February 2014 Vol. 27 No. 2
The Voice of Kitsap Business since 1988
Local lights will brighten a campus, p. 32
Terminal condition Women in Business section, pp. 6-15
Inside Special Reports: Women In Business, pp 6-15 Digital Trends, pp 30-33
The old hangar and attached building that have long housed the fixed-base operation at Tacoma Narrows Airport may be declared surplus property by Pierce County, which owns the airport in Gig Harbor. The lease for Associated Aviation, a longtime maintenance business in the hangar, has been terminated.
Old FBO hangar at Tacoma Narrows in Gig Harbor may be declared surplus and offered for sale to private investors By Tim Kelly, Editor Ben Olsen has been around airports almost as long as the former military hangar where he works. “I started out working for Gross Aviation down at the old South Tacoma airport when I was 13,” recalled Olsen, who recently turned 60. “I was one of the guys who rode his bicycle to the airport every
People, pg 2 Real Estate, pp 23-25 Human Resources, pg 27 Financial, pp 28, 29 Automotive, pp 34, 35 Editorial, pp 36-38 Home Builders Newsletter, pp 19-22 The McDonald’s on Wheaton Way in Bremerton will be torn down and replaced with a new building over the next few months.
day after school and on weekends and sat on the lot and watched airplanes.” His aviation career started when the business owner’s wife noticed him hanging around and offered him $10 to sweep out their hangar. But now the veteran airplane mechanic Cover Story, page 4
Tim Kelly photo
Area’s oldest McDonald’s will be razed, rebuilt on Bremerton site By Tim Kelly, Editor There’s one less McDonald’s in Bremerton, but only for a few months. The outdated drive-in restaurant at 3580 Wheaton Way, site of the first golden arches in West Puget Sound when it was built in the early 1970s, will be torn down and replaced with a new building on the same lot. The new McDonald’s is projected to open in May and will have a
double drive-thru lane and a modernized overall look that are part of the corporation’s current design standards. “This store is old and highmaintenance,” said Doug Fenwick, CEO of Peninsula McDonald’s, owned by franchisees Brian and Kathy Beaulaurier. They operate all 15 restaurants on the McDonald’s, page 25
Kitsap Bank hires new Chief Financial Officer Kitsap Bank has announced the hiring of Alan Crain as Executive Vice President and Chief Financial Officer. Crain has more than 25 years of experience in community banking, and most recently served as Chief Financial Officer at Seattle Bank, where he worked with Alan Crain management and local
investors to restore the distressed bank to profitability. He previously spent 14 years as the CFO at Cashmere Valley Bank. Crain is a graduate of Central Washington University with a Bachelor of Science in accounting, as well as a 1996 graduate of the Pacific Coast Banking School at the University of Washington. “Alan has a broad background in finance, accounting, investment management, information technology,
public finance, mortgage banking, and overall bank operations,” said Anthony George, president and Chief Operating Officer at Kitsap Bank. “We are excited to have such a high-quality and well-respected banker join Kitsap Bank in this critical role. Alan’s experience and background are the perfect addition to our executive team as we look to the future of our organization.” Crain is chairman of the Governance Committee for the Washington Business
Alliance and serves on the advisory boards of Mont Vista Capital, an alternative energy investment bank, and Central Washington University’s College of Business. He is also active in the American Bankers Association, the Washington Society of CPAs and other local nonprofit organizations.
Music store in Silverdale hires new manager Ted Brown Music in Silverdale started the new year with Eric Behling promoted to be the store’s new manager. Formerly the assistant manager, Behling has been with Ted Brown Music for over 10 years. His involvement with music has spanned most of his life, with performing in Eric Behling school bands and growing up with musician parents. Born and raised in Silverdale, Behling also teaches private bass guitar lessons and runs the Trinity Records recording studio in Bremerton. Tacoma-based Ted Brown Music provides instrument sales, band/orchestra instrument rentals, repairs, private lessons and more. Through its nonprofit TBM Outreach, the business has donated over 300 band instruments to young musicians who couldn't afford to play in school band. Ted Brown Music is at 3276 NW Plaza Road in Silverdale, next to the Kitsap Mall. For more information, check out tedbrownmusic.com.
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Kitsap furniture maker receives performance award as Boeing supplier Watson announced that it received the 2013 Boeing Performance Excellence Award at the Gold level. The Boeing Co. issues the award annually to recognize select suppliers for their on-time delivery and exceptional customer care. Watson, a furniture manufacturer in Poulsbo, maintained a Gold composite performance rating for each month of the 12-month period ending Sept. 30, 2013. Watson was one of only 124 suppliers to receive the Gold level of recognition for 2013. “The Boeing Performance Excellence Award reflects the hard work and effort of the men and women of Watson,” CEO Clif McKenzie said. “Our company is an example of American manufacturing – of America at work. We operate locally and keep jobs here while meeting rigorous performance standards for aerospace suppliers. It’s the beauty of a vertically integrated model.” During the performance rating period, Watson provided height-adjustable desks and storage, conference and training tables for Boeing facilities nationwide.
Bremerton Marina ‘club’ offers tenants reciprocal rights at other ports Bremerton Marina announced the launch of a program called the Olympic Peninsula Cruising Club that allows new tenants signing up in 2014 reciprocal rights at three Puget Sound locations. Current tenants will be grandfathered in to the program, which gives Bremerton Marina tenants reciprocal moorage at three locations: the Home Port Marina in Pleasant Harbor, Port Hadlock Marina and Emerald Yachts in Gig Harbor. Bremerton Marina, owned and operated by the Port of Bremerton, plans to add more locations in the future. “We’re thrilled to be able to offer this value-add to our tenants,” said new Port of Bremerton CEO Jim Rothlin. Reciprocal moorage is based on availability, and limited to two consecutive nights at any marina. Cruising Club members may visit each facility up to four times per year, giving them a total of a possible 24 nights at reciprocal properties. There are no blackout dates even in the summer months. To book, Cruising Club members call the Bremerton Marina office at 360-373-1035. Reservations may be made up to 60 days in advance, but only one reservation at any given time can be on the books. Port Hadlock Marina has 600 feet of waterfront, picnic tables and barbeque pits, and offers kayaks for rent. The marina is situated at the south end of Port Townsend Bay close to the entrance to Straits of Juan De Fuca. Pleasant Harbor is a major stopping point on Hood Canal and particularly popular during the three-week shrimping season in May. Yacht brokers Emerald Yachts have agreed to host Bremerton Marina Cruising Club members at their dock near downtown Gig Harbor. The Bremerton Marina, built in 2008 on Sinclair Inlet, has 220 permanent slips available on a month-to-month basis as well as room for 80-100 visiting boaters. For more information, visit www.portofbremerton.org/marinas/bremerton or the marina's Facebook page: www.facebook.com/BremertonMarina. The marina office phone number is 360-373-1035.
Gig Harbor Fly Shop offers seminars, classes for anglers
Leadership Kitsap accepting applications for class of 2015 Leadership Kitsap is taking applications for the Class of 2015. The application deadline is April 10, 2014, for this intensive 10-month training program. If you are interested in becoming more knowledgeable about the Kitsap area and learning how to make a positive impact in civic issues affecting your community, Leadership Kitsap is for you. The mission of Leadership Kitsap is to educate, prepare and connect a new group of committed leaders for community involvement in Kitsap County. Our vision is to create a community where there is a diverse network of effective leaders educated in public policy issues and committed to serving as stewards. Accordingly, its programs are designed to help participants acquire not only a fuller sense of the wide array of critical issues affecting the Kitsap community but also the skills necessary to motivate and engage others in collaborative efforts to resolve them. An exciting piece of the curriculum is participating in a community project. To find out more information about this 10-month community leadership program or to apply, visit www.leadershipkitsap.org. Applications may also be picked up at the Leadership Kitsap office located inside the United Way office at 645 Fourth St., Suite 101, Bremerton. For general questions, contact executive director Kathy Nelson at 360-782-1058 or email: exdir@leadershipkitsap.org.
OLYMPIA — Passage of I-502 to legalize marijuana in Washington does not restrict the authority of cities and counties to regulate or ban marijuana businesses in their jurisdictions, according to an opinion issued by the state Attorney General’s Office. The formal Attorney General’s Opinion was released Jan. 16 in response to a request from Sharon Foster, chair of the Washington State Liquor Control Board, regarding local ordinances affecting new marijuana businesses. The board developed rules for implementing I-502 after it was approved by voters in 2012, legalizing the possession and sale of recreational marijuana in Washington. The opinion states: “Under Washington law, there is a strong
presumption against finding that state law preempts local ordinances. Although Initiative 502 establishes a licensing and regulatory system for marijuana producers, processors, and retailers in Washington State, it includes no clear indication that it was intended to preempt local authority to regulate such businesses. We therefore conclude that I-502 left in place the normal powers of local governments to regulate within their jurisdictions.” According to a news release from the Attorney General’s Office, the drafters of I502 could have structured the initiative to require local governments to accept marijuana businesses, but they did not do so. If the Legislature wants to change that, it can amend the law.
2014 KEDA Annual Meeting & Luncheon March 20, 2014 11:30 am to 1:30 pm The Baymont Inn & Suites, Bremerton Highlights include:
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February 2014 Kitsap Peninsula Business Journal • KPBJ.com 3
Gig Harbor Fly Shop is expanding its educational opportunities in 2014 with courses ranging from exploratory sessions to full introduction classes. Two free hourlong exploratory seminars are scheduled for Feb. 22 and March 22, both at noon. A primary goal of the education program is to help simplify and streamline the process of getting into the sport. The Gig Harbor Fly Shop wants to help dispel the myth that fly fishing is difficult. “Fly fishing has the potential to be technical and can be a way to challenge oneself as an angler, but to get started is far more simple than most folks realize,” said the shop’s education director, James Harrington. “Knowing the basic equipment, learning how to cast and a handful of flies are all you really need to get started. There’s no limit to where you can take it from there.” Interested individuals can attend the free seminar then follow up with a basic introductory class. “Fly Fishing 1.1” costs $50 and covers topics including tackle and equipment, basic fly types, how and where to fish in Washington and what many consider to be the highlight of the class, hands-on casting instruction. There are also intermediate and advanced classes. In addition to offering seminars and classes, the Gig Harbor Fly Shop strives to build a community around fly fishing and hosts additional free seminars and clinics. A full list of events is on the shop’s website along with links to their webstore and blog at www.gigharborflyshop.com. The shop is at 3115 Harborview Drive and can be reached at sales@gigharborflyshop.com or 253-851-3474.
AG opinion: I-502 does not prevent cities, counties from banning marijuana businesses
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from page 1 who runs his business, Associated Aviation, at Tacoma Narrows Airport in Gig Harbor is engulfed in turbulence over his leased hangar — which was the first building on the airport when it was moved there in the early 1960s from McChord Air Force Base south of Tacoma. Olsen, who has a sterling reputation among pilots for the quality of his work, has struggled to stay caught up on his rent payments in recent years, and Pierce County, which owns Tacoma Narrows Airport, is basically evicting him. Associated Aviation had until Jan. 31 to pay about $24,000 in back rent to avoid being shut down, and Olsen said last week just before the deadline that the business got caught up. Still, that only bought him a little more time. When he was notified of that deadline by airport manager Deb Wallace on Dec. 20, Olsen said he was “shocked” at the other news she delivered. “She told us that regardless of whether we got caught up or not, that most likely the lease would terminate on March 31, and this is a quote, ‘because we are likely going to surplus the hangar,’” he said Jan. 20 during an interview at his business. He added that Wallace told him it would cost more to do all the needed repairs and renovation of the building than to “gut it and completely rebuild it.” That was essentially the recommendation from an assessment done by the Pierce County Department of Facilities Management, which concluded that the aging hangar and attached office building are in poor condition. That report, dated Nov. 23, cited serious concerns about the hangar’s electrical wiring, as well the lack of insulation and an HVAC system in the building, peeling and rotting sections of siding, and other problems. The report recommends “completely stripping the building to the structural steel, and rebuilding the hangar building utilizing only the existing concrete slab and structural frame.” The County Council would have to approve declaring the hangar surplus property, but Wallace said that issue is unrelated to terminating Associated Aviation’s lease at the end of March. “We are in the process of taking a proposal to council for surplusing that building, and then we would put it up for redevelopment,” she said. “The reason Associated received that (termination) letter has nothing to do with that; it has everything to do with the history they have of paying their rent.”
Tim Kelly photo
A Cessna Citation corporate jet sits in the Associated Aviation maintenance hangar at Tacoma Narrows Airport in Gig Harbor. Wallace noted that the business was put on a month-to-month lease almost a year ago. Prior to that, Associated had operated on a five-year lease. “They have had, through the duration of this contract, issues with their payment,” she said. As for the assessment done on the hangar, Wallace said she is “concerned that we are in a building that’s in that poor a condition.” No one disputes that the old building needs work. However, Olsen said the condition of the hangar is basically the same as when Pierce County bought the airport five years ago from the city of Gig Harbor. He said his business has done a lot of routine maintenance and upkeep on the building. He also said no one's to blame for the financial struggles of his business as general aviation business declined the last few years, but the termination of the lease "has gotten a lot of our customers really upset." Wallace said she's had calls from concerned pilots who keep their small planes at the airport and have them serviced at Associated Aviation. There's been "a lot of misinformation" circulated about the lease termination and what's going to happen with the hangar, she said. "I would like to keep (Associated) on the airport, but the issue of surplus is separate from the eviction notice," she reiterated. "This is just a tough one, because they've been here for years at the airport." Some in the local aviation community have connected the dots between Associated Aviation's ouster, the surplus plan for the building, and a new player on the scene — George Swift, who just finished building a big new private hangar at Tacoma Narrows and is a potential buyer of the Associated hangar if it's declared surplus property. Swift owns Western Steel, a construction company based in the Tacoma area that builds hotels and other commercial projects. He recently formed
Coming Next Issue...
another company called Narrows Aviation and bought the fuel concession from the FBO (fixed-base operator) at Tacoma Narrows Airport in October. A large banner with the business name is hung on the front of the Executive Terminal, the front office building attached to the hangar housing Olsen's aircraft maintenance operation. Next door sits the large new hangar Swift's company built. Olsen and others wonder whether Swift's arrival as a major new airport tenant spurred the process to get the FBO building/hangar declared surplus so that an investor might do what the county can't afford — spend up to $2 million for a replacement facility, possibly before Tacoma hosts the prestigious U.S. Open golf tournament in 2015. “None of this started, or we had even heard about it, until this new hangar over here was being built,” Olsen noted. That's not the case, Wallace said, even though she confirmed that Swift is interested in the Associated hangar. “George Swift also bought Narrows Aviation and he is talking with us about the surplusing of the building. He will undoubtedly be one of the people who bids on that,” she said. However, Wallace said the airport was "looking at our options before George came on the scene. We've actually been looking at doing something with this building for some time." She said the long-term goal is to have an upgraded facility that will generate more revenue for the airport, which doesn't have funds in its capital facilities budget to renovate the "dilapidated" building. So it makes sense to surplus it and sell it to an investor. "That's prime property in the center of the airport," Wallace said. “It’s a prime location that is underutilized.” The county would still have a ground lease for the site, she noted, and would require that the building be redeveloped for aviation purposes. That doesn't necessarily mean it would still house an aircraft maintenance business. Moreover, Associated Aviation’s closure would mean the loss of a certain type of service that’s become hard to find in the Puget Sound area. “One key thing here, to me, is that we’re the only company or shop in the Northwest … that does turbine engine work on private or corporate-owned airplanes,” Olsen said. “The closest place I know of is Portland.” Frank Scoggins is a private pilot, a retired Air Force general, and a loyal Associated Aviation customer for three
Retirement Lifestyles
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Impacts of rules, regulations, legislation
planes he keeps at the airport. He shares Wallace's view that the FBO site is the centerpiece of the airport, but he questions the basis for a surplus declaration. "That is prime real estate, and it ought to be used for the good of the entire airport community," Scoggins said. "Anything that would cause that property to be surplus should be based on the fact that the county doesn't require use of the building anymore. "In my opinion, surplusing a building should have nothing to do with the fact that an individual offered to buy it, but only if that facility was excess to their needs." Swift, reached by phone at his Western Steel office in Milton, said his new hangar is almost ready for occupancy, and he has a corporate tenant lined up to store aircraft there. He was vague when asked about his interest in the Associated hangar. "I don't know that much about what they're doing with the surplus thing," Swift said. "We'd look at it, depending on what the requirements would be with it" for redeveloping the facility. He said the hangar "has a lot of issues." "Whoever takes that project on," Swift said, "if they want to remodel and redevelop it, it's going to take a lot of money." Wallace, who took over as manager in 2011, said the airport is growing, helped by the runway rehabilitation project completed last year. “Tacoma Narrows has been an underutilized airport that had a huge list of deferred maintenance,” she said. The focus now is on “turning it into the economic generator it can be.” She said that two years ago only about half of the 80 hangars owned by the county were occupied, but that has increased to 75 percent. Olsen views it differently, and feels like his struggling small business is getting squeezed out. “And again, I’m not blaming the county for our business problems, I’m not blaming the county for much of anything, really,” he said. “It’s just sad to see it go downhill.” He’s not sure what will happen after March. He’s explored other options to stay on the airport, but said there’s not another space that’s big enough and affordable for his operation. He said he enjoys his work and doesn’t want to retire for another 10 years. He wants to keep his business going for one simple reason. “Because I love it,” he said. “And it's the way I make my living; it’s the way I’ve made my living since I graduated from high school.”
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Kitsap Bank announces retirement of board member Kitsap Bank announced that David Gitch retired from his position on the bank’s board of directors effective Dec. 31. Having served on the board since 1998, Gitch reached the mandatory retirement age for active board members, and in 2012 he transitioned into the role of director emeritus. In honor of his David Gitch retirement, Kitsap Bank is donating funds to the Harrison Medical Center Foundation in Gitch’s name. “Dave Gitch has been an invaluable asset in his role on the bank’s board and as a member of the board's audit committee,” said Cydly Langer Smith, chairwoman of the board. “Dave’s leadership, integrity, insight and wisdom have been instrumental in the growth of the bank. All of the Kitsap
Bank community extend their gratitude to Dave for his years of faithful service.” Gitch retired in December 2004 as president and CEO of Harrison Medical Center, capping a 40-year career in health care administration. He has served as a board member for numerous organizations including Admiral Theatre, Lutheran Community Services, Washington Health Foundation, Martha and Mary Lutheran Services, and Great Peninsula Conservancy. Most recently, he has been involved with the Olympic Peninsula Kidney Dialysis Center, the Tri-County (Kitsap, Jefferson, and Clallam) Workforce Development Council, and the Bremerton Rotary Club.
The almost 100 employees at the Bremerton Housing Authority (BHA) selected Kitsap Humane Society as the nonprofit organization they will “adopt” in 2014 to focus their afterhours volunteer time and team-building efforts. BHA staff will be holding supply and fundraising drives throughout the year for the animals at Kitsap Humane Society, as well as volunteering at KHS events such as the Fore the Animals Golf Tournament on May 9 at Trophy Lake Golf & Country Club in Port Orchard; PetsWALK on July 12 in downtown Poulsbo; and Animal Krackers, a dinner and auction event benefiting Kitsap Humane Society, held in the fall in downtown Bremerton. “We are honored that the employees of the Bremerton Housing Authority selected Kitsap Humane Society as their nonprofit for 2014,” said Eric Stevens, KHS’ executive director, “we look forward to working with them and having their support in our efforts to rescue, rehabilitate and rehome over 4,000 animals this year.” For more information son Kitsap Humane Society, visit kitsap-humane.org.
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The Kitsap Community & Agriculture Alliance (KCAA) is organizing the West Sound Agritourism Workshop, a special event to initiate the Kitsap Peninsula as a destination for small farm, nature and other outdoor activities. The workshop will be held Feb. 22 from 8:30 a.m. to 4 p.m., with lunch provided, at the Bremerton Boys & Girls Club, 3102 Wheaton Way. Workshop Sessions include: • Agritourism — Cultivating Tourists on the Farm, an overview introduction with Curtis Beus, director of Okanogan County WSU Extension. • Agritourism Assets Mapping • Agritourism Issues Desired outcomes are: • Increased knowledge about small agriculture's place and contribution to a sustainable West Sound regional food system and the local economy. • Increase knowledge of attendees about current & new agritourism enterprises including opportunities, regulations, liabilities, and marketing. • Small Ag questionnaire & opinion survey results. • Asset map of current and planned agritourism activities. Tickets for the event are $20 for KCAA members, $25 for nonmembers, and $10 for students and interns. Tickets are on sale at Brown Paper Tickets (http://bpt.me/559822). The Kitsap Community Agricultural Alliance is a 501(c)(3) nonprofit that provides Kitsap County and West Sound residents with small agriculture events, education opportunities, and resources required for small producers to profitably and efficiently supply products to consumers, retailers, wholesalers, food service operators and food manufacturers. These efforts contribute to a sustainable small agricultural industry, the local economy and preservation of our region's farming heritage for future generations. For more information, go to www.kitsapag.org.
