kona continues with staffing of dedicated has grown into their largest division. cyclists, and more than 3,000 mountain bike competitors have raced in the Kona racing pro“A lot of shops don’t want to carry the low-end bikes gram worldwide. because they don’t want that kind of customer,” he said.

The company reported its sales last year at about “But those are the shops that are guaranteed to fail. $18 million in the U.S., and another $36 million in Because the low-end customer becomes the high-end Canada (the British Columbian co-founders still make customer. their home in Vancouver), Europe, South America, and “Not only that, but the person buying a $500 comChina. Their Kona Europe division in Monaco has muter bike might become a life-long cyclist. And while grown into their largest division. their second bike might not be a Kona, they’ll rememIn their newest 6,600 square feet of space, the storeber us as the first bike they bought. And that’s front at 1622 N. State Street in the old Rent To Own really special.” building, Kona World plans to feature nearly their Blackwood said the decision to open a retail store entire line of bicycles (about 100 in all). They offer mulafter 28 years in manufacturing came about after the tiple color options, and models ranging from $400 36 | BUSINESSPULSE.COM

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Whatcom Top 100 #23: Kona Bicycle company Top: Manager Matt Hoffmeyer has worked many years with Kona, and he hails from St. Louis.

Center: Brandon Weekly, who will handle much of the repair load, illustrates some rear-tire tuning to sales rep Amanda Bryan.

Bottom: Cory Blackwood said his job title is “Hats” because of the variety of areas he works in. He gets excited about the new product launches – like one this August – when 200 dealers from around the U.S. and the world come to town.

company hosted annual product launches in Bellingham. Each year, for the last five years, Kona has flown in more than 200 of their best dealers in the U.S., Canada, and South America in an attempt to show off Bellingham – and their bicycles – in a more positive light.

This year’s event is scheduled for August. It will include meetings about product development, pub crawls, and plenty of bike rides, followed by more pub crawls, Blackwood said.

“It’s a 100-hour work week for us, and I absolutely have a blast,” he said. “Bellingham is so cool and people don’t realize how amazing it actually is. However, we do warn our dealers that this is the one week of the year it doesn’t rain.”

When asked about the turning point of when Kona shifted from a cottage industry supporting a lifestyle interest into a global industry leader, Blackwood said that if there was such a point, it wasn’t intentional. He said one benefit of operating smaller and more nimble than other bicycle companies is the ability to take risks with unusual designs, and then watch when those designs eventually are copied within the industry.

“We don’t feel as though we’re giants in the industry and we’ve never operated to take over and shut down the competition,” he said.

“The goal as I’ve always seen it is to be successful and make cool bikes and have fun. And we’re still doing that today.”

38 | BUSINESSPULSE.COM

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INDUSTRY REPORT: HOTELS

TownePlace Suites and SpringHill Suites recently opened on Northwest Avenue, and became the first Marriot-branded properties in Whatcom County. GM Keith Coleman and Sales Director Anna Johnson work for both hotels.

40 | BUSINESSPULSE.COM

 Plenty of rooms at the inns As the loonie dives and flights contra�, hotels still spring up in Bellingham Article and Photos by Cheryl Stritzel McCarthy

H

ear that boom? It’s the hotel industry in Whatcom County.

Two years ago, Whatcom County and Bellingham had 1,563 hotel rooms. By next year, the region will have added 973 new hotel rooms, an increase of 62 percent. About 800 of those are in six properties – four of which (and almost 400 new rooms) sit within blocks of each other near the corner of West Bakerview and Northwest Avenue.

New rooms include the 100room expansion opening soon at Silver Reef Hotel Casino Spa in Ferndale, more than doubling its capacity to 205—largest in the region—and the recently re-opened 200 rooms at Semiahmoo Resort in Blaine.

Most of Bellingham’s new hotels are in the Bakerview/Northwest and Bellingham International Airport area: SpringHill Suites (122 rooms) opened October 2013;

La Quinta Inn & Suites (81) December 2013; TownePlace Suites (83) February 2015, and Home2 Suites by Hilton (105) March 2015.

Holiday Inn Airport is expected to open in 2016.

 “It’s not all gloom and doom because a couple of flights were cancelled.”

– Loni Rahm, President, Bellingham Whatcom County Tourism

On Meridian Street, Oxford Suites Bellingham is on target to open across from Bellis Fair Mall this summer. Also still to come soon: The Inn at Lynden (35 rooms; see our separate story on this restoration of a historic building), and a small boutique Orca Inn in

Bellingham. That will make eight new hotels in a 20-month period.

This influx of hotel openings might seem on the surface contradictory to some recent market trends.

The Canadian dollar nosedived below 80 cents in U.S. value, around 20 percent since its high a year ago. And, the expanded Bellingham International Airport has seen airlines cancel flights and routes.

The number of Canadians crossing the border south into Whatcom County declined more than 10 percent during the first two months of 2015, compared to the same period in 2014. That number is down 14 percent compared to the same period in 2013, according to the local Border Policy Research Institute.

That mirrors the situation nationally: Trips by Canadians into the United States are down 15 percent over the last two years, according to Statistics Canada and Bloomberg News.

But no one in the hotel and travWHATCOMBUSINESSALLIANCE.COM | 41

INDUSTRY REPORT: HOTELS

 “So many local companies here produce so many room nights; that’s our meat and potatoes.”

– Sara Holliday, GM, Home2 Suites by Hilton

GM Sara Holliday opened the Home2 Suites this year, the first of this Hilton brand in Washington and on the West Coast, sitting near Northwest Avenue near and across from the two new Marriott properties.

el industries hereabouts seems too worried. Travel-related spending in Whatcom County has increased more than 50 percent since 2000 to about $600 million a year.

That dispels the theory that an airport slump might have let the air out of new hotel optimism.

“It’s not all gloom and doom because a couple of flights were cancelled,” said Loni Rahm, president of Bellingham Whatcom County Tourism. Rahm pointed out that in hotel developers’ comprehensive feasibility studies, recent airport expansion was just one factor among many for entering the Bellingham marketplace.

“Instead of relying so much on leisure travel, other market segments will be beefed up, which we were already doing because we knew these hotels were coming,” Rahm said. The industry is growing existing corporate business, and alerting conference planners that more meeting space is now available.

When the 360 Hotel Group in Lynnwood, Wash., developed the Marriott-branded suites, SpringHill and TownePlace, their management stated that based on market studies their target guests would come from business travel beyond just airport42 | BUSINESSPULSE.COM

related trends. Local management echoed the same baseline marketplace target.

Sara Holliday, the general manager for Home2 Suites by Hilton, said, “Industry insiders saw the ongoing need for more hotel rooms in Bellingham." Home2 Suites opened with its kitchenette concept on Northwest Avenue in midMarch.

Holliday said before the current build, Bellingham’s story was often “no rooms to be had.” Nearly half of the hotel capacity in Bellingham frequently filled with extended-stay workers hired by local businesses, leaving little room for leisure travelers, or vice versa.

The new extended stay hotels are a better fit for people who need a temporary home, and offer other hotels a chance to book the leisure travel, Holliday said. She does not see the current Bellingham hotel market as overbuilt.

“The need was there, for sure.

I’ve worked at several different hotels here in town,” Holliday said.

“I’ve seen the different markets that produce room nights. Extended-stay was the greatest need.”

Three of Bellingham’s new hotels are extended stay: Home2 Suites

by Hilton, Marriott’s TownePlace

Suites Bellingham, and Oxford Suites Bellingham. They feature different concepts – some designed for work space, others more like studio apartments.

Rahm said that before the hotel build-up, at certain times of year and on certain weekends travelers understood they couldn’t stay here.

Whether it was Back2Bellingham staged conjointly by Western Washington University and other colleges, or Mother’s Day, soccer weekends, or turnarounds at the Cherry Point factories, rooms were difficult to come by.

“So the message is, let people know we have more rooms,” Rahm said. “Redirect the perception: We are not sold out during peak times.”

Despite the declining loonie and drop in cross-border traffic, Rahm said Whatcom County remains a destination of interest to the Canadian traveler. “Eighty cents on the dollar is still a bargain for many items.”

Keith Coleman, general manager of Marriott’s SpringHill Suites Bellingham and TownePlace Suites Bellingham, agreed that the Canadian traveler continues to come to Bellingham. “Even with their declined dollar, the product is cheaper here in some cases,” Coleman said.

Anna Johnson, sales director for SpringHill and TownePlace, said occupancy in Bellingham has stayed strong compared to other cities,

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About half the guests at SpringHill Suites consists of corporate travelers, driven by the popular Marriott rewards program for frequent users.

owing “…a lot of that thanks to our Canadian friends.”

Their general manager, Coleman, said that given the competition, “We’re maintaining well.

Rates here are steady and increasing….Certain segments are seeing a decrease in revenue, but overall, we’re ramping up at both hotels.”

SpringHill and TownePlace are the first Marriotts in Whatcom County. “Our rewards program has a huge following,” Coleman said. “People doing business in Bellingham were driving 22 miles so they could stay at a Marriott in Burlington.”

Now those travelers will stay in Bellingham. About 50 percent of hotel guests at SpringHill are corporate travelers. That percentage is higher at TownePlace, an extendedstay hotel.

The low loonie is having some effect – “everybody (in the industry) would be lying if they said it wasn’t,” Coleman said. "Just not as much negative effect as some might imagine.

“When you see an area that’s declining, you use revenue strategies to fill in.”

For Constance and Gene Shannon, co-owners of Fairhaven Village Inn, the dropping Canadian dollar has had little effect. Their

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INDUSTRY REPORT: HOTELS

GM Alex Nephew, seated in the breakfast area of Hampton Inn Bellingham-Airport, said the local industry is experiencing “massive supply vs. steady demand.”

Canadian leisure market at this 22-room independent hotel continues to hold steady at about 18 percent of occupancy, as it has over the years.

Bellingham’s huge increase in hotel capacity is a good thing longterm, Constance Shannon said.

"The building boom offers consumers choice, increased amenities, availability, and value," she said.

But in the short term, it creates a chaotic market and puts downward pressure on revenue. She expects it might take two years or more to settle into predictability. “When the market is chaotic, you don’t know what your occupancy will be next month,” she said. "With equilibrium, you can make forecasts based on previous years.”

Revenue at Fairhaven Village Inn was lower this January and February compared to earlier years, but this summer’s reservations and rates are up “substantially” from last year. “This summer will tell us a lot about the influence Bellingham’s 46 | BUSINESSPULSE.COM

increased capacity will have,” Constance Shannon said. “If we realize stable rates and 70 percent or higher occupancy during sum-

 “The pie stayed the same, and all our cuts got smaller.”

– Alex Nephew, GM, Hampton Inn Bellingham – Airport

mer, that tells us Bellingham can support the capacity, at least during summer.”

Winter will be more challenging.

“Can we, as a group, draw business and regional meetings to come stay in the offseason?” Constance Shannon said.

Nationally and internationally,

hotel development has been atop the list for investors, she said. It’s not surprising, then, given the availability of funds, that cities like Bellingham see an upsurge in hotel building. Per square foot, revenue forecast is high for hotels, compared to apartments and mixed-use buildings.

“Any developer will go where money is available,” Constance Shannon said. “After the recession, the first thing people asked was, ‘Where can I put my investment that’s less vulnerable? Where can I earn the most per square foot?’

I’m not a developer, but I’m in the industry and can see how others are making decisions.”

Nationally, consolidation among airlines, plus re-allocating planes to other markets, impacted Bellingham’s airport in 2014. Last year nearly 10 percent fewer people flew out of Bellingham than in 2013. That’s the first time in more than a decade those numbers have dipped instead of climbed. The decline is expected to drop another 10 percent in 2015.

Frontier Airlines stopped its seasonal non-stop service to Denver after offering it for three years.

Frontier accounted for 1.4 percent of Bellingham’s departing passengers in 2014. Alaska Airlines announced this year it will shift its Las Vegas and Hawaii flights to a seasonal-only basis. Allegiant Air cancelled its flights to Maui, Honolulu, and Reno, and reduced its service to San Diego to seasonal.

Just over half of the passengers departing from Bellingham International Airport are Canadian.

Though flights have been reduced, demand for air travel out of Bellingham International Airport (BLI) remains strong, airport manager Mark Leutwiler said by email. “BLI is marketing to airlines to replace flights recently lost or reduced. We’ve added customer amenities, such as a new website, flybli.com, and a parking rate calculation tool. BLI offers great value

 “Bellingham’s increase in capacity is a good thing long-term, but creates a chaotic market short-term.”

– Constance Shannon, Co-Owner, Fairhaven Village Inn

for travelers, not only through lowcost tickets, but also in other costs such as on-airport parking.

“For airlines at BLI, their return on investment is better at BLI because cost per passenger is much lower than at a larger airport.”

Holliday said the drop in airport traffic will affect hotels, but not much. “We’ll see a dip, but that’s not what fills us,” she said. “Between 60 to 70 percent of the business that comes into Bellingham’s hotels is due to local businesses that bring in guests.” Prominent examples: Western Washington University, PeaceHealth St. Joseph’s Medical Center, BP Cherry Point Refinery, and the U.S. Coast Guard. “So many local companies here produce so many room nights – that’s our meat and potatoes,” she said.

When the Canadian dollar is strong, Bellingham hoteliers see an influx of travelers Thursdays through Sundays. “Of course we love to see that,” Holliday said. “It’s more business all around to share.

You can look at the loonie Monday morning, and know if you’ll be busy that weekend.”

Alex Nephew, general manager of Hampton Inn Bellingham-

Constance Shannon, co-owner, Fairhaven Village Inn

Airport, agreed that the weaker Canadian dollar affects business, but not dramatically. He sees the boom in new hotels as more of an issue.

“The pie stayed the same, but all our cuts got smaller,” Nephew said.

He sees demand for hotel rooms staying steady, with more hotels to soak it up. He said “massive” supply versus steady demand is the prominent feature of the local hotel industry now.

Nephew said 2012 generated the most revenue at Hampton Inn Bellingham in the 21 years since its opening. That year, in addition to the rebuilding of a large sea vessel in Fairhaven, the BP Cherry Point Refinery conducted its turnaround early, unintentionally dovetailing it with Conoco Phillips’s turnaround.

(Turnaround at refineries and other factories is a shutdown of units taken offstream for an extended period for revamp and/or renewal, requiring loads of workers brought in for maintenance and repairs.)

“The refineries are one of the larger demand drivers in our area,” Nephew said. “You couldn’t find a room anywhere in Whatcom County. You had to go to Everett to find a room. The refineries, the

hospital, the university – if they’re not doing something big, what do we have that will fill Bellingham?

Other things fill it three to six times a year if we’re lucky.”

When Marriott’s SpringHill Suites Bellingham opened last autumn, Nephew saw a marked change in occupancy in Hampton Inn Bellingham. The metric that shows his bookings by travel agents dropped 12 percent. “When they came on board, you could see that drop, and it has held steady. That was a big hit.”

