Kitsap Peninsula Business Journal - May 2015

May 2015 Vol. 28 No. 5

Est. 1988

An edition of the K i t sa p Su n

Room to grow

Blue Sky Woodworks at Twelve Trees is one company taking advantage of what business parks offer Page 4 Coppertop Park offers Island alternative | Page 5 Day Road properties draw outside investors | Page 9

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Business Calendar May 5, 19 and 26 Good Morning Kitsap County Come out Tuesday mornings to meet a new business professional each week for a question and answer session.

Where: Hop Jack’s, Silverdale When: 7:30-9 a.m.

Info: silverdalechamber. com May 5, 12, 19 and 26 Tuesdays@noon Workshop 90-minute workshops in marketing, finance, software and cloud computing.

Where: OfficeXpats, 403 Madison Ave. N, Bainbridge Island When: noon Info: officexpats.com

your own glass and RSVP for the event.

Where: 3450 NW Carlton St., Silverdale When: 5:24-8:03 p.m.

Cost: $10 cash Info: rsvp4silverdale greendrinks@gmail.com May 8 Brown Bag Lunch Lecture Series The topic will be “Southern Resident Killer Whales in the Salish Sea,” presented

by Susan Marie Andersson, certified marine naturalist.

Where: Waterfront Community Center, 370 Brien Dr. NE, Bainbridge Island When: 11:30 a.m.-12:30 p.m.

Cost: $3 donation May 12 Kitsap Business Forum

May 5 Kitsap Development Officers Group Meeting Josy Koumans of Thalassa Solutions Group will present “Talent Management — Improving effectiveness of your organization with an integrated approach to attracting, motivating and developing talent.” All nonprofits welcome.

Where: Poulsbo Library, 700 NE Lincoln Road, Poulsbo When: noon-1:30 p.m.

Cost: Free May 6 Contracting Coffee Hour Diana “Dee” Lasota, contracting officer with NUWC Keyport, will be leading and answering questions. Walk-ins are welcome, but registration is appreciated.

Where: KEDA, 4312 Kitsap Way #103, Bremerton When: 7:30-9 a.m.

Info: kitsapeda.org May 7 Silverdale Greendrinks Benefitting the Kitsap Regional Library Foundation. Please bring

Featuring “Business Hacks: Tricks, tips, tools and resources you’ll wish you had known sooner” with a panel of four speakers.

Where: Park Vista Senior Living, Port Orchard When: 7:30-9 a.m.

Info: kitsapbusinessforum. com May 12 Key Life Decisions: Are You Prepared?

Teresa Bryant, an Edward Jones financial advisor in Bremerton, is hosting this educational seminar. The seminar is free, but space is limited; please RSVP. Where: Bremerton City Chambers, 345 Sixth St., Suite 600, Bremerton When: 5:30 p.m.

Info: 360-373-1263 May 19 Social Security: Your Questions Answered Discussion of retirement income plans, when to start taking benefits and information about taxes.

The presentation is free, but please register.

Where: John L Scott, 9564 Silverdale Way, Suite 100, Silverdale

When: 5:30 p.m.

Info: 360-698-7408 May 20 Small Business Finance for Government Contractors This small group workshop for government contractors will provide information

Edward Jones Coffee Club on putting together line of credit and accounting systems.

Where: KEDA, 4312 Kitsap Way, #103, Bremerton When: 9-11 a.m.

Info: 360-377-9499, kitsapeda.org May 21

Power Lunch Kitsap Speaker presentation series on renewable energy and local sustainability for citizens, businesses, and policy makers.

Where: Rice Fergus Miller, 275 Fifth St., Bremerton When: 12:30-1:30 p.m Info: 360-643-3080

Edward Jones financial advisor Donald Logan hosts a coffee club every fourth Wednesday of the month. |Where: Edward Jones, 2416 NW Myhre Road, Silverdale When: 8:15 a.m.

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Also in this issue

MAY 2015 | 3

introduction | david nelson

Encouraging stories from our incubators

T • What’s the future of Bainbridge Bakers? 16 • Owner of Wig Wam Pub dies in Hawaii, 11 • Peninsula Paint adds two stores, will move one to new Bremerton site, 13 • Human Resources

columnist Julie Tappero, 23

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.

Brent Morris, Publisher brent.morris@kitsapsun.com David Nelson, Editorial Director david.nelson@kitsapsun.com Tim Kelly, Managing Editor tim.kelly@kitsapsun.com editor@kpbj.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 360-7925247 or hugh.hirata@kitsapsun.com.

To advertise in the Kitsap Peninsula Business Journal, contact Michael Stevens at 360-7923350.

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. 5

he sunny local job numbers reported by Kitsap Sun business reporter Tad Sooter recently had a distinctly 2008 feel to them. That’s because we’re back at a level of employment not seen in seven years, according to first-quarter stats.

That means an average of more than 86,000 jobs, including 2 percent growth in private employment from a year ago and 4 percent in government jobs, mostly federal.

The housing market seems the same — pending sales for March up 23 percent from 2014, and closed sales up 35 percent, and a bump of $10,000 in the median sales price from a year ago. And on top of that, it’s nearly impossible to find an apartment — the vacancy rate is less than 3 percent on average across the county, making this one of the tightest rental markets in the state, and average rents are up 7 percent.

Whatever the reason reviving some indicators to pre-recession levels, it looks like there’s reason for optimism if you run a customer-facing business. That’s why this edition’s look at emerging business was interesting to me. We’ve heard often about the county’s strengths and oppor-

tunities — manufacturing, aerospace, military contracting — but the cover story on business parks focused on something that can go unnoticed.

Business and industrial parks don’t occupy downtown, they’re out of the way places where few retail customers ever arrive. The role they play as incubators is an underestimated part of our economy, and I think the article shows some real success from small businesses and manufacturers using such parks.

A story from one of the companies profiled didn’t make it into this edition’s story, but I’ll quickly share: A new company had never worked with a business park, and noticed the rent was 30 to 40 percent higher than buildings elsewhere. But the owners were convinced because of a few park offerings — a state-of-the-art fire suppression system already in place allowed them to safely stock more inventory, better freight access with existing loading docks, and the park’s flexibility with building sizes that subsequently allowed for rapid growth when the business expanded.

It’s obviously important to stay focused on our region’s growth areas that are often praised, whether marine manufacturing, aerospace or military contracting.

But the lesson from the recession was that fundamentals can change — housing bubble, anyone?

The numbers I mentioned at the start give some comfort that our local economy is recovering. And chasing the main future business drivers, as groups like KEDA continually focus on, is the right course. But the underpinning growth coming from out-of-the-way places is just as important. That story is emerging, and encouraging.

