June 2013 Vol. 26 No. 6
The Voice of Kitsap Business since 1988
Collaborators’ indie game for iPhones, p. 29
Pleasant place gets busier Clean, green ozone powers company, p. 30
Inside Special Reports: Comercial Real Estate, pp 6-17
A cyclist rides by a courtyard and retail storefronts in the Pleasant Beach Village development on Lynwood Center Road on Bainbridge Island.
By Tim Kelly, Editor Summertime will see more of Pleasant Beach Village blossoming in Lynwood Center on Bainbridge Island, along with the start of construction on the Phase 2 residential component of the revived development. Tim Kelly photo There’s still unoccupied space in the row of four commercial buildings on the east side of Lynwood Center Road, but the building at the south end of the row — across the street from established businesses such as the Treehouse Café and Lynwood Theatre — soon will be filled by The Marketplace at Pleasant Beach. Eric Andersen is managing that project and will operate a coffee shop called The Boathouse that will anchor one end of the 2,700-square-foot market. Pleasant, page 13 Andersen is well known on the island from the years he spent
People, pg 2 Financial, pp 24, 25 Human Resources, pg 27 Technology, pg 29 Automotive, pp 34, 35 Editorial, pp 36-38 Home Builders Newsletter, pp 19-22
Proving Grounds
Coffee roaster marks 10th anniversary with accolades, new tasting room By Rodika Tollefson When Kelsey and Stacy Marshall had an idea more than a decade ago that combined their love of good coffee with their passion for sustainability, they encountered one roadblock after another. Several banks turned them down for loans, even after a few iterations of their business plan.
Rodika Tollefson photo
Grounds for Change owners Kelsey and Stacy Marshall in the retail space of their newly opened tasting room. Grounds, page 4
New GM, sales manager hired for Kitsap Conference Center Columbia Hospitality has hired Arne Bakker as general manager and Lauren Lomax as sales manager for Kitsap Conference Center at Bremerton Harborside. Bakker comes to Arne Bakker Kitsap from the Regus Group in Tacoma, where he served as general manager and was responsible for
sales and operations including marketing activities, business development and fostering client relationships. A native of The Netherlands, Bakker has spent much Lauren Lomax of his career working internationally. At Kitsap Conference Center, Bakker
will oversee the facility’s entire team and lead initiatives related to strategy of overall operations, and relationships with the Kitsap community. He fills the position left open by the February departure of Ken Millsap, who was GM at the conference center for about 15 months. Lomax recently relocated to the Pacific Northwest from North Carolina as the sales and event director for The Arbors Events, where she oversaw all sales and
event initiatives. As sales manager, Lomax will manage all corporate and sales endeavors, including developing client relationships, sourcing new business, and event execution. Columbia Hospitality, Inc. (www.columbiahospitality.com) is a Seattle‐based hospitality management and consulting firm contracted with by the city of Bremerton to operate Kitsap Conference Center and Gold Mountain Golf Club.
2 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
Youth services librarian receives state award Shannon Peterson, Youth Services Coordinator for Kitsap Regional Library, was named the 2013 recipient of the CAYAS Award for Visionary Service to Youth at the Washington Library Association Conference in Vancouver, Wash. CAYAS is the Shannon Peterson Children’s and Young Adults Services group for the Washington Library Association. Every year CAYAS recognizes an individual who, through their practice and example, provide inspiration and leadership for others who serve children and young adults in libraries. Those eligible to be nominated for this award include staff or volunteers from public, school or special libraries. Peterson served as a youth services librarian specializing in teen services at KRL’s Port Orchard branch before becoming the system’s leader for youth services late in 2012. She is also the president-elect of the Young Adult Library Services Association, a subgroup of the American Library Association. Peterson was nominated for the award by Port Orchard branch manager Kathleen Wilson, who noted in her submission that “Shannon is a tireless advocate for teens and the positive role public libraries can play in their lives. I have watched Shannon transform the lives of many teens over the years. To most of these teens, the library was the only place they felt they truly belonged and Shannon is able to not only give these teens a place to feel welcome but she has mentored and inspired them … by giving them opportunities to become leaders on their own.” The selection committee for the award said they were particularly impressed by Peterson’s work to provide her teen advisory panel a chance to participate in a panel discussion at the YALSA Teens and Libraries Summit in Seattle.
Longtime partners in civil engineering/surveying firm retiring By Tim Kelly, Editor Every half a century or so, the place where Herb Armstrong works changes names. This time, it’s his name and his partner’s that will no longer be associated with the office on Lindvig Way in Poulsbo where the two civil engineers have worked since Eisenhower was president. Armstrong and Pete DeGroot, who are retiring this summer, started working in the late 1950s for Roats Engineering. After a hitch in the Army, Armstrong joined DeGroot as a partner in the firm in 1962. “We’ve been doing civil engineering and land surveying for Kitsap County and Jefferson County ever since then,” Armstrong said. When they took over the business after founder George Roats’ death, the partners changed the name to ADA (Armstrong, DeGroot & Associates) Engineering. The surveying part of their operation will continue, Armstrong said, taken over by “a couple younger guys” in the office. Mike Dunphy, ADA’s lead surveyor who’s worked there for 22 years, and Tim Cartwright bought — and renamed — the surveying division, and they’re leasing part of the ADA office. “The land survey office is called DC Surveying, but it’s still in the same place, with the same phone number in Poulsbo,” Armstrong said. “They’re taking over all our survey records since 1958.” He said ADA once had 15 engineers and surveyors working for the firm, and boasted that “almost every engineer in Kitsap County at one time worked for us.” The two partners talked to a lot of people hoping to find someone to buy out ADA’s civil engineering operation, but nothing worked out.
position on a contract basis with the city from 1962 to 1990. He said he also served in the same capacity for the city of Winslow before Bainbridge Island incorporated, and for the Kitsap Public Utility District. Armstrong, who’s 78 and has had some health problems in recent months, said he and DeGroot, 77, finally decided at the end of last year it was time to retire. “Most people probably retire at 65 or something, but we were having so much fun, and we had lots of projects so we just kept going,” he said. Before the ADA office closes this summer, Armstrong said they’re finishing work on a couple more projects, such as the Apple Point housing
Courtesy photos/Pete DeGroot, top, and Herb Armstrong, shown in photos from 1991, are retiring and closing their ADA Engineering office that’s been in Poulsbo for more than 50 years.
“There’s a couple young engineers working here, but they just didn’t want to be on their own, I guess,” Armstrong said. “Maybe they thought it was too risky. The last four years for consulting engineering have been pretty poor because of the housing situation, so there hasn’t been a tremendous amount of work.” During his long career, Armstrong got a lot of contract work consulting for public agencies and municipalities. The Washington State University grad was the first city engineer for Poulsbo, holding that
development in Kingston and replacement of the Waterman fishing pier in Port Orchard. The two ADA partners may eventually sell their building in Poulsbo, which sits in a desirable location behind the new Norseman statue at the corner of Lindvig Way and Viking Avenue, but for now they plan to lease the space not used by the surveying office. Armstrong said he looks forward to “going fishing and enjoying the Northwest” in retirement, and he and his wife, Elda, will tend to a little Christmas tree farm they own on Hansville Road in North Kitsap. “It’s called St. Mick’s Tree Farm,” he said. “It’s named after my dog.”
Coloring Outside of the Lines! KEDA wins Washington Department of Commerce Economic Development creative marketing award for “Kitsap Connected”!
Please join us in thanking these Kitsap Connected project sponsors for their leadership and vision:
Deal signed for first purchase of Pope Resources land near Port Gamble subsidiary Olympic Property Group, said the deal is “an important milestone in our six-year partnership with the community. “We look forward to continuing to work together to achieve great outcomes for the remaining forest la nds.” The sale is expected to close this summer, and Forterra will assign ownership of the forestland to Kitsap County and the tidelands to Washington Department of Natural Resources for long-term stewardship and management. Funding for the purchase will be provided by the National Coastal Wetlands Program, Washington State Department of Ecology, Washington Wildlife and Recreation Program and Washington Stat e Aquatic Lands Enhancement Account. The Kitsap Forest and Bay Project is supported by Kitsap County, the Port Gamble S’Klallam Tribe, the Suquamish Tribe, Forterra, Great Peninsula Conservancy and many community groups. The parties must finalize fundraising and complete the purchase of any additional forest lands by March 2014.
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Forterra and Pope Resources signed a purchase and sale agreement May 29 to protect 535 acres of forestland and 1.5 miles of shoreline along Port Gamble Bay, south of the former Pope & Talbot sawmill site. Forterra had been negotiating with the landowner on behalf of the Kitsap Forest & Bay Project, a coalition of community groups who have worked to obtain grants and other funding to acquire and conserve as much as possible of 6,700 acres that Pope intends to sell. The land, which includes an extensive network of trails that have long been accessible to the public, is in several separate tracts in North Kitsap, mostly between Port Gamble and Kingston. “This agreement is the first stroke in making an audacious vision a reality,” said Michelle Connor, Forterra executive vice president. “It is a great credit to the many elected leaders, tribes, agency staff, community stakeholders and the landowner who are acting to ensure a positive legacy for the future.” Jon Rose, president of Pope Resources
4 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
GROUNDS
from page 1 But the couple persevered. With a $10,000 investment from Stacy’s parents (who’d always had a modest income) and a 100-square-foot cottage they built on their Bainbridge Island property, Grounds for Change was born. In July, the Marshalls will be celebrating the 10th anniversary of their business, which has grown steadily through • For a sneak the years — from peek behind $25,000 in sales the scenes at that first year to Grounds for nearly $2 million Change, go just seven years to kpbj.com later, without any for our outside investors. featured They have video. plenty to celebrate besides their growth. Not only has the pair been able to live out their values of sustainability, their business has been recognized multiple times for its practices and its positive impact. The most recent nod came in April from B Labs, which selected Grounds for Change for its “Best of the World” list. B Labs certifies so-called B corporations — those that demonstrate high standards of social and environmental responsibility — and its Best list included the top 10 percent of those corporations with the highest scores. This recognition comes on the heels of a Family Business Award from Seattle Business magazine earlier this year. Grounds for Change (www.GroundsForChange.com) was also the first coffee roaster in the country to become CarbonFree certified in 2008, partnering up with CarbonFund.org to offset 100 percent of the emissions from the full lifecycle of its coffee including production and transportation. “We’re living our values through our business, so those certifications matter to us. I don’t think we could do business any other way,” Stacy said. “But at the foreground of our business is the quality of coffee.” What contributes to the quality is not only the raw beans — organic, shadegrown, Fair Trade-certified beans sourced meticulously from farmers in Mexico, Guatemala and other countries. It’s also the attention to detail in the roasting process, which Kelsey says is an art similar to winemaking. It takes trial an error, along with skill, to reach the unique flavor
10th Anniversary Open House
Where to Get Your Grounds for Change Fix
The anniversary celebration will take place from 5-9 p.m. on July 12, at Grounds for Change, located at Agate Pass Business Park, 15773 George Lane NE, Suite 204 in Poulsbo. The event will include live music, food, beer, wine, selfguided tours, roasting demonstrations, art projects for kids and more. A local nonprofit will be selected for a “charity coffee swap” —Grounds for Change will swap a half-pound bag of coffee in exchange for a donation to the nonprofit. Businesses and organizations are invited to participate by contributing information, coupons, small giveaways or other items for a goodie bag. Call the roastery for details at (360) 779-0401. For more information, go to groundsforchange.com.
Bremerton: Toro Lounge, Harborside Market, Hi-Lo's 15th Street Café, Bridgeview Bistro Port Orchard: Stormy Espresso Silverdale: ElBe's coffee Poulsbo: Burrata Bistro, Tizley's Europub, The Hare and the Hound, Central Market, Crimson Cove Suquamish: Coyote Coffee, Masi Latte, Bella Luna Pizza Kingston: The Flying Pickle Indianola: The Indianola Country Store Bainbridge Island: The Manor House, The Beach House restaurant, Town and Country Market, Islandwood, OfficeXpats
profiles, and the beans are roasted in specific ways, based on their origin, so their specific characteristics are highlighted. The coffee is also roasted in small batches, to order, so it’s as fresh as possible when it reaches the consumer. Regular cuppings as well as third-party reviews help ensure quality control as well. The company has grown organically. After moving to the Agate Business Park in Poulsbo, the business outgrew the space and expanded a few years later. Employees were also added, to a current total of four besides the Marshalls. The couple’s families on both sides have been a big part of the business. Many friends and family members volunteer to help out during the busy times while Stacy’s brother, Mike Williams, is the lead roaster. “Our entire family is woven into the fabric of Grounds for Change,” Stacy said. “Kelsey and I have been absolutely blessed with not only supportive parents but a large extended family spanning from Iowa, Ohio and Illinois to California, who have believed in what we do, the business that we’ve created and who have supported us in
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so many valuable ways.” In turn, the couple have treated their employees like family. Not only do they provide four weeks of annual vacation, 401(k) plans, health insurance and other benefits, they pay for maternity and paternity leave and they even loan employees money for emergencies. They’ve also introduced a Baby at Work program, encouraging employees to bring their babies up to a certain age to work with them — and the Marshalls' own two kids frequently can be seen at the facility. “We are fortunate to have the staff we have here. That’s the piece for me that’s so remarkable, to have this amazing team that’s so passionate every day about the work we do,” Stacy said. Kelsey said the goal has never been to become a huge company but rather have sustainable growth while maintaining the “triple bottom line”— being a socially, environmentally and financially responsible business. That’s one of the reasons, he said, certifications such as B Lab’s B Corporation are important: They help validate what they’re doing and they also help the company improve. The B Corporation certification is “not just for super green companies,” he said. “The idea of the score is to give you a kick in the pants to get a better score. It’s a way of benchmarking,” he said. The Grounds for Change customer base spans the country and includes many local
retail and wholesale customers, from coffee shops and restaurants that serve the coffee, to stores like Central Market that sell it retail. Many local customers also choose to pick up their orders at the Poulsbo roaster instead of having it mailed. Although the company started out as an online-based roaster mailing orders, the local customer base has been steadily growing. “Grounds for Change wouldn’t be what it is without the local customers. We’re fortunate to have been here for 10 years,” Stacy said. “It’s really a wonderful community.” Now, local retail customers will be able to drop in any time to buy coffee off the shelf — Grounds for Change is opening a tasting room. “A considerable amount of effort went into the tasting room. Our focus has been more on local outreach and that’s part of the rationale for the tasting room,” Kelsey said. The remodel of the building to add the tasting room was completed about a year ago but the official opening will coincide with the 10th anniversary celebration on July 12. The tasting room and retail space will offer freshly roasted coffee beans as well as teas and some Grounds for Change and coffee-related merchandise. “For local folks, it’s great to come right to the source and get coffee that’s just come off the roaster,” said Wendy Churchman, office manager since 2008. “That’s part of the reason for the expansion (into a tasting room).” The July 12 anniversary open house, scheduled from 5 to 9 p.m., will be a familyfriendly event that will feature several local businesses’ food, beer and wine, as well as local musicians. The company will also be partnering with a local nonprofit organization for a “charity coffee swap.” Another one of the Marshalls’ passions is to support various causes as well as help match up businesses with nonprofits. Grounds for Change is part of “1% for the Planet,” supporting nonprofits such as The Humane Society of the United States, and has donated more than $80,000 to its partner NGOs as of last year. Additionally, the business supports local efforts, such as environmental and other programs at Suquamish Elementary School. “We want to be part of the local community and for us that also means spotlighting local businesses and nonprofits,” Churchman said. “That’s why a piece of the July 12 event is to give the local community the opportunity to give back.”
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Cybersecurity consultant earns advanced recognition in digital forensics Brian Morkert, president and chief consultant at Audit West IT Risk and Compliance Advisory Services, has completed advanced coursework and won a SANS Institute Digital Forensics Challenge. The SANS Institute “Lethal Forensicator” Brian Morkert Coin was awarded to Morkert for demonstrating exceptional talent in the digital forensics profession. Digital forensics is the analysis of computers and other types of digital media to determine the occurrence of illegal or unauthorized activities, including attack and breach of organizational systems. Digital forensics involves collection of specialized techniques, processes, and procedures used to preserve, extract, analyze and present electronic evidence. “Digital forensics is an important component of cybersecurity as well as legal evidence,” says Morkert, who has been in the information security industry for more than 25 years and regularly trains organizations on incident response. Audit West is an independent information security and risk management consulting firm with a mission to help clients protect themselves and their customers from information technologyrelated risks.
Olalla Recovery Centers names new executive director Olalla Recovery Centers, a substance abuse treatment provider in the Puget Sound area, has named Christine Lynch its new executive director. She takes the place of Kevin Merrick, who is retiring after 18 years as chief executive. Lynch has been with Olalla Recovery Centers for over 13 years, and she has over 20 years of experience in the fields of criminal justice and substance abuse treatment services. As executive director, Ms. Lynch will ensure the quality of services and
evidence-based programs offered at both locations. “I am honored and privileged to assume the role of executive director and continue the legacy of the founders, by offering excellent treatment services that are accessible and affordable to individuals seeking to recover from chemical dependency,” Lynch said. Olalla Recovery Centers, founded in 1969, is a private, nonprofit substance abuse and addiction treatment center. The residential program at Olalla Guest
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Kitsap Bank announced that Jody Tanori has been named Employee of the Quarter. Tanori joined Kitsap Bank in September 2011 as a teller and moved into her current position as a loan assistant in April 2012. She was recognized with the first-quarter Jody Tanori 2013 award for excellence in customer service, demonstrating exceptional teamwork, and consistently outstanding job performance. “Jody demonstrates the type of behavior that Kitsap Bank needs in order to grow and prosper,” CEO Steve Politakis said. “She is conscientious about timeliness, accuracy, and most importantly, she makes it possible for the Port Orchard lending team to consistently provide excellent customer service to their customers and prospects.”
Lodge provides inpatient treatment and detoxification services for adults. The outpatient program in Gig Harbor offers addiction treatment services for adults and adolescents. Both programs are nationally accredited by the Commission on Accreditation of Rehabilitation Facilities. Olalla Recovery Centers and the Guest Lodge is located at 12851 Lala Cove Lane SE in Olalla. The outpatient center is located at 5122 Olympic Dr. NW, Suite A105 in Gig Harbor. For more information, visit www.olalla.org.
Housing, commercial markets improving across region
6 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
By Shannon Childs Kitsap Bank Isn’t it time for some good news about the economy? We think so! That’s why after six years in the economic doldrums, we are excited to see trends that show significant improvement in our Kitsap marketplace. Collective wisdom says it was the housing market that led the downturn and that housing must lead the way back up again — and that seems to be the scenario emerging here. New home construction is experiencing a revival in Kitsap County. A look at recent MLS data in the accompanying chart shows that from Jan. 1 to mid-May, sales of new homes have increased 141 percent over the same period last year. If all of the pending sales under contract close, the total closed will surpass the total for all of 2012 — 272 units of new construction sold in 2012 compared with 279 (137 under contract plus 142 sold and closed) thus far in 2013. Other indications that recovery is occurring are that home prices are stabilizing and home values are beginning
to appreciate. Lots are affordable, and we have seen multiple large parcels with preliminary plat approval sold in Kitsap County over the past year. Acquisitions of large plats by major single-family home developers and construction companies signify that they are moving back into the marketplace and that they believe Kitsap will be a growing market for the future.
Over the past 12 months alone, we have observed at least four large plat transactions in Kitsap County, ranging from $1 million to $2 million. “I think that what we see today should be encouraging to everyone,” said Linda Smith, Executive Vice President/Credit Administrator at Kitsap Bank. “Housing prices are stabilizing, interest rates are low
and stable — and are expected to remain so through 2013 — and there are numerous opportunities for builders in this market. We are very pleased to see the return to a more vibrant market, and we are actively reaching out to single-family developers for home construction loans.” The economic downturn took a toll on both builders and local banks alike. Some of our local builders have struggled over the past several years, curtailing new projects during the downturn in the market; because of their conservative actions, they have survived. Likewise, those banks that made the tough call to pull back on construction financing — a necessity due to the market conditions at the time — have come through the tough times. But unfortunately, those that didn’t respond quickly are no longer in existence.
Commercial Real Estate We are also seeing improvement in the commercial real estate market. Some of the Markets, page 17
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Pace of construction and renovation projects picks up Peninsula Roundup In Kingston, the BJC Group is working on a new home for Puerta Vallarta restaurant at “George’s Corner.” The 6,000-square-foot building is about a month away from completion and will feature unique interior finishes such as metal, concrete countertops and brickwork. The restaurant will be moving into the Roundup, page 16
An artist’s rendering of what the completed Bainbridge Island Museum of Art will look like. The museum is scheduled to open in June.