Everyone will have to work harder to fill hotel rooms during the off-season, Holliday said. But “this summer, they’ll all be filled; all hotels in Bellingham will be running 80 percent,” she predicted. “It’s an exciting time for our industry here. The economy is picking up.

We are seeing more business travelers, and that’s an indicator of how other companies are doing.

“For us, this growth is exciting because we know there’s more to come.”



WHATCOMBUSINESSALLIANCE.COM | 47

INDUSTRY REPORT: HOTELS

$6 million Waples renovation and Inn revitalizing downtown Lynden

By Sherri Huleatt

Billy Waples is a Lynden legend. Born in 1897, he helped bring the railroad and Northwest Washington Fair to Lynden, and he played a vital role in pulling the small community through the Great Depression by extending millions of dollars in credit to local citizens.

-room udes a 35 roject incl square feet of p n o ti a v o s, rly 10,000 illion ren The $6 m tel, along with nea Bread, Village Book o e h u e nd n a e v il A O r e fo v boutiqu li d , reserve Drizzle O retail space s, a tap house, and m a re .

Paper D sting Room Vinegar Ta

48 | BUSINESSPULSE.COM

His greatest legacy was the Lynden Department Store.

Known as Delft Square, it burned down seven years ago.

Today, cranes hover high above downtown Lynden where the historic building is undergoing final touches for reconstructing it, renamed the Waples Mercantile Building and adding another 35 rooms to the booming hotel industry in Whatcom County.

The Delft Square store, which opened in 1914, served as the beating heart of the community—offering special events, community meals, and a playground for Billy Waples’ many grandchildren.

On that fateful day in 2008 his family and the community watched helplessly as beloved Delft Square burned from the inside out. The fire left the building nearly destroyed, with its roof and much of its interior gone.

“To see my grandfather’s dreams disappear was devastating,” said a teary-eyed Judy Judson Waples at a recent Mt.

INDUSTRY REPORT: HOTELS

ns to the uilding pla to about b d te n se re ion recently p n. In addit also invitTeri Treat tary club in Lynde re e w y il o m R fa aples’ meeting Mt. Baker bers, the W attle to attend the m e m b u Se 40 cl ve up from ed, and dro building. e and tour th

The Forefr o (pictured nt Ventures, LLC te on the left am is mad ), a sonal frien e ds and bu long with Matt and up of Jeff and Deb si about rev iving dow ness partners, the Teri Treat (on the ri ra McClure McClures g ntown Lyn and Treats ht); both perden. are passio nate

Baker Rotary meeting. “And now, I just can’t believe there’s hope.”

The Waples Mercantile Building, is getting a $6 million head-to-toe remodel, complete with a 35-room boutique hotel and nearly 10,000 square feet of retail space—almost all of which has been quickly snatched up by local companies.

Avenue Bread, Village Books, Paper Dreams, Drizzle Olive Oil and Vinegar Tasting Room, and a tap house serving more than a dozen local beers have all signed leases to open in the new Waples Mercantile Building.

“We want it to be the heart of the town again—a place that creates new memories,” said Teri Treat, who is both the managing partner in the ownership group of two couples, and the general manager of the Inn at Lynden. “We want to help create a resurgence and revived interest in downtown Lynden, bringing it back to how thriving it was years ago.”

Treat and her husband, Matt, grew up in Whatcom County at a time when the Lynden Department Store was the heart of the community. Their business partners, Debra and Jeff McClure, purchased the shell of a building after the fire in 2008, and now, inspired by the success of the Jansen Art Center in Lynden, they’re hoping to reestablish Waples’ building as the hub of the city.

“There’s already a sense of excitement over what’s going on,” said Scott Korthuis, the mayor of Lynden. “We see the Jansen Art Center fully remodeled and the Windmill in the process of being remodeled. The overarching goal is to have these revived businesses bring in new customers, which in turn creates the need for more business in downtown Lynden.”

Mayor Korthuis also mentioned that some of the new 50 | BUSINESSPULSE.COM

businesses coming to the Waples Mercantile Building, like Avenue Bread and Village Books, will be open at night, adding a new night-life factor to Lynden tourism.

The Inn at Lynden will offer 35 mid-scale rooms with locally-made amenities, unique historic elements, and bicycles for rent. Treat said she expects the rooms to fill with

“We want to help create a resurgence and revived interest in downtown Lynden, bringing it back to how thriving it was years ago.”

– Teri Treat, Managing Partner & GM, The Inn at Lynden

business and leisure travelers, stopping through town for agricultural-based business, sporting events, shopping trips, or to catch the latest show at the Jansen Art Center. Rooms range from $149 to $259 (with full kitchens).

Restoration of a 100-year old building that nearly burnt down has been far from easy, according to Jeff McClure, co-founder of Forefront Ventures LLC and a partner at RMC Architects. “The place was an absolute mess when they

“To see my grandfather’s dreams disappear was devastating. And now, I just can’t believe there’s hope.”

Luxury Rooms & Spa

– Judy Judson Waples, granddaughter of Billy Waples

Stay Spa Savor first started construction,” McClure said. “They were taking truckloads of garbage and soggy plaster out of the building.”

Now, with the help of the project’s general contractor, Dawson Construction, ownership has high hopes of an opening in mid-November this year. The building also has landed a spot on the National Register of Historic Places.

“We really want to showcase the history of this building,” McClure said.

“And we’re happy to bring in new businesses that complement downtown.

Lynden City Council has played a huge role in getting the project rolling. In September 2014 the City Council waived nearly $60,000 in fees to help redevelop the building, and agreed to a $175,000 investment in street improvements.

Although Lynden still has that smalltown vibe, it’s the second largest city in Whatcom County and has a very strong economic base in agriculture.

The Treats, who have several decades of experience in real estate and hospitality, have involved Billy Waples’ family virtually every step of the way.

“Our vision hasn’t changed this entire time, and it’s because we all share a deep passion for the community,” said Teri Treat. “We love Lynden, we love Whatcom County, and we love restoring old buildings.”

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WHATCOMBUSINESSALLIANCE.COM | 51

WBA Advocacy: proposed salmon hatchery hb 1270

Salmon presence down 90% since 1850 State House bill aims to replenish salmon through privatization of the Washington hatchery program.

Article by Mike McKenzie, Managing Editor Hatchery photos by Gabriel Knapp/Business Pulse 52 | BUSINESSPULSE.COM

WBA Advocacy: proposed salmon hatchery hb 1270 happen in Washington with a similar program.

At the heart of it, and creating the only public dissent, lies its free-market infrastructure, i.e., nonprofit, albeit privatized management. “A new fish hatchery management program‌state and private partnerships for managing salmonid hatcheries,â€? states the bill, which did not make it to the floor of the legislature this year and now must undergo re-introduction in 2016. Hence, Summer 2016 is the soonest this program could become a reality.

The description continues: “The Washington Department of Fish and Wildlife must permit a private nonprofit-qualified, regional aquaculture association to operate one salmon hatchery in a county that borders both Canada and the Puget Sound that is designed to supplement the natural production of salmon in the state by increasing salmon stocks and limiting commercial fishing opportunities in the L

hatchery-affected area.�

Sponsored by the House’s Committee on Agriculture & Natural Resources, and primarily

HB 1270 states, “A new fish hatchery management program‌ state and private partnerships for managing salmonid hatcheries (is a)‌.proven, successful structure utilized by the state of Alaska for the past 40 years.â€? co-authored by Whatcom County Rep. Vincent Buys and longtime commercial fisherman Doug Karlberg of Bellingham, the bill received strong support from vari-

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ous corners of the fishing sectors.

Especially significant endorsements came from both Lummi and Nooksack tribal representatives in testimony during hearings in Olympia this year. Also, the bill’s authors received strong support from sport fishing sources.

Some highlights of HB 1270: • Changes the hatcheries that can be managed under an agreement between the Washington Department of Fish and Wildlife and private sector partners to only those located in the Hood Canal basin. • Allows private sector hatchery partners operating chum salmon hatcheries to harvest some of the hatchery fish for sale and use any sale proceeds for reinvestment into the hatchery. • Provides direction to hatchery partners to prioritize the retention of classified employees.

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LUMMI ISLAND WILD SEAFOOD www.lummiislandwild.com Why Does

Reefnet Salmon Taste So Good?

The salmon is higher in beneficial omega-3 fat because it still has so far to swim before it will reach its home on the Fraser River.

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54 | BUSINESSPULSE.COM

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by Native Americans of the Puget Sound area in war canoes using cedar bark rope and marsh grass to simulate underwater reefs.

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In examining all sides of this matter Business Pulse interviewed, among others, Rep. Buys and Doug Karlberg and a group of four individuals involved in the management of fish and wildlife with the Lummi Nation. Because of some resistance to the bill resulting from its infrastructure of partnering the State with private enterprise – a negative, as expressed by the Lummi representatives – we have presented two accompanying editorial viewpoints.

Karlberg described some history and background, and the pro’s of HB 1270. Clifford Cultee, a Lummi Councilman who coleads initiatives on fish and wildlife, detailed the reasons that the Lummi Indian Business Council (LIBC) would not support it. His editorial reflects some differing viewpoints within the Lummi tribal hierarchy in that elected official Eldon Hillaire, chairman of the Lummi Natural Resources Commission, both testified in favor of the bill at a legislative session in Olympia and wrote a letter of assent to the sponsors. We also have included in this package a letter of approval from the Nooksack tribal leadership.

The bill passed one committee of the House this year, Agriculture & Natural Resources, then failed to make it through a committee on information and technology before time ran out on the legislative session.

Sponsors of HB 1270 will have to reintroduce the bill next January when the regular session of the legislature convenes, sending it back through the processes for either passage or killing it. When that session ends without an emergency clause (highly unlikely) and if the bill passes and gets signed by Gov. Jay Inslee, it would take effect 90 days later.

WHATCOMBUSINESSALLIANCE.COM | 55

WBA Advocacy: hb 1270 - pros Doug Karlberg (at left) has spent most of his life fishing for a living. He still manages a fish processing plant in Alaska. He serves on the Board of Directors for the Whatcom Commercial Fishermen’s Association in Bellingham.

Karlberg grew up in suburban Marietta bordering Lummi Nation and fished all the waters hereabouts both for sport and for a living. He has been the face of the commercial fisheries’ alliance by helping author HB 1270 that would revamp the state’s salmon hatchery program.

(Photos by Mike McKenzie)

Reforming the hatchery program would benefit all stakeholders proportionately

By Doug Karlberg, Board of Directors Member Whatcom Commercial Fishermen’s Association

T

he ability to raise salmon in hatcheries was widely known right after the Civil War. The invention of canning salmon really opened up the West Coast to exploitation beginning on the Sacramento River with the first salmon hatchery in 1872.

As mining decimated the Sacamento River’s salmon, canner William Hume quickly moved to the Columbia River where fishing was extraordinary. But within 10 years salmon runs had declined precipitously.

William Hume then decided to move to the Rogue River, where he established the first hatchery to

supplement salmon production. The Federal government also established salmon hatcheries on the Columbia in the 1890s to replace destroyed salmon habitat.

Hume did not suffer the great habitat destruction on the Rogue, so his goal was different: He wanted to supplement robust natural production.

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56 | BUSINESSPULSE.COM

These two systems argued often and publicly as to which had the best methods to run a hatchery.

Hume experienced significantly more success than government-run hatcheries, yet eventually he lost the argument, and the government placed hatcheries in places where Hume had proven that they do not work well.

House Bill

Report

Download the full text of HB 1270 http://goo.gl/PHYZa7

EDITOR’S NOTE: This letter over a year-and-a-half ago from professional fisherman Doug Karlberg representing the local commercial fisheries “got all this started (on HB 1270),” Karlberg told Business Pulse.

TO: Lummi Natural Resources Commission and Directors Office FROM: Whatcom Commercial Fishermens’ Association / Board of Directors DATE: Monday, December 16, 2013 RE: Proposed Regional private non-profit hatcheries, owned and operated by local stakeholders

We think it is worth a try to gain some local control, and put some large numbers of chum and pink fry back into the natural environment, like it was historically. That was the original balance. Pink and chums salmon fry give something for Chinook, coho, and steelhead fry to eat, and give the birds and other fish something to prey upon, other than Chinook and coho smolt.

Dear Natural Resources Commissioner and Director (Merle) Jefferson,

Chum and pink salmon smolt are food for salmon, birds, and many other fish, including herring. Adding this food back into the marine environment might just increase the survival of Chinook, coho, and steelehead. While 92 percent of the salmon are gone from Washington waters, so are 92 percent of the smolt. Adding this smolt back might just improve the marine environment.

Our Board met with you last year late in the legislative session. Our Board would like to request enabling legislation for hatcheries similar to the highly successful system in place in Alaska, and we would like to go to legislature with your support. Please take a look at what we are proposing and see if this is something you could support. If you have suggested changes, we are happy to do so.

This year in Alaska they harvested 272,000,000 salmon worth $691,000,000 to the fishermen. We would like to duplicate some of their hatchery success here in Whatcom County.

This legislation brings a lot of authority away from Olympia and back to the regional leaders. This may be good for some of your hatchery operations.

We think, considering all that has not worked, that an Alaska style hatchery is worth a try, and we would like to do this with our local tribes as partners.

The first step is to get legislation which makes this legal to do. The legislation is only the first step though. The second step is put together a Non-profit owned by the local stakeholders to control and operate a hatchery. I have set out in stone that the local tribes would control a minimum of 50 percent of the Board of Directors in respect for your Treaty Rights.

Let us know if the Lummi Nation would be supportive of asking legislature for these changes.

I suspect we are all frustrated at not getting salmon back in significant numbers even with decades of efforts. Even as we have had large pink runs for the first time in decades, we are only one large flood away from losing them, and having to start over as the watershed has been stripped of natural vegetation.

Merry Christmas to all of you, and your families,

We would be happy to incorporate any changes or suggestions you might have. We do have legislative timelines in front of us if we want to get legislature to act, and I think we would need to know by the first week of January.

Doug Karlberg Board of Directors/Whatcom Commercial Fishermen’s Association

WHATCOMBUSINESSALLIANCE.COM | 57

WBA Advocacy: hb 1270 - pros

The intent of HB 1270 is to keep hatcheries like this one at Whatcom Falls Park in Bellingham from going dry, as some tanks have from lack of funding, and replenish salmonid production through privatization in partnership with the state.

And, this is the hatchery system that we have inherited today in Washington.

Hume proved that hatcheries worked better if located on the salt water, whereas most government hatcheries are located far up rivers and streams – as close as possible to the wild salmon spawning grounds.

Many other salmon producing countries, such as Japan and Russia, also developed hatcheries to considerable economic success. Hatcheries in those countries are booming.

Washington’s have never produced many successes at reproducing the volumes of salmon that existed back in 1850. Japan, Russia, and now Alaska, all now produce salmon at near or above the level of salmon that existed in 1850, simply by utilizing hatcheries efficiently.

Alaska is producing 110 percent of the salmon that existed in 1850, while Washington State is producing less than 10 percent during the same 165 years.