• David Nelson is editor of the Kitsap Sun and editorial director of the Kitsap Peninsula Business Journal.

on the cover David Cox moved his company, Blue Sky Woodworks, from its longtime Bainbridge Island location to Twelve Trees Business Park near Poulsbo last year. The company employs about 30 people and Cox said they needed more shop space. Blue Sky makes custom cabinetry and display cases for cosmetics departments at major upscale retailers across the U.S. and in Canada.

Story, page 9 (Meegan M. Reid photo)

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growth & expansion

Business parks’ flexible spaces fit companies ready to grow

By Tim Kelly KPBJ editor Two of the region’s largest business/industrial parks don’t quite manifest the model their developers envisioned when the projects were planned. However, they adapted in different ways to changing market demand for such sites, and both Twelve Trees near Poulsbo and Coppertop Park on Bainbridge Island are virtually full today.

Those business parks became successful businesses because they have flexible spaces that accommodate the needs of companies when they’re ready to buy or lease a building that suits their needs, and when they subsequently need to expand or downsize.

A good example at Twelve Trees is furniture maker Watson, the largest non-military manufacturer in Kitsap County. The company added about 20,000 square feet to their plant a few years ago, and Watson could expand a lot more on the site they’ve occupied for more than a decade.

“They can more than triple their size where they are — the infrastructure’s in the ground,” said Mark Salo, president of Apanage Corp., which built and manages the business park that opened in 1990. “That’s been the success of Twelve Trees … it’s all designed for flexibility, because the small market (like Kitsap) works differ-

ently than a big market.”

Coppertop developer Doug Nelson, owner of the American Property real estate brokerage on Bainbridge, said his original concept was to build warehouse-style structures with rollup doors, expecting to draw contractors and construction-related businesses to the 7-acre site on Sportsman Park Road. However, it turned out there was considerable interest from owners of other types of businesses who were seeking a more affordable alternative to the pricey downtown Winslow area.

“This leasing light industrial space is really a small market. Not very many widget builders in Kitsap County.”

Mark Salo, president of Apanage Corp. that developed Twelve Trees “Some of our higher-end tenants were so frustrated with Winslow, they said if you’ll spiff up your (buildings), we’ll lease space,” Nelson said.

The spiff-up investment is evident all the way up to the bright

Twelve Trees: Incremental growth

By Tim Kelly KPBJ editor At Twelve Trees Business Park — which was started with “a horrible business plan,” according to Mark Salo — success came through incremental growth since the park opened in 1990.

“We had all kinds of ideas early on, but we just have to service the market that’s here,” Salo said.

“We incubate companies, but we don’t make entrepreneurs,” he added.

In those early days of developing the park, Apanage anticipated businesses leaving or expand-

ing from the Seattle metro area for affordable property in Kitsap.

“We thought for years we were getting ready to accommodate a push from the Seattle side,” he recalled. “It didn’t happen; isn’t going to happen.”

A lot of companies at Twelve Trees, both large and small, are there because the owners are from the area and started their businesses here.

“Watson furniture came here because Cliff (McKenzie, company CEO) was on Bainbridge Island,” Salo said, and it was a similar situation with the family that owned the orthotics and

metal roofs on the buildings, which gave rise to the park’s descriptive name. The development opened in 2005 as Sportsman Park, but Nelson eventually changed the name to reflect the widely used “coppertop” moniker for the site.

Coppertop has nine buildings and is adding more on the remaining space at the park. The park will operate a storage unit rental business in part of the planned 53,000-square-foot addition, but much of it is planned as storage and warehouse space for businesses at Coppertop, such as a refrigerated storage room for Bainbridge Island Brewing.

“We’re building it mostly to support the tenants we have in our existing park,” Nelson said.

The much larger Twelve Trees park still has considerable open land with infrastructure in place for new buildings on the site’s 100-plus acres, which were amassed gradually by acquiring small parcels of adjoining land over the years. But Salo said additional construction will happen only when there’s a demand for it.

“This leasing light industrial space is really a small market,” and heavily influenced by the region’s extensive Navy operations, Salo said. “Not very many widget builders in Kitsap County.”

The situation’s a little different on Bainbridge Island, where it’s not widgets but legal weed see business parks | 7

• Coppertop Park, p. 5 • Day Road, p. 8 prosthetics company that was acquired by Trulife 10 years ago.

“So it’s local entrepreneurs, and then larger corporations that happen to be doing something here” — likely something related to the area’s naval bases and Bremerton shipyard.

A military contractor, Vitro, was the first tenant at Twelve Trees, occupying a 76,000-square-foot building that Salo said was the largest non-military industrial building in the county at the time. see twelve trees | 5

companies in kitsap business parks Business: Chowren Toys Location: Twelve Trees Business Park, North Kitsap Footprint: 11,000 square feet What they do: Sell new and vintage LEGO sets through an online store.

A faceless warehouse in Twelve Trees Business Park contains a child’s paradise.

Shelves inside the Chowren Toys storeroom are stacked floor to ceiling with Lego sets, everything from the newest releases to vintage collectibles.

The authorized LEGO dealer sells exclusively through its online store, and business has been good. Chowren Toys recently expanded into an additional 5,000-squarefoot space.

The warehouse is a far cry from the garage where brothers Jack and Jason Chow first started selling sets to finance their LEGO obsession.

“Honestly, it was never our intention to start this business,” Jack said. “As the years went on our sales

and inventory expanded to where we felt we could no longer treat it or operate it as a hobby.”

Chowren Toys is among the growing ranks of e-commerce companies in Kitsap. The number of businesses and individuals selling goods online roughly doubled between 2008 and 2013, according to Department of Revenue statistics.

The Chow brothers have considered opening a traditional retail shop to market their LEGOs. For now, they’re enjoying the flexibility afforded by an online-only business.

“Our working schedule has always revolved around our children’s schedule and it still does,” Jack said.

For more information, go to www.chowrentoys.com.

Business: SAFE Boats International Location: Olympic View Industrial Park, Bremerton Footprint: Roughly 90,000 square feet and 3.5 acres of industrial land.

What they do: Build boats for military and security forces.

boats completed this spring.

Since its founding two decades ago, SAFE Boats has grown into a global player, pulling down big contracts with defense forces in the U.S. and around the world.

The manufacturer builds all its small patrol boats in the Port of Bremerton’s Olympic View Industrial Park, where it is easily the largest tenant. About 200 employees work in SAFE Boats’ Bremerton plant.

The company started in one taped-off corner of an Olympic View warehouse.

As demand for its vessels grew, SAFE Boats took over the warehouse and

The Tunisian Navy patrols more than 700 miles of Mediterranean coastline.

Many of the boats the African nation employs in that rugged mission were built in a Bremerton industrial park.