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 7
Although the recovery in the commercial real estate sector is slow, the past year has seen increased activity in new construction. There are various projects in the works or on the drawing board around the Greater Kitsap Peninsula, as well as numerous tenant improvement projects, which continue to see strong interest. Below is a roundup of some of the commercial construction activity happening around the West Sound: Bainbridge Island has been busy with several projects. The Bainbridge Island Museum of the Arts is nearly completed, with a ribbon-cutting scheduled for June 14. The building is slated to become LEED Gold-certified, the first museum in the state to do so. The three-story, 20,000-square foot building includes three galleries and a large archival space and is part of the Island Gateway complex that includes the KidiMu. Also part of the complex is a retail/commercial building under construction in the spot where Eagle Harbor Market once stood. The building will have retail on the ground level and commercial/office space on top, with a parking garage underground. The steel structure is complete and the metal studding nearly done, with roofing and mechanical systems going in next. Both this building and the museum are designed by Coates Design architects and built by PHC Construction. In the Lynwood neighborhood of the island, the first phase of the Pleasant Beach Village mixed-use project, designed by Wenzlau Architects, has been completed by Fairbank Construction (see related story). The second phase will begin with site grading this summer. The second phase includes 22 courtyard-style apartments and a community pool. A third phase will eventually add as many as 45 single-family homes. On the drawing board for the island is a shopping center off High School Road that will be designed in the style of Seattle’s University Village. The eight-acre site will include seven buildings for a total of more than 60,000 square feet and a drug store as the anchor. The project is in the planning stages by Wenzlau, with construction expected next spring. Harrison Medical Center is also planning a new project on Bainbridge, a medical building at the corner of Madison and State Route 305 that will include 24hour urgent care and a primary care clinic, as well as itinerant space for lease by physicians. Harrison was in the process of finalizing the land purchase agreement at the end of May and CEO Scott Bosch said they were confident the agreement would go through. The center, designed by Coates, will include 17,000 square feet on two levels. Tim Ryan Construction is expected to start building in the fall. Another project on the drawing board is the renovation of Town & Country Market sometime early next year, but the store will stay open during construction.
Architect’s leaving an imprint on Bainbridge By Rodika Tollefson When it comes to influence on the look of Bainbridge Island’s Winslow area, perhaps no one has as much claim as Charlie Wenzlau. The island-based architect has designed 10 projects within a few blocks alone and has had his creative fingers in such downtown landmarks as the San Juan building by the ferry, Madrone Village downtown, and The Winslow mixed-use project at the corner of Winslow Way and Ericksen. Despite the illusion of a formal Winslow-Wenzlau connection — they have similar pronunciation but are completely unrelated — for Wenzlau, creating such a deep tie with the island was about being in the right place, at the right time. It all started after he moved to the Northwest in the mid-'90s from San Francisco, where he had worked as an architect for about a decade. Wenzlau’s dream was to start his own firm and design livable neighborhoods, so he headed north to obtain a master’s degree from the University of Washington. His thesis was a site plan and design for what is now Poulsbo Place, back then still home to World War II housing. The
Photo by Rodika Tollefson
Charlie Wenzlau stands outside of Ericksen Cottages, a pocket neighborhood he designed in downtown Bainbridge. The community includes 11 small-footprint cottages situated around a common courtyard (part of which can be seen behind him.) neighborhood envisioned by Wenzlau was a walkable community with a mixture of housing types, parks and shopping. He never got to work on the actual redevelopment
(though interestingly enough, years later the master-planned community looks like it’s been inspired by that student project, whether by coincidence or not), but when it
came time to open his firm, serendipity brought Wenzlau to Winslow. Mixed-use projects were just coming on the radar for local developers in the early 2000s. Called “new urbanism,” the concept challenged traditional zoning by changing density and other concepts to provide pedestrian-friendly living mixed in with amenities such as retail shops, and Bainbridge became a pioneer of sorts in Kitsap County. “(The city) created a mixed-use design plan for Winslow, an innovative concept, and I was the first person in town to be able to do it,” Wenzlau said, adding that his interdisciplinary background including planning, real estate and development gave him a unique advantage in what he saw as an emerging trend. Bainbridge had the vision. Wenzlau was ready to commit to realizing it, building by building — following his passion for “reinforcing what is good about a place while accommodating the inevitable process of change.” The mixed-use idea — which he noted was a rediscovery of a concept that existed in Architect, page 9
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from page 8 the 1920s — has changed how communities address suburban sprawl. For Wenzlau in Winslow, the focus on these types of projects meant keeping busy for quite some time. “I’ve done so many projects here that they’re starting to change the character of downtown, which is fun for an architect,” he said. He started as a one-person firm working out of the bedroom of an old farmhouse; Wenzlau Architects eventually grew to eight employees at one point. The company, located on Madison Avenue in the middle of many of his projects, now has three architects on staff along with an office manager. “It’s been a steady workflow because of many infill projects,” he said. While mixed use has been a satisfying niche, Wenzlau’s portfolio is much more diverse. The common thread in all his work is the idea of sustainable and livable communities. Cottage-style pocket neighborhoods are one example. Working in partnership with Linda Pruitt, co-founder of The Cottage Co., Wenzlau designed projects such as the Chico Bay Cottages in Silverdale, which has attracted media attention from around the region. The project also received the grand award from Builder magazine in the “singlefamily community” category last fall. Pruitt’s company had pioneered the idea of small-footprint, cottage-style pocket communities — and received national press — nearly two decades ago as an alternative to downsizing. The cottage communities typically feature a small number of homes clustered around a courtyard and lush community garden. The homes themselves are small — as small as 1,000 square feet —
and each has a private garden. In the case of Chico Beach, the seven waterfront cottages also have Energy Star and Built-Green 4-Star certification, a commons building and a carcharging station. “The concept is starting to become more mainstream,” Wenzlau said. “I like the sustainability concept, the small footprint and the community aspect and I think it’s very livable. If you’re going to live in a higher-density situation, this gives you the most livable option because of the focus on the gardens. The gardens are the best part of the project; they’re amazing.” Having now designed various types of housing and commercial sites, Wenzlau feels that his original dreams are coming
true: designing entire neighborhoods and larger-scale projects, not just infill housing. “It’s really a dream to do all your work in your community, and planning a larger site then coming back to do the buildings is even better,” he said. “I finally can say now that I have the expertise to do any type of housing that would go into that type of a neighborhood. … Developers are becoming more interested and willing to mix these housing types together, and it makes for a more authentic neighborhood.” One of Wenzlau’s new dreams is to take what he learned on Bainbridge and share that with other communities, especially in Kitsap. Already, he’s landed some projects outside of the state. His passion is to show
Tim Ryan Construction, Inc.
TRC 2013 Commercial Projects
Rice Fergus Miller adds four to architectural staff
Recently completed projects • Jensen Building Renovation • Island Cool Yogurt • Re/Max Victory Office tenant improvements • 900 Pacific Building tenant improvements Current projects • Skookum Office Expansion • Retina Center Northwest Expansion • Aldercrest Heath & Rehab Expansion & Electrical Upgrades • High Point Center Renovations • Harrison Medical Center’s new Bainbridge Island location
LEED & Healthcare Construction Professionals Tim Ryan Construction is dedicated to improving their employees’ knowledge and skills of the latest techniques and trends needed to work in this modern construction environment. Tim Ryan Construction employs LEED Accredited Professionals (AP) on staff as well as ASHE Healthcare Construction Certified Staff.
Family Owned & Operated for Over 56 Years Tim Ryan Construction, a second generation family owned business providing quality cost effective construction since 1957 with professionalism and integrity. Today, Tim Ryan Construction is recognized and respected as a premier commercial contractor and developer.
As a member of the US Green Building Council, Tim Ryan Construction is proud to help bring more LEED (Leadership in Energy and Environmental Design) projects to Kitsap.
Technology Driven Industry Changes Cloud computing, three dimensional design, and BIM (Building Information Modeling) are just a few of the platforms that are changing the design & construction industries. Tim Ryan Construction welcomes change and is quick to deploy systems and strategies that will improve communications & collaboration with our Client’s, the Design team and our subcontractors resulting in reducing changes, improving schedules and lowering costs for all.
360-779-7667 | www.TimRyanConstruction.com
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 9
Rice Fergus Miller, a 45-person architecture, interior design and planning firm, has added four employees. Sabina Fiore is a designer with 12 years of experience who focuses on multi-family housing, senior housing and multi-use residential. She has a bachelor’s degree in Architecture, Design and Planning from University of Washington. Mike Wright is an intern architect focusing on community and housing projects. He has a master’s degree in architecture from the University of Washington. Suzanne Pontecorvo has joined the firm as a project manager in our senior living market. She has over 20 years of experience in architecture and project management. She has a bachelor’s degree in architecture from Woodbury University in Burbank, Calif. Maiko Terao is an architect and LEEDaccredited professional with over 12 years of experience. With a passion for sustainable design, she focuses on senior living and healthcare. She earned her bachelor’s degree in architecture at the University of Oklahoma. Rice Fergus Miller is located in downtown Bremerton and can be reached at www.rfmarch.com.
how communities can transform themselves to be less automobile-dependent and implement “Main Street” ideas. “My goal for the next part of my career is to do work throughout Kitsap and share the lessons from Bainbridge in other areas. Bainbridge is very innovative,” he said. Even as he continues to venture off island to do his work, he seems to have a soft spot for his community. It’s not just about being surrounded by the results of his work — it’s also about accountability, he said. “The best part for me is getting feedback from people in the community about the work we’ve done and how it fits well with the community,” he said. “That’s the best payback.”
Fairbank Construction: Building ‘cool stuff’ for 35 years By Rodika Tollefson The construction industry is slowly turning the corner, and when things kick into high gear, Fairbank Construction Co. wants to be ready. Earlier this year, the company opened an office in Seattle and owner Tad Fairbank expects to add 15 people to the existing 60-employee base by the end of the year. “Residential is seeing the biggest growth. We work with 25 architects and all are busy — this is all happening in the past six months to a year,” he said. “We’re feeling pretty good.” Feeling so good, that the timing felt right to add a Seattle office, which has 15 people on site. The company had an office there for a few years during the boom of the early 2000s. “We’ve worked with architects in Seattle over the years and they’ve all encouraged us to open an office there (again),” Fairbank said. “As we saw the market churn, we decided to do it.” Fairbank Construction has stayed busy through the downturn, thanks in part to its ability to anticipate the market and stay nimble. Eight years ago, Fairbank Special Services was added to offer work on smaller projects and remodels, along with maintenance contracts. “It was market demand. For years, we turned down smaller projects,” Fairbank said. “From a business standpoint, we felt if the market slowed down, we could have the
team do smaller projects.” The plan has worked well — when both the residential and commercial markets came to a halt, Fairbank Special Services continued to stay busy with everything from deck additions and small kitchen remodels to specialized garages and indoor tennis courts. Fairbank is not new to the construction industry cycles. He launched his company 35 years ago in Snohomish County to build homes, after teaching at a small college for several years. With the help of a pickup truck, a Skil saw, some hand tools and a friend as an occasional helper, he worked on his first project during the evening while still working for another contractor during the day. It didn’t take long to add a full-time employee, then another, and eventually Fairbank Construction expanded into commercial projects and had work in six counties. Bainbridge Island became the new home both for Fairbank and his business in 1982 — a “lifestyle choice,” he said. Since then, the company has built hundreds of homes along with medical clinics, banks, condominiums, churches and unique projects such as St. Cecilia’s Faith Education Building and the waterfowl rehabilitation facility for West Sound Wildlife Center, both on Bainbridge. Current commercial projects include the Kitsap Community Resources’ housing
complex adjacent to its new Port Orchard center, also built by Fairbank, and Pleasant Beach Village, a multiuse project that’s entering its second phase in the L y n w o o d neighborhood of Bainbridge Island. The company will also break ground in the fall on the new Salvation Army Bremerton Tad and Sally Fairbank of Fairbank Contruction headquarters. together on the weekends, and the What ties them all together is the company looks for people who share philosophy best summed up in the certain values when hiring new staff. company motto: “We build cool stuff.” There’s even a personality test as part of the “Regardless of what we’re building and hiring process. But don’t expect to find a the size of the project, the idea of building corporate atmosphere when you visit. In cool stuff gives them (the employees) a fact, you may spot Fairbank walking around passion so it’s more than just a job,” in jeans and sandals. Or perhaps you’ll get a Fairbank said. “It’s an attitude these guys glimpse of the nine-hole putting course in have. For clients, a project is a big the office. investment and they need to know we’re Fairbank Construction Co. excited about it, whether it’s a deck or a (www.fairbankconstruction.com) is a home.” family business that includes Fairbank’s The philosophy almost becomes a wife, Sally, his son and his stepson. lifestyle itself. Fairbank said many Fairbank is positioning the company for the employees are friends who do things next generation of leadership. “The goal is to have the company develop and mature so the next wave of leadership steps in,” he said. “I’d like to see the company continue on long after I’m gone, so my focus is to position the company for that.” Fairbank has seen big changes in the 3780 Mile Hill Drive industry in the last few decades — Port Orchard, WA 98366 including technology that’s allowed the ability to seamlessly integrate a second office — but he said one aspect hasn’t changed at all. “It’s still about building relationships with clients,” he said. “Many of my clients are good friends now. It’s still very exciting to me — they come in with their dreams and to walk them through the process of fulfilling those dreams is very exciting.”
The Source for All Your Construction Needs 10 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
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Construction company relocates office to Port Orchard Pacific Coast General, LLC has relocated its offices to the Harbor Plaza Building at 450 Port Orchard Blvd. in Port Orchard. The company is a general contractor performing construction services for public, private and commercial clients in Western Washington. For more information on Pacific Coast General, (360) 442-2799.
Rush Cos. continues to grow, expand construction and commercial fishing in Alaska. After obtaining a degree in business administration, he flew airplanes for Alaska Airlines for seven years. He started doing real estate development and investing on the side with his wife and soon realized he wanted to turn that into a full-time career. He returned to Rush Cos. in 2007 as Gordon Rush’s partner and company president, managing it day-to-day. Although he sees the recovery of the commercial market still a couple of years out, Smith said in the development world, that means preparing for it now. The key is
to try to understand and anticipate the market and community needs ahead of time. “What’s helping the recovery of the commercial side is the availability of capital. The banks will start lending again,” he said. “They’re sitting on piles of cash and it’s starting to loosen up. Most projects require a preleasing component. There’s no more building 100 percent on spec — we’re not back to those days.” Matt Smith, president of Rush Cos.
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 11
By Rodika Tollefson Gig Harbor’s Rush Cos. has been in business for almost three decades, and throughout the years has stayed flexible to change with the industry and the market. Case in point is the recent strategic shift in its residential division — where in the past the company built mostly a small number of custom homes on the residential side, the new approach is to build family homes in subdivisions, with the goal of doing 50 to 100 per year. So far, Gig Harbor and Puyallup are the “testing grounds” for the new model, with other areas being identified. “It’s a pretty big shift for us strategically,” said Rush Cos. President Matt Smith. “We try to look ahead where the market will be and not where the popular vote is.” The commercial side is ramping up more slowly but the company is adding new staff as the demand grows. Currently, Rush employs about 120 people, half at the Gig Harbor corporate headquarters and the other half as on-site managers at the multi-family communities the company manages. Of those, 20 employees have been added in the past 18 months as the market picked up. What makes the Rush approach unique is the comprehensive services. The company is comprised of three divisions — commercial, residential and property management — that can develop, build and manage properties. But clients don’t have to opt for all three in order to work with Rush. “The vertical integration is big. It allows for continuity as you go through the divisions,” Smith said. “But we do a lot of work for outside clients, not just Rush internal jobs.” Rush Cos. (www.therushcompanies.com) does new construction and tenant improvement work around the Puget Sound area, with a specialty in the medical/dental field, and recently was awarded its first out-of-state contract for an orthopedic group. The long-term goal is to expand along the Interstate 5 corridor as well as into the North Kitsap and Jefferson County areas. On the Kitsap Peninsula, Rush’s new construction projects include Harbor Greens and Olympic Square in Gig Harbor, Sedgwick Landing plaza and Franciscan Professional Center in Port Orchard, among others. Two apartment complexes are currently in the works in Port Orchard off Sedgwick Road, one nearly complete and another to break ground this summer. Smith said part of the growth for Rush Cos. means continuing to build its reputation. “Growth depends on what the industry requires,” he said. “We want to be recognized as the best developer and construction company in the region. That’s our vision.” Smith, who grew up in Gig Harbor, worked for company founder Gordon Rush while in high school, both in
Tim Ryan Construction’s been going strong for 50-plus years
12 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
By Rodika Tollefson The work of Tim Ryan Construction is familiar to many people around Kitsap. The company built such notable buildings as The Doctors Clinic on Myhre Road, Harrison Urgent Care in Port Orchard, Trophy Lake Golf clubhouse and Poulsbo Village Shopping Center. It has also worked on major renovation projects such as the Bremerton Bar & Grill, the LEED Platinum-certified Rice Fergus Miller headquarters in Bremerton, and the High Point Shopping Center in Port Orchard. Tim Ryan founded the business 56 years ago in Kirkland to build homes, but changed the focus to commercial construction when he moved his business — and his family — to Kitsap County in 1972. His sons, Dan and Kevin, have been part of the business for more than 20 years, coming back after going off to college for construction management degrees and working for large national contractors. “We grew up with it. We did work for our dad in high school,” said Dan Ryan, who is now company president (Kevin is VP). While Kitsap keeps Poulsbo-based TRC busy, the company has done projects as far
as Alaska. Medical buildings have been one of its specialties for more than a decade, including tenant improvements. “It’s not as simple as going in and taking things out,” Ryan said, using the current expansion of Retina Center NW in Silverdale as an example. “We have to do dust containment, infection control (and so on), so the crew has special certifications. There’s a huge level of understanding that goes into a complex system.” By specializing, they can stay in tune with those industries’ trends. In medical, for example, it’s trends like the new pod concept — being implemented at a Bainbridge Island clinic — where the patient comes into one door and the doctor into another door, which opens to a staff area. “It’s intended to eliminate waiting areas, get the doctor from one patient to another faster, and improve patient flow and make it feel less clinical,” Ryan said. The company has 15 employees currently and had as many as 30 at peak times. In addition to buildings such as professional offices, recreational and retail (among others), TRC looks for what Ryan calls odd opportunities: beach restorations,
Kevin Ryan, left, and Dan Ryan small public projects and such. While TRC has changed with the market, what hasn’t changed is its approach, according to Ryan — solving problems before they become problems and helping the owners through the process. “We’ve done it so many times that we can take good care of our clients. That’s probably why we have so many repeat
clients,” he said, adding that about 80 percent of the work comes from repeat business. One thing that has changed is the way the company uses technology. Tim Ryan Construction (www.timryanconstruction.com) was at the forefront of implementing computerized project management that includes 3D modeling and real-time project changes that staff can do in the field via their tablets. The system includes capabilities to add information about mechanical systems, maintenance and many more details. It can do cost estimates, scheduling, change orders, troubleshooting and much more. “The industry is changing quickly and the contractors are pushing the architects as much as the architects are pushing the contractors,” Ryan said. “The struggle now is how to use that (capability) and who wants how much information. … We’ve been using the system for a year and the more we get into it, the more it’s capable of.” One challenge is training all the staff to use another layer of technology, as well as getting other partners on board, such as architects and clients. Ryan said that will be the goal when the company undertakes construction of the new Harrison Medical Center clinic on Bainbridge. “The intent is to have an integrated project delivery that includes the Harrison representatives and the architects. The biggest piece is how to integrate all the staff into it so it can be used for communications and troubleshooting,” he said. This new project delivery model is where the future is, Ryan believes — but it also fits the company’s own business model. “It’s clear this is where it’s going and you either get involved or you’re playing catch-up. We wanted to be proactive and be leading,” he said. “It fits within the way we were already doing things, the mentality of solving problems before they come up. Some of these (technology) tools help do that faster.”
PLEASANT
New shuttle will take visitors to attractions beyond Winslow When foot passengers stream off the ferry from Seattle on weekends this summer, they’ll have an easy option for visiting more of Bainbridge Island than the familiar “Winslow walk.” The local Chamber of Commerce is organizing a shuttle bus service that will run a north and south loop starting from the ferry terminal on Saturdays and Sundays. The two 45-minute routes will be timed to connect with ferry arrivals throughout the day until about 5 p.m. “It will be a hopper, you can hop on and hop off, for one price for all day, and that will allow you to go on either bus,” chamber president Rex Oliver said, adding that the fare will probably be $7. The north loop will include a stop at the Bloedel Reserve, while the south loop will go through the Lynwood center and to Fort Ward Beach, he said. A pair of 31-passenger buses that are handicapped-accessible and have bike racks will be leased from Agate Transportation. Details were still being worked out in May, but Oliver said the plan is for the shuttle service to start operating the last week in June or the first week in July. An agreement with Kitsap Transit will allow the agency’s regular bus drivers to be hired for the weekend shuttles. Kitsap Transit runs various weekday routes around Bainbridge Island but only operates one Saturday route and none on Sundays.
during the recession and the foreclosed 16acre property eventually was purchased in 2011 by Jacobi, founder of Windermere Real Estate. Next to Manor House are a new restaurant and boutique hotel that will be open this summer. The Beach House restaurant, which shares the Manor House kitchen, was scheduled to open May 28. The Inn at Pleasant Beach has eight suites and manager Rachel Nye said she expects the hotel will be open by June 1 or soon after. “It really is becoming a village,” Andersen said. “What’s really been surprising for me, having worked in downtown Bainbridge so long, is the south end really is eager to have a place to kind of call their own. “There’s been an overwhelming positive response in the community.”