Bremerton Housing Authority picks Humane Society as its nonprofit for 2014
New business ventures reflect local women’s passions
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By Rodika Tollefson Jennifer Wiebusch has spent 35 years in a fitness-related career. The Olympic Fitness instructor and personal trainer loves her job, but knows she wants to slow down a bit and not exercise for a living the rest of her life. Three years ago, Wiebusch found the answer: personal coaching. It’s a bit different than personal training, but has one thing in common, challenging people to achieve a goal. “As a personal trainer, I will give you five things to do — my plan for what I think is best for you. In coaching, I’m an accountability partner,” she says. “You bring me something you want to Jennifer work on and I’m there Wiebusch beside you. I act as your guide through the process but I don’t tell you the answers.” She took a year to get trained and licensed, and in February 2011 was ready to launch Heartstring Life Coaching. She’s still an instructor and manager at Olympic Fitness, where she’s worked for 27 years. But personal coaching is where her new passion is. “It’s not a one-time visit. It’s a long-term commitment, and I see people have success. I see them being able to make changes before my eyes,” she says. “That’s my joy, seeing people become more confident and becoming decision-makers on their own.”
Zoe Bartlett’s change was more drastic. After a career in hospitality and later at Microsoft, she wanted a new challenge. “I wanted to try something different and did a 180-degree turn,” she says. She spent two months in France to learn more about her passion: food and wine. The result was a cupcake business, which she later sold, but not before she got bit by the proverbial entrepreneurial bug. That’s when Intentional Table was born as a virtually based special events business. A year ago, she kicked it up a notch — she partnered with Linda Brandt to open a food studio on Bainbridge Island. The business Zoe Bartlett includes a cooking school, retail and special events. The studio uses both staff and guest instructors, including some from the community, and as classes started selling out, more have been added. Bartlett decided to become an entrepreneur so she could create new experiences for herself and grow in new ways. And she’s done that for others, too, helping customers expand their horizons. But the best part for her is seeing Intentional Table become a hub. “I absolutely love what I do and I feel that Intentional Table is a gathering place. That’s what I love about it because we executed it well,” she says. “It’s extremely gratifying.”
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They took eight months to research and study treatment options as well as create a solid business plan and look for investors. Lice Girls opened in September as a mobile treatment service, with the goal of adding a physical location after a year or so. “We were so busy, we couldn’t keep up with demand,” Frost says. After just three months, the pair moved ahead with a treatment center. Since opening the brick and mortar location, they’ve had customers come from as far as Gig Harbor and even Seattle. Frost says both she and Gomma have worked with families before and they went overboard with their research because they wanted to provide a service based on their ethics. They also offer products for home treatments along with education and information. Registered nurse practitioner Nancy Boyden has her own practice that she opened last June in Gig Harbor. Nancy Boyden also took the leap last June to open a practice in Gig Harbor. A registered nurse practitioner, she offers primary care along with skin treatments and bioidentical hormone replacement therapy. While she’s new to being a solopreneur, she’s a veteran at her job, having been in practice for two decades. Boyden, who has a master’s degree in nursing, has been using bioidentical hormone replacement therapy for about 10 years, treating not only women but also men and teenagers. Patients travel from around the region and the state for the therapy, a natural approach to hormone replacement that uses herbs and compounded drugs made of natural plant derivatives. Many times, patients come to her after exhausting other treatment options with no results. With a staff of three, Boyden’s practice offers a variety of treatments for conditions ranging from loss of energy and weight gain to acne. “There are not many nurse practitioners who own their own businesses, and not many do what I do,” Boyden says. “I thought there was a need.” Sarah Frost and Sophia Gomma were also compelled to start a business to fill a need. The two women have worked together on large projects and realized they made a good team. So they started brainstorming business ideas. That’s when they kept hearing that Bainbridge Island needed a lice-treatment service. “At first we weren’t fond of the idea, but the more we did research, the more we saw the need,” Frost says.
Sarah Frost, left, and Sophia Gomma did a lot of research before starting a mobile service for treatment of head lice, calling their business Lice Girls. “We’re not just here for the service, we’re here for support. We want to be a resource,” she says. The two partners have received inquiries about franchising and Frost doesn’t discount the idea. “We want to finetune the service locally first,” she says. Christie Johnson has also been in business less than a year but is already positioning her enterprise for major growth. She opened Purpose Boutique in downtown Bremerton in August, and the store has surpassed all her expectations. Johnson, whose husband is a Navy officer, was working part-time in marketing and public relations while raising two small children. But she felt she could do greater good through a business than personally. She opened the boutique in her house using savings, and invested the profits into a small storefront. The store did so well, Johnson needed a bigger space soon after, so she recently swapped spots with Amy Burnett’s art gallery to have more room in their shared building on Pacific Avenue. Purpose Boutique donates 20 percent of profits to nonprofit organizations, Ventures, page 15
Veteran mortgage lender’s new gig has feel of a reunion valuable today, he notes, in a more highly regulated lending environment with more stringent requirements for mortgage loan documentation. “It’s gone full circle,” Bergquist says. Kind of the same as he and Hawryluk working together again, which he says isn’t much different than it ever was. “Only that I call her boss every day,” he chuckles, “which she hates.” Hawryluk weathered the upheaval in the mortgage business when the housing market collapsed and the recession hit, Reunion, page 13
Val Hawryluk wears a special jersey showing her Seahawks spirit at the newly opened Evergreen Home Loans office she manages in Silverdale.
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 7
By Tim Kelly, Editor It's not quite the same as Christine McVie rejoining Fleetwood Mac for a reunion tour, but veteran mortgage loan officer Val Hawryluk says her move to manage a newly opened Evergreen Home Loans office is "kind of like getting the old band back together again." Coincidentally, Hawryluk began working in the mortgage business the same year that Fleetwood Mac released the classic album Rumours. "I started doing mortgages in 1977 with the old Olympic Savings & Loan," she says. Hawryluk notes that makes her "probably the longest, oldest loan officer in Kitsap County, because I take loans still to this day. I'm an originator, and I've always managed the branch in addition to that." As her career advanced, she became a principal in Spectrum Financial Corp., which was sold in 1996 to a company that was acquired by Wells Fargo. For the last 15 years she was a branch manager with Eagle Home Mortgage in Silverdale. But the new year finds her in a new job, though Hawryluk is working with a familiar cast at Evergreen, where — to paraphrase another rock classic — the new boss is the same as the old boss. Evergreen senior vice president David Sloan left Eagle about six months before she did, and recruited her to manage the branch that opened in Silverdale in January. "So I felt like I was coming back to something I'd already known before," she says. Sitting in her new office wearing a Seahawks jersey, the affable Hawryluk says she left her previous company on good terms. She decided to make the move partly because Eagle was merged with its parent company and became a large nationwide opreration. "My best fit is at a regional-size company," she says. "I would equate it with Goldilocks and Three Bears — this company's too big, this company's too small, and everybody has a different bed they want to sleep in, so to speak. So this is just a good fit for me." Her presence at Evergreen also made it seem like a good fit for Tom Bergquist, someone else she worked with early in her career, when she advanced from a backroom support role processing mortgage applications to being a loan officer working directly with clients. "I worked for a boss who truly believed in me — who now works for me," Hawryluk says, referring to Bergquist, who was the founder of Spectrum Financial. "He thought I could be a loan officer." Bergquist, who had retired but decided to get back in the business a couple years ago, says he's pleased to be part of Hawryluk's staff of 10 loan officers at the new Evergreen office. “She was my loan processor, and she was extremely good at that,” he recalls of working with Hawryluk in the late ’70s. “She was technically competent with everything that was going on. It was more getting her the confidence to go out and take that to the sales side of the business.” That strong technical background is
Café owner has a handle on enhancing her community By Tim Kelly, Editor Her entrepreneurial success in Kingston is not quite a story of hometown girl makes good, but almost. Amy Anderson wasn't born here, but the owner of Cup & Muffin and the Axe Handle Café sure feels like she belongs here now. She and her husband, Mark, were grand marshals for the town's annual Fourth of July parade last summer. For several years before that, Anderson participated in the parade by handing out coupons for a free cup of coffee at Cup & Muffin, the local coffee stand she took over and revitalized six years ago. "The streets are packed, and that’s the one time you can reach out and take somebody’s hand and give them something from your business," she said. Although she didn't grow up in Kingston, Anderson's deep family roots aren't far away. Her grandmother was in the first graduating class at Chimacum High School, and she proudly notes that the house her great-grandfather from Scotland built in Sequim is still there. She researched the local history of the Cup & Muffin site before going into business there. After the original owners who ran a drive-in restaurant had retired and sold the property, it became a Taco Bell and then drive-thru coffee stand as it went through a succession of short-term owners unable to make it a viable business.
Amy Anderson is proprietor of the Axe Handle Café, which opened last summer and is her second business in Kingston. She has owned The Cup & Muffin, shown below, for six years in a spot across the street from the café. Tim Kelly photo
But Anderson saw a diamond in the rough, even though the coffee stand is
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flanked on Kingston's main drag by competitors — a McDonald's and a gas station with its own java hut next to the pumps. "Cup & Muffin is my baby," she said. One problem with the place when Anderson bought it was the building's drab, nondescript appearance, so she painted the structure orange to make it stand out. Another issue was mediocre customer service, so she kept only one employee — a smiling 16-year-old who had been the exception when Anderson got coffee there before becoming the owner. "She worked for me off and on for
several years," she said. "I started with one employee, now I think I have 10 there." The business lived up to its new name by offering muffins along with coffee, plus scones, cinnamon rolls and breakfast sandwiches. "We probably sell as much food as coffee there now," Anderson said, even though there's no room to add inside seating. There is a walk-up window next to a few outdoor tables, on the opposite side from the busy drive-thru lane on the small lot. "The place was built as a double drive-thru burger joint, Burger Landing, and the owners lived in the building behind it. They were very invested in our community," said Anderson — and the same applies to her now, as proprietor of two local establishments. "My favorite part of building this … is providing a space for people to come together," she said on a recent morning at the Axe Handle as she greeted customers coming in to her café, where people sometimes walk in alone but see a familiar face and wind up sharing a table. She said one night recently a couple young guys she didn't know came in, but a connection was quickly established when they pointed out their grandfather in some of the historical photos on the wall. Those photos and the café's name — even the repurposed axe customers grab to pull the front door open — honor the community's history as a logging town.
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from page 8 The Axe Handle opened last June across the street from Cup & Muffin in the IGA shopping center. In a similar scenario to how Cup & Muffin started, Anderson took over a location that had been occupied previously by a coffee shop (Cuppa Bella) that didn't last long. She and her husband, Mark, had planned to open another business in the building next to their coffee shop. Her vision was a store/deli setup that would sell a variety of locally sourced items. But their plans shifted when the owner of the IGA center, Rick Bjornson, approached them a year ago about opening a business in the space he had available. "It was a little bit hard for Mark to convince me to scrap the business plan we
Jenn Fredericksen owns two coffee shops and is a principal in Peninsula Electric. had worked on," Anderson said. But she's happy with how things have turned out with the Axe Handle, which was closed for about three weeks after Christmas so the couple could complete some kitchen upgrades and other finishing touches that didn't get done in the rush to open their café last summer. Anderson, who turns 40 this month, prepared for being a hardworking entrepreneur by running a Seattle business called Espresso by Design for 10 years before she and Mark started their family. "The last day I worked there was my due date with my daughter," she said. Now her 10-year-old likes to come in to the café, "and she'll put on an apron and wash dishes with the girls." When the Axe Handle reopened in January, it also unveiled an expanded menu developed mostly by Mark. Shepherd's pie
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For example, she’s registered a license for a burger joint and even received a call from the Great American Franchise TV show (but couldn’t participate without a physical location). She has other ideas for businesses and doesn’t discount the idea of venturing off into a new one some day. She’s also working on a real estate license and plans to become involved with a Seattle brokerage her brother is opening. The best part about being a business owner, she said, is watching the companies grow and working with the employees. “We try to give them the world,” she said. As one example, the company provides medical and dental coverage as well as a simple IRA. Having employees is also the most challenging part because she feels responsible for providing them with employment. “The most stressful part is making sure the business is going for the employee,” she said. “The rest of it is easy to figure out.”
and peppercorn barbecued ribs have been popular items on the new dinner menu, and Anderson said another of her husband's specialties, jerked chicken, will return this summer when the meat can be smoked outside. Since the café's kitchen is on the other side of a wall from a bookstore, it has some limitations to reduce fire risk. There is no grill and no fryer, which means no french fries, and no scrambled eggs or hashbrowns (breakfast dishes are served with roasted potatoes, and eggs are poached or cooked in individual containers.) The mostly greasefree kitc hen has a panini grill for sandwiches and for cooking sausage patties and bacon, and a convection oven for baking. The Axe Handle serves wine and beer, all from Washington wineries and area craft breweries. The café is open from 7 a.m. to 9 p.m. every day except Sunday, when it
serves breakfast only and closes at 2 p.m. — allowing the owner an evening for family time. Anderson, who has 28 total employees at her two establishments and can do any job at either place herself, took a break over Thanksgiving after working long days most of last year to get her new business off the ground. She went to Hawaii with her friend Beth Brewster, owner of Kingston Adventures outdoor recreation business, as part of Brewster's support crew while she competed in an elite double Ironman triathlon. Now the ever-smiling Anderson is immersed again in running her coffee shop and café, which is where she wants to be. “These are small businesses, so you have to be there, with your customers and with your staff," she said. "Customer service and seeing people smile is what drives me.”
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really strive to put the employees first,” she said. “If you treat them well, customer services comes.” When the couple launched the electrical business, Fredericksen went as far as getting a trainee card. On her first job, she cut her hand, and on the second, she got real nervous while working on a ladder. That was the end of her field training, but she’s become knowledgeable about wiring and parts and is very comfortable talking shop with customers. Fredericksen’s father was an electrician and the family moved to the area from New York when she was in seventh grade. A Central Kitsap High graduate, she took nursing and then business classes at Olympic College, but had to put her education on hold as her businesses required more and more attention. Between the two businesses and raising two boys, Fredericksen keeps busy. But her mind never stops thinking about new possibilities.
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By Rodika Tollefson Jenn Fredericksen was only 21 when she became an entrepreneur. She started working at Latte on the Way in Poulsbo before she was old enough to drive, and when the owner was ready to sell seven years later, Fredericksen took the leap. Some 15 years later, Fredericksen not only has two coffee shops employing 10 baristas, she also has a hand in Peninsula Electric Corp., a business she owns with her husband, Charlie (who she met at her coffee stand.) Their company is about eight years old and employs 11 people including nine on crew. They work on both commercial and residential projects as well as some federal contracts, with a customer base around Western Washington and in Alaska. Peninsula Electric also does generator work. The two businesses are quite different but have one thing in common: Fredericksen’s view of her employees. “I
Successful careers shift perceptions of ‘man’s world’ roles Women achieve goals in traditionally male professions
10 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
By Rodika Tollefson Angel Wunder was raised in a family of healthcare providers — her mother was a radiologist and her father a pharmacist. Growing up around the pharmacy, she said she noticed that many people would start out with one or two prescriptions, then kept adding more — they were not getting better. She wanted to go into the medical field, but also wanted to do something to help people heal. She started out doing marketing for a chiropractic clinic, and was helping Angel Wunder soon patients in the physical therapy bay. That was the beginning of a new passion that grew into a successful career. As a solo chiropractor in Poulsbo for 12 years, Wunder offers several services at her Wunderful Health wellness center. “I focus on high quality and not quantity, and each patient receives personalized treatment,” she said. “I can help people feel better and it’s usually immediate.” She’s the only area chiropractor who also does massage therapy, and she performs laser therapy, which helps with healing and pain control. She’s certified in various treatment techniques.
Rochelle Stockwell is slots manager at Clearwater Casino Resort. “I do this because I enjoy it, it’s where my heart is,” she said. “This is my passion.” Rochelle Stockwell, slot manager at Clearwater Casino Report, started out with Port Madison Enterprises as a slot cashier after high school and has worked her way up through several positions over the past decade. “Once I got in the door, I found that environment exciting,” she said. After deciding to make gaming her career a few
years ago, she also took classes at Olympic College. In the slot department, Stockwell oversees 70 employees and the performance of 1,100 slot machines. “I really enjoy who I work for and the company. They’ve given me many opportunities to grow,” she said. She said Clearwater Casino encourages women to take leadership roles — in fact, her predecessors in her job were also female. Stockwell is currently enrolled in an executive development program at the University of Washington’s Foster School of Business and hopes to use her education in new leadership roles. She loves diving into data and finding ways to improve the revenues generated by her department. “There’s a lot going on and sometimes I don’t know where the day will take me,” she said. Allison Westergard has been curious about how things work since she was a child. She gets to satisfy that curiosity as a lead industrial engineer at the Puget Sound Naval Shipyard. Her job is to look at processes and find ways to make them faster, safer and more efficient — and to train Allison others how to do it. Westergard Westergard is a black
belt in Lean/Sigma concept and supervises green belt trainees, working with a fresh cadre every six to 12 months. While leading the group, she also participates in improvement projects herself. “The reason I like working at the shipyard is because we’re making sure our sailors are prepared to go to sea,” she said. “We’re part of something bigger than ourselves.” She enjoys seeing how systems and people interact and helping to improve that interaction. She also likes the teaching aspect of her job. “I like helping (others) go back to their jobs and see things from a new perspective,” she said. Westergard recently passed the professional engineering exam that allows her to become a licensed industrial engineer in the state. She hopes to pursue a master’s degree and eventually a doctorate. Di Brown was the technology manager for Central Kitsap School District for nearly 11 years until last summer. Her new role is as the director of information systems at Washington Schools Risk Management Pool. Brown, who still lives in Di Brown Bremerton, is responsible for all IT operations including computer networks, tech support staff, phone systems and audio-visual equipment. Brown served as a grounds intelligence analyst in the Army and her first job out was an executive assistant. It was the early ’90s, when computers were just becoming more common in the workplace. “I became the person you called before there was an IT department,” she said. That got her hooked, and her career progressed to include other aspects of the IT industry — first by accident. “Once I realized I liked it, I wanted to go into information management,” she said. “I went on a quest, and I moved around a lot because I wanted to learn different skillsets.” She says the best part of her job is “being able to make people’s lives easier.” It’s a fast-paced environment, as technology evolves on a daily basis. “I use my technology skills less than anything else,” she said. “It is all about the people. Technology is a tool and it’s always about the people doing the actual work.” Ellen Ross-Cardoso has been managing her family’s development company, Royal Valley LLC, for nine months — and loves being a developer. The company owns several properties in different stages of development, including 160 acres in Seabeck slated for residential use and another property in Central Kitsap that will mix residential with retail. Careers, page 14
Engineering her role in the realm of developers By Rodika Tollefson When a proposed development strikes a chord with the community for one reason or another, the atmosphere can get quite passionate. For Berni Kenworthy, that kind of pressure is just part of the job. As one of four partners at Team 4 Engineering based in Poulsbo, Kenworthy is frequently the face of a new project.
Berni Kenworthy is a developer and one of the partners in Team 4 Engineering in Poulsbo.
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“I’ve learned to get a thick skin and I’ve learned to be confident we can find a compromise,” she said. A thick skin may be required often in her profession, which is typically a man’s arena. But Kenworthy is equally comfortable managing civil engineering projects and leading a council of up to 30 people representing area developers. As the president last year for the Home Builders Association of Kitsap County’s Developers Council, she facilitated various discussions with stakeholders, including county planners, that affected the local industry. She’s donated dozens of hours to support the HBA’s review of the Bremerton fire code as well as to help improve the county Department of Community Development’s process. For her efforts, she was selected in January to receive HBA’s Associate Member of the Year award. “I liked being part of the council and being able to come together with developers and jurisdictions to listen to each other and collaborate,” she said. Kenworthy started out in the environmental field after graduating from
North Kitsap High School and getting a degree in environmental science and chemistry. She worked for the dredging industry, traveling around the world. She’s also done cleanup projects, including at the Hanford nuclear plant in Eastern Washington, while working for the Department of Energy. But she was more drawn to the engineering side of things, even in environmental work, and she also has a master’s degree in engineering. Looking for a way to travel less and work closer to home, Kenworthy landed at Team 4 Engineering more than eight years ago. One of the attractions to the company was the possibility of becoming a partner, which she did after a year. Her job includes working with private land developers on both residential and commercial sides. A typical job may entail a subdivision of as many as 100 lots, or commercial sites such as banks and retail centers. A big part of her job also includes networking and being involved with the community. And over time she’s done less design and more business development and project management. “A major challenge is to balance client needs with regulations and to keep up with all the changes that impact clients,” she said. Kenworthy says she misses the number crunching and other project design aspects sometimes, but she enjoys what she does now. “I like the challenge of collaborating with multiple entities — and it feels good when you’ve achieved (the goals),” she said. For most of her partnership time, the economy has been a challenge. Kenworthy said it was a little stressful, but they were fortunate to only make one layoff at Team 4. “It took us working our tails off to retain existing clients and find new ones,” she said. Things are turning around, however, and she says clients who’ve been quiet are calling again — the company, in fact, hired more staff within the last year. “People’s confidence is improving, as is their ability to get lending,” she said. “Things are coming alive.” Kenworthy, who grew up in a military family, was a teenager when she first moved to Kitsap. She left for 10 years and came back in 2000, and is enjoying living here as an adult. In addition to being involved with the HBA, she’s active with the Mathis Guild, which raises funds for Harrison Medical Center needs. “I like that my work is local and I feel part of the community,” she said. “I see the results of my efforts and it feels good to be connected.”