SAFE Boats International has shipped more than 20 vessels to the Tunisian Navy, including two 65-foot patrol

see companies | 6

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MAY 2015 | 5

Coppertop: Winslow alternative

By Tim Kelly KPBJ editor What do a ballet studio, a microbrewery, and an acupuncturist have in common?

They’re neighbors and tenants at Coppertop Park, a business park who’s newest tenant isn’t a business — the Boys & Girls Club of Bainbridge Island.

The youth organization is movt w elv e tr ee s | f rom 4

That original building is now owned by Trulife, which is a global corporation, but the company it acquired at Twelve Trees illustrates how the business park accommodates expansion needs.

“Our initial lease negotiations with them were for 1,500 square feet, and they topped out at like 106,000, through incremental growth,” Salo said.

The leased buildings at the park “are designed and built for a long life with multiple tenants moving in and out, and a variety of unit mixes.”

Trulife no longer occupies the two additional leased buildings it had expanded into, but it’s still one of the larger operations at Twelve Trees.

Salo said Trulife’s purchase of that building a couple years ago was the only time Twelve Trees has sold one of its leased buildings to a tenant.

Apanage hasn’t built a for-lease building at the park since 2003. Current tenants there are Dahl Glass, a third-generation family business that was based in Silverdale for decades; and Blue Sky Woodworks, a 25-employee company that started on Bainbridge Island and makes custom retail casework and cabinetry for national cosmetics retailers.

The tenant with the longest lease history at Twelve Trees is Wärtsilä Defense Inc., a U.S. subsidiary of a global marine engineering firm. The building Wärtsilä has leased for more than 20 years was expanded in 2008 to double its size; it’s big enough for the company’s two 50ton bridge cranes used in

ing in May into part of a building previously used as storage space for Storyville Coffee.

Storyville is one of the largest Coppertop tenants, along with New Motion Physical Therapy and Island Rock Gym. It leases an entire building that houses a roasting facility — or gallery, as its described on the company website — that supplies Storysee coppertop | 7

repairing ship and submarine propellors.

More of the buildings in the park were built for companies that want to own their own facility, Salo noted, such as Vici, a company that needed “a really high-end building” where it makes products used in chemical testing.

With infrastructure and permits already in place, Apanage has been able to start and complete construction quickly when a company is ready to buy a site at Twelve Trees.

Although Apanage is no longer buying more land or adding infrastructure, Salo said the company plans to build out the rest of the business park.

“The five divisions will support about 1 million square feet, and there’s about 600,000 that’s been built,” he said.

That’s a notable achievement, considering the long struggle to get the project developed and then market the location.

“When we started, we couldn’t even get realtors to come to the site and look at what we were doing, and now it’s got its own name and reputation,” Salo said.

He adds with surprising candor that “this was a horrible business plan, but we made it work.”

There was no breakthrough that cemented the project’s success; it’s been gradual growth over the years as the park proved to be a good fit for businesses with local roots that were ready to move out of an entrepreneur’s garage and then continued expanding.

“Kitsap County is unique,” Salo said, “and the growth that has happened here has been indigenous — it’s from here, people who live here.”

TIM KELLY

Coppertop Park on Bainbridge Island is home to a diverse mix of businesses.

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growth & expansion

companies in kitsap business parks com pa n i e s | f rom 4

spilled over into additional buildings.

The two boats it completed for Tunisia this year were assembled in temporary hangars outside the main plant.

SAFE Boats recently opened a satellite facility at the Port of Tacoma to fulfill an order of larger patrol boats for the U.S. Navy. Executives considered consolidating operations in Tacoma. Instead they decided to extend the company’s leases in Olympic View, after the port agreed to more flexible terms and a sizable discount on rent.

“We’ve had a great relationship with the Port of Bremerton,” SAFE Boats CEO Dennis Morris said.

SAFE Boats now pays the port about $300,000 per year in rent.

For more information, go to www. safeboats.com.

Kitsap County Industrial Parks 1

South Kitsap Industrial Area (SKIA) (Including Olympic View Industrial Park)

2

Port Orchard Airport (Gig Harbor North Industrial Park)

3

Port Orchard Industrial Park

4

West Hills/Wright Creek

5

Newberry/Dickey/El Dorado Area

6

Twelve Trees Business Park

7

Bond Road Business Parks (Calvary Business Park; Arbor Business Park; Kennedy Business Park)

8

Port Madison Enterprises Property (Agate Pass Business Park)

9

Day Road Industrial Parks

Hansville

6

10 Sportsman Park

7

Edmonds

8

9 10 5

4

Industrial/Manufacturing Zoning or Industrial Park

SKIA

For more information, contact the

Kitsap Economic Development Alliance www.kitsapeda.org or 360-377-9499

Business: NET Systems Inc. Location: Day Road industrial area, Bainbridge Island Footprint: Roughly 46,000 square feet of building space on 10 acres.

What they do: Manufacture net systems for the commercial fishing industry.

NET Systems (officially Nor’Eastern Trawl Systems) was founded on Bainbridge in 1978, at a time when the U.S. commercial fishing fleet was exploding in size.

The manufacturer built its reputation on not just making nets, but fully outfitted net systems with all the hardware needed for fishing.

As tighter quotas forced consolidation in the fishing industry

over the following decades, NET Systems introduced products that would allow boats to fish more efficiently, with less environmental impact.

“We’re still innovative, and we’re always looking for more efficient gear, but it’s a different pace,” company president Dan Oliver said. “Now it’s, ‘I know how much I’m going to catch, how can I do it smarter?’”

The company’s signature product is a knotless netting woven by massive, automated looms inside its Day Road net factory. The knotless netting is stronger than traditional knotted netting, making it less likely to distort and break.

NET Systems is tapping into new markets this year after taking over see companies | 7

West Seattle Ferry

3

2 2 Map provided by the Sun Newspaper

Stirrett Johnsen expanding into warehouse near Twelve Trees park

By Tim Kelly KPBJ editor The newest arrival on the Twelve Trees scene isn’t actually in the Twelve Trees Business Park, but mechanical contractor Stirrett Johnsen Inc. is expanding into a nearby building for many of the same benefits the business park offers.

Silverdale-based Stirrett Johnsen paid $1.69 million earlier this year for a 22,000-square-foot building on Twelve Trees Lane that had previously housed Ferguson Enterprises, a plumbing supplies company that moved to Silverdale.

Company president Steve Stirrett said the company is doing a lot of work for large multi-unit buildings.

“We’re involved with four of the Amazon buildings in Seattle right now,” he said.

The Twelve Trees warehouse will provide more storage for mechanical systems before they’re shipped from Stirrett Johnsen’s Silverdale fabrication plant to job sites.

“We’re building more and more of our jobs off-site, and taking more assemblies to sites,” he said. “We need to build ahead, so we needed more room to store product. see stirrett | 9

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MAY 2015 | 7

companies in business/industrial parks com pa n i e s | f rom 6

over the seine net division of MARCO Global, a Seattle fishing equipment maker. The acquisition will allow NET Systems extend its reach in the sprawling purse seine industry.