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An eight-room boutique hotel and the Beach House restaurant are expected to be open this month in the Pleasant Beach Village development at the Lynwood center on Bainbridge Island. Funding for the shuttle program comes from the city’s lodging tax, some sponsorships and the passenger fares. “Between all that we think we can make it work,” Oliver said. “We don't anticipate making any money off it, we just want to get people around to visit other parts of the island.” The idea of a summer shuttle has been discussed in previous years, but this will be the first time such service has been provided. “The main reason for it is last year we saw in excess of 51,000 walk-off visitors to Bainbridge Island,” Oliver said.
Windermere Real Estate/West Sound, Inc. Serving Poulsbo, Silverdale and Bremerton
PROPERTY FOR SALE OR LEASE Poulsbo MLS #447811 $660,000 Well performing light industrial project in vibrant Poulsbo is home to thriving businesses w/ongoing leases. 4 of 5 units offered for sale. Contact listing agent for verified proforma. Kelly Muldrow 206-949-3420. Bremerton CBA#218892 2,600 sq.ft. office on Perry Avenue. Very convenient location with good parking. Can be divided with separate entrance. Has Kitchenette. Joe Michelsen 360-692-6102/360-509-4009. Bremerton CBA#485909 Excellent 9400 sq.ft. warehouse/distribution center with Hwy 3 visibility, easy access to freeway, office, dock high and PSE energy package. All at very competitive rents. Joe Michelsen 360-692-6102/360509-4009. Silverdale CBA#517898 $205,000 Zoned Hwy Tourist Commercial, this well kept comfortable 3/1, 1,299 sq.ft. rambler home on 1.87 acres is well suited for a variety of office and some retail uses. Located on busy street in Silverdale. Mark Danielsen 360-692-6102/360-509-1299. $435,000 Silverdale MLS#389401 Former Bistro Restaurant, charming building in commercial zone on .59 acres on Bucklin Hill Road. Great location, good visibility & traffic. Other suitable uses may include professional offices &
retail. Mark Danielsen 360-692-6102/360-509-1299. $450,000 Bremerton MLS#409249 Historic 600 seat Roxy Theater with all the character & charm of the vintage 1940’s, but with superb concert acoustics from the new $120K sound system. New roof, new electric & plumbing upgrades. Mark Danielsen 360-692-6102-360-509-1299. Bremerton CBA#512042 $900,000 Multi use building on Pacific Ave in downtown Bremerton. 3 commercial suites and 11 residential units and the adjoining 53 space parcel parking lot. Solid cash flow investment. Victor Targett 360-692-6102/360-731-5550. Silverdale MLS#484573 $3,500,000 Fully leased, 16,200 sq.ft. office building in Silverdale. Three great tenants with long-term, triple net leases at 7.6% cap rate. No deferred maintenance, hi-tech security system and ADA compl iant with elevator. Bob Guardino 360-692-6102/360-710-7844. $250,000 Bremerton CBA#523985 This .58 acre with Village Commercial Zoning allowing many retail and office uses. Fully graded with all utilities available. Adjoins State Hwy 3 to the west and The Summit Apartments to the south. Victor Targett 360-692-6102/360-731-5550.
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June 2013 Kitsap Peninsula Business Journal • KPBJ.com 13
from page 1 running the espresso stand at Town & Country Market on Winslow. “This whole area is really starting to turn into something,” said Andersen, who was excited to get involved with Pleasant Beach Village when developer John Jacobi took over the project that had been mothballed a few years ago before it was finished. “It’s starting to all come together now.” At the opposite end of the market from Boathouse will be a wine bar called Suzanne Maurice run by Kathryn and Jerome Fath. Other vendors will include a local produce stand and crêperie that Paul Sisley will operate as Buckwheat & Broccoli; a deli affiliated with Hitchcock, chef Brendan McGill’s restaurant on Winslow; an eatery with a tex-mex menu that will be operated by Salmon Canyon, a Lynwood restaurant a block down from the market; and two retail shops, one selling art, textiles and clothing, and the other with home décor and furnishings. The first business to open in the Pleasant Beach storefronts late last year was Vintage Home & Garden at the north end of the block in a building that also houses the nonprofit PAWS cat adoption center. The Island Cool frozen yogurt shop opened earlier this year in a building that has another 950-square-foot storefront available for lease. The entire building in between those businesses is still open and offers 2,500 square feet of retail space for lease, according to broker/manager Jim Laws of the Windermere real estate office on Bainbridge. Woodson Lane, which goes up behind the retail buildings and past a dozen leased apartments above the row of storefronts, leads to Manor House, a historic building that reopened a year and a half ago as a weddings and events center. The century-old Manor House was originally built as a large Tudor-style home, and it’s been the site of different restaurants in the past few decades, most recently Edna’s Beach Café that was owned by Bill Nelson. The Pleasant Beach Village area was originally developed by Nelson as Blossom Hill, but his unfinished project foundered
Home Depot selling property that was potential store site By Tim Kelly, Editor The site where Home Depot once had considered building a store in Port Orchard is now for sale, with an asking price of $7.4 million for the 20.74-acre property south of the Walmart supercenter on Bethel Road. “We’re opening very few new stores,” said Brian Cannard, real estate manager for Home Depot in Seattle. He said the Port Orchard location — which was purchased before the recession — did not have sufficient sales projections for the company to invest in building a store there. The property, listed in April with Northwest Retail Partners, consists of several parcels that Home Depot purchased separately several years ago. Of the 20.74 acres, only about 12 acres is usable for development, in accordance with a wetlands plan that was approved by the Corps of Engineers and remains in effect
for the property. After Home Depot purchased the property, which was outside city limits at the time, the company opted to hold off on its building plans until the city of Port Orchard completed its Bethel Corridor annexation. That annexation was approved in late 2011, but since then Home Depot has decided not to build a store on Bethel. “We tried to make it work, but unfortunately it’s not going to be one that’s opened,” Cannard said. There are three Home Depot stores on the Kitsap Peninsula, in Poulsbo, Silverdale and Gig Harbor. As for marketing the Port Orchard property, Charlie Footh of Northwest Retail Partners said the site’s approved wetlands plan is a plus for any interested developer, along with the property’s annexation into the city. He also said it’s a
Photo courtesy Home Depot
Area outlined in this aerial photo shows the property along Bethel Road in Port Orchard owned by Home Depot that is for sale. prime location with cross-access allowed to the adjacent Walmart lot and the ability to have a service road coming into the south side of the property off Salmonberry Road. The only site work completed since Home Depot purchased the land was removal of some old houses and other structures.
“It’s relatively ready to go,” Footh said. “It’s a great piece of property, given its location.” As for whether Home Depot would only sell the entire property or might sell smaller parcels of it, Footh said “We’ll consider all offers.”
14 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
City’s fire code update won’t add sprinkler requirement, for now By Tim Kelly, Editor A requirement that fire sprinkler systems be installed in all new residential construction has been removed from a proposed update of Bremerton’s fire code, but the city fire marshal hasn’t changed his view that such a requirement should be in the code. “I just didn't have all the pieces I needed in time to take it to council,” Bremerton fire marshal Mike Six said on May 22, before a City Council work study session that night at which the proposed fire code update was on the agenda. “We’ll revisit it when the time is right, and I don’t know when that will be.” Adding the sprinkler requirement to the fire code is opposed by the local building community. Opponents say mandatory installation
of fire sprinklers would add significantly to the cost of new housing, and it should be a homebuyer’s option rather than a requirement for builders. They also are miffed that neither the Kitsap Home Builders Association nor other stakeholders were notified or consulted before the Bremerton Fire Department submitted the proposed code change to the City Council. “This is very, very frustrating, having been on both sides of the fence,” said Ron Perkerewicz, a past HBA president who also was Kitsap County development director during the 1980s and ’90s, when his duties included being the county’s building official and fire marshal. “The state (fire code) has left it totally optional for sprinklers in residences,” he said. “Bremerton has been trying very circuitously to find a way to require
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sprinklers in all homes.” He added that “the city of Bremerton didn't have the courtesy of talking to anyone in the building industry before throwing this ordinance out there for consideration.” Six said he doesn’t think it’s likely that some sort of stakeholders meeting regarding the proposed fire code change would be helpful, because neither his support for mandatory fire sprinklers in new housing nor builders’ opposition would change. “The homebuilders have come out publicly and said they will never agree to fire sprinkler systems,” Six said. “They’re not interested in actually having an improved level of safety, it’s more of a financial concern for them. “They’ve voiced their opinion several times. They have addressed that issue already, so I don't see them changing their minds in a meeting.” But Perkerewicz and Kitsap HBA executive vice president Teresa Osinski hope the Bremerton City Council will consider the builders’ position in deciding on any proposed fire code changes. They note that insurance companies aren’t pushing for building codes to require residential fire sprinklers, and that most homeowners don’t think they’re worth the added expense. Osinski and Perkerewicz contend builders are not dismissing safety considerations by opposing a sprinkler requirement in the fire code. They agree that sprinklers can reduce property damage in a home fire, but say what’s more critical to providing safety for a home’s residents is installing smoke detectors, which cost far
less than a sprinkler system. “Smoke detectors save lives, that’s a fact, and it’s been proven over and over,” Osinski said. “If insurance companies believed fire sprinklers were important to control their risk, they would require them. And they don’t give you a break (on homeowners insurance) for having them.” Perkerewicz noted that the fire department hasn’t done a cost-benefit analysis to help evaluate whether requiring sprinklers in all new homes would be worth the considerable cost. Osinski said fire officials’ estimated cost of about $1.40 per square foot to install sprinklers in a new house is too low. She said the actual cost is probably closer to $2 per square foot, which would add about $5,000 to the price of an average 2,500square-foot home. She also noted that a larger water meter that costs about $2,500 is required for homes that have sprinklers. “People don't want them; they’d rather have granite countertops or a beautifully landscaped front yard,” Osinski said. Perkerewicz said city fire marshal Six “has this mission in life to have everything sprinklered. “I guess the question is why does Bremerton have be safer, in their mind, and require sprinkler systems that are over and above what a lot of cities in the state require.” A requirement for residential sprinklers remains a contentious issue even though it’s been withdrawn for now, but Six said the overall update proposed for the city’s fire code has other aspects that he thinks Sprinklers, page 15
Renamed Visit Kitsap Peninsula welcomes REI, presents tourism awards During its annual meeting May 22 at the Best Western Silverdale Beach Hotel, the Kitsap Peninsula Visitor and Convention Bureau announced it has officially changed its name to Visit Kitsap Peninsula. John Kuntz, president of the organization's board, said the decision to change the name had been under discussion since last year. “When the organization was founded in 1983, it was standard practice to use terms like convention and bureau in the title, but the trend has been to adopt a less complicated name,” Kuntz said. “The
Seattle VCB spent $100,000 on research that led it to the decision to change its name to VisitSeattle. We decided to take advantage of that research and do the same. The timing was right.” Executive Director Patricia Graf-Hoke said the transition will be easy since the organization has always used VisitKitsap.com as its website address and that won't change. At the event attended by nearly 250 guests, Visit Kitsap Peninsula welcomed REI and got an update from company executive Kevin Golic about the REI store scheduled to open in Silverdale in September. The event also included presentation of the 2013 Tourism Vision Awards. (Full list of recipients online at kpbj.com)
Visit Kitsap Peninsula photo
Jon Kuntz, owner of Olympic Outdoor Centers and board president of Visit Kitsap Peninsula, talks about the tourism group’s name change during his presentation at its recent annual meeting.
Bainbridge firm hires architect with building industry experience Miles Yanick and Co. has added Jo Pederson to the staff of the Bainbridge Island architecture and design firm. Pederson holds a degree in architectural studies from the University of Washington. She has previous project management experience working architectural firms, and she also has worked for construction companies. Yanick said Pederson’s breadth of experience will enhance the company’s profile and provide more effective services in the design/build process.
Omission The banking roundup in the May issue of the Kitsap Peninsula Business Journal did not include Union Bank, which has branches in Bremerton, Silverdale, Poulsbo and Bainbridge Island.
Correction
SPRINKLERS
from page 14 businesses will appreciate, such as reducing fire alarm requirements. The update would essentially incorporate International Fire Code standards into the city’s regulations, he said. By going with the International Fire Code language, Six said, and removing some areas that are adequately addressed in the city’s building code, “we’ve been able to lighten up the fire code and make it more user-friendly.” The Bremerton City Council is likely to vote on the proposed fire code update in July, after more discussion at a work study session June 12.
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 15
The name of D.H. Briant & Associates Architects, P.S., designers of the new clubhouse at White Horse Golf Club, was spelled incorrectly in a story in our May issue.
ROUNDUP
16 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
from page 7 building from its previous location, which was leased. Rice Fergus Miller is working on a new home for the Kingston branch of Kitsap Regional Library. The planning is in the early stages. The library is part of the Village Green project, which is also slated to include a community center and a senior housing complex. The Village Green Foundation is still raising capital funds for the center. RFM is also working on the design of the Suquamish Clearwater Casino Resort’s expansion, part of a four-phase master plan. The first phase will include the addition of 10,000 square feet of meeting space and another 4,500 square feet of “pre-function” space. Also part of this phase is a new 700car parking garage, new fine-dining restaurant, remodeling of the Longhouse Buffet, more office space and new walkway/elevator entrance. Construction is expected to last 18 months and be completed in December 2014. Future phases will add a 100-room, five-story hotel; remodel and expand the casino; and add more meeting space. The entire master plan is scheduled for completion by December 2017.
KPBJ photo
The Sydney complex of eight apartment buildings is nearing completion in Port Orchard. The 106-unit development built by Rush Cos. of Gig Harbor is behind a small commercial center at the northwest corner of Sidney and Sedgwick roads. In Poulsbo, the BJC Group is working on another restaurant, King’s Wok. This will be the second location for the restaurant that is currently in Silverdale. The 6,800-square-foot building is going up in the Oldhava area, near WalMart, with construction anticipated to start in July and be completed in seven months. Poulsbo’s former DME Auto building, located on Seventh Avenue, will be getting
a façade facelift. The vacant building is being redesigned by ADM Architecture to create a multi-tenant layout and help attract new tenants. Also in the works is a new Safeway on Lincoln Road off SR 305. Previous buildings on the site, including the former headquarters of Olympic Property Group, have been demolished. The 59,000-squarefoot store, which will have a gas station, is expected to open by December. In Silverdale, the largest new construction project is nearly completed by Andersen Construction. Harrison Medical Center’s new orthopaedic hospital, adjacent to the Silverdale hospital campus, is scheduled to open in mid-September. Installation of medical equipment will begin in late August. The hospital, designed by Rice Fergus Miller, will have 54,000 square feet of space, four large orthopaedic operating rooms and 16 pre/post-surgery bays on the first floor; 24 single-patient rooms on the second floor; a rooftop rehab trail and various amenities geared specifically for orhtopaedic patients and procedures. The third floor is being built out for a future expansion, which will include 26 patient rooms. Another medical project in Silverdale is the expansion of Retina Center NW, designed by Indigo and being built by Tim Ryan Construction. The 3,200-square-foot expansion will be done in June. Other tenant improvement projects in Silverdale include an All Star Lanes major facelift (the bowling alley will remain open through construction), which BJC Construction expects to finish in August; and the upcoming renovation of a 4,000-squarefoot building that will house a new Cobalt Mortgage branch, an ADM Architecture project currently in permitting stage. In Bremerton, the 10,000-square-foot Salvation Army headquarters on Sixth Avenue will be gutted and completely redone, with another 13,000 square feet on two floors added to the ’70s building. Hecker Architects and Fairbank Construction are working to add a hygiene
center and other service areas and to upgrade the exterior. Construction is likely to start in the fall and last about a year, with the Salvation Army HQ to be moved temporarily. The former Dodge dealership on Auto Center Way has become the headquarters for Skookum Contract Services. Rice Fergus Miller and Tim Ryan Construction are working on a 16,000-square-foot expansion of the office space (into what used to be the old shop). The project is in permitting. Downtown Bremerton is adding more apartments. Lorax Partners of Seattle, which developed Bremerton Harborside, is adding four floors on top of the city’s Burwell/Fourth Street parking garage (one side of which has the new SEEfilm Cinema on top). Described as the only vertical urban apartment living and unique for Kitsap County, the building will include 71 units ranging from studios to two bedrooms, expected to be available in 2015. Another downtown apartment project, Spyglass Hill, is just beginning the design review and permitting process. It’s planned for the 600 block of Washington Avenue, just south of the Manette Bridge. Sound West Group is the developer and its inhouse partner, FPH Construction, will build the five-story structure that will have 80 apartments with views over the water. Port Orchard has new apartments under construction. Rush Cos. is nearing the completion on The Sydney, 106 units in eight three-story buildings off Sedgwick Road. The initial phase will be done in June and the rest in August. The garden-style, higher-end apartments will include one- to three-bedroom units. Across the street, Rush will be breaking ground in June on The Sinclair, another 126 units that will be similar in style but also include studio apartments. The second phase of Kitsap Community Resources’ Port Orchard project is also nearly complete. The first phase was the construction of a new center that opened in September, and the second is the addition of Jackson Village, 10 affordable homes now under construction. Both are Wenzlau/Fairbank projects. The homes are cottage style and will have a common playground area shared with the KCR admin building. A couple of upcoming Port Orchard projects include the expansion/tenant improvement of a vacant space in the High Point Shopping Center by the Bethel roundabout, and a major renovation of the Kitsap Regional Library’s Port Orchard branch. In Gig Harbor, Ship to Shore will soon have a new downtown storefront, doubling its current space. Miles Yanick & Co. is designing a new 7,000-square-foot building next to Arabella’s Landing. The project has a site plan and is in early permitting stages, with construction expected to start by the end of the year and be finished in time for a summer 2014 opening.
MARKETS
from page 6 empty storefronts that dotted the local landscape over the past several years are now being revitalized and repurposed. “This is a wonderful environment for acquisition or new construction of commercial buildings. Commercial rates are at unprecedented low levels,” Smith said. “We anticipate rates staying low through the end of the year, and possibly into next year. This presents a great opportunity not only for new commercial construction, but also for existing commercial building owners to remodel, retrofit, refinance, or perform major improvements to their real estate holdings. “If you have been considering ‘green’
investments, such as solar lighting or energy reduction upgrades, now is a great time to move on those.” We have seen a number of opportunities to acquire existing commercial buildings in Kitsap County. An excellent example of a recent real estate purchase and major remodel is the facility in Silverdale that will soon become the new home of REI. Local investor group Sound West Holdings acquired the building previously occupied by Kitsap Sports. Bremerton-based FPH Construction is performing the construction work and Kitsap Bank provided a portion of the acquisition funding, as well as the landlord portion of the financing. According to FPH Construction owner Mike Brown, an extensive remodel is now underway. “We took 32,000 square feet down to 24,000 square feet and are providing additional parking, which REI needs,” Brown said. “I think the number of people who could use that site is limited, but REI is a destination, and it works well for them. This is in their backyard; REI has exceptional name recognition on the peninsula.” Brown said construction is nearly concluded and the building will be handed over to REI on June 1. REI is doing the tenant improvements and anticipates opening in early October. “There has been a lot of commercial real
estate activity over the past several months, and the last two to three weeks have been simply crazy,” Brown said. He thinks we are coming out of a cycle with a lot of distressed property opportunities, and he sees more ground-up construction going forward. He went on to say, “There’s not much left in Silverdale. Commercial construction will have to leapfrog the freeway; a large project with a lot of horsepower will have to make that move.” Low commercial loan rates, coupled with low pric ing and a stabilizing economy, have inspired numerous business owners to commit to business expansion or to increase their real estate holdings. Local restaurant owner Sergio Andrade has been expanding his footprint, and now has six restaurants in Port Orchard, Kingston, Gig Harbor, Federal Way and Lacey, operating under the Puerto Vallarta and Blue Agave brands. Construction of a new building for his Puerto Vallarta restaurant in Kingston is under way, and it is expected to open the first week of July. The project, built by Port Orchard-based BJC Group and financed by Kitsap Bank, is a stand-alone building in the George’s Corner area of Kingston. “We are experiencing a nice uptick in activity over what we saw in previous years,” said Robert Baglio of BJC Group. He said BJC is working on several concurrent projects at this time, including
Some final tips for potential borrowers: • Get your banker involved at the beginning of the project, to help guide you through the process. • Conduct your due diligence and hire respected experts. Good architects, contractors and builders will prove invaluable in bringing your project to a successful conclusion. • Work closely with your contractors, going through the project and analyzing costs, as well as engineering and constructability of the project. Know the numbers before you break ground. If you are interested in learning more about the various types of commercial financing available, we encourage you to contact your local Kitsap Bank loan officers. • Shannon Childs is Senior Vice President/Marketing Director of Kitsap Bank.
