KPBJ December 2015

Kitsap Peninsula

Business Journal An edition of the Kitsap Sun

KPBJ.COM

December 2015 | Vol. 28, No. 12

The stylish look of empowerment

Kitsap Sun 545 Fifth Street Bremerton, WA 98337

Kent, WA PERMIT No. 71

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Inside:

How a Bremerton boutique’s partnerships impact lives | Page 4

Pop-up stores find niche | 6

Seasonal hiring in retail | 5

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| December 2015 |

WELCOME | DAVID NELSON

Growing pleasures

On the Cover Purpose Boutique owner Christie Johnson holds one of the dresses made for the Bremerton store’s own label. | Story, page 4

I

LARRY STEAGALL photo

Focus of holiday hiring shifts Online shopping is a big factor in large retailers needing to hire more seasonal employees at warehouses rather than stores. Story, page 5

Kitsap Peninsula

3

KPBJ.COM

Business Journal The Kitsap Peninsula Business Journal is published by the Kitsap Sun the first week of every month, and distributed to business addresses through Kitsap County, North Mason and Gig Harbor.

David Nelson, Editorial Director david.nelson@kitsapsun.com Tim Kelly, Managing Editor tim.kelly@kitsapsun.com Mike Stevens, Marketing Director mstevens@kitsapsun.com Jeremy Judd, Digital Director jeremy.judd@kitsapsun.com For inquires to receive the Kitsap Peninsula Business Journal at your business, contact Circulation Sales Director Hugh Hirata at 360792-5247 or hugh.hirata@kitsapsun.com.

To advertise in the Kitsap Peninsula Business Journal, contact Michael Stevens at 360-792-3350.

TO SUBMIT NEWS: Tim Kelly, Managing Editor tim.kelly@kitsapsun.com 360.377-3711, ext. 5359

Standard mail postage to be paid at Bremerton, WA

POSTMASTER: Send address changes to Kitsap Sun, PO Box 259, Bremerton, WA 98337-1413 © 2015 Kitsap Peninsula Business Journal / Kitsap Sun ISSN 1050-3692 VOLUME 28, NO. 12

Green building guru’s new island home Jason Mclennan has launched a new architecture and design firm and is building a house on Bainbridge Island to Living Building Challenge standards. Story, page 18

Son bringing family’s Thai flavors to Poulsbo The Tran family runs two successful Thai restaurants on Bainbridge Island, and one of the founders’ nine children is preparing to make his mark with a new dining spot in Poulsbo.

Story, page 28

live in East Bremerton, so this year’s Black Friday meant less shopping nearby rather than a frenzy. I say that because a few days after Thanksgiving what had remained of Haggen’s grocery was finally shuttered, dormant next to that neighborhood’s other notable vacancy at the former East High. Haggen locations in Port Orchard, Gig Harbor and Silverdale may have been bought back by Albertson’s/Safeway, but the one near me will — for now — be remembered more as a case study of how ambitious growth can collapse in a hurry.

Don’t worry, I’m not whining, I’ve got Safeway and Fred Meyer close enough and maybe a grocer or co-op will see the opportunity downtown provided by hundreds of new apartment dwellers. It’s the Haggen employees we should feel for these days.

The grocer’s rapid and failed plan to expand by hundreds of stores and multiple states can be read in contrast to the profiles in this edition of the Kitsap Peninsula Business Journal, which is focused on retail during this shopping season.

A cousin of mine lives in Redmond, and when I asked her if she’d been to a store called Purpose Boutique in Kirkland, her eyes lit up.

Of course! And of course she had no idea that Purpose is a Bremerton shop that tried incremental expansion by crossing to the East Side, saw some success, and, as our story hints, may try again soon.

Likewise, Liberty Bay Books, a Front Street stalwart in Poulsbo, is using the Christmas season to test the waters in Bremerton with a pop-up shop, a trend that several Kitsap retailers are using to boost sales incrementally and hedge against online retailers. Port Gamble’s Tango Zulu Imports added downtown Seattle as a location, but future growth is focused back on this county. And a family restaurant from Bainbridge, making more than just a seasonal expansion, is just one more proving a business plan at the neighborhood level before expanding responsibly.

That handful of local small businesses isn’t competing in the corporate grocery world, but that doesn’t mean the pressure to find the sweet spot in manageable expansion is simpler in an era when Cyber Monday looms to steal Black Friday’s fan base. Wisely planning for the future is something to be celebrated in our small business community, which is what makes this edition such an interesting read if you’re plotting a similar course.

I suppose my Christmas wish is that you’d be too busy with customers to read this edition right away — but what kind of growth strategy would that be for us? Enjoy your holidays, and enjoy this edition of the Business Journal as part of your retail season.

4

| December 2015 |

Purpose aligned for more growth, impact ■ Bremerton

room. When she was a guest on an EntreLeadership podcast earlier this year, she said Purpose Boutique had first-year revenue of $500,000, “and now we’re looking at our second year with two storefronts and a clothing line and we’re tripling those numbers in such a short amount of time.”

The second Purpose store opened in Kirkland a little over a year ago, and “it outperforms our Bremerton store, and continues to grow,” Johnson said in November.

boutique planning for third store and beyond

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

As Purpose Boutique has expanded with a second store — and the site of a third may be announced by Christmas — the business owners envision more growth and have expanded their philanthropic focus beyond charity to empowerment.

“The original vision was that we would just give money,” Christie Johnson explains, and the business she started in Bremerton in 2013 continues to donate 1 percent of sales to charities that help women in dire need. “But then we slowly started integrating this larger vision into our business, at the time when Amy joined my husband and me as a co-owner, and we realized you could do so much more to change lives through the products we carry.”

So instead of getting their clothing and accessories from conventional suppliers, Johnson and co-owner Amy Witt have been forming more partnerships with “empowerment manufacturers” such as Open Arms, a nonprofit in Austin, Texas that provides training and living-wage jobs for refugee women. The workers at Open Arms learn sewing skills, and the products they make include a line of dresses that Purpose designed in-house and sells as its own private-label brand.

“We’ve given $26,000 to date to those charities,” Johnson said, and the boutique now carries more than 20 brands that are made by women who have gained meaningful employment.

“Partnering with a business like Purpose Boutique is fantastic, because they support our shared mission,” said Meg Erskine, executive director of the the Multicultural Refugee Coalition that encompasses Open Arms and other programs. “We’re helping each other with a shared goal.”

Witt explained that their em-

Shared passion

PHOTOS BY LARRY STEAGALL

Amy Witt, left, is co-owner of Purpose Boutique with Flip and Christie Johnson. The Johnsons opened Purpose in downtown Bremerton in 2013, and they opened a second store last year in Kirkland. Plans are pending for a third location.

powerment partners are nonprofits doing the frontline work of providing services directly to disadvantaged or exploited women. “Then to also do design and marketing and sales on top of that is a lot for one organization to handle,” she said. “That’s where Purpose, as a retailer, we already have access to so many customers who love shopping with us and trust us, and we know what customers want, so we can bring both the sales channel and the customer knowledge to those partnerships.”

Some of those partners are Krochet Kids, started in Uganda by three guys from Spokane, and jewelry makers Starfish Project in Asia and The Shine Project, a Phoenix-based nonprofit that provides jobs and college scholarships for inner-city students.

A new line for this holiday season came out of a fall trip to Thailand, where Johnson and Witt met with a nonprofit partner, Not Abandoned, which helps

Terra Miller, a firsttime shopper at Purpose Boutique, looks through some of the dresses and other clothing displays at the downtown Bremerton store.

survivors of sex trafficking and runs an artisan training program called Freedom Stones.

“We did a private-label jewelry line with them that we designed in Bangkok within two days,” Johnson said.

There aren’t that many empowerment partners that are viable clothing suppliers, but the Purpose owners’ goal is to find more and eventually carry their own brand of clothes exclusively in their stores.

Since Purpose introduced its own brand last February, the boutique has sold more than 1,000 dresses and other private-label clothing items.

“We probably could’ve sold more, too,” Witt said, “but we started with a smaller quantity of styles just to test and see how they’ll do.”

For Johnson, the mother of two young children, it’s been heady growth in just two years for the venture she started in her living

Johnson and Witt were already friends as Navy wives when Purpose opened, and Witt joined the company in July 2014 because her passion for philanthropy — as well as her experience the previous year working in Africa for the Bill and Melinda Gates Foundation — aligned with Johnson’s mission for Purpose.

Witt, who worked as a business consultant before joining Purpose, has a master’s in sociology from Stanford and did a summer fellowship in Thailand in 2009 analyzing impacts of the global economic crisis on migration and human trafficking.

“One of my big takeaways from the work at Gates Foundation and being on the ground in Africa ... was that people don’t want to be dependent on charity, they want a job,” Witt said. “They want to be able to provide for their own families. It was exciting to see how businesses were actually a really critical part of that, creating competitive markets and jobs that were not just a charity program.”

She and Johnson started talking about “sourcing products that provided people with these jobs,” and that led to Witt coming on board.

“I caught the vision and completely changed my career path and decided I wanted to partner in this, and Christie kindly invited me to,” she said.

Personal Investment Flip Johnson, Christie’s husband and chief financial officer See PURPOSE, 9

| December 2015 |

Retailers still hire holiday help, but needs are shifting than hire temporary help.

With orders pouring in online, more workers are being hired for behind-

MEEGAN M. REID

Employee Andy Fedor is framed by a festive wreath as he prices items in the home goods section at JC Penney in the Kitsap Mall.

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

It was only October, but Silverdale JCPenney manager Rick Elkins’ mind was already on the holidays.

With new stores staffing up at The Trails at Silverdale shopping center, and an H&M poised to open at Kitsap Mall, Elkins knew he couldn’t wait around to make his holiday hires.

“We made a conscious decision to start a couple of weeks earlier,” said Elkins, who started advertising for seasonal employees in early October to help the store through its busy holiday months. JCPenney brought on about 65 workers to supplement its regular staff, which usually stands between 150 and 175.

Growing competition for workers could bode well for the future of Kitsap’s retail employment, which has been lackluster in recent years, even as sales rebounded.

The state Employment Security Department estimated about 10,500 people were employed in Kitsap’s retail trade sector in 2014, an industry that includes stores and dealerships.

In 2008, the same sector employed 11,900. This fall Employment Security pre-

AS MORE AND MORE shopping is completed online, the holiday hiring is shifting away from stores and into the warehouses.”

— John Challenger, CEO of outplacement firm Challenger, Gray & Christmas

dicted Kitsap employers would bring on about 420 workers for the holidays, down slightly from its estimate of 465 in 2014. Kitsap wasn’t alone. Holiday hiring was expected to remain flat from 2014 statewide and nationwide.

State labor economist Paul Turek pointed to two factors that could temper holiday hiring. First, more people are shopping online, which reduces the need for brick-and-mortar stores staffed by actual people.

Second, he’s seen more employers staffing up earlier in the year, which means they are more likely to extend holiday hours for their existing employees rather

the-scenes jobs, according to Chicago-based outplacement firm Challenger, Gray & Christmas, Inc., which publishes a national holiday hiring forecast each fall.

“It used to be that the bulk of holiday hires would be in customer-facing positions on the sales floor and behind the cash register,”

CEO John Challenger said in a news release. “Now, as more and more shopping is completed online, the holiday hiring is shifting away from stores and into the warehouses.”

In Washington, this benefits areas like Kent, where mega-retailers have built sprawling warehouse com-

plexes. With companies like Amazon and Walmart vying for workers to fill their fulfillment centers, staffing agencies are scrambling to find warm bodies and warehouse wages are rising.

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| December 2015 |

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So regardless of where you purchased your annuity, call your local financial advisor to schedule your complimentary review.

New Trails center will fill in more gaps in 2016 ■ Planned Gap outlet store won’t be opening

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

Homegoods, Ulta Beauty and an AT&T wireless store are the only three businesses open for the first holiday season at The Trails of Silverdale, but shoppers checking out the new retail center soon will have a dining option there when Blazing Onion opens its first Kitsap County location in mid-December.

Two other restaurants — Chipotle Mexican Grill and MOD Pizza — will open in January at The Trails, along with Silverdale Smiles Dentistry and Orhtodontics.

Work should be completed by the end of December on two covered paseos with fire pits and outdoor seating; one will be next to the pizza restaurant and one by

Blazing Onion.

The Trails developer CenterCal Properties doesn’t have firm opening dates for other stores and restaurants coming to the mall in 2016.

One development is firm, however; there will not be a Gap outlet store, which previously was one of the announced tenants. Online ads popped up in May for hiring staff at the Silverdale store, but apparently the company — which announced in June it was closing 175 of its North American stores, including one at Kitsap Mall that closed in July — changed its plans for putting an outlet store at The Trails.

The Gap corporate office, which had issued a statement in June saying its store closures would not affect Gap outlet stores,

did not respond to emails requesting comment for this article.

Without the anticipated Gap store at The Trails, the only clothing retailer confirmed as a tenant is Forever 21.

“We may be able to announce some more signed leases before the end of the year,” CenterCal spokeswoman Mickey Marrafino said in November.

She said negotiations are ongoing with a grocery store to occupy one of the new shopping center’s largest spaces. According to previous announcements, it will be a company that does not currently have any Kitsap stores.

Marrafino also said construction will begin in December on the final See TRAILS, 10

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| December 2015 |

Fair-trade retailer opens third store ■ Started in Port Gamble, Tango

Zulu’s new location is on Bainbridge

By Rodika Tollefson KPBJ contributor

When Tracy Zhu opened Tango Zulu Imports in Port Gamble with her husband, Drew, she was looking for a way to quit corporate life and the lengthy commute to Seattle.

The idea was to start a small business in her own community.

She thought that perhaps after five years, she might expand to a second location.

In November, Tango Zulu opened on Bainbridge Island — not the second, but the third store for the 5-year-old business, which also has a robust e-commerce site.

“It’s been slow and steady growth,” Zhu says.

What’s just as remarkable as the growth of this “mom-andpop” business is that the Zhus did it all without incurring any outside debt. The couple’s own savings as well as operations have funded all the expansions — which include a store in Pioneer Square in Seattle.

Zhu, who has an accounting background, says the success stems from having tight cash-flow and inventory management. Neither is an easy task, considering

that not only much of the brickand-mortar business is seasonal (particularly in Port Gamble), but the products sold are also handmade in small batches, often in remote areas of undeveloped countries.

“It’s very hard to scale up,” she says. “Already vendors were having trouble shipping to two stores, so I’m always looking for more vendors.”

The limited inventory is due to the fact that Tango Zulu is focused on fair trade, ethically sourced products — everything from home décor to jewelry and gifts. African baskets are the bestsellers, with apparel — including U.S.-made — the second-most popular category. While there’s some crossover among the three stores, the inventory is tailored to each location.

Zhu says that when she first started five and a half years ago, the majority of people coming through the doors didn’t know whatfairtrademeant.Now,it’sthe opposite. But while it’s important to her how and where her wares are made, she doesn’t make that a selling point for her customers.

“I don’t ever want people to buy products from me because I’m

PHOTOS COURTESY TANGO ZULU

Tango Zulu’s store in Pioneer Square, shown above, opened in Seattle in 2014. The business specializing in fair-trade imports was started in Port Gamble five years ago, and owner Tracy Zhu opened a third store on Bainbridge Island in November.

telling them it’s the right thing to do,” she says. “I want them to buy because they love the products.

So we’re focusing on items that are both beautiful and practical.”

Organic growth

Zhu, who has a degree in international business, had traveled extensivelywhileworkingininternational logistics. When she decided to take the plunge and launch her own business, she was comfortable with importing, sourcing and day-to-day operations.

Still, she had never even worked in a retail shop. That meant a steep learning curve.

Despite that, the Port Gamble store, which opened in 2010, was

profitable from the start, she says.

“Port Gamble was a perfect incubator for us,” she says. “We were able to get the space that was relatively inexpensive, and in a supportive environment both in terms of our customers and fellow business owners that were there.”