The manufacturer employs about 60 people at its Day Road facility. Work

is divided among three divisions: the net factory, which churns out the netting material; the net loft, where workers shape and assemble nets; and the steel shop, which produces metal hardware for the finished net systems.

For more information, go to www. net-sys.com.

Business: Nine Point Growth Industries Location: West Hills industrial area, Bremerton Footprint: 4,000 square feet

TIM KELLY

Bainbridge Island Brewing operates its production brewery and a public taproom at Coppertop Park.

What they do: Grow and package cannabis for recreational marijuana stores.

Long before the first recreational marijuana business licenses were issued in Washington last year, pot entrepreneurs were scrambling to find locations where they could legally set up shop.

A combination of state rules, including a 1,000-foot buffer area around many public gathering areas, and local land use codes, weeded out a large number of available commercial properties in the county.

Even in areas where marijuana businesses were allowed, landlords were often hesitant to take a risk on the new industry.

“I went through two months of property owners basically telling me to get off their property,” said Gregory Stewart, founder of Nine Point Growth Industries in Bremerton. “Then business owners started to realize what the future might look like and what the opportunities could be.”

Stewart, who was awarded the second marijuana producer license issued by the state, eventually found an amenable landlord offering warehouse space in the West Hills industrial area on the outskirts of Bremerton.

busi n e s s pa r k s | f rom 4

that will be produced by a new business setting up in Day Road Industrial Park. A group of out-of-state investors purchased a building there at twice its assessed value and will be the landlord for two separate marijuana businesses — one is a grower/processor (that’s already operating ??), and the other will be the island’s only recreational marijuana retailer when it opens this summer.

“We do have our taproom for a retail component, but we are very much an industrial operation.”

Bainbridge Island Brewing co-owner Russell Everett Other marijuana growers approved in the county have landed in industrial and business parks out of necessity. County and municipal codes adopted during Initiative 502 implementation funneled marijuana producers and processors into those areas.

On Bainbridge Island, the City Council voted to allow marijuana businesses in the industrial area along Day Road. Buffers around schools and parks effectively eliminated all but a sliver of the available land.

New York-based developers scooped up one parcel in the marijuanafriendly zone on Day Road last summer for $1.3 million, roughly double the property’s assessed value. The developers remodeled an existing building to accommodate a grower and a retailer. So far one grower, a business called Way Kool, has been approved for the site.

Other marijuana growers and processors have set up shop near Bremerton National Airport, off Mile Hill Road in South Kitsap, Clear Creek Road in Central Kitsap and Stottlemeyer Road in North Kitsap.

The Kitsap region has other designated business/industrial parks that are mostly undeveloped land, such as Olympic Property Group’s Wright Business Park in Bremerton, pad-ready sites in the Port of Bremerton’s Olympic View Industrial Park as well as 3,700 acres around the airport planned for development in the portowned Puget Sound Industrial Center– Bremerton (formerly SKIA), and an area called Cara Creek adjacent to the Port Orchard Industrial Park.

coppertop | f rom 5

ville’s online gourmet coffee bean sales and its three Seattle coffeeshops that opened in the past year and a half.

“It’s such a diverse crowd we’ve got here,” said Doug Nelson, the business park developer whose American Property real estate office is at Coppertop.

Getting a zoning change to allow offices as well as light industrial uses was key to bringing in a mix of businesses at the park, which opened in 2005.

“Bainbridge Island isn’the most friendly for business parks; the zoning is fairly restrictive,” Nelson said. “They want anything that has any activity to be in downtown Winslow.”

However, Coppertop has attracted tenants that relocated from Winslow, including New Motion Physical Therapy, Fire Dragon Acupuncture & Massage, and Island Health & Chiropractic.

“This kind of grew up into a commercial district, and I think it surprised the city of Bainbridge that there was a demand for something like this,” Nelson said.

The park’s advantages that appeal to a variety of businesses, he said, are ample parking, convenient access to State Route 305, and flexible spaces that can be configured to meet a tenant’s needs.

Also, the rents are less than what’s charged for Winslow spaces, “so tenants can have a little larger space, and invest the extra money back into their business,” he said.

Coppertop has buildings that can accommodate Island Rock Gym’s 38-foot climbing wall, and that allow tenants like Bainbridge Island Brewing to combine different business operations.

“We do have our taproom for a retail component, but we are very much an industrial

TIM KELLY

Island Rock Gym’s location at Coppertop Park is spacious enough for a 38-foot-high climbing wall. operation,” said Russell Everett, the brewer and co-owner with his father, Charles Everett. “From a pure retail perspective, it would be great to be on Winslow, but we have the manufacturing aspect as well. We need a bigger space with industrial (lease) rates, and higher ceilings.” see coppertop | 8

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growth & expansion

Day Road: Outside investors

By Tim Kelly KPBJ editor The industrial areas off Day Road on Bainbridge Island are going through some changes in ownership and tenants, with investors from off the island and out of state acquiring property there.

The Bainbridge Business Park, a site that includes three buildings with a total of about 50,000 square feet of space, is being purchased by Azose Commercial Properties of Mercer Island.

“We have it under contract,” CEO David Azose said, although he explained that the company’s financing for the deal won’t be approved until a tenant running a marijuana-related business moves out.

That tenant is Cannatest, a small business that does marijuana testing for medical cannabis dispensaries. Cannatest predates Initiative 502 that legalized recreational marijuana in Washington, and the business does not grow, process or sell marijuana; it only tests medical marijuana samples for potency and other factors.

Azose said Cannatest’s lease at the business park expires at the end of May, and the sale of the business park won’t close until sometime this summer.

Azose Commercial owns other light industrial property nearby

— three buildings at 8040 Day Road next to manufacturer Net Systems.

“We’ve become attractive even to (investors) from out of the area,” noted Sheri Watson, a commercial real estate broker who’s handled the transactions of many Bainbridge properties, including some that were originally owned by Watson furniture company. Her father was a founder of the company, which now has a large plant and corporate office in Twelve Trees Business Park near Poulsbo.

A fourth building Azose owned at the 8040 Day Road site was sold last August for $1.3 million to MAKH Properties LLC, a group of New York investors.

The building is about 8,800 square feet and its valuation was about $650,000 in Kitsap County Assessor’s records for 2015.

“Day Road in general is a pretty healthy area,” Watson said, “but it’s still challenging for small businesses; (lease) prices are going to be stiff.”

The rent that properties in the area can command is what’s drawing investor interest.