Alaska’s system is 40 years into production, and it is operated by private groups of nonprofits overseen by one of the finest fishery biological organizations in exis58 | BUSINESSPULSE.COM

tence, the Alaska Department of Fish and Game.

Central to Alaska’s success: the lessons learned from the State of Washington, and what not to do.

Learning from William Hume’s successes on the Rogue River,

increasing the wild returns simultaneously.

Across 40 years, Alaska has seen its salmon production increase on average 500 percent a year. Many here in Whatcom County have enjoyed the economic benefits

Alaska is producing 110 percent of the salmon that existed in 1850, while Washington State is producing less than 10 percent during the same 165 years.

Alaska located its hatcheries on the salt water—as far from wild salmon rivers as possible. This allowed for the movement of fishermen away from the native wild rivers to harvesting the hatchery production.

This movement allowed for more salmon to enter the wild rivers,

and brought these gains home to Whatcom County. Not surprisingly, commercial fishermen in Whatcom County have brought this Alaskan hatchery system and its successes to the state legislature’s attention (House Bill 1270 requesting essentially a cloned program).

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Alaska’s hatchery system is highly-regulated, and hatchery locations are tightly controlled. Most of the hatchery locations today are so limited that hatchery growth is limited. In Washington we have located just three places that would meet Alaska’s criteria for a hatchery location.

One is right here in Bellingham, utilizing the pipeline from Lake Whatcom.

A hatchery located on Bellingham’s waterfront, if the Alaska experience is any example, would produce over 500 year-round equivalent jobs, and increase commercial fishermen’s annual revenues from salmon fivefold.

Additionally, this would produce the finest pink salmon recreational fishery ever right on Bellingham’s new waterfront on Labor Day. That would attract an estimated 250,000 visitors annually, based on the hatchery developments in downtown Juneau as an indicator.

Not many ideas could produce this much economic development locally.

Utilization of local natural resources provides the single largest bang for our buck when it comes to economic development. We already have the infrastructure in place to harvest, process, freeze, market, and distribute the product. Whatcom County could keep almost every dime.

Most of Washington’s salmon history, instead of this picture of productivity, is one of habitat destruction and constant bickering amongst people who like to catch and eat salmon.

An all-important facet of this legislative proposal to emphasize: Washington’s first residents, the Nooksack and Lummi Nation, received a promise of 6.25 percent of the salmon that existed in 1855 in exchange for giving up title to almost all the land in

Washington. And the fish are gone.

Understandably the tribal fishers are frustrated (it’s their way of life), and they would like to have these salmon resources restored to support themselves and their families.

So what can we do to reverse the decline in salmon populations?

It will be difficult to replace the habitat lost. We can make progress, but it will take a long time, and as a practical matter, not all of it will be made to look like it existed in 1855.

We can stop all water withdrawals from the Nooksack River, and the salmon will still not return in the abundance that existed in 1855.

We cut down trees that were 500 years old, and replacing them will be difficult, if not impossible.

Compounding this dilemma is the blame game. Who is to blame?

Who is responsible for rebuilding the habitat? The tribes have taken a hard line on these issues, and won virtually every court case, but that still does not answer the question, “When are the salmon coming back?”

If anyone raises more salmon or cleans up the habitat, there is no guarantee that they will benefit. For example, the Lummi Nation operates a hatchery on Kendall Creek. The Lummis are footing the bill 100 percent, but only get to harvest half. This is a reverse incentive to begin rebuilding our salmon runs.

The innovative legislation for one hatchery in Bellingham attempts to address this by partnering with the Lummi and Nooksack Nations, and all the other stakeholders, to raise salmon together.

Each party gets a share equal to what they put into the endeavor.

The tribes hold 505 of the votes in a non-profit which would own the proposed hatchery, while the balance of the

Doug Karlberg contemplates the questions of the day: Who is to blame? Who is responsible for rebuilding the habitat? When are the salmon coming back?

WHATCOMBUSINESSALLIANCE.COM | 61

WBA Advocacy: hb 1270 - pros endeavor is owned by commercial, recreational, and municipal interests.

Now, we know that some in the environmental community have concerns about the use of hatcheries, which holds risks for wild salmon. Some of these concerns are related directly to Washington hatcheries which were located as close to the wild salmon breeding rounds as possible.

They are not scientifically valid

measurements of the Alaskan system, which has proved that hatcheries can co-exist with wild salmon, and that both can flourish.

Maternity wards at the local hospital are like a salmon hatchery. Humans want their babies to be born in the safest environment possible, and then they are sent home. Salmon hatcheries operate in the same way, as the baby salmon release into the wild. Keep in mind that salmon born in the wild are

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20 times more likely not to survive than from hatcheries.

Naysayers point to all the possible worst scenarios, seldom seeing any benefits. Fortunately, in a broader sense, we have a 150-year history of salmon hatcheries in four countries. Experimentation was the order of the day during the first 50 years. Experimentation which would not be allowed today, because there was some minor level of risk.

Today we know that even with all that risky experimentation, there was hardly any uncontrollable ecological disaster. Naysayers are not inventors, or explorers, nor do they solve problems. Naysayers only see risk.

Nature has a way of experimentation also. It is called evolution.

With modern science we now know that not all salmon return to their native rivers. This especially is true with pink and chum salmon.

We can radio tag and follow them today, as well as test their DNA. Mother Nature has always allowed some salmon to stray, and for good reason. Today some groups decry this as unnatural.

This is an old argument, as hybridization is quite natural. We plant tulip bulbs from Holland with complete confidence that they will not take over the world. If the tulips spread too much, we pull them out.

Some environmentalists have speculated that hatcheries overgraze the ocean. Unfortunately we probably harm the environment by not having enough salmon fry in the ocean.

In 1855, about 10 times more salmon fry swam in the ocean than we have today. Salmon fry, especially pink and chum, were naturally far more abundant historically than today. This imbalance stems from salmon hatcheries managed by government—all too often subject to political pressure to raise Chinook and Coho salmon with the best intentions to support the recreational fishery.

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Unfortunately, Chinook and Coho salmon rank higher on the food chain, and both will eat chum and pink fry when they are young.

We have turned nature on its head and we’re raising too many wolves and not enough rabbits. And we wonder why the wolves are not surviving well.

There is a good reason why Alaska raises predominantly pink and chum salmon. It is more natural. Today Japan has a huge industry primarily based upon salmon hatcheries. Japan had similar problems due to their lack of buildable land and a large population on small islands. Japan had to destroy salmon habitat to feed their people.

Japan had similar problems. They supplemented their salmon runs with nonprofit, private hatcheries.

Today, Japan has a huge industry based upon hatcheries. Their example might hold solutions to our predicament for Washington.

They supplemented their salmon runs with hatcheries. Japan’s example may hold solutions to our predicament for Washington.

Hatcheries in Japan are also operated by non-profits. Although many Washington hatcheries are operated by people with the best intentions, government monopolies by their very nature do not innovate or change quickly.

I don’t know how we reverse the damage humans have done to salm-

on habitat, but in the short term a pilot hatchery might provide us at least with more salmon at no cost to the taxpayer.

We actually might learn something.

Some will point to the risks to salmon returning to the Nooksack River. A lot of groups protect salmon today, but the groups that I have the most confidence in for protecting the Nooksack River are the Lummi and Nooksack

Nations. Since the Boldt Decision of 1974 (dividing the salmon fishery into two commercial fisheries: the "all-citizen" fishery and the "treaty-tribe" fishery) they have put together world class salmon biology organizations.

This is a good debate to have.

Let’s work together and carry it on with the re-introduction of HB 1270 next year.

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WBA Advocacy: hb 1270 - cons

Nay: Lummi Business Council lists 5 reasons for opposing

B

usiness Pulse met with four gentlemen representing various positions within the Fish & Wildlife administration for Lummi Nation to discuss the proposed HB 1270.

We learned that some opposition exists within the tribal leaders.

Cliff Cultee, a member of the elected Lummi Indian Business Council (and its former chair two terms), is co-leader of a task force dealing with hatchery management. He volunteered to outline what lies behind the opposing viewpoint, which centers on private rather than government management of the proposed hatchery program. Here is Mr. Cultee’s commentary:

By Che Leah ten (Clifford Cultee), Councilman Lummi Nation Born and raised on the Lummi Nation reservation, Che Leah ten (Clifford Cultee) was elected to the Lummi Indian Business Council (LIBC) in 2010 and he served two terms as chairman.

Now he is a co-Team Leader of the Hatcheries Protection Task Force. A lifelong fisherman, Cliff has advocated the last 8 years for treaty rights and for natural resources protection on the Lummi Natural Resources commission. “I believe in working to unite the Lummi community by creating tribal government transparency and accountability,” he said of his role on the LIBC. The Lummi Nation was one of eight included among the original “Self-Governance Demonstration Project” tribes.

66 | BUSINESSPULSE.COM

Lummi Nation has been a manager of the salmon resource since time immemorial, and continues to engage in salmon management as a co-manager with the State of Washington. With a growing population of nearly 5,000 tribal members, salmon fisheries are paramount to provide for treaty harvest through the 7th generation.

Thus, we engage in all aspects of salmon management in order to remediate the adverse effects of actions by the non-Indian populations that have depleted salmon runs.

Hatcheries play an important role of mitigating the loss of harvestable salmon to our people. Without hatcheries to mitigate for the loss of natural production, there would not be enough harvestable salmon to provide a meaningful treaty right to take fish.

Lummi Nation cannot support the privatization of hatcheries in the State of Washington in the same manner that they have been privatized in Alaska, for several reasons: 1. Hatcheries have been acknowledged as mitigation for the loss of productive habitat, and the state that permitted those land use practices for short-term economic gain at the expense of the salmon, which are required to meet the treaty

right to take fish.

2. The Tribes in U.S. v Washington are co-managers of the resource, and fisheries are managed under the Puget Sound Salmon Management Plan to provide for sustainable production and equal allocation between state and tribal areas.

3. Privatization of hatcheries, if possible, would remove the state responsibility to mitigate for past destructive land use practices.

4. Tribes are restricted to terminal areas and there is no area that can be set aside for a revenue fishery.

5. Several salmon species in Puget Sound are listed as threatened under the Endangered Species Act, and hatchery production has to be permitted.

HyShqe (thank you)

Early this year the top two officials in the Nooksack Tribe, Chairman Robert Keller Jr. and Vice Chairman Rick D. George, submitted a letter of full support to the sponsor of HB 1270, Rep. Vincent Buy. (Copy courtesy of the Nooksack Tribe.)

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ENTREPRENEUR CORNER: KICKSTART BELLINGHAM SERIES

Chris McCoy (left) founded Kombucha Town in Bellingham to craft brew the ancient Chinese tea-based specialty drink kombucha. The company specializes in all-natural ingredients. Here McCoy laughs it up with Tyler Byrd on the Kickstart Bellingham series People in Motion.

68 | BUSINESSPULSE.COM

Invent Co-Working provides Kickstart Bellingham series

A voice with a view on the Web: “People in Motion” for startups

by Business Pulse Staff Photos courtesy of Red Rokk Interactive WHATCOMBUSINESSALLIANCE.COM | 69

ENTREPRENEUR CORNER: KICKSTART BELLINGHAM SERIES

Amal Graafstra (right), speaking in the People in Motion interview series at Kickstart Bellingham alongside Tyler Byrd, opened Dangerous Things in Bellingham two years ago. It is a biotechnology company operating on the cutting edge of what he terms “the forefront of a new kind of evolution—biohacking.”

One statistic strikes fear into the hearts of entrepreneurs and founders everywhere: 90 percent of all startups fail.

From lack of funding, to internal drama, to creating a product that has no market—the pitfalls of the local startup number many, while often flailing without an ample support system.

“There are days when I’m ready to quit… and there are other days when it’s just awesome,” Shawn Kemp said. He is chief operating officer and co-founder of ActionSprout, a Bellingham startup that manages niche fund-raising through Facebook. “You have to be able to suffer through those really bad days.”

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“Many incredible startup stories and ideas (exist) at a new level around Whatcom County. But without a forum to connect, some of that innovation and talent gets lost. This new series (and) Kickstart Bellingham offer a simple way to share stories, stay motivated, and get connected with like-minded entrepreneurs.”

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People in Motion is part of a larger Kickstart Bellingham project launched by Tyler Byrd, founder and CEO of Red Rokk, a digital creative agency. The new Kickstart Bellingham website offers an online forum for founders and entrepreneurs to connect, post events, share ideas, and ask questions.

“There are so many incredible startup stories and ideas floating around the local community, yet there’s no place to really share them,” Byrd said. “I see the startup community entering a new level in Whatcom County, but without a forum to connect with others, some of that innovation and talent gets lost. This new series, as well as Kickstart Bellingham as a whole, offers a simple way to share stories, stay motivated, and get connected with like-minded entrepreneurs.”

Since its recent launch People in Motion has featured Kemp from ActionSprout, Chris McCoy from Kombucha Town, Skye Elijah from CoinBeyond, Amal Graafstra from Dangerous Things, and others.

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great connections here. The stuff that’s happening at Invent [Co-working] and all the different activity here is pretty robust….

You don’t see that with some of the bigger cities in terms of the ability to actually connect and reach out.”

McCoy, owner and CEO of Kombucha Town that craft brews all-natural kombucha, shared a similar sentiment. He said that Bellingham offers a safe place to share unique and sometimes crazy ideas: “[Bellingham] is a great, safe place to go out there and offer an idea that’s a little different….People here really care about their community, which is something that makes it great to be a startup—people want to help you out.”

Examples of those crazy ideas, awesome events, and People in Motion interviews all appear on the Kickstart Bellingham website, along with job listings and startup directories. (Go to RedRokk.com’s portfolio page.)

“Kickstart Bellingham offers a one-stop shop for local startups,” Byrd said. “Our hope is that by showcasing the creative talent in Whatcom County and connecting them online, we’ll ignite a stronger business community and spark innovative ideas.”

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ANALYSIS: LAND USE over-REGULATION - part 1

Over-regulation in the use of property It suppresses personal choices,and erodes our economy, but citizens still can make a difference locally

by Roger Almskaar, Land Use Consultant

Editors Note: An old joke about Minnesota is that whenever it rains, they declare 100s of new lakes. A rough similarity in Whatcom County, according to land-use consultant Roger Almskaar, is that inappropriate judgment by officials can turn land normally dry in the growing season into regulated wetlands. This is one alltoo-common way that over-regulation prevents businesses and property owners from using their land for lawful purposes.

74 | BUSINESSPULSE.COM



 

  

     

  

DITCH? CREEK? WETLANDS? Pictured here, an example of a company near Ferndale unable to expand onto its property (the field) because of over-regulation. Specifically, the land was zoned, platted, and serviced for industrial use over 15 years ago with wetlands rules in place. But, now most of it has been declared a wetlands and buffer, hands-off, based on a judgment by the critical areas staff and their supervisors in the County Planning Department. Usually these regulatory positions are held by a biologist, but often one with little indepth education, field training, and experience in the federally-required sciences of soils and hydrology.