Improving spaces through color is designer’s forté
12 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
By Rodika Tollefson When Connie LaMont looks at a space, she can envision its possibilities in her mind. It’s not just her 30-plus years as an interior designer and colorist that helps her intuitively transform it. LaMont likes to read people when she first meets them, based on various cues including body language — an ability influenced by her mother, who had a degree in psychotherapy. LaMont says her goal is to improve her clients’ lives through the right use of color — and it starts by understanding their personalities. “The correct color brings more energy to the clients,” she says. “I want to empower people and give them positive energy so they can believe in themselves, and it can be as simple as bringing in some color into their space.” She calls her process “sculpting with color,” which includes layering colors and manipulating them to make the space feel bigger and lighter. She uses at least five colors in a space and as many as 30 or 40, and says that color impacts everything from emotion to how a person feels physically. Part of the problem-solving she does is
Designer Connie LaMont mathematical. Influenced in this case by her engineer father, she says identifying solutions to color-related issues is like solving math problems. “If people don’t know why a space makes them feel tired, that’s a math problem,” she says. “I know how to read people and get to the correct answer. … Being a colorist is almost like being a musician and hearing when someone’s out of tune.” LaMont’s first degree was in studio arts but she started dabbling in interior design in her 20s. Friends liked what they saw, and told their friends, who told their friends.
When her children were a little older, she went back to school for an interior design degree — and that’s when she got real excited about color. Color consultations are her main service, and she works with two or three clients a day. That’s half or less than what she used to do, but she had to cut back a few years ago for medical reasons. When LaMont and her husband, Wayne, moved to Poulsbo about a decade ago, she planned on being a stay-at-home mom. Within a week, her sister, who lives a mile away, told her someone needed interior design. Word spread. Her stay-athome days were over. “There wasn’t a lot of interior designers in the area,” LaMont says. “It was like wildfire.” Wayne, who’s been an architect for a long time, joined LaMont Design, Inc. in 2000. The couple have been working both on separate and joint projects since then, including several landmarks. Connie also has her hand in many beautification projects in downtown Poulsbo and has also received two beautification awards from the Chamber of Commerce. LaMont travels all over the country for her design work and tailors the colors to the
specific region. She works with her clients’ budgets and has even been given as a “gift” to people who can’t afford much except maybe some furniture and décor rearranging. She says that many times people don’t realize that using her services doesn’t take a lot of time and money, while it helps them plan their space better. “There are zero boundaries. There are no rules, and if there are, I’m all about breaking them,” she says. Her personal tastes stay out when she works with a client. LaMont even gets hired by people who don’t like much color and prefer to stick with neutrals. “Everybody lives exactly correctly and what I want to do is finish their train of thought and give them the space they don’t think they deserve,” she says. “That’s the best part.” After 30 years as a colorist, LaMont can still find new, fresh ideas. She compares her job to eating ice cream because she enjoys it so much, especially meeting many interesting people from different walks of life. “As a business, it’s much more fun that I thought it would be,” she says. “It gives me so much energy. It’s the funnest job in the world.”
Rodika Tollefson photo
Kitsap Birth Collective co-founders Kendra Machen, left, and Joanna Bennett sit outside of the massage therapy room, which can also be used for consultations.
Kitsap Birth Collective moves into new location, launches doula co-op By Rodika Tollefson Kendra Machen, a Port Orchard doula and certified birth educator, has been serving as a local resource to new moms and moms-to-be for many years. In 2007, she created Kitsap Birth Collective with the goal of connecting families and birth professionals. In December, the Kitsap Birth Collective took off in a new way. With a group of four other doulas, Machen created a nonprofit that opened an official center in Port Orchard for birth education, classes
and other activities. The group has also launched a co-op for other professional doulas and affiliates to provide networking, referrals and professional development. Each of the five doulas on the board of directors is a mother and has her own business. Machen has been providing birthing services for 15 years including classes and training. She previously had a small office on the second floor of the same building on SE Ellis Court. When she Collective, page 13
Liberty Bay Bank promotes Robertson to VP Liberty Bay Bank in Poulsbo announced the promotion of Elizabeth Robertson to vice president. Robertson, who’s been with the bank since 2009, and as vice president and credit administrator she leads credit analysis activities and supports overall lending administration. Robertson has been in banking for over 17 years with experience in credit; commercial, consumer and residential lending; loan servicing and documentation; and new accounts. She has a master’s degree in Business Administration from the University of Massachusetts-Amherst. “Elizabeth has been a key contributor to the bank since opening in Elizabeth 2009. Her expanded leadership role will allow the bank to continue Robertson providing superior service for its growing client base,” said Charles Turner, Liberty Bay’s executive vice president and chief credit officer.
New manager takes over Kitsap Bank branch Kitsap Bank recently promoted Marni White to branch manager at the Pioneer Way location in Gig Harbor. White has been with the bank since 2011, previously as a customer service representative in South Kitsap and the Pierce County region. Last April she was promoted to a Senior Customer Service Specialist. With eight years in the banking industry, White has served as a manager at US Bank and Wells Fargo prior to joining Kitsap Bank. “Marni has proven herself to be an effective leader who is focused on providing our customers with the best possible customer service every Marni White day,” said Dave Jeffcoat, Kitsap Bank Vice President/Regional Operations Manager. “She is well-deserving of this promotion.” Port Orchard-based Kitsap Bank operates 20 locations throughout Western Washington.
AWOB session will discuss certification issues
COLLECTIVE
from page 12 learned about the available lease in November, Machen saw the potential for her vision to grow, and got the other women on board. “We hit the ground running full speed and jumped in,” said co-founder Joanna Bennett, a doula and massage therapist who moved her massage therapy practice from Gig Harbor to the new Kitsap Birth Collective location. As a collective, their goal is to support
both mothers and professionals. The co-op already hosts La Leche League and ICAN meetings and childbirth classes, and is offering the space to other nonprofits. “Our hope is to serve the community at large and be a resource for moms,” Bennett said. “The nice thing about being in a group is that we can also lean on each other.” In addition to a comfortable massage room and a large open space for classes and meetings, the 1,425-square-foot space includes a full kitchen and a small retail area.
from page 7 partly because she stuck to a more conservative approach back when a flood of "fast and easy" mortgages were fueling the housing bubble. She says she didn't do subprime loans or adjustable-rate mortgages that offered borrowers risky options such as interest-only payments. She didn't get caught up in what was described as "irrational exuberance" in the housing market that proved unsustainable. As a result, she says, "for a long time people considered me maybe out of date." "It didn't feel very good when I heard it the first time," Hawryluk admits, "but when the market collapsed, and I said 'oh, the 30year fixed-rate qualified mortgage is back,' ... so then I laughed and said I'm back and I'm hip and in vogue again." That's not an I-told-you-so retort, but rather a recognition of the current reality in the post-recession mortgage business. "We've gone back to basics, and I think it is in everybody's best interest," she says. That includes increased regulations imposed in the wake of the subprime mortgage crisis, such as more stringent rules for verifying a borrower's income and ability to make mortgage payments. "You shouldn't have ever had to regulate someone to do the right thing, but unfortunately they did have to regulate it," Hawryluk says, and mortgage lenders have to adapt to that. "We are in an environment of much more federal regulation or oversight," she notes, adding that "you're
going to deal with it, and you're going master it to stay in, or you go home." She doesn't think the pendulum swing toward more regulation has clamped down on lending as tightly as some people believe. "Everybody talks about how money is less available," she says, but she offers a different perspective. "The average person has to provide more paperwork to get a loan, but we're still doing zero-down loans, we're doing 3 percent down loans, we're doing VA loans. All the tools are still there. "If we're missing one element, it's potential buyers' trust in the market." She remains upbeat about the housing market, noting that qualified borrowers can still get interest rates in the 4's. She noted that Evergreen — which has branches in several Western states, the majority of them in Washington — funded a total of $1 billion in loans in 2013, and expects a 50 percent increase this year. "I'm excited about the market," she says, "especially where Kitsap is, because we don't have the volatile employment swings that some places do." The mortgage pro who grew up in the small town of South Bend, Wash., says she enjoys helping clients through the home financing process, as well as her role as branch manager leading a cohesive team. "I don't have much of an ego, but I do believe I understand what it takes to wow a customer," she says. And after the deal is closed, when she sees clients again out in the community, "you've got to be able to look them in the eye and know you took good care of them."
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 13
What does it mean to be certified as a Woman-Owned or Economically Disadvantaged business? And why would someone want to do it? For Julie Tappero, it meant facing a complex process to submit a successful application. And then she did it three more times to receive additional certifications. But it was worth it, she says, because that certification opened broad opportunities to expand the access of her business to lucrative contracts with local, state and federal governments as well as government contractors. Certification is often seen as a reliable indicator of credibility that can expand marketability. Tappero is the founder of West Sound Workforce, a professional staffing and recruiting firm in Kitsap and Pierce counties. She currently chairs the Kitsap Economic Development Alliance and the Olympic Julie Tappero Workforce Development Council. She’s one of the founders of the nonprofit Alliance of Women Owned Businesses (AWOB) and serves in leadership positions for the Staffing Association of Washington and the regional chapter of the Society of Human Resource Managers. She also writes a monthly article on human resources and workforce management for the Kitsap Peninsula Business Journal. At the AWOB’s monthly Power Series program on Feb. 12, Tappero will be joined by a panel of experts on the process of obtaining certifications, including Linda Jadwin from the Board of National Business Owners Corp.; Mary Jo Juarez representing Astra Women’s Business Alliance; and Debbie McVicker, deputy director of Washington state’s Office of Minority and Women’s Business Enterprise. The event will be held from 5-6:30 p.m. at the Inn at Gig Harbor. The Alliance of Women Owned Business is a membership-driven nonprofit organization formed for the purpose of supporting women-owned businesses in the West Sound and South Sound regions, serving Mason, Pierce, Kitsap and Thurston Counties.
REUNION
CAREERS
from page 10 Not only did she grow up around real estate, she married a builder. Her husband owns JC Construction and Ross-Cardoso has worked with him on projects. When her father died last year, the timing was right in her life to take over his duties. Her background Ellen Rossincludes retail Cardoso management and sales and she loves to find solutions to problems. “It’s a very collaborative process,” she said, acknowledging that it can also be a slow process at the same time. Ross-Cardoso feels that being in her 50s means she doesn’t have to prove herself in a tough field, and she finds that being a woman is actually an advantage. She says the most important thing for her is to continue the work of her father, who was prominent in the community. “We want to be proud of what we do in the community,” she said. “It’s important to me to be an asset.” Linda Brown, CEO of The Doctors Clinic, is the only female executive of a
physician-owned group with 50 or more physicians in the state. She took the helm in 1999 after being recruited, and during her tenure, the practice has gone through many major milestones. It has doubled its number of physicians, to 75, and has grown the employee base to 450. The Doctors Clinic also has doubled the number of locations, to 10, while adding an imaging center, physical therapy services and an Linda Brown ambulatory center. The organization has also made a transition to electronic health records. As the oldest of six children, Brown learned to make decisions early. The biggest challenge in her job, she said, is keeping up with the constant changes in regulations and reimbursement rates. “One of the things I like the most is helping employees see their potential and give them opportunities to grow. That’s very rewarding,” she said. “I also like helping physicians succeed and thrive. The business side of medicine is frustrating and they want to focus on patient relationships. … I feel fortunate that I found a career that matches my skill set.”
14 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
Windermere Real Estate/West Sound, Inc. Serving Poulsbo, Silverdale and Bremerton
PROPERTY FOR SALE OR LEASE Poulsbo CBA#521145 $495,000 Well-performing light industrial project in Poulsbo is home to thriving businesses with ongoing leases. 3 of 5 units are offered for sale. Three adjacent units are occupied by a single tenant. Total 4818 square feet. Contact listing agent for verified proforma. Kelly Muldrow, CCIM 206-949-3420 19362 POWDER HILL PLACE $17.00 NNN Conveniently located in Poulsbo's Powder Hill Project, this Class A office building offers up to 11,650 square feet of professional, high-tech office space. Convenient to Hwy 305, with easy access to Bainbridge Island, Silverdale and ferries. Unit includes fiber-optic connectivity, and all bandwidth is included in rent. Kelly Muldrow, CCIM 206-949-3420. Poulsbo CBA#509029 $239,000 BUILD FOR LESS THAN LEASING. Build-to-Suit opportunity in Poulsbo across from new Safeway. Approved for 4,790 sf building. Perfect for medical or financial services user. Great visibility with views of Olympics. Kelly Muldrow at 206-949-3420 or Joe Michelson at 360-282-5340. Kingston CBA#218220 Built out office space in a retail center. Great visibility to Hwy 104. Former Real Estate office. Joe Michelsen 360-509-4009. $612,000 Poulsbo CBA#525540 7600 sq.ft. warehouse for sale. Seller will lease back 1/2 and there is a long term tenant in 1/4 of the building leaving 1800 sq.ft. to lease or use by new owner. Joe Michelsen 360-509-4009.
Silverdale #509770 $415,000 Zoned regional commercial. Main floor office with .5 bath. Impressive propane in-floor radiant heated 40' X 55' garage with two 12' X 14' doors and 16' ceilings. Additional 2 car garage with extra space for storage. Upstairs open concept 2 bedroom, 1 bath, 1247 sq.ft. modern living space with huge deck. Kristina Togia 360-536-5275. Poulsbo CBA#501452 Retail bldg in highly visible location by State Hwy 305. Owner remodeling former auto service bldg into retail use. Space range 1,000 SF-7,200 SF. $15.00/SF/YR NNN. Mark Danielsen 360-509-1299. $750,000 Bremerton CBA#534824 Two warehouses in the Olympic View Business and Industrial Park with ground leases from Port of Bremerton acress SR3 from Bremerton National Airport. Seller to lease back 8581 Warrier. Metal buildings w/3phase power, 23' ceiling in ctr, 21' at eaves. Christine Salo 360-509-0908 or Joe Michelsen 360-509-4009. Bremerton CBA#512042 $850,000 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 360-731-5550.
Jessie Nino, a financial adviser with Edward Jones, receives her 40 Under Forty award from Kitsap Peninsula Business Journal publisher Lary Coppola at the 2013 event. Nino, who is also president of the Poulsbo Chamber of Commerce, had a previous career using her industrial engineering degree in a job working for a defense contractor in torpedo manufacturing. Dominique Graves also helps The Doctors Clinic physicians and other staff be successful in their jobs, albeit in a different way. Graves has been the company’s systems administrator for five years, responsible for building and maintaining servers, solving network-related problems, overseeing implementation of new software and other things. She has seen the Dominique company grow from 10 Graves servers to 90. “I learn new things every day in the technology field. This definitely keeps me on my toes in an environment where there’s never a dull moment,” she said. Graves “had no idea” what she wanted to do after graduating from Central Kitsap High School. It took her about five years to realize she loved working with computers. She narrowed that down to software after taking a “boot camp” at Paladin Data, and decided to pursue an associate degree in computer information systems at Olympic College. She started out at The Doctors Clinic as a desktop administrator and after three years was promoted to her current job. “What I like best is that things are always changing, and that’s also a drawback,” she said. “There’s always something new to learn and there’s always a challenge, and I like the variety.”
Jessie Nino is enjoying a second career in what is generally a maledominated industry: a financial adviser with Edward Jones. But before she made the switch into the financial sector three years ago, she earned a degree in industrial engineering and worked for a defense contractor in torpedo manufacturing. Starting out in supplier management, she traveled all over the country and later to the United Kingdom. During that career, she began pursuing a master’s degree in business administration. When she became a mom and wanted more flexibility, Nino decided the financial sector would be a good fit. “I’ve always been a budget nerd,” she said. “I took personal finance classes and got really excited about it.” She can still use her analytical brain and loves working with people to help them meet their retirement vision. She notes that in this region, there are more women who pursue this career, and the ratio of women locally is 50 percent at Edward Jones. Her analytical side also comes into play in her role as president of the Poulsbo Chamber of Commerce. She said she wouldn’t be able to have such a busy and fulfilling career as well as community commitments if not for her husband, who works part-time and is the primary caregiver for their children. “Those nontraditional roles work for our family,” she said. “If I didn’t have this support at home, I couldn’t be here.”
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Amy Burnett photo
Purpose Boutique owner Christie Johnson, left, stands with employee Lindsey Lindseth inside the clothing store, which she originally started out of her home.
“We are not putting a limit on what we can do through Purpose Boutique. We set goals for ourselves and so far we’ve surpassed them.”
VENTURES
— Owner Christie Johnson supporting socially sustainable organizations directly in other ways. “The best part is knowing the business has greater purpose and that has fueled our success,” she says. Her vision is for Purpose Boutique to
Kitsap-based mortgage loan officer rejoins First Federal
Real estate office expands from Gig Harbor into Kitsap County
First Federal has announced that Shawnee Spencer has rejoined the bank as a mortgage loan officer for Kitsap County. She previously worked for First Federal from 1993-2007, doing mortgage and commercial lending during the Port Angelesbased bank’s initial entry into the county. Spencer had worked Shawnee as a mortgage loan officer Spencer with Umpqua Bank and Wells Fargo before rejoining First Federal. She will be based at the bank’s Poulsbo branch until this summer, when she will move to First Federal’s new Silverdale branch. “Shawnee’s wealth of knowledge in mortgage lending and significant ties to her community will undoubtedly assist First Federal in finding innovative solutions that will help to meet the financial goals of our customers – helping customers achieve their dreams, with a “home town” touch,” said Kelly Liske, executive vice president and chief banking officer. First Federal operates nine full-service branches in Clallam, Jefferson and Kitsap counties and a lending center in Whatcom County.
Paraissance Realty, originally headquartered in Gig Harbor, has expanded to Kitsap County. Managing broker Chelsea Guelcher and broker Shana Burden head the Paraissance Realty Kitsap Team with an office in Silverdale at 3100 NW
become a large corporation with multiple locations, but she’s building up to that gradually. She’s already recruited one person to be the director of giving, in anticipation of creating a board of directors some day.
Chelsea Guelcher
“We are not putting a limit on what we can do through Purpose Boutique,” she says. “We set goals for ourselves and so far we’ve surpassed them.” Johnson says she’s taken an unconventional path for a Navy wife with a Christian background, while learning to delegate things like cooking and cleaning so she can have a balance. “It’s great to break the mold,” she says.
Bucklin Hill Road, Suite 113. They have a combined total of 20 years of experience in the real estate industry. They specialize in first-time homebuyers and military buyers, as well as short sale, investment and auction properties. For more information, go to www.paraissancerealty.com.
Shana Burden
Liberty Bay Bank Values Women In Business
19917 Seventh Ave NE, STE.101 | Poulsbo, WA 98370 BUSINESS | PERSONAL | HOME
360-779-4567 • www.libertybaybank.com
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 15
from page 6 supporting Hope for Our Sisters and MISSSEY, as well as other charities through some of its lines like TOMS Shoes. Her business has already donated thousands of dollars to the various causes. Johnson is changing her model a bit, donating 10 percent of profits while
Purpose Boutique recently expanded into a larger space in the building at the corner of Fourth Street and Pacific Avenue in downtown Bremerton.