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June 2013 Kitsap Peninsula Business Journal • KPBJ.com 17
SBA-504 Loans The advantages of an SBA-504 loan are: • A long-term fixed rate, 20 years for real estate and 10 for equipment. • Low interest rates – 4.15 percent in May. • The low down payment retains capital in the business. Conventional bank loans require a 20 percent down payment or more. The SBA-504 loan has a minimum down payment of 10 percent (15 percent for start-up businesses and special purpose properties). • There are no balloon payments on the 504 loan. • The 504 loan is governmentguaranteed. Therefore, the collateral required is normally just the property being constructed or purchased. • Most closing costs can be included in the financing. • Projected income of a business can be considered in addition to historical cash flows. This is particularly advantageous for growing businesses expanding into larger facilities. The structure of an SBA-504 loan has three participants: • The bank – provides a first trust deed loan for at least 50 percent of the total project cost. • A 504 CDC – provides an SBAguaranteed 504 loan for up to 40 percent of the total project cost, or a maximum of $5 million ($5.5 million for manufacturing businesses and “green” buildings). • The small business owner – contributes a down payment of at least 10 percent . To qualify for an SBA-504 loan, the business must be organized for-profit; as a sole-proprietorship, corporation, partnership or limited liability company (LLC); and have a tangible net worth no greater than $15 million and average net profits after tax less than $5 million in the last two fiscal years. Owner-occupancy requirements: • 51 percent owner-occupancy is required within one year of closing for existing buildings • 60 percent owner-occupancy is required upon completion of new construction (and there must be intent to increase to 80 percent owner-occupancy by the 10th loan anniversary.)
A new Puerta Vallarta restaurant is under construction in Kingston.
new construction in Poulsbo, as well as two renovation projects. There are numerous options to consider when financing your commercial real estate investment. For many small to mediumsize businesses, a Small Business Administration (SBA) loan may be the right vehicle for your project. According to Kerry Keely, Kitsap Bank Vice President/SBA Manager, “If buying or constructing your own building is desirable, one of the SBA’s flagship programs, called the SBA-504 loan, can help you achieve your goal.” Those loans are intended to help small businesses buy, construct or improve commercial and industrial buildings, as well as buy and install heavy machinery and equipment. “Whether you are considering a groundup construction project or the expansion of an existing facility for owner-occupied business use, you should definitely explore the benefits of using this SBA loan program for preservation of working capital for business expansion, and for its long-term fixed interest rate,” Keely said.
LANGE’S RANCH PARK
…Where the hills come alive!
18 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
The Place For Your Most Memorable Event Corporate Banquets Summer Picnics Weddings (indoor or out) Birthday Parties Anniversaries Seminars Award Ceremonies Summer Outdoor Pool Halloween Parties Christmas Parties This year, 9 Hole Disk Golf “If you didn’t have your party at Lange’s Ranch Park, you didn’t have a party!”
Kitsap farmers learn about good practices for food safety By Rodika Tollefson Produce farming used to be a relatively simple process — the farmer needed to be skilled and educated mostly in how to grow the fruits and vegetables and manage the farm for a good harvest. But things have changed in the past couple of decades, as more “superbugs” have been discovered that affect safety of produce. To help address food Kitsap residents who have small farms attended a workshop on safety, the U.S. Department food safety issues in agriculture with state and WSU Extension of Agriculture has representatives at Pheasant Fields Farm in Silverdale. implemented a voluntary One of the reasons that farmers were program called GAP, Good Agricultural missing information is the fact that many of Practices, and local farmers as well as the pathogens weren’t prevalent a few organizations like the Kitsap Community decades ago, according to Tricia Kovacs, and Agriculture Alliance are working to education and outreach coordinator for the make sure people who sell produce to the state Department of Agriculture. There’s public become educated about the changes also more awareness about safety issues. in farming practices. “I think there’s been a change in media “What has been generally expected (of attention because of farm scares. There’s farmers) has changed and we have more been so many produce-related outbreaks in superbugs now, so it’s more important for recent years, there’s an awareness of how people raising food to be more aware of fruits and vegetables can be contaminated, issues,” said Marilyn Holt, who owns and there’s more scrutiny,” she said. Abundantly Green Farm in Central Valley. The GAP program was implemented by “There’s a lot of people in Kitsap County the U.S. Department of Agriculture and is looking at becoming small farmers and similar to organic food certification. It’s selling at farmers market and perhaps the voluntary (with pass/fail scores not food co-op when it becomes operational, published) and the farm doesn’t receive an and they don’t know those problems exist.” actual printed certificate. But once certified, Holt herself is an experienced food the farm is listed on the USDA’s website, producer. A fourth-generation farmer, she and more and more big buyers such as sells not only at the local farmers market restaurants and schools are requiring thirdand through CSA (Community Supported party certifications such as GAP. Once Agriculture) shares, but also to businesses farmers implement the practices, to such as cafés. But when she took a GAP become certified they can request to have class a few years ago, even she was surprised an audit/inspection, which WSDA does to learn certain things — for example, that during harvest time. E. coli can be transmitted through produce.
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The Good Agricultural Practices program is different from the proposed new federal rules under the Food Safety Modernization Act. The act, signed by President Obama on Jan. 4, 2011, was called by the Food and Drug Administration “the most sweeping reform of our food safety laws in more than 70 years.” The FDA’s proposed rule for produce safety under the act includes new standards for growing, harvesting, packing and holding produce for human consumption. The comment period for the proposed rule was recently extended to Sept.16. Once it is enacted, farms subject to the act will have to comply. Many of the proposed principles are t he same as the ones included in GAP. “If farms meet good agricultural practices, they’ll be well prepared to meet the new rules,” Kovacs said. That’s why farmers like Holt, past president of KCCA, are working to make sure Kitsap farmers are being educated. She said the GAP program allows producers, especially those just starting out, to begin preparing early and do things right from the start. The WSDA has hosted several GAP workshops around the state that are part of a two-year Specialty Block Crop Grant and one of the workshops was offered recently in Kitsap County, at Nikki Johanson’s Pheasant Fields Farm in Silverdale. Johanson, who previously attended a GAP workshop elsewhere, helped organize a “mock audit” at her farm. Johanson said consumers are becoming smarter, too, and they want to know how their local farmers are raising food. She frequently fields questions from customers about the way she does things. She notes that the new requirements are all focused on food-borne pathogens and not genetically modified organisms, which are a separate issue. “It’s pretty obvious things have changed and there are new requirements. All those regulations are designed to help us,” she said. “The bottom line is delivering safe products to the public. You just want to be a farmer but it’s not a simple matter anymore.” Although GAP is voluntary, it is not simple. It requires extensive documentation of everything from various procedures to water-management plans. “A lot of what we’re seeing is people are already doing these practices,” Kovacs said. “What’s different is good documentation.” The WSDA didn’t plan any more GAP classes in Kitsap because of the limited funding for the Bridging the GAP program grant, Kovacs said. But Johanson and Holt hope this is just the beginning of expanding local education opportunities, and KCAA’s goal is to find new resources to help local farmers learn. “Kitsap has a growing farming population, which seems to be hidden. It has a fairly rural culture and we live in the shadow of several large cities, so we’re in a wonderful position to grow and sell produce. There’s also a good market for it because people want to buy local food,” Holt said. “Kitsap County is getting enough critical mass to bring in other programs.”
June 2013 Edition
NAHB Improving Markets List Includes 5 Markets in Washington State
Events And Activities VISIT the NEW HBA Website! www.kitsaphba.com Online Registrations! Wednesday, June 5, 4 p.m. Kitsap HBA Remodelers Council Thursday, June 6, 7:30 a.m. Developers Council Mtg. Wednesday, June 12, 8 a.m. IRC Code Update Class HBA Office Register with BIAW Tuesday, June 18, 5 p.m. Builders Best Awards Location TBD Thursday, June 27 Executive Cmt. Mtg., 2 p.m. Gov. Aff. Cmt. Mtg., 2:30 p.m. Board of Directors Mtg,, 3:30 p.m. Friday, June 28 Final day for EARLY BIRD Golf Registration! Save MONEY! Register & pay today
JULY Big Event! HBA Builders Classic Golf Tournament Per Golfer fee After June 28: $115.00 ($460/team) VISIT the NEW HBA Website! www.kitsaphba.com Online Event Registrations!
Early in May the NAHB released its most recent Improving Market Index (IMI). The IMI is designed to track housing markets throughout the country that are showing signs of improving economic health. The index measures three sets of independent monthly data to get a mark on the top Metropolitan Statistical Areas. The three indicators that are analyzed are employment growth from the Bureau of Labor Statistics, house price appreciation from Freddie Mac and single-family housing permit growth from the U.S. Census Bureau. NAHB uses the latest available data from these sources to generate a list of improving markets. A metro area must see improvement in all three measures for at least six consecutive months following those measures’ respectiv e troughs before being included on the improving markets list. The number of U.S. housing markets showing sustained improvement in three key measures fell slightly to 258 in May from 273 in April, according to the NAHB/First American Improving Markets Index (IMI), released in early May. This total includes entrants from all 50 states and the District of Columbia. “The fact that over 70 percent of all U. S. metros are holding onto their spots on the improving list is definitely good news, and representative of the generally brightening outlook for housing markets nationwide,” said NAHB Chairman Rick Judson, a home builder from Charlotte, N.C. “That said, our industry’s progress on the road to recovery is being slowed by rising challenges related to the availability of credit, building materials, labor a nd lots for development.” “While seasonal trends in home prices resulted in an overall decline in the IMI this month, the index remains at a very strong level and continues to represent markets in every state,” noted NAHB Chief Economist David Crowe. “Some metropolitan areas that had previously charted marginal home-price gains dropped off the list this time as a result of typically softer prices seen i n the winter months, which is similar to what the index showed in this same period last year.” The May report includes 5 MSAs for Washington State. They are, Bellingham (with over 4% increase in prices from the price trough in February 2012); Longview (with almost a 4% increase in prices over their price trough of December 2011); Seattle (with almost a 14% increase in prices from the price trough in Jan uary 2012); Spokane (with an almost 6% increase in prices from the price trough of December 2011); and Wenatchee (with a price increase of just over 1% from the price trough of March 2012 - of note however is a permitting increase of over 12% since their permitting trough of April 2012). “Today ’s report shows that the majority of U.S. metros are experiencing strengthening house prices, employment and pe rmitting activity, which is a much more positive picture than the one we were seeing a year ago,” observed Kurt Pfotenhauer, vice chairman of First American Title Insurance Company. “That’s the big picture on which consumers need to focus.” A complete list of all 258 metropolitan areas currently on the IMI, and separate breakouts of metros newly added to or dropped from the list in May, is available at w ww.nahb.org/imi.
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2013 OFFICERS President . . . . . . . . . . . . . . . . . . . . Robert Baglio First Vice President . . . . . . Judy Mentor Eagleson Second Vice President . . . . . . . . . . . . . . John Leage Treasurer . . . . . . . . . . . . . . Randy Biegenwald Secretary . . . . . . . . . . . . . . Dee Coppola, CGA Immediate Past Pres. . . . Wayne Keffer, CGR, CAPS
2013 BUILDER & ASSOC. DIRECTORS Karla Cook • Judy Granlee-Gates Joe Hurtt • David Godbolt, CAPS, CGP, CGB, CGR Berni Kenworthy • Miriam Villiard Kevin Ryan • Leslie Peterson, CGA Shawnee Spencer • Jim Way, CGB
2013 STATE DIRECTORS Robert Baglio • Kevin Hancock Lary Coppola • Judy Mentor Eagleson Justin Ingalls, RCS • Wayne Keffer, CGR, CAPS John Leage • Ron Perkerewicz
2013 ALTERNATE STATE DIRECTOR John Armstrong • Walter Galitzki Brent Marmon • Greg Livdahl • Jim Heins
LIFE STATE DIRECTORS Bill Parnell
2013 NATIONAL DIRECTORS Robert Baglio • John Leage
2013 ALTERNATE NATNL. DIRECTORS Michael Brown • Jeff Coombe
LIFE DIRECTORS Rick Courson • Jim Smalley • Bob Helm Bill Parnell • Larry Ward John Schufreider • Dori Shobert
2013 COUNCIL & CHAIRS Build a Better Christmas. . . Randy Biegenwald Built Green . . . . . . . . . . . . . . . . Walter Galitzki By Laws & Nominations . . Wayne Keffer, CGR, CAPS Developers Council. . . . . . . . . Berni Kenworthy Golf Classic . . . . . . . . . . . . . Shawnee Spencer Govt. Affairs Cmte . . . Judy Mentor Eagleson Remodelers Ccl Chair . . . . . . . Walter Galitzki Membership . . . . . . . . . . . . . . . . . . John Leage Parade of Homes . . . . . . . . . . . . . Dee Coppola Peninsula H&G Expo. . . . . . . . . . Ardi Villiard Peninsula H&R Expo . . . . . . . . . Dee Coppola
HBA STAFF Executive Vice President . . . Teresa Osinski, CGP tosinski@kitsaphba.com Events and Administrative Assistant . . . Katie Revis hbaevents@kitsaphba.com Administrative Coordinator. . . Kathleen Brosnan info@KitsapHBA.com
Home Builders Association of Kitsap County 5251 Auto Center Way, Bremerton, WA 98312 360-479-5778 • 800-200-5778 FAX 360-479-0313 www.KitsapHBA.com
June 2013 Edition
Robert Baglio
Wild Wild West — HBA Auction
Well the HBA Auction was a rooting tooting good time. The theme was Wild, Wild West, 2013 President complete with a gun fight and wall of whiskey. It was a well attended and festive event. As usual, Stokes Auction did a great job and the Kitsap Golf and Country Club served as a wonderful venue. The auctioneer did have his hands full attempting to manage a fairly rowdy crowd, but he kept them under control and focused. One of the highlights of the evening was the gun fight, duel if you will, between past and present HBA Presidents, with the loser having to make a cash donation (The Quick and the Broke). An event like this cannot be a success without the help and support of the community. I want to express our appreciation to all of those businesses and individuals that sponsored a table, donated an auction item, or made a contribution. I would also like to thank all those WINNERS that kept bidding until they walked away with one of those amazing auction items. Your support and attendance is greatly appreciated. A few of the great items donated to the auction included: • Advertising packages from the Kitsap Sun and Kitsap Business Journal • A wonderful piece of art from Lisa Stirrett • A catered picnic and once in a lifetime Skeet Shoot outing • A local piece of nostalgia that would complete any man-cave, a sign salvaged from the iconic Toys Topless • Gift packages from the Clearwater Casino • A Summer Blast Tri-fecta. The winner of this fabulous auction item will soon be enjoying the music of Joey James Dean, while sipping on a cold beer from a pony keg from Silver City Brewery, and munching on a tasty burger from Minder Meats. Now that sounds like a nice summer evening. • A cruise on a luxury yacht to include beverages and lunch The BJC Group
I would like to recognize our major sponsors: Pacific Northwest Title, Mentor Company, FPH Construction, PHC Construction, Liberty Bay Bank, Hard Rock Inc, Armstrong Homes of Bremerton, and Central Highlands Builders. One again, thank you very much for supporting the HBA. By supporting us, we can in turn support those candidates that support the construction industry.
Teresa Osinski
Return on Investment
As business owners you consider ROI every day. Often you use the analysis when CGP considering your investment in Executive membership in the HBA. That’s Vice President fair, as long as you have all the data. Among other benefits, each member’s $1.30 per day investment provides passive benefits. These are benefits that are there working for them whether they take any additional action or not. Just one example of a passive benefit is our website. Recently a call came to the HBA from a consumer looking for one of our members by name. He explained that when he “Googled” this company the HBA popped up. I was able to quickly get the caller the member company’s phone number and I was able to encourage the caller to rely on HBA members for all his home’s service needs. If this caller completed a transaction with that member; there is no question it more than covered what that member invested in an annual membership. In addition to “passive” benefits like the website, printed directory, and our ongoing advocacy for you and your industry, members have access to great buying power benefits that other industry members do not. These are “active benefits” because they do require that the member take some action to get them. There are many examples of “active” benefits but here are just a couple for you to consider. The National Association of Home Builders has a vast network of national service companies that want to do business with Builders. As a registered member of the Member Advantage program (FREE to do!) you can get discounts on GM vehicles (personal or fleet), Office Depot, and LOWE’s just to name a few. Visit www.nahb.org/ma for the full list of Member Advantage participants. Additionally, through the Building Industry Association of Washington you can participate in the BIAW Rebate Program (free!) and by submitting some simple paperwork receive significant refunds each quarter. Recently, Pristine Homes completed their BIAW Rebate paperwork and received a check for $470 (this is more than their annual HBA dues). To get these rebates, no receipts are required! Just turn in the paperwork by the quarterly reporting deadline. There are many more active and passive benefits HBA members receive for their $1.30 per day investment. I want to encourage each and every HBA member to take the time to learn about just one benefit they aren’t currently using. Once you start learning all the ways you can benefit through membership, you will want to keep learning and incorporating those options in your operations. Call me to discuss this. I am personally committed to helping you determine the true ROI of your membership.
IRC Code Update Class HBA in Bremerton
Home Builders Classic Golf Tournament “I’m going to give you a little advice. There’s a force in the universe that makes things happen. And all you have to do is get in touch with it, stop thinking, let things happen, and be the ball.” ~ Ty Webb, Caddyshack Where: Rolling Hills Golf Course When: Friday, July 12, 2013 - Shotgun Start at 1 p.m. Early Bird Registration is open NOW! SAVE money and register by June 28. The Early Bird price is just $100.00 per golfer. Regular rate is is $115.00. Be a hole sponsor for just $150 and visit with every golfer on the course!
Learn the significant changes from the last edition (2009) to the current edition (2013) of the International Residential Code, including Washington amendments, particularly: fire protection of floors, wall bracing requirement, deck connections, window and door flashing and much more. This class will also include the recently adopted changes to the Washington Energy Code, such as: additional energy efficiency requirements, increased building envelope stringency, duct and air leakage testing and more. Several local Building Officials will be present. Class will be here in Bremerton on June 12, from 8 a.m. to Noon. Registration is through BIAW 360-352-7800. $75 for members and $150 for non-members. Space is limited.
June 2013 Edition
It’s election time and that means the Government Affairs Committee is busy getting to know the candidates. There are 114 candidates running in 71 races. We have decided to start Judy Mentor Eagleson with the City of Bremerton. Mentor Company In 2011 Bremerton city 2013 Chair residents voted to reduce the Bremerton City Council size from nine members to seven — this change will go into effect in January 2014. Because of this reduction, every district in Bremerton will have an election. In addition to Bremerton Council positions, the Mayor of the City of Bremerton is also up for election as is the Municipal Court Judge. Three lucky candidates — Leslie Daugs, Position 2, Greg Wheeler, Position 4 and Municipal Court Judge James Docter are running unopposed. In the remaining positions Mayor, Patty Lent is seeking reelection and is being opposed by last minute filer Todd Best, a former New York City fireman. Position 1 candidates are Mike Sullivan and Cynthia Galloway. Position 3 candidates are Adam Brockus, Jerry McDonald and Mike Strube. Position 5 candidates are Dino Davis, Deirdre McKeel and Keith Ranburger. Position 6 candidates are Faye Flemister and Roy Runyon. Position 7 candidates are Nick Wofford and Eric Younger. At our last Government Affairs meeting we had the pleasure of sitting down with Leslie Daugs, Adam Brockus, Michael Strube and Greg Wheeler and talking about the issues facing Bremerton. We talked about the fact that the City of Bremerton continues to collect Business and Occupation (B&O) taxes over and above the State B&O taxes and is the only government in Kitsap County to do so. We talked about the impact of this additional tax on business location decisions and encouraged the current Council members and candidates to continue to look for ways to eliminate this additional tax. We talked about the City of Bremerton’s Fire Chief ’s proposal of additional local amendments to the City of Bremerton Fire Code. We would encourage the City Council to take a step back and really understand the implications of the approval of those amendments, especially with regard to the move to mandatory fire sprinklers. Then we talked about the number of vacant homes and vacant or under occupied commercial buildings within Bremerton City limits. And finally, we talked about the possible correlation of these increased regulations and higher taxes with the low vacancy rates. We look forward to continuing these discussions with the remaining candidates in Bremerton and then will provide our endorsements.
Register & Vote!
Government Affairs Committee
Government Affairs Committee Meetings — You’re invited! Government Affairs meetings are open to HBA members. Unless otherwise noted, meetings are: 2:30-3:30. Meetings are the last Thursday of each month (unless changed). If you have questions please call: Judy Eagleson at Mentor Company or Teresa at the HBA.
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O T ff In he eri Se Be ng rv st ic e
It’s your responsibility. Key dates: July 8 - Deadline for voter registration, address change & other updates July 19 - Ballots mailed out & Accessible Voting Units at available voting centers July 29 - Deadline for in-person new Washington State voter registration. NEW ONLY August 6 - Primary Election October 7 - If you missed registration for the primary, today is last day for reg./updating October 18 - Ballots mailed out & Accessible Voting Units at available voting centers October 28 - Deadline for in-person new Washington State voter registration. NEW ONLY November 5 - General Election
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Member Advantage www.nahb.org/ma
Thinking of getting that Every Year Thousands Save Millions! graduate in your life a new computer? Check out the deals HBA members can get through the NAHB Member Advantage DELL deals! Members can save up to 30% off top of the line Dell computers. Call 800-695-8133 and mention NAHB or visit www.dell.com/mpp/nahb. Last November, Cook Construction took advantage of the Dell benefit and purchased the exact computer they had already priced-out but got it for significant savings by using the NAHB Member Advantage Dell deal. Let your investment as a member pay you back! Check out all that the Member Advantage program has to offer at www.nahb.org/ma
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June 2013 Edition
Welcome New Members Salisbury Woodworking Inc Tom Salisbury 7689 NE Day Rd Bainbridge Island, WA 98110 (206) 842-9500 toms@salisburywoodworking.com And the SPIKE goes to... Wayne Keffer CGR CAPS Wayne R Keffer Construction
Fire One Inc Don Casey 107 Washington Blvd. Algona, WA 98001 (360) 478-0428 doncasey@fire-one.org And the SPIKE goes to... David Smith Central Highlands Inc.