(Staff Photo) WHATCOMBUSINESSALLIANCE.COM | 75

ANALYSIS: LAND USE over-REGULATION - part 1

This property in Birch Bay (and another view of it across the way, with Roger Almskaar looking across it on p. 81) stands as an idled example of a bog-down in regulations. A developer inexplicably has been kept from building houses because of red tape.

(Staff photos)

I

was hired by the Whatcom County Planning Department in 1971 to administer permits and draft the policies and rules required by the justadopted state Shoreline Management Act. The county had no zoning and the big issue of the day was isolated city-size lot 76 | BUSINESSPULSE.COM

subdivisions in rural and farm areas.

The county was tightening its subdivision ordinance, as required by a recent state law; “recreational developments” had become a major statewide issue, especially on shorelines.

Whether to zone or not was the main issue in the 1970 Whatcom County Commissioner race. The Republican incumbent who supported zoning won. ARCO had

just bought several farms for what is now the BP Cherry Point Refinery.

We didn’t have enough rules on land use back then, in the rural counties and elsewhere in the state, or across the nation. I have long believed that we need rules at all levels of government to adequately protect both environmental quality and lawful private interests from irresponsible, selfish, or short-sighted impacts, large or small, by either private parties or public agencies.

But today, I say we have too many such rules. It isn’t just the

overwhelming number, but their complexity, their growing overreach into our personal and business lives, and their frequent lack of coordination in rules-writing and enforcement by myriad agencies.

The right hand of the government often doesn’t know what the left hand is doing, especially at the upper end of the food chain, i.e., that other Washington. Most fellow citizens know this, and are not happy about it, but many continue to support the career politicians who won’t reform the mess.

My intent is to show how overregulation is a serious problem in our community, state, and nation; to describe how and why these strangling rules adversely impact our economy, private lives, and even public programs, and to inform readers of current opportunities in our county and cities to reform arbitrary and subjective rules.

Many land use rules and the way the government administers them are not only obstructing our general economic vitality, along with individual opportunity, but they eat away at our individual rights.

Especially property rights – fundamental and critical civil rights for people and business. Overregulation of business and property grown as a national issue since the 1970s.

Yet, despite the efforts of many organizations and citizens and some government leaders to achieve reform, the situation worsens every day. Many agencies still operate on a rules binge, especially state and federal, ignoring the very slow pace of economic recovery.

The EPA recently adopted rules that expand federal jurisdiction from actually-navigable water bodies to apply to every ditch and intermittent stream in the nation.

We soon will see the federals out in farm country, along with the Department of Energy, and the county planning staff, looking for water quality problems.

Do we need three agencies on

the same task? Ask your legislators, “Why all three levels?”

Also, our state Department of Fish and Wildlife (DFW) recently amended its rules on fish habitat, greatly expanding its jurisdiction over dry land that lies adjacent to water bodies, over objections from many. Similar to the new “EPA effect,” we now have three state agencies – DFW, Department of Ecology (DoE), and the

Fred DeLuca, founder of the Subway franchise, is quoted in a 2013 interview: “If I started Subway today, [it] would not exist…

The environment for entrepreneurs has continuously gotten worse because there are more and more regulations. It's tough for people to get into business, especially a small business."

Department of Natural Resources (DNR), plus local staff regulating these loosely defined “riparian” areas, for overlapping purposes.

Many recent private and government reports show how this is costing the economy billions. It’s having serious adverse effects in the state, and locally, too, especially on business development and the cost of housing. And the trend line runs upward.

In a 2013 blog, Erin Shannon

of the Washington Policy Center (based in Seattle and Olympia) listed several publications that strongly agree about how the many land use regs and other rules cause harm to business in general. [See box with Internet links.]

These entities include the Washington State Department of Commerce, the former State Auditor, and the Kansas Citybased Kauffman Foundation. Fred DeLuca, founder of the Subway franchise, is quoted in a 2013 interview: “If I started Subway today, [it] would not exist…” The environment for entrepreneurs in the U.S. has, he said, “continuously gotten worse because there are more and more regulations. It's tough for people to get into business, especially a small business."

••• Land use in this context means human activities that might or might not be allowed on land or water. It includes urban and rural uses, such as housing, business, and recreation, as well as resource uses such as farming, fishing, forestry and mining, which might not require any buildings or utilities.

Some common land-use regulation problems for businesses and land owners mean higher investment and operating costs for often ineffective compliance with arbitrary or subjective standards. For example, wide buffers along seasonal ditches on farm land without evidence of a problem takes valuable resource land out of production.

The type of person or business most likely to suffer financially or personally from the problematic rules and procedures is one proposing to develop vacant land, whether in cities or rural or resource areas, for houses or a business.

The government must comply, too. Capital (i.e., taxpayer) costs for many infrastructure projects, especially roads, often run much higher due to environmental requirements.

This can include costly and complex WHATCOMBUSINESSALLIANCE.COM | 77

ANALYSIS: LAND USE over-REGULATION - part 1 mitigation requirements for impacts on small, marginal wetlands, which usually provide few, if any of the claimed benefits to nature and society.

Wide buffers, and subjective wetland delineations and ratings in environmental rules can consume large areas of valuable residential and business-zoned upland, and block valuable views.

Also, more traditional rules, such as density standards for housing

development, can be too low relative to actual development costs, and relative to what the finished product will sell for in that location.

Subdivision process time limits can be too short; the process has become very complex and slow, due largely to the involvement of multiple agencies.

[Read the Monterey Heights article for a horrible example of arbitrary, irresponsible permit processing by a state agency.]

Many land use rules and the way the government administers them are not only obstructing our general economic vitality, along with individual opportunity, but they eat away at our individual rights. Especially property rights….

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The more complex and ambiguous the rules, the more likely the application of substantive standards and procedures will be unreasonable, subjective, even biased.

Reforming all of the state and federal rules is a daunting task, but can be pursued any time through the legislature, or agencies, or the courts; many trade associations and other groups are already engaged.

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They need the public’s help.

Many opportunities lie ahead during the next year that affect over-regulation of land use – a very serious issue for businesses and individuals – in Whatcom County and all its seven cities.

This is where citizens have a chance to make a difference by diving in head-first, urgently.

The county and its cities are reviewing their Comprehensive Plans – their development regulations, and capital facilities plans, as required by the state Growth Management Act (GMA). These components make up the three legs of the GMA stool. This process began over a year ago and met a deadline of June this year.

However, beyond that deadline, right now, the constituency can still have input.

ANALYSIS: LAND USE over-REGULATION - part 1 The local governments must revise these documents, if needed, to achieve compliance with the goals, policies, and mandates of the current GMA. These standards are broad, and include: • Economic vitality; • Affordable housing; • Environment; • Resource land use (e.g. farming etc.); • Permit process, and • Property rights.

The law also requires that the county or city policies and regulations must work toward achieving a balance among all of its stated 13 goals, that they fit local values and conditions (see link below).

Citizens have many opportunities during this slow process to comment on staff and Planning Commission drafts, and later the final proposals in front of the independent county and city councils.

They will accomplish more by working with like-minded citizens

Cont #WHIRLS1090D9

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and organizations. Unreasonable or ambiguous rules can be reformed, if people show up and point out the problems, and ideas for solutions.

Current phases include comments on the Draft Environment Impact Statement (D-EIS), and partake in discussion on population, employment, and development alternatives. The D-EIS fact sheet, on page i-iv, has a good summary of these items and the EIS process. And the County Planning Commission schedule appears at www.co.whatcom.wa.us/1170/ Comprehensive-Plan-Updates.

Check city sites for their programs.

In conclusion, I hope you will agree with me that regulatory reform is urgently needed, here and at the state and national level.

I’m sure the majority of us want effective and long term protection of the environment, along with a coordinated system of rules that are reasonable, clear, concise, and likely to achieve a public purpose.

Roger Almskaar has vast, 34-year experience in the land and real estate industries. He has served as a Land Use Consultant in Whatcom County since 1981, analyzing sites and obtaining permits, short plats, zoning, and critical areas for private clients.

He also has been a licensed realtor (1981-’05); a commercial broker (’88’05), and on the planning staff for Whatcom County (’71-’81). The County adopted his draft of its first Shoreline Management Program in 1976. Roger taught courses in coastal zone management at Western Washington University during the 1970s.

He graduated with a BA in history, geography, and geology from the University of Washington (’69).

He became a teacher and journeyman carpenter in his hometown Seattle. In 2009, the Building Industry Association of Whatcom County awarded its Daryl McClelland Award (he serves as a state director for the association, and on the Legislaative Policy Committee). In 2010 he received the Whatcom Realtor Association’s Partner of the Year award.

Roger considers himself an environmentalist who wants to protect natural resources and protect air and water quality, etc., and invests his money and energy as needed. Yet, he believes that some have taken this cause too far become “environmental extremists, or “anti-growthers.” He helped start the Whatcom chapter of Citizens’ Alliance for Property Rights (CAPR) six years ago to raise awareness of these trends locally, also organizing forums, classes, and serving on advisory committees for land use and environmental topics.

Business Pulse hired Roger to compile these editorial analyses of the impact of regulations choking the life out of property and business owners’ rights.

A permit process nightmare A big reason housing is so costly, and business climate negative

by Roger Almskaar, Land Use Consultant

A

lmost eight years ago, Mayflower Equities submitted an application to Whatcom County for Monterey Heights to create 51 lots for 51 middle-priced, single-family home lots on about one-third of a vacant 31-acre site in Whatcom County.

The gross density is 1.6 units per acre, well below the 124 homes allowed by the area’s Urban Residential zoning of four homes per acre.

Located off of Birch Point Road north of Birch Bay Village, the site

is mainly cleared and slopes gently southward (check out the photo).

The plan set aside 20 acres as open space – 66 percent of the site – including wetlands and buffers.

It’s in an Urban Growth Area, with comparable residential development on three sides, and serviced

by Birch Bay Water and Sewer District.

The application prepared by a local engineering firm was accepted in September 2007 by Planning Development Services as complete, and they collected fees exceeding $5000. The owners also submitted an environmental checklist and several other environmental reports, and circulated them to several government agencies and local interested groups for comment, as required

by law.

By early 2010, the developer and their team had complied with all the County’s procedural and substantive requirements: Planning, Engineering, Health and Fire Marshal. This included review of a wetland delineation/mitigation plan prepared by a qualified scientist, approved as complying with the County Critical Area Ordinance (CAO). (This project is subject to seven local ordinances, several state laws and agency rules, and at least one federal law.)

The County Council granted Preliminary Approval on March 16, 2010, on a 7-0 unanimous vote, after positive recommendations by staff and the County Hearing Examiner, along with 32 conditions WHATCOMBUSINESSALLIANCE.COM | 81

Whatcom Business Alliance Upcoming Events Calendar

July 22

Member Appreciation Night at the Ball Park First Pitch 7:05 p.m., Joe Martin Stadium Bellingham Bells vs. Victoria HarbourCats

October 28

Northwest Business Expo & Conference 1-7 p.m., Event Center at Silver Reef Hotel Casino Spa

November 19 Economic Forecast Breakfast 7:30 a.m., Event Center at Silver Reef Hotel Casino Spa

Learn more about these events online at www.whatcombusinessalliance.com or call 360.746.0418

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from the several county departments.

So what’s the problem? Why does the land sit empty and idle?

Because it, like its grass, is left blowing in the wind – whipped about by a storm of regulations.

Today, more than 5 years after approval, the lack of response and cooperation of a single regulatory agency, the State Department of Ecology (DoE), has kept the applicant unable to start building the required infrastructure required to complete the property’s long plat.

This is because DoE denied one minor, often-routine approval, even after all other approvals had been granted across the board. If DoE had bothered to comment during the State Environmental Policy Act (SEPA) process in 2007, as other agencies did, this impasse could have been resolved long ago, with significantly less costliness. DoE’s inaction when County solicited comment, and then negative action after all other permits were granted, has created an extremely risky financial situation for the applicant.

By now the application process has topped $100,000. Preliminary plat approvals allow up to 5 years for completion. A single, 1-year extension may be granted.

The 5-year window is gone, but not the significant negative economic impacts of the DoE’s policies – on businesses, on consumers, and on taxpayers who fund all these processes. An extension has been requested; however, it’s doubtful that one year will be enough to start constructing homes.

How did DoE create this horrible mess for this small business? In 2008, they declined to comment on

the wetland report attached to the SEPA checklist, which described in detail the minor wetland filling and mitigation plans. DoE is on record stating that is has no obligation to comment under SEPA, just when a permit application is placed in front

DoE denied one minor, often-routine approval, even after all other approvals had been granted across the board….DoE’s inaction, after all other permits were granted, has created an extremely risky financial situation by (costing over) $100,000.

of them.

The permit at issue is a “Section 401 [Clean Water Act] Water Quality Certification,” requested of the U.S. Army Corps of Engineers for the proposed wetland alteration. The Corps cannot process this application until after the County has completed its SEPA process, and DoE cannot issue their concurrence until the Corps issues the permit.

Try untying that knot.

DoE holds veto power over some local approvals for a project. If they

had bothered to express their concerns earlier, this horrible situation for this business could have been avoided. [The DoE would not review the County’s approval until many years and thousands of dollars have been invested.]

Further muddying the situation, when a proponent disagrees with DoE and opts to appeal its decision, the local permit time clock keeps ticking. DoE can stall for years, so even if Mayflower were to win an appeal, the project could die due to expiring local approvals.

The applicant appealed early in 2013 to the state Pollution Control Hearings Board (PCHB), which upheld DoE’s denial in two rulings, 2013 and 2014. This Board is known for political decisions, and rarely rules against DoE. The applicant’s only recourse now is to appeal the PCHB decision to the Superior Court, and go up against the state Attorney General staff again, amply funded by our tax dollars. Mayflower’s odds of winning remain uncertain, at best, with time running low on the local permits expiring.

They cannot sell any lots until completing all the conditions and recording the plat, and the negative DoE decision prohibits them from starting construction.

Say you are a business person who has invested well over $100,000 during the past 8 years, and you have no income to show for it, and your investment in the application, and the land, is at risk.

What would [or should?] a prudent person do at this point?

Maybe it’s time for a regulation to put an end to regulations….

These sites provide an excellent state and national picture: • •

http://www.washingtonpolicy.org/blog/post/two-new-statestudies-say-regulatory-relief-priority http://www.washingtonpolicy.org WHATCOMBUSINESSALLIANCE.COM | 83

Personally Speaking

PERSONALLY SPEAKING… with

RICHARD JEFFERSON

By Mike McKenzie, Managing Editor Photo by Gabriel Knapp/Business Pulse

T

he Lummi Nation is operating in rapidgrowth mode on business development. A sit-down conversation with one of the individuals driving a large part of that – the realestate, the hotel expansion, and a proposed modern marina – has been involved in community planning for many years on behalf of his life-long home base.