Business owner explains why he decided ‘enough is enough’
16 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
By Tim Kelly, Editor One thing Ken Perry is certain will improve in 2014 after getting out of the business he ran since 1989 is his income. “I don't know necessarily what my future holds,” says Perry, longtime owner of Team Innovative Services, “but ultimately, if I don't work any hours in the landscape business, I’ll make $200,000 more than I did on average over the last few years.” Perry’s no pauper; he had some very successful years during the first two decades of operating his landscape services business, and he had some real estate ventures that were even better income sources in the good years before the recession. He makes clear that he wants no one’s sympathy for liquidating his business after the last few years of trying in vain to keep the enterprise profitable. Like many business owners battered by the recession, Perry’s had some grim years financially since his company was at its peak in 2007-08, when he had 23 employees. “My net worth has dropped over $1 million in the last five years,” he says, “based on property appraisal values, based on assets and debt, things I had to liquidate to try and stay in business, … even though I didn't show losing an average of $200,000 a year on my taxes.” Yet the irrepressible Perry, 47, isn’t bemoaning his losses and actually says he’s “ecstatic” about having the opportunity to
talk about, just to get people to realize how tough it can be for small businesses facing stateimposed costs that have — at least for his business — risen dramatically the past several years. Those ever-rising costs and spiking fuel prices ultimately eroded the margins for his landscape business, Perry says. The four factors that he says aligned to prompt his decision to close his business are: 1) the unemployment insurance rate going up; 2) increasing worker’s compensation assessments for the state Department of Labor & Industries; 3) rising fuel prices; 4) KPBJ file photo Team Innovative Services owner Ken Perry is shown last summer difficulty getting bank after the at the temporary nursery he opened on weekends. Perry closed his financing recession. landscaping services business at the end of 2013 after 25 years. For his first 20 years in business, Perry says the start something new. unemployment insurance rate held steady “It’s a choice,” he says of the decision to at 2 percent, meaning he paid $2 for every close his business. Then he adds, “the state $100 in payroll. Employers pay into a trust forced my hand a little bit, I would say.” fund for unemployment insurance, and the That last part is what he really wants to amount is based on their layoff history and
the amount in the trust, with the tax rates recalculated every year using a formula established in state law. Rates had remained low during several years of historically low unemployment in Washington prior to the recession. However, when the economic downturn hit and unemployment claims and payouts (and fraud) soared, the rates consequently started to climb. Perry says they haven’t leveled off yet for his business, which dropped to only six employees by the end. “I think my new rate for 2014 that I just got notice on is 7.9 percent; that’s a 400 percent increase (in the rate) on an employer-paid tax in five years,” he notes. He’s perplexed about unemployment insurance not only because of the rising rates, but because he thinks employers shouldn’t have to pay the entire cost of premiums. It’s the only type of insurance, he says, that doesn’t require any payment by the potential beneficiary, the employee. Then there’s the cost of worker’s compensation coverage through L&I — which is the only option in Washington, one of four states that doesn’t allow private insurance coverage for worker’s comp. L&I implemented reforms in 2011 to lower costs and improve efficiency, and the agency recently announced a modest 2.7 percent increase in the average rate for 2014 after two consecutive years with no increases. But Perry says his worker’s comp costs tripled over the past 20 years. He also argues that L&I lacks sufficient resources to adequately investigate the rising level of fraud in worker’s comp claims. In 2000, he decided to switch to diesel trucks for his business, even though they cost more, because the diesel rigs would last longer and get better gas mileage running on fuel that was $1.45 a gallon at the time, compared with $1.55 for regular unleaded. "I bought four new dump trucks on one day," he recalled, but the pump price for diesel eventually surpassed regular unleaded, peaking at $4.50 a gallon last year. In addition to diesel for the trucks, the business had to buy fuel for all the mowers and other gas-powered machines used in landscape maintenance. "The sytem is broken when it comes to small service businesses that have a backbone in labor and fuel," Perry says. That combination of relentlessly rising business costs meant that his profit margins “have continually gotten smaller and smaller and smaller, until about 2010 they actually for me, maybe not for every company, but for me the way I was leveraged, they started to go the opposite direction.” It reached the point, he says, where his landscaping business “was losing money and I couldn’t make it up just getting bigger.” He also points out that even in prosperous years for Team Innovative, running his business didn’t generate the Owner, page 17
HBA installs new officers
majority of his income. “In the good years, 80 percent of my effort went into the landscape maintenance business to make 20 percent of my money,” he says. “I was doing some development work, and flipping houses and doing things like that, that’s where I built my wealth. But I’ve lost all that now, because of the market collapse … and because of the (difficulties in) banking. “Beyond the housing market I’ve got great opportunities, (but) I can’t get financing right now.” In his view, community banks aren’t as supportive of struggling small business operators as they should — or used to be — in the tightened lending environment after the recession. After college, Perry thought his psychology degree with a focus on industrial organization might land him a job as a productivity and efficiency expert at a major corporation such as Boeing. He also had the opportunity to take over a well-established insurance brokerage that his father, a prominent local businessman in Kitsap County, had run for 25 years. But he had worked a lot in landscaping to help pay his way through Western Washington University, and he decided to stick with that temporarily — then the business took off and turned into his 25year run with Team Innovative. In good years or lean times, he says he always covered his payroll, no matter what it took. “I never missed a paycheck in 25 years,” Perry says. “Now did I end up selling personal things sometimes? Absolutely. Did I have lots of great things in the past that I don't have as much of now? Absolutely. Do I have a retirement now? Nothing. “There is not anything in this … that I want anyone to feel sorry for me. I’m really OK with this.” In retrospect, he says he might have been better off if he had decided to close his business three years earlier. Perry’s confidence is undiminished, though, and his career options now include working in the nonprofit sector. He’s been on the board of numerous community organizations in Kitsap, and he’s done a lot of fundraising. For example, the annual holiday-season dinner/auction event he organizes has raised tens of thousands of dollars for The Arc, a nonprofit that helps people with developmental disabilities. He says he loves public speaking, and acknowledges he harbors some political aspirations, though he has no definite plans. Anyone who’s had a conversation with Perry probably won’t be surprised that being a motivational speaker is another possibility he envisions. He’s already designed a positive motivation seminar, which he says is based on a bell-curve analysis of an experience he knows well. “It’s all about people going through changes in their life.”
The Home Builders Association of Kitsap County held its annual Installation & Awards Banquet on Jan. 10. 2014 president Judy Mentor Eagleson and all the group’s new officers are shown at left. The evening also included presentation of HBA awards for the Remodeler, Associate, and Builder Member of the Year.
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 17
OWNER
from page 16
Panel discussion: Giving businesses incentives to go solar
18 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
By Tim Kelly, Editor Rick Lander knows he won't get many business owners to consider an investment in rooftop solar panels just for the environmental benefits. But pitching a project that also offers financial incentives — tax credits and lower utility bills, as well as some good PR in the bargain — that's likely to get some attention. It worked that way at Liberty Bay Auto in Poulsbo, a high-end used car business where most of the electricity is now generated by a 700-square-foot array of 44 solar panels installed on the roof in December. "It's a good thing, a green thing," said Dean Church, who started the business with his father 25 years ago. But he didn't jump on the idea the first time he was contacted by Lander, president of Washington Solar Incentives. Church had his general manager check out the details. "After doing some research, we found there’s huge benefit to it," he said, meaning benefits for his bottom line. "The return on investment is good; a five-year return when you spend $60,000 to put something on our roof, that’s not too bad. "The tax incentives are huge. I think if the tax incentives were not there, there would be a lot of people shy away from it, at least businesses." Lander knows that, too. That's why he's encouraging business owners to consider investing in solar this year when they can take advantage of a combination of lower equipment costs and a bundle of incentives that won't last indefinitely. "We were doing community (mostly residential) solar projects in 2011 and it was a great investment for people, but the timing was wrong," Lander said. "It required a lot of investment and the economy was still slow." So he shifted gears and worked a couple years for a large energy-efficiency company
Photo courtesy Liberty Bay Auto
A 700-square-foot array of 44 solar panels was installed on the roof of Liberty Bay Auto in Poulsbo. The business worked with Washington Solar Incentives on the project. in Seattle, and took a course in solar applications at Shoreline Community College. "During that time the in-state manufactured solar panels that qualify for a generous state incentive came down in price about 36 percent," he said. "And the state incentives and utility grants stayed intact. So it became a real interesting economic model for a business to consider as an investment." His company's installations use panels made by Silicon Energy, which a few years ago was the only manufacturer in the state. Those units are considerably more expensive than mass-produced panels from big foreign
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companies, but Lander said they're higher quality, and using domestically made panels qualifies a project for larger state incentives. And now there's another in-state solar company, Bellingham-based Itek Energy, which was cofounded by Bainbridge Island developer Kelly Samson. Washington Solar Incentives (washsolar.com) concentrates on marketing to businesses now rather than residential retrofits. Lander is in discussions with Kitsap Bank about possible installation of up to nine solar panels on the canopy over the drive-thru lanes at the East Bremerton branch, which is being replaced with a completely new building that will feature advanced technology
inside and out. "As we’ve become a more sustainable organization, solar is something we want to look at," Kitsap Bank CEO Tony George said, and Lander's company is one the contractors they're considering for the project. He said the expected payback over five to seven years makes sense for a solar installation at the new branch, but there's more to it than dollars and cents. "The other thing we like about it is it’s going to be very visible," George said. "We’re also looking at putting some kind of monitor in the lobby to show how much energy is being produced, so people can see it."
Companies like to show their green credentials to the public, especially when energy-saving measures they implement are reducing operating costs as well. And utility companies promote energy conservation with rebate programs because they'd rather not have to build expensive new power plants. Lander said the current utility rebate for a commercial solar project is 54 cents per kilowatt-hour for electricity produced by the system, up to $5,000 a year. "Plus you get accelerated depreciation," he said. "You can write 100 percent of this thing off in five years." The solar energy from the installation at Liberty Bay Auto should provide most of the power needed for the showroom and service shop, though it won't likely produce a surplus that sends power back into the grid. "We’ll never get to the point where it goes backward, but we’re going to save a lot," Church said. "These guys were great to work with, Rick and his team," he added, noting the extensive modifications needed on the roof of the building, which originally was a lumber yard and has been there at the north tip of Liberty Bay for more than a century. "We had to add support pieces to 80 trusses." Installation challenges are not a big stumbling block to Lander, a former general contractor who hopes to see a boom in commercial solar this year and beyond. "I'm really passionate that we've got to find alternative energies and save energy," said Lander, a former general contractor. "The only way we're going do it is if we have an economic model that makes sense. That's the only way we'll really get a lot of solar up. "Now it makes economic sense, so the business world should consider it as an investment opportunity."
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February 2014 Edition
Events And Activities VISIT the NEW HBA Website! www.kitsaphba.com On Line Registrations! Wednesday, February 5 Kitsap HBA Remodelers Council, 4 p.m. HBA Thursday, February 6 Developers Council, 7:30 a.m. Tuesday, February 11 Pen. Home & Garden Expo Cmt. Mtg. HBA, Noon Lunch Provided
2014 Officers and Directors Installed Each year the Home Builders Association takes the time to celebrate its volunteer leaders and the hundreds of member companies that invest in the work of the HBA. This is a fun night and a great way to celebrate how important the construction industry is to Kitsap County. During the evening board members and committee chairs were honored for all their time and contributions. The Association’s 2014 President, Judy Mentor Eagleson, was installed by 2010 President Ron Perkerewicz who told wonderful stories about how Judy came to be President and also about her father who was President of the HBA in 1963. As one of his last acts as the 2013 President, Robert Baglio recognized many of our area’s elected officials for their commitment to public process and the local economy. Honored as 2013 Public Officials of the Year were: Port Orchard City Council Members — Fred Chang, Jim Colebank, John Clauson, Carolyn Powers, Cindy Lucarelli, Jerry Childs, and Robert Putaansuu; City of Bremerton Council President, Greg Wheeler; and Bremerton Mayor, Patty Lent. Each of these elected officials showed tremendous professionalism and commitment to public service through their actions in 2013. When you see them, please thank them for their service to our communities.
Friday, February 14 Valentines Day (...and the date final payments are due on Expo booths) Tuesday, February 25 Pen. Home & Garden Expo Cmt. Mtg. HBA, Noon Lunch Provided Thursday, February 27 2 p.m. Executive Cmt. Mtg. 2:30 p.m. Government Affairs Cmt. Mtg. 3:30 p.m. Board of Directors Mtg. Membership Fact #2: Builder & Remodeler members can get back CASH simply by submitting easy paperwork indicating use of certain brand products in their projects. IT’S FREE MONEY! NO RECEIPTS REQUIRED. WE PROMISE THERE IS NO “CATCH” You’re buying the products already, why not get cash back for doing it? Check it out: www.facebook.com/MemberRebateProgram or at www.hbarebates.com Members ONLY — To be entered to win the quarterly drawing, please email tosinski@kitsaphba.com and put this in the subject line: “Membership Fact #2 News”
2014 BUILDER & ASSOC. DIRECTORS Karla Cook • Walter Galitzki • Stuart Hager Joe Hurtt • Berni Kenworthy • John Leage Leslie Peterson, CGA, Jim Ullrich Miriam Villiard • Jim Way, CGB
2014 STATE DIRECTORS Robert Baglio • Judy Mentor Eagleson Jim Heins • Joe Hurtt • Justin Ingalls, RCS Wayne Keffer, CGR, CAPS Ron Perkerewicz • Kevin Ryan
2014 ALTERNATE STATE DIRECTOR Dale Armstrong • John Armstrong Kevin Hancock • Brent Marmon
LIFE STATE DIRECTORS Bill Parnell
2014 NATIONAL DIRECTORS Judy Mentor Eagleson • Jim Heins Shawnee Spencer
2014 ALTERNATE NATNL. DIRECTORS Michael Brown • Jeff Coombe
LIFE DIRECTORS Clauson, Lucarelli, & Childs of Port Orchard City Council
Wheeler and Baglio
Baglio and Lent
Rick Courson • Bob Helm • Bill Parnell John Schufreider • Dori Shobert Jim Smalley • Larry Ward
2014 COUNCIL & CHAIRS
The Home Builders Association of Kitsap County is the largest construction trade association in Kitsap. Members of the Association enjoy the benefits but they also know the importance of supporting the only organization advocating for their right to do business in Kitsap. Each member is also a member of our State Association and our National Association. Through these three memberships each company is benefitting from a tremendous amount of hard work by the paid staff at each level. Each day a relatively small number of staff are making huge differences and generating important outcomes, but that success is only possible because of the support provided by the membership. Each year members donate tremendous time and talent toward the mission of the HBA. To honor that important contribution, three members are honored with the “Of The Year ” awards. The 2013 awards went to: Berni Kenworthy, Team 4 Engineering: Associate Member of the Year; Walter Galitzki, Sun Path Custom Construction: Remodeler Member of the Year; and Judy Mentor Eagleson, Mentor Company: Builder Member of the Year. When you see them, be sure to thank them for their significant contributions.
Build a Better Christmas . . Randy Biegenwald Built Green . . . . . . . . . . . . . . . . Walter Galitzki By Laws & Nominations. . . . . . Robert Baglio Developers Council . . . . . . . . . . Byron Harris Golf Classic . . . . . . . . . . . . . Shawnee Spencer Govt. Affairs Cmte. . . . . . . . . . . . . Kevin Ryan Remodelers Ccl Chair. . Wayne Keffer, CGR, CAPS Membership. . . . . . . . . . . . . . . . . . . . Jim Heins Parade of Homes . . . . . . . . . . . . . . . . . . . . TBD Peninsula H&G Expo . . . . . . . . . . . Lena Price Peninsula H&R Expo . . . . . . . . . Dee Coppola
HBA STAFF Executive Vice President . . . Teresa Osinski, CGP tosinski@kitsaphba.com Administrative Coordinator. . . Kathleen Brosnan info@KitsapHBA.com Events and Administrative Assistant . . . Katie Revis hbaevents@kitsaphba.com
Home Builders Association of Kitsap County
Walter Galitzki — Remodeler Member of the Year
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2014 OFFICERS President . . . . . . . . . . . Judy Mentor Eagleson First Vice President . . . . . . . . . . . . Kevin Ryan Second Vice President . . . . . . . . . . . Jim Heins Treasurer . . . . . . . . . . . . . . Randy Biegenwald Secretary . . . . . . . . . . . . . . Dee Coppola, CGA Immediate Past Pres. . . . . . . . . . Robert Baglio
Judy Mentor Eagleson — Builder Member of the Year
5251 Auto Center Way, Bremerton, WA 98312 360-479-5778 • 800-200-5778 FAX 360-479-0313 www.KitsapHBA.com
February 2014 Edition
Judy Mentor Eagleson
Maximize Your Membership
So you have joined the Home Builders Association Mentor Company of Kitsap County (HBA) - or you are thinking of doing 2014 President so — congratulations! Now what? The HBA is an association of professional builders, subcontractors, service providers and purveyors representing almost 300 companies and thousands of employees in Kitsap County. The association provides information, education, and services that promote the health and welfare of the construction industry. As leaders of the industry, we foster safe, affordable housing, and promote economic development by advocating on behalf of the construction industry and the consumers that rely on that industry. You could just sit back and let us do our stuff ... or you could maximize your membership, jump in, and take advantage of all that the HBA has to offer. You most likely know that you can save money with the Return on Industrial Insurance and Health Insurance programs. You also probably know about the resources and benefits through BIAW and NAHB, but you may not know all the ways to get involved locally. If you are interested in government, then the Affordable Housing Council Government Affairs Committee is for you. This committee, chaired by Kevin Ryan, int erviews candidates and makes recommendations to the HBA’s political action committee. They do not make their choices based on party affiliation, but rather, they support the candidates that they believe understand the economic impact construction has on our community, and those that have the ability to properly evaluate regulatory ideas. If events are more your thing, then Kevin Ryan would love to have you join the Government Affairs Dinner and Auction Committee. This is always a not to miss party with a purpose. The proceeds from this event go toward supporting the candidates chosen by our political action committee. More of the outdoors type — then Shawnee Spencer would love to have you on her Builders Classic Golf Tournament committee. At this event, golfers of every skill level join in the fun, vying for awards for everything from First Place to Best Dressed. If you tend to lean toward the charitable efforts, than get involved with the Home Builders Foundation, a registered 501C (3). This Foundation supports many important services in our community. Those that like to shop and wrap presents would enjoy Build A Better Christmas, chaired by Randy Biegenwald. This group shops for, and wraps, dozens of gifts which are given to the Mom’s and their children staying at the YWCA’s Alive Shelter during the Holidays. Those that want to ensure homes are safe for our elderly or handicapped may want to help raise funds for Hang on Kitsap, chaired by Ron Perkerewicz’s annual Virtual Bike & Rod Run. If you value the beautiful Silverdale Veteran’s Memorial Park and want to ensure there are funds for its necessary maintenance, let us know and you can help generate funds for its ongoing capital needs. For more information on this ongoing effort you can call the HBA or talk to the point person, John Armstrong. For those of you seeking marketing opportunities you don’t need to stop with our membership directory or our web site — you will find your place on the committees for, or in a booth at, the Peninsula Home & G arden Expo, the Parade of Homes (possibly back this year) or the Peninsula Home & Remodel Expo. Just talk to Lena Price or Dee Coppola about these opportunities. If development is your specialty then you will want a seat at the Developers Council. Byron Harris has an educational and entertaining year planned for this group. Or perhaps you would enjoy hanging out, and learning with, other remodelers. Way ne Keffer heads up the Remodelers Council and has a theme for this year “Tools for a Profitable Year.” Kitsap continues to have the oldest BUILT GREEN® program in Washington and all builders and suppliers are encouraged to learn more. Walter Galitzki continues to be the association’s BUILT GREEN® Chair and promotes a network of architects, builders, subcontractors, suppliers and real estate agents workin g to improve your quality of life with environmentally sensitive construction. So you see, the Homebuilders of Kitsap County really has something for everyone. Jump in and maximize your membership!
The HBA celebrated our successes from 2013 and rang in 2014 at the annual Installation & Awards Banquet in January. It CGP was a wonderful event and we were so happy to have the Executive support of many of Kitsap’s Vice President elected officials and department heads in attendance. As you already read on the first page, many wonderful awards and recognitions were handed out as well. As the Executive Vice President of the HBA I am regularly impressed with the commitment our members have to this association and am so thankful to be able to work on behalf of the construction industry. With the new year came new carpeting for the HBA office. After almost a quarter century, it was about time to pull out the old and put in some new. As I write this, we are still unpacking, sorting, and reorganizing, but the new carpets look wonderful and thanks to Tim Ryan Construction, the process went very smooth.
Teresa Osinski
This year, the HBA will continue to advocate for our membership and the unsuspecting public. I have enjoyed building a positive relationship with Mike Eliason, the Executive Director of the Kitsap County Association of Realtors. Together our two organizations have been able to effectively educate many, area, elected officials about the impacts pending public policy changes may have on the construction industry, housing sales, and ultimately on the local economy. I look forward to continued opportunities to collaborate this year. I hope that the Cities will take an active role in reaching out to the users of their regulatory systems and include them in their code drafting processes. Kitsap County has really developed an excellent practice of bringing folks into code processes early and it has helped to ensure the goals desired for the public’s benefit are achieved without excessive, unintended consequences. We saw some positive strides in this direction in 2013 in both Bremerton and Port Orchard and we encourage more of the same in 2014. This year is a big year for elections. The people of Kitsap County will be asked to cast their ballots and vote on a long list of positions. It is each adult citizen’s obligation to register to vote and then to actually cast their ballot. The HBA will interview candidates in many of the races and I hope our members take the time to participate. The HBA Government Affairs Committee is open to all HBA members. You do not need to have contributed to the Affordable Housing Council, nor do you need to be particularly politically active or knowledgeable to participate. Showing up is the first step and listening and learning will help our members be more informed voters. Most interviews take place on the final Thursday of the month during the Government Affairs Committee meeting, but call the HBA or watch your monthly, green, HBA Events postcard for updates or meeting date changes. Not sure if you’re registered or if the registration you have is up to date? Visit www.myvote.wa.gov.
February 2014 Edition
Government Affairs Committee
Legislature gets back to work
Our State Legislature is back to work for a short 60 day session and we are reminded of how their decisions in Olympia affect our industry and daily Kevin Ryan Tim Ryan Construction lives. To quote Winston Churchill he said; “Politics is not 2014 Chair a game. It is an earnest business” He was spot on, as we sometimes forget the impact we can all make by getting to know our elected officials and reaching out to them to provide our input on current legislation. As a younger “Baby Boomer” I can still remember waking up on Saturday Mornings and between the prime time cartoons we would be presented with excerpts of ABC’s Scholastic Rock and we would learn in a very short time frame the basics of how “Bill” the cartoon character makes his way up Capitol Hill to become law. The simplicity with which this cartoon impacted thousands of us at that age is amazing. A few of the bills affecting our Industry this session are: • HB 2498 Impact Fee Deferral • HB 2161 SEPA Traffic Mitigation • HB 2414 Low Flow Toilets • HB 2260 Fire Sprinkler Installation • HB 2213 Electrical Code Task Force • HB 2214 Code Officials Training • HB 2249 Energy Code Climate Zones • HB 2332 Wage Violation Damages • HB 2333 Anti-retaliation • HB 2334 Worker Misclassification • HB 2258 Eliminating the 7 Part Test for Independent Contractors • HB 2147 Independent Contractor Certificate • HB 2061 / SB5931 Health Exchange Fix As with any legislation you have those that encourage efficiency and those that create more bureaucracy and paperwork. HB 2147 and HB 2258 encourage efficiency by streamlining the process for being classified as an Independent Contractor. Bills under consideration that potentially add more cost to our direct labor and rights as employers are HB 2332, 2333, and 2334. I encourage all of you to review these bills by visiting the “Resources” tab on the Kitsap HBA website; http://www.kitsaphba.com/resources/ and click on Washington State Legislators. Once on the website you can learn about the specifics of each bill by clicking on “Bill Search” and entering the bill number. The original bill document, sponsors, history, and other information are all available to view as well. Many of us may not be aware that there are a total of nine Legislators currently serving us in Kitsap County in Olympia. If you do not know which Legislative district you are in and who is representing you, this information is also here. So read up on the current legislation and let the HBA leadership, or your elected officials, know directly how you feel so we can make real change for our membership and Industry. Remember that the only way to really affect how “Bill” gets up the hill or dies along the way is when we get involved.