For the first two years, Zhu ran the store by herself, seven days a week. Her only day off was every third Saturday of the month, when Drew — who still helps occasionally — covered for her.

After two years, she was finally ready to add one part-time helper.

“I was very cautious, maybe overly so, about adding payroll,” she says.

By 2013, Tango Zulu outgrew

the 600 square feet of space and Zhu moved it to a new spot in Port Gamble, doubling the space. The following year, the 2,000-squarefoot Pioneer Square location opened its doors, followed by the 900-square-foot shop that opened in Winslow Green in November.

The Zhus had actually been eyeing Bainbridge Island for more than two years.

“It took that long for the right spot to open up,” Zhu says.

The right spot, next to Bainbridge Bakers, opened up after the new owners of the bakery gave up a space the previous owner had expanded into. Including this location, Tango Zulu now has a total of two full-time and five part-time employees, not counting the owners.

Zhu seems content with where the business has taken her. Her focus for 2016 is to stabilize the three brick-and-mortar shops and grow the e-commerce side, which has been on the back burner.

The online store went live at the same time the first Port Gamble shop opened. Zhu says the idea was to supplement sales.

And it’s been that and more — every year, the percentage of online sales as part of the overall business has been growing.

“It’s been a really good stabilizer for us,” she says.

For Zhu herself, the move to entrepreneurship proved to be the right choice. She’s loved watching her idea manifest itself.

“It has turned out to be something I really enjoy,” she says, “as far as making the decisions and having to think on the fly — and building something from the ground up.”

Celebrating over 6,000 successful job placements on the Kitsap Peninsula!

| December 2015 |

play windows at the corner of Fourth Street and PaciďŹ c Avenue downtown. â&#x20AC;&#x153;Theyâ&#x20AC;&#x2122;re young, enthusiastic and energetic,â&#x20AC;?

Burnett said of her tenants. â&#x20AC;&#x153;None of us expected them to do this well, but I knew they had a good idea. â&#x20AC;&#x153;They provide a good product, and they have a personal connection with their customers.â&#x20AC;?

Purpose staff focus on personal styling with customers, and the boutiqueâ&#x20AC;&#x2122;s fashions have mainstream appeal at relatively affordable prices.

â&#x20AC;&#x153;Thatâ&#x20AC;&#x2122;s something we really want to maintain,â&#x20AC;? while expanding fair-trade partnerships with manufacturers, Witt said. â&#x20AC;&#x153;And we know thatâ&#x20AC;&#x2122;s the only way weâ&#x20AC;&#x2122;re really going to scale these empowerment products.â&#x20AC;?

However, with the success Purpose has seen in its ďŹ rst two years, the partners are thinking big. â&#x20AC;&#x153;When it was in our living room, the vision wasnâ&#x20AC;&#x2122;t 10 or 20 stores,â&#x20AC;? Flip Johnson said. â&#x20AC;&#x153;But now that it kind of caught on and we built these systems and

processes, we can see how it would grow from two to three, and three to ďŹ ve, and then 10 and beyond.â&#x20AC;?

His wife anticipates beyond. The boutiqueâ&#x20AC;&#x2122;s sales pitch is â&#x20AC;&#x153;How you shop can change a life,â&#x20AC;? and Christie wants to change many. â&#x20AC;&#x153;We want as many stores as we can possibly have to scale this empowerment manufacturing, to provide jobs to as many women that need digniďŹ ed work as we can,â&#x20AC;? she said. â&#x20AC;&#x153;I for some reason see 40 stores; thatâ&#x20AC;&#x2122;s what I see.â&#x20AC;?

LARRY STEAGALL

Joy Heinze, a Purpose Boutique stylist, arranges clothing at the downtown Bremerton store.

Purpose from 4

for Purpose, said Wittâ&#x20AC;&#x2122;s investment as a partner accelerated their second store opening.

Operating two stores has steered them toward standardizing their operation, which now has about 25 employees. â&#x20AC;&#x153;We do everything now with the idea that we want to have a franchise model,â&#x20AC;? he said, citing Michael Gerberâ&#x20AC;&#x2122;s book â&#x20AC;&#x153;E-mythâ&#x20AC;? as a guide. â&#x20AC;&#x153;The idea is that you take everything in your business and create a system for it that you can then replicate, even if youâ&#x20AC;&#x2122;re just a one-store business. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re doing that now; ... so then when we do open the third or fourth store, weâ&#x20AC;&#x2122;re ready and all this process is already in place.â&#x20AC;?

A submarine officer, Flip Johnson plans to take on a

full-time role at Purpose after he gets out of the Navy.

So far, Purpose has been self-ďŹ nanced by the ownership trio, each of whom takes a modest salary while theyâ&#x20AC;&#x2122;re building up the business. â&#x20AC;&#x153;We have funded our business on proďŹ ts and personal investments,â&#x20AC;? Christie Johnson said, crediting her husband and Wittâ&#x20AC;&#x2122;s with making that possible. â&#x20AC;&#x153;We have smart husbands that were really good with money, and invested money early on in life, so then we had money to invest,â&#x20AC;? she said.

That could change for the company to scale up its operations and manufacturing partnerships. â&#x20AC;&#x153;We bootstrapped it so far,â&#x20AC;? Flip Johnson said. â&#x20AC;&#x153;For future expansions, weâ&#x20AC;&#x2122;re looking at a couple different options to help give us some more leeway and credit, so we can open up

stores a little sooner.â&#x20AC;?

Where next?

Theyâ&#x20AC;&#x2122;d like to add more stores in the Seattle-Tacoma area, but havenâ&#x20AC;&#x2122;t ďŹ nalized their third location yet. Asked if a site closer to home at the new Trails at Silverdale shopping center was a possibility, Christie Johnson acknowledged that â&#x20AC;&#x153;itâ&#x20AC;&#x2122;s on our radar.â&#x20AC;?

Sheâ&#x20AC;&#x2122;s quick to point out that the Bremerton store will remain even if another Purpose location opens in Kitsap.

Such expansion possibilities werenâ&#x20AC;&#x2122;t on the radar when the shop opened in a small storefront space in Amy Burnettâ&#x20AC;&#x2122;s art gallery building. But Burnett was one of her earliest supporters, Christie Johnson said, and after only a few months the two changed places and Purpose ďŹ lled the larger space with dis-

OUR PURPOSE BEHIND THIS BUSINESS and life is loving God and loving people ...

We also believe that as Christians, we are called to use our talents and resources to bring about holistic (physical, economic, emotional, and spiritual) healing and freedom, especially for the poor and oppressed.â&#x20AC;? â&#x20AC;&#x201D; Boutique co-owners Christie and Flip Johnson, and Amy Witt

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Introducing our new Business Accounts Weâ&#x20AC;&#x2122;ve proudly served individuals around our community for decades. And now weâ&#x20AC;&#x2122;re bringing that same level of service to small businesses, too â&#x20AC;&#x201C; with a whole suite of new products. Because at the

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| December 2015 |

Controversy gives way to commerce ■ Shopping plaza opening at site of tree protest on Bainbridge Island

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

On an August morning in 2014, a teenage protester climbed 70 feet into the branches of a Douglas fir tree on Bainbridge Island and hung sprawling banners below her perch.

“Boycott Walgreens, KeyBank and mall sprawl,” one banner read, in big white letters.

The protester came down after 40 hours, greeted by a throng of supporters. The trees came down soon after.

Last month, the Walgreens and the KeyBank branch opened.

They’re the first tenants of Wintergreen Walk, a development at the northeast corner of High School Road and Highway 305 that inspired vehement opposition from some islanders.

Managers hope island residents will embrace their businesses despite the controversy.

“So far the feedback has been awesome,” said Trina

LARRY STEAGALL

KeyBank Manager Jon Phelps shows off the bank’s new location on Bainbridge Island.

Wankowski, a Walgreens manager who helped set up the Bainbridge store.

“We haven’t heard any of the negativity.”

KeyBank had been located south of High School Road for eight years and simply moved across the street to a space in Wintergreen Walk.

“We’re not new to the island, we’ve been a huge partner on the island,” branch Manager Jon Phelps said.

Opening a new branch shows KeyBank’s commitment to the community, he added.

“We didn’t want to be one of the banks that pulled up roots and moved off the island,” Phelps said. “We’re here to stay,” The branch will certainly elevate KeyBank’s presence on Bainbridge. The 3,300-square-foot building occupies a prominent position above the busy intersection and features

Kitsap’s taxable retail sales revenue outpaces state average Taxable retail sales in Kitsap County took a big jump in the second quarter of 2015, increasing 11 percent from the same quarter of 2014.

That was the largest year-overyear jump in quarterly sales for the county since the start of the recession.

Sales totaled more than $963 million in the second quarter, according to the Department of Revenue.

Statewide, retail sales reached $33.9 billion, marking a 9.4 percent increase from the same quarter of 2014.

Sales reported by Kitsap’s retail trade industry in the second quarter were up 10 percent from the same period of 2014. Retail trade accounted for about $512 million of Kitsap’s taxable sales in the second quarter. Retail trade sales include sales made by stores, dealerships, online sellers and other

a drive-thru with separate lanes for ATM access and deposits.

Inside, customers will be greeted at a concierge desk and directed to tellers, an ATM or loan specialists, depending on their needs.

Safety deposit boxes are available in a secure backroom, an amenity the old Bainbridge KeyBank lacked.

Phelps is eager to show off technology the bank is testing at the branch. The ATMs are paperless — no envelopes needed — greatly speeding the deposit process. An “electronic cash recycler” behind the teller’s stations rapidly counts and sorts bills.

In general, the branch feels open and airy.

“It gives us the capacity to add the amenities we re-

ally needed,” Phelps said.

In a way, Walgreens isn’t new to the island either.

Winslow’s old drugstore was once a Walgreens, though that was decades ago.

The pharmacy has returnedwitha14,500-squarefoot store and drive-thru.

The first customers navigated 19 shopping aisles.

The store features a large supplement section, photo department and oversized beer coolers. In the pharmacywaitingroom,patrons can view the progress of their prescription orders on video monitors. A vaccinationroomwilloffershotsfor travelers and standards like flu vaccines.

Bainbridge Walgreens Manager Sharon Opido said 11 of her 15 employees live on the island.

“We’re trying to stay as local as we possibly can,” she said.

Both Wintergreen Walk tenants touted features aimed at appealing to ecologically conscious islanders. The Walgreens has electric car charging stations in the parking lot, LED lighting in the store and only paper bags available at the counters. Phelps said KeyBank quadrupled its typical landscaping budget for the Bainbridge branch, Phelps said.

“We’re trying to be good stewards of the community,” he said.

Five more buildings are planned for Wintergreen Walk, which encompasses 8 acres. The developer, Ohio-based Visconsi Cos., is courting a mix of restaurant, retail and medical office tenants. A Visconsi representative said in November that a third tenant was close to signing. Buildings will be constructed as tenants commit.

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traditional retailers.

The auto, building material and construction sectors continued their resurgence, posting double-digit increases from the second quarter of 2014. Though a much smaller player by sales volume, manufacturing enjoyed a 19 percent increase in taxable sales.

See more charts and a full breakdown of sales by industry at pugetsoundblogs. com/minding-your-business.

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| December 2015 |

FINANCIAL PLANNING | EDWARD JONES

Get your affairs in order for an orderly estate Article provided by Edward Jones for use by financial advisor Robert Morgan of Poulsbo.

Y

ou may be quite willing to plan an investment strategy for your retirement years.

After all, it can be enjoyable to think about traveling the world, pursuing your hobbies or participating in any of the activities you’ve associated with an active retirement. However, once you do retire, you’ll need to “shift gears” somewhat to focus on your legacy.

Specifically, to protect your loved ones and ensure your intentions are clear and carried out, you’ll need to do some more planning – and you’ll need to share your thoughts with your family.

Here are some moves to consider: • List your assets and debts. Your family needs to be aware of your assets and debts, so share this information with them while

you are alive and well.

• Create a durable power of attorney. Give a trusted friend or family member a durable power of attorney to pay bills and make financial choices on your behalf if you are unable to do so.

• Choose an executor.

An executor is the person or entity you name in your will to carry out your wishes. An executor has a variety of responsibilities, so pick someone who is honest and capable of dealing with legal and financial matters. Talk with an attorney about how best to name your executor.

• Update your will. You might have written a will many years ago, but, over time, many aspects of your life may have changed. Review your will with your attorney to ensure it reflects your current wishes.

• Review benefits of a living trust. A simple will may not be enough to accommodate your estate-planning needs. You might want to

Check out end-of-year investment tips Article provided written

by Edward Jones for use by financial advisor Mary Beslagic of Manchester.

W

ho knows where the time goes?

Although 2015 is almost in the books, you can still make some yearend investment and financial moves that may help you get off to a good start in 2016. Here are a few suggestions: • Boost your 401(k) contributions. Ask your employer if you still have time to add more to your

401(k) before the year ends.

If not, at least increase your contributions in 2016, especially if your salary goes up.

• Consider “tax-loss” selling. We experienced considerable turbulence in the financial markets this past year, so you may own some investments that have lost value. Generally speaking, it’s a good idea to hold these investments if they still meet your needs, but if you do decide to sell them, you can use the loss to offset capital gains taxes on investments you’ve sold that have appreciated. If

consider establishing a living trust, which provides you with significant flexibility in distributing your assets and can help you avoid the time-consuming, expensive and public process of probate. To create a trust or other estate-planning documents, you will need to work with a qualified legal professional.

• Review your beneficiary designations. The beneficiary designations on your financial accounts (401(k), IRA, etc.) and your insurance policies can even supersede the directions on your will, so it’s essential that you update these designations to reflect events such as divorce and remarriage. And make sure your beneficiaries have the facts they need to claim their benefits.

• Share location of your legal documents. Your loved ones should know where you keep documents such as your birth certificate, will and living trust.

the loss from the sale was greater than your combined long- and short-term capital gains, you can deduct up to $3,000 against other income. And if your losses exceed your capital gains by more than $3,000, you can carry the remaining losses forward to future tax years.

• Review your asset allocation. Make sure your asset allocation – that is, your investment mix – is still appropriate for your time horizon and goals. You might See TIPS, 14

If you keep these items in a safe deposit box, tell your family where you keep the key.

• Encourage two-way communication. It’s obviously necessary to communicate your final wishes to your family members – but listen to their wishes and

concerns, too. For example, ask your children to agree on who gets those objects of special concern to them, such as furniture, mementos and heirlooms.

As you can see, you’ll need to take several steps to fulfill your intentions – and the above list is cer-

tainly not exhaustive. So plan carefully, engage the appropriate team – financial advisor, attorney, tax professional – and put your plans in motion. By being proactive, you can greatly ease the burden on your loved ones in the future.

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| December 2015 |

HUMAN RESOURCES | JULIE TAPPERO

Workplace options to get employees into automatic retirement saving plans

T

he Society for Human Resource Managementâ&#x20AC;&#x2122;s 2015 Strategic BeneďŹ ts Survey revealed that human resource professionals believe that a focus on employee beneďŹ ts will be key in attracting and retaining workers in an ever-tightening job market. In the beneďŹ ts arena, health care beneďŹ ts are still the king, with the vast majority of those surveyed saying it was the most important beneďŹ t to their employees. But it was followed in importance by retirement and savings planning beneďŹ ts, which are predicted to grow in importance over the next 3-5 years.

The issue, according to the White House, is that about a third of workers do not have access to a workplace retirement plan and many of those same workers also do not have an IRA or other personal retirement mechanism. Small businesses are often unable to provide retirement beneďŹ ts to their employees. With the advent of the Affordable Care Act, the emphasis is more focused on providing health care beneďŹ ts, and many businesses have had to cut in other areas in order to afford increasing health care costs.

Predictions are that the Social Security retirement fund will run in the red within the next 20 years or so. Statistics from AARP tell us that by 2030, 20 percent of Washingtonians will be 65 or older and

462,000 Washingtonians have less than $25,000 in savings. In addition, 75 percent of small employers in the state donâ&#x20AC;&#x2122;t offer retirement plans, leaving 1.5 million workers without access to a workplacesponsored retirement plan.