Kitsap Bank/Mortgage Division Shannon Childs 619 Bay Street Port Orchard, WA 98366 (360) 876-5542 schilds@kitsapbank.com And the SPIKE goes to... Dee Coppola, CGA Wet Apple Media
C.B.H. Construction LLC Eric Smallbeck 8637 NE Nature Way Kingston, WA 98370 (360) 204-6487 cbhconstruction@hotmail.com And the SPIKE goes to... Joe Hurtt Kingston Lumber
Get the Washington State Building Code Updates! Get all the updates through the Washington Association of Building Officials’ webpage! Visit www.wabobookstore.org/category_s/1835.htm to order the section or sections you need. Prices range from $17.00 to $21.00 a section (IRC, IFC, IMC, etc)
2nd Annual HBA Builders Best Awards! Applications due May 10. Reception & Awards Ceremony June 18. Support the Builders! Join us on Tuesday, June 18 for the 2nd annual HBA Builders Best Awards. This is a social event with an exciting presentation of awards to the terrific builder members of the HBA. See the award winning work they’ve recently completed and congratulate them on building a beautiful Kitsap! Awards will be presented at a lovely cocktail reception on June 18 at 5 p.m. (location to be confirmed). All HBA members are encouraged to attend. Register with the HBA today!
Thank You Renewing Members Over 30 Years Kitsap Trident Homes (34) Arness Inc (31) Over 20 Years Pioneer Builders Inc (29) Washington Water Service Co. (28) Arborview Construction (24) Jankowski Construction Inc. Kitsap Plumbers Group Inc Over 15 Years Sound Excavation Inc Jennings-Heins & Associates Inc Sullivan Heating & Cooling Inc FPH Construction Inc. Eagle Homes Inc 15 Years Randy Biegenwald CPA PS Bruce Titus — Port Orchard Ford
10 Years Winslow Masonry Over 5 Years Sonny Beez Landscaping & Mntnc.(9) Inspection & Permit Services (9) Puget Sound Energy N.L. Olson & Associates Inc. The Roof Doctor Over 1 Year Clark Construction LLC The Legacy Group Orca Remodeling & Plumbing Mitchell Lumber Company 1 YEAR Anniversary Peninsula Electric Corp.
Over 10 Years Eagle Home Mortgage (13) SF Kafer Construction Newton Construction Morrison Gravel Inc. John S Trapp Construction Chinook Properties
Peninsula Home & Remodel Expo! Reinvest in Your Dream Attention Vendors! Do you have a product that you want Kitsap to know about? The Peninsula Home & Remodel Expo is just around the corner. For information on the Expo visit our website at www.kitsaphba.com and click on the icon for the Peninsula Home & Remodel Expo. Reservation forms, contract, etc will be available for download by the end of June. If you would like to be added to the mail and email list for early notification, please call the HBA 360-479-5778 to be added. This Expo is a great, local opportunity to get in front of a target audience interested in the home they have now, or the one they are planning to have in the near future. Space is always limited, so do not delay! 2013 Peninsula Home & Remodel Expo Dates: October 4, 5 & 6.
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June 2013 Kitsap Peninsula Business Journal • KPBJ.com 23
If rates rise, what should you do with bonds? By Jessie Nino Interest rates are at historic lows. But they will rise eventually. If you invest in fixed-income vehicles, such as bonds, what might higher rates mean for you? As is almost always the case in the investment world, there’s no simple answer. First, it’s important to distinguish between short-term and long-term interest rates. The Federal Reserve is determined to keep short-term rates low until unemployment improves, but, in the meantime, longerterm rates may well rise. Depending on your situation, a rise in long-term rates can present both opportunity and concern. The opportunity: Rising rates can mean greater income if you invest in newly issued bonds. The concern: If you already own longer-term bonds, and rates rise, the value of your bonds will fall. That’s because other investors won’t want to pay full price for your bonds when they can get new ones at higher rates. Even if the value of your long-term bonds falls, isn’t it worthwhile to hold on to them? After all, as long as your bond doesn’t default — and if the bond is considered “investment grade,” a default is unlikely — you will get a steady source of income and you’ll receive the full value of your bond back at maturity. Aren’t these valuable benefits?
24 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
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They are indeed, but they may be more relevant for short-term bonds. Longerterm bonds — those of 10-year duration or longer — are more subject to inflation risk than shorter-term bonds. Of course, we’ve experienced low inflation for a number of years, but, over time, even mild inflation can add up. When this happens, and you own a long-term bond whose rate doesn’t change, you could face a potential loss of purchasing power. One of the reasons that long-term bonds pay higher interest rates than short-term bonds is because the issuers of longer-term instruments are rewarding you for taking on this additional inflation risk. Consequently, simply holding on to long-term bonds — especially very longterm ones, such as those that mature in 30 years — may not be the best strategy. If you review your fixed-income holdings and find that they skew strongly toward longer-term bonds, you may want to consider reducing your exposure in this area. If you did sell some of these bonds, you could use the proceeds to help build a “bond ladder” — which may be one of the best ways to invest in bonds. To create this ladder, you need to invest in bonds of varying maturities. When market rates are low, you’ll still have your longer-term bonds earning higher interest
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rates, thereby paying you more income. And when market rates rise, you can reinvest your maturing short-term bonds at the higher rates. You must evaluate whether the bonds held within the bond ladder are consistent with your investment objectives, risk tolerance and financial circumstances. If you own bonds, you do need to be aware of where interest rates are — and where they may be headed. Nonetheless, as we have seen, you don’t have to be at the mercy of rate movements. By keeping yourself informed and choosing the right
strategies, you can benefit from owning bonds and other fixed-income vehicles in all interest-rate environments. Before investing in bonds, you should understand the risks involved, including credit risk and market risk. Bond investments are subject to interest rate risk such that when interest rates rise, the prices of bonds can decrease, and the investor can lose principal value if the investment is sold prior to maturity. • Jessie Nino is an Edward Jones financial adviser in Poulsbo.
Be aware of the need for disability insurance By Ed McAvoy It probably doesn’t show up on your calendar, but May is Disability Insurance Awareness Month. And you might agree that such a month is useful, when you consider the following: • Three in 10 workers entering the workforce today will become disabled before retiring, according to the Social Security Administration. • At age 42, you are four times more likely to become seriously disabled than to die during your working years, according to National Underwriter Life & Health. • Disability causes nearly 50 percent of all mortgage foreclosures, according to Health
Affairs, a health policy research journal. Given these statistics, it’s not surprising that the Life and Health Insurance Foundation for Education (LIFE) sponsors Disability Insurance Awareness Month to encourage Americans to address their disability income needs. Here’s the bottom line: You can be really good at budgeting your money and you can be a disciplined long-term investor — but unless you’ve protected at least a reasonable percentage of your income, your whole financial strategy is incomplete. And all your goals, such as a comfortable retirement, could be jeopardized. Insurance, page 26
Feeling like you paid too much in taxes this year?
This year, evaluate whether you can benefit from: 1. Tax-advantaged investments. If appropriate, consider tax-free municipal bonds to provide federally tax-free income.* 2. Tax-advantaged retirement accounts. Consider contributing to a traditional individual Retirement Account (IRA) or 401(k) to help lower your taxable income. 3. Tax-advantaged college savings accounts. Contribute or gift to a college savings plan for your children or grandchildren. *May be subject to state and local taxes and the alternative minimum tax (AMT). Edward Jones, its employees and financial advisors are not estate planners and cannot provide tax or legal advice. You should consult with a qualified tax specialist or legal advisor for professional advice on your situation.
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Your local Edward Jones financial advisors: Ron Rada
Pat McFadden
Todd Tidball
Donald Logan
Jessie Nino
8079 E Main St Suite 111 Manchester
19740 7th Ave NE Suite 114 Poulsbo
18887 Hwy 305 NE Suite 100 Poulsbo
2416 NW Myhre Rd Suite 102 Silverdale
19740 7th Ave NE Suite 114 Poulsbo
360 871-0998 1-800-995-0242
360 779-6450
360 779-6123 1-800-248-6123
360 692-1216
360 779-6450
Erin R. Abrigo
Calvin Christensen
David Hawley
Teresa Bryant
Glenn Anderson, AAMS
5775 Soundview Drive Suite 203-C Gig Harbor
3100 NW Bucklin Hill Rd Suite 115 Silverdale
23781 Hwy 3 Suite 101 B Belfair
555 Pacific Ave Suite 101 Downtown Bremerton
19032 Jensen Way NE Poulsbo
253 853-7988
360 698-6092
360 275-7177
360 373-1263 1-888-373-1263
Edward A. Finholm
Denette Chu
Angela Sell
Jeff Thomsen, AAMS
Jay Seaton
25960 Ohio Ave NE Suite 101 Kingston
423 Sedgwick Rd Suite 121 Port Orchard
3276 Plaza Rd NW Suite 112 Silverdale
5971 Hwy 303 N Bremerton
600 Kitsap St Suite 102 Port Orchard
360 297-8664
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Debi Tanner 8202 NE State Hwy 104 Suite 106 Kingston
360 297-8677
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360 475-0683 1-888-475-4450
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Schelley Dyess
Mary Beslagic
Lori L. Morgan, AAMS
Ed McAvoy
2299 Bethel Ave Port Orchard
8079 E Main St Manchester
360 876-3835 1-888-688-7817
360 871-0998 1-800-995-0242
213 Madison Ave N Suite 200 Bainbridge Island
20270 Front St Suite 102 Poulsbo
206 842-1255
360 598-3750
Michael F. Allen, AAMS
Jim Thatcher
3500 Anderson Hill Rd Suite 101 Silverdale
2135 Sheridan Rd Suite E Bremerton
360 308-9514
360 373-6939
Inflation and your retirement just be the lag Milton Friedman lectured on. One of the challenges we have when working with trillions of dollars is that it’s hard for most of us to wrap our minds around just how much money that is. To give you some perspective, if you gave away $1 million per day it would take you 2,738 years to give away $1 trillion. Jesus walked the ear th about 2,000 years ago. So you would have had to start giving away $1 million per day 738 years before Jesus was born just to get to $1 trillion. A dollar in hand today will purchase more than a dollar will purchase in the future, and this is not by accident but by design. As you transition into retirement you need to realize having too much money safe, secure and guaranteed may make you feel good in the short term, but sitting in a large cash position is likely a recipe for losing purchasing power over time. According to Bankrate.com, a five-year CD (Certificate of Deposit) is currently paying 1.6 percent. So if inflation is currently running at 1.5 percent, and you have to pay ordinary income tax of 15 percent on the interest you earn on your CD at the end of every year, then you can see the 1 percent yo u earn in your CD is slowly losing purchasing power. One of my clients recently quipped that CD stands for certificate of disappointment because of the dismal rates. Most of the people I meet don’t like the idea of having to cut back on their lifestyle every year as they transition through retirement. This is why you need to keep your money working hard for you. What steps should you take right now to posit ion your money and protect your purchasing power if inflation is getting ready to hit? In a summary of a working paper by the Yale International Center for Finance titled Facts and Fantasies About Commodity Futures, dated February 2005, the researchers point to commodities as one possible way to diversify your portfolios against inflation. The researchers wrote: “Commodity futures returns have been especially effective in providing diversification of both stock and bond portfolios. The correlation with stocks and bonds is negative over most horizons, and the negative correlation is stronger over longer holding periods. We provide two explanations for the negative correlation of commodity futures with traditional asset classes. First, commodity futures perform better in periods of unexpected inflation, when stock and bond returns generally disappoint. Second, commodity futures diversify the cyclical variation in stock and bond returns.” If you’re not familiar with the term commodities, think of items such as energy (oil and gas), grains (corn and wheat), precious metals (gold and silver), industrial metals (high-grade copper), livestock (hogs and cattle), as well as "soft goods" such as cocoa, coffee, cotton and sugar. Commodity futures have a reputation for being risky, and you shouldn't invest in anything unless you understand all of the risks. Today investors are looking to tools such as mutual funds, ETFs and annuities that invest in or are linked to commodities to give them some
exposure to this riskier asset but further diversify their portfolios. Ultimately if you are concerned about protecting your purchasing power, then you may want to consider diversifying your portfolio by owning real assets that have historically done well during inflationary times. We are in a unique economic environment and past performance is no guarantee of future results. Commodities are just one way investors are looking to diversify their portfolio. Many are also considering tools such as TIPS (Treasury Inflation Protected Securities), dividendpaying stocks and inflation-protected annuities. Retirement is all about cash flow, not your net worth. Your income and purchasing power is what will allow you to have the lifestyle you have worked hard for. Your retirement plan should include strategies for trying to reduce the risk of stock market volatility, protect your purchasing power
from the effects of inflation, and generate a lifetime of inflation-adjusted income as securely as possible. • Jason Parker is the president of Parker Financial LLC, a fee-based registered investment advisory firm specializing in wealth management for retirees. His office is located in Silverdale. The opinions and information voiced in this material are not intended to provide specific advice or recommendations for any individual, and do not constitute a solicitation for any securities or insurance products. All information is believed to be from reliable sources; however, no representation is made as to its completeness or accuracy. Please consult your trusted professional for advice and further information. Jason Parker is insurancelicensed and holds his series 65 securities license. He offers annuities, life & long-term care insurances as well as inve stment services. Follow Jason’s blog at www.thriving-inretirement.com.
Financial advisor’s long-term care seminar focuses on family needs Edward Jones financial advisor Donald Logan is hosting a free educational seminar titled Family Matters with Long-term Care on June 27 at Edward Jones Investments, 2416 NW Myhre Road. Ste. 102 in Silverdale. During the seminar, participants will learn more about: • The common funding options to provide quality long-term care • How long-term care insurance can play a significant role in helping to preserve one's assets • How one can take control of where and how he or she receives long-term care services. The one-hour seminar is free, but space is limited. To make a reservation, call Logan or Beth Halvorson at 360-692-1216.
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 25
By Jason R. Parker One of my clients brought by a ledger his mother kept from January through February 1956. His mom was trying to track where all their money was going because they had no idea why they didn't have enough left at the end of every month. What's fascinating to me about this ledger is the impact inflation has had over the last 57 years. Here are a few items from this 1956 ledger that caught my attention: rent $40 per month; car payment $44 per month; gas & electric $11 per month; groceries about $80 per month; black and white TV payment $13 per month; and a swamp cooler payment of $6 per month. Their income was $77 per week; $309 per month; $3,706 per year. When I plug some of these n umbers into the Bureau of Labor statistics inflation calculator I found that $40 for rent in 1956 would be $342 today. I can't imagine a family could find a home to purchase or rent at $342 per month today. An annual income in 1956 of $3,706 is the equivalent income in 2013 of $31,712. Here are the other expenses in today’s dollars: car payment $376, gas & electric $90, groceries $685, black & white TV $111, swamp cooler $51. Historically inflation has been directly related to the increase in the quantity of money. When the Federal Reserve Bank slashes the federal funds rate and uses tools such as quantitative easing, the Fed is increasing the quantity of money to produce inflation. Milton Friedman, who won the Nobel Prize in economics, once said, “There has never in history been an extremely rapid increase in the quantity of money without an inflation.” With the Federal Reserve slashing rates and buying assets, they have injected trillions into the system. In the U.S. where we are running a trillion-dollar budget deficit and have racked up almost S17 trillion dollars of debt, most people would argue that the $2.5 trillion the Fed has injected into the system would meet the definition of a rapid increase i n the quantity of money. However, when I spoke with Steve Cunningham, who is the director of research for the American Institute for Economic Research, he said, "Even though the Federal Reserve has been increasing the money supply, much of that money supply is sitting in banks’ reserves. And banks are currently holding 15 times excess reserves. It is when banks begin to release the money back into the system that the money supply increases and the effects of inflation may begin to take hold." Milton Friedman taught that historically a lag existed between the time the money supply increased and inflation took hold. With banks holding 15 times excess reserves, you have to wonder what impact it will have on prices when all of that money begins to flow into the economy. The fact that we have not yet experienced inflation due to the Federal Reserve’s quantitative easing may
What change do you want to create? By Dan Weedin If you were having lunch at the next table over from my 89-year old mother and me recently, you might have overheard this conversation. Mom: “You’re my favorite. Me: “Your favorite what?” (I’m her only child) Mom: “My favorite nephew.” Me: (with a chuckle) “Well, that’s fine, but I’m your son!” Mom: (with her own chuckle) “Oh… that’s right!”
26 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
This conversation about three years ago would have been unthinkable for us. My mom was fully capable and living on her own with my father. In the past two and a half years, my father developed bladder cancer; they moved to an assisted living facility; he died and she moved in with us for two years; and now we just moved her to a memory care facility as she has been battling dementia the past 24 months. Her life changed and so did ours in what seems the blink of an eye. We now make decisions
with a whole new reality and time frame. This includes our own thinking around aging and mortality. Three years in today’s high-technology business world is now an eternity. I can tell you with great clarity that easily 50 percent of my income now is derived from things I wasn’t doing three years ago. With changes to technology, changes in the economy, and my own propensity to get bored, I’ve re-invented myself and my practice in what in a short time period. What about you? The great American humorist Will Rogers once quipped, “Even if you’re on the right track, you will get run over if you just sit there.” He was right in the 1920s and he’s even more right in this century. Change is now magnified as a strategic necessity for CEOs and small business owners. You must be prepared to respond to change; make sure your team is willing and skilled at responding to change; and be out in front of it in your industry. Otherwise, Will Rogers’ observation will be true for you. Let’s take a look at my five sure-fire ways to make change your friend and not your foe: 1. Stop making five-year plans. Too much can change in that time and you
should focus on things that you have a clearer picture of. Three years is the maximum you should be looking out at on a rolling basis. Your team also knows this even subconsciously. Start being honest about the new strategy cycle reality. Otherwise, your vision might become obsolete before your halfway to it. 2. Make strategy a focus of your time. Stop lying to yourself by saying you have no time to strategize. Time isn’t a resource issue; it’s a priority issue. Take time at your most creative part of the day to literally put your feet up on your desk, clasp your hands behind your head, and THINK. Be creative and intentional about the change you want to create in your organization. What’s your business look like in three years? How do you know you’re on track to get there? What changes need to be implemented, and how do you lead them? What new products and services can you create that might not even exist today? You can’t do all this thinking hunkered down over spreadsheets or answering emails. You need to make strategy a priority. 3. Be bold. Too many business executives and owners are fearful. Fearful that change will be too hard and that employees don’t want it. Fearful of failure and fearful of what others will say. So fearful that opportunity is lost, and can never be reclaimed. At some point in time, you were bold. Bold and confident enough to start your business and become successful. Don’t now fall into the “success trap.” That’s a deep pit that is painful and sometimes impossible to dig out of and you fall into it when complacency and fear set in.
4. Engage your team. Yes, change can be hard, but so can failure. Change is better than failure. By engaging your team and teaching them through your leadership not only how to embrace change, but to be a catalyst for it, you’re most assuredly putting yourself in a position of strength. 5. Be diverse. Your team should be diverse in many ways. Most specifically, be diverse in age and thinking. When people are challenged and forced to work with others who offer different perspectives, magic can happen. Being a true leader is being able to maximize your talent, not control it. By having diverse thinking and experience, you may just find that the answer to where you will be in three years is in the room! Bottom line. Change is inevitable; it’s more rapid than ever; and it’s your friend if you let it. Being able to reposition, be resilient, and be cutting-edge doesn’t come about by serendipity. It comes about by being prepared. Just as my wife and I now have started making changes in our life to be ready for future “transitions,” you should become very thoughtful and strategic about change in your business, so you can be the one who “runs over” instead of the one who gets “run over.” • Dan Weedin is a Poulsbo-based strategist, speaker, and mentor. He leads an executive peer-to-peer group in Kitsap County where he helps executives improve personally, professionally, and organizationally by enhancing leadership skills. He was inducted into the Million Dollar Consultant™ Hall of Fame in 2012. You can reach Dan at 360697-1058; e-mail at dan@danweedin.com or visit his web site at www.DanWeedin.com.