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Nationwide Housing Production Edges Just Under 1 Million Units in December
Member Advantage www.nahb.org/ma
In mid January, the National Association of Home Builders Every Year Thousands reported on the overall improved Save Millions! construction market in 2013 compared to 2012. The following information was provided by NAHB. Following an unusual surge in housing starts in November, nationwide housing production fell 9.8 percent to a seasonally adjusted annual rate of 999,000 units in December, according to newly released figures from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. “Total housing starts of just under 1 million units in December was the third-highest monthly level of production in 2013,” said Rick Judson, chairman of the National Association of Home Builders (NAHB) and a home builder from Charlotte, N.C. “This rate is in line with our builder surveys, and tells us we are seeing a return to trend after a strong November.” “Last year was a good year for home building, with overall production up 18 percent from 2012,” said NAHB Chief Economist David Crowe. “As pent-up demand is unlocked and the labor market improves, we anticipate that 2014 should be an even better year for home construction. That’s good news for economic growth, as each new home that is built creates three full-time jobs and contributes to the tax base of local communities.” Single-family housing starts fell 7 percent to a seasonally adjusted annual rate of 667,000 units in December. Except for November, this was the highest monthly total for single-family starts in 2013. Meanwhile, multifamily starts fell 17.9 percent to 312,000 units in December. Regionally in December, combined single — and multifamily housing production rose 15 percent in the West but fell 33.5 percent in the Midwest and 12.3 percent in the South. Production was unchanged in the Northeast. Overall permit issuance fell 3 percent to 986,000 units in December. Singlefamily permits dipped 4.8 percent to 610,000 units from a strong pace the previous month, while multifamily permits were unchanged at 376,000 units. The Northeast and West posted gains of 11.2 percent and 10.5 percent in permitting activity for December, while Midwest and South registered declines of 18.8 percent and 7.4 percent, respectively. Members of the HBA should log in to the NAHB website to access timely and important information about the economy, construction trends, and helpful information for running their own businesses. Log in at www.nahb.org.
Government Affairs Committee Meeting 2014 Schedule Last Thursday of each month 2:30-3:30 p.m. at the HBA Office in Bremerton Periodically extra meetings are added or the standard meeting is extended, or moved. Please watch the HBA online calendar for the latest info or your monthly events postcard.
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Home Builders Association of Kitsap County
February 2014 Edition
Welcome New Members Miles Yanick Jo Pederson 600 Winslow Way E, Suite 247 Bainbridge Island, WA 98110 (206) 842-6516 jo@milesyanick.com
Haselwood Chev/Buick/GMC Dave Aycock 501 West Hills Blvd. Bremerton, WA 98312 (360) 479-4910 davea@haselwood.com
And the SPIKE goes to...
And the SPIKE goes to...
Robert Baglio The BJC Group
Robert Baglio The BJC Group
Visionarch, LLC Thomas Glenn PO Box 147 Port Orchard, WA 98366 (360) 871-3302 margit@visionarchllc.com And the SPIKE goes to...
Wayne Keffer Wayne R Keffer Construction
Thank You Renewing Members Over 30 Years Novak Gutters (32)
Unsure about the future of your health insurance? Get a free quote: Companies in Kitsap that are in construction related fields may find our health insurance to be a better quality and more affordable that the options available through the new Washington Exchanges. From arborists to waste disposal and beyond, our insurance program may be an option! It’s worth a quote, don’t you think? Please contact the HBA to receive an application. You do not need to be a member to get a quote for health insurance. However, if you decide to sign up for the insurance you do need to be a member and retain your membership in the HBA. The BIAW Health Insurance Trust is one of the very few association health programs considered to be bona fide by the Washington State Insurance Commissioner. Check it out!
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Over 5 Years A Kitchen That Works (8) Robison & Sons (8) Homewood Construction LLC Legacy Telecommunications 5 Years Servpro of Kitsap County Storeybuilding LLC Over 1 Year Better Built Storage Barns LWH and Son Construction LLC 1 Year Express Septic Service Hager House
BIAW Member Rebate Program! No one likes to leave money on the table. So, what would you think if you could get a rebate for your loyalty to many of the nation’s leading housing industry product suppliers? Well, now you can! BIAW’s Member Rebate Program increases your bottom line. For the minimal effort of informing the program about the products you use in the homes you build and remodel, you will get cash back. Each quarter you simply file the easy report about the projects you’ve completed and the products you used, and you will get money back! Several HBA members have already participated. If you’re not, then you’re leaving money on the table and giving your competitors and advantage over you. You do not need to change anything about how you do business or how you purchase the products you use in your projects. You do not need to keep and track receipts or cut off any bar codes from packaging. This is really easy! You submit the simple paperwork on time and the BIAW Rebate Program does all the work! Rebate checks are cut once per quarter. Get your feet wet! Try it out! The more you do it the more rebates you’re likely to earn. Learn more at www.hbarebates.com or checking out their Facebook page “Member Rebate Program.” It’s easy to get started. Just register, download the form, and submit it by the quarterly deadline. Don’t just leave money on the table. Participate in the BIAW Member Rebate Program. Please note: This program is only available to current BIAW Members, but remember all HBA members are also members of the BIAW.
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Kitsap Bank’s new Bremerton branch will have a Starbucks By Tim Kelly, Editor Construction has been going on since November for a new Kitsap Bank branch in East Bremerton. Bank officials tout the many advanced technological features designed into the new building at the corner of Wheaton Way and Sylvan Way, but what a lot of customers may find most appealing is that the branch will have a Starbucks. The bank confirmed in late January that Starbucks will lease about 1,800 square feet of space for its coffee shop, which will be accessible through the shared lobby in the new glass-walled building. It also will have a drive-up window, though customers won't
be able to get a latte in the same lane where they make bank deposits. The existing Wheaton Way branch has been remodeled three times since it was built in 1961, when it was Kitsap Bank's first location outside the company's longtime headquarters in Port Orchard. Bank president and Chief Operating Officer Steve Politaikis said it's the right time and place for a new building.
"We’ve been in that community 52 years," he noted. "It’s been a very significant office for us, and we have a great customer base there. And that area is definitely in need of some revitalization and investment." A similar project is starting in the same block on the other side of Wheaton Way, where the oldest McDonald's drive-in in the region will be torn down to build a new
one on the site. (See story on cover) Bank officials said they hope to move into the new branch in August, and it's still uncertain whether the existing branch will remain open throughout the construction. There are four other Kitsap Bank branches in Bremerton. The bank portion of the new building, which is being built closer to the northwest New branch, page 24
Kitsap home prices up for first time since 2007
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 23
The median price of single-family homes in Kitsap County climbed to $240,725 last year from $233,000 in 2012 (a 3 percent increase) — the first time prices went up since 2007. While the median is still far from the 2007 peak of $290,342, the numbers are encouraging, according to the Northwest Multiple Listing Service, which released the statistics in January. Of the 3,340 units sold last year, 401 were newly built homes and 17 new construction condos. The MLS, which represents 20,000 real estate brokers in 11 counties, said the number of closed sales of homes and condominiums grew 17 percent last year areawide, with the median price up to $270,000 from $245,000 in 2012. In total, Kitsap County saw $1 billion worth of closed sales for homes and condos, and sold the fifth-lowest number of condos among counties, 202 (after King, Snohomish, Pierce and Whatcom). Three-bedroom homes were the most popular, comprising 61.5 percent of singlefamily houses sold in Kitsap. During 2013, the areawide supply, as measured by months of inventory, ranged from a low of 1.95 in March to 3.68 in December. In Kitsap, there was 3.39 months’ worth of supply, compared to 1.47 in King and 2.31 in Pierce. Industry watchers tend to use a four- to six-month range as an indicator of a balanced market, favoring neither buyers nor sellers, according to the MLS. Kitsap saw a 12 percent increase in listings, compared with 14 percent areawide, and the highest-priced home sold locally was $2.35 million. MLS said the growing number of high-end homes was one of the positive indicators of market recovery. In Kitsap, 47 of the homes sold were priced at $1 million or more, a number surpassed only by King County (1,426) and Snohomish (50).
Construction has begun (far right) at the corner of Wheaton Way and Sylvan Way in Bremerton on a building that will house a Kitsap Bank branch to replace the old facility at the site, plus a Starbucks. Artist’s rendering at right shows what the new glass-walled building will look like. There will be solar panels (shown in blue) on the canopy over the bank’s drive-thru lanes. Kitsap Bank illustration Tim Kelly photo
NEW BRANCH
from page 23 corner of Wheaton Way and Sylvan Way, will only be about half as large as the 5,000square-foot existing branch. Along with all the high-tech features to streamline banking transactions, the new bank will have electricity-generating solar panels mounted on the roof covering the drive-thru lanes. That's consistent with
other sustainability measures Kitsap Bank has implemented as a business, such as recycling programs, encouraging customers to opt for paperless statements, and using some reclaimed materials from the old building in construction of the new branch. CEO Tony George said the new branch will have a high level of sophistication in its design and functions, including features such as automated cash-counting machines and video connections with drive-through
Partners In Success Congratulations! 24 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
Brent Marmon for being the recipient of the 2013 BIAW Associate Appreciation Award. “In recognition of your outstanding contributions to the building industry.”
Providing superior customer service and professionalism to every real estate transaction.
customers. "It's really a branch for the future," he said. "There will be a technology wall, with all kinds of interactive displays. "This is our first one, but the intention is to have a branch just like one you’d see in downtown San Francisco or Seattle; we’re trying to move in that direction." That direction includes a "virtual teller" that will be in the lobby in the future, although George said the technology is not
yet ready to install such a station when the new branch opens. Another design aspect George noted is the ability to seal off interior offices so the lobby can be used for after-hours community events. The building was designed by Rice Fergus Miller architects of Bremerton, and the contractor for the projects is BJC Group of Port Orchard.
Regional distributor Pettit Oil Co. shuts down Pierce County-based Pettit Oil Co., a longtime distributor of fuel and heating oil on the Kitsap and Olympic peninsulas, shut down abruptly in January after plans to restructure the business through a bankruptcy filing did not work out. The company, owned by former Silverdale residents Norm and Linda Sather, had one of its distribution facilities in Bremerton and reportedly had about 10,000 customers in Western Washington. But Pettit had filed for Chapter 11 bankruptcy protection in late 2013, and the company's attorney, Brian Budsberg of
Olympia, said its assets would be liquidated since the company was unable to maintain operations while reorganizing under the bankruptcy filing. In documents filed in court, Pettit listed more than $18 million and liabilities topping $22 million. Budsberg said in media reports that the company's pending sale to Associated Petroleum Products of Tacoma was blocked because of objections by U.S. Bank, one of Pettit's largest creditors.
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Peninsula McDonald’s photo
The new McDonald’s being built to replace the old one on Wheaton Way in Bremerton will have a double-drive thru like this one that was put in when the McDonald’s in Belfair was remodeled.
MCDONALD’S
PETTIT
from page 24 Pettit had been in business as a fuel distributor for more than 75 years and at one time had 200 employees, though that had reportedly declined to about 125 at the time of the bankruptcy filing. Although
Norm Sather was still listed as Pettit's CEO, apparently his son, Chris, had been running the company. Calls to the Pettit Oil's main office in Lakewood on Jan. 17 got a recorded message saying the company was no longer in business.
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 25
from page 1 Kitsap and Olympic peninsulas. They had been exploring possible sites closer to downtown Bremerton, but that didn’t work out because of city zoning restrictions on drive-thru lanes. The drivethru restrictions have been eased in the commercial corridor to the north along Wheaton Way, but Fenwick said they didn’t want to move closer to another McDonald’s just two miles away. So the resulting decision was to do a “scrape and rebuild” of the aging building, which was last remodeled in 1998. Peninsula McDonald’s originally planned the project for last year, but had to wait for approval from corporate headquarters. The existing restaurant, which was closed Jan. 28, has a basement used for storage, but the replacement structure will be built on a slab. The resulting footprint won’t be much larger, though it will be shifted over slightly to allow room for parking spaces on the south side of the lot. Previously vehicles on busy Wheaton Way only could enter on that side and drive behind the building to park on the north side or use the drive-thru lane. The new double drive-thru lane will take away a few parking spots at the back of the lot, but Fenwick said there’s plenty of parking at the location. “This one is a high-use drive-thru store,” he said, noting that on average, about 70 percent of McDonald’s customers use the drive-thru lane. Of the 15 Peninsula McDonald’s locations, all but one were existing
restaurants the company bought. The only one built as a new McDonald’s is the one at the Puget Sound Naval Shipyard, which opened about 14 years ago. The Wheaton Way project is the first scrape-and-rebuild approach for updating one of the Peninsula McDonald’s restaurants, but there are more in the pipeline. Fenwick said the Port Angeles McDonald’s and the one on Mile Hill Drive in Port Orchard, which like Wheaton Way are both basement stores, will be rebuilt in the next five years. “We did a major remodel, which is just short of a rebuild, at the Sedgwick Road (Port Orchard) location and in Belfair within the past three years,” he said. “The infrastructure was new enough that doing a major remodel was the right answer for those stores,” Fenwick said, “but not for this (Wheaton Way) store.” The replacement building will look “drastically different, inside and out,” Fenwick said, from a larger, more efficient kitchen layout to a more attractive counter and seating area, and a modern, visually appealing exterior. “One of the biggest reasons (for rebuilding) is to give our customers a better experience, and it’s hard to do that with this store,” Fenwick said. It also makes business sense. “We will see a pretty good bump in sales by building a new building.” He also noted that none of the employees will lose their jobs because of the project. They will have the option of transferring to another McDonald’s temporarily, then returning to work at Wheaton Way when the new restaurant opens.
Amnesia By Dan Weedin In the NFC championship game last month, Seattle S e a h a w k s quarterback Russell Wilson dropped back to pass on the very first play of the game. He was flushed out to his left by a San Francisco 49ers defensive player and in attempting to make a pass, fumbled the ball. It was recovered by the 49ers and led to an early lead for the opposing team. Wilson ended up playing a terrific game and helped lead his Seahawks to the win and a trip to the Super Bowl. He was asked about the fumble in the postgame press conference and he responded, “Sometimes an athlete needs amnesia.” He is right. Athletes that don’t develop “amnesia” and forget about their bad plays, end up reliving them in their mind, only to have them continue to haunt them for the remainder of the game. I call it renting space in your brain. There’s only so much room in there and if you use it to dwell on your “bad plays,” then there’s not much room left for all the “good stuff.” The same is true for us as business professionals. Just like NFL quarterbacks
and Major League Baseball closers, we “found out.” However, if you have high will make errors and mistakes. Heck, if self-esteem, the next opportunity is a you’re not failing, you’re not trying, given. You know you will succeed. You right? The all-stars in business have know if you play “your game,” you will learned the principles of “amnesia.” They have every opportunity to win. move on and go to their “next play.” Self-esteem is something you can Unfortunately, many business control. First, you remove stinking professionals don’t; not unlike many thinking. You need to talk positively to athletes that end up with short careers. yourself. I’m not talking about frivolous The danger is that not having amnesia affirmations that you mindlessly repeat. will stunt your professional growth and I’m talking about the true belief that you limit your ability to maximize your success. are good at what you do and effective at Ultimately, this not only affects your career helping improve the lives and condition and your opportunities, but impacts your of others. If you believe that, truly believe life, too. The bad news is that this is easier said than “Sometimes you need a pat done. We are, after all, humans that have a on the back and sometimes gazillion thoughts enter you need tough love. The and leave our brains daily. The good news is that you good coaches know what can plan to have amnesia. you need and help you move Allow me to explain with forward faster.” my 3 Tips to Losing Your Memory and Thriving: — Dan Weedin, Work on constantly Executive coach improving your selfconfidence. This is the most important of all three strategies and needs to come first. It’s the that, and then you will grow your selffoundation. If you have low self-esteem, confidence. This isn’t arrogance; it’s you will doubt your ability to come back genuine confidence. after a bad experience, a mistake or a Get coached or mentored. Business blunder. You will wonder if you will be and executive coaches and mentors are
26 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
Hospice Of Kitsap County to open thrift shop in Bremerton BREMERTON – Hospice of Kitsap County has signed the lease on a retail location at 301 Pacific Ave. in downtown Bremerton, where the nonprofit organization will open a resale store. The 4,000 square-foot shop will feature clothing, furniture and housewares. All proceeds from the store will be used to help fund Hospice programs such as the Fred Lowthian Care Center and the uninsured patient program. “We looked at other hospices across the country and researched other local charity thrift shops,” said Corrigan Gommenginger, execut¬ive director for Hospice of Kitsap County. “We’ve found that the revenue generated from a resale store could significantly help fund our programs.”
Now the challenge is to fill the store. To encourage donations, 13 nearby businesses chipped in prizes for a drawing to be held in February. Anyone who donates items to the thrift store in January can enter to win prizes. Donations are currently being accepted at the store on Saturdays from 9 am to 4 pm and during the week by appointment. Call the thrift store at 360813-1451 to set up an appointment. Donations are also being accepted during the week (Monday through Friday from 9 am to 4 pm) at Hospice of Kitsap County’s administrative offices at 10356 Silverdale Way NW. A complete list of items that can and cannot be accepted is available at www.hospicekc.org. Volunteers are needed immediately to
help get the store ready, and will eventually be needed to take on regular shifts at the store. Gigi McKay, a former manager for Goodwill Industries of Seattle, has been hired to serve as the manager. People interested in volunteering to work at the store should contact Jennifer Cleverdon, volunteer coordinator for Hospice of Kitsap County, at 360-698-4611 or jennifer.cleverdon@hospicekc.org. This is the 35th year that Hospice of Kitsap County has been providing dignity, compassion and comfort to people completing life’s journey and those who care for them. Hospice provides comprehensive services in patient’s homes, at the Fred Lowthian Care Center inpatient facility, and at skilled and assisted-living facilities throughout Kitsap County. For more information, please visit www.hospicekc.org or call (360) 6984611.
adept at helping you vent; talk out issues; discuss failures; and help move forward. You can’t be brilliant by yourself. While coaches and mentors are great at advancing skills, the ability to help change behaviors (in this case negative thinking), may be the most important thing they do. Sometimes you need a pat on the back and sometimes you nee d tough love. The good coaches know what you need and help you move forward faster. Be part of a community. I have a small mastermind group with colleagues from all over North America. We meet via videoconference weekly and then in person every quarter. If you commit to telling the truth with each other, then you will discuss failures and foibles. They can help you overcome these issues and similar to a good coach, move forward. This is important because aside from coaching, you need your peers. Peers that you don’t see all the time. Peers that might offer unique perspectives. You need to go find these people outside your comfort zone. While this may not be easy, it’s worth it. They can help you get amnesia, and you can help them, too. Bottom line — we all face adversity in our business lives. Perspective is important, but it’s not easy to have all the time. In addition, often the bad things happening to you may really be hard. Trying to be The Lone Ranger is dangerous to your professional and personal health. Important note — you also need to have amnesia on your “good plays.” Celebrate your successes, but move on. If you revel too long and too hard on your victories, you may end up like the character in Bruce Springsteen’s song “Glory Days.” Too much of a good thing is just as harmful as its counterpart. As we move into the second month of this year, make a commitment to get amnesia. Move past the last play to the next one. By keeping that mentality, you’re more likely to stack up a bunch of winners in 2014! • Dan Weedin is a strategist, speaker, author and executive coach. He helps business leaders and executives to become stronger leaders, grow their businesses, and enrich their lives. He was inducted into the Million Dollar Consultant™ Hall of Fame in 2012. You can reach Dan at 360-6971058; e-mail at dan@danweedin.com or visit his web site at www.DanWeedin.com.