Now there is a state trend to require companies to automatically enroll their employees into a Roth IRA. Eight states, including Oregon and California, have either passed or have legislation in the works that would require automatically enrolled IRAs. In California, it will require a payroll deduction of around 3 percent to go into a tax-deferred savings plan unless the worker opts out. For the most part, companies arenâ&#x20AC;&#x2122;t required to match employeesâ&#x20AC;&#x2122; savings, and the only cost to the businesses is the cost of administering the plan. The idea behind these laws is that participation, and thus savings, are much higher when employees are auto-enrolled and must take proactive action in order to opt out.

This year the state Legislature passed SB 5826, which creates Washingtonâ&#x20AC;&#x2122;s Small Business Retirement Marketplace.

As opposed to what is happening in other states where employees are automatically enrolled in IRAs, in Washington this new marketplace will simply educate and provide access to retirement plans for small businesses with fewer than 100 employees.

Participation in the marketplace is voluntary for both employers and employees.

The marketplace will be used by business-

es to select from a variety of plan types to ďŹ nd one that suits their needs. There wonâ&#x20AC;&#x2122;t be any cost for businesses to enroll, and fees for employees will be capped at 1 percent. Payroll deductions will make it easy for employees to save.

Another option already available to small employers is myRA. Any employer without an employer-sponsored retirement plan can offer myRA to their employees. It is a Roth IRA that invests in U.S. Treasury retirement savings bonds. Any employee can sign up online at myra.gov.

There are no fees and no minimum amount to invest, and workers take their accounts with them when they change jobs. You, as the employer, are not required to make a company match. MyRA is a simple, safe and affordable way to start saving, and may be an option for your small business and employees until youâ&#x20AC;&#x2122;re ready to take the next step.

While some states are ahead of the trend, the federal government is talking

â&#x20AC;˘ Julie Tappero is 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.

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about this as well. President Obama announced a proposal during the 2015 White House Conference on Aging to require employers without retirement plans to autoenroll employees in an IRA, which would require approval by Congress. Some states have expressed concerns about how all of this coincides with ERISA requirements, and itâ&#x20AC;&#x2122;s expected that the Obama administration will issue guidance on this subject by the end of the year.

I dislike government mandates as much as the next person. But I had a dad who mandated we participate in savings plans from a young age, and I saw the beneďŹ ts as time went on. When paychecks are stretched thin, itâ&#x20AC;&#x2122;s hard to put something aside for the future. But even saving a small amount consistently builds over time. As employers, we can offer something really valuable to our staff by giving them education about and access to retirement planning resources, so when they reach their golden years the good times arenâ&#x20AC;&#x2122;t in their past.

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| December 2015 |

MEEGAN M. REID

Server Erin Vega takes a food order at ChocMo, a Poulsbo restaurant that has banned tipping.

Tipping from 10

“It won’t cost them any more to dine at ChocMo than it would have before,” he said.

If diners still feel inspired to pay extra, they can contribute to a new charitable fund overseen by ChocMo employees. Crabtree said customer feedback has been almost entirely positive. He hopes that if ChocMo’s no tipping experiment pays off, other Kitsap restaurants will follow suit.

“We felt it was important to help lead that change,” Crabtree said, “and we think it’s the direction most people are going to go.”

Fellow restaurateurs will be watching ChocMo’s progress closely.

“It’s encouraging to see people willing to be leaders,” said Jeff Waite,

Tips

from 12 consider being a bit more aggressive if you’re not meeting your financial targets, or more conservative if you’re getting closer to retirement. If you want greater diversification, you might think about adding an asset class that tends to react to market conditions differently from your existing investments. Diversifying your portfolio may help reduce the impact of volatility; however, diversification, by itself, can’t guarantee a profit or protect against loss. If you do need to adjust, or “rebalance,”

WE MAY SEE the whole industry turn that way, and ideally that’s what will happen. I think that’s what everyone is waiting and hoping for.”

— Jeff Waite, owner of Harbour Public House on Bainbridge Island

owner of Harbour Public House and Pegasus Coffee on Bainbridge Island.

Like many restaurant owners, Waite is taking a cautious view of the anti-tipping trend.

you can do so fairly easily in tax-deferred accounts, such as your IRA or 401(k) – but for those investments held in a taxable account, you should talk to your tax advisor on how to manage the tax consequences of rebalancing.

• Evaluate your insurance situation. This past year, did you undergo any changes in your personal life, such as marriage, divorce or the addition of a new child? If so, review your life and disability insurance to make sure they are sufficient for your needs, and list the proper beneficiaries on all insurance policies.

• Start an emergency

Tipping might be an anachronism he said, but it’s an anachronism to which diners and staff are accustomed. Moving away from tips could be an unpopular transition, particularly among servers who are used to leaving the restaurant with a wad of cash each night.

Waite hopes many restaurants will make the shift at the same time, which would soften the blow for individual businesses.

“We may see the whole industry turn that way, and ideally that’s what will happen,” he said. “I think that’s what everyone is waiting and hoping for.”

At the Boat Shed in Bremerton, Kathy Davis-Hayfield isn’t ready to embrace the no-tip model. She said tips are shared evenly among staff and the restaurant hasn’t had trouble retaining employees.

“I’m all for taking care of staff, but we do it in different ways,” Davis-Hayfield said. “Giving them a healthy, stable place to work in, a fun place to work in, a popular place to work in.”

Keeping prices affordable is one way the Boat Shed stays popular.

Davis-Hayfield doesn’t believe the restaurant could increase prices significantly without losing a lot of customers, particularly with the economy still on the mend in Bremerton.

“The timing may be a little too soon,” she said.

That said, Davis-Hayfield knows a statewide wage bump will come eventually.

“Once the minimum wage goes up, we’re going to have to get creative,” she said.

fund. If you don’t already have one, start an emergency fund before the year is out. Ideally, you’d like to have between six and 12 months’ worth of living expenses in such a fund; without it, you might be forced to dip into your longterm investments to pay for unexpected costs, such as a new furnace, a major car

Business Briefs Business Forum hosts a World Café on collaboration In support of enhancing teamwork among leaders in Kitsap County, the Kitsap Business Forum will host a World Café using the “Team of Teams” concept on Dec. 8.

Shannon Bruce, executive coach of Excell Puget Sound, will facilitate discussion on the topic Team of Teams: Collaborative Leadership in Kitsap, 2015 with the intent to engage attendees in a fun and creative process known as a World Café to harvest their insight for topics for the Kitsap Business Forum in 2016.

For more information on the process, visit www. theworldcafe.com.

During this interactive discussion, participants can expect the following contributions and takeaways: • Education on what it means to create a “Team of Teams” within Kitsap to improve collaboration

across all chambers, government entities, businesses and community organizations; • Celebration of the impact the Kitsap Business Forum has had in 2015 with a chance to cast vision for 2016; • An opportunity for local business/community leaders to bring their unique point of view and perspective to influence and shape the Kitsap Business Forum topics for 2016; • The chance to interact in a creative process that you can use again.

Kitsap Business Forum, created by the Silverdale Chamber of Commerce, is held from 7:30-9 a.m. at the Kitsap Conference Center, 100 Washington Ave. in Bremerton. The monthly events are free, and parking is provided for attendees in the Anthony’s parking spaces, first floor blue level.

Anyone interested in attending the Dec. 8 event should RSVP to 360-6926800, or go online to register at http://KitsapBusinessForum.com.

repair or a big medical bill.

For this fund, you’re less interested in return than in preservation of principal, so put your money in a low-risk, liquid account.

Making these moves can help you close out 2015 on a positive note – and ring in the new year with greater confidence in your financial future.

Celtic Nights Spirit of Freedom FRIDAY, JANUARY 8 @ 7 P.M. 360.373.6743 | admiraltheatre.org

2015

2015 Partners

Be part of this 94-year tradition of helping our neighbors in need!

Please donate to Kitsap Sun’s 2015 Bellringer Campaign Fill out the Kitsap Sun Bellringer form below and mail with your donation. Or, go to www.kitsapsun.com/bellringer and donate online.

Kitsap Sun will recognize donors with a special thanks in the daily newspaper and online during the drive.

100% OF BELLRINGER LLR RINGER D R DONATIONS O NATIO GOES DIRECTLY TO LOCAL FOOD BANKS

YES!

I want to restock the shelves of local food banks through the Kitsap Sun 2015 Bellringer campaign.

(Make check or money order payable to “Bellringer fund.”)

Complete and submit this form or donate online at kitsapsun.com/bellringer DONORNAME(S)________________________________________________________________________________________________________________________________ ______ DONATION AMOUNT$_____________________________ TELEPHONE __________________________________________________________________________ CREDIT CARD #__________________________________________________________________________________________________________ NAME(as it appears on card)_____________________________________________________________________________________________ EXP. DATE________________________ ZIP CODE (of credit card account)_________________________________________________ ACCEPTED CARD TYPES: Optional donation message for publication in the Kitsap Sun, up to 15 words, subject to editing. Please allow up to two weeks for publication.

________________________________________________________________________________________________________ ________________________________________________________________________________________________________ CLIP AND MAIL TO: KITSAP SUN BELLRINGER, P.O. BOX 259, BREMERTON, WA 98337. OR DROP OFF AT KITASP SUN OFFICE, DOWNTOWN BREMERTON, 545 5TH STREET.

16

| December 2015 |

Bremerton auto giants to combine ■ Parr owner retiring, selling

dealerships to Haselwood

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

Two flagship Bremerton auto dealership groups will become one this winter.

Haselwood Auto Group announced Nov. 19 that it is buying Parr Auto Group.

After the deal closes the two former Parr dealerships will be known as West Hills Ford Mazda and Haselwood Volkswagen Hyundai.

The transaction is expected to close in December. Terms of the deal were not announced.

Parr Auto Group owner Rod Parr said he is retiring and wanted to sell his dealerships to a local group.

Haselwood proved the best match, he said.

“It’s a good fit,” Parr, 69, said. “... They know our employees, they know our market and they’re involved in the community.”

Haselwood Auto Group owner Rick Wiler said the Parr properties will complement Haselwood’s lineup of dealerships.

“We are excited to welcome the Parr dealerships into the Haselwood family. … Rod Parr has developed

LARRY STEAGALL / KITSAP SUN

Parr Ford Mazda customer Jay Gandee, of Bainbridge Island, gets set to take a truck for a test drive.

outstanding dealerships at exceptional retail locations

that are congruent to our current operations in West

Hills Auto Plex,” Wiler said in a news release.

Haselwood Auto Group operates five dealerships representing 11 manufacturer brands. Parr Auto Group operates two dealerships representing Ford, Mazda, Hyundai and Volkswagen, which will be added to Haselwood’s offering.

Parr owned his Ford dealership since 1983. He added the Volkswagen dealership in 1988. Some of Parr’s 172 employees have been with the company for three decades, he said.

Parr said he’d been mulling retirement for the past year. He’s been in the auto sales business for 50 years.

“It’s not easy to give up,” he said.

Bremerton auto dealers enjoyarelativelystablemarket, but they too saw sales slow during the recession.

Business has rebounded in the past five years, according to data provided by the city. Gross sales reported from auto retail sales, wholesale and service, increased 44 percent between 2010 and 2014.

Auto industry sales account for roughly one-third of all taxable sales made in Bremerton.

The merger of Haselwood and Parr leaves a smaller pool of new car dealers in the county.

These include Advantage Nissan in Bremerton, Grey Chevrolet and Bruce Titus Ford in Port Orchard and Peninsula Subaru in Gorst.

Hospital may be razed when Harrison completes move ■ Silverdale campus expansion

now scheduled to finish in 2019

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

It’s becoming more likely Harrison Medical Center’s Bremerton hospital will be torn down after the group completes its Silverdale campus expansion.

Harrison president David Schultz said no outside entity has made a proposal for repurposing the aging, 250-bed facility on Cherry Avenue, which would require extensive remodeling to be adapted to another use.

“We’ve had, I would say, minimal interest,” Schultz said in a recent interview.

Harrison will move ahead with demolishing the hospital within a year of moving acute care services to Silverdale. Schultz said money is budgeted for demolition, and Harrison is committed to “not leaving a big vacant building” in East

Bremerton.

While the future of the East Bremerton hospital remains unsettled, plans are progressing for the expansion of Harrison’s Silverdale campus and development of a new clinic in Bremerton. The groundbreaking for the 240-bed Silverdale facility, initially slated for this fall, has been pushed to the spring. Schultz said it took longer than anticipated to finalize the scope of work and budget.

Completion is now targeted for 2019 instead of 2018.

A parking garage will be first on the list for construction, followed by a medical office building and eightstory hospital tower. The project will relocate the existing emergency department and helipad.

Harrison hired Balfour Beatty Construction, a Dallas-based firm with offices in Seattle, as its lead contractor. The roughly $240 million

project is being financed

by Catholic Health Initiative, which owns Harrison parent company CHI Franciscan Health.

Schultz said it’s too early

to know when Harrison will begin moving employees and services from Bremerton to the expanded Silverdale campus.

“That’s really a key

question for all of us,” he said.

Schultz said he hopes to have a new ambulatory care center open in Bremerton before the

Cherry Avenue hospital closes. Harrison is scouring Bremerton for property to build an 18,000-squareSee HOSPITAL, 23

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Mary Hinkle, LMP, owner of Bravo! Bodyworks and Therapeutic Massage in Allyn, won our September “Business of the Month” media award, sponsored by KMAS Radio.

Chamber and Belfair Licensing Closed 3pm on Thursday, Dec. 24; reopen Monday, Jan. 4, 2016 HAPPY HOLIDAYS!

Mary Hinkle LMP, owner of Bravo!

Bodyworks

FRIDAY, DECEMBER 4

SUNDAY, DECEMBER 6

THURSDAY, DECEMBER 10

SAVE THE DATE:

ALL EVENT INFORMATION: ADENA CLARK, 360-277-5007

Nall Roofing Erin Nall, Office Manager Belfair 360-552-2811 Nallroofing@yahoo.com

Wittenberg CPA, PS Michael Wittenberg, CPA Shelton 360-426-0230 www.wittenbergcpa.com

P A G E

North Bay Marijuana Northwest Termite and Pest Control Elizabeth Feldman Christine Marshall, DDS Belfair 360-552-2456 360-340-8748 www.NorthBayMarijuana.com www.buggman.com Kitsap Public Health The Hardware Distillery Co. Shelley Rose Jan Morris Bremerton Hoodsport, WA 360-337-5230 206-300-0877 www.kitsappublichealth.org jan@hardwaredistillery.com

C O M M E R C E

Red & White Gala & “Hot Stuff” Auction Saturday, February 6, 2016 Alderbrook Resort & Spa

WELCOME NEW MEMBERS

O F

Chamber Holiday Party The Salmon Center, Belfair 5:00 – 7:00 p.m.

C H A M B E R

Holiday Tree Lighting Celebration Lighting at 5:00 p.m.

Scott McLendon’s Hardware, Belfair

Kerry London Myers and Jeff Nunnemaker of Hood Canal Events shared the behind-the-scenes story on how to best “Be the Traveler” in Union all throughout the year. You, too, can join in the fun. Visit them at www.hoodcanalevents.com.

Please congratulate Dana Rosenbach, North Mason School District Superintendent, as our September Member of the Month, and the super staff from the Economic Development Council of Mason County – Jennifer Baria, Executive Director Lynn Longan, and Karin Leaf – our October members of the month.

Thank you for all you do for our community and the chamber!

Liz Corliss-Clark, owner of Sisters Point Cabin, on Hood Canal (pictured right), was the lucky winner of our October “Business of the Month” media award, sponsored by the Kitsap Sun.

J O U R N A L

11:30 a.m. – 1:00 p.m.