INSURANCE
longer waiting period if you have created an emergency fund containing six to 12 months’ worth of living expenses, kept in a liquid account that offers significant preservation of principal. Avoid overly restrictive policies. You may want to avoid an "accident-only" policy or one with a limited benefit term (five and 10 years are common). These policies may be cheaper, but they don’t cover either a disabling illness or the entirety of your working life. Consider adding appropriate “riders.” It will likely add to the cost of your policy, but a cost-of-living rider will help protect your future benefits from the effects of inflation. You also might want to add a future income options (FIO) rider, which provides you with the ability to purchase additional coverage in the future with no further medical underwriting. These suggestions are general in nature. Your financial advisor can help you determine if you need a private disability insurance policy — and, if so, what type of policy is best suited for your needs. But don’t wait too long to take action in this area. You can’t predict the future, but you should still prepare for the unexpected. • Ed McAvoy is an Edward Jones financial adviser in Poulsbo.
from page 24 Of course, you may not be totally unfamiliar with disability income insurance; if you work for a large employer, a group disability policy may be part of your employee benefits package. If so, you should certainly accept the coverage, which may be offered to you free, or at minimal cost. However, this coverage might be inadequate to replace the income needed to allow your family to maintain its lifestyle without dipping into your investments. Consequently, you might need to think about purchasing an individual disability insurance policy. Here are some tips: Look for a policy that is “noncancellable” until you reach age 65. When you purchase a non-cancellable policy, your policy premiums can’t be changed, provided you pay them on time. Pick the right waiting period. Typically, disability insurance policies don’t start paying benefits immediately; there’s usually a waiting (or “elimination”) period ranging from 30 days to two years. Obviously, a shorter waiting period is more desirable, but it’s probably also going to be more expensive. You may be able to give yourself the flexibility of choosing the
Pay attention to conditions for using unpaid interns • While working for you, they must be receiving training similar to that which they would get at a school. • That training must be for their benefit, not for yours. • Your intern cannot work in place of an employee, but rather must work under the direction of your employee. • You cannot derive any immediate advantage from your intern’s activities. In fact, they might just disrupt your work at times! • They may not be entitled to a job at the end of their training. • The intern understands they are not entitled to wages. Some of these provisions are easy to comply with, while others are a bit harder. Unfortunately, this definitely means that if you’ve been daydreaming about getting an unpaid intern to catch up on all of your neglected filing and those projects that have been languishing unfinished around the office, you’d better just keep on dreaming! If you are unsure that your internship meets the Department of Labor’s guidelines, there are some additional steps you can take to protect your company: • Coordinate your internship with an accredited educational institution. Ask the professor to help you develop requirements that will enable the intern to receive academic credit for their internship. • Create a detailed description of the internship program, detailing exactly what the intern will be doing. Be sure that the intern will be developing skills they can take to other employers and that they spend a sufficient amount of their time learning from mentors in your business. • Consider paying the intern minimum wage. You are more likely to attract and retain a qualified intern if you provide them some financial incentive, and you’ll have the peace of mind knowing you cannot be found on the wrong side of the law. The provision that requires the work to benefit the intern rather than the business is often one the Department of Labor will hone in on. They will look at the skills the individual attains through the experience,
and expect that the intern will not perform routine work of the business on a regular basis, and that the business will not depend on the work of the intern. At the end of the day, the intern should come away with work experience that rivals what they would have learned in an academic program. And the DOL will be expecting you and your business to have been inconvenienced and burdened by the effort. Any benefit to you must be far outweighed by the benefit to the intern. Documentation is absolutely critical if you have an internship program. Document the expense to your business of the training and any concrete monetary expenses as well. Document the training experience the intern will receive. Have a written agreement specifying that the intern cannot have an expectation of employment after the internship. And, of course, document that there will not be any wages paid for the work experience, and the fixed time period the internship will last. Unpaid interns are allowed in nonprofits and government environments. And of course, those entities are also allowed to utilize volunteers, something for-profit corporations cannot do.
Assuming that you’re a for-profit business, remember that free is not always free. Sometimes the cost of skirting the law is more than the cost of complying in the first place! Our experience is that it’s very hard to find quality people who will be interested in an unpaid internship. Even an internship paying minimum wage often goes unfilled. If you’d like to help an enthusiastic worker gain some new skills, while you tap into their eagerness to enhance their knowledge base, pay them a fair training wage during the internship and you will both most likely benefit from the experience. • Julie Tappero is the president and owner of West Sound Workforce, a professional staffing and recruiting company based in Poulsbo and Gig Harbor. She can be reached at julie@westsoundworkforce.com. View her LinkedIn profile at www.linkedin.com/in/jtappero. The recommendations and opinions provided are based on general human resource management fundamentals, practices and principles, and are not legal opinions, advice, or guaranteed outcomes. Consult with your legal counsel when addressing legal concerns related to human resource issues and legal contracts.
AWB honors Amy’s on the Bay for owner’s community support Amy Igloi, owner of the popular Port Orchard restaurant Amy’s on the Bay, was honored recently by the Association of Washington Business (AWB) for her volunteer efforts in the community. She is well known in South Kitsap for her generosity when it comes to supporting both local nonprofits, as well as hosting many other fundraising events, and donating her profits from those events. “These awards highlight what we have always known: Washington businesses take their responsibility to the community seriously,” said AWB president Don Brunell when presenting the award. Among the beneficiaries of Igloi’s largesse are the annual Juvenile Diabetes Research Foundation Wine & Dine event, the annual Tip-A-Cop partnership with the Port Orchard Police Department to raise funds for Washington Special Olympics, and the annual $5 Pancake Breakfast that benefits South Kitsap Helpline.
Amy’s on the Bay also does periodic "take-overs" where Igloi donates 50 percent of the sales to either a family with medical bills or community nonprofits, and donates 30 percent of sales to Youth Services. In addition, Amy’s donates pancake batter to a local elementary school, 90 pounds of eggs twice a year to the South Kitsap Fire & Rescue's pancake fundraisers, and labor and services to the Manchester Library's annual Father's Day Salmon Bake, as well as giving numerous gift certificates to local charities to use as charitable auction items. Igloi serves on the boards of the Washington Restaurant Association, Association of Washington Business, Olympic College's Culinary Arts Board, Tacoma Narrows Bridge Advisory Committee, and she was just recently appointed to the Human Touch board of directors. Amy’s on the Bay can be reached at (360) 876-1445, or visit www.amysonthebay.com.
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June 2013 Kitsap Peninsula Business Journal • KPBJ.com 27
By Julie Tappero Summer will soon be upon us. Young people have already started their pursuit of a coveted summer work experience to build their resumes and their bank accounts. And we are already hearing from businesses that are thinking of handling projects and overflow work by hiring an unpaid intern. After all, the businesses are already shorthanded, work is picking up, they’ll be able to give someone much-needed work experience, and they’ll get some free labor! It’s a win/win, right? Or is it? The practice of hiring unpaid interns has made the news regularly in the last couple years. While it’s been a standard practice in some industries, such as publishing, fashion and entertainment, recent lawsuits have shed a bright legal light on it. There are several pending lawsuits by unpaid interns, some that represent many people in classaction suits. For example, an unpaid intern for the Charlie Rose Show on PBS sued in a class-action lawsuit, and the suit was settled for about $250,000. And although a classaction lawsuit was disallowed last week against the Hearst Corp., the unpaid interns participating in the suit can still pursue legal action on the merits of their individual claims. The Department of Labor enforces the Fair Labor Standards Act. The Act covers anyone who is employed, and defines that as someone who is suffered or permitted to work. It makes sure that businesses are following wage-and-hour laws, and of course, that they are paying the government their fair share of payroll taxes. If you’re misusing an unpaid intern for free labor, you can get your business into a lot of trouble. If there are unpaid interns working at your company, or if you’re thinking of adding an intern to your staff, you need to be very, very sure that you’re meeting the government’s guidelines for unpaid interns. The Department of Labor provides six tests to determine whether your intern can be unpaid:
Belfair businessman’s success created legacy of giving Les Krueger, who died at 88, and his wife built senior care facilities and were known for philanthropy
28 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
By Tim Kelly, Editor When he was a youngster working in the fields of his family’s Wisconsin farm in the 1930s, Les Krueger would look up enthralled when men of means in that hardscrabble era occasionally drove past in their fine Cadillacs. Much later in life, when the farm boy with an eighth-grade education had become a successful business owner and a man of means himself, Krueger bought a vintage Cadillac like the doozies he had admired long ago.
In 1986, he went with his son to a car auction in Kirkland and saw a 1939 Cadillac LaSalle. “He said, ‘I’m buying that car,’” recalled Rick Krueger, even though the old classic was in sorry condition and needed extensive restoration. His father had told him about daydreaming on the farm about one day sitting behind the wheel of such a magnificent automobile. Les Krueger, who died May 16 at the age of 88, had the LaSalle restored, and it’s still parked in the garage of the longtime family home on Hood Canal near Belfair. “He used to drive it to church,” Rick Krueger said. Les Krueger and his wife of 63 years, Betty, were well known for their philanthropy in the communities where they lived and ran their businesses — nursing homes and retirement centers in Mason and Kitsap counties. The church they attended, North Bay Lutheran Community Church in Allyn, was one of the recipients of the couple's generosity. "About six months ago," Rick Krueger said, "Les told me 'if I die, make sure you pay off the mortgage at the church.'" But no posthumous donation was needed; the Krueger family patriarch took care of things himself with a visit in December to Pastor Brian Pederson at the church where the couple were charter members when it was founded three years ago. “Les and Betty have been extremely generous,” said Pederson, who met the Kruegers when he previously was pastor at Christ Lutheran Church in Belfair, where the couple were longtime members of the congregation. “They love their church and wanted to see it succeed and do as much as
Photo courtesy Krueger family
Les and Betty Krueger sit in front of the stone fireplace that he built at their longtime home near Belfair. they could to help.” The pastor said Les Krueger also loved to share the rhubarb, apples and corn he grew in his garden with other church members. “The thing that resonates with me is Les was so unpretentious and humble,” Pederson said, borrowing a line from Scripture to describe him as “a man with no guile.” The Kruegers also donated $100,000 a few years ago toward the purchase of land where Faith in Action, a Belfair-based interfaith group, plans to build a senior service center. Krueger, who was the youngest of 10 children, completed his GED during a stint in the Army right after World War II, then came to the Kitsap Peninsula where some
of his relatives had moved. He made a living using the stone mason skills his father had taught him and his brothers. But a career change 50 years ago led to the legacy he and his wife eventually created. Their interest in the elderly care business was sparked by Les Krueger's sister, who owned a nursing home called Why Not Lodge on Long Lake near Port Orchard. In 1963 they became entrepreneurs, buying a Shelton nursing home that was going bankrupt and that Betty said was in deplorable condition, and renovating it while they lived there with their three young children for a couple years. They had sold their house that Les built and cashed out his GI insurance to come up with the $15,000 down payment on the nursing home they renamed Shelton Manor. "They put basically everything they owned into that first place," Rick Krueger said, but their investment worked out. “After we cleaned it up, we had a waiting list,” Betty Krueger recalled. “So after a couple years Les said let’s build another one.” They built and operated more facilities as the nursing home business grew rapidly in the U.S. after the passage of Medicare in 1965. By 1975, they owned five nursing homes between Bremerton, Port Orchard and Shelton. In 1982 the couple sold their businesses, two of which Rick Krueger operated for several years after buying them with his two sisters. However, seeing a need in the community for senior living facilities for people who didn’t need nursing home care, the Kruegers got back in the business and built two retirement centers — Claremont East in Bremerton in 1985, and Alpine Way in Shelton in 1988. They also were partners in a senior living complex their son and his wife, Leslie, developed in Silverdale in the 1990s that includes Clearbrook Inn, Northwoods Lodge and Country Meadows cottages. That campus, which was operated as Encore Communities, was sold last year to National Health Investors, Inc. for $25 million. Betty Krueger said she and her husband, who was in care at Northwoods Lodge just before he died, passed up opportunities to be involved in projects outside their community. ‘We had many offers to go out of state, but I told Les the only partner I ever want is you,” she said. The couple were major donors to development of a healing garden connected with Harrison Medical Center's cancer unit in Bremerton, and the rooftop garden named in their honor opened last fall. Over the years the Kruegers' contributions also have supported the Admiral Theatre Foundation, the Pacific Northwest Salmon Center, the Boys and Girls Club of Mason County, the Theler Community Center in Belfair, and the Olympic College Nursing Program. A Krueger, page 29
Indie developers release first iPhone game to good reviews
KRUEGER
from page 28 community memorial service for Les Krueger was held May 31 in Bremerton at the Admiral Theatre. “We both started out from very humble beginnings,” Betty Krueger said, so they wanted their family to give back to the communities where they prospered. “We have a lot to be thankful for,” she said. "He felt like we were in business in this community, so we should support the things that make the community better," Rick Krueger said of his father. Described by his son as a savvy and aggressive businessman, Les Krueger was a
Illustration by Sky Horse
Sky Horse Interactive partners Jeremy Moff, Joe Plotts, Darren Ekman and Dave Stafford. who said his discovery of Vanished — which he described as "A short, but nonetheless lovingly designed and surprisingly beautifully scored IOS game" — on a weekend when he was moving helped relieve stress. Stafford got a foreshadowing of their game's reception when his sons, ages 10 and 22, tried out Vanished. "I was really touched by my two kids testing the game," he said. "Both of them wouldn’t put it down until they finished it." "We actually had a pretty amazing launch," Plotts said. "The fact is, there are 200 games per day being released for iOS." He said they created their game, which downloads for $1.99, for that platform because "The best market for mobile games is on the iPhone right now." It took 14 months for the Sky Horse guys to develop their first mobile video game. "A lot of that is work we can reuse," Moff noted, "and a lot of it was training ourselves." The four developers, who all live in North Kitsap and have known each other several years, consciously avoided assigning themselves silent partner over the years with his children and their spouses in other businesses and commercial real estate, including the property leased by Harrison Medical Center for a Belfair clinic. "I think the thing I'm going to miss most about the guy is he was good counsel," Rick Krueger said. "Les is an example of the American dream," said his son-in-law, Jack Johnson, one of a pair of brothers who married Krueger's daughters and who own Peninsula Topsoil & Landscape Supplies in Belfair. "He never even graduated from high school, and there was one point where they employed over 500 people." "He was a good partner to have, for sure," Johnson added.
exclusive roles in their collaboration. "We sort of united behind Sky Horse as a team of creative game makers. We all have skills we bring," Plotts said. There's no front man for the group, although Stafford was the member
interviewed for an Indie Game Magazine article about Sky Horse. Many of their work sessions on Vanished were held via Skype, and once or twice a week they'd meet at the unofficial Sky Horse headquarters, a room in the Suquamish house where Plotts lives part-time. They created Vanished as a trilogy and are working on the next two games, which they plan to have available in the App Store later this year. If they can build on their initial success, they might eventually make game developing their primary livelihood and "get out of the service economy," as Plotts said. "Client work," Ekman explained, such as website design, etc. "It’s definitely a dream of ours," Ekman added, "but I don’t think we’re there yet." "We’re pleased with the launch, but it’s going to take some work building a brand," Moff said. The fact that four guys are able get a game they created on their own into the global market for iPhone apps shows the opportunity available for indie developers. "That’s what the mobile revolution did, was allow smaller teams of developers to bring games to market," Plotts said. "And you’re seeing innovative, creative games come into that market."
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June 2013 Kitsap Peninsula Business Journal • KPBJ.com 29
By Tim Kelly, Editor The members of Sky Horse are thrilled to see their debut make it in the charts and get good reviews. They even scored a magazine feature. Rising rock stars on the cover of Rolling Stone? No, these guys are geeks, and their creative collaboration as partners in Sky Horse Interactive produced an iOS video game called Vanished: The Island, which is available through the online App Store. This indie band of game developers — Jeremy Moff, Joe Plotts, Darren Ekman and Dave Stafford — didn't create a fullthrottle, shoot-em-up video game. Theirs has plenty of visual appeal, but they aimed for something different with their entry in the adventure game genre: A compelling story, one that weaves in a little Mayan history to boot, as gamers solve a mystery. The market for iPhone and iPad games is crowded and highly competitive, with hundreds of new choices added daily to the App Store, yet Vanished: The Island got noticed when Sky Horse released the game a few weeks ago. It was featured on the AppAdvice website as one of "Today's Best Apps" on April 28, and on May 4 it hit #42 in Puzzle Games and #64 in Adventure Games for iPhone downloads from the App Store. A reviewer on the App Unwrapper website called it "an enjoyable game to play" even though veteran gamers might not find it challenging. He rated Vanished: The Island a 4 on a 5-point scale for game play ("The controls are very intuitive and responsive and the screens load quickly"), and for graphics ("While the graphics aren’t groundbreaking by any means, they’re better than those of most games of this genre in the App Store"). That reviewer as well as others was particularly impressed with the game's audio, rating it 4.5/5 and noting: "The music is very atmospheric and never feels annoying or disruptive. I didn’t feel the need to shut it at any point or listen to my own music. ... The sound effects also work very well, adding more realism." Moff said it was very rewarding to see the positive reviews, particularly one on the Bridge Burner Gaming website by a reviewer
Ozone International: A green, growing manufacturer
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30 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
By Tim Kelly, Editor When you think of ozone — if you ever do — maybe what comes to mind is “Lost in the Ozone,” the swingin’ country rock song from 1971 by Commander Cody and His Lost Planet Airmen. No? Perhaps it’s more likely you recall environmental concerns in the 1970s and ’80s over a hole in Earth’s protective ozone layer caused by chlorofluorocarbons (CFCs), which were eventually banned. But ozone’s no blast from the past for the 34-year-old president and co-founder of a Bainbridge Island company that recently received Seattle Business magazine’s 2013 Manufacturer of the Year award in the Small Firms category. Jon Brandt and his father, Kelly photo retired surgeon Jim Brandt, Jim Brandt stands outside the manufacturing plant Tim on started Ozone International Bainbridge Island where Ozone International assembles its in the garage at Jon’s house patented WhiteWater sanitation systems that are widely used 10 years ago. Their company, in the food processing industry. which now has 55 employees and occupies two buildings in the food processing industry,” Jim Brandt an industrial area on Miller Road, has explained while giving a visitor a tour of the grown into a leading manufacturer of green Ozone International operation. “It’s technology — ozone-based sanitation and another very useful tool.” cleaning systems for the food processing industry. Ozone science The company’s patented WhiteWater Ozone is a naturally occurring gas system provides a chemical-free method known as O3 because each molecule has using ozone-infused water to sanitize fruit, three oxygen atoms, the result of vegetables, seafood and poultry, while also atmospheric oxygen (O2) reacting to an continuously cleaning and disinfecting all electrical discharge, such as lightning. product contact surfaces in the processing Compared with chlorine, which is used equipment. in conventional sanitation wash processes, “Ozone is not a cure-all for everything in ozone is a much more powerful and faster-
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acting antimicrobial agent at lower Jon Brandt said in a telephone interview concentrations. It kills most food-borne while on a business trip to California, where pathogens, including those most the company has a lot of customers in the commonly associated with causing illness, state’s huge agriculture industry. such as listeria, e coli and salmonella. By offering an operating lease that “It’s very effective includes installation and against all known maintenance of their ‘What we really try bacteria, viruses and systems, as well as to do is treat this fungi,” Jim Brandt upgrades as the explained. technology continues to machinery as a Also, ozone breaks develop, the company service, and not down fairly quickly and reduces the initial cost as a device.’ does not give off any toxic for their customers and byproducts, only oxygen. provides assurance that — Jon Brandt, the machinery So unlike chlorinated will co-founder of Ozone operate reliably. water, the water used in ozone systems can be “What we really try to International with his filtered and recirculated, do is treat this machinery father as a service, and not as a reducing overall water usage. device,” Jon Brandt said. Another advantage is Some of the that ozone doesn’t have to be shipped and maintenance and upgrading is done stored in tanks like chlorine or other remotely by technicians at the Bainbridge potentially hazardous chemicals. The facility who use computers to monitor and WhiteWater system produces ozone on adjust systems installed anywhere. demand by using low amounts of electricity Purchasing a WhiteWater system to transform oxygen in the air, and the required a capital investment of about captured O3 is then pumped into water $180,000 to $200,000, but a customer can that’s sprayed on food moving along lease one for $45,000 to $50,000 a year. processing lines. Businesses can recoup the lease costs, The cleaning function that Ozone Brandt said, through savings in their International touts about its system uses a operating expenses from switching to an dual stream of cold water. A low-pressure ozone system. stream of ozonated water disinfects Through benefits such as extending the conveyor belts and other surfaces, breaking shelf life of seafood through ozone’s the molecular bonds so fat, grease and superior sanitation, there’s a savings from biofilm on the surfaces are washed off by a reducing the amount of credits a processor high-pressure spray. has to issue for returned products that The father-son company co-founders become spoiled or unusable. said the multiple benefits of using their “Green technology is usually more ozone-based system include eliminating a expensive than conventional,” Jim Brandt lot of chemicals used on food; reducing said. “This is a very unique technology in that energy consumption from not having to use it saves money from day one for a plant.” hot water; the potential to decrease water However, the leasing model created use by recirculation; and a significant cost some financial challenges for Ozone savings by switching to the technology. International. The company still has to “We’re actually able to provide a cover its manufacturing costs even though technology that’s as green as it gets and it doesn’t receive full payment for the chemical-free, and it improves food safety machinery on delivery to customers. and is typically cash-flow positive,” Jon “This is a business that as you build all of Brandt said. this equipment, you’re taking these contracts and your customers owe you a lot Ozone business of money over years to come,” Jon Brandt Even with all the remarkable properties said. “But you’re having to spend all your of ozone, plus the engineering and dollars today to secure all these contracts.” innovation that led to Ozone Most of the investment that got the International’s patented machinery, it’s company going and sustained it for several taken a long time and a lot of perseverance years came from family members and for the Brandts’ business to become the friends, but that wasn’t viable as the thriving enterprise it is today. business began to grow significantly with “The first seven years our growth was the switch to leasing. pretty nominal,” Jim Brandt said. He added “We outgrew our network, so we had to that “to have a (food processing) plant go to institutional lending,” Jon Brandt commit to a new technology they know said. nothing about, and change all their ways, That happened late last year when that’s a tough sell.” Columbia Bank extended a significant line They had an effective and of credit to Ozone International. environmentally friendly technology to “They’ve been really supportive,” offer food processors, but it took a change Brandt said, noting that Columbia wanted in how Ozone International offered that to increase its investment in regional technology to kick the company’s growth manufacturing companies utilizing green into high gear the last couple of years. technology. “They work very closely with “We changed our business model, from Ozone, page 30 selling ozone machines to leasing them,”
OZONE
from page 30 us, so we can take these contracts and build all the equipment.” Ozone growth However, the company’s recent rapid growth that was recognized by the Seattle Business award means more investment will be needed. “We’re going to have to go back and get more financing because we continue to grow,” Jim Brandt said. Another area of business expansion is in cold storage for fruit growers and distributors, who can utilize ozone as a gas instead of applying a post-harvest fungicide. “Typically you take a dump truck full of apples and drench them in chemicals, so you can store them for months and sell them year-round,” Jon Brandt said. In controlledatmosphere storage rooms — concrete chambers holding a couple thousand bins of apples at very low oxygen levels — ozone gas is pumped in to oxidize ethylene, a gas given off by ripening fruit. It also controls fungi that make apples start to rot. “So you slow down ripening and control decay without chemicals,” Brandt said. As with the food processing industry, he noted, it’s a huge market but a widespread transition to ozone will take time because “you’ve got to ease people into this.” In 2011, Ozone International bought the cold storage division of Purfresh, a California-based company that uses ozone in providing preservation solutions in
Photo courtesy Jon Brandt
Ozone International president Jon Brandt, third from right, and his father Jim Brandt, center, stand with some of their employees at the Washington Manufacturing Awards ceremony hosted by Seattle Business magazine. The company the Brandts founded 10 years ago was recognized as 2013 Manufacturer of the Year in the small firms category. ocean shipping of food and other sensitive cargo. “When we won that award, we said there are about 400 million apples that were treated without chemicals in Eastern Washington thanks to ozone,” Brandt said. Ozone partners Jon Brandt’s parents bought a Bainbridge Island home in 1989 that became their full-time residence when Jim retired in 2004 from his medical practice in Palo Alto, Calif. The water from their well had an unappealing sulfuric odor — the familiar “rotten eggs” smell — and they found a remedy in using ozone to oxidize chemical compounds tainting the water.