84 | BUSINESSPULSE.COM

Richard now runs Lummi Commercial Company, after several years as Director of Planning and some stints on the Lummi Indian Business Council (as a “naïve” young college grad, he voted against gaming).

Already, Lummi Nation impacts Whatcom County as its largest employer, largely through its 400-person government building and the 600-person Silver Reef Hotel Casino Spa staffing, and more lies on the horizon with I-5/ Slater property leasing and the safe haven for the tribal fishing fleet.

Richard discussed the back-

ground and future for Lummi Nation prosperity with Managing Editor Mike McKenzie – the grand plan, the inner workings, the nuances, and the hurdles to clear.

Sharing his personal story and values (see separate story), Jefferson revealed deep insight into some of the determination and vision that’s helping elevate the life of the Lummi.

His professional background began as undergraduate and master’s graduate from the University of Washington in engineering….

I attended the University of Washington, and received both my bachelor’s and master’s degrees in mechanical engineering.

The closest I came to an engineering career was working at Northwest Indian College as an instructor, setting up an engineering program....before they had dorms, and there weren’t enough students.

Then I went into project management for the tribe, running construction projects, and now manage engineers and architects.

HOW LCC FUNCTIONS Lummi Commercial Company is a separate corporation, incorporated underneath tribal law, and the board is appointed by the tribal council (Lummi Indian Business Council, or LIBC). This company oversees the Fishermen’s Cove, the convenience stores, the (Shell) minimart in front of the casino, the 260 (beverage) store right off of I-5, and the Casino In the past LCC had an arm’slength relationship with the casino, because we had a management company running the Casino.

We no longer have a management agreement and are running the Casino ourselves, we recently hired a new CEO, Frank Cornett, who reports directly to me and the Board.

IRONY OF THE POSITION I almost didn’t take this job. I was on the tribal council for six years right after I got out of college, and I actually voted against gaming.

I was idealistic, and naïve. It’s been a great blessing for the tribe. We distribute about $600,000 in community contributions each year.

I don’t gamble, I don’t drink, I don’t smoke, but we sell cigarettes, we sell alcohol, and I supervise the casino.

I-5/SLATER MOTIVATION But the real motivation for me moving to LCC (from the Planning

From an independent report a couple of years ago: LIBC (tribal government) is 3rd largest employer in the county…Silver Reef is 7th. One of every 33 jobs is driven by the Lummi. “Put together the Northwest Indian College, the fishery, all those entities, we’re the largest….(and) Lummi Nation in 2012 infused into the County $490 million.”

Department) was when the tribe purchased the property out on I-5, south of Slater. We have 160 acres there now, and recently got the last 80 acres placed in trust. LCC hired me to help that process along and start looking at the possibilities of developing the property.

People want to know what we’re going to do. We had a letter of intent with Costco, and talked with Walmart and Bass Pro Shop, we never reached an agreement with any of them. What we have learned is that the market will determine how this site is developed over the next 10 years.

TWOFOLD GOALS We have two main goals: to generate additional revenue for the Tribe.

The second is to create as many living-wage jobs as possible. We expect our business partners to hire tribal members, but also local community members, and then make sure that they treat them right.

PURCHASE WAS DEFENSIVE Originally, about three years ago, we bought 80 acres. The Nooksack tribe had an option on it. So, it was a defensive measure to keep another tribe from owning property between I-5 and the Silver Reef Then we decided, well, let’s see how much more property we can get here – the other 80.

Now that all the property is trust we will complete a master plan and seek an anchor tenant.

In the past it would have been a challenge to develop this property.

Amongst that 160 acres you’ve got part of it in Ferndale, part was in Bellingham’s UGA, part of it in unincorporated Whatcom county.

Now that it is in trust all permits will be issued by Lummi, other than federal permit and encroachment permits.

VISION FOR MARINA The marina concept came from the community, when I was planning director. As the planning director I read through all the community plans that had been done, that I could find, all the way back into the ‘70s. And they all had one thing in common: The need for a marina.

PROTECT THE FLEET We’ve got the biggest fishing fleet on the West Coast, and we need a marina to keep our fishermen safe. We fish all winter long, and it’s our livelihood, so sometimes we take risks that we shouldn’t. If you get caught in a storm, can’t get your boat out, you’ve got to make a run for Blaine or Bellingham… that’s not safe.

LOOKED ELSEWHERE We did look at a number of places, including Sandy Point, the aquaculture dike, inside the sea wall where the old blockhouse used to be, and inside of Portage Bay. But Gooseberry Point is where the fishermen want to be, and where we have the infrastructure.

WHATCOMBUSINESSALLIANCE.COM | 85

Personally Speaking FUEL STRATEGY We’ll also increase our capacity to sell fuel to pleasure boats. Right now we sell at the dock at the same price as at the gas pumps. We’re missing a huge opportunity: People go a long ways for a few cents, especially when you need several hundred gallons, depending on the size of the boat. We want to be a force in that business. And as that drives traffic here, take advantage of that business, and upland retail.

DINING OPTIONS? From the county ferry (far left) across the boat parking lot, and to each side of this view, lies the expanse upon which the tribal council and Lummi Commercial Company envision a modernized Marina. It would shelter the Lummi fishing fleet and attract leisure boaters with a dry-stack storage space. (Photo by Mike McKenzie)

DIFFERENT STYLES CONSIDERED We looked at putting in a traditional marina, where you dredge and drop armor rock. We looked at it a little different, where the armor rock wasn’t contiguous and there were little islands so water could still flow through and fish would still have passage through there.

The consultant estimated it would take 10 years to get through the Corp (U.S. Army Corps of Engineers, which requires permitting)…and that was three years ago.

NO DOUBT: WORLD STANDARD Then we looked at this floating attenuator (in the proposed design), and engineers said it can’t be done.

We challenged them. Don’t tell me we can’t do it; we can do anything.

So they said OK, it hasn’t been done.

There’s engineering out there that proves that this type of thing can be done. It is more costly. This design almost eliminates dredging and fill, which should reduce the time to get a Corp permit. We also didn’t want to look like hypocrites, opposing other projects that require dredging and filling.

If we’re able to do this at some point it will be, other than bridges, 86 | BUSINESSPULSE.COM

the largest floating breakwater in the world.

COMMERCIAL-REC MIX The marina is designed primarily for our commercial fishermen, but we hope to provide upland storage for about 200 recreational boats --

“If we’re able to do this (attenuator style marina) at some point it will be, other than bridges, the largest floating breakwater in the world.” we see some business there with the dry-stack storage.

Originally one of the things we envisioned was a building right next to the water, and an automated system in which you would punch in the number of your boat, it would go grab it, then come out and launch it, all in one motion.

We’ve moved away from that because of the lack of funding and space. There’ll be some dry stacks, but it’ll be grabbing your boat with a forklift.

My vision is either two restaurants, or a combination of fish ‘n’ chips down below, and a high-end restaurant on top where you take advantage of the view and do a high-quality seafood, surf ‘n’ turf type thing.

STORE, GAS, FISHING SUPPLIES The store and gas station will move across the street, and we’ll probably make a chandlery in the store carrying some hardware and supplies for both commercial and recreational fishermen.

PROCESSING PLANT MOVE It will stay about in that location (south end). The current plan moves it out into the water so fishermen can pull right up to it and unload.

Now they have to run a fork lift all the way out to the end of the dock. Sometimes we have 24-hour opens, so if I have to dock and wait sometimes an hour to get my product off and head out again, that’s costly. We can eliminate that…

NEW WAY TO LAUNCH Right adjacent to the plant would be a boat ramp with a float for launching your boat. And then next to that you could drop your boat off the end of the dock.

South of the Processing Plant we’ll place the fuel dock. And then, three or four rows of floats for different size boats.

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Personally Speaking PERMITTING PROBLEM?

LUMMI BUSINESS STORY

We met with all the agencies – Corps of Engineers, Fish & Wildlife, EPA, Washington State Fish & Game to try to identify issues and concerns with the design and hope to resolve these before submitting our application.

This project has been funded by half the money we get from the (Lummi Island) ferry lease for the last three years.

We had an independent company do an analysis for us. It showed that LIBC (tribal government) is the third largest employer in the county, and the casino is the seventh.

When you put together the LIBC, the casino, the Northwest Indian College, the fishery, all those entities, we’re the largest employer in Whatcom County.

One of every 33 jobs in the county is driven by the Lummi.

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The report said that Lummi Nation in 2012 infused into the County $490 million, directly, indirectly, and induced.

TRIBAL SHOPPING

Most of our employees are nontribal, especially at the casino – they live off the reservation, shop off the reservation. There isn’t any place other than our convenience stores for us to spend our money.

LEADING GAS PRICES

I buy all my gas at the Lummi Mini Mart fuel station, whether they’re the lowest or not. We’re working on staying competitive.

Last summer we made an effort to sell gas close to or below Costco when possible, and I don’t know that people picked up on that.

Because of high Canadian traffic, there were some who wanted to charge what the market will bear. If I see gas cheaper in Skagit County for no other reason than it’s not in Whatcom County, then why charge that? We’ve continued pushing on that issue.

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For the first time we’re trying to put our business information out there, educate people on who Lummi is and what we’re doing.

We’ve always had a good sense of doing business.

The reef-net salmon fishing technology allowed us to catch more sockeye than anybody else, and it allowed us to trade with other tribes—not only in Puget Sound but beyond—trade items reaching all the way to Montana.

An elder told me that Gooseberry Point was the biggest trade village in Puget Sound.

WHAT LIES AHEAD?

The Tribe’s goals and aspirations —and we’ll accomplish it—is to not continue to rely solely on gaming.

We want to develop businesses that bring in as much revenue as the casino does.

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Personally Speaking ‘I kind of wanted to be an astronaut at one point,” Jefferson said. In a rare work-day break, he relaxed on a bench at Zuanich Park before a downtown meeting for a photo shoot with our Gabriel Knapp.

[EDITOR’S NOTE: In his own words, our Personally Speaking guest describes growing up on and returning to the Lummi reservation, and impacting lives as a $6/hr tutor, government official, community planner, and businessman.]

Richard Jefferson’s life built on strong belief system 90 | BUSINESSPULSE.COM

I came from a large family – 13 children. I’m fourth youngest, behind all six sisters and three brothers.

We were the last family to live on Portage Island, where I was born. As a kid it was like being at camp all year long…it was great.

Our cousins still talk about spending days on the island with us.

A developer was going to build condos out there, so the County bought most of the island to stop the development and was going to make a park out of it. We got kicked off in the middle of the winter by the Tribe and the County.

We don’t talk about it a lot. We lived for a while in a hamburger stand on the Stommish Grounds.

When we first moved over there we didn’t have inside toilet (until) my dad finished a well. He worked hard and built us a beautiful home.

He was a fisherman most of his life, and later in life a drug and alcohol counselor. Mom worked hard and never complained, and ended up being a drug and alcohol counselor also. She was on the tribe’s Education committee for 35 years.

Education was a big part of our life. Twelve of us graduated from high school. I was the first one to go to college and finish. An older brother went to junior college, and became a very successful fisherman.

STRONG PARENTAL MESSAGE Mom and Dad always told us, “You can do or be anything you want. You want to be a doctor, a lawyer, or president of the United States – you can do it, if you’re willing to put the work in.”

I believed it. They instilled that in all of us. Guess I kind of wanted to be an astronaut at one point.

STAYING HOME

Our Goal is to Help You Achieve Yours

I did go for an interview and received a job offer from NASA’s Jet Propulsion Laboratory in Pasadena, but I knew that I couldn’t live there. I always knew I was going to come home.

My wife, Heather, is a teacher and works for the Ferndale School District. We have three sons who we are very proud of, who also attended school in Ferndale.

MAKING POSITIVE INFLUENCES What I’ve done in planning for 20 years, and as planning director, it’s been a great experience. But what I’m most proud of is coming home and working at Ferndale High School as a tutor. With a master’s degree, for six bucks an hour, 30 hours a week.

I worked for nine months, but they spread my pay out over 12 months. I couldn’t afford to do that for more than a year. One of the girls I worked with as a tutor went into engineering at the University of Washington, and she actually went to work with the Jet Propulsion Laboratory.

Stories like that make my day.

Being able to be a coach, too. I’ve got boys who have been out of school three years who see me and say, “Hey, coach, how you doing?”

I always told them, if they need anything, call…don’t get in a car with somebody who’s drunk – you need a ride, I’ll come get you, no questions asked that night. We might have a talk a few days later.

See why so many clients from the Northwest – from individuals and non-profits to small and large companies – trust the people of Archer Halliday.

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• Tax Returns & Tax Planning • Tax Strategies & Implementation • Pensions • Growing Your Business • Small Business Consulting • Start Up Business Consulting

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Certified Public Accountants & Business Consultants 1621 Cornwall Avenue, Bellingham, WA 98225

TRIBAL ACCOMPLISHMENTS The Lummi now have doctors and lawyers and rocket scientists.

We’ve had some phenomenal athletes come out of this small community, too.

My cousin placed second or third in the world, and won the Pan Am Games in roller skating. Another cousin at age 16 was the fastest 19-and-under outrigger puller in the world. He and his brother also road bull in for a few years, and

(360) 756-1010

www.archerhalliday.com

made it on ESPN a couple of times.

I’ve thought about putting together documentation about Lummi achievements on the education side, then athletic side, and about the accomplished musicians, so kids can see what they’ve all accomplished.

I think this would help our youths believe that they might be able to do or be anything they want to be, if they are willing to work hard.

WHATCOMBUSINESSALLIANCE.COM | 91

Whatcom Business Alliance Fostering Business Success and Community Prosperity

Member News

Port busy in air, land, and sea

T

he Port of Bellingham has showed up in many headline-grabbing initiatives recently:

OLD GP SITE: Rhine Demolition of Tacoma has signed for $998,518 to demolish the red-brick digester building and the bark-and-chipper building with four white silos on the former GeorgiaPacific site on the Bellingham waterfront. They expect to complete the work by the end of this year, though the contract allows up to the end of January 2016.

A $100,000 contingency is part of the contract, and a Brownfield Grant will apply $374,000 to the cost to level the digester building.

The Port will either keep or move a steel container next to it; all other materials possible will be recycled.

CONTRACTOR APPROVED: The Port Commission made official what has been known for a long time: International giant Harcourt Developments in Ireland got the go-ahead from to start the waterfront plans targeted for 2019 completion.

AIRPORT CHANGE: Director of Aviation Dan Zenk left Bellingham International Airport to become a senior manager in the aviation operations division at Seattle-Tacoma International Airport, effective this month. He worked at BLI nine years and became director in 2011. Airport Manager Mark Leutwiler is positioned as interim director while a 92 | BUSINESSPULSE.COM

national replacement search takes place with a September hiring as the target.

ALL-AMERICAN MARINE: Contingent on receiving grants to cover costs, All American Marine will double space in a new building and Fairhaven Shipyard will have a new $7.6 million pier.

The Port will conduct soil and sediment cleanup on almost 8 acres.