“There’s not a lot of industrialzoned property on Bainbridge Island, so there’s a lack of a lot of available property,” David Azose said. “The rents per square foot are actually surprisingly high in relation to other industrial areas

Undeveloped parks: Pad-ready

By Tim Kelly KPBJ editor The largest area of undeveloped land available for industrial development in Kitsap County is at the Port of Bremerton. The port’s Olympic View Industrial Park has 11 pad-ready sites of 1 to 2 acres.

Just like other undeveloped business park areas, though, the pads may be ready but prospecWright Creek Business Park in West Bremerton is one of several undeveloped sites for business or industrial parks in Kitsap County. tim kelly

tive owner-builders are not.

“In the last six months we’ve probably had a dozen people who have approached us about different projects,” Port of Bremerton CEO Jim Rothlin said. “They’re just kind of trying to gauge what’s out there, which is typical as you see the economy start to turn a little bit.”

If a company decides it wants to set up shop, the port’s ready to ac-

like Tukwila and the Kent Valley.”

The investors who are becoming landlords may be from outside, but their tenants are mostly local, rather than businesses relocating to the area.

“A lot of our tenants are people who chose to live on Bainbridge Island, and they could’ve lived anyplace,” Azose said. “They have businesses, and since they chose to live on Bainbridge, they want to have a location close to where they live.”

State corporation registration lists three LLCs from New York as partners in MAKH Properties, along with BI Day Properties LLC of Bainbridge Island.

The principal in BI Day Properties is Steven Kessler, although

he has no ownership stake in the 8040 Day Road building; he and Brendan Hill, Kessler’s partner in Saltese LLC, are leasing space in the building for a statelicensed retail marijuana store.

Azose said he sold one of his four buildings at 8040 Day Road last summer after the previous longtime tenant, Blue Sky Woodworks, moved out last year to relocate to Twelve Trees. That was around the time the state began issuing licenses for recreational marijuana businesses, and Azose said he was inundated with offers for his vacant building because it was in the only Bainbridge area where zoning allows marijuana businesses.

Bainbridge can only have one

licensed retail shop. Kessler said he and Hill applied, but they are now partners with the applicant who got the coveted top spot in a lottery for the single license.

That person wants to be a silent partner in the marijuana store, which Kessler said will be called Paper & Lease.

“We’re just waiting for our final walkthrough from (the state Liquor Control Board) to get our license,” he said in late April. “We hope to be licensed and open by June.”

Kessler has operated a pet training service on the island called The Brooklyn Dog Whisperer, but is focused now on getting his new business going.

“Both Brendan and I live on the island, we have kids on the island, and we felt it was very important that folks like us open this store,” he said. “Our entire business model is about making this legitimate.”

Most of the space in the building is leased to a licensed marijuana-growing business called Way Kool, Inc. State regulations do not allow a retail licensee to also be licensed as a grower or processor, but Way Kool and Kessler’s retail shop are separately owned businesses so they can operate in different parts of the building with separate entrances.

Way Kool’s registered owner is Lonnie Lamprecht of Sequim, who operates a real estate data business. He did not return calls seeking comment for this article.

commodate them.

“We’ve got these pads, and if somebody wants to go we can throw these buildings up, we can put them up in eight to 12 weeks,” Rothlin said.

It’s a similar situation at Wright Creek Business Park — nine padready lots from 20,000 to 80,000 square feet are for sale on land in Bremerton owned by Olympic Property Group. It’s next to the site that once was planned for a large housing development.

“We can supply a turnkey build-

ing,” said Greg Millerd, the realtor marketing the OPG property.

Mark Walsh, VP for real estate development at OPG, said the company recently reduced the price on the Wright Creek lots by about 20 percent.

“We’ll see if that generates results or not,” Walsh said. “The problem is there’s a lot of older (buildings) we’re still competing with that’s a lot cheaper.

OPG also has a business park site that’s part of its Harbor Hill development in Gig Harbor.

The city had hoped to see a corporate campus on the original 120-acre site, but that didn’t happen. Instead, much of the site has been rezoned and developed for retail and other amenities for the Harbor Hill residential area.

OPG has 11.5 acres left for a potential business park, but “we’ve found no interest really,” project manager John Chadwell said.

“The Gig Harbor office market is perhaps oversupplied right now.

There’s vacant space in many office buildings here.”

coppertop | f rom 7

on the patio outside.

Across the parking lot, Metro Market Catering operates a commercial kitchen for its main business, but also uses part of its space for a café.

Storyville has gone that direction as well. It held a grand opening April 25 for the new coffee shop in its Coppertop building.

The company had planned to open a coffee shop in a promi-

nent retail building on Winslow that it bought in 2011, but the site has remained vacant and Storyville recently put it up for sale.

Nelson is marketing the property for Storyville, and he said a deal could be completed in a few weeks. Once the Winslow building is sold, it’s likely to be shared by multiple shops, he said.

Tim Kelly

This building in the Day Road Industrial Park on Bainbridge Island was sold for $1.3 million last year to a New York investment group that is leasing it to a marijuana-growing business and a retail marijuana shop that plans to open in June.

About two-thirds of their space is utilized for the brewing operation, but the streetfront taproom is integrated with the shiny tanks in the back to create an attractive setting. The family-friendly taproom has become a popular gathering spot on the island and hosts live music regularly, and occasionally has food vendors set up

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MAY 2015 | 9

Blue Sky a good fit in Twelve Trees Company relocated from Bainbridge for more space in business park to build high-end cosmetics counters

By Tim Kelly KPBJ editor He’s not exactly an exile, but last year David Cox joined the ranks of Bainbridge Island business owners who moved their manufacturing operations off the island to Twelve Trees Business Park near Poulsbo.

Cox said he relocated Blue Sky Woodworks because the Day Road Industrial Park site where he’d had his company for 23 years got too expensive to lease.

Blue Sky, which makes custom cabinetry and display cases for the cosmetics industry, was leasing two buildings on the Day Road property that Azose Commercial Properties bought a few years ago.

“The new owner kind of forced my hand when they decided to increase my rent substantially,” Cox said.

The company also needed more room, preferably under one roof, and Cox had considered buying a building or possibly erecting his own on property he owns on Bond Road in Poulsbo. He’d been looking for another place for a year or so before finding a suitable site at Twelve Trees.

Blue Sky set up shop at its new location last May, leasing 20,000 square feet of space in a 55,000-squarefoot building that’s about 10 years old.

“It was just a warehouse, and we had to put in a lot sti r r ett | f rom 6

We’re building and staging.”

It will be a couple more months before the company is set up in the Twelve Trees building, but Stirrett said the warehouse meets their needs and the property is easily accessible.

of infrastructure,” Cox said. “But once we did it, I wished we would’ve done it years ago.”

At Twelve Trees, there’s more shop space for Blue Sky in a newer, higherquality building, Cox noted — and it doesn’t require running propane heaters during the winter.