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In minimum wage debate, consider variations used by states give them a shot at jobs and reduce the impact on businesses that have to train these inexperienced workers. For example, in Washington, a minor under the age of 16 may be paid 85 percent of the state minimum, but bear in mind that we’re talking about 14- and 15-year-olds. Once your employee turns 16, the full minimum wage applies. In Georgia, the minimum wage may be reduced by 50 cents for any employee under 18. Other categories of workers who are exempted from coverage in Washington include certain agriculture workers, those employed to do casual labor in a home (such as a babysitter), inmates, and volunteers in government or nonprofit organizations. Remember, for-profit businesses are not permitted to utilize volunteers. And in many states, family members do not need to be paid minimum wage, a benefit to family-owned and run businesses. Some states have recognized the impact that minimum wage laws impose on the viability of small businesses. Several states consider the annual revenue or number of employees when applying minimum wage laws. For instance, in Missouri, a retail or service business with gross annual sales of less than $500,000 is exempt. Georgia exempts employers with fewer than six employees. Another idea that continues to arise is that of a training wage. Despite being introduced in our state legislature, it has never been passed. However, this idea is actually based on federal laws. Under the original FLSA, employees under the age of 20 could be paid $3 below the federal requirement during the first 90 days of employment. Illinois is a good example of the training wage concept. Employers may pay their workers under the age of 18, and any worker during their first 90 days of employment, 50 cents less than the state’s minimum wage. Georgia has a similar law. Another interesting idea is that of a benefits credit against the minimum wage. The cost of providing benefits, especially health insurance, can be a big hit to a company. On the other hand, small businesses often strive for a strong benefits package in order to attract good people. Nevada considers employer-provided health insurance to be part of the total compensation package. Nevada’s minimum wage is $8.25, but if an employer provides health insurance benefits, the minimum wage is a dollar less.
The vast majority of states have tip credit laws wherein an employee’s tips are considered when applying the minimum wage. The laws vary, but it’s common to set a lowered minimum wage for tipped employees, along with a maximum amount of tip to be added on. At the end of the day, the tipped employee will have made at least minimum wage with the two combined. According to the Bureau of Labor Statistics, 3.6 million people (4.7 percent of workers) were paid minimum wage. Of those, about half were under the age of 25, and to put that into perspective, those under 25 make up only 20 percent of hourly workers. The industry with the highest percentage of minimum-wage workers was leisure and hospitality, an industry where tips are very common to supplement wages. There’s no doubt that the debate over minimum wage is on fire and will continue
to rage for some time to come. But when we consider the laws we already have, we can see that we don’t have to have a one-sizefits-all approach. Applying thought, creativity, good judgment and cooperative partnerships will help government create minimum wage laws that protect workers and preserve business. • 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.
Leadership Kitsap offers workshop on navigating conflicts Leadership Kitsap will offer its fifth annual leadership skill-building event on Feb. 26. The daylong advanced training workshop on “Redefining Your Relationship to Conflict” will be conducted by Greg Abell. A significant challenge of leadership is to mobilize individuals and groups to effectively navigate conflict. How does your relationship with conflict impact your ability to engage this critical responsibility? Over the past 30 years the field of Alternative Dispute Resolution has responded to this need with skills and strategies for resolving conflicts. However, some conflict we encounter may not be resolvable in the traditional sense. In this seminar participants will examine their personal relationship with conflict, identify a more complex set of skills and strategies for effectively being with conflict, and explore three fundamental roles leaders can choose when encountering conflict. The workshop’s objectives are for participants to: • Explore a more complex structure for understanding the aspects of conflict • Identify their personal narratives regarding conflict • Create realistic expectations for the engagement of conflict • Maintain health and wellness when engaging long-term conflict. Abell is a trainer and a senior partner with Sound Options Group in Washington state. He has served as a founding member and board president of the Kitsap County Dispute Resolution Center, president of the Washington Mediation Association, and senior consultant to the Consortium for Appropriate Dispute Resolution in Special Education (CADRE). He serves as an advisor for the Leadership Kitsap Foundation. As a professional mediator, Abell has experience mediating highly contentious, multi-party community and institutional disputes. His practice as a conflict resolution professional is driven by a core belief that everything of importance happens within the context of interpersonal relationships. The workshop will run from 8:30 a.m. to 4:30 p.m., with networking at 8 a.m., in the United Way Building at 645 Fourth St., Suite 101, in Bremerton. Registration is $100 before February 1, and $125 after that date. Space is limited and registration is available online at www.leadershipkitsap.org. For more information, call Kathy Nelson at 360-782-1058.
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February 2014 Kitsap Peninsula Business Journal • KPBJ.com 27
By Julie Tappero There is a movement under way in this country to raise the minimum wage, and many of our elected officials have joined in. Seattle’s new mayor, Ed Murray, is raising hourly pay for city workers to a minimum of $15, and has created a task force to explore requiring all city businesses to pay that amount. SeaTac may be raising the minimum wage for airportrelated workers to $15. Gov. Jay Inslee has called for a raise statewide to $11.81. Even President Obama has weighed in, saying “Let’s declare that in the wealthiest nation on Earth, no one who works full-time should have to live in poverty, and raise the federal minimum wage.” Without getting into the debate itself, I think it’s interesting to take a look at the approach to minimum wage throughout the country. In the 1938 Fair Labor Standards Act, minimum wages were set for the country. But states have also been in this game for a long time, and all but five states have minimum wage standards. The highest state minimum is Washington’s, at $9.32. San Francisco’s minimum wage is $10.74. Los Angeles is about to consider a minimum of $15.37 for hotel workers. So everyone makes at least the minimum, right? Wrong! There are categories of workers that are exempted from the minimum wage. Federally, full-time students working in higher education organizations, or in certain industries such as retail stores, may be paid as little as 85 percent of the minimum. Student learners participating in a vocational education program may be paid 75 percent. And workers with disabilities may be paid a subminimum wage set by the employer. Various states have utilized some creativity as they apply their minimum wage laws. They’ve utilized tip credits, benefit credits, special rules for youth, and even some exemptions. As the battle rages over minimum wage, we might be able to pick up some interesting concepts by looking at what others do. Starting with youth, states have often applied different rules to minors in order to
Use ‘tax diversification’ to help manage retirement income By Mary Beslagic You need to save and invest as much as possible to pay for the retirement lifestyle you’ve envisioned. But your retirement income also depends, to a certain degree, on how your retirement funds are taxed. And that’s why you may be interested in tax diversification. To understand the concept of tax diversification, you’ll need to be familiar with how two of the most important retirement savings vehic les — an IRA and a 401(k) — are taxed. Essentially, these accounts can be classified as either “traditional” or “Roth.” When you invest in a traditional IRA or 401(k), your contributions may be taxdeductible and your earnings can grow taxdeferred. With a Roth IRA or 401(k), your contributions are not deductible, but your distributions can potentially be tax-free, provided you meet certain conditions. ( Keep in mind, though, that to contribute to a Roth IRA, you can’t exceed designated income limits. Also, not all employers offer the Roth option for 401(k) plans.) Of course, “tax-free” sounds better than “tax-deferred,” so you might think that a Roth option is always going to be preferable. But that’s not necessarily the case. If you think your tax bracket will be lower in retirement than when you were wor king, a traditional IRA or 401(k) might be a better choice, due to the cumulative tax deductions you took at a higher
28 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
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tax rate. But if your tax bracket will be the same, or higher, during retirement, then the value of tax-free distributions from a Roth IRA or 401(k) may outweigh the benefits of the tax deductions you’d get from a traditional IRA or 401(k). So making the choice between “traditional” and “Rot h” could be tricky. But here’s the good news: You don’t necessarily have to choose, at least not with your IRA. That’s because you may be able to contribute to both a traditional IRA and a Roth IRA, assuming you meet the Roth’s income guidelines. This allows you to benefit from both the tax deductions of the traditional IRA and the potential tax-free distributions of the Roth IRA. And once you retire, this “tax diversification” can be especially valuable. Why? Because when you have money in different types of accounts, you gain flexibility in how you structure your withdrawals — and this flexibility can help you potentially increase the amount of your after-tax disposable income. If you have a variety of accounts, with different tax treatments, you could decide to first make your required withdrawals (from a traditional IRA and 401(k) or other employersponsored plan), followed, in order, by withdrawals from your taxable investment accounts, your tax-deferred accounts and, finally, your tax-free accounts. Keep in mind, though, that you may need to vary your actual
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Being asked a few questions should be the beginning of the life insurance process, not the end of it. At Edward Jones, we meet with you face to face, so we can get to know you and your entire financial picture. That way, we can help find the life insurance policy that best suits your family’s unique needs. Because the more we know about what’s important in your life, the better we can help you take care of it. Edward Jones operates insurance producer in California, New Mexico, and Massachusetts through the following subsidiaries, respectively Edward Jones Insurance Agency of California, L.L.C., Edward Jones Insurance Agency of New Mexico, L.L.C., and Edward Jones Insurance Agency of Massachusetts, L.L.C.
To learn about the wide range of life insurance products we offer, contact your local Edward Jones financial advisor.
sequence of withdrawals from year to year, depending on your tax situation. For example, it might make sense to change the order of withdrawals, o r take withdrawals from multiple accounts, to help reduce taxes and avoid moving into a different tax bracket. Clearly, tax diversification can be beneficial. So after consulting with your tax and financial advisors, consider ways of allocating your
retirement plan contributions to provide the flexibility you need to maximize your income during your retirement years. Edward Jones, its employees and financ ial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation. • Mary Beslagic is an Edward Jones financial advisor in Manchester.
Are you prepared for the unexpected? By Don Logan When you’re working to achieve your financial objectives, you will encounter obstacles. Some of these can be anticipated — for example, you won’t be able to invest as much as you want for retirement because you have to pay for your mortgage. Other challenges can’t be easily anticipated, but you can still plan for them — and you should. Obviously, the word “unexpected,” by definition, implies an unlimited number of possibilities. However, at different stages of your life, you may want to watch for some “expected” unexpected developments. For example, during your working years, be prepared for the following: Emergency expenses — If you needed a major car or home repair, could you handle it? What about a temporary job loss? These events are costly — especially if you are
forced to dip into your long-term investments to pay for them. To help guard against these threats, try to build an emergency fund containing six to 12 months’ worth of living expenses, held in a liquid, low-risk account. Investment risk and market volatility — Extreme price swings are unpredictable, and they can affect your investment success. To defend yourself against wild gyrations in the market, build a diversified portfolio containing quality investments. While diversification, by itself, can’t protect against loss or guarantee profits, it can help reduce the effect of volatility on your portfolio. And here’s one more thing you can do to cope with the ups and downs of investing: Maintain a long-term perspective. By doing so, you won’t be tempted to overreact to short-term downturns. Prepared, page 29
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An unbelievable retirement-planning opportunity including PERS, TRS & SERS income, then she would take a 10.3 percent reduced initial benefit and would receive $3,587 per month. This income would be guaranteed on an inflation-adjusted basis for the rest of both their lifetimes. The third and lesser-known option which is simply unbelievable to me is that these retirement systems allow for her to name her 6-year-old grandson as the 100 percent beneficiary in lieu of her husband. If she were to die, her grandson would continue to receive inflation-adjusted income for the remainder of his lifetime. By naming her grandson as beneficiary, she would take a 16.3 percent reduction in her initial benefit and would receive only $3,347 per month to start instead of the higher $3,999 had she did not named a beneficiary. But now this income of $3,347 would be guaranteed for the remainder of both her and her grandson's lifetimes. In order to consider the planning possibilities, we need to make some assumptions: 1) Mrs. Jones will live to age 90; 2) Her husband has a life expectancy of age 90; 3) Her grandson has a life expectancy of age 90; 4) They will elect the income that is adjusted for inflation and use a constant COLA/inflation factor on their income of 2.5 percent per year. If Mrs. Jones just elects her maximum single life benefit over her lifetime, then she would receive approximately $792,712 of lifetime benefits. If Mrs. Jones names Mr. Jones as her primary beneficiary, then the combined lifetime benefit would be approximately $834,202 of lifetime benefits. If Mrs. Jones names her 6-year-old grandson as the primary beneficiary over both her lifetime and his lifetime, then they would receive approximately $11,498,092 of lifetime benefits. (Yes, you read that correctly. That is more than 11 million dollars.) For the couple who will not need to rely solely on their pension income for their
PREPARED
longer-than-anticipated life span also carries with it the risk of outliving your money. Consequently, you may want to consider investment solutions that can provide you with an income stream that you can’t outlive. Also, you’ll need to be careful about how much you withdraw each year from your various retirement and investment accounts. Need for long-term care — If you had to stay a few years in a nursing home, the cost could mount to hundreds of thousands of dollars. These expenses could jeopardize your financial security, so you’ll need to protect yourself. You could “self-insure,” but as that would be extremely costly, you may want to “transfer the risk” to an insurance company. A financial professional can help explain your choices. None of us can foresee all the events in our lives. But in your role as an investor, you can at least take positive steps to prepare for the unexpected — and those steps should lead you in the right direction as you move toward your important goals. • Don Logan is an Edward Jones financial advisor in Silverdale.
from page 28 Long-term disability — One-third of all people between the ages of 30 and 64 will become disabled at some point, according to the Health Insurance Association of America. Disabilities can be economically devastating. As part of your benefits package, your employer may offer some disability insurance, but you may need to supplement it with private coverage. Premature death — None of us can really predict our longevity. If something happens to you, would your family be able to stay in your home? Could your children still attend college? To protect these goals, you need adequate life insurance. As you approach retirement, and during your retirement years, you may want to focus on these challenges: Living longer than expected — You probably don’t think that “living longer than expected” is necessarily a bad thing. However, a
retirement lifestyle, this could be a really interesting gifting strategy. Obviously other considerations exist, and you should never make this type of decision in a vacuum. You want to look at your entire retirement plan including the tax and estate implications before you select the best strategy for you. You will also want to consider the tax implications for your grandson. This initial election is irrevocable so it's important that you get it right. Once you make your decision, in most instances you will not be able to change it. If you have already retired from one of these Washington state retirement systems, you cannot go back and make any changes. This type of planning is controversial, as it should be. When you choose to name your grandchild as your beneficiary, you are increasing the burden of the retirement system to pay income for a very long time. Your grandchild never paid a penny into the system, but would benefit from a lifetime of guaranteed income. I do not believe this is what the retirement system was designed for, but for now this is how the system is structured. However, when I spoke with representatives at the Department of Retirement Systems, I was told in a recent meeting they discussed changing who you can name as beneficiary for 100 percent of your benefit, and they anticipated these changes would be made by July 2014. Link: http://soundretirementplanning.com/
purchasing-service-credits-for-teachers-inwashington-state-from-drs-for-trs-plans-1-3/ The reduction in pension benefits will be determined by several different factors and the percentages above may not be an accurate representation of your personalized pension benefits. The example above assumes Mrs. Jones does not withdraw her own contributions. Be sure to request an estimate from the Department of Retirement Systems to better understand what this decision would look like for your specific situation. I spoke with Gabby, Lee and Shayna at the DRS when researching this beneficiary election option; phone 1-800-547-6657. • Jason Parker is president of Parker Financial LLC, a fee-based registered investment advisory firm working primarily 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. Parker is insurance-licensed and holds his series 65 securities license. He offers annuities, life and long-term care insurances as well as investment services. Follow Jason’s blog at www.soundretirementplanning.com.
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 29
By Jason R. Parker We are always looking for ways to add significant meaningful value to the financial lives of the people we serve, and I just learned about a planning opportunity that needs to be considered. Please note that this opportunity is likely to change soon and may be lost completely. If you are preparing to retire from one of these three Washington State Retirement Systems please take a minute to read this and be sure to pass it on to anyone who you think this may help. 1) Public Employees (PERS); 2) Teachers (TRS); 3) School Employees (SERS) You probably know at the time of your retirement you can name a beneficiary to your pension. Depending on the income option you select, your beneficiary would continue to receive all or a portion of your pension income after you die. For most retirees retiring from one of these three systems, you have the option of electing a lower initial monthly pension in exchange for a pension that is tied to the consumer price index (CPI) for Seattle. Your election at the time of your retirement will determine if you will have static income or inflation-adjusted income once payments begin. What most people do not know, and what I was shocked to discover, is you could name your grandchild as beneficiary on your pension income. Let me give you a quick hypothetical example of the power of this planning opportunity. Mrs. Jones is 77 years old and preparing to retire from the Teachers Retirement System (TRS). If she elects her maximum single life pension benefit with no survivor option, then she would have a guaranteed inflation-adjusted retirement income of $3,999 per month. If she were to name her husband, Mr. Jones, who is currently age 75, as her beneficiary at 100 percent of her retirement
30 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
Content marketing emerges as hottest new trend By Rodika Tollefson Content marketing rose as the darling concept of digital marketing in the last couple of years, sending many companies scrambling to join the growing trend of serving up content first and advertising last or maybe not at all. Also dubbed brand journalism and brand storytelling, the concept is turning on its head the question of what, exactly, is the core competency for a corporation that previously offered, say, soft beverages. Or credit cards. Or perhaps shoes. We are, of course, talking about Coca Cola, American Express and Nike. Or are we? Remember when blogs became hot and “everyone is a publisher” was the new mantra? In the world of business, now every brand and its brother is a media company, or at least striving to be. Content marketing is the new black. Just ask Coca Cola, which employs full-time journalists and scores of freelancers to provide original content for its website, dubbed Coca Cola Journey (www.coca-colacompany.com). Ask Starbucks, which created an online media portal long before brand journalism became the term du jour. Or ask Red Bull, whose digitally distributed magazine, Red Bulletin, reportedly has millions of subscribers worldwide. What exactly is content marketing? To put it in simplest terms, it’s marketing a product or service by providing useful and interesting content — and not always about the company’s latest and greatest. In fact, it’s only occasionally about the company. Essentially, it’s a way to build a following without the constant “buy me!” or “act now!” techniques of marketing days of yore. It’s really an extension of what social media has been asking of brands: Don’t bother with the impressive annual report or the beautifully crafted sales copy. Be useful and interesting if not entertaining. The idea of brand storytelling, of course, is not new. It’s at least as old as John Deere’s The Furrow magazine (born in 1895) and Jell-O’s first recipe book.
Duracell's video about Seattle Seahawks player Derrick Coleman is a good example of content marketing. Go to http://bit.ly/1fi4uKl to see the video on YouTube.)
But in the digital marketing era, when lines between journalism, public relations and marketing are blurred (and native advertising is growing as a promising income source for traditional media publishers), editorial content produced by businesses big and small is becoming the norm. Consumers are allegedly starved for content (whether they have any more time for it or not), or at least fed up with advertising (even with the more cunning kind, behavioralbased). And who doesn’t love a good story? Here’s one example. A January YouTube video (with 10.5 million views and growing in its first two weeks) tells the emotional story of Seattle Seahawk Derrick Coleman (http://bit.ly/1fi4uKl). Despite being deaf since age 3, he worked against the odds to become a professional football player, an NFL champion. At the end of the one-minute story about his journey, the words “trust the power within” flash on the screen, followed by the Duracell logo. Beautiful story. So what if it’s really an ad for a battery maker? The video is inspirational and engaging. Duracell is merely footing the bill. Content, of course, doesn’t come cheap, especially good content — and good content is
imperative in order to compete for eyeballs, considering the overabundance that’s being produced. And for small businesses, it’s impractical if not impossible to keep small editorial departments on board. But it can be done on a shoestring. Just look at Missouri Star Quilt Co. The small family business became the go-to online fabric shop by spending very little on marketing and instead offering tutorials on its YouTube channel
and tips on its blog. The business exploded in just two years and now ships hundreds of packages daily all over the world. For small businesses, content marketing may sound intimidating but it doesn’t need to be. Small-business leaders are already passionate about their products and services, they just need to share that passion without explicitly peddling their wares. They’re already experts in their fields, they just need to put that expertise in writing, so to speak. And it doesn’t always need to be original stuff — it can be as simple as curating other people’s great content and providing a forum for conversation. Not everyone is a natural storyteller, but learning a few storytelling tricks is not rocket science. What’s important is using content marketing as a tool for the right reasons and not for the doing’s sake. There’s enough digital drivel out there — no need to add to the pile just because the “experts” said so. It’s one instance when “just do it” is not the best advice.
The buzz on digital media buzzwords It’s a brave new marketing world out there and as digital media grows to conquer advertising trends, some buzzwords are rising to the surface. Here are some quick definitions for those hot words that are making marketers nod their heads: Content marketing: Creating and distributing useful content (vs. advertising) in order to acquire and retain customers. A rapidly growing trend in digital marketing led by giants like Coca Cola and Microsoft (see related article). It can include original and curated content, focused on what the customer wants and needs. Native advertising: Sponsored content (i.e., online articles) presented in a way that integrates it seamlessly into editorial content. Similar to newspaper advertorials, native advertising is used with the goal of promoting a brand in a less intrusive way. The New York Times was the latest to embrace the concept, rolling out native ads in January on a redesigned website. It’s a hot topic in front of the FTC because of the blurring lines between traditional editorial content and sponsored content. Social commerce: Also known as s-commerce, it’s online commerce that blends social media, peer-to-peer selling (eBay etc.), group buying (Groupon), peer reviews or “participatory commerce” (Kickstarter), among other things. Dubbed “social media meets shopping,” it’s a growing trend — especially as social networks like Facebook figure out how to capitalize on it. Responsive design: A much-debated new way to design websites that “respond” to any platform/screen. The websites are optimized for minimum scrolling, zooming etc no matter the platform. Also called fluid design, it uses flexible grids that are sized based on the browser width and it displays the content differently. It’s a growing trend fueled by proliferation of mobile devices but it’s different from traditional design by doing away with the need to program several versions of the same site. Agile marketing: A more elusive term, used to describe a process or principles that allow marketers to quickly adapt to changing markets and customer needs. Instead of using rigid plans, agile marketing uses data, prototypes or small experiments, team collaboration and other methods to respond to change while keeping aligned with the business vision. Big data: Another term that has varying definitions, big data is viewed by some as an up-and-coming challenge for marketing. Big data includes the collection of very large and very complex data sets that provide unprecedented insights into consumer behavior — hundreds of terabytes a week — but require serious computing power to untangle. Omni-channel: A term that’s slowly entering the marketing industry lingo, it is similar to cross-channel but goes beyond and is usually used by retail brands. Omnichannel refers to all channels that customers may use, including online and mobile, direct mail, brick-and mortar, etc., and omni-channel retailing is about giving the customer a seamless experience wherever the customer wants to be.