All American Marine will end up with a 39,000-square-foot facility and owner Matt Mullett said the company will expand its number of employees from 45 to 70-75.

Warehouse 9 will come down and some parking removed.

Fairhaven Shipyard would move into AAM’s old building.

Cleanup of soil and contaminated marine sediments is estimated at $14 million across several years.

Model Toxic Control Act grants could cover about half.

••• Ben Kinney Acquiring ActiveRain From Zillow The Ben Kinney family of companies entered into an agreement recently to acquire ActiveRain from Zillow Group.

Ben Kinney ActiveRain® is a social networking, blogging, and training platform for the real estate industry. It offers real estate agents support and education to grow their businesses.

Kwkly®, a text-to-lead service

that helps buyers connect with agents, is also a part of this transaction.

“This acquisition not only extends our company’s global reach,” Kinney said, “it also strengthens Bellingham’s status as a technology hub in the Pacific Northwest.” Kinney was our WBA/ Business Pulse Business Person of the Year this year.

The Ben Kinney family of companies comprises real estate-related training and software companies, including Real Launch, Brivity and Blossor, plus technology firms Big Fresh and Tech Help. Kinney has been a licensed real estate professional 11 years and leads nearly 1,000 agents in the real estate brokerages he owns and operates in the U.S. and the United Kingdom, with Keller Williams Bellingham among them.

Exxel Pacific honored with Build Washington Awards Exxel Pacific Inc. recently received several 2015 AGC Build Washington Awards: The Safety Excellence Award for the second straight year; the distinctive Grand Award for Safety Excellence, and Kevin Lanham was named AGC of Washington Superintendent of the Year. Exxel Pacific was founded in 1989 with offices in Bellingham and Seattle, and has become an industry leader in constructing residential and commercial projects throughout the Pacific Northwest.

Kevin DeVries, the president and CEO, sits on the board of directors of our WBA.

CHARTER COLLEGE ADDS DIGITAL, SOCIAL MEDIA CLASS A new 40-week Certificate in Marketing Through Digital and

Social Media program will focus on how to approach new audiences within online communities, and how companies can become more engaged with consumers and strengthen the relationship between customers, products, and services.

The online, instructor-led program provides students with critical-thinking experience to support the marketing challenge in a multi-disciplinary environment that includes communication, marketing, digital media, and social media.

Charter’s Prospect Education provides educational services through Charter College campuses in Washington, California and Alaska. The college also operates an online program that services the western United States.

SPRAGUE PROMOTED, RADEL NEW MANAGER AT MANPOWER Dale Sprague Jr. was promoted to Market Vice President of the Pacific Northwest Region, and Manpower hired Jill Radel in his old position of Branch Manager of the Bellingham office. Sprague will be responsible for Manpower throughout Washington, Oregon, Idaho, and Alaska. Radel will serve clients and candidates in Whatcom, Skagit, Island, and North Snohomish Counties for temporary and permanent staffing.

integrated health system in Duluth, Minn.

Dr. Michael Murphy assumed a newly-created position at the Dr. Mike healthcare system Murphy level to lead clinical care, quality and safety, and patient experience.

He came from Sharp Grossmont Hospital in San Diego.

SILVER REEF NAMES CORNETT CEO Frank Cornett has assumed the CEO leadership of Silver Reef Hotel Casino Spa. He replaces Harlan Oppenheim, one of our recent finalists for Business Person of the Year.

NELSON NAMED MANAGER

PRITCHETT VOTED TOP CEO AWARD Bob Pritchett, who co-founded Faithlife, earned 2015 Glassdoor Highest Rated CEO honors.

Glassdoor, a leading jobs and careers online marketplace, rated Pritchett among the Top 25 among the small and mid-size business sector. The ratings cover leaders from countries in North America and Europe. He serves on the WBA board of directors.

Landmark Real Estate Management announced the hiring of Eric Nelson as its commercial property manager. Nelson has 28 years of experience in the commercial brokerage

LOCAL CHEF WINS 2nd JAMES BEARD AWARD Chef Blaine Wetzel at the Willows Inn on Lummi Island earned his second straight James Beard Foundation Award -- Best Chef in the Northwest. Last year he was co-winner as the nation's Rising Star Chef.

MOTOR WELD INC. Full Service Truck & Trailer Repair • Welding & Fabrication

PEACE HEALTH NAMES TWO SR. MANAGERS Dr. Michael Metcalf has joined PeaceHealth Medical Group as its new Chief Operating Officer this month. Dr. Dr. Michael Metcalf has more Metcalf than 25 years’ experience in large, multi-specialty group practices, such as his previous role as executive vice president of clinic operations with Essentia Health, an

Locally owned & operated for 20 year s

360.671.8770

2426 E. Bakerview Rd. • Bellingham, WA 98226 Hours: Mon.-Fri. 8am-5pm Saturday by appointment WHATCOMBUSINESSALLIANCE.COM | 93

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

Helping the environment by going around politicians “You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.” - Buckminster Fuller

I

t is a common refrain in many circles that climate change is the most serious threat facing our planet.

However, judging by the actions of politicians, rather than their words, that’s a hard conclusion to draw.

On Earth Day 2015, for example, Governor Jay Inslee lamented that the legislature had not acted “at all” on environmental policy. He blames Republicans, but his climate policy in actuality was rejected by majority Democrats in the state House of Representatives, not in the Republican-controlled state Senate.

Ironically, politicians often get rewarded for failure. Politicians who choose “bold” policies that go 94 | BUSINESSPULSE.COM

nowhere argue that such failure demonstrates their seriousness about the issue. Rather than be embarrassed at the failure to advance a climate-change policy after three legislative sessions, the governor calls it evidence of his superior commitment compared to his legislative opponents, rather than a failure of his ability to find workable environmental solutions.

People who truly care about the environment don’t have to wait for politicians. The free market provides ways to help the environment by investing in projects that increase the availability of renewable energy and reduce carbon emissions.

In the same way that Uber allows us to find a cab, compare prices and rate drivers, some smart phones and on-line tools provide a variety of ways to reduce our impact on the environment. People are taking power for themselves, rather than fruitlessly hoping politicians will take action.

Not only do such approaches offer the opportunity to take action now, but the cost is paid voluntarily

by those who can afford it, instead of government imposing costs on everyone – rich and poor.

For example, anyone concerned about carbon emissions can invest

People who truly care about the environment don’t have to wait for politicians. The free market provides ways to help the environment by investing in projects that increase the availability of renewable energy and reduce carbon emissions. in Kickstarter-type, carbonreduction projects. An organization called Green-e certifies projects to ensure they deliver on the promise of reduced greenhouse gas emissions. For example, Green-e certi-

fies methane-capture projects that prevent the potent greenhouse gas from escaping into the atmosphere.

You can also invest in projects that put more renewable energy on the grid.

Cloud Solar is a crowd-funded startup allowing people to invest in a portion of a solar farm in sunny parts of the country. Instead of putting a panel on your roof where clear weather is rare or marginal, you can invest in a project where the panels will operate at peak efficiency. Cloud Solar still relies on generous taxpayer subsidies, but if demand for solar increases due to projects like this, policymakers should soon be able to cut taxpayer subsidies.

Smartphone apps could allow people to invest in other renewable sources of energy. Already you can purchase renewable energy credits (RECs) to support the generation of green sources of energy.

These approaches work because even though the particular electron flow that you help generate would never reach your house, it still increases the total supply. It is no different from a bank, where the dollar bills you take out are different from the ones you put in; but, of course, that doesn’t matter to the consumer.

The energy sector represents just one example of how the free choices help the environment. Investments in wildlife protection, wetland creation, and other environmental benefits are all available on the free market.

Too many people confuse political shouting with real environmental progress, choosing symbolic public marches over effective private action. A growing number of people, however, ignore the political games and make a direct difference.

More than ever, we have the opportunity to use the creativity of the free market to do what politicians cannot – provide effective and real environmental solutions.

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Guest Column: labor market Erin Shannon | Small Business Director Washington Policy Center Erin Shannon became director of the Washington Policy Center for Small Business in January 2012. She has an extensive background in small business issues and public affairs. The Center improves the state’s small business climate by working with owners and policymakers toward positives solutions.

How much would a paid leave law cost Bellingham?

O

n February 1, 2016 the City of Tacoma will become the third city in Washington, and one of just 18 in the nation, to force employers to pay for employee paid sick leave.

Other cities are poised to follow in their footsteps: The City of Spokane is considering a mandatory paid sick leave proposal.

While the City of Bellingham has yet to tackle this controversial issue, imposing paid sick leave could one day become a statewide mandate.

During this legislative session, the House of Representatives passed House Bill 1356, which would mandate paid sick leave for every employer with more than five employees in the state. The bill died in the Senate, but doubtless it 96 | BUSINESSPULSE.COM

will be reintroduced next year.

A recent news article on the policy of mandated paid sick leave suggests that business owners should not panic about the mandate because some business owners in cities that require paid sick leave say the regulation is not horribly burdensome.

Of course, that is some businesses. Other businesses have a very different opinion.

The owner of eight McDonald’s franchises in Seattle, employing about 500 workers, says Seattle’s paid sick leave mandate has significantly increased his costs. First he had to pay to update his payroll software in order to track the accrual and use of leave hours to comply with the new law.

Then came the dual costs of paying the wages of workers who began using the paid leave, while paying another worker to fill in for the absent worker. And he says more workers are calling in sick “a lot more” than before the law was

Imposing paid sick leave could become a statewide mandate. According to the Bureau of Labor Statistics, there are nearly 98,000 workers in Bellingham. Theoretically just over 38,000 Bellingham workers would get mandated leave…. and the cost to employers in Bellingham for mandatory paid sick leave would be more than $16 million every year.

in place. Some workers probably are using the sick leave mandate as paid vacation.

Seattle’s sick leave mandate increased his costs by $17,600 per restaurant the first year, and jumped to $19,200 each in the second year. That is an increase of $153,600 a year for all of his Seattle locations. He says roughly twothirds of those higher costs are to pay workers who call in sick, with the remaining one-third is to pay the workers who cover last-minute shifts.

Of course, he can’t afford to simply absorb an extra $153,600 per year. He says his profit margin is already low—around 5-6 percent.

So he had to raise menu prices in his eight Seattle stores. Multiple studies show this is a typical response to the increased costs of a paid sick leave mandate—higher prices for consumers.

So how much would a paid sick leave mandate cost people in Bellingham? According to the Bureau of Labor Statistics, there are nearly 98,000 workers in Bellingham. The BLS pegs the average cost to an employer for paid sick leave at 25 cents per hour per employee.

Nationally, 39 percent of privatesector workers do not receive paid sick leave. So theoretically just over 38,000 Bellingham workers would get mandated leave. Assuming those workers clock the national average of 1,700 hours per year, multiply by $.25 per hour, and the cost to employers in Bellingham for mandatory paid sick leave would be more than $16 million every year.

Studies consistently show that paid sick leave mandates have increased costs for employers and consumers.

A University of Washington report found employers used one of the following cost-cutting measures in response to the new paid sick leave mandate: • 8.2 percent of employers raised prices on consumers.

•

6.4 percent of employers decreased pay raises or bonuses, reducing take home pay for workers.

• 5.3 percent of employers decreased the vacation time they offered, again increasing the burden of the mandate on workers.

• 2.7 percent of employers reduced their number of Seattle employees or moved employees out of the City.

Nearly 20 percent of Seattle employers said their profitability was “worse” or “much worse” as a result of the city’s paid sick leave law.

Surveys on mandated sick leave laws in San Francisco and Connecticut reveal similar results.

In San Francisco nearly 30 percent of the lowest-wage employees were laid off or given reduced hours after passage of that city’s paid sick leave mandate.

Other employers cut back

employee bonuses, vacation time and part-time help to absorb the new costs. In Connecticut, employers reported that state’s paid sick leave law forced them to raise prices, reduce hours, wages and benefits, and sometimes eliminate jobs. Others said they would likely hire fewer people in the future.

Forcing paid sick leave may seem like a nice thing to do for workers, but most employers cannot simply absorb increased labor costs from such government mandates. Often those costs are shifted back on to workers in the form of fewer benefits and reduced hours, and to consumers in the form of higher prices.

Many people support mandated paid sick leave laws because it makes them feel good about themselves, but we should also think about the harmful and less obvious effects it has on people.

WHATCOMBUSINESSALLIANCE.COM | 97

Guest Column: personal Investing Jacob Deschenes | Owner Era Capital Management LLC Jacob is a licensed investment advisor and owns Era Capital Management LLC, a registered, fee-only investment management firm serving individuals, wealth advisors, and corporate clients throughout the United States. He uses contrarian methodology with uniquely-developed matrixex and mathematical and statistical analyses. Visit www.eracapitalmanagement.com.

Investing and emotions = oil and water… they don’t mix.

D

o you wish you’d bought a house four or five years ago when it seemed like the well was poisoned? And looking back on it, do you realize it was a great time to take advantage of lower prices?

This happens all too often, and it’s all because emotions get in the way.

Frankly this scenario is humanly predictable.

Emotions are not created equal, and negative emotions have stronger influences on us in financial investments than positive emotions.

When we are faced with the possibility of missing out on an opportunity or suffering a loss, we tend to make quick and often irrational decisions.

These emotionally driven actions often bring regret later. Pausing for a breath is always a good idea when you feel emotionally-charged. You might find out that the idea that just sounded so great might actually become the worst action you could take.

Why? Because when you think it’s time to buy, you’re already too 98 | BUSINESSPULSE.COM

late, and then you’re running scared and selling low. Your investment portfolio should equal the sum of many moving parts and different strategies, and one way to capitalize on our human flaw is by adding a contrarian methodology that prefers to buy stocks when most people are selling – and vice versa.

Normal vs Abnormal, FatTail Opportunities

In seeking investable opportunities, it is vital to determine what’s normal vs. abnormal for an individual stock or market index, and take advantage of the opportunity that seems contrary. Markets from time to time misprice securities, creating abnormal price fluctuations. For long-term investors the best opportunities exist on the tails of a normal distribution curve that creates more favorable risk/reward

ratios. Patience pays in waiting for the markets to come to you.

EXAMPLE: APPLE INC. Apple Inc. is a very successful

Contrarian thinking is hard to master because it can feel risky sitting out on a limb….Often, though, the best opportunities exist when you think differently from everyone else.

Abnormal events present an opportunity to take lemons and make lemonade. company, and long-term investors have been rewarded as a result.

Apple has seen times of normal sustainable price appreciation. But in 2012 Apple was front-page news and it went up nearly every day. Fair weather Investors gobbled up shares left and right with no reservations.

This irrational exuberance created an abnormal (overbought) fattail event not seen in a seven-year period for Apple. Once you run out of buyers the stock has nowhere to go but down, which fully materializes months later into another abnormal (oversold) fat-tail event on the other side.

This is just one example but happens all the time to other stocks.

Abnormal events present an opportunity to take lemons and make lemonade.