“I wanted to get out of (Day Road), and for about same amount of money we have 40 percent more building here,” he said. “In comparison it’s a much better facility.”

Mark Salo, president of Apanage Corp. that developed Twelve Trees, grew up in the same Bainbridge neighborhood as Cox. He’s pleased to have him as a tenant now.

“It’s a very exciting company,” Salo said of Blue Sky. “The companies that I find exciting are the ones that make products here and put ’em on Highway 3 and send them somewhere else. Actual family-wage manufacturing.”

Cox started his cabinetry business in the 1980s by converting a daylight basement to a workshop in the small beach house where he lived on Bainbridge.

A contact he made while working as a union carpenter on construction of the Kitsap Mall led to his first contract to make display cases for Bon Marche stores — even though he hadn’t built anything like that before.

“I figured it out,” he said.

“There are not a lot of buildings like that, that have that kind of access and storage capacity. It was literally the only one like it we could find on market,” Stirrett said.

“That lot has 3 acres of level paved parking, and your’re just not going to find that. You can get a lot of utility out of that.”

MEEGAN M. REID

Blue Sky Woodworks cabinet assembler David Tangen removes a light panel as he works on a cabinet destined for a Macy’s store in Chicago that will display Viktor & Rolf Flowerbomb fragrance.

“I remember going out to the Southcenter Mall Bon store (in Seattle) with a tape measure and a tablet, taking notes,” — and that was an old-school paper tablet, not an iPad-style tablet computer.

Today Blue Sky has about 30 employees, and the company makes custom-ordered cosmetics counters that are shipped to stores such as Nordstroms, Macy’s, Saks and Neiman Marcus all over

the U.S. and Canada, where Hudson Bay Co. is a major client.

Cox, who said they rarely do work for Washington stores anymore, sends one or two employees to supervise locally hired sub-con-

tractors for installation at the stores.

Cox handles sales, bidding jobs and meeting with clients, and the former carpenter is conversant in top-selling fragrances.

“We’re just finishing a big project for Chanel at Macy’s on State Street, in an old historic building in Chicago,” he said.

“We did another project in the same store for a brand called Viktor & Rolf’s Flowerbomb.”

Even though Blue Sky has kept busy building counters for stores as far away as Puerto Rico, Cox said the move to their facility at Twelve Trees has made the operation more efficient and positioned for future expansion.

“We would like to someday if we need more space, and this (building) offers that option,” he said.

“We’re kind of in a position now where I feel like we’re growing again. Just by moving here we were able grow, and to me that’s a real plus.”

10 |MAY 2015

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Developer starts conversation about revamping Gig Harbor center Olympic Property Group interested in 6-acre retail site with 7 Seas brewery

By Charlee Glock-Jackson For KPBJ There may be big changes in store for the Peninsula Shopping Center on Uddenberg Lane.

Or maybe there won’t be.

That’s what Olympia Property Group wants to learn from two community meetings about the future of the 6-acre shopping center that’s been a downtown Gig Harbor fixture for more than half a century.

The site is currently the home of 7 Seas Brewing, the post office, a Columbia Bank branch, a flower shop, restaurants and several other small, locally owned retail businesses.

There are also several vacant spaces where Rexall Drug and, most recently, Ace Hardware used to be.

The shopping center was purchased in 2011 by the Milgard family after QFC closed its downtown supermarket and sold the property.

According to Jon Rose, president of OPG, his company has had its eye on the shopping center for several months.

OPG, which is part of Pope Resources, has owned and developed hundreds of acres of land in Gig Harbor North, where OPG brought in Costco, the YMCA and large residential developments, and it will soon break ground for Herons Key, an upscale retirement center.

“We approached the Milgards about the possibility of at least helping them gather information from the community about what could be done at Peninsula Shopping Center,” Rose said.

To that end, OPG and the Milgards will hold two public meetings to learn what the people of Gig Harbor would like to see happen at the site. The first was held April 28 and the second was scheduled for May 7 at the Inn at Gig Harbor.

OPG will present a couple of tentative ideas about what a new version of the shopping center might include. Rose emphasized OPG’s drawings will be “just ideas. They are not actual plans in any sense,” he said. “They’re just a way to start a conversation and get people talking and thinking about what they want to see happen there.”

One concept that’s being considered is a mixed-use complex that includes residential and retail.

“Maybe there could be some condos or apartments in addition to restaurants and retail shops,” Rose said. “There’s a synergy to adding residential to the downtown area.”

“The post office end especially is pretty run down and it would be great to have it fixed up.”

Michelle Barnes, store owner at Peninsula Shopping Center Much has changed in downtown Gig Harbor since the shopping center was built back in the 1950s.

It was built to be close to where much of the population lived at the time.

“But the dynamics of retailing have changed over the past 60 years and Gig Harbor has grown, and we think it’s important to find out what the people of Gig Harbor want in their downtown today,” Rose said.

He also said that because the property is nearly 6 acres in an area where most lots are a quarteracre or less, “… what happens here can have a big impact on the future of downtown. This is a chance to influence the future of Gig Harbor in a thoughtful, systematic way, rather than one small

property at a time,” as currently happens.

In March, OPG representatives met with all the tenants of the shopping center. A few of the businesses, such as Columbia Bank and 7 Seas Brewing, have long-term leases.

Others, such as Charlie Barnes children’s store and Gig Harbor Copy &

Mail, have short-term agreements. According to Michelle Barnes, owner of Charlie Barnes, OPG presented the tenants with several possible scenarios of what might be done.

Barnes said she is in favor of the project, “and I’m hoping that the community can see it with open eyes and an open heart. Some-

thing definitely needs to be done and in a timely manner.”

One of the possible scenarios presented at the tenant meeting was to level the entire complex to add more downtown parking. That idea didn’t sit well with the anyone.

Most of the other options focused keeping the bank

end of the property as is and redoing the area north of 7 Seas from the flower shop to the post office, Barnes said.

“The one that was sort of the fan favorite was a drawing that included some green space that would enliven and imSee dev eloper | 30

prove the area and bring

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MAY 2015 | 11

Gorst pub owner dies during swimming event in Hawaii could devote more time to it. It will proceed, though it won’t be the same.

“He was a great guy, the life of the party,” Wood said. “When he showed up, the room brightened.

“It’s going to be really hard to replace him, probably not in this lifetime.”

Well-wishers have crowded the Wig Wam since

LARRY STEAGALL / KITSAP SUN FILE

Wig Wam Pub co-owner Eric Sweet is shown talking with customers in 2012 after he and partner George Wood reopened the longtime tavern in Gorst.

By Ed Friedrich Kitsap Sun Erik Sweet never got to open his brewery.

Sweet, 44, a Navy officer and co-owner of Wig Wam Pub in Gorst, drowned April 26 while participating in a biathlon in Hawaii.