What they learned led to them launching their business venture, which Jim said was primarily his son’s mission when Ozone International was founded in 2003. Jon Brandt had a short professional baseball career (ended by shoulder problems), pitching for the Eugene Emeralds of the Class A Northwest League in 2001 after the San Diego Padres drafted him out of college. He’d been drafted by the Seattle Mariners out of high school but chose instead to play baseball at UCLA, where one of his teammates and close friends was future Philadelphia Phillies all-star Chase Utley. Brandt said the competitiveness and work ethic developed in his sports career helped
him in the transition to starting a business. The recent award recognized their company’s innovation and growth into a global operation that has more than 350 clients in 20 countries, from Tyson Foods to Select Fish, a Seattle seafood processor owned by Whole Foods Market Inc. However, the Brandts acknowledge there were times the family enterprise didn’t seem headed for the level of success they’ve achieved. “We just sort of stuck at it,” Jon Brandt said. “There have been many times over the last 10 years that I’ve scratched my head and looked in the mirror, and said ‘what am I doing?’” He credits his dad’s steadfast belief that their company would ultimately be successful. “I couldn't talk him out of it, and I tried,” he said. “Now he just sort of shakes his head and chuckles a little bit about where it’s gone from the early days.” The elder Brandt says his son has been the driving force behind Ozone International’s success, which they both believe will continue. “I think we’ve just barely tapped the potential uses of ozone,” Jim Brandt said. He said they’ve gotten some inquiries from private equity groups interested in the company, but the Brandts want to keep their business growing and are not looking to sell. “We’re still a small company,” Jim said. “This company will have much more value in five years than it has today.”
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 31
Gig Harbor’s impresario made it a happenin’ place
32 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
Laureen Lund is retiring after 14-year career building a marketing department from the ground up By Rodika Tollefson When Laureen Lund was first approached about the idea of promoting Gig Harbor tourism, she was an unlikely candidate. She had a background in journalism and event planning but she knew nothing about tourism. And she had just moved to Gig Harbor and didn’t know much about the area either. Gig Harbor had just seen the opening of two hotels, and the advisory committee for the city’s lodging taxes decided the area needed a tourism specialist. Lund landed the independent contractor gig. That was 14 years ago and the marketing powerhouse Lund has created since then gives no hint of those early beginnings — which included her working out of her home and from a desk at the Gig Harbor Chamber office for two years. When the city built its new city hall, the Gig Harbor Civic Center, the city council saw an opportunity to move the job inhouse, full-time. Lund’s job kept expanding, as annual events and more marketing programs were being launched. A new city logo, a visitors guide, annual summer concerts and outdoor movies. and a comprehensive website are just some of the things she’s had her fingers in. Not to mention the behind-the-scenes work that’s landed Gig Harbor in various out-of-state and national publications, including, last year, in the Smithsonian magazine as one of the 20 best small towns for its culture, charm and heritage (Gig Harbor was No. 5). After June 6, Lund will leave all those busy days behind. After talking about retirement for several years, she finally decided to take the plunge. It’s hard to imagine how she’ll put on the brakes after living and breathing Gig Harbor nearly 24/7 for so long, but Lund seems to have a plan. “I’m going to have to teach my brain how to turn off but that’s something I’m looking forward to,” she said. “I’m ready to be selfish and do things for myself.” A couple of things that Lund realized early on was that she couldn’t market just the city, despite being a city employee, and that she couldn’t target only visitors. “The idea was always to bring in overnight visitors. One thing I’ve learned is that you can’t market your community as a
destination if you don’t have your community on board, so one thing I’ve done is market to the local community,” Lund said. “It’s regional and that to me is important because for guests to spend the night, you need at least three things to keep them busy.” Which is why her press releases and promotional activities included events outside of the city in communities like Fox Island and Key Peninsula — and even Olalla, which neighbors Gig Harbor but is in a different county. “We position the community as a place to stay and still take a day trip to the Turner Joy or the glass museum (in Tacoma). It’s a good middle point,” she said. Steve Ekberg, who’s served on the Gig Harbor City Council for many years, said Lund essentially became the spokesperson for the area and helped put Gig Harbor on the visitors’ map. “A lot of places you go and say you’re from Gig Harbor, people have heard about us,” he said. “She did an outstanding job bringing people to Gig Harbor.” While Lund’s been the creative brain
behind many new events in Gig Harbor, the one she calls “her baby” is the annual outdoor concert series, Summer Sounds at Skansie. At least one of the bands that’s performed for several years, The Beatniks, causes the downtown streets to close as about 5,000 people pack the Skansie Brothers Park on the waterfront. Several downtown restaurants have added extra perks to the events by offering food deliveries. “I believe the location (brings) the success more than anything. I credit the city for making that piece of property a park. It’s one of the most valuable things Gig Harbor has,” Lund said. The summer concerts, which are scheduled on Tuesdays, are one example of how events that don’t seem explicitly geared toward “putting heads in beds” (as the tourism industry calls overnight visits) actually do.
Kathy Franklin, manager of Maritime Inn downtown, said she’s had several hotel guests who came to Gig Harbor specifically for the concerts, but even if people don’t spend the night, they get to see Gig Harbor and then come back to stay later. “If that event wasn’t there, it would be just a Tuesday night,” she said. “It’s a big boost to retail shops and restaurants because people meander around town.” If it seemed like Lund knew everything about Gig Harbor, it’s because she did. And if it seemed like she had a presence in many of the area events, it’s because she did that, too, whether it was in person or behind the scenes. The work frequently didn’t stop in the evenings or on the weekends, even if it was just simple things like keeping up with social media posts. “She’s come up with amazing programs to spotlight Gig Harbor and promote tourism. Her mind is like a computer — she knows all the people to call,” Franklin said. “She’ll be sorely missed.” One of the many new events Lund helped launch was the Gig Harbor Paddlers Cup, which the Gig Harbor Kayak Club hosted for the second year earlier this Lund, page 33
Gig Harbor Garden Tour marks 16th year Gig Harbor’s annual Garden Tour is in its 16th year, and tickets are on sale for the twoday self-guided tour showcasing outstanding gardens in the area on June 29-30. Tickets are available in Gig Harbor at The Garden Room, Wilco, WildBirds Unlimited, Rosedale Nursery, Ace Hardware stores, Tacoma Community College, Sunnycrest Nursery. The featured speakers for the tour are regional gardening expert Ciscoe Morris, who will give a presentation on Great Plants with “Oh la la” Appeal on June 27 at 7 p.m. at Kensington Gardens; Riz Reyes, who will discuss Collector’s Plants for the Novice Gardener on June 29 at 2 p.m. at Sehmel Homestead Park; and Creative Gardener owner Sue Goetz at Ace Hardware on June 30 at 2 p.m. The Pierce County Master Gardeners’ Demo Garden and Nature Trail at Sehmel Homestead Park will be one of the featured spots on this year’s tour. The Master Gardener Clinic will be open both days to answer gardening questions. Considered one of the premier tours in the region, the event was started by volunteers and the Milgard family, then was operated by Tacoma Community College, and today is its own 501(c)3 nonprofit supporting TCC’s Adult Basic Education Program in Gig Harbor and the Key Peninsula, as well as Reach Out and Read national reading program and Communities in Schools. In addition to the two-day tour, the Gig Harbor Garden Tour Committee also organizes the annual Dig the Gig dinner and auction event, which will be June 14 at Canterwood Golf and Country Club. The evening includes the annual handpainted Adirondack chair raffle. Tickets are $50. Additional information about the events is available at www.gigharborgardentour.org. For information about special overnight Garden Tour package lodging, visit www.gigharborguide.com.
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Gig Harbor collects two awards at Main Street state conference Gary Glein, board president of the Gig Harbor Downtown Waterfront Alliance (GHDWA), was recognized as Volunteer of the Year at Washington Main Street’s Excellence on Main Awards Ceremony held May 16 in Vancouver, Wash. The ceremony was held in conjunction with RevitalizeWA, the statewide Preservation and Main Street Conference. Glein is a resident and property owner in the Main Street district. Chris Philips and John Lantz, fellow alliance supporters, credit Glein’s passion for people and hard-nosed approach to market data for helping to weave together the diverse interests of the city, property and business owners, residents, visitors and other community stakeholders. “Gary has worked tirelessly and effectively to bring a focused, balanced and friendly professionalism to our local Main Street organization,” they said. The Gig Harbor Downtown Waterfront Alliance also was honored with the Green Community award for its summer flower basket program. Each year since 2009, the alliance has funded the purchase of 80 to 100 flower baskets that grace the historic downtown waterfront district throughout the summer. The alliance has been able to procure financial sponsorship to help cover a portion of the cost of the baskets, and in 2012, they recruited the first corporate sponsor. Money raised from the sale of goodie bags at the popular Girls Night Out event in November also was earmarked to provide support to this beautification project. In addition to the financial support of the project, GHDWA now recruits and mobilizes a crew of nearly 40 volunteers who faithfully water the baskets every morning from May through September. The Excellence on Main Awards, presented by the Washington State Main Street Program, recognize communities, organizations and individuals who are helping to achieve economic vitality and build sustainable communities through downtown revitalization and preservation. Washington’s Main Street Program is housed in the Department of Archaeology and Historic Preservation and administered, under contract, by the Washington Trust for Historic Preservation.
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Now Accepting Online Nominations! We are now accepting nominations for the Kitsap Peninsula Business Journal’s annual 40 Under Forty leadership recognition program! Do you know someone outstanding in their industry or profession who is deserving of recognition? Help us highlight the best and brightest young business leaders on the Kitsap Peninsula. Individuals must be under the age of 40 on Sept. 15, 2013 for consideration. C O R P O R A T E
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June 2013 Kitsap Peninsula Business Journal • KPBJ.com 33
from page 32 spring. Allan Anderson, the coach of the club, which competes nationally and internationally, said the event has been recognized last year for filling hotel rooms. For him, the best part was promoting the team and its successes. “I appreciated the fact Laureen recognized the value of the kids and wanted to tie (the team) with the community,” he said. “It allowed the community to come downtown and see what we do and how talented some of the kids are — an opportunity to see future Olympians.” Lund’s efforts haven’t gone unnoticed beyond Gig Harbor. In 2011, she received the Tacoma Pierce County Tourism Professional of the Year award from the Tacoma Regional Convention and Visitor Bureau. The award is given to individuals who have made significant contributions to the success of the tourism industry. Three-quarters of Lund’s position has been funded by lodging taxes, with the rest coming from city funds. The unique city job eventually attracted the attention of other cities such as Federal Way and Sequim, which have used Gig Harbor as a model. “Municipalities are recognizing the value of their own marketing,” Lund said. Gig Harbor’s marketing department eventually grew to two people, with a part-
time assistant. Karen Scott, who was in that role for eight years before recently moving to another department full-time, was named in May as Lund’s successor. Scott already became the official marketing director as Lund wraps up her final month. “Karen is very qualified to step up. One of the signs of a well-run city is when you have someone stepping up to take over,” Ekberg said. What’s next for Lund, a Central Kitsap grad? Some of the usual catch-up things, like cleaning the garage and organizing thousands of photos on her computer. Fun things like learning to make pasta, quilting, continuing her running and cycling training, and keeping up her new blog, www.myfabfiftieslife.com. Lund has an entire list that she started in February. One thing that’s not on that list: work. She said she’s been offered jobs since announcing her retirement in April but that is not part of her plan. Whatever she does, Lund said she’ll miss the people she worked with — not only the people in the community but her coworkers at the city. “The city often gets a bad rep and I’ve never worked with a finer group of people,” she said. “What I’ll miss the most is the people who’ve been genuinely appreciative and supportive. I’ve enjoyed working with thousands of people and with the residents of Gig Harbor.”
2013 Ford C-Max Energi: Ford’s new plug-in hybrid By Bruce Caldwell Ford’s new C-Max Energi is a stylish take on fuel efficiency in a compact package. It’s Ford’s answer to the Toyota Prius plug-in and the Chevy Volt. The CMax is also available as a traditional hybrid without the ability to run solely on electric power. Both models have their merits, but as residents of a hilly neighborhood, we’d pick the considerably less expensive C-Max Hybrid over the Energi. If we lived in Pancake, Kansas, or commuted from one end of the Bonneville (Utah) Salt Flats to the other, the Energi would win. The electric-only range is claimed to be 20 miles, but we never came close to that lofty goal. The regenerative braking system is constantly replenishing the battery, but a full charge requires either a standard 120volt household plug-in (the recharging cord stores neatly beneath the floor behind the driver’s seat) or the optional (and much quicker) 240-volt charger. It takes about seven hours for a 120-volt recharge and three hours using 240V power. Avoiding gas stations altogether would take incredible driving/navigational skills for our highly variable topography. Anyone able to use electric power exclusively could more easily justify the $7,700 price
differential between the plug-in and standard hybrid C-Max models. Walkaround: The Ford C-Max is a handsome little hatchback. The body looks a little like an extra small mini van, but the four standard style, fronthinged doors, fivepassenger seating, and limited cargo space place it squarely in the compact sedan/wagon category. Its styling is contemporary with strong ties to other Ford passenger cars (especially in the grille and front end). The roof is tall, but a gentle rearward slope keeps it from being a boring box. Fit and finish are excellent. Interior: Abe Lincoln would enjoy driving the C-Max based on its ample front legroom and top hat friendly headroom.
34 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
— Calling for Entries —
Doctors Making a Difference Do you know a doctor on the Kitsap Peninsula (Bainbridge Island to Gig Harbor) who is making a difference in the lives of their patients? WestSound Home & Garden magazine is looking for doctors who are making a statement with new technology, or providing unique solutions — doctors with a special talent for children, or providing compassionate care for the elderly, etc. In the 2013/14 issues of WestSound Home & Garden magazine, we will publish profiles of "Doctors Making A Difference!"
Nominate online at www.wshomeandgarden.com Click on “Doctors Making a Difference”
The three-passenger back seat is still great for big hats, but shorter on legroom. Accommodations improve if the front seats are moved up a little. The floor is flat and there is good foot room under the seats. The middle seating position is narrow. Three adults are a tight squeeze, but the seat is fine for children. Cargo space is disappointing for a vehicle that looks so promising. The oversized 7.6-kWh lithium-ion battery pack and short body limit cargo capacity and shapes of items that can fit. The split seats fold flat, but the battery box is higher than the seat backs. Miscellaneous interior bins are on the small side. The C-Max Hybrid has 10 cubic feet more cargo space than the Energi. Our well-equipped tester had all the latest high tech audio/communications/navigational features including voice recognition. Under The Hood: Both the C-Max Energi and the regular hybrid model use the same 2.0-liter Atkinson-cycle inline 4cylinder gasoline engine, which is rated at 141 horsepower and 129 lb-ft of torque. The auxiliary electric motor is rated at 118 horsepower and 117 lb-ft of torque. Both versions of the C-Max end up with a net 188 horsepower. A continuously variable automatic transmission sends the power to the front wheels. Fuel economy figures are a little confusing. The EPA rates the C-Max on gasoline at 43 mpg combined city and highway. The EPA electric plus gas combined figure is an astronomical 100mpg. The information display on our tester said 42.5-mpg after 300 miles of various mode driving. We weren’t able to make any sustained electric-only trips. Behind The Wheel: The Ford C-Max Energi is a decent driving car. The ride is pretty smooth (especially considering the 38-psi inflation pressures for the Michelin
Energy Saver P225/50R-17 tires). The handling is reasonably nimble. The compact size makes it ideal for city driving. Our tester had the optional Automated Parking System (an outstanding parlor trick if ever there was one). Switching between electric and gasoline power is seamless. There isn’t anything unusual about driving the Energi unless you pay too much attention to the various dashboard displays. It can be like a rolling video game watching the readouts (including a regenerative braking judging system that rates your braking techniques). Ford calls the display Smart Gauge with Eco Guide. Acceleration is glacial in electric-only mode, although there is the strong initial electric motor torque sensation. The Energi weighs a full two-tons, so that’s a heavy box to accelerate. The 0-to-60 time drops in half when the gas engine is added to the equation. As a hybrid the C-Max delivers very acceptable acceleration characteristics — not a rocket, but not a slug, either. Whines: Cargo space is noticeably compromised by the larger battery pack in the C-Max Energi. With the pullout cargo cover in place we were only able to fit one carryon size suitcase between the cover and the battery. The foot-operated rear hatch opener is a great idea, but we couldn’t get it to work as quickly or as effortlessly as the TV commercials. Bottom Line: We like the 2013 Ford CMax as a hybrid, but we’re not sold on the plug-in Energi. The underlying vehicle is a fine urban transportation module, but we can’t justify the added cost of plug-in capability. The price differential between the C-Max plug-in and the C-Max hybrid along with real world fuel economy averages don’t currently pencil out. Our advice is to buy the C-Max Hybrid.
2013 Buick Enclave tops 3-row luxury crossover segment automatic on/off headlamps, power rear liftgate, heated outside power mirrors with integrated turn signals, rear parking assist, 17-inch or 18-inch wheels and tires, structure-less front wiper blades, and dual outlet exhausts. The Leather Package ($43,285) upgrades to perforated leather upholstery, heated front seats, eight-way power passenger seat, memory seat settings, side blind-zone and cross-traffic alert. The Premium Package ($47,625) adds 19-inch chrome wheels, articulating headlamps, power folding side mirrors, power tilt/telescope steering column, Bose 10-speaker premium sound system, and cooled front seats. Other options include navigation ($1,540), trailering package ($525). Interior: The big news for the 2013 Enclave is its chic, handsome new interior. It offers an elegant blend of stitched, high quality leather, brightly colored instrumentation and premium materials, tastefully blended with lots of wood and understated tinted chrome. The full-color screen on the touchscreen navigation package does double duty as a rearview camera with a cross-traffic alert. Instrumentation features an analog speedometer, tachometer (with no redline), temperature, fuel and amp gauges. The leather-covered steering wheel contains the usual audio and phone controls on the right, and cruise control on the left. The front bucket seats are firmly comfortable. The center stack is simply selfexplanatory — which isn’t the case in the Enclave’s imported rivals. Dual climate controls, OnStar, rear wiper, seat heater/cooler controls, traction control, rear hatch release and power plug are all easily identifiable. Between the two front seats is GM’s exclusive front-center airbag, which could be a lifesaver in hard side impacts. A second-row console offers separate climate controls and a second jack-driven audio channel, allowing kids their own entertainment center. In the sevenpassenger configuration, the second row uses two captain’s chairs with armrests. The third row is a three-place bench seat with reasonable headroom. Behind the third row is a reasonable amount of storage for groceries and the like. One oddity is that the Enclave eschews the smartkey/push-button start system that has seemingly become the norm for not only its competitors, but most vehicles. I’m not sure if it’s just a minor inconvenience, or an intentionally polite nod to the relative age of Buick buyers. The key fob does include remote lock/unlock, a rear hatch release, and remote start. Under The Hood: All Buick Enclave models are powered by a direct injection, 3.6-liter 24-valve V6 with variable valve timing, that’s married to a 6-speed automatic — with no manual shift function — and delivers a spirited 288 horses to the highway.