Mobile payments: What’s in your (digital) wallet? By Rodika Tollefson It’s not unusual these days to see a customer in a store checkout line whipping out his or her smartphone for the cashier to scan. In most cases, they are scanning an app for their loyalty shopping card or a coupon — but some are actually using their phones to pay. In some countries around the world, digital wallets have given rise to an industry with billions of transactions. In developing countries, they’re a new way to conduct business for a population that doesn’t bank but is a power user of mobile phones. Even in countries like Japan, e-wallets are wildly popular. But in the United States, mobile payments have been slow to take off — save for the widely used Starbucks app and some experiments like Google Wallet. Still,
market research firm Parks Associates forecasted in January that 43 percent of smartphone owners will be using mobile wallets by 2017. A digital wallet typically requires a prepaid account that you can monitor and refill, or it ties into existing credit card or bank accounts. Merchants need special hardware to accept the payments. In the United States, that’s typically places that have the “contactless” scanners, using near-field communication (NFC) technology, also known as “wave and pay.” In Kitsap, you can find them at locations such as Rite Aid and McDonald’s. If you like to be an early adopter, there are a few options you can try out: Google Wallet, a pioneer of the concept, starts with a Google account (you know,
“one Google account for everything Google”). The app allows you to consolidate loyalty cards from various retailers. In addition to the app, Google Wallet offers a card you can use to withdraw money from the ATM or use like any debit card — so now all Grandma has to do at Christmas is email you and voila! you’ve got cash. To pay with your actual phone, you have to find a merchant that accepts “contactless” payments and own a device that supports it — the list is relatively short but includes popular Android phones like several versions of the Samsung Galaxy and HTC Evo. ISIS Mobile Wallet, a relative newcomer, is a free app that works with certain Android phones (which need special SIM cards) on AT&T, Verizon and T-Mobile networks. For iPhone users, accessory maker Incipio unveiled a product
in January called Cashwrap, which works in conjunction with the ISIS app and stores information on a chip. The wallet works with some Chase, Wells Fargo and American Express credit cards, or you can set up an account and add money from a debit/credit card or bank account. Works at any merchant that has NFC readers. Square Wallet, from the company that pioneered credit card processing via mobile, uses an app that links to a credit card and includes your photo. Check in at the location, tell the cashier your name, and you’re done once the cashier checks your name/photo. Square doesn’t store credit card info on the phone, and also allows you to add loyalty cards and receipts. Kitsap merchants that have Square readers include Mobile, page 33
Virtual currency Bitcoin has advantages, risks operating system). In other words, Bitcoin is not backed up by anything but software code. People can buy the currency on online exchanges or from other people, and deposit it into virtual wallets, then use it at any online or brick-and-mortar merchant that accepts it. At a physical location, customers use their mobile phones by scanning merchant-provided bar codes. In addition to acquiring the money through exchanges or payments from others, consumers can earn bitcoins through “mining,” a term that refers to using peer-topeer computing power to essentially run the network (approve and verify transactions and keep the data secure) by solving complex mathematical algorithms. Anyone can become a miner by running a special software, but as mining became more popular, it has required specialized hardware capable of processing the data blocks quicker, and miners typically join a pool to solve the algorithms faster. New bitcoins are also created through mining, but the protocol is designed to create them at a fixed and decreasing rate — and there is a cap of 21 million bitcoins that will ever be created. Small merchants reportedly like the virtual money because it costs less for transactions than credit cards. And the Bitcoin website touts the democracy of the system and the ease of transactions on users’ own terms. But the currency has drawbacks. The main one is that the exchange rate fluctuates based on supply and demand — and that fluctuation can be in the hundreds of dollars. Which means unless the merchant or customer converts Bitcoins into regular money right away — and many do — they could lose a lot of value. In January, for example, closing price went from $806 on Jan. 1 to $1,005 on Jan. 5 and to $918 on Jan.
24, according to data from MtGox, one of the Bitcoin exchanges. There’s also been instances of some governments banning it. The Bitcoin website, bitcoin.org, doesn’t list any merchants currently in Washington state (there are several in Portland), but some businesses in the state are starting to experiment with it on a small
scale. One example is Volstead Act, a bar in Spokane that recently dipped its toes into the virtual waters and was even offering discounts to patrons paying with Bitcoin. According to bitcoin.org, which is managed by the core developers, as of August the value of U.S. bitcoins in circulation exceeded $1.5 billion.
“Partners in Business” “NW Commnet provided the fiber optic for our whole building. They were wonderful — they took care of everything, making the transition very smooth. “Fiber optic is fabulous. We can move files quickly and it is more affordable.” — Diane Raszler, AU.D. Hearing Advantage
360-613-5220 • TELEBYTE.COM
360-373-2137 • NW-COMMNET.COM
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 31
By Rodika Tollefson January was a big month for Bitcoin, the digital currency that’s been creeping its way into mainstream since being introduced two years ago. First, Overstock.com became the first major online retailer to accept Bitcoin, quickly processing $100,000 worth of orders, and resurrecting speculations about whether other players, like Amazon, would follow suit (Amazon reportedly said not in the near future, if ever). Then, the Sacramento Kings became the first major sports team to accept it at the team’s retail store. EBay will reportedly allow customers to sell bitcoins this month. From the Golden Gate Hotel and Casino in Las Vegas, which started taking Bitcoin at its front desk and gift shops (but not the casino floor) in January, to the Robocoin, an ATM installed at a Vancouver, B.C. café last fall specifically for Bitcoin — this decentralized payment method seems to be gaining traction. So much so that Congress held hearings regarding financial regulation, and expressed cautious optimism about its future. And even the U.S. Postal Service hosted an online forum exploring the future of virtual currency and its potential. How does it work? Bitcoin is an online payment network that’s not owned by anyone and is controlled by its users. Because it’s a peer-to-peer network, every user “holds” a fraction of the Bitcoin “bank.” It doesn’t have a central authority or any governmental oversight, and is used around the world much like cash would be. The Bitcoin Foundation, supported through memberships (and headquartered in Seattle), acts as an organizing body whose role is to standardize, protect and promote Bitcoin. The digital money uses cryptography to make transactions secure, but the software itself is an open-source code that any developers can review or contribute to (similar to the WordPress contentmanagement system or the Android mobile
Let there be (new) light: ‘Market is finding us’ Customers testing LED replacements made locally call them ‘the wave of the future’ for outdoor lighting
32 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
By Tim Kelly, Editor Pedestrians at the University of Washington-Tacoma will notice something different soon while walking at night by a busy campus corner. Five of the university’s heritage lampposts are being relocated to the block of Court C near 19th Street and Jefferson Avenue, and observant passersby might notice a brighter glow from the vintage-look “double acorn” lights, which will have new high-intensity LED bulbs from a Port Orchard lighting company. The university is testing Hi-Lamps from Differential Energy Global (DEG) Ltd. in the streetlamps, as well as in two buildings, and plans to eventually put the new LED bulbs in all the lampposts that illuminate campus walkways. That would yield a substantial savings in energy usage and costs, since the LED replacement bulbs use 45 to 70 percent less electricity than conventional high-intensity-discharge (HID) lamps used in outdoor lighting fixtures. “This is really the wave of the future on these for energy conservation,” said Hugh
Smith, resource conservation manager for UW-Tacoma. The school has about 30 of the heritage lampposts, and Smith said they will be used in all future development on the downtown campus. He said the university was looking for a way to adopt energy-saving LED technology without the expense of new light fixtures typically required for an LED retrofit. That’s one of the most appealing features of the new products Differential Energy Global is bringing to market after extensive research and development, company president Rick Flaherty said. The DEG Hi-Lamps and Hi-Bay Lamps will fit most existing light fixtures, and installation simply requires taking out the old bulb and removing the ballast before screwing in the new bulb, which can be done in less than 10 minutes. “Theirs is a very exciting change to the standard technology. The screw-in LED replacement has always been kind of a bugaboo,” said Kerry Cameron, conservation program manager at Tacoma
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Bob Nietfield, left, new VP for sales at Differential Energy Global, and company owner Rick Flaherty hold high-tech LED replacement bulbs at DEG’s production facility in Port Orchard. Tim Kelly photo
“This is really the wave of the future on these for energy conservation.” — Hugh Smith, UW-Tacoma resource conservation manager
Power. “Now there’s an opportunity for an LED solution at a reasonable cost.” Smith said the main reason for making the change in their streetlamps is the energy savings with LED lighting. “They’re a large consumer of energy, the original (lights), so when we found out about Rick and the DEG lamps, we went over and took a look at it,” Smith said. “He’s just now coming into production with them, which is wonderful.” The five heritage lampposts are being moved from a different part of campus undergoing landscape renovation to Court C, an area that currently has two city streetlights but needed more lights to enhance security, Smith said. They should be in operation by the end of February. “The city of Tacoma is waiting for us to light them up; they want to look at them,” Smith said. The LED conversion on campus “looks very promising,” he added, and the city may use replacement bulbs from DEG in its similar vintage lampposts. What UW-Tacoma is doing on a relatively small scale is happening in numerous larger settings as well, Flaherty said. The Epson manufacturing center in the Portland area put DEG bulbs in all its exterior lights; samples have been sent to a Michigan-based grocery chain that has 93 stores similar to Fred Meyer in several states; and other potential customers testing the products include some multinational corporations. So DEG is ramping up production to be able to supply a global distribution network that's taking shape. That's what Bob Nietfield, hired in
Photo courtesy UW-Tacoma
The University of Washington-Tacoma will test replacement LED bulbs from Differential Energy Global in several heritage lampposts on campus walkways. The city of Tacoma is also considering using the bulbs in its similar streetlamps. January as DEG's vice president of sales, is concentrating on. "We have not gone to market yet at all, zero; the market is finding us, very quickly," Nietfield said. "This is the part that’s crucial right now for us, to set up the correct lines of distribution." Flaherty said that during the last two months of 2013, the company filled its backlog of initial orders, which amounted to almost 300 units that were shipped to at least eight states and overseas. But DEG's 2014 output at the plant it shares with Leader International in the Port Orchard Industrial Park is headed way up. "Between now and the end of March we’re planning on scaling up ... to 1,000 units a week,” Flaherty said in mid-January. “That's what our goal is." He anticipates hiring 10-12 new production workers to operate at that pace, plus a few more on the sales/admin staff. Nietfield came to DEG from North LED bulbs, page 33
LED BULBS
from page 32 Coast Electric, where he was in charge of the company's energy conservation division. His experience in the lighting industry also includes 15 years working for Platt Electric Supply. “I’ve been regularly visiting here for two years,” he said shortly after his hiring at DEG. “I would say it was a joint effort of me being so interested in this product, and probably on their side of the fence, just kind of picking my brain on lighting applications in the market.” He sees tremendous potential for DEG because there will be huge demand for the company’s lighting innovations. “If I didn’t believe in the product and see something truly unique here, I wouldn’t be here,” Nietfield said. “Our product is going to be a game-changer in the industry.” For his part, Flaherty is focused on securing the investment needed so DEG can expand its production rapidly to meet demand. One approach to reach investors and raise working capital for DEG is a private equity offering — formally called a Reg D rule 506 private placement memorandum offer (PPMO) — filed through the Securities and Exchange Commission. According to company documents posted on the commission’s EDGAR website in October, the PPMO is in effect for one year (and can be extended) to raise $1.75 million from investors.
MOBILE
wanted to run it through a normal, realworld application.” PSE and Tacoma Power both offer customer rebates for certain energy-saving measures, and lighting upgrades with DEG products qualify. “The utilities have all been in here and seen the product, and they love it,” Nietfield said. “For utilities, lighting is one of the number-one ways to reduce load, so that more businesses and more houses can be added to the grid. “That’s why they love to rebate. It’s an easy reduction for them,” and a lot cheaper than the cost of building a new generating facility. While DEG would become highly profitable if its bulbs become the industry standard for LED retrofits, Flaherty cares just as much about providing a product that
conserves energy and resources, reducing carbon footprints. He thinks it’s cool that DEG bulbs aren’t so hot, literally. “A typical high-intensity-discharge, 400watt metal halide or high-pressure sodium bulb is burning at somewhere above 700 degrees Centigrade,” he noted. “And our entire lamp is in an enclosure, and it’s not over 85 degrees Centigrade.” One of DEG’s selling points is that customers can put in LED bulbs without replacing the light fixture, but for new construction and other applications where new fixtures are needed, the company might in the future manufacture their own complete assembly. “It will be probably the next evolution of DEG, would be to get into supplying a fixture with our lamp in it,” Flaherty said. “I think it’s a logical next expansion.”
Former Bremerton schools superintendent to give talk on early childhood education Bette Hyde, director of the state Department of Early Learning and former superintendent of Bremerton schools, will be the guest speaker Feb. 19 at a League of Women Voters of Kitsap Bette Hyde program on early childhood education. The program will run from 9:30 a.m. to noon at the Eagles Nest on the Kitsap County fairgrounds, 1195 NW Fairgrounds Road. Free and open to the public, the event will be a chance to find out what the state is doing to offer “seamless high-quality programs for children and families so that every child enters school healthy, capable and confident,” Hyde said. She will also discuss educational partnerships, proposed legislation and
current initiatives in early learning. Hyde was first appointed to head the Department of Early Learning by former Gov. Chris Gregoire in 2009. Gov. Jay Inslee recently reappointed her to the position. When Hyde was superintendent in Bremerton, the district became known for its innovative approach to early learning, especially for offering all-day kindergarten to all students and for partnerships between the district and local preschools to improve kindergarten readiness. Early learning is gaining higher visibility around the country because research has shown that children who receive a highquality preschool education are on track to get higher grades, to be more likely to graduate from high school and less likely to commit crimes or get pregnant as teenagers.
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 33
from page 31 some Fred Meyer stores, Radio Shack, Walgreens and Rite Aid locations (plus Starbucks). Patrons of some chain diners and stores will soon have another option. Major retailers like Kmart, Wal-Mart, Lowe’s and Best Buy are part of a consortium called Merchant Customer Exchange, or MCX, that’s been developing a mobile payment app. The consortium’s participants range from restaurants like Olive Garden and Red Lobster, to gasoline providers like 76 and Shell. It lists Southwest Airlines, Sears, Dunkin Donuts and Target, among many others. The consortium has been at it since 2012; however, it hasn’t announced a rollout timeline. If you want to get a taste for the idea and you like coffee, you can start with the Starbucks app. Link a Starbucks card, tap a button, get the cashier to scan the bard code and you’re done. You can store multiple methods of payments (including PayPal) and even reload while standing in line — plus get freebies after a number of purchases. Then, if you forget your wallet on the way to work, you can still start your day blissfully caffeinated. You may get so addicted (to the mobile payments, that is), you’ll never bother to go back for a forgotten wallet. Just don’t get stopped for speeding or texting — failure to produce a wallet with your driver’s license while operating a vehicle is still very much a nuisance.
Flaherty said he can’t discuss the SEC filing, but he said in general that DEG is drawing the interest of investors. “I can tell you that we had a substantial offer to buy a majority interest in the company that we turned down,” he said, although discussions are ongoing. Another site where DEG replacements have been installed in exterior lights is its own building — and Nietfield said they plan to post a YouTube video of the installation process, which also will mention their 60 percent reduction in energy use for lighting. “We did this facility and went through a normal procedure of applying for a grant, and it went through smoothly and we captured the utility rebate money” from Puget Sound Energy, he said. “We got over $3,000 toward changing our own. We
2014 Toyota Tundra Crewmax: Trucking limo-style By Bruce Caldwell The 2014 Toyota Tundra CrewMax pickup is big — American big. I grew up with the concept that Japanese pickups were small, spartan mini-trucks that were best for commuting and occasional lightduty hauling. That’s no longer the case as both Toyota and Nissan are strongly entrenched in the full-size American style pickup market. You could say that the new Tundra is Texas big as it’s built in San Antonio, Texas, USA. Texas is truck territory and except for its corporate headquarters the Tundra is as Texan as any rig that’s ever run over an armadillo. Walkaround: The 2014 Toyota Tundra CrewMax takes up a lot of driveway real estate. It’s every bit as imposing as any Ford, Dodge or GM pickup. From its massive grille to the huge 20-inch chrome wheels to the limo-size rear doors to the high step-in height it is one big truck. The fit and finish of all body panels is excellent. The doors shut solidly. The construction quality is comparable to a luxury sedan. That’s a world apart from the tinny mini-trucks that were imported in the early ’70s. Interior: The interior of the top-of-theline Tundra 1794 Edition is a highlight of
an already impressive truck. Spacious and luxurious are two words that come to mind. The 1794 Edition (named for the year the former JLC cattle ranch was established where the trucks are now built) is sumptuous in an expensive den/library/office sort of way. The rich saddle tan perforated leather and suede seats with white stitching would fit in any upscale home. The power lumbar seats are heated and ventilated. The contoured wood, leather, and aluminum (power tilt and telescopic functions) would also be at home in any executive suite. Handsome wood trim accentuates the leather. Storage compartments and bins are huge, like the rest of the truck. The console bin could hold a small child if it were equipped with seat belts. Ample
COME DRIVE THE NEW 2014
34 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
TOYOTA TUNDRA
West Hills Auto Plex • 901 West Hills Blvd. 360-377-1200 • www.heartlandtoyota.com
storage is great for anyone who uses his or her truck as a mobile office. The back seat has limo-like legroom. The seats slide and recline for adjustability. There are substantial grab bars and running boards to assist rear seat ingress/egress. The lower seat cushions fold up from the flat floor leaving lots of interior cargo capacity. The huge rear window is power operated for fresh air or access to any livestock you might be hauling. All the interior room comes at a slight compromise to the pickup bed. The fullwidth bed is only 5½-feet long, but that’s still ample given the passenger bias of the Tundra CrewMax. There are sliding cargo cleats and cargo loops for securing loads. A power moonroof and an excellent JBL stereo and navigation system were other interior highlights. The interior was wellinsulated and car-like quiet on the road. Under The Hood: The largest available Tundra engine — a 5.7-liter V-8 that’s rated at 381 horsepower and 401 lb-ft of torque, powered our test truck. The transmission was a smooth 6-speed automatic with a dial for choosing between two-wheel drive and four-wheel drive. The rear gear ratio is 4.30:1. The transmission has a tow/haul mode. There are engine and transmission oil coolers. There is a factory-installed tow/hitch receiver with 7-pin trailer wiring harness. Four-wheel disc brakes help stop heavy loads. The Tundra can be equipped to tow up to 10,400 pounds. Safety equipment includes traction and stability control, four-wheel anti-lock disc brakes, trailer sway control, brake assist, Smart Stop Technology, and eight airbags. The EPA rates the 5.7-liter V-8 Tundra at 13 mpg city and 17 mpg highway. We
averaged 13.9 mpg in mixed driving conditions with an empty bed. The Tundra is not for buyers who dislike gas stations. Behind The Wheel: Once you adjust to the sizeable width and length of the Tundra the driving experience is very good. Controls and gauges are well placed and the cabin comfort is first class. Our tester had the optional Blind Spot Monitor with Rear Cross Traffic Alert, which should be considered mandatory. The driving position is elevated, which is nice in traffic. That doesn’t make traffic less congested, but at least you can see what the holdup is. Parking can be a challenge in malls full of “compact” spaces, but that problem isn’t limited to just pickup trucks. The Toyota Tundra excels on the open road filled with passengers and/or cargo, but city driving is fine as long as you allow extra time for finding a suitable parking spot. Whines: I can’t get behind the 1794 moniker. When it takes more than one sentence to explain a name and then it still elicits blank stares it’s not a great name. Maybe it means something at the Tundra assembly plant in Texas, but it’s just four random numbers elsewhere. I think the frontend styling is overly blunt, but it apparently works for Ford, so other truck builders have followed suit. The Toyota Land Cruiser and Sequoia have much more agreeable noses without looking wimpy. Bottom Line: The 2014 Toyota Tundra CrewMax 1794 Edition is one impressive truck. It combines all the power and strength of a full-size 4x4 pickup with the creature comforts of a luxury sedan. The Tundra is high style/high function dual-purpose transportation at its best.