Neighborhood Network “Tax Tips for Nonprofits” Johnny Hawkins, CPA Olympic Tax & Business Consulting, LLC Union River Grille, Belfair 11:30 a.m. – 1 p.m.,

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18

| December 2015 |

THE CORE OF MY PHILOSOPHY is that we need to not just do less harm, we need to actually do good.”

Architect Jason Mclennan talks with a group of people Nov. 21 while giving a tour of Heron Hall, his house under construction on Bainbridge Island. He is standing next to a structural integrated rammed earth wall that’s 2 feet thick with an insulation core. The house is designed to be certified to Living Building Challenge standards.

— Living Building Challenge creator Jason Mclennan

TIM KELLY PHOTO

There’s no place like home

■ Architect’s residence on Bainbridge Island

will be first in state certified as Living Building

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

Think globally, build locally.

That’s what renowned architect Jason Mclennan, who created the Living Building Challenge sustainability standards, is doing on Bainbridge Island’s south shore.

And the way he’s building the walls of his family’s new home is as old as dirt. In fact, he’s using dirt.

“Some of the soil is from my site, from the excavation, and the rest is from a very short drive away. So there’s almost no impacts,” Mclennan said.

It’s dirt, but there’s actually a precise formula for soil blending in the “structural integrated rammed earth” walls built by Sirewall, a company in British Columbia.

The dirt is mixed with a small amount of

cement and pneumatically compacted into structural forms around an insulation core to make Sirewall’s “engineered sandstone” walls. They’re 2 feet thick, stronger and more durable than concrete walls or conventional wood-frame construction, and require no finishing work inside or out — no sheetrock, no vapor-barrier wrap, no siding, no paint.

Mclennan isn’t just having Sirewall build the walls for the 3,000-square-foot house he designed, which will be the first in Washington certified to Living Building Challenge standards. He also formed a Bainbridge-basedsubsidiary,SirewallUSA, with the son of company founder Meror Krayenhoff (see related article, page 32).

“Its exciting that he’s on board,” Krayenhoff said of the partnership with Mclennan.

“He wants his home to be a showcase for the Living Building Challenge, and Sire-

A rendering of what Heron Hall will look like when completed.

Construction is scheduled to be finished in August.

MCLENNAN DESIGN

wall’s a part of it.

“He’s a guy who walks the walk ... and we just like working with the guy because he has a lot of integrity.”

Mclennan developed the LBC, regarded

as the most stringent sustainability code in the construction industry, as CEO of the International Living Future Institute and Cascadia Green Building Council.

The architect’s residence — dubbed Heron Hall — also will be his home base for Mclennan Design, a new architecture and planning firm he recently founded with two former colleagues from BNIM, a national firm based in Kansas City, Mo. With the launch of his new firm, McLennan is changing roles at the International Living Future Institute, which he joined in 2006. He will step down as CEO by the end of the year and become chair of the nonprofit’s board.

“I’m going to continue to be a very strong participant in the program and the mission,” he said. “But I’m an architect, designer, planner, and I always intended to go back into practice after getting the See ARCHITECT, 32

Events And Activities VISIT the HBA Website! www.kitsaphba.com

2015 Officers

Thursday, December 3 Developers Council, 7:30am

Tuesday, December 8 Builder Breakfast, 7:30am Elmer’s in Poulsbo Guest: Commissioner Rob Gelder

Tuesday, December 15 Build A Better Christmas, 3pm Gift Wrapping & Social HBA Office Thursday, December 17 SPECIAL DATE Executive Comm. Mtg., 3:00pm Board of Directors 3:30pm Thursday, December 17 General Membership Mtg., 5pm Kitsap Golf & Country Club Advanced Registration Requested $20.00/per member Friday, December 25 HBA Office Closed Merry Christmas!

MARK YOUR CALENDARS: Friday, January 1 HBA Office Closed Happy New Year!

Friday, January 8 Installation & Awards Banquet Kitsap Golf & Country Club, 6pm Register online today! www.kitsaphba.com

Back to School in 2016 The HBA offers classes to members and non-members alike! We are committed to helping industry professionals get and stay up to date on their required certifications, like Lead, CPR, and Erosion Control. We also want to help the industry learn the best business practices, building basics, and energy efficiency.

The industry is changing and the companies that do best are ones committed to learning.

We are offering a large array of classes in 2016 and when taken in the right combinations students can earn designations from the National Association of Home Builders. A designation sets you apart from your peers. It shows that you are committed to education in your trade and can be a valuable asset when competing for projects.

One designation you might consider earning in 2016 is a Certified Green Professional designation. This designation includes classes on business management as well as classes on green building techniques. Even if you aren’t sure your clients are motivated by a green home, the Washington State Energy Code gets more and more strict. These courses will help you determine the most efficient way to build new homes in Washington, while achieving important “green” benefits for your clients. The combination will help set you apart from your peers and give you a competitive edge financially.

Many of our non builder members will be interested in The Art of Effective Networking. During this class you will learn how to maximize your communication skills. This is key to all successful business ventures. Another class some of our Associate members may be interested in is, “Move That House”. Move That House is focused on techniques to sell a home that is contingent to your buyer’s ability to purchase. It will include “5 Things you can do for under $1,000” to make the listed home more appealing as well as many other effective tips and tricks.

Members and non-members are welcome to register and take our classes.

The details and dates are being settled but here is a list of the classes the HBA will be offering in Bremerton in 2016. We will put these on our online calendar with registration information. Make 2016 a year of learning! Sign up for one of these classes: Construction Contracts & Law CPR & 1st Aid Business Management for Building Professionals EPA Lead Renovator EPA Lead Renovator Refresher Construction Management School The Art of Effective Networking Move That House Basics of Building Green Building for Building Professionals Certified Erosion and Sediment Control Lead Certified Erosion and Sediment Control Lead - Recertification Estimating

President................................... Kevin Ryan 1st Vice President...................... Jim Ullrich 2nd Vice President ............. Miriam Villiard Treasurer ....................... Randy Biegenwald Secretary .................................Dee Coppola Immediate Past President..... Judy Mentor Eagleson

2015 Builders & Assoc. Directors Bill Broughton, Walter Galitzki, Stuart Hager, Jim Heins, Joe Hurtt, Berni Kenworthy, Jo Pederson, Leslie Peterson, Jim Way

2015 State Directors Robert Baglio, Lary Coppola, Judy Mentor Eagleson, Justin Ingalls, Wayne Keffer, Ron Perkerewicz, Kevin Ryan, Jim Ullrich

2015 Alternate State Directors John Armstrong, Rick Cadwell, Kevin Hancock, Byron Harris, Brent Marmon

Life State Directors Bill Parnell

2015 National Directors Kevin Ryan, Shawnee Spencer, Jim Ullrich

2015 Alternate Natnl. Directors Mike Brown, Jeff Coombe

Life Directors Rick Courson, Bob Helm, Bill Parnell, John Schufreider, Dori Shobert, Jim Smalley, Larry Ward

2015 Council & Committee Chairs Build A Better Christmas ..... Randy Biegewald Built Green.............................Walter Galitzki

By Laws & Nominations ........Judy Eagleson Developers Council..................Robert Baglio Golf Classic........................Shawnee Spencer Govt. Affairs Cmt.........................Jim Ullrich Remodelers Council Chair... Dale Armstrong Membership ..........................Miriam Villiard Parade of Homes .................................... TBD Peninsula H&G Expo....................Lena Price Peninsula H&R Expo............................. TBD

HBA Staff Exec. Vice President .....Teresa Osinski, CGP tosinski@kitsaphba.com Events & Admin. Assistant .......Katie Revis hbaevents@kitsaphba.com Admin. Coordinator ............. Jennifer Phillips info@kitsaphba.com

Home Builders Association of Kitsap County 5251 Auto Center Way, Bremerton, WA 98312 (360) 479-5778 • (800) 200-5778 FAX (360) 479-0313

www.KitsapHBA.com

Kevin Ryan Tim Ryan Construction

Teresa Osinski CGP

President, 2015

Executive Vice President

Our Year in Review Every year as December begins we instinctively begin to look back and reflect on the past year and take stock of what we accomplished and look forward to new year approaching. Take a few moments out of your own busy schedule to do this you will be glad you did.

As our Industry continues to evolve we at the HBA asked ourselves if our brand reflected the organization we truly represent. As many of you know after much effort and with the assistance of many in our organization and in the branding industry the general membership has agreed to change our name. To answer the old saying “What’s in a name?” was one of the goals. Looking back on it I am proud to say that with the vetting process has made us stronger as an organization.

By taking the time to really look in the mirror and hear from so many that have made this group of building professionals the respected organization it is has been very rewarding. This month we will continue to draw from our membership input on the new Logo and other important brand identifiers and look forward to implementing this in 2016.

Kitsap County has seen the uptick in the construction market hit our shores.

There continues to be strong demand for housing and buildable lots are in short supply. The commercial market is brisk in both new construction and in the tenant improvement sectors. One of the challenges facing our industry is the lack of skilled labor in the trades. Recently I attended a conference of building professionals in Bellevue and was blown away at the pace of building and shear number of large projects that are currently impacting our regions workforce.

Across the street from our room there were no less than six tower cranes in an area of less than 10 city blocks. The value of one of the projects alone was $285 Million. As I looked out over the project it occurred to me what a great case study it would be to have a group of young kids experience this first hand. We as an organization must continue to foster in our youth the importance of our industry to our communities. A career in the construction industry is a lifelong skill set that is not only rewarding on each project you complete but, it leaves a legacy to your community in which you live for others to enjoy as well.

Thanks to all of you that continue to volunteer your time and effort to keeping our industry strong. Best wishes to you and your families.

The Home Builders Association continues to support the construction trades even after 60 years of a changing industry, economy, and world. As the year winds down I want to thank each and every member company. This is an association and by that we are here because we have members that invest in the services we provide. Your support helps now and in the future.

During the year I had the opportunity to speak before local, elected bodies as well as to civic groups. One topic I often speak on is housing affordability. Many in our community consider affordable housing in the context of low-income buyers. The HBA cares about this aspect of affordability as well as the broader context. In fact, the HBA is proud to have Habitat for Humanity, Bremerton Housing Authority, and Housing Kitsap as members. Additionally, the HBA provides monthly meeting space to the Kitsap Housing Coalition. All of these organizations work hard to ensure housing for all that desire it, and particularly low income families. Their fight is ours too and we are proud to stand with them.

The full concept of affordability is broader however than just one economic class.

Most families looking for homeownership understand affordability. Affordability is measured differently by each buyer and is hinged upon the financial constraints of their situation.

The HBA realizes that what is affordable in one part of Kitsap may not be affordable in another. Like the real estate adage, “location, location, location”, affordability is affected by geography. It’s simply a fact that a dollar will go farther in some areas of Kitsap than another. Likewise, one market’s buyers will be more sensitive to price changes than buyers in another.

On behalf of the Association’s members, the HBA addresses this issue throughout the County and throughout the year. Regulations drive up the cost of housing faster than the market can respond. Most regulations go unanswered in appraised value. Left unchecked, regulations could quickly drive housing out of reach of most families.

I find that I am often the only one speaking on these matters. Home owners do not engage elected officials about regulatory cost increases, unless it is a utility rate, because home owners already have their home and aren’t typically considering a future when they might be impacted by the regulation. Non-home owners are also disconnected to the process and do not usually know that pending regulatory changes may dash their hopes and dreams of homeownership.

The HBA has a history of effectively helping local elected officials find alternatives and balance on regulatory matters. We are committed to protecting the construction trades, the business owners that employ thousands of Kitsap residents, and the employees of these trades that have families to support. We are also honored to support our community’s future home buyers.

The construction industry is an honorable field and it is a great pleasure to work each day to make it better for our members. Happy New Year!

NAHB MEMBER ADVANTAGE HBA Members have buying power that just keeps getting better and better! If you’re a member now, you should see how you can benefit from these features of membership. If you’re a business owner in Kitsap but aren’t a member yet, check out this program and see if you could improve your bottom line by joining the HBA today! Membership is $557 per year. You could easily save more in leveraged buying power with these discounts than your annual membership investment. Check it out!

– Lowe’s – www.LowesForPros.com/NAHB - Member contractors with a Lowes Accounts Receivable can get free shipping and save a total of 7% on purchases!

– General Motors – www.nahb.or/ma. Members can save $500 on their next Buick, Chevrolet and GMC vehicle (some limitations) and a member business owner may save up to $1,000.

– Dell – www.dell.com/nahb - You can save up to 30% off a computer.

– Office Depot – 10% off all delivery orders and free shipping on orders over $50. Call 800-274-2753 and mention NAHB to sign up.

– There is so much more! AT&T, Verizon, Sprint, T-Mobile, UPS & YRC, GEICO, Hertz, Avis, Budget, Associated Petroleum Products, FTD, Wyndham Hotel Group, Omaha Steaks, and more! Call the HBA to learn more today!

Government Affairs Committee Jim Ullrich, Ullrich Contracting Inc. Well with December here we are looking at rolling into the New Year, 2016. This is looking to be an exciting year as far as politics are concerned.

We have perhaps the most important electoral decisions to be made for the country in the last 150 years. Are we going to watch the further deterioration of our country’s role in the world scene, leaving a large vacuum sure to be filled by those that we would not call our allies or friends?

Are we going to have our economy that limps along at 1.5% growth and a 38 year low participation of abled body employment? Are we going to live with more and more regulations stifling the economic engine of this country, small business? Are we going to live in a country where more small businesses are closing than starting? Are we going to live in a country where the checks and balances that were set up by the framers of our constitution are tipped further and further out of balance? Are we going to continue down the road of dividing up our population by race, religion, socio economic status etc. etc. etc.? Are we going to continue down the road to the destruction of our country?

Or are we going to turn this country around and start us back on the road to being a great country again, where our friends trust us and our enemies fear us. Do we want a country where we have not a guarantee of economic equality but do have a guarantee of economic opportunity? Do we want a country where if you build a better mousetrap, people will beat a path to your door to buy it and not just the government taxing and regulating that mousetrap into oblivion? Bill Gates, Jeff Bezos et al are billionaires because they came up with a better way of doing things, they built a better mousetrap.

If you like the direction this country is going then you know who to vote for. But if you think we can do better and you want to get the country into an upward trajectory than get involved and get out there and help elect the candidate that you think has the best plan of attack. This is my last article for the HBA and I appreciate the opportunity that has been given to me to express some of my ideas. I hope that some of the ideas that I have expressed have made you think. I hope that our country will choose the right path because we are at a crossroads.

I hope all of you will have a merry Christmas, happy Hanukah or a happy celebration whatever your beliefs. I hope all have a prosperous new year. I pray that God will continue to bless the U.S.A. Thank you.

2016 HBA Installation & Awards BASH! Please join us on Friday, January 8, 2016, for the annual celebration of the HBA! All our members and friends are encouraged to register, and attend this important, annual celebration. We will welcome our new Officers and Directors, celebrate our members, and award the coveted “of the year” recognitions.

You can register on our website at www.kitsaphba.com by navigating to the HBA Events and News page. Using the calendar, just click on the January 8, 2016 event. You can also phone the HBA (360-479-5778). Join us! We want to celebrate with you!

EPA Ramps Up Lead Paint Inspections As printed online on NAHBNow, November 9, 2015 Some regional offices of the Environmental Protection Agency (EPA) are changing the way they approach lead-safe work practice inspections, which could be a factor in the rising number of companies fined for violating EPA regulations.

EPA’s approach to lead-safe work practice inspections varies by region. Region 7 (Midwest) is the latest to employ a more targeted approach, having recently increased its focus on the St. Louis, Mo., area. The strategy mirrors what was done during the summer of 2014 in EPA Region 1 (New England), which concentrated its efforts primarily in New Haven, Conn. EPA says the strategy led to improved compliance and awareness of the Lead-based Paint Renovation, Repair, and Painting (RRP) regulations.