Behind The Wheel: The Enclave is a well-designed combination of acceleration, comfort, and surprising agility. Despite its size, it moves with the athleticism of a much smaller vehicle, and actually feels smaller than it is — no trivial achievement in a 4,922-pound vehicle. Acceleration, cornering, steering, braking, and overall handling are all competent and very confident, but not exactly what I’d call sporty — but they aren’t meant to be either. On a trip to just south of Salem, Oregon and back on the same day — almost eight hours behind the wheel — the Enclave
offered a ride marked by comfort and relative quiet in spite of some bad road surfaces. Whines: Maybe I’m just clumsy, but I kept unintentionally changing the radio station from the steering wheel control. I’d prefer a manual shift option. Bottom Line: The 2013 Buick Enclave is a people-pleaser — as its continuing strong sales confirm. It dominates the Luxury Crossover segment simply because there is no vehicle that can quite match its volume, comfort, value and stylish practicality. If there is an example of what American car companies do really well, this is it.
BUICK ENCLAVE
501 WEST HILLS BLVD., BREMERTON WWW.HASELWOOD.COM
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 35
By Lary Coppola While owning a Buick in China is a status symbol akin to owning an E-Class or better Mercedes in America, and in spite of the average age of a Buick buyer declining from 64 to 57, General Motors’ (GM) still has its competitive hands full. Its Buick Enclave dominates the prestigious three-row luxury crossover segment against strong competition from the likes of Audi, Acura, Volvo, Mercedes-Benz, and even Lincoln, by offering an extremely attractive package of luxury, value and three-row flexibility. Updated for the 2013 model year, Buick is focused on retaining that top spot in American sales. The Enclave presents a perceptively gentle restyling outside, while featuring a beautifully upgraded interior, that adds elegant ice-blue ambient lighting, brightly colored new climate controls and genuine upholstery stitching that reinforces the image of premium quality. The 2013 Enclave is technologically adept as well, utilizing GM’s IntelliLink system, which supports audio streaming of Pandora Internet radio and Stitcher SmartRadio as well as available Sirius/XM satellite radio. Walkaround: The 2013 Enclave is easily recognizable. Its larger, more pronounced, resurrected trademark waterfall grille, and historic portholes on top of the hood, both scream “Buick.” Body-color rocker moldings and front and rear fascias, accented by tasteful chrome highlights, along with modern LED headlights and running lights, add to the Enclave’s luxury charisma. At the rear is a stylish new LED taillight design resulting in a uniform strip of glowing red across the entire span. There are also provisions for its hefty 4500-pound towing capacity The 19- and 20-inch wheels add a bold exclamation point to the Enclave’s style statement. Model Lineup: The 2013 Buick Enclave is offered in one model with three trim packages. Every Enclave is available with the choice of front-wheel, or all-wheel drive. The base Convenience Package ($39,270) offers fabric upholstery, tri-zone climate control, a tilt-telescoping, leatherwrapped steering wheel featuring audio and cruise controls, OnStar with automatic crash response and turn-by-turn navigation, IntelliLink connectivity to your cell phone and Pandora/Stitcher SmartRadio, AM/FM/XM/Sirius, with a 6.5-inch touchscreen, USB and power ports, cruise control, complete instrumentation including outside temperature gauge, second-row captain’s chairs for 7-passenger seating (8-passenger seating is available with second-row bench seat), 8-way power driver seat with lumbar adjustment, twoway power front-passenger seat, driver express up/down and front-passenger express down power windows, keyless entry, remote vehicle start, auto-dimming inside rearview mirror, active noise cancelation, universal home remote,
Publisher Lary Coppola Editor Tim Kelly Advertising Sales Dee Coppola Creative Director Steve Horn Webmaster/IT Greg Piper Graphic Design Kris Lively Office Administration Jennifer Christine Web Host PCS Web Hosting LLC Contributing Writers Rodika Tollefson Don Brunell Dan Weedin Julie Tappero Jason Parker Press Releases
36 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
Email to pressreleases@KPBJ.com The Kitsap Peninsula Business Journal is a special interest publication dedicated exclusively to providing news, information and opinions to the business communities of the Kitsap and Key Peninsulas, and North Mason County. It is published monthly by Wet Apple Media. Copyright, 2013, with all rights reserved. Postage is paid at Tacoma, WA. The Kitsap Peninsula Business Journal is read by more than 26,000 business, professional, political and military leaders in Kitsap, Pierce, and Mason counties. Additional copies are available for $1.50 each. Annual subscriptions are available for $25. Reproduction or use of any editorial or graphic content contained herein in any manner whatsoever without the expressed written consent of the Publisher is strictly prohibited. The Kitsap Peninsula Business Journal is proudly composed using Apple Macintosh® computers and printed by The Kitsap Sun, Bremerton, WA. Views expressed herein are strictly the opinions of the authors and do not necessarily reflect those of the advertisers or ownership of The Kitsap Peninsula Business Journal.
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Preparing to pitch… in Paris By John Powers Kitsap Economic Development Alliance Experienced economic developers will tell you to focus your attention on working with businesses already operating within your community to help them to grow and prosper. Our team at the Kitsap Economic Development Alliance adheres to this philosophy of taking care of our economic base by making sure our existing businesses know they are valued; and, that we are here to help connect them to resources and relationships essential to their continued success. Nearly three-quarters of our alliance’s resources are deployed in executing business retention and expansion activities — chief among those is our Procurement Technical Assistance Program, which last year assisted over 200 local businesses in securing over $50 million in work with government clients. It is also important for economic development partnerships like KEDA to tell and sell their respective communities’ economic story to an audience beyond the local market; to targeted audiences of businesses from across the country and around the globe that would be well served by relocating to, or expanding into our market — into Kitsap. Larger multi-national companies may examine the roster of peer companies already clustered in a certain region as an indicator of that particular market’s ability to support the enterprise’s prospective operations. In Kitsap such iconic corporate names include:
AMSEC, BAE, General Dynamics, L-3 Communications, Lockheed Martin, Northrup Grumman, Raytheon and SAIC... to name a few. Clearly Kitsap is already home to defense and aerospace industry leaders operating around the globe. Economic development recruitment activities include participating in regional, state, national and international trade shows where recruiters can focus their attention on certain industry sectors that may be a good fit; directly connecting with companies in search of economic development assets that make a particular community competitive. These essential assets include human capital, financial capital, transportation infrastructure, commercial and industrial real estate options, health care and educational opportunities, intellectual and innovative capital, access to robust supply chains, and a strong measure of social political capital that welcomes and supports businesses. Kitsap’s economic development assets are highly competitive, and, include: • Leadership in several key regional economic sectors — military and defense, advanced manufacturing, maritime shipbuilding, technology, tourism, health care and professional services. • Top rankings in essential economic indicators – workforce educational attainment, per capita economic output, intellectual property development, median household income and employment rate. • The largest industrial greenfield site in the Central Puget Sound / SKIA. • Proximity, connectivity, and per-capita contribution to dense and diverse I-5 corridor economy, known around the globe as the Greater Seattle Market. • Exceptional quality of life, and most sustainable balance of work and life. Because Kitsap plays such an integral
role in the Greater Seattle regional economy, our economic development outreach efforts are aimed at leveraging Kitsap’s regional role by positioning Kitsap to participate in the ongoing historic expansion of the region’s aerospace industry, both commercial and defense. This year KEDA, via our Kitsap Aerospace & Defense Alliance (KADA) initiative, will participate in five aerospace trade shows. These opportunities to tell and sell the Kitsap story by personally placing our economic balance sheet in front of the aerospace industry investors and operators include: Pacific Northwest Aerospace Alliance Trade Show in Lynwood; National MRO Show in Atlanta; NW Aerospace & Defense Symposium in Tacoma; BCI Aerospace & Defense Supplier Summit in Seattle; and the world’s premier show – The Paris Air Show – this month in Paris, France. Three members of KADA’s steering committee will be participating as members of the Washington State Department of Commerce’s delegation. I will be joined by Port of Bremerton CEO Tim Thomson and Kitsap County Commissioner Josh Brown, immediate past chair of the PSRC. The delegation will include 50 industry leaders, economic developers, and elected officials from six of our state’s 39 counties. Gov. Jay Inslee will lead the delegation and will be directly involved in our meetings with aerospace companies looking to do business in Washington state. My job is to lay out the case for doing business in Kitsap – a compelling case that I look forward to making. And, I look forward to debriefing you on our efforts in next month’s column. Time to take the field and pitch. On Kitsap! • John Powers is executive director of the Kitsap Economic Development Alliance.
Oil and water can coexist Francisco. But shale oil is recoverable only through hydraulic fracking, and California has banned the practice. Despite its 9 percent unemployment rate and heavy debt load, California has locked away billions of dollars in oil reserves. Compare that with North Dakota, which enjoys a $1.6 billion surplus and a 3.3 percent jobless rate. Industry experts now say the region’s Bakken Formation and Three Forks Formation hold up to 11 billion barrels of recoverable oil, 6.7 trillion feet of and 530 million barrels of natural gas liquids — a threefold increase over estimates just five years ago. So what’s the point? Thanks to new drilling techniques and technology, we can now safely recover billions of barrels of oil that were previously out of reach. With our national debt set to pass $17 trillion, energy production is a way to put Americans back to work, fund essential government programs and chip away at our horrendous national debt. The International Energy Agency says the U.S. could become the world’s largest oil producer in the second half of this decade and could be nearly self-sufficient by 2035. Oil and natural gas account for 1.7 million family-wage jobs and that’s projected to grow to 3 million by the end of this decade and to 3.5 million by 2035. Shale energy development has already contributed nearly $62 billion in federal, state and local tax revenues and could generate another $2.5 trillion by 2035. The bottom line is oil and natural gas wells can safely coexist alongside farming and drinking water supplies. We can have a healthy environment and economic prosperity if we insist that our government allow exploration and extraction to occur. • Don Brunell is president of the Association of Washington Business. Formed in 1904, AWB is Washington’s largest statewide business association, and includes more than 8,000 members representing 700,000 employees. AWB serves as both the state’s chamber of commerce and the manufacturing and technology association. While its membership includes major employers like Boeing, Microsoft and Weyerhaeuser, 90 percent of AWB members employ fewer than 100 people. More than half of AWB’s members employ fewer than 10. For more about AWB, visit www.awb.org.
EDITOR’S VIEW
The freshman Democratic congressman, who represented Port Orchard when he was a state senator, asked Port Orchard organizers of the Seagull Calling Contest about being one of the judges, but the Chamber of Commerce executive director reportedly nixed the idea. There are lots of towns in Kilmer's district that would love to have him participate in their community festivals, and certainly wouldn't turn down a request from such a prominent public official, even if the person running the event is a Republican. Sounds like a seagull scandal. Better call on Congress to investigate.
from page 38 Washington Monthly blogger Ed Kilgore said recently about scandal obsession on the NPR talk show To the Point. As U.S. Rep. Derek Kilmer said at a local event last week while home during a congressional recess, "We've got to get past the point where the definition of success is making the other party look stupid." • • • Speaking of that, was it political pettiness that denied Kilmer a role in a Memorial Day weekend community festival?
June 2013 Kitsap Peninsula Business Journal • KPBJ.com 37
By Don C. Brunell Association of Washington Business There’s an old saying that oil and water don’t mix. That may be true, but apparently they coexist quite well. Traveling through Sweetwater in west Texas, you see an interesting mix of irrigated farming, cattle ranching, oil production and wind energy. Farmers draw water from wells to irrigate fields and provide drinking water for people and livestock. Scattered across those same fields are traditional oil wells that have been pumping crude since 1921. Less than 10 miles from Sweetwater is the Roscoe Wind Farm — 627 wind turbines standing in irrigated cotton and hay fields, wheat fields and cattle pastures. The $1 billion project is one of the world's largest wind farms with a capacity of 781.5 MW — enough to power 250,000 homes. Texans say this shows that clean water, renewable energy and oil production can coexist. It’s a matter of geology. Water wells average about 600 feet deep while traditional crude oil is extracted from 2,500 to 8,500 feet beneath the surface. Fracking occurs even further down. Texas is experiencing a new oil boom. Oil production has doubled since 2005, and it’s poised to double again by 2020. More than 250,000 Texans work in the oil and gas industry earning an average of $100,000 a year. While much of Sweetwater's success has come from traditional oil wells, future prosperity may come from fracking. The area is home to the massive Cline Formation, a 9,800-square-mile reservoir of shale oil 9,500 feet beneath the surface — more than a mile and half below the water table. Based on their experience, Texans believe they can use fracking to extract new oil while protecting farmland and water supplies. In contrast to the Texas oil boom, oil production in California is down 21 percent since 2001. This is not because California is running out of oil. To the contrary, California has huge offshore reserves and an estimated 15 billion barrels of shale oil in a deposit southeast of San
Remembering Ron Ross, and other observations… Kitsap is a little poorer with the recent death of one of its most passionate philanthropists, Ron Ross. I met Ron in 1979 when I first started my business, and he was among my very first clients. He was supportive of both my business as it evolved over the years, and me personally, strongly encouraging my foray into politics. He was an avid property rights advocate and an original member of the Kitsap Alliance of Property Owners (KAPO). But my most memorable experience with Ron was when he invited me to fish in Alaska aboard his boat the Salmon Spirit. It’s one of the highlights of my entire life. It was strictly catch-and-release salmon fishing, because Ron, in spite of being Kitsap’s personification of evil— a developer— had a very deep respect for nature and our environment. I saw things I’ll never forget as we went five days without seeing another person or boat. I’ve always loved the outdoors, but this gave me a much deeper understanding and respect for the environment. Ron quietly gave so much to Kitsap — he and his wife of nearly six decades, Nadean, helped kick off the Haselwood Family YMCA project with a $1 million pledge. The Ross family also developed the ballfields at the corner of Central Valley and Paulson roads in Central Kitsap. Their Central Valley property, Royal Valley Farm, was opened to the public several times a year, and includes a huge barn dance. Last fall they allowed the Silverdale Chamber to use it for a mud run course to raise money
for local charities— which, sadly, got them sued. Other properties owned by the Ross family are used for disc golf, a driving range, miniature golf, and paintball LARY COPPOLA among other The Last Word activities. Ron Ross was a good man to whom Kitsap owes a huge debt of gratitude. He was an honest businessman who was tough, but fair. It was an honor to have been considered his friend. RIP Ron… • • • The Kitsap Sun, following in the footsteps of the Seattle Times and numerous other daily papers across the country, recently started charging for access to its website. For $10 a month you get to read all the stories as they’re published, and comment online as well. If you’ve noticed, the number of online comments has dropped sharply, as not all of the regulars chose to sign up. In some instances, that’s probably a good thing. This would have been the perfect time to change from anonymous commenters to making people own their words by posting under their real name. I sincerely believe this would elevate the quality of debate, as well as weed out the intentionally vitriolic. Unfortunately, the Sun appears to be afraid to do so. Being in the business, I can’t say this surprised me, only that it’s taken so long for
this business model to become the industry standard. My observation is the old men who ran the daily newspaper industry in this country for far too long refused to acknowledge or understand the impact the Internet would have on the print side of the business. In spite of overwhelming evidence younger readers prefer to read online, many of the old guys don’t, so they never understood the massive paradigm shift that occurred — or why. Online advertising was the stepchild of print. Print salespeople didn’t understand how — and more importantly, who — to sell online ads to. It was often given away with print ads. Newspapers are struggling to get advertisers to pay fair prices for online ads — in spite of the fact more “eyes” see them because ads are online almost forever, and can be linked to an advertiser’s Web site. That’s because they’d conditioned advertisers to expect it for free, so they place little value on it. Advertising websites such as Craigslist and others — which are free — have also decimated the classifieds, another stalwart of newspaper profitability. Expect paywalls to become commonplace in the next two to three years, as printed dailies slowly die out. Niche papers like this have a longer lifecycle, but it’s just a matter of time — which is why we’ve positioned our website as Kitsap’s primary business news resource. We have no immediate plans to implement a paywall, but are watching how long it
takes paid online readership to become the norm. • • • The most expensive off-year election this state has ever seen will be between Rep. Jan Angel (R) and Sen. Nathan Schlicher (D) for the state Senate seat Schlicher, a physician, was appointed to when Derek Kilmer was elected to replace retiring congressman Norm Dicks. Campaign spending is expected to reach nearly $2 million — on each side. Control of the Senate hangs in the balance. If Angel wins, Republicans could be in the driver’s seat even without defecting Democratic senators Tim Sheldon and Rodney Tom. Interesting races will also take place on Bainbridge Island, where three council members — Bob Scales, Debbie Lester, and Kristen Hytopoulos — have all chosen not to run for re-election, and in Bremerton, where reducing the council from nine members to a more sensible seven pits several sitting council members against each other. Todd Best, most noted for the Tomb of the Unknown Soldier project, has challenged incumbent Mayor Patty Lent. Being Bremerton’s mayor strikes me as a no-win situation. There’s not enough money to run things properly, and do necessary maintenance, much less improve things — and no political will to raise revenues to accomplish what needs to be done. But I’m sure several Kitsap Sun commenters hiding behind their silly pseudonyms have all the answers. Too bad they didn’t run.
38 • Kitsap Peninsula Business Journal • KPBJ.com June 2013
Double dose of good news in a land deal, a loony leaving Two breaking news items reached us just ahead of deadline for this issue, and the view here is they both qualify as good news. One is the announcement that after several years of work by a host of diligent community volunteers and conservation groups, a deal was signed to buy a prized piece of the 6,700 acres of land that Pope Resources is divesting itself of in North Kitsap. All the folks involved with the Kitsap Forest & Bay Project — and there are plenty — will savor what’s been achieved, especially since a big chunk of state funding for the acquisition was jeopardized earlier this year when Pope Resources and the Department of Ecology were locked in a staredown over finalizing a cleanup agreement for the old mill site on Port Gamble Bay. Achieving the original goal of acquiring all five separate tracts that comprise Pope’s 6,700 acres may be out of reach, but that shouldn’t dim the celebration of completing a deal at long last. Near the end of an 18-month purchase option on the Pope land that ended this spring, it seemed the community effort had amassed about $12 million in funding. The
news release last week announcing the deal to buy 535 acres along 1.5 miles of shoreline south of the mill site did not mention the price, but it probably took much of that estimated 12 mil. The news release said the Kitsap Forest & Bay Project, represented by Forterra, has until March 2014 TIM KELLY to complete any purchase of Editor’s View additional land. There’s a lot to play out yet in this story. Even if funding can be found to buy some of the remaining land — which includes miles of trails that the public has enjoyed access to for hiking, biking and horseback riding — what will Pope decide to do with the rest of it come next March? Start selling 20-acre lots? Olympic Property Group president Jon Rose, the dedicated point man for Pope Resources on the land conservation effort and an ambitious development plan for the town of Port Gamble, said in the news release that “We look forward to continuing
to work together to achieve great outcomes for the remaining forest lands.” So we’ll see what happens... • • • The other welcome news is that Michelle Bachman will be leaving Congress next year, having decided not to seek reelection to a fifth term. Of course, the tea party’s poster girl from Minnesota said (presumably with a straight face) her decision had nothing to do with the fact that she won re-election by an exceedingly narrow margin last November, and that her prospects looked dim for a 2014 rematch with the same well-funded challenger. Nor was her decision influenced, she claimed, by multiple ongoing ethics investigations into alleged campaign finance violations from her short-lived bid to win the Republican presidential nomination last year. That’s about as believable as a perp caught by a police dog saying “That Doberman took a chunk outta my hide, but that’s not why I’m going to the ER.” Maybe Bachman’s planning to run for the Senate. Wouldn’t it be an entertaining race if she were to run next year against Democratic Sen. Al Franken? The liberal author,
comedian and former “Saturday Night Live” writer and cast member vs. Bachman, who’s loonier than the Minnesota state bird. Or she might, as Joan Walsh speculated on Salon.com, join Sarah Palin “on the expolitician/grifter gravy train.” For the foreseeable future, she’ll no doubt gleefully keep stoking the outrage of congressional Republicans and their brothers in arms at Fox News over the trifecta of “scandals” swirling around the Obama administration of late — Benghazi, the IRS debacle, and Justice Department snooping through reporters' emails and phone records. Those issues need clear-eyed, unbiased investigation. But scandalmongering distracts public attention from the multitude of real problems — start with the unconscionable sequestration — that this Congress plagued with Obama-despising obstructionists like Bachman ought to be finding remedies for. And a June swoon over scandals may last all summer and block any discernible path to meaningful bipartisan action. “This is just like a bottomless crack pipe to a lot of conservatives,” political analyst and Editor’s View, page 37
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