2014 Honda Accord: Gas or hybrid? Which is right for you? than the previous generation, but it's still easily identifiable as an Accord. The grille boasts classy horizontal bars with the Honda badge stationed in the middle. The sedans have a low beltline where the side windows meet the sheet metal to offer improved visibility — especially for rear seat passengers. The EX and EX-L add premium touches such as LED brake lights and daytime running lights. Other than that, not much has changed from the 2013 redesign. Interior: The interior of both the Gas and Hybrid versions feature the same quality of materials and the same level of comfort, functionality, and technology, including a USB and iPod ports. Other than the instrumentation displays and the powertrain, there’s seemingly no difference in these two vehicles inside or out. Visibility is excellent from the driver’s seat, and thanks to the low beltline, from the rear seats as well. Honda’s LaneWatch camera system — standard on all trim levels — displays the image of the driver’s right-side blind spot when the right turn signal is activated. Under The Hood: There are two engine choices and three new transmissions offered in gas-powered versions of the 2014 Accord. The base is a 2.4-liter 4-cylinder that delivers a healthy 185 horses (189 in the Sport version), and was the powerplant in our test version. The optional engine is a 3.5-liter V6 that harnesses 278 horses. In the sedan, 4cylinder engines are linked to a 6-speed manual or Continuously Variable (CVT) automatic, and V6 engines are connected to a 6-speed auto. Both our test vehicles were equipped with the CVT. The Accord Hybrid utilizes a 2.0-liter 4cylinder, dual-overhead cam, Atkinson cycle, i-VTEC gas engine rated at 141 horses with 122 lb-ft of torque married to a pair of electric motors. The combination delivers 196 horses and 226 lb-ft of torque to the Accord Hybrid. Honda’s CVT replaces a traditional transmission by using the electric motor to send power to the front wheels during both city driving and highway cruising. Behind The Wheel: The difference between the performance of the two Accords is in the eye of the beholder. Ride quality, comfort and quietness in general is pretty pleasing for either Accord, with improved noise reduction over previous models. Steering in either offer little in the way of feedback and is about as numb as anything else in this class — except perhaps the Fusion. The Accord Hybrid’s regenerative brakes have a nice, solid feel, and lack the jerkiness found in some other hybrid systems. The Accord’s various powertrains offer different driving experiences, but most buyers will gravitate toward 4-bangers with automatic transmissions. The 4-cylinder gas version has good power for acceleration and passing, yet according to EPA figures, is still rated at a highly respectable 36 mpg/highway. The clue you’re driving the hybrid occurs when strong power is suddenly needed, and you experience that lethargic rate of acceleration hybrids are known for. However, unless you have to put the pedal to the metal, everyday cruising feels pretty
much the same in either Accord. The transitions from gasoline to electric are smooth, and the Accord is noticeably quiet when running on electricity alone. EPA ratings for the 2014 Accord Hybrid are 45/city, 50/highway, with a combined rating of 47 mpg. The gas version is 27/city, 36/highway for a combined 30. We found those numbers pretty spot-on. If you lighten up on your right foot you can exceed them. Whines: I’m not a fan of CVTs in general. Under hard acceleration, to me at least, they sound and feel ’60s-era cars with slipping automatics. Bo ttom Line: Either Accord is pretty
good. Personally, I’d opt for the hybrid. It utilizes some advanced technology to become what I believe hybrids should have always been — ultra-economical versions of mainstream vehicles so similar in feel and driving dynamics that except for increased fuel economy, most consumers wouldn’t notice the difference. In the entire week we drove it, we didn’t have to buy gas and returned it with over half a tank left. The combination of its on-road feel and outstanding mileage make it a more than serious contender for the Toyota Prius, Chevy Volt, and Ford Fusion Hybrid, among numerous others.
COME DRIVE THE
2014 Honda Accord
360-377-1100 520 West Hills Blvd., Bremerton • www.westhillshonda.com
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 35
By Lary Coppola We recently had the opportunity to test drive the 2014 Honda Accord EX-L standard gas version, and the TRG gas/electric hybrid version of the EX-L in back-to back weeks. Both cars were similarly equipped, and this will be a comparison review. Both an all-new Accord sedan and coupe were introduced last year, and only minor updates have been made for 2014. However this year saw the debut of a regular gas/electric hybrid model and a limitedproduction, plug-in hybrid as well. Honda products in general have a history of reliability and high resale value. Although much like its main competitor, the Toyota Camry, the Accord has also always been somewhat mundane. However, it is the benchmark for this particular market segment that includes the Nissan Altima, Ford Fusion, Subaru Legacy and VW Passat. The Accord model lineup seemingly offers something for everyone — well almost anyway. The Accord doesn’t come in an allwheel drive version like the Fusion or Legacy, nor is a diesel option like the Passat offered. Model Lineup: The 2014 Accord, and Accord Hybrid 4-door sedans are offered in three trim levels — LX, Sport, and EX/EXL. There’s also an EX-L Touring version. Except for choosing an automatic transmission in the LX model instead of a manual, major options for the 2014 Accord come with moving up the trim level scale. Among the most desired available options are the V6 engine, satellite navigation, Sirius/XM satellite radio, a 7-speaker/360watt audio system, 18-inch wheels, leather seating, the multi-angle rear-view camera, HomeLink r emote system, LED headlights, blind-spot display, and adaptive cruise control. Additional personalization accessories include a sport grille, underbody kit, rear spoiler, remote engine-starting unit, and illuminated doorsill. The basic LX is pretty well-equipped, and features an 8-inch color display with rearview camera, dual-zone automatic climate control, 16-inch wheels, and a 160-watt AM/FM/CD stereo with Pandora Internet radio compatibility. The Sport model adds a power driver's seat, 18-inch alloy wheels, and a small horsepower increase, while EX models include a power moonroof and the LaneWatch system. EX-L models add leather, upgraded audio, heated front seats, and lane-departure warning. The top-of-the-line EX-L Touring model has a standard V6 engine, forward collision warning, and adaptive cruise control. Hybrid models include LaneWatch, LED daytime running lights and a 10-way power driver's seat. Moving up from the base trim to the EX-L also adds heated front seats along with lane departure and forward collision warning systems. The Touring trim adds a navigation system, Honda’s Homelink technology, and adaptive cruise control. All 2014 Accord Hybrids are equipped with 17-inch wheels. Walkaround: The Accord sedan is more than three inches shorter and more rounded
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36 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
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, 2014, 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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By Don Brunell With the ongoing debate about income inequality and increasing the minimum wage, it's important to revisit the basics. In order to demand a wage increase, you must first have a job. In order to have a job, someone must create that job. In order to create that job, someone must start a business. But now, when our economy desperately needs more — and better — jobs, a major study shows that starting a business in the U.S. is more difficult than ever. The study by the World Bank and the International Finance Corp. ranked 189 nations on how easy it is to start a new business. They considered the number of procedures required, the time necessary to complete the paperwork and the expense involved. The U.S. ranked 20th, down from 11th last year. Our showing was well behind countries such as Rwanda, Belarus and Azerbaijan. The good news? We narrowly beat out Uzbekistan. New Zealand is the best place in the world for entrepreneurs, according to the report. Starting a business there requires "one procedure, half a day (and) less than 1 percent of income per capita and no paid-in minimum capital," the study noted. New Zealand was followed by Canada, Singapore, Australia and Hong Kong in the top five. By contrast, the U.S. requires, on average, six procedures, takes five days and requires 1.5 percent of the company's income per capita.
The study also listed the countries that made it easier to start a business in 2012/13. The U.S. was not on that list. Despite our slide in this global ranking, the U.S. was well ahead of Surinam, where it takes almost 7 months to start a business. Why is this important? Because most jobs are created by small businesses, and research shows that economic growth is driven by the entry of new businesses rather than by the growth of existing firms. Chances are we wouldn't be debating income inequality or the minimum wage if we had a robust, expanding economy that was creating tens of millions of new jobs. However, an annual avalanche of federal and state regulations is making it increasingly difficult to run a business. Bernie Marcus, co-founder of Home Depot, says he never would have been able to start the company in today's regulatory environment. "I can tell you that today the impediments that the government imposes are impossible to deal with. Home Depot would never have succeeded if we'd tried to start it today," Marcus said. How does Washington rank? It depends on whom you ask. Chief Executive magazine ranked Washington 36th out of the 50 states in 2013, up one from the previous year. While
we get good marks for quality of life and workforce, we take a hit when it comes to taxes and regulations. Forbes magazine ranks Washington ninth overall, but places us 27th in business costs and 32nd in regulatory environment. The bottom line is this: While news coverage tends to focus on "big business," most jobs are created by small business. And launching a new company is risky in the best of times. In many ways, it's like skydiving: You prepare the best you can, but in the end, it is a leap of faith requiring enormous courage and personal risk. Many entrepreneurs mortgage their homes and empty their savings in order to start a business. In this economy, they lie awake at night, worrying how to make payroll for the employees who depend on them. Elected officials in Washington, D.C. and Olympia — most of whom have never run a business — should keep that in mind when they consider imposing new regulations and taxes that make it harder for employers to sustain and create jobs. • Don Brunell is a business analyst, writer and columnist. He recently retired as president of the Association of Washington Business, and now lives in Vancouver. He can be contacted at TheBrunells@msn.com.
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Kitsap’s 12th Man — You Orchestrating and amplifying our collective message By John Powers Our Economic Development Alliance’s recent economic forecast showcased the power of strategic partners collaborating on telling each other’s stories. Like the Seahawks 12th Man, Kitsap’s team “story” is heard more loud and clear by an ever wider audience whenever our community comes together to orchestrate and amplify its collective message. While the good folks of SF may not recall who wears #11 for Seattle (Percy Harvin), they sure as heck know who wears #12! At KEDA’s Jan. 29 event, economist John W. Mitchell, Ph.D., briefed local leaders on Kitsap’s current and future economic challenges and opportunities, and its integral role in the Greater Seattle regional economy. Dr. Mitchell talked about Kitsap’s regional strengths in the defense, maritime, manufacturing, health care and technology sectors; and, he spoke about the long-range regional horizon as
having mostly clear skies … economically speaking. In many ways, John Mitchell shared with us a story about Kitsap, about ourselves, that many already knew. But, such a story is often times better understood, appreciated and circulated when told by a maven. Three hundred business and community leaders also heard from Robb Zerr, marketing manager for the Washington State Department of Commerce, about the power of communities banding together to brand their market; while strategically, and collaboratively, telling their respective and collective economic development stories through digital media. The objective is to build an ever-larger corps of “Digital Ambassadors” telling and selling Kitsap’s story. This strategy is outlined at www.aboutdci.com/2013/10/six-tips-tolaunch-your-economic-developmentdigital-ambassadors-campaign.
John Rosebeary, right, and Jonathan Ogilvie shake hands at Virginia Mason Medical Center in Seattle the day after Rosebeary’s kidney transplant surgery in January to receive Ogilvie’s donated organ.
Robb shared his insights from the perspective of having lived in Kitsap, and having worked in the marketing and communications arena, both private and public sector, across the region for nearly 30 years. Robb’s remarks highlighted KEDA’s award-winning “Kitsap Connected” multimedia marketing campaign. He talked about the added value of strategic communications by and between Commerce and KEDA and their many mutual strategic partners. Zerr examined the multiplier effect that grows exponentially when more and more strategic partners begin to collaborate and tell each other’s story — when KEDA tells the story of an economic sector, or individual business; and, likewise, when the subjects of those stories tell the story of Kitsap’s attributes and our Alliance’s role in working with the community to retain, expand, and attract businesses throughout Kitsap. Kitsap’s story, and the story of our Al liance and our many strategic partners, is well told on our new web site (www.kitsapeda.org) unveiled Jan. 29. This site, together with KEDA’s refreshed logo and look and a host of social media initiatives, provides a broad array of marketing tools that, when used in concert by more and more Digital Ambassadors, begins to amplify our collective message about business opportunities in the Kitsap market.
In addition, take a look at Commerce’s “Choose Washington” website (www.choosewashington.com) and KEDA’s “Kitsap Connected” (www.kitsapconnected.org) portfolio of web-based videos, and you will find numerous examples of KEDA telling the story of our region’s economy and the advantages of doing business in Washington; and, conversely, Commerce touting the economic assets of our region, and promoting the connectivity and competitiveness of businesses based in Kitsap. It is this symbiotic relationship that results in a leveraged multiplier effect when orchestrating and amplifying Kitsap’s message to a more far-reaching national and international market. Like the 12th Man making sure the Seahawks’ opponents know (loud and clear) the Seattle fans enthusiastically back their team; and the Hawks making sure the 12th Man knows how much the team appreciates the fans — in the economic development arena, it’s also incredibly effective when all the players are on the same page and have each other’s back, front and flank ... and are telling each other’s story. Here’s to Kitsap’s story – may our 12th Man — You — tell It loud and proud! On Kitsap ... Go Hawks! • John Powers is executive director of the Kitsap Economic Development Alliance.
Photo courtesy Rosebeary family
GIVING
me offering to do that, isn’t that what you would want?” Ogilvie’s participation in the transplant means he will miss about six weeks of work, but he said he has the full support of his boss in Dallas, Dan Tinker, who also knows Rosebeary from past business ties in Washington. A grateful Rosebeary said all the support and help he and his wife have received from so many people is "completely overwhelming." "People overall are generous," he said. "You watch the news every day and see the bad parts of society, but I think overall society is good and people are good, and they want to help out. "To be in a situation that you need some help and people come running to help you, it's very nice." Asked if he's thought of a special way to thank Ogilvie, his reply was a variation on the pay-it-forward theme. "I think the best thing you can do is live a good life and treat people well," Rosebeary said, "and when you get the chance to help people, you help them." And maybe take them fishing.
February 2014 Kitsap Peninsula Business Journal • KPBJ.com 37
from page 38 but he and his wife are staying in temporary lodging near Virginia Mason because he has to go in for frequent checkups until he’s stable enough to return home, hopefully in mid-February. Meanwhile, in a nice bit of symmetry, Ogilvie spent a couple weeks recuperating at the Rosebearys’ home in Poulsbo. John’s sister, one of the volunteer donors who wasn't a suitable match, came over from Eastern Washington to help take care of Ogilvie, the house and the animals on the Rosebearys’ 5-acre spread. Ogilvie, who planned to return to Texas at the end of January, said he admires Rosebeary’s “cowboy values” — his work ethic and character. In deciding to be a kidney donor, he also thought about what it would be like if he was in the situation the Rosebearys faced. “The most significant part of the decision, was John has a family similar to ours,” Ogilvie said. They both have adult daughters, and in explaining his decision to his concerned children, “I just basically said if I was in John’s position and he came to
A local independent political party … Will it work? Of the three potential choices to replace Commissioner Josh Brown, who resigned to become executive director of the Puget Sound Regional Council, the choice of Linda Streissguth was the best one. Commissioners Charlotte Garrido and Rob Gelder deserve kudos for having the fortitude to stand up to their own party’s Precinct Committee Officers (PCOs), whose choice was Bremerton City Council member and selfproclaimed ultra-liberal, Leslie Daugs — who hadn’t even begun to serve the term she was re-elected to less than 30 days before Brown’s replacement process began. The choice of Streissguth ignited an internal battle within the local Democratic Party, with PCOs whining publicly in a Kitsap Sun article that the commissioners had no right to override their first choice. Excuse me? If their first choice is to be the anointed one, why bother to select three, or even consult the commissioners at all? The PCOs obviously weren’t thinking about future electability when they made Daugs — who has zero administrative, budgeting, financial, or personnel management experience — their top choice. Garrido and Gelder both know from personal experience exactly how vitally important having genuine qualifications — meaning more than a D next to their name on the ballot — actually is. Especially since Republican Ed Wolfe announced his intention to seek that seat in November. Wolfe’s stellar resume and centrist beliefs make him a very formidable candidate in a district unafraid to elect a Republican. Based
on numerous conversations with Democratic Party insiders, I believe Wolfe would have buried Daugs in a landslide — with strong support from moderate Democrats. Streissguth, common-sense a moderate, will present a much stronger challenge in November. The crybaby actions by the LARY COPPOLA PCOs who were so offended the The Last Word commissioners had the integrity to actually do the job they were elected to, by selecting the most qualified candidate, demonstrated nothing short of mind-boggling arrogance by airing the party’s dirty laundry in public. I bring that incident up, because their public whining is a clear case of the tail wagging the dog. I believe that kind of arrogance is symptomatic of the growing divide between an unelected, bureaucratic ruling class making many of our decisions, and the voters. It seems everywhere we look, there is increasing dissatisfaction with the partisan system. Congress is gridlocked, and neither side seems to represent anyone except the extremists on both the left and right who control the parties. Meanwhile, the majority of us here in the middle are forced to choose between ideals represented by people like Hillary Clinton or Rand Paul; Jay Inslee or Don Benton; Patty Murray or Ted Cruz; locally, Charlotte Garrido or Linda Simpson. All too often, we don’t
believe in either of them or what they stand for, but only believe less in what their opponent represents. Yet because of the partisan system, we’re forced to align with what most often we individually consider the lesser of two evils. Awhile back, I posted a question on Facebook that brought out some rather interesting responses. It basically asked if you would support independent party candidates in Kitsap County for local elected offices such as County Commissioner, City Council, etc. The question of state representatives intentionally wasn’t included because they would have to make a choice of which party to caucus with in Olympia, and as long as the partisan system exists there, we want to know which ideology we’re voting for at that level. The Facebook post brought out the more predictable partisan responders — on both sides — making the same old tired arguments for the status quo. But I also received quietly encouraging phone calls and emails from a number of sitting electeds, as well as former officeholders, and some surprising hopefuls — people both parties, but primarily the Democrats, had shunned. Frankly, I’d prefer to see all local elections be nonpartisan — including the commissioners, and all City Council and mayoral positions. There is no logical reason for the Sheriff, Coroner, County Clerk, Treasurer, Assessor and Auditor to be partisan positions. These are purely administrative jobs, and the skills required to perform them at the highest levels are
non-political. What I wonder is, if all local races were either nonpartisan or three- or more-way races, with the top two candidates facing the voters in the general election, would better quality candidates step forward — candidates both local parties currently tend to exclude — and would those independents actually be electable? There is a local precedent for this. Mason County voters elected independent Randy Neatherlin as county commissioner. He faced Democrat Denny Hamilton and Republican Travis Couture in the primary, and defeated Hamilton — whose wife was that region’s head of Obama for America — in the general election. This kind of a transformation would require a county charter change. This was explored in Kitsap about a dozen years ago, with Freeholders elected from both parties drafting a pretty good charter for voters to consider. It called for five commissioners, elected only by voters in their districts — not countywide as they are now. This was the major hurdle to total agreement, insisted upon by Republicans because the sitting District 2 commissioner had never won in the district, but was elected by Bainbridge Island Democrats. Realizing this would liberate voters from the party’s stranglehold on county government, the Democratic Party strongly advised a vote against the charter, which lost at the polls — thanks again to Bainbridge Island. Perhaps it’s time to revisit the charter process. Your thoughts?
38 • Kitsap Peninsula Business Journal • KPBJ.com February 2014
A lot of giving, going both ways They had talked about taking a fishing trip together sometime, maybe off the Gulf Coast of Texas or up in Alaska. But it seems more of a sure thing now, given the unique bond John Rosebeary and Jonathan Ogilvie share. It started as a business relationship about 15 years ago when Ogilvie worked for a wholesale supplier of Rosebeary’s company, Viking Fence in Poulsbo. The two became friends, met each other’s family, and kept in occasional contact after Ogilvie moved to Dallas four years ago. They’d see each other when Ogilvie was back in the area for a visit. Then in January, they got together again — at Seattle’s Virginia Mason Medical Center, where Ogilvie was the donor for a kidney transplant Rosebeary needed. “It’s very, very humbling,” Rosebeary said of his experience as recipient of his friend’s organ donation. “It’s hard to imagine that someone would go through that sacrifice for you and be able to give you a part of them. It affects them for the rest of their life as well. “It’s a pretty selfless act."
Rosebeary was diagnosed with kidney failure in April 2011, and soon after he started dialysis treatments and was placed on a waiting list for a transplant. Ogilvie said he learned of Rosebeary’s situation a little over a year ago from a mutual business acquaintance. “I heard that TIM KELLY he had a few people who Editor’s View attempted to donate and it didn’t work out, so I talked with my wife and said I would like to try to qualify as a donor for John,” Ogilvie said. He called Rosebeary’s wife, Janet, to tell her he was beginning the lengthy evaluation process to be a donor, but asked her not to tell her husband yet. “He didn’t want me to know he was doing it at first, until he found out if he was going to be a match or not,” Rosebeary said, "and then he called me. That was a pretty emotional call.” Emotional in a good way, Ogilvie said.
“It felt really good to be able to help somebody out, and in particular John.” As critical as the organ donation was, so is the generous help of many others as Rosebeary recovers from the successful surgery. He’s been active for years in supporting and raising money for causes he's passionate about, such as Corey's Day on the Farm, a long-running event for specialneeds children held every May at a family farm near Silverdale. He’s been a key organizer of the annual Thunderbird Pro Rodeo that’s a benefit for the farm event, and in 2008 Rosebeary started the Corey’s Day Classic golf tournament as another fundraiser. Like other generous business owners who support community groups and local charities, Rosebeary said it's an obligation he embraces: "I've always believed when you make your living in a community, you have to give back. There's always been a place in my heart for that." Now he's experiencing a role reversal as family and friends organize fundraising efforts for him, to help pay substantial
medical bills for transplant-related costs not covered by insurance. “John is very well liked in this community and has a very giving spirit,” said Julie Johnson, who met the Rosebearys through the rodeo. She’s part of a group of family friends who are planning a benefit dance tentatively scheduled for May 2, which will also include a live and silent auction with a select group of donated items (one special item already has been pledged by rodeo star Clint Corey.) Also, Johnson and Virginia Mason support staff helped the family set up an account with HelpHopeLive.org, a national nonprofit that helps transplant patients create and manage fundraising campaigns. Online donations are an option, and all funds raised are held by HelpHopeLive in a restricted account; money may be withdrawn only for verified medical needs, such as the very expensive anti-rejection drugs patients take after an organ transplant. Rosebeary was discharged from the hospital Jan. 18, four days after his surgery, Giving, page 37
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