Out of the 65 inspections conducted in New Haven during that period, EPA issued enforcement actions against six companies. “After seeing what was done in Region 1, we saw an opportunity for us to not only educate the remodeler community, but also the general public to help drive demand for the remodelers who are certified to do the job the right way,” said Jamie Green, chief of the toxics and pesticides branch for Region 7.

EPA issued a press release and conducted radio interviews when the initiative kicked off last August. Since then, 26 inspections have been conducted in St. Louis to evaluate lead-safe work practices. Inspectors also began conducting “compliance assistance visits,” reaching approximately 200 remodelers throughout the city. The visits were done at times when regulated work was not being done, so rather than carry out an inspection, the inspectors would explain the RRP regulations, deliver information packets and answer questions. Projects that receive full inspections are identified in a variety of ways, but primarily as a result of tips and complaints submitted by the general public, as well as from EPA-lead searches of publicly available information. Still, many are conducted on an ad-hoc basis, according to Green, who says inspectors will often drop in on a project while traveling to and from predetermined inspections.

Next month, Region 7 will launch an advertising campaign to raise awareness among St. Louis-area consumers about the risks of lead exposure. “The ultimate goal here is to protect children’s health,” Green said. “There are a lot of remodelers out there who are doing it right, so a large piece of this is to make sure we’re reaching out to consumers about the value of hiring those certified renovators.”

Green says it’s too early to determine the impact of the new, targeted approach.

However, the focus on St. Louis will continue through the end of the year, when Green will assess the initiative’s effectiveness and decide if similar measures would be worthwhile in other parts of the region.

Nationwide, the number of enforcement actions against businesses that violated the RRP regulation increased in 2015. Seventy-five companies received fines of $2,000 to more than $50,000, mostly for violating work practice standards and/ or failing to obtain proper training and certification regarding lead-safe work practices. For more information about how to comply with the RRP rule, visit nahb.org.

NOTE Provided by HBA of Kitsap County: In Washington the enforcement of the RRP is done through the Washington State Department of Commerce.

In 2016, the Association will be holding Certification and Re-Certification classes at our Bremerton office. These classes are for member and non-member companies. The first classes are scheduled for February. Check the Association’s website (www.kitsaphba.com) for dates and information on how to register.

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| December 2015 |

23

Kitsap sees record increase in lodging revenues for Oct. Staff report

Kitsap County hoteliers posted record increases for the month of October.

According to Smith Travel Reports, which track national data for the lodging industry, Kitsap County posted the largest increases in sales revenue, demand, and per-room rate among all reporting counties in Washington.

Revenues in October were up 41.2 percent, or nearly $1 million over the same period last year, and the year-to-date increase in 2015 is 20.4 percent for $5.6

million in additional lodging revenue this year.

As of Oct. 31, Kitsap hoteliers had generated more than $33 million in lodging sales. Clark County had the next-largest increase with revenueup16.4percentover 2014. The state average increase was 11.4 percent.

Demand for rooms in Kitsap in October was up 35.2 percent over last year and 16.5 percent year to date, which translates into visitors booking 49,405 more hotel rooms from January through October 2015 than in 2014. The next closest increase was 11 percent

Best Western proposes hotel on Poulsbo site

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

A Best Western hotel has been proposed for a hillside overlooking Poulsbo’s Central Market.

The city received preapplication materials for a 94-room hotel planned for

Hospital from 16

which which would provide primary and urgent care, among other services.

Schultz said the search has focused on the area surrounding Olympic Col-

Hospice of Kitsap may have a buyer A Pierce County medical group is in talks to acquire Hospice of Kitsap County.

Tacoma-based MultiCare Health Care System announced recently that it expects to close the deal this year. The acquisition will be subject to a Depart-

reported by Pierce County.

As revenue and bookings increased, the number of rooms in Kitsap was up only 2 percent this year, below the state average for supply increase of 3.9 percent. In addition, the occupancy rate at area hotels is up 32.5 percent and the average room rate has increased 38.4 percent.

The data is provided

by Visit Kitsap Peninsula.

VKP director Patricia GrafHoke attributes the record numbers to corresponding increases in leisure travelers visiting Kitsap, nongovernment business trav-

a vacant parcel off Forest Rock Lane, east of Highway 305. Preliminary drawings submitted to the city show a five-story, 59,500-squarefoot structure with basement-level parking.

The hillside lot is 2.5 acres, but a significant portion of the property is designated as wetland, limiting

development to the eastern and western extremities.

A Poulsbo planner said it’s unclear yet whether the designs would meet the city’s height restrictions and other guidelines. A preapplication conference was scheduled Dec. 1.

The applicant for the project is Benny Kim, of Edmonds-based design firm An and Kim LLC. In an email last week, Kim said initial feasibility studies are underway.

lege in West Bremerton, though it’s still possible the clinic could be built in East Bremerton.

Schultz also confirmed Harrison is developing a medical residency program for training family physicians in Bremerton. The only residency program in

the county, hosted by Naval Hospital Bremerton, will be phased out in the next year. Schultz said Harrison hopes to launch its program in fall 2018 with space for six to eight students.

“It’s one of the better things we could do for this community,” he said.

ment of Health certificate of need evaluation, according to the announcement.

The Hospice of Kitsap board of directors issued a request for proposals earlier this year seeking a larger health care organization to join. Executive director Kevin Turner, who was hired in June following a leadership shakeup, said af-

filiation was the best choice for the nonprofit, “based on insuring hospice choice in the county for the longterm, and a stable place for our employees.”

Hospice of Kitsap struggled with declining revenue in recent years, losing more than $1 million in 2014, according to financial filings.

LARRY STEAGALL | KPBJ FILE

A strong year for the region’s tourism industry continued in October, with Kitsap hotels reporting a 41 percent revenue increase year-over-year for the month, and a year-to-date increase of more than 20 percent over 2014.

elers, and visitors attending private events. Unlike government travelers that must adhere to lower, GSA perdiem rates, leisure travelers pay higher room rates.

According to a study by the Puget Sound Regional Council, the tourism industry in Kitsap region generates more than 6,700 jobs.

Visit Kitsap Peninsula

(www.VisitKitsap.com) is the official, state-recognized agency responsible for economic development and promotion in Kitsap’s tourism industry.

He acknowledged the site poses development challenges.

The property is owned

by PPB Properties LLC, of

Lynnwood, which appears to be a holding company for Prime Pacific Bank.

There are Best Western hotels in Silverdale and on

Bainbridge Island.

See preliminary site plans and renderings at pugetsoundblogs.com/ minding-your-business.

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24

| December 2015 |

Roxy at center of Bremerton revival ■ Sound West Group has contract to buy historic theater, more property on Fourth Street block

By Josh Farley

“We wanted to make the street a great street again, and I think we’re onto something here,” he said. “I’m extremely pleased.

Things are really coming together.”

Sound West would like to build 30 to 35 apartment spaces on the block, to go with the existing 65 parking spots and two retail storefronts. But nothing is set in stone.

Larson sees a downtown that’s “funky and hip,” ripe for millennials to move into, with the Roxy as a “critical piece” to help that block of Fourth Street come alive.

Crystal Yingling, who has spearheaded the Roxy Revival group aimed at resurrecting the theater, said it’s the fifth time an owner has closed in on buying the property but only the second to secure it under contract. She said she’s “cautiously optimistic” the deal will go through and has met with Larson about a plan going forward.

Larson said his group isn’t interested in managing the theater; he would like to work with a community group like Roxy Revival that’s already been meeting.

“I’m just Tom Sawyer painting a fence here,” he said.

jfarley@kitsapsun.com 360-792-9227

Wes Larson recalls the lines that wrapped around the block on Fourth Street when “Star Wars” premiered at the Roxy Theater.

That was 1977. Nearly four decades later, Larson would like to bring back the crowds to the historic Bremerton theater.

“It’s one of the most amazing assets in all of downtown Bremerton,” Larson said of the 1941-built Art Deco movie house. “I think it’s got a lot of potential.”

Larson’s Sound West Group has the theater under contract, though the final purchase has not gone through. It’s the latest in a number of purchases on the street that the Bremerton-based development company is pursuing in an effort to “reactivate” the portion of Fourth between Washington and Pacific avenues, he said.

In total, they have contracts to purchase PHOTOS BY MEEGAN M. REID/KITSAP SUN nearly 70,000 square feet of real estate on the same block — and more would be wel- Sound West Group’s Wes Larson pauses while walking along Fourth Street as he talks about a few of the buildings that his group is purchasing in downtown Bremerton. comed, Larson said.

“We’re trying to acquire as much as Manette Bridge, a we can,” he said. $15 million project “We feel it’s the right that will bring 80 time. And the bigger, new units to downthe better.” town Bremerton.

The company is The stretch of closing in on two Fourth Street bebuildings east of tween Washington the Roxy, one of and Pacific long which once housed included vacant the Sears departbuildings that some ment store and the developers have other belonging to blamed on its onelongtime property way street configu"Let us get your home OIL • GAS • HEAT PUMPS • A/C owner Lou Weir. ration and dense cozy for football sundays!

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Some of the buildings have not been street, started a stakeholders’ group to occupied by storefront businesses for find a solution to bring life back to the For more information on services decades. Sound West Group hopes to tap street. Coupled with the city’s approval we provide please visit us at: into about $235,000 in federal block grant to use its federal HUD money toward www.DanasHeating.com money that would modernize the building downtown economic development, Rice at 279 and build new facades at the Sears Fergus Miller drew concepts that included **Financing now available. See if you qualify today!** and Weir buildings. The Bremerton City residential units on the street — and Sound Council will vote to formally ask the fed- West Group has largely followed through Family Owned and Operated Since 1997 eral Department of Housing and Urban on that vision, Rice said.

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December Chamber Events

Bremerton Chamber Installs 2015-2016 Board of Directors

Harrison Medical Center

The Bremerton Chamber of Commerce installed the 2015 - 2016 Board of Directors at our annual Gala on Thursday, October 29.

Haselwood Auto Group

Gold Members

Puget Sound Naval Shipyard & Intermediate Maintenance Facility Tim Ryan Construction, Inc.

2015 - 2016 Executive Committee Cindy Moore, Kitsap Bank Chairman Gary Chaney, John L. Scott Real Estate Chairman Elect Jay Bohreer, Harrison Medical Center Vice Chairman Clarke Whitney, Clarke Whitney CPA Treasurer Leslie Petersen, Liberty Bay Bank Secretary Joe Roszak, Kitsap Mental Health Services Immediate Past Chairman

Save the date: Thursday, February 18, 2016

Tom Brobst, Puget Sound Energy Teresa Bryant, Edward Jones Investments Jack Edwards, Baymont Inn & Suites Wes Larson, Sound West Group Leah Olson, Kitsap Credit Union Mary Anne Mascianica, PSNS & IMF Sharon Smith, Miller-Woodlawn Funeral Home Stacey Tucker, Chico Towing Vic Ulsh, Bradley Scott Commercial Real Estate

December 15 - 11:30 AM Membership Luncheon Kitsap Physical Therapy and Sports Clinics “Ergonomics in the Workplace” Arena Sports Bar & Grille

New Members Northwest Chimney Service Inc. Plaza Barbershop Floor Decorators Carpet One Swarner Communications/ Northwest Military

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Board of Directors

December 14 - 11:30 AM Armed Forces Festival Committee Meeting Cloverleaf Sports Bar & Grill

C O M M E R C E

Land Title of Kitsap County

Entertainment for the evening was Live From Televisionland "The Nightclub Show!"

December 10 - 5:30 PM Holiday After Hours Land Title of Kitsap County

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Kitsap Sun

Guests at the event enjoyed fabulous food, a Halloween Candy Buffet, and had the opportunity to bid on great auction items during the silent auction. Each table got a chance to be the highest bidder for some delectable desserts.

December 8 - 7:30 - 9:00 AM Kitsap Business Forum Global Café 2015: Teams of Teams: Collaborative Leadership in Kitsap Kitsap Conference Center

C H A M B E R

Platinum Members

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December 3 - 11:30 AM Membership and Marketing Committee Meeting Arena Sports Bar & Grille

26

| December 2015 |

New brew crew in city

■ Bremerton soon will have five breweries

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

Wandering down Fourth Street on a recent Wednesday evening, Andrew Schenck’s attention was irresistibly drawn to a sign for Wobbly Hopps Brewery.

“That’s not the kind of thing I miss,” Schenck joked, seated next to a flight of beer samples laid out on a table inside the Bremerton taproom.

Schenck and companion Eri Comparri had hopped a ferry from Seattle to enjoy the break in the weather. They were considering walking around the block to the new LoveCraft Brewery after their stop at Wobbly Hopps.

“I’d love to see some kind of brewery tour,” Schenck remarked.

Seemingly overnight, Bremerton has grown enough breweries to warrant a bona fide beer tour.

Wobbly Hopps opened in September in a space near the old Roxy Theater. LoveCraft Brewing quietly began pouring in No-

vember week at its space on Fifth Street, with a grand opening planned for the day after Thanksgiving.

Seattle-based Hale’s Ales is building a Bremerton tasting room, which should MEEGAN M. REID / KITSAP SUN open across from HiLo’s 15th Street Café Eri Comparri and Andrew Schenck enjoy a flight of beer at sometime before the Wobbly Hops in Bremerton. The two hopped a ferry over from end of the year. The Seattle to take advantage of the clear skies with views of the newcomers join a Olympic Mountains.

Bremerton craft beer scene already home to Der Blok- feature “farmhouse-style” beers ken Brewery in Manette and Sil- and imagery inspired by horror ver City Brewery in Auto Center. writer H.P. Lovecraft. The camLoveCraft, the newest of the paign raised more than $30,000 bunch, is the brainchild of Jesse in seed money, which the Wiland Tasha Wilson, who met sons put to use building out their while working at a Seattle brew- brewery in a space leased from ery. Jesse, a 2004 Olympic High the architecture firm Rice Fergus School graduate, went on to serve Miller. as an assistant brewer at Port The finished LoveCraft BrewTownsend Brewing. ing gives patrons a front-row seat A little more than a year ago, to watch the beer-makers in acthe Wilsons launched a campaign tion. A bar lined with stools faces on the fundraiser site Kickstarter. the gleaming three-barrel brewTheir pitch was for a downtown ing system. The Wilsons plan to Bremerton brewery that would keep eight beers on tap, including

MEEGAN M. REID / KITSAP SUN

Jesse Wilson talks about the brewing equipment at his newly opened LoveCraft Brewing Co. in downtown Bremerton on Fifth Street.

guest brews and ciders.

Jesse Wilson said it was gratifying to bring the brewery from Kickstarter concept to completion.

“It’s been a long haul, but it feels good to be serving beer finally,” he said.

The crowds drawn to Wobbly Hopps, just around the corner, bode well for the success of both downtown breweries. Even on a Wednesday night, on the eve of Thanksgiving, the taproom was buzzing. Customers perched on tables or kicked back on couches.

Kitsap gets first shares of marijuana tax revenue

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

Marijuana money is beginning to flow into Kitsap County coffers.

At the direction of the Legislature, the state is doling out a share of excise taxes charged on legal marijuana sales to local governments.

Kitsap County is set to receive more than $98,000 in the 2016 fiscal year, which began July 1, according to a report posted by the Liquor and Cannabis Board.

Port Orchard will receive about $65,000.

“It’s nothing to sneeze at,” outgoing Port Orchard Mayor Tim Matthes said.

Matthes, who lost his re-election bid in November, opposed allowing recreational marijuana stores within city limits but the City Council voted to permit

them. Matthes later joined dozens of Washington mayors in lobbying the state for a slice of marijuana excise taxes. If the city is going to have marijuana stores, “we should at least share the revenues,” Matthes said.

Lobbying by local governments paid off. Legislation passed into law this year revised the marijuana excise tax to a single, 37 percent assessment, charged when retailers sell marijuana products to consumers. It also instructed the state to distribute a portion of the tax revenue to local governments that have licensed marijuana stores within their borders. The state will distribute $6 million to local governments in fiscal year 2016, an amount that will increase in future years.