Have a question about this column, or contrarian investing? Write Jacob@ eracapitalmanagement.com

Offset emotions with mathematics and statistics Contrarian thinking is hard to master because it can feel risky sitting out on a limb when the rest of the crowd takes a specific direction. Often, though, the best opportunities exist when you think differently from everyone else.

Mathematical and statistical analysis is a powerful tool for removing emotion from the investment process.

Luckily in today’s world we don’t have to compute complex equations by hand; we can off-load the task to computers using common software. All we need to know to build a forecast is what the equation represents in the context of the data being analyzed.

No one can predict the future with absolute certainty, but finding ways to stack the deck in your favor is the next best option.

I believe when you invest you must define your strategy in advance.

Understand that you have many ways to construct and manage an investment portfolio. A thoroughly thoughtout plan built to your specific needs should be well-diversified across many assets classifications, but also different strategies styles.

Do you know a person who’s been successful investing by winging it?

Stay emotionally grounded. And try contrarian thinking and strategies.

– Jacob Deschenes

An example, using Apple, of how Jake manages contrarian tracking

“We Got It”

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GUEST COLUMN: REAL ESTATE Lylene Johnson | Managing Broker, Muljat Group Lylene Johnson has dealt in real estate 25 years, specializing mostly in residential after previously owning and operating a small, island grocery store. She has partnered with her husband Rich at the Muljat Group since 2004.

Everyone asks, ‘How is the market?’

Count the signs in the yards….

I

f I had a dollar for every time someone has asked me that over the last 27 years, I would have probably retired by now…but I don’t mind the question, because I am always looking for the answer. It hides in a constantly changing kaleidoscope of inventory, interest rates, businesses opening and closing, people moving here, there, everywhere.

So where do I look?

I specialize in residential real estate, so the fastest, easiest, most up-to-date indictor of the market’s direction begins by counting signs.

How many yards have For Sale signs in them? That’s the first step.

Then I look to see how many of those houses have pending sales contracts on them. From there, it is easy to divide the number of pending contracts by the total number of signs, and in the blink of an 100 | BUSINESSPULSE.COM

eye I know the percentage of current demand for current inventory.

That’s interesting, but it’s just a number.

Bellingham is the largest single residential market in Whatcom County, but that might be shifting a bit. Last year, the number of single family homes sold in Bellingham increased 2.2 percent over 2013. Sales in Ferndale increased 17.1 percent over the same time period, and sales in Lynden were up 7.7 percent.

It gets much more interesting when you do it for years, on the same day, of the same week, every year…in a number of areas and a number of price points, because then you see trends and you can

(almost) forecast the future. Let’s look at a sample: Obviously, this is a very simplistic way to analyze the market.

It doesn’t account for more or less building activity, it doesn’t analyze the impact of interest rates, and it doesn’t tell us what type of property is selling or sitting. What it does is help to spot trends.

So, how is the market?

Bellingham is the largest single residential market in Whatcom County, but that might be shifting a bit. Last year, the number of single family homes sold in Bellingham increased 2.2 percent over 2013. Sales in Ferndale increased 17.1 percent over the same time period, and sales in Lynden were up 7.7 percent. In the first quarter of this year, sales in Bellingham rose 3 percent over 2014, while Ferndale rose 43.3 percent over a year ago and Lynden bounced up by 76.3 percent. (Note: six homes in Bellingham, 29 homes in Ferndale, and 29 in Lynden).

Recent information about Bellingham businesses planning to open branches in Lynden might be responding to this housing

Bellingham Residential Pending Sales as a % of Available Inventory All Price Ranges - Mid April 2003

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

46%

50%

49%

28%

24%

28%

22%

20%

24%

31%

37%

28%

42%

2003

2004

2005

2006

2007

60% 50% 40% 30% 20% 10% 0%

surge. It is far from changing the “balance of power” (Bellingham still had 38 percent of all the residential sales in Whatcom County, compared to Ferndale’s 18 percent and Lynden’s 12 percent), but it is certainly a trend to watch.

So, how is the market going to be?

2008

2009

2010

2011

there now.

I foresee additional gains in sales and prices. By the way, the average price of a home sold in the first quarter of 2015 was up 6.5 percent over a year ago, and the median was up 8.3 percent. Yes, the upper end is coming back.

It should be an exciting ride

2012

2013

2014

2015

through the summer, so let’s hold on and enjoy it. There’s nothing we can do to control it anyway.

If you have a question, please contact Lylene directly: 360-303-1327, or Lylene@JohnsonTeamRealEstate.com

Single family home sales are obviously on an upward trend.

Whether that is good news or bad will unfold over the next few months. We have experienced the excitement of soaring home “values” – and we all need to remember the pain of the aftermath before we wish for it to happen again. There are still many properties which will not sell at the prices their owners paid in the height of the crazy time.

On the other hand, inventory is very tight, which is giving contractors the opportunity to work, create jobs, and contribute to better times in the retail sector as well. Rental options are also limited, which contributes to construction opportunities.

The availability of land for building in Ferndale and Lynden undoubtedly lies behind the faster increase of sales there relative to Bellingham. The danger is that housing stock growth will outpace population growth, leading back to the downward cycle. But we aren’t WHATCOMBUSINESSALLIANCE.COM | 101

GUEST COLUMN: SMALL BUSINESS DEVELOPMENT CENTER CJ SEITZ | Interim Director, SBDC CJ has nearly 20 years’ experience in executive planning, administration, financial strategy, and marketing. She served in leadership positions with several Bellingham nonprofit and governmental organizations, and held a senior admin position with a commercial construction firm. Now interim director at SBDC, she first worked there as a certified business advisor (2005’09). CJ has a degree in accounting and a master’s degree in business administration from Western Washington University.

Relying on past success: Is it costing you?

J

ulie (not our client’s real name) leads a mediumsized business with nearly 29 years of success. Like many of you, Julie works long, hard hours. But lately her business doesn't seem to be making progress toward her goal of generating profitable growth.

In fact, she has been having trouble paying her bills.

After her first visit to our Small Business Development Center, Julie told us, “I wish I would have come to you sooner.” Why? Because she discovered that the financial pain she was feeling now could have been avoided.

Like many business owners, Julie didn't recognize the warning signs that existed in her business. We see this frequently here. Whether it’s missing warning signs, or failing to see opportunities ripe for the taking, many small business owners get stuck and keep doing what they've always done – relying on (and hoping to reclaim) past successes.

When Julie started her business she reviewed her financial statements every month with her team.

She knew her numbers and the 102 | BUSINESSPULSE.COM

drivers of her business growth. As she built her business she let the numbers guide her. She tried new ideas and watched the results carefully.

Over time, she created a business model that worked well. She applied this same business formula year after year, eventually building

By falling out of the habit of reviewing financials monthly, negative trends grew into very real cash flow issues. a sizable business and a great legacy.

But those days somehow slipped away.

Julie works every day and feels she is in touch with her business performance, yet lately she’s had trouble paying her vendors. Today she’s tired, she's stressed, and she’s unsure about which way to turn or what to do next.

Julie wants to be a great CEO. In today's fast-changing, often confusing world, this is a top-of-mind worry for Julie. If she makes the wrong decisions now, disaster could follow for a lot of people – her fam-

ily, employees, vendors and customers, and certainly herself.

Julie came to the Small Business Development Center referred by her banker after she applied for her third increase on her line of credit, a request the bank was hesitant to grant. The bank was concerned with trends in reviewing her financial statements.

Your SBDC team helped Julie identify several subtle trends that had impacted her business slump: a very gradual increase in cost of goods sold, combined with a very gradual lengthening of days to collect her receivables. These trends started over 18 months ago and had put Julie in a double bind – more costs to pay and fewer dollars in hand.

Because Julie had fallen out of the habit of reviewing her financials on a monthly basis, these trends have now grown to be very real cash flow issues.

Julie is now working with your Bellingham SBDC on a monthly basis to reverse these trends by going back to basics and analyzing her company’s financial performance regularly. Her goal is to get reacquainted with the financial statements, to build her understanding of important financial ratios, and to utilize tools and research to keep current on industry trends.

Services like these are available to all Whatcom County businesses, free of charge, through your SBDC. If you can relate to Julie’s situation, I encourage you to reach out to us and start your own relationship with a SBDC business advisor.

No one person, advisor, or confidant could take the ultimate financial decision-making burden off Julie’s shoulders. She’s learning (again) that the more she knows about how her business is truly performing, the better the decisions she can make.

By telling these stories, I hope you will find motivation to continually examine your business, to stay on top of industry trends, and, above all, seek resources like your Bellingham SBDC to help you achieve your vision of success. Get another set of eyes to review your numbers, learn about trends and identify issues and opportunities.

Your Bellingham SBDC is here to help.

Solutions as unique as our clients.

Providing creative solutions for your business

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Guest Column: Lean heretic Randall Benson | Lean Consultant Randall Benson is a management consultant, author, and Lean master working out of Whatcom County. You can visit his blog “The Lean Heretic” at www.leanheretic.com, and his website at www.bensonconsulting.com.

What can Toyota tell you about organizing your office?

S

ure, Toyota knows plenty about making great cars, but really – what could they tell you about organizing your office?

It turns out they can tell you plenty. They invented the Lean 5S approach for organizing and maintaining any workplace. Yes, including your office.

Recently, a friend related how he lost a substantial check from a client, and he had to ask his client to stop payment and issue a replacement check (embarrassing!). Even though he first searched his home office, he eventually found the original check (plus several nowoverdue bills) under a pile of papers on his credenza.

Another friend told me she couldn’t concentrate on her writing when her desk was cluttered with distractions, and changing between projects took forever. They are perfect candidates for 5S. Want to be more effective and productive in your work space, regardless of what shape it’s in?

Here’s how: The Big Idea of 5S is to make 104 | BUSINESSPULSE.COM

a workplace always fit for use (like writing articles), and for making abnormal conditions (like misplaced mail) immediately visible. The 5S program also eliminates: • Visual distractions; • Long changeovers; • Errors, and • Lost time looking for stuff.

If you use your office for meetings, video calls or webinars, you’ll also appreciate the professional

A disorganized office can take a toll in terms of your energy, effectiveness, and peace of mind, not to mention mistakes. image that 5S helps you communicate when others visit your office – either in person, or by visual link-up on the computer screen.

A disorganized office can take a toll in terms of your energy, effectiveness, and peace of mind, not to mention mistakes. Consider the office in the photo from one of my past projects: Can you imagine how effective the owner of this office is?

Fortunately, your office doesn’t have to look like this before you

can put 5S to work. Even if you’ve tried organizing your office before with discouraging results, following these simple 5 S’s will guide you to success.

1. Sort First, take a photo of your office for future comparison. Then remove everything, except necessary furniture and equipment, to a temporary sort area (no, not still in your office). As you remove the piles of stuff, sort them into boxes and trash bags.

These 7 sort categories work for me: Trash, Donate/sell, Repurpose, Repair, Store remotely (infrequently used), Store in the office (frequently used), Put on desk or in desk drawer (constantly used).

2. Set in Order Put designated items back into your office. Position them based on frequency of use. For example, my scanner is at my fingertips, but my stapler is on a side shelf. Store the infrequently-used items somewhere else like a basement cabinet or shelf, or hide them behind cabinet doors in your office.

Dispose of everything else and clean up the sort area. Make your office look streamlined and serene.

Shoot a progress photo.

3. Sweep (or Shine) Make your office easy to clean and easy to see problems. Keep a waste basket, recycling bin, cleaning supplies, and a small vacuum in your office.

• Clean at the end of every day and maybe between projects.

Do your own daily cleanup so you can notice problems.

Put desks and heavier equipment on wheels and stands so it’s easy to clean under and around them.

• Mark and label locations and make sure things are back in those locations before you leave.

• Replenish supplies and remove broken items - everything should be fit for use.

• Only label stuff in your drawers if it helps you — it’s easy to take 5S too far, becoming a Lean zealot poster child.

Now, take a photo of your new office. (Whenever you want to feel great, take a look at the before and after photos.)

4. Standardize Maintain high standards for cleanliness and organization. In your office, keep only those things you use, and keep them in a designated place. You might want to use an end-of-day checklist; it works for pilots and surgeons, why not you?

Use your final photo as the standard.

Do you know an office like this near you? Apply 5S (savvy, not a salve) (Photo by Randy Benson)

7 Labels for Sorting Stuff • Trash • Donate/sell • Repurpose • Repair • Store remotely (infrequently used) • Store in the office (frequently used) • Put on desk or in desk drawer (constantly used).

5. Sustain Keep everything in working order. Never let clutter reappear.

Take a photo once a month.

Check to see if your office improves or deteriorates.

As you spend time in your “new” office, you might experience a new sense of serenity and clarity. That will translates into higher effectiveness and a feeling of reduced effort.

You will find the improvement very noticeable, if not downright astounding.

Words fall short.

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www.ChocolateNecessities.com WHATCOMBUSINESSALLIANCE.COM | 105

Guest Column: Human Resources Rose Vogel | HR Programs for SHRM Rose Vogel is a vice-president co-chair of the Programs Committee for the local Mt. Baker Chapter of the Society for Human Resources Management (SHRM). She serves as director of human resources for Anderson Paper & Packaging, a company with 62 employees. She is a graduate of WWU-Fairhaven and has a masters degree in Human Resources labor relations.

Good news can be bad news when it comes to work history and social media

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recent article in the New York Times discussed the pros and cons of applicants disclosing their entire work history. In summary: •

Pro – HR professionals have a complete history and sense of the applicant’s work history.

• Con – HR professionals have a complete history and sense of the applicant’s work history.

Your work history is a bit like your credit report, in that it simply follows you wherever you go.

Studies show that about three-

fourths of employment recruiters use the Internet when hiring.

If you want a corporate job after college but neglected to give notice to your summer college employer this may get discovered. Some employers are using social media to check into an applicant.

Employers must be careful, however, of discrimination laws.

For example, a post might reveal an individual’s ethnicity, age, political views, or that they are pregnant – all disclosures that fall under protected categories, and that employers cannot consider when hiring.

An applicant’s posts may or may not be private, depending on their social media settings. Some

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employers ask for applicants’ social media passwords during interviews so they can look into the applicants’ possibly restricted posts.

Once an applicant is hired they must maintain professional posts.

Negative posts can lead to termination.

Complaints or issues must be handled internally through the Human Resources department.

A waitress in North Carolina was fired for posting a complaint about customers who did not tip her. She mentioned her employer’s name and was fired.

Best practice for an employee or applicant for a job: Consult with an HR professional, either within your workplace or through an organization such as SHRM, on how best to manage disclosure of your work history. And, on appropriate and effective use of social media, avoiding negative pitfalls.

Employers can avoid the potential danger zone of utilizing social media in assessing job candidates, and even current employees.

Remember, the good news of modern-age technology and social media can also easily become the bad news.

Frank J. Chmelik and Jonathan K. Sitkin have been selected to the 2015 Washington Super Lawyers list.