The Texas native served 26½ years in the Navy, enlisting at 17. A lieutenant commander, Sweet’s last stint was as ship maintenance officer aboard Bremerton-based aircraft carrier USS John C. Stennis. His official retirement date was May 1, though the ceremony was held March 6 on the ship.

Sweet’s wife, Cmdr. Linda Seymour, is commanding officer of the destroyer USS Halsey in Pearl Harbor. The two were participating in the Kailua Dash & Splash Biathlon.

Sweet encouraged Seymour to go ahead of him because she’d been working out more and he didn’t want to hold her back. He ran 2.8 miles without problems but struggled with the 800-meter swim.

Lifeguards asked whether he needed help. He said yes, and they pulled him into the boat and rushed him to an ambulance. Af-

ter 45 minutes of CPR, he was pronounced dead. The Honolulu medical examiner’s office determined the cause to be drowning.

Sweet and business partner George Wood bought the Wig Wam late in 2011 with no intention of operating a pub. They wanted to start a brewery.

As they were cleaning the building, people stopped and asked whether they were opening the old tavern. They decided they would, and Sweet’s dad, Mike Sweet, moved from Texas to manage it. Meanwhile, Erik and Woods were building a brewery behind it.

“That was his passion,” Mike Sweet said. “When he got out (of the Navy), he didn’t want to work at the shipyard, he wanted to be a brewer. So the last couple of years they’ve been putting it together.”

Erik wanted the brewery to open by the end of 2015, and it still might.

“His dream was to build a brewery, so we’re going to carry on and get it done,” Mike Sweet said.

Wood, 66, said he’ll regroup and get back at it.

The partners were holding off on the brewery until Erik got out of the Navy and

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learning of Erik’s passing.

“It’s a little bit hard to do, but it’s great to know he touched so many people,” Mike Sweet said.

Seymour, who jumped in the ambulance and talked to Erik on the way to the hospital, said he was her best friend. Many others would say the same thing.

“He would light up a

“His dream was to build a brewery, so we’re going to carry on and get it done.”

Mike Sweet, father of Erik Sweet room,” she said. “He just always made sure that everybody was having a good time.”

12 |MAY 2015

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financial planning | edward jones

Step-by-step approach on estate planning Article provided by Edward Jones for use by financial advisor Jessie Nino of Poulsbo.

L

ike many people, you may enjoy investing. After all, it can be invigorating to put away money for your future, follow the performance of your investments and track the progress you’re making toward your long-term goals, such as a comfortable retirement. However, you might be less excited about doing estate planning, dreading the perceived time, effort and cost. Yet, you can make the entire process more manageable by breaking it up into specific tasks.

What are these tasks? Everyone’s needs are different, but here are a few suggestions that may be applicable to your situation: • Purchase life insurance. If something were to happen to you, would your family be able to stay in the house? Would your children be able to go to college?

You should have sufficient life insurance

to take care of these and other essential needs. You might hear about various “formulas” for how much insurance you should purchase, but you may be better off by working with a financial professional — someone who can evaluate your assets, goals and family situation, and then recommend an appropriate level of coverage.

• Draw up your will. For most people, a will is probably the most essential estate-planning document. Regardless of the size of your estate, you need a will to ensure that your assets and personal belongings will be distributed according to your wishes. If you die intestate (without a will), your belongings will be distributed to your “heirs” as defined by state laws — and these distributions may not be at all what you had in mind.

• Consider a living trust. Depending on your situation, you may need to go beyond a will when drawing up your estate plans.

For example, you might want to create a living trust, which can allow your assets to go directly to your heirs, avoiding the public, time-consuming and expensive process of probate. A living trust offers other benefits, too, so you may want to consult with a legal professional to learn more about this estate-planning tool.

• Check beneficiary designations. The beneficiary designations on your insurance policies and retirement accounts, such as your IRA and 401(k), are powerful see estate | 13

Goodbye, child care costs — hello, college saving opportunities Article written by Edward Jones for use by financial advisor Jim Thatcher of Bremerton.

I

f you’re a working parent, you know firsthand about the difficulties of finding quality, affordable care for your children. But eventually, your kids head off to school, and those child care bills go away, or at least diminish greatly. When that happens, you could start putting away money for another one of your children’s milestones: college.

Just how expensive is child care? Costs vary greatly among the 50 states, but the national average for a 4-year-old at a child care center is approximately $7,880 per year, according to Child Care Aware of America, a child care resource and referral agency sponsored by the U.S. Department of Health and Human Services.

What could you do with this money once your child enters kindergarten?

Of course, not all schools provide allday kindergarten, so you still may have some child care costs. For the purposes of illustration, let’s presume you can finally say “goodbye” to child care costs when your child is in first grade, and let’s also

assume your child is attending a public school. If you invested that $7,880 every year for 12 years, until your child reaches 18, you could accumulate more than $150,000 in a tax-advantaged college savings account, such as a 529 plan — assuming the money was placed in a hypothetical investment that earned 7 percent per year. (Keep in mind, though, that the word “hypothetical” means exactly that, because whenever you put money in any variable investment, there are no guarantees.)

Actually, earnings in a 529 plan accumulate and are distributed tax-free, provided they are used for qualified higher education expenses. (529 plan distributions not used for qualified expenses may be subject to federal and state income tax and a 10 percent IRS penalty on the earnings.)

Also, your 529 plan contributions may be deductible from your state taxes. However, 529 plans vary, so be sure to check with your tax advisor regarding deductibility.

A 529 plan offers other benefits, too. For one thing, the lifetime contribution limits are generous; while these limits vary by state, some plans allow contributions see college | 13

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MAY 2015 | 13

Peninsula Paint relocating newly acquired Bremerton store

By Tim Kelly KPBJ editor Peninsula Paint Co. is growing again, and moving.

Owners Ray and Diane Donahue recently purchased the Benjamin Moore franchises formerly operated as Nayer Paint & Design in Bremerton and Gig Harbor.

The new owners — who also have Benjamin Moore stores in Poulsbo, Bainbridge Island and Port Townsend — are preparing to relocate the Bremerton store from Callow Avenue to a larger location near the Highway 3 interchange at Kitsap Way. The nearly 3,000-square-foot space is in a two-story building owned by Sullivan Heating & Cooling that was built in 2012 at 5373 Auto Center Way. “It’s basically double the size of what we have in Bremerton now, and relatively close to the same square footage as our main Poulsbo store,” said Keith Coster, manager of Peninsula Paint in Bremerton.

Sullivan Heating owner Dan Sullivan said his company is doing the build-out in the space. Peninsula Paint will be the second tenant in Sullivan’s 22,000-squarefoot building, where welding supplies distributor Airgas has leased space since the site opened.