Money distributed to local governments is coming from taxes collected in the previous fiscal year. As a result, Port Orchard, which had three marijuana shops

licensed by the end of 2014, will receive a healthy allocation this fiscal year. Cities like Bainbridge Island and Bremerton, which had their first marijuana stores licensed in June 2015, will receive much smaller amounts. Poulsbo has a moratorium on recreational marijuana businesses and will receive no marijuana money.

Funds allocated to local governments from marijuana excise taxes is earmarked for law enforcement and will be funneled to police departments and sheriff’s offices.

Kitsap County Sheriff’s Office Deputy Scott Wilson said money the county receives will be used to support narcotics investigations carried out by the Special Investigations Unit. Wilson said it’s too early to draw any conclusions about the effect new marijuana laws have had on crime rates in Kitsap.

Initiative 502, passed in 2012,

allowed Washington residents older than 21 to possess less than 1 ounce of marijuana for personal use, while creating a structure for a regulated marijuana industry.

The excise tax revenue comes in addition to money local governments collect from the regular sales tax charged on marijuana retail sales. Port Orchard Treasurer Allan Martin estimated the city received about $18,200 in sales tax revenue generated by marijuana businesses in the first six months of 2015.

Eight recreational marijuana stores have been licensed in Kitsap. Local shops made nearly $5 million in gross sales from July 2014 to June 2015, according to a state database.

New wave of applicants More stores likely are on the way.

The Liquor and Cannabis Board opened a new application

A cutaway in one corner of the floor offered views of the brew house in the basement.

Sheree Jankowski, who owns the brewery with her husband, Jon, said they’ve enjoyed steady walk-in traffic and are beginning to make inroads with shipyard workers, who are often in a hurry to zoom out of town. New businesses and development plans along Fourth Street are also encouraging, she said.

“We’re totally thrilled with our space,” Jankowski said. “There’s a lot going on around Fourth.” period for marijuana retail licenses in October. The agency has received nearly 1,000 applications, spokesman Brian Smith said Tuesday. About 40 applications came from Kitsap, according to a database posted by the board.

The state is giving top priority to established medical marijuana businesses, as it works to bring the state’s loosely regulated medical cannabis system in line with the tightly controlled recreational system. The Cannabis Patient Protection Act, passed this year, will force medical marijuana dispensaries to close by July 2016, but provides an opportunity for those outlets to become recreational marijuana retailers.

The Liquor and Cannabis Board is giving special consideration to medical marijuana businesses that applied for a recreational retail license before July 1, 2014, have been in the business since before 2013, obtained appropriate business licenses and See MARIJUANA, 32

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28

| December 2015 |

Chef extends culinary tradition of family who came as refugees ■ Partners with

boyhood ties opening Thai restaurant in Poulsbo

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

Many a restaurateur has opened an eatery with a menu sourced from mom’s home cooking. Kachai Thai Kitchen, set to open in January in Poulsbo, will be the second such restaurant started by one of the siblings in the Tran family.

San and Lani Tran and their nine children came to Bainbridge Island from a refugee camp in Thailand about 35 years ago amid rising fears of a communist takeover in the country.

In 1992, the couple opened a Thai restaurant called Sawatdy, with all their children working there.

That included Kachai Thai Kitchen chef/owner Binh Tran, even though the career path he had in mind back then wasn’t joining his Thai mother and Vietnamese father in the restaurant business.

“Actually, no, because I was studying to be a doctor,” the soft-spoken Tran said. He had recently graduated from Seattle Pacific University with a degree in biochemistry when Sawatdy opened.

“I told my mom I’m going to be here for two weeks to help out,” he recalled, “and 10 years later I was still there.”

Tran never went to medical school, though he eventually moved on from the family restaurant and earned a business degree from Seattle University in 2001, then completed an

PHOTOS COURTESY BINH TRAN

Binh Tran, shown above in the kitchen at his family’s Sawan Thai Kitchen restaurant on Bainbridge Island, will be chef and owner of a new restaurant called Kachai Thai Kitchen that will open in Poulsbo in January. Some of his featured dishes are crispy calamari with sweet chili sauce (right).

online MBA program.

The love of food and cooking instilled by his mother drew him back to the restaurant business, though, and he said he was curious about what innovative chefs in the Puget Sound area were doing. “I was very interested how to combine the exotic Thai ingredients with the local fresh ingredients to create something even more magical,” he said.

Tran got the chance to work with Seattle chef John Howie when he opened Seastar in Bellevue in 2003,

and then worked at Toi, a Thai restaurant/bar that’s gone now but was a Belltown hotspot a decade ago.

From 2005 to 2013 Tran returned to working at Sawatdy, where his sister, Quyen, is now chef of the popular restaurant next to a gas station on Fletcher Bay Road. Their brother, Minh Tran, opened Sawan Thai Kitchen in 2008 at Lynwood Center on Bainbridge Island, and their mother runs the kitchen there now.

Kachai is going in next to Central Market in Poulsbo at the former site of Stella’s

ing in December at The Trails at Silverdale.

“We’re not just winging it; everything has been done with intent and to align our visions,” Nelson said.

Remodeli ng of the Poulsbo building began this fall and the interior has been totally gutted to create “an open, airy feel,” he said.

Binh Tran with his parents, Lani and San Tran, at “The ceiling is 16 Sawan Thai Kitchen. The family’s first restaurant, feet high in the Sawatdy, opened on Bainbridge Island in 1992. space.”

Diners will Pizza & Pasta, which closed see the whole kitchen, the in March 2014. The build- cooks and the flames of the ing is owned by Tran’s part- grills, combined with bold ner in the restaurant ven- visual elements in the resture, Doug Nelson, whose taurant’s décor.

American Properties real “It’s almost like a fuestate agency is based on sion of different restaurant Bainbridge Island. styles,” Nelson said “It’s not “We’ve known each going to be your stereotypiother since we were kids,” cal Asian restaurant with Nelson said. a white tablecloth and a They played soccer to- flower on the table. gether after Tran moved to “The whole vision here the island as an 11-year-old, is to create a family dinand one of his close friends ing experience more than from those days is Nelson’s just a restaurant to go eat wife. at. There’s going to be food “We’ve always talked for the eyes and the ears, as about how good the food well as for the mouth.” is that Binh cooks,” Nelson Tran said the menu will said. “When Stella’s moved be distinctive, with dishes out, it was a great opportu- such as papaya salad and nity for us to do something curry noodles that are together and get his cook- favorites from northern ing out there.”

Thailand where his mother “And when I approached grew up.

Doug, I said I don’t want to The name Kachai is a start just another restau- Thai word for wild ginger, rant,” Tran said. “I want also called finger root, that something fun, I want Tran uses in curry dishes. something exciting.”

“We want to provide They worked on a busi- great food, exceptional serness plan for Kachai Thai vice, and just the ambiance Kitchen for more than a that can make people feel year with consultants at the like, hey, this is the place to Seattle-based Restaurant be,” Tran said. “That’s what Group, and with interior we are trying to create.” designer Sue Genty, whose In telling his family’s firm also designed the Blaz- story on the Kachai webing Onion restaurant open- site (www.kachaithai.

com), Tran recalls the joyful childhood ritual of walking with his mother through street markets in Thailand, Laos and Vietnam as she chose fresh fruits, vegetables, herbs and meat for her cooking. “She instilled in me not only a love for food,” he writes, “but also an appreciation for how an amazing meal can bring friends and family to the table.”

Kachai Thai Kitchen will have plates priced from $8 to $14, along with an assortment of local craft beers as well as Thai beers such as Singha and Chang.

The 47-year-old Tran, who speaks five languages, lives in Seattle, where his wife is a Spanish professor at a community college. But he cherishes his roots on Bainbridge Island, where he also was a high school wrestling coach while working at the family restaurant in the 1990s. He met his wife, who grew up on the island, on the ferry when he was on a trip with the wrestling team.

He said opening his own restaurant is exciting. It’s also very meaningful for his family, who appreciate the opportunity they got for a new start many years ago when they were sponsored by a local church to come to Bainbridge.

“We’re blessed in so many ways, … and we never forget that,” Tran said, recalling the newly arrived family getting a Thanksgiving turkey and other food from Helpline House, along with assistance finding jobs.

“That’s how we survived.

We came here with nothing, and now we have great friends and family and belong to a great community.”

Though he aspired to become a doctor when he earned his first college degree two decades ago, Tran is comfortable wearing a chef’s jacket in the kitchen rather than a lab coat in a hospital.

“After all that time, I am still here in the food business and not in the medical field,” he said. “This is where I belong.”

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30

| December 2015 |

Revised development plan is for all condos

■ Silverdale

waterfront project originally had restaurant, commercial space Staff report

The developer of the proposed Bucklin Court project has submitted a revised plan that eliminates retail and restaurant space that had been planned along with

condos on the Silverdale waterfront, just east of the Best Western Silverdale Beach Hotel.

Rick Krueger of Daybreak Development LLC of Belfair now plans to build 30 condominium units on the 1.3-acre site, which the company bought for $1 million in 2014. The original plan submitted last year to Kitsap County included 4,500 square feet of retail space and 3,700 square feet of restaurant space in a three- to four-story, mixed-use development with 13 residential units.

Krueger said discussions he

had with Silverdale real estate agents led to a reassessment of the development.

“They basically said the commercial space would be tough to rent,” he said. “You don’t want to build anything you can’t rent. So we just kind of shifted gears and the plan now shows 30 units.”

In addition to 25 condos in the main building, there will be five built on the back of the property, between the main building and Bucklin Hill Road.

Having more condos also makes sense, Krueger said, be-

People in Business

PHOTO COURTESY TRILLIUM EMPLOYMENT SERVICE

Trish Borden, right, and Karen Williams

Job-placement nonprofit’s longtime director retires Trillium Employment Service’s executive director, Trish Borden, announced her retirement at the end of the year. She has had a 29-year career at Trillium, a nonprofit organization that specializes in helping businesses hire and employ individuals with developmental disabilities.

Borden, a well-known advocate for inclusive employment, has overseen significant growth at Trillium. When she joined the company, there were three staff members serving three businesses and fewer than 20 job-seekers. Trillium currently has offices in King, Pierce, Kitsap and Clark counties serving hundreds of businesses and individual jobseekers, and has a current staff of over 50.

“I have gained so much wisdom through this work and my life has been rich with knowing that we are making and will continue to make an impact,” Borden says. “I am looking forward to

my future of some play and some peace.”

Borden also announced her successor will be Karen Williams, who has served as assistant director for two years, returning after a short stint away from Trillium, where she originally worked as an employment consultant. Williams will officially take over as executive director Jan. 1.

Of her career leading Trillium, Borden says: “We were clear that we wanted to be the best employment agency — offer the best training and coaching to our employers and provide the best services to people who want to work regardless of their reputations or assessments. For 29 years, we have been doing just that.”

Law firm adds associate at Bainbridge Island office The law firm of Sherrard McGonagle Tizzano announced the addition of Meredith Holmes to its legal team.

She is a 2014 graduate of Seattle University School of Law, and earned her undergraduate degree in public relations and marketing from Pepperdine University.

Holmes grew up in Meredith North Kitsap and is the Holmes daughter of a former partner of the Sherrard law firm, John Wesley Johnson. She will specialize in personal injury cases as an associate of William McGonagle at the law firm’s Bainbridge Island office.

The firm also has a Poulsbo office.

cause of “the amount of interest we’ve had in the units.

“I think there’s probably a pentup demand for those in Silverdale.

These are nice units, on the water, private, in a good location in walking distance of shopping.”

Krueger, whose family has developed senior living centers in Kitsap County and Belfair over the years, said the concept for Bucklin Court complex is similar to the Harbor Steps Apartments in Seattle.

A preliminary site plan for the revised proposal shows a mix of one- and two-bedroom units,

served by about 30 surface parking stalls and underground parking. Other planned amenities include kayak storage and an entry garden.

Daybreak Development submitted its proposed revision on the project to the county in October, and a hearing is scheduled for Dec. 10.

Krueger noted there was no opposition when the original plan was reviewed by the county, and he said the permitting process could be completed in time for construction to begin next summer. He said the condos could be ready for occupancy in spring 2017.

Church pays $3.1 million for Regal Cinemas in Silverdale

By Tad Sooter tad.sooter@kitsapsun.com 360-475-3783

A movie theater in Silverdale will soon become a place of worship.

New Life Church on the Peninsula has purchased Regal Cinemas Silverdale 4 and plans to convert the theater into a church and school, according to documents filed with the county.

MEEGAN M. REID / KITSAP SUN Church leaders have not responded to requests Regal Cinemas in Silverdale has been purchased by New Life Church on the Peninsula. for comment on the sale in recent weeks. Neither has Tennessee- Documents recorded by the county sugbased Regal Entertainment Group. A man- gest that New Life is financing the project ager at the theater declined to say when the with a $6.5 million loan from the Assembusiness might close and directed questions blies of God Loan Fund, a Missouri nonto the corporate office, which did not return profit that provides financial assistance messages. to religious institutions.

New Life paid $3.1 million for the 9923 PopNew Life Church on the Peninsula is lars Ave. property, according to the Kitsap headquartered in Silverdale, with locaCounty Assessor’s office. The sale closed tions around Kitsap County and North Nov. 12.

Mason. Congregations typically gather on The Regal property gives the church public school campuses. nearly 3 acres near the intersection of KitThe church owns 4 acres off Clear sap Mall Boulevard and Silverdale Way, in Creek Road near Greaves Way, which it the heart of the county’s busy commercial acquired in 2008. hub. The 14,000-square-foot theater was The closure of Regal’s Silverdale 4 built in 1985. would leave the neighboring AMC as SilThe day after the sale, an architect re- verdale’s only movie theater. The eightquested a meeting with county planners screen AMC recently underwent a mato discuss a proposal for converting the jor remodel. Regal operates theaters in theater into a church and training center. Poulsbo and Port Orchard.

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| December 2015 |

Using earth to build walls for the long haul

By Tim Kelly

tim.kelly@kitsapsun.com 360-792-3359

Before he founded Sirewall in 1992 in British Columbia, Meror Krayenhoff worked as a carpenter and general contractor. But he came to see a problem with the wood-frame houses he was building.

“Looking at the durability of wood buildings, it’s disheartening,” Krayenhoff said by phone from his company office on Salt Spring Island, north of Victoria.

What bothered him was “the idea that we’re spending our nation’s energy and income building buildings that last less than 50 years on average.”

So he started searching for a more durable alternative, and he knew it had to be something that wouldn’t rot or be vulnerable to insects.

“We looked at lot of things and came up with rammed earth,” he

said. “We came up with a team here, and said how can we make this so it works structurally, architecturally, and within building codes.”

It took years of research and testing and refining, but Krayenhoff’s company succeeded.

“We were able to build with a completely new material within a building code not really designed for new materials,” he said.

The alternative his company developed can be seen on Bainbridge Island, where Jason Mclennan’s eco-friendly house is being built with structural integrated rammed earth (SIRE) walls that are 2 feet thick with an insulation layer in the middle, and are stronger than standard concrete walls.

The Sirewall website boasts this endorsement from Mclennan, the architect who pushed green building to new heights by developing the Living Building See WALLS, 34

The rammed earth walls of a two-story tower at Heron Hall, the Bainbridge Island house designed by Jason Mclennan, shows the striations resulting from the construction method.

EMILY HAGOPIAN COURTESY MCLENNAN DESIGN

Marijuana from 26

taxes. Smith said fewer than 20 of the new retail applicants statewide had met those standards as of Tuesday.

Medical marijuana businesses must meet the same location requirements of recreational retailers to become licensed.

This means their stores can’t be within a 1,000-foot buffer zone established around schools, parks and some other public gathering places.

Smith said the total number

of retail licenses issued will depend on the results of a consultant study. The report is due by the end of November.

While pushing medical marijuana businesses to close or join the recreational system, the Cannabis Patient Protection Act also created an endorsement that will allow recreational retailers to sell medicinal marijuana to qualified patients. Smith said 137 of the state’s 214 licensed retailers have applied for the endorsement. All eight Kitsap stores applied, according to the board’s database.