Eight for Eight There is only one law firm north of Everett that has had multiple lawyers selected to the annual Super Lawyers list for eight years in a row and a lawyer, Frank Chmelik, selected every year since the list was started. That law firm is Chmelik Sitkin & Davis.

Only five percent of Washington state lawyers are selected to the prestigious list. The team of lawyers at Chmelik Sitkin & Davis have quietly built a reputation for their commitment to responsive, professional and quality service for their clients in Northwest Washington.

It Takes a Team

LITIGATION |

BUSINESS

|

MUNICIPAL

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1500 Railroad Avenue, Bellingham, WA 98225 (360) 671-1796 | www.chmelik.com

ENVIRONMENT

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LAND USE

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REAL ESTATE

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DEVELOPMENT

Guest Column: AGRI-BUSINESS John Stuhlmiller | State Farm Bureau CEO John Stuhlmiller, CEO, has worked at the Washington Farm Bureau for 11 years. Previously he served for almost 20 years as staff to the Washington State Senate on agricultural issues. He holds a degree in political science from Pacific Lutheran University (1985), and a masters in public administration from The Evergreen (Wash.) State College (’90). John grew up on a dryland wheat farm in Lincoln County, and now resides in rural Thurston County with his wife Allyson and their 11 children.

Agriculture and Business: Expanding export capacity, expanding opportunity

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significant and distinctively “Northwest” coalition operates in Washington state, and it is growing stronger every day.

Agricultural and other business groups have come together with labor unions, trade groups, and community leaders all across the state in support of increased capacity of export terminals in Whatcom County and in Longview, Wash.

Some might wonder how these diverse groups joined forces so coherently and resolutely — aren’t we talking about primarily exporting coal from these terminals?

The projects are not merely coal terminals; they will increase our ability to export and import all products from the Northwest and beyond. Commodities like timber and grain, along with many other agricultural projects will make their way through Washington through these terminals. Farmers and ranchers know the critical nature of infrastructure improvements for the future of trade in our state, which is 108 | BUSINESSPULSE.COM

why the Washington Farm Bureau has been on board in support of the Northwest terminal expansions since the beginning.

Washington state produces many

Regulatory overreach blocking private investment of crucial trade infrastructure improvements is the last thing our state’s economy needs. Trade and exports must thrive to keep Whatcom County and all of Washington competitive and a desirable place in which to invest. goods that require transport to the marketplace, both domestically and internationally. In Whatcom County, for example, farmers grow

some of the best blueberries in the world. These blueberries get shipped around the U.S., and to Asia and beyond.

Suppliers rely on rail mobility and port capacity to get their goods to market in a timely manner. As I travel around the state, many farmers tell me they are worried.

Although there’s a high volume of products, there is an insufficient and sometimes unreliable means to get those products to their destination.

This hindrance is very real for growers and sellers — together totaling thousands of Washingtonians whose jobs depend on a robust agriculture industry that demands efficient channels by which to trade. For those growers whose crops have a particularly short shelf life, backlogs in shipment can mean devastating financial losses.

Washington agricultural products rank No. 2 in the total volume of goods exported from our ports, and recent data shows 13 percent of Washington’s economy linked to the agriculture sector. Washington crops grown and transported across

our state make up a vibrant mix of products sold in foreign markets.

Just as the manufacturing sector constantly strives to pull ahead of competing markets, farmers in our state must stay competitive as well. If we stall on rail and port infrastructure improvements, we risk falling behind. Western Washington University professor Steven Globerman’s study released last year highlighted abundant prospects benefiting our sector with “… opportunities for increased bulk commodity exports originating in Washington state, in particular agricultural products.” If the proposed terminal expansions continue to receive negative scrutiny and opposition, thousands representing business, labor and agriculture have to ask, “Since when has the state of Washington hesitated in being competitive?”

Private investment in Washington’s port and rail infrastructure is ensured with the proposed export terminals. They would guarantee that growers, manufacturers, and shippers can offer their goods to existing markets, as well as untapped ones, regardless of where their commodity is being shipped.

Some opponents cite concerns of increased rail traffic as the reason to block expansion capacity. A study released last summer by the Puget Sound Regional Council, however, forecasts that rail traffic will double in Washington in the next few years, even if fossil fuels are removed from the equation.

Make no mistake, coal will continue to travel by rail through Washington as it has for decades. If we continue to stall export capacity, the commodity will simply head north to Canadian ports (which are expanding now) or south to California. Other realistic scenarios include Asia simply buying a lowergrade product from sources outside the U.S. Regardless of how the debate plays out with regard to coal, now is the time to expand our trade capac-

ity for all Washington products. We must carry on our region’s legacy as a vital trade gateway.

Washington farmers and businesses have poised to promote a prosperous future for all.

Regulatory overreach blocking private investment of crucial trade infrastructure improvements is the last thing our state’s economy needs. Trade and exports must thrive to keep Whatcom County and all of Washington competitive

and a desirable place in which to invest.

On behalf of businesses and agriculture around Whatcom County, we at the Washington Farm Bureau hope you will look into all the facts about the terminal expansions.

Please go to www.createnwjobs. com to learn more about increased revenues, local job growth, private investments, and especially the environmental stewardship surrounding the proposals.

WHATCOMBUSINESSALLIANCE.COM | 109

LIFE IN THE TECH LANE TECH HELP / BIG FRESH Experts at Tech Help in Bellingham, a division of Big Fresh, provide answers to the questions that are trending among clients. If you have a tech question for our experts, send an email to getanswers@gotechhelp.com

Windows 10: The (free) savior of Microsoft

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icrosoft didn't exactly please its business audience with Windows 8.1. Adoption has been awfully slow (and now will likely halt with this new version on the horizon).

Microsoft even noted that the company is "looking to find the balance, so that all the Windows 7 users get a familiar experience on the devices they already have."

Windows 10 to the rescue.

With Windows 10 still in its pre-release stages, early adopters are very excited about its features and how it is better than its predecessor in many ways.

Let’s start by answering the most 110 | BUSINESSPULSE.COM

common questions first: • Where’s Windows 9?

Perhaps the biggest surprise that Microsoft pulled with its new operating system is that it’s skipping 9 and heading straight to 10. But remember, they didn’t issue 4, 5, or 6 either, going from Windows 3 to Windows 7 after several versions with numbers or names in between (e.g., 98, and Vista, et al) • What is it? A complete operating system update for Windows.

• When is it out? Microsoft announced July 29.

• What will it cost? For Windows 7 and 8.1 users, it will be free for one year.

How does Windows 10 differ from Windows 8.1? A short list: Better search Microsoft first implemented a search bar in the Start menu in Windows 7; just open the Start menu and start typing to search for files and programs on your computer. The old search bar is still there in Windows 10's Start menu, but now, users can also activate the search dialog by clicking the new magnifying-glass button on the taskbar.

More important, the search functionality has improved, giving you quicker and more accurate results when you search for recently opened files or folders. You can even search for Web content from the search bar now; Web results

will be returned alongside other search results, with an icon to indicate that it's a Web page.

Virtual desktops As you move through your typical workday, you probably use different apps at different times. That's why the new virtual desktop functionality — dubbed Task View — in Windows 10 might be useful. It's a handy multitasking feature that lets you create as many "desktops" as you like, each with different apps open, and switch between them on the fly.

For example, you might create one desktop that always has Microsoft Excel, the calculator app, and your favorite finance software open. When you're done crunching numbers, you can keep those apps open and running so they're ready to use, but switch to a different desktop so they aren't cluttering up your workspace. Switching between desktops is as easy as clicking a button on the taskbar.

File security Though not many details have been announced, Microsoft hinted at a new micro-level security feature that can help you keep your work files safe. Instead of running enterprise apps inside a secure "container" that can't be accessed by other apps on your computer, Windows 10 is capable of employing data separation at the file level. That way, files stay secure no matter where they go — even when you move them from your PC to a mobile device, email them to a co-worker, or upload them to the cloud.

Top apps for your summer travels: Proper planning makes all the difference between a rushed, stressful trip and a restful, worry-free vacation. Fortunately, applications designed for smartphones and tablets abound in help with planning your trip, generating your itinerary and applications that provide crowd-sourced reviews of destinations. Here’s a selection of apps we at Tech Help feel could be of great use to travelers:

Hipmunk Hipmunk (Android, iOS) presents a fast, all-in-one travel planning and booking solution, with a powerful flight and hotel search engine, as well as easy in-app booking. In addition to the usual flight search criteria such as price, Hipmunk also includes an agony index for flight duration, number of stops, and other factors. Users can also take advantage of last-minute hotel deals, read reviews from TripAdvisor and other sources, and check out heat maps that show hotel proximity to shopping, dining, and entertainment venues.

SkyScanner SkyScanner (Android, iOS) is a great tool for travelers looking for the perfect deal on domestic and international flights. SkyScanner works by comparing prices across millions of flights and hundreds of airlines.

From there, users can even book flights directly from the app with provided links to travel agents or airlines. Flights can be filtered by airline, cabin class, price, or takeoff and landing times, with weekly or monthly chart views to check out prices over time.

TripAdvisor TripAdvisor (Android, iOS) is your crowd-sourced guide to hotels, restaurants, and attractions worldwide. TripAdvisor allows you to browse through millions of reviews, images, and videos featuring various establishments worldwide. You can also access contact details; search for nearby establishments; explore restaurants by food type, price range, or rating; check out air fares, and even add to the knowledge base by posting your own reviews, images, and entries for the places you visit.

Kayak Kayak's mobile app (Android, iOS) provides users with a flexible assistant for searching for and booking rental cars, flights, hotels and more. Compare deals, book flights and accommodation, track your flights, and manage your itinerary from Kayak's convenient mobile app. It's a great, centralized tool for keeping track of everything you'll need to arrange getting to and from your travel destinations.

Airbnb Please socialize with us on Facebook at both the Business Pulse Magazine page and the Whatcom Business Alliance page.

Follow us on Facebook!

Airbnb (Android, iOS) is a marketplace app that allows users to search for and find unique accommodations across the world, from momand-pop B&B gigs for a night, to a small apartment for a week, or even a castle for a month—there's no shortage of quirky and unique establishments. Airbnb covers a range of price points in more than 34,000 cities and across almost 200 countries, which means the adventurous or flexible traveler has some interesting choices for accommodations for their next vacation.

WHATCOMBUSINESSALLIANCE.COM | 111

Scene on the Street

Scene

on the

Street

Rockets’ red glare lights up Lummi economy Every summer, late June, rows and rows and rows of temporary sales stands pop up—between 60–70, according to permit records—on the Lummi reservation for selling fireworks. This year the side-by-side, makeshift ‘Fireworks City’ moved to Slater Road and a brand-new paved area, away from the lineup along Haxton Way across from the Silver Reef.

One official said that the fireworks industry impact has become a vital boost to an entrepreneurial venture that provides significant income for community members.

BUDDING YOUNG ENTREPRENEURS Anthony Barrera, 13 (left) and Carlos Castaneda Jr., 14, had their family-owned D-N-C display open at 7:30 one morning, ready to go as one of the few stands remaining on Haxton.

112 | BUSINESSPULSE.COM

BARGAIN BETTY’S, indeed, is a Lummi tradition of more than 50 years. Betty Hamerly (1916-2003) opened the stand next to her house in the early 1960s. In her later years she still would sit outside on a cushioned chair and greet customers.

WASHINGTON FIREWORKS Super Store started as a wholesale enterprise, and opened for retail a few years ago with one of the largest displays in the area.

It sits on Haxton, just north and across the road from Bargain Betty’s, and near another long-time dealer, Vinnie’s Boom City. Sometimes the names are as colorful as the fireworks.

(Photos by Mike McKenzie)

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M A G A Z I N E

Business Pulse brings you information regarding the people, companies, ideas and trends that are shaping our county. Business Pulse is the official magazine of the Whatcom Business Alliance (WBA) and is a quarterly publication.

The Publication of The Whatcom Business Alliance

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ADVERTISER INDEX American Canadian Fisheries . . . . . . . . . . . . . . . . . .64 Anderson Paper & Packaging . . . . . . . . . . . . . . . . . 78 Archer Halliday . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 Bank of the Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 Banner Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Barkley Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 Baron Telecomunications . . . . . . . . . . . . . . . . . . . . . 17 Bellingham Bells . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109 Bellingham Cold Storage . . . . . . . . . . . . . . . . . . . . . .55 Big Fresh . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 Birch Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Chmelik Sitkin & Davis . . . . . . . . . . . . . . . . . . . . . . . 107 Chocolate Necessities . . . . . . . . . . . . . . . . . . . . . . . . 105 Chrysalis Inn and Spa . . . . . . . . . . . . . . . . . . . . . . . . . 51 DariTech . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 Data Link West . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 DeWaard & Bode . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 Enfield Farms Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97 Faber Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 Fat-Cat Fish Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89

Gravity Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Haggen Market Street Catering . . . . . . . . . . . . . . . . 9 Hardware Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 Hempler Foods Group . . . . . . . . . . . . . . . . . . . . . . . . 43 Heritage Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Hilltop Restaurant . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79 Insight Magazine . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 Invent Coworking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Lakeway Inn & Conference Center . . . . . . . . . . . . 114 Larson Gross . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 Laserpoint Awards . . . . . . . . . . . . . . . . . . . . . . . . . . . 103 Lummi Island Wild . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Lyndale Glass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Management Services NW . . . . . . . . . . . . . . . . . . . . 21 Manpower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 Mills Electric . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 88 Motor Weld Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 Noggin Branding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 North Cascades Institute . . . . . . . . . . . . . . . . . . . . . 106 Northwest Healthcare Linen . . . . . . . . . . . . . . . . . 103

Northwest Propane . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 PeaceHealth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 Peoples Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 Print & Copy Factory . . . . . . . . . . . . . . . . . . . . . . . . . . 72 ReBound Physical Therapy . . . . . . . . . . . . . . . . . . . . 32 Roger Jobs Motors . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Saturna Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 SaviBank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .87 Sig's Funeral & Cremation Services . . . . . . . . . . . . 95 Silver Reef Hotel Casino Spa . . . . . . . . . . . . . . . . . . 59 Skagit Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 115 Skagit Valley Casino Resort . . . . . . . . . . . . . . . . . . . . 62 SpringHill Suites Marriott . . . . . . . . . . . . . . . . . . . . . 49 Trans-Ocean Products . . . . . . . . . . . . . . . . . . . . . . . . 55 Umpqua Bank . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 VSH CPAs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 WECU . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 Western Refinery Services . . . . . . . . . . . . . . . . . . . . . 24 Whirlwind Services . . . . . . . . . . . . . . . . . . . . . . . . . . . 80

WHATCOMBUSINESSALLIANCE.COM | 113

Intelligent Urban Design in a Vibrant Community

Barkley Village is setting a new standard in Bellingham.

Class-A office space complimented by dining, shopping and entertainment. State-of-the-art buildings and security, ample parking, on-site management, and unmatched amenities make Barkley Village the perfect setting for your business.

Where Quality of Life is Smart Business barkleyvillage.com For leasing information call (360) 671-6450 ext.103