For information on marijuana rules, go to www.lcb.wa.gov.

Architect Jason Mclennan leads a group on a tour of his homesite on Bainbridge Island Nov. 21.

TIM KELLY PHOTO

Architect from 18

programs that I had envisioned moving in the right direction.”

One of the most notable Living Building projects is Seattle’s Bullitt Center, which opened in 2013 and is where the International Living Future Institute has its offices. Mclennan noted there are more than 300 projects in various stages of development worldwide adhering to LBC standards.

“It’s really taken on a life of its own, so I thought it was time to get back into doing what I love to do,” he said, “which is to design great places for people.”

His Bainbridge home will feature unique components such as a rainwater collection system — the first in Kitsap County — that will provide all the water for the six-person household, and an advanced type of composting toilets.

“It’s sort of off the water and waste grid,” he said.

That took some doing. The system that will channel rainwater from the roof into a 15,000-gallon cistern required approval from the Kitsap Public Health District, and Mclennan’s property is just within a zone where a Bainbridge city ordinance required houses to connect to the city sewer system.

He worked with city officials on an ordinance change to exempt homes with systems like his from the sewer hookup, although the house will have a septic system.

The rainwater catchment is unique, health district assistant environmental health director John Keese said.

“He submitted a significant engineering plan to show how the water balance can work,” Keese

said. “The trick with rainwater systems is being able to store enough water when it’s not raining.

“There’s also a very complex treatment system … for using water in the home. It’s a rather complicated engineering design, and of course the house design is predicated to be built around it.”

The system is “very well engineered,” Keese said, but it’s also considerably more expensive than hooking up to city water, for installation and ongoing maintenance costs.

“Most people could not afford to use this type of system,” he said. “It’s a complicated treatment system that’s going to have to be maintained to stay serviceable. …

When it gets built you’ve got to collect water and start sampling water to make sure it works correctly.”

Mclennan’s house won’t be off the electric grid, but its rooftop solar panels will generate more than the household’s annual energy needs, which includes charging the family’s electric vehicles.

“So I’ll be exporting at least 5 percent more energy to the grid that is clean, renewable energy,” he said.

Since the home will be tied to the electric grid, it will have a Tesla Powerwall battery for a backup power source.

All wood used to build the house meets Forest Stewardship Council standards for sustainable harvest. Cottonwood trees cut down on the homesite were milled to provide some of the interior wood trim. The exterior accent siding will be made using the Japanese technique of “shou sugi ban” for charring cedar to preserve it and make the wood more resistant to weather and insects

without using chemical sealants.

Mclennan also prides himself on reusing salvaged items — many found at Earthwise Architectural Salvage in Seattle — in the house he describes as a “modernist barn.” They include carved stone tiles (from an old church that was razed) incorporated into a courtyard wall and the master bedroom’s interior; an elegant stained glass panel that will hang in front of a narrow vertical window at the top of the staircase tower that connects the main and upper floors; timbers and light fixtures; and an ornately carved wooden front door from a house in Afghanistan.

Regenerative design Mclennan is one of the most influential architects in the global green building movement. During a recent conversation at Treehouse Café in Lynwood Center, about a block from where his Bainbridge home’s being built, he explained how his design philosophy was shaped in his hometown.

“I grew up in a mining town in northern Canada, in one of the most polluted places on the planet,” he said. “So I saw the worst of humanity’s impacts in extracting useful material from the earth, in this case nickel. That’s the degradation side.”

He also witnessed and participated in “the regeneration side” through collective efforts to heal the community of Sudbury, Ontario after a century’s worth of environmental damage.

“When I was growing up, one of the world’s largest regreening campaigns anywhere began in my hometown,” he recalled.

People planted thousands of See ARCHITECT, 34

K I T S A P

More Opportunity. Spirited Community. The Best Place to Be.

W H AT ’ S H A P P E N I N G N E X T ?

Being a Gig Harbor Chamber of Commerce member just got even better.

Thanks to the new Chamber Members App a tap on their trusty smartphone enables members to keep up with Chamber events, RSVP, and take advantage of special member-to-member deals. They can also view member benefits, educational and sponsorship opportunities, the full membership list, and more.

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3125 Judson Street

Kaleidoscope

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3208 Tarabochia Street

7512 Stanich Lane, Suite 2

Other Upcoming Events Public Affairs Forum Thursdays, 7:30 AM December 3, 10, 17

Annual Awards Dinner Saturday, Dec. 5 Tickets $65

Learn more at: www.gigharborchamber.net/calendar Connect With Us

Harbor Hill Drive Extension Receives State’s Largest The project will connect the end of Harbor Hill Drive to Burnham Drive, a key local transportation objective. It will include curb, gutter, sidewalks and lighting street improvements, and new storm water, water and wastewater utilities. The extension has a total budgeted cost of $11.5 million. Construction is scheduled to begin in fall 2016 and will take 12 to 18 months to complete.

P A G E

The City of Gig Harbor was recently awarded an $8 million State of Washington Transportation Improvement Board (TIB) grant to fund the Harbor Hill Extension Project.

It is TIB’s largest Urban Arterial Program Category grant.

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The new Chamber Members App and Go Gig Harbor can be found at Apple App Store or Google play. Chamber members can download either or both apps, and anyone can download Go Gig Harbor. Download today and make your holiday season bright…and easy!

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Both apps reflect the Chamber’s dedication to remain vital and relevant into the future — and to better meet the needs of those it serves, especially younger members and visitors. Online analytics have indicated that more and more folks engage with the Chamber via smartphones.

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Why two mobile apps, you ask? Go Gig Harbor already makes it easier for community residents and visitors to find places to dine, shop and play.

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Dec. 5

J O U R N A L

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B U S I N E S S

Just in time for the holiday season the Gig Harbor Chamber of Commerce launched it’s Chamber Members App in early November. It follows on the heels of Go Gig Harbor, the Chamber’s community mobile app that was launched in April.

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Membership Just Got Even Better

34

| December 2015 |

Architect from 32

trees, took measures to restore soil health and water quality in the area’s lakes and streams, and “over the last 40 years, they have completely changed the local ecology.

“So I saw the best of humanity’s impacts when a community said we’ve got to clean up where we live. And that set me on a life course of trying to bring this philosophy forward.”

The Living Building Challenge is grounded in “regenerative design” philosophy, and Mclennan — who’s written five books and has a sixth coming out next year — said he’ll be carrying that into practice with his new design firm.

The approach goes well beyond making houses and commercial buildings highly energyefficient.

“The core of my philosophy is that we need to not just do less harm, we need to actually do good,” he said. “In the Living Building Challenge we talk about what does good look like? So instead of buildings that are less likely to give you cancer, how about buildings that can’t give you cancer?”

To that end, LBC requires use of building materials that contain no toxic substances on its Redlist.

Living proof The first Living Building projects had to overcome lot of skepticism and barriers, including state and local building codes that restricted things like rainwater collection systems, Mclennan said.

But he noted that as projects were designed and built, the structures weren’t anything “weird” and didn’t require occupants to give up any amenities or to inconveniently adapt their functions to

Walls from 32

Challenge: “My belief is that Sirewall is timeless and beautiful, the most sustainable wall system on the planet.”

Mclennan backed that belief by partnering with Joss Krayenhoff, the company founder’s son, to form a subsidiary, Sirewall USA. “That’s part of our strategy to push it forward,” he said. “We’re

achieve sustainability goals.

Those projects show LBC is a viable approach, he said, and the Bullitt Center proves it can be financially successful.

“It cost around 30 percent more than conventional (construction) — not 300 percent more, 30 percent, so it’s not a crazy amount more — but it’s the most energy-efficient office building in the world,” Mclennan said. Construction costs were $18.5 million, but the building has a projected 250year lifespan and will provide a huge return on investment over time to its developer, the nonprofit Bullitt Foundation.

“They’re already cash-positive, but their return is lower than it would have been if they would have just tried to cash out like a normal developer tries to flip something, and it’s all about how can I deploy the least cost up front ... and make the most money in a short amount of time,” he said.

“So what we’re saying is no, think it through, think about total cost of ownership, think long-term, and the economics is powerful then.”

That long-term perspective is what makes green building an approach that Mclennan maintains can be implemented in affordable housing as well as high-profile buildings like the Bullitt Center.

“They cost more to build up front,” he said, “but a lot of them are funded by agencies and private foundations that support affordable housing and housing for low-income individuals.”

He cites a Minneapolis nonprofit that’s developing a housing project called The Rose, billed as “the country’s first affordable, multifamily development project to embrace the framework of the Living Building Challenge.”

Affordable housing that has LBC-level energy efficiency, Mclennan notes, could practically hoping to make the material more common, and we can help other architects design with it, if they need some technical help.”

Mclennan said Sirewall is “very viable” for both residential and commercial construction, but there are two main barriers to it becoming more common.

“It’s not widely used because there’s not that many people that can do it. And it’s not the cheapest thing to do,” he said.

The material cost is compara-

Mclennan Design will be working on projects worldwide, and one of the more high-profile developments in the works is

Leonardo DiCaprio’s Blackadore Caye, which will be the first Living Building resort. The famed actor asked Mclennan to work on designing the ambitious eco-conscious resort, with the intent to regenerate the damaged ecosystem of a narrow 104-acre island off the coast of Belize.

Mclennan’s firm also launched an initiative called the Green Warrior Society, which will donate planning and design services for charitable organizations that want to use sustainable construction in building needed facilities.

“We’re pretty excited about that,” he said, mentioning two projects the society is assisting so far — a Clinton Foundation orphanage in Haiti, and a “healing village” planned in Kansas City that will be a retreat and counseling center for veterans.

Although the international scope of his firm’s work requires extensive travel, Mclennan said he’d welcome working close to home if the right opportunity came up.

One possibility is renovating the old military barracks at Fort Ward, about a mile and a half along the shoreline from his new home, for use as a school teaching regenerative design.

It would be “part of my mission to create change and educate people,” Mclennan said, though he stressed that no decision has been made yet on buying the property or submitting a definite proposal. A pre-application conference with the city was scheduled Dec. 3.

“We’re picking very carefully what projects we do,” he said of his new firm. “We’d love to do work in Washington state; it’s just got to be a project that’s really going to push the boundaries, because we’re not a normal

practice that’s going to compete for regular work.”

Though self-assured in his vision for cutting-edge design, Mclennan does not regard his Living Building Challenge as an elitist approach.

In fact, he contends the sustainability-focusedLBCshouldbe“the ultimate nonpartisan-based program” because it promotes energy self-sufficiencythroughrenewable sources, elimination of building materials that pose health risks, and a carbon-neutral (or better) footprint for structures whose long-term durability adds to their value. All while supporting local businesses and economies.

“I find it interesting that green building and sustainability often gets lumped and written off by half the population as, you know, that hippie green thing, without actually thinking through what it accomplishes, and what do you value,” Mclennan said.

“I can talk about this to the most left-leaning or the most right-leaning person, and say look, if you believe in what you actually say, then both sides should be doing this.”

The LBC architect acknowledges the high cost of green building is a barrier, but he draws a comparison with any new technology that’s more expensive for early adopters, then ultimately becomes more affordable as its widely used.

“We’re in that curve with living buildings where it’s early,” he said.

But he envisions more projects like the Bullitt Center shifting the mindset of developers and builders away from a quickprofit strategy to more long-term investments that achieve sustainability — and sustain profitability.

“So there’s nothing elitist about that,” Mclennan said. “It’s practical.”

tively low, but it’s labor-intensive to build the rammed earth walls.

Calculating the overall cost of using Sirewall in a project would include not having to add exterior or interior finishing materials such as siding or drywall on the “engineered sandstone” product.

The walls can be given coloration to blend with their surroundings.

“We just love the material, and we’re going to be using it a lot in our work,” said Mclennan, the founder and one of three princi-

pals in Bainbridge Island-based Mclennan Design.

Krayenhoff, who was 3 when his family moved from Holland to Canada, said Sirewall works with a number of other prominent architectural firms on buildings in European countries and other places worldwide.

“They want something they know is going to last,” he said.

“They’re thinking about buildings that last hundreds of years.”

He noted that’s a contrast with

so many builders in Canada and the U.S., where “the first question is what does it cost. They use materials that cost as little as possible, and mostly they’re toxic.”

Mclennan wants to work on changing that approach by promoting use of sustainable building materials such as Sirewall.

“It has great payback … but not everyone thinks long-term,” he said. “A lot of people think pretty short-term, which is something we have to change.”

THE WAY SOCIETY is structured, doing the right thing costs more ... because we have as a society subsidized the wrong thing and we penalize the good.”

— Jason Mclennan

eliminate power and water bills for low-income residents most in need of a financial break.

“As long as you can figure out how to pay for the upfront cost, it’s the best thing you could do long-term economically for these families,” he said. “So we’re seeing people that are getting that, and are trying to figure out how to find the resources to build better.”

Another benefit — the air quality in such buildings would help improve the health of people who live there.

“Usually affordable housing projects have terrible air quality, and over time, due to cheap materials and lack of maintenance, the quality degrades even further,” Mclennan said, resulting in problems such as mold and high rates of allergies and asthma.

“A living building will be healthier,” he said. “And the poor need it more than anyone.”

The problem he sees is that “the way society is structured, doing the right thing costs more ... because we have as a society subsidized the wrong thing and we penalize the good.”

Green is not elitist

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| December 2015 |

SCORE MENTORING | KEN SETHNEY

How can I market my business on a tiny budget?

E

very small business needs to watch expenses, whether it’s been around for 15 years or 15 minutes. When it comes to getting customers interested in your products or services, you may be tempted to spend a little more in hopes of getting a lot in return.

While it is true that a wise investment in a wellplanned marketing strategy has a better chance of succeeding than a “throw out some money and hope” approach, there are many tactics that are low in cost for time and materials, and have proven themselves to be highly effective in raising awareness.

Talk about a nearly perfect return on investment.

Here are a few.

•Networking.Word-ofmouth is the most effective form of advertising and it’s even more effective when you’re the one doing it.

Business and professional associations are great places to start, especially when they sponsor events designed to bring people together in relaxed settings.

Also, look for organizations of interest to the people you want to do business with. Though some limit participation by those outside the industry, you can usually find events that are open to potential vendors such as yourself.

• Business cards. Although technology seems to bring us even closer to a “paperless” world, the humble business card remains an indispensable way to share basic information about yourself to the people you meet. Yes, they are “old school,” but they can still work.

A distinctive paper stock or color may help it stand out, but the basics of design still apply. Be sure to include your name and title, business name, contact information, website, and — if appropriate — Twitter handle. Make sure to use high-resolution versions of any images (photo, logo, etc.) so they reproduce well.

• Volunteer. Community groups are always in need of a helping hand.

Find one that aligns with your personal interests and ask about opportunities to help. There’s usually no problem finding a niche for someone with limited time left over from running a small business.

Even helping out at a one-

Kitsap Bank receives Family Business Award Kitsap Bank is the winner of a 2015 Family Business Award from Seattle Business Magazine. The Port Orchard-based bank won in the category for large businesses with more than 200 employees in Washington state.

The magazine honored the impact and legacy of the state’s top family-run companies Nov. 24 at the Family Business Awards ceremony in Seattle. Runners-up in the large firm category included McLendon Hardware and Mutual Materials.

Kitsap Bank was founded in 1908 in Port

day event can bring you in contact with new networks and opportunities to share what you do.

Similarly, business and professional groups, including your local Chamber of Commerce, usually have roles that can be worked into your schedule in exchange for some exposure for your business. The more you do, the more people will see you as a trusted leader and someone to do business with.

• Blog. You can take your message to the world by being a regular blogger. Blogs are easy to set up and when integrated into your small business website, can serve as a conduit for people interested in your skills and knowledge. Coming up with topics is easier than you think. You’re already surfing the web and the press for trends that affect your industry or your customers; why not share and comment on them in your blog.Includingrelevantkeywords in your text will help ensureyourpostsarepicked up by search engines.

Stay away from topics that are too personal, controversial, or potentially divisive.Customersreadblogs for resources, not rants.

SCORE is a nonprofit organization with more than 12,000 volunteers who provide free, confidential business mentoring and training

workshops to small business owners. To contact Kitsap SCORE,emailkitsap@scorevolunteer.org, call 360-3281380 or visit kitsapscore.org.

Ken Sethney is a volunteer business mentor and branch manager with Kitsap SCORE. He is a former ad agency creative director and marketing coach who worked with the owners of midsizecompaniesthroughout the U.S. Contact Ken via email at ken.sethney@score volunteer.org.

18th Annual

2016 Economic Forecast 18th Annual

2016 Economic Forecast Decision Makers Breakfast

Kitsap Conference Center January 28, 2016 7:30 – 10:00 a.m.

• For help communicating with your customers, contact SCORE — Mentors toAmerica’sSmallBusiness.

Keynote Speaker: John Mitchell, PhD – 2016 Economic Forecast

Orchard, for over 93 years and three generations, the bank has been privately held by the Langer family. Through their leadership, the bank invests in the community by supporting local nonprofit and civic organizations, ranging from the arts, education and health, to economic and business development, and the environment. Over the past five years, Kitsap Bank has invested more than $2 million and over 5,200 hours in the community through sponsorships, donations and volunteer activities.

Kitsap Bank operates 21 locations throughout Western Washington, and is the 10th-largest bank based in the state, according to Puget Sound Business Journal.

Sponsorship Opportunities Available! $50 - KEDA Investor Partners $75 - Non Investor Partners $450 – Table of 10/KEDA Investor Partners $650 – Table of 10/Non KEDA Investor Partners PREMIER SPONSOR

Visit Kitsapeda.org for more information and registration or contact Theresa Mangrum (360) 377-9499 mangrum@kitsapeda.org

| December 2015 |

BUSINESS STRATEGY | DAN WEEDIN

Stop trying hard and start doing well “Do or do not, there is no try.”

B

y now you’re all familiar with the wisdom of that great Jedi Master, Yoda.

With the new Star Wars movie out this month, I thought there might be no better way to begin my column than with his out-ofthis-galaxy insight, which coincidentally is completely correct.

Here’s the problem. Too many people believe that “doing” is trying harder. You might hear an employee (or your child) exclaim, “I’m trying,” only to be met with your rejoinder to “try harder,” as if that was the magic elixir to actually doing. It’s not; it’s just a great way to find failure faster.

“Trying harder” is perilous to success. The reason is threefold: 1. Trying harder is accompanied often by desperation. The consequences of not succeeding will be met with some calamity – usually internally created by the person trying harder. Desperation leads to “pressing.” If you’ve ever played sports, you know that

“pressing” rarely leads to success because the pressure is too great.

2. Trying harder leads to taking imprudent chances. Taking risks and being bold is fine. Reaching too far by throwing the proverbial Hail Mary into the end zone regularly fails. Unlike football games, the repercussions of these attempts can have long lasting effects on confidence and performance.

3. Trying harder leads to bad habits. Instead of focusing on what does lead to “doing,” the focus is on overcoming and surviving the constant pressure. This leads to burnout, apathy and disillusionment.

So how do we get to more consistent doing? I’m glad you asked!

Here is my simple Unleashed 7-Step process to help you and your employees (and even children) eliminate “trying hard,” and get more done: 1. Relax. Really. I’ve worked with many clients that put an inordinate amount of pressure on themselves. The reality is that for the vast majority of us, we aren’t dealing with life and death. Having a healthy perspective on your business, your career and your

life is critical to relaxing and not taking yourself or your situation too seriously.

2. Focus on activities and behaviors. Lack of discipline, not lack of talent, is the main adversary to getting things done. Too many times, we focus on the end results rather than the small but necessary activities and behaviors required to reach those objectives. Focus on daily improvement and you’ll eventually surpass your original goal.

3. Change your self-talk. We are often guilty of being our worst critics. You would never accept negative and destructive language from someone else, but each of us has freely heaped it on ourselves. Influence begins from within. Have the discipline to selfcontrol to talk to yourself with motivation rather than malice.

4. Reward yourself for small achievements. In order to “do” big things, you will have needed to accomplish many little things along the way. Invest time in rewarding yourself. It can be small, but make it meaningful.

This builds confidence, promotes positive self-talk, and drives momentum.

5. Invest in yourself – Get help.

I’ve known many a “do-it-yourselfer” who wants to eschew help from anyone. These people try hard, and when things don’t work try even harder. The problem is they are trying harder doing the wrong things. The smartest people I’ve known have invested in themselves through coaching, mentoring and mastermind groups. You can’t be brilliant by yourself.

6. Be resilient in setbacks. Almost nothing gets done without a few hurdles. Projects, goals and objectives will all face some crisis, setback or calamity. Simply being able to preservere in these challenges is “doing.” You need to have the mindset to plan failures and defeats into your process, so that when they do occur, you won’t succumb. Those that are “doers” are the ones that know how to react and respond to crisis and learn from failures because they’ve planned for it.

7. Have fun. Life is too short to be burdened by anxiety and stress. I know, that’s easier said than done, right? The reality is that many people simply are trying hard because they want a better life, a better lifestyle or a better situation. This isn’t the right mindset. Instead, people need to concentrate on what they are passionate about; what brings enjoyment to their lives. Are you

OlyKraut tops all in edg3 Fund contest Staff report

An entrepreneur from Olympia whomakesfermentedveggiesthat are good for your gut was selected as the winner of the $20,000 cash prize in Kitsap Bank’s second annual “edg3 Fund” small business competition.

“OlyKraut is the result of my fascination with fermentation and my activism,” owner Sash Sunday said during her presentation at the edg3 Fund finals Nov. 12 at Kitsap Conference Center in Bremerton.

Kitsap Bank created the contest to recognize small businesses whose sustainability measures improve their communities economically, socially and environmentally.

OlyKraut has been handcrafting sauerkrauts, pickles and sipping brines since 2008. Through

their traditional preservation techniques that never include fermenting in plastic, each kraut is able to be filled with healthy probiotics like Lactobacilli. These healthy bacteria strengthen immune function, support digestion and help revitalize the body.

OlyKraut believes in growing a healthy regional food system by using locally sourced, organic ingredients and building connections with local farmers.

Sunday told the audience and the three contest judges that her business — which also was one of five finalists last year in the inaugural edg3 Fund — purchased 1,400 pounds of local produce in its first year of operation. That amounthasgrowntoabout50,000 poundsthisyearandsheexpectsit to double again in two more years.

Shesaidthe$20,000wouldhelp OlyKraut increase its production

capacity and broaden its marketing to reach new customers.

“Thank you to Kitsap Bank for helping to build a regional economy full of businesses who value social and environmental impact on par with profitability,” Sunday said. “We feel so honored to be the recipients of the edg3 Fund award.”

This year, Port Orchard-based Kitsap Bank received edg3 Fund (rhymes with hedge fund) applications from entrepreneurs throughout Western Washington in industries ranging from food/beverages and tourism to arts, education, socially responsible retail, technology, environmental conservation and agriculture. Online voting on the initial pool of entrants selected 16 semi-finalists, and five of those advanced to the final round.

This year’s other finalists were

37

having fun? If not, then it’s really easy to say you’re trying hard. It’s amazing what happens and what gets done when you’re having fun!

Here’s the deal: Trying hard has nothing to do with work ethic.

It has nothing to do with “buckling down” or pressing your “nose to the grindstone.” It’s really just an excuse for not accomplishing your goals. “Doing” is done when one focuses attention like a laser on those things that they really strive to attain, have a purpose, develop a plan, and decide that they will accomplish regardless of what stands in their way. Those that are “doers” have common denominators like boldness, confidence and perspective. They also tend not to be perfectionists. Instead they understand their skills and talents, do the best they can every day, accept that failure is part of the process, and strive to be just a little bit better every day doing what they love.

If you do all of that, you’ll stop trying hard and have time to enjoy the fruits of your doing.

• 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. You can reach him at 360-697-1058; e-mail at dan@danweedin.com or visit his web site at www.DanWeedin.com.

Sasha Sunday, owner of OlyKraut, holds her award as she is joined by other members of her company in accepting the prize at Kitsap Bank’s edg3 Fund event on Nov. 12 at the Kitsap Conference Center in Bremerton.

PHOTO BY DEE COPPOLA

Purpose Boutique in Bremerton, The Smithshyre farm in Poulsbo, Combat Flip Flops in Bellevue and Community Supported Biocycling in Seattle.

At the concluding event, the business owners gave presentations before a live audience about how they would use the prize money, and answered questions from the three judges. This year’s judges were John Eisenhauer, owner of Kombi Corp. on Bainbridge Island; David Giuliani, cofounder of Washington Business Alliance; and Jill Bamburg, presi-

dent and co-founder of Pinchot University in Seattle.

“We are extremely pleased that OlyKraut has won the $20,000 prize,” said Tony George, Kitsap Bank’s president and chief operating officer. “They are focused on making a difference in the community in a socially and environmentally responsible way. We expect great things from OlyKraut and are honored to provide them the ‘edg3’ they need to take their business to the next level in the second year of the edg3 Fund competition.”

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| December 2015 |

REGION’S ECONOMY | JOHN POWERS

Defense/military sector provides Kitsap’s economic footing

2

015 was a solid year for our local and regional economy.

Last year: employment levels reached an eight-year high; wages rose; manufacturing output reached new highs; the commercial real estate market was very active; home prices appreciated; new business formations increased; retail sales were strong; tourism enjoyed a significant rebound; healthcare expanded; intellectual property development advanced; and the core of Kitsap’s economy — the defense and military sector — grew stronger as implications of sequestration subsided, and Navy Base Kitsap’s mission was strengthened.

You can learn more about local economic strides at the Kitsap Economic Development Alliance’s 18th annual Decision Makers Breakfast and Economic Forecast Conference on Jan. 28,

from 7-10 a.m. at the Kitsap Conference Center. You may register at www.kitsapeda.org.

This past year, my monthly columns in this Business Journal were aimed primarily at current market developments relative to the private-sector component of our local and regional economy.

Topics included trade and foreign direct investment; advanced manufacturing – maritime, aerospace and sustainable products; healthcare expansion; technology growth; education, training and workforce; real estate investments; entrepreneurship and small business start-ups; and business leadership.

I start this new year of 2016 with a focus on the No. 1 sector of our local economy – the defense and military sector.

According to the Washington Military Alliance (WMA) and the Puget Sound Regional Council of governments, this sector accounts for nearly 40 percent of Kitsap’s employment base and economic output. The annual

economic impact of Naval Base Kitsap’s multiple missions and tenant commands (PSNS/IMF Bremerton, Bangor, Keyport, Naval Hospital and Manchester) is greater than $6 billion — the direct spending exceeds $2.5 billion per year.

The Department of Defense employs over 30,000 FTEs, the majority of which are highly skilled civilians engaged in the repair, maintenance, supply, and home porting of the Navy’s modern fleet.

There are also thousands of highly skilled engineers, technicians, and service providers employed by large national defense contracting firms such as Raytheon, Lockheed Martin, General Dynamics Nassco, BAE, AMSEC, and Chugach. In addition there are dozens of local businesses that support NBK’s Missions, including many with a defense legacy such as ATS, Art Anderson Associates, Paladin Data Systems, Skookum, Thermion, JPL Habitability and many, many more.

Nearly one out of three jobs in Kitsap are tied to our defense and military sector. That is why I am pleased to report that KEDA’s annual Economic Forecast Conference will feature a focused look at the current and future impact of our economic foundation — the defense and military sector — Kitsap’s No. 1 economic sector and among the top four sectors in our regional economy (aerospace, ICT, military/defense and maritime). And among the four counties that comprise our regional economy (Snohomish, King, Pierce and Kitsap), Kitsap is, on a per capita basis, far and away the leading defense economy in our region, in the state, and a leader nationally.

In addition to presenting a highly informative, timely economic forecast by John Mitchell, PhD, this year’s event also will feature a comprehensive briefing by Rear Adm. Jeffery Ruth, Commander Navy Region Northwest. Ruth will brief hundreds of community leaders from across

Kitsap and throughout our region on the Navy’s current operations in the Pacific Northwest, with a focus on Naval Base Kitsap’s multiple missions and impact on our regional economy.

In addition to the Navy commander, Kristiné Reeves, executive director of the Washington Military Alliance, will provide an update on the work of the WMA and how it partners with our Kitsap Economic Development Alliance in supporting the defense industry and working with local businesses to secure opportunities within the industry.

I wish you a Happy New Year, and invite you to join us at this year’s Economic Forecast Conference on Jan. 28, 7-10 a.m. at the Kitsap Conference Center. Register at www.kitsapeda.org.

On Kitsap!

There’s another problem.

Tips, which can amount to up to 70 percent of a server’s income, often go unreported to the IRS. In fact, the Internal Revenue Service estimates that $11 billion in tip income goes unreported each year.

As higher minimum wage laws shift servers’ income from tips to wages, that income will now be reported by employers and Uncle Sam will get his cut.

There is another underreported aspect of some new minimum wage laws: the union exemption.

Many ordinances passed to date, including SeaTac’s, specifically exempt employers from paying the higher minimum wage if they have a union contract. Many analysts believe that supporters like the powerful Service Employees International Union (SEIU) are pushing the higher minimum wage laws specifically to lever-

age employers into signing union contracts.

But union membership comes with union dues, money the unions spend to increase their political influence and power.

Bottom line: those dues come out of the workers’ pockets.

And finally, to benefit from a higher minimum wage, you must first have a job. And for many untrained young people, the $15 hourly wage is an unsurmountable barrier.

Look at it from the employer’s perspective.

The only thing that offsets the time and money it takes to train a young worker is they earn less than experienced employees.

Once they get training and experience, they can move up the ladder and command a higher salary.

Why would an employer hire an untrained, inexperienced person for $15 an hour when older, more experienced workers are pounding the pavement looking for work?

The youth unemployment rate is more than double that of adults.

Mandating higher wages will only make that situation worse.

More than half the counties in our state have unemployment rates above the national average – 184,000 people are jobless. If they can’t find work at $9.47 an hour, how will they find work at $15 an hour?

Finally, we wouldn’t be talking about mandating a higher minimum wage if the economy were in better shape. In a strong, vibrant economy, employers compete for workers with higher wages and better benefits.

The answer is not to mandate higher wages, but to free privatesector employers from crushing taxes and costly regulations so they can expand and create the good-paying jobs millions of Americans want and need.

BUSINESS COMMENTARY | DON BRUNELL

When a higher wage isn’t

T

he news is full of organized protests and street demonstrations demanding a $15 per hour minimum wage.

Several cities across the nation have passed or are considering big hikes in their minimum wage.

SeaTac was the first in our state to pass the $15 minimum wage, followed by Seattle and the University of Washington. Washington, D. C. now has the nation’s highest “state” minimum wage at $10.50, followed closely by Washington state at $9.47.

Supporters say a $15 minimum wage will improve the lives of low-wage workers and boost the economy by putting more money in their pockets to spend in the local community.

But workers may not see the promised benefit to their bottom line. Consider the restaurant industry.

Some restaurant owners subject to the higher minimum wage are banning tips on the theory that tips, which formerly supplemented low wages, are no longer necessary or appropriate. That will put a big hole in workers’ pockets.

Atlantic magazine reports that food servers in San Francisco average $13 per hour in tips, in addition to their $12.15 minimum wage. That results in a $25 hourly wage.

A national survey of 15,000 food service workers found that servers in Miami, Boston and San Francisco reported the highest mediantipsperhourataround$13.

Thelowest—around$7—werein Minneapolis, Detroit and Seattle.

• John Powers is executive director of the Kitsap Economic Development Alliance.

• Don C. Brunell is a business analyst, writer and columnist. He 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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