Peninsula Paint took over the two additional stores Jan. 1, and plans to keep the Gig Harbor store in its location at 6820 Kimball Drive.

“This will be the first time we’ve ever taken over a brand new space,” Diane Donacol l ege | f rom 1 2

well in excess of $200,000. And a 529 plan is flexible: If your child decides against college or vocational school, you can transfer the unused funds to another family member, tax- and penalty-free.

A 529 plan is a widely used choice for college savings, but it is not your only option. You could also consider a Coverdell Education Savings Account, which, like a 529 plan, can generate tax-free earnings if the money is used for higher education expenses. You can typically only put in a maximum of $2,000 per year to a Coverdell account, but it lets you use the funds on K-12 and college expenses. e state | f rom 1 2

and can even supersede the instructions left in your will. So it’s in your best interests to make sure you’ve got the right people listed as your beneficiaries. Over time, you may need to update these designations to reflect changes in your family situation.

• Make final arrangements. Whenever you pass away, it will be a stressful time for your loved ones. To ease their burden, consider establishing a “payable-ondeath” account at your bank, and then funding this account to pay for your fu-

tim kelly

The new owners of the Peninsula Paint Co. store in Bremerton are moving it from its longtime location on Callow Avenue (right) to a larger leased space in the Sullivan Heating & Cooling building (above) that was built in 2012 on Auto Center Way. hue said of the new Bremerton store, adding that they hope to be moved in by June.

“The other space is just too small,” she said of the 629 Callow Ave. location, which has been home to a paint store for decades.

Moving to the Sullivan building will provide easier accessibility, Donahue said.

“It’s a lot bigger space, and it’ll be great for getting on and off the highway for contractors and customers,” she said. “We’re looking forward to getting in that space.”

The Donahues had off-and-on discussions about buying the two stores from Whichever college-savings vehicle you choose, it will take discipline on your part to continue investing in it, year after year.

And after freeing yourself from those child care bills, you can certainly think of other ways to use this “found” money.

That’s why you might want to automatically move money from your checking or savings account to your 529 plan, Coverdell account or other investment earmarked for college. As your income rises over the years, you can increase the amount of these automatic transfers.

In any case, once those child care bills stop, you can put that money to work on your children’s behalf. Make the most of this opportunity. neral and related expenses.

• Share your plans. The most comprehensive estate plan in the world may not be of much value if nobody knows of its existence. Share your plans with your loved ones and heirs. It’s important that everyone knows their roles in carrying out your wishes.

When dealing with any estate-planning issues, you’ll want to consult with your legal and tax professionals. And by taking a step-by-step approach, you can keep the process moving forward — without feeling that you’re being overwhelmed.

owner Mark Nayer for a few years. The deal worked out after they saw the forlease sign at the Sullivan building last year and knew it would be a good place to relocate the Bremerton store.

They plan to hire a few more employees for the larger location.

As for possibly acquiring more stores under their Peninsula Paint banner, Donahue said nothing else is currently on their radar.

meegan m. reid

“Right now we would say no,” she said.

“But Benjamin Moore would like us to have a different answer.”

The Sullivan building is located on the 2.5-acre site of a former city park, and Dan Sullivan said his property has 1.5 acres that could be utilized for another building in the future.

14 |MAY 2015

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business strategy | dan weedin

Don’t be a horrible boss ... to yourself I was skimming through Facebook one recent Friday a few weeks ago and came across a very brief but telling comment by a person I know as an entrepreneur. It read, “Weekend? I’m self-employed.

There’s no such thing.”

If you’re self-employed, an entrepreneur or a business owner and you believe this to be true, then I have four words for you…

You’re a horrible boss! You’re doing something wrong. And, you need to change it if you ever want to maximize your talents, skills and value to others.

You started a business or a practice because you wanted to control your own direction and outcomes in life. Why is it that you would treat yourself worse than anyone else that you might employ?

I don’t know what purpose the author of the statement on Facebook had for making it. Suffice it to say, that I’ve heard this proclamation many times and admit at times in the past have made it myself.

What I’ve learned and implemented in my life has come from work with my own mentor to the betterment of my business and personal life. Allow me to share with you my thoughts on identifying and exterminating this dangerous myth.

How do you know you’re afflicted? Do any of these look familiar: • You resign yourself to the fate of work-

ing late into the night or on weekends to stay “caught up.”

• Through your actions, you demonstrate that working “hard” is better than working “smart.”

• You hold up working long hours as some badge of honor. In fact, you love this badge so much that you post it on your social media that you’re working late hours and weekends!

• You don’t consider taking time off during the week just for yourself because of how it might look to others.

• You start losing the passion you once had for your craft because it now has become a “job,” rather than a vocation.

If any of these resemble or sound like you, you have Horrible Boss Syndrome.

There are more telltale signs to this malady, but I don’t have enough room in this column to share them. Let’s use the rest of the space I have to offer you solutions.

Here are my Top 7 Ways to purge Horrible Boss Syndrome: 1. Consider yourself a peer. That’s right; consider yourself a peer of yourself! Too often, Horrible Bosses think they are unskilled labor and perform tasks and activities below their talent level. This starts with a mindset of abundance, rather than one of scarcity.

2. Delegate. Once you’ve convinced yourself you’re a peer, now you have to unload those tasks and activities. That means delegate. Delegate work that is be-

neath your skill level, above your skill level (e.g. bookkeeping and web design), or that you just don’t like doing.

3. Uncover discretionary time. We all have time in our day to unburden our mind. Get away from your desk and take a walk, read a magazine, run to the café for a coffee, or hit the gym for a quick workout. If you don’t allow your mind to breathe, especially during the day, you will burn out. On days I’m in my office, I force myself to change my activity about every 90 minutes to do just this.

4. Just say NO. Politely decline requests from others to do things or join committees that you don’t have a passion for or simply don’t want to allocate your valuable time to. Stop feeling guilty or obligated. If it doesn’t make sense for you at this time in your life, just say no.

5. Say goodbye. If you’re currently involved in something that is mentioned above, be strong enough to leave. Being active in a role that requires your time and labor intensity and that has become a burden only makes your life more taxing.

My guess is all of you have at least one of these. How much time can you free up?

6. Reward yourself. You undoubtedly reward your employees and your clients for work well done or for thanks. How about you? When was the last time you rewarded yourself for doing even small things?

Create a list of small rewards to pat yourself on the back when you do well. Hor-

rible Bosses are demeaning in their language (check your own internal words) and Great Bosses offer rewards and kudos.

7. No Unsolicited Advice. Solicit advice from those people you trust and want advice from. Don’t allow others to give you their unsolicited opinions. It’s usually more for their benefit than yours. Unsolicited advice tends to lower your confidence, increase analysis paralysis, and increase your workload. Seek out those that have your best interest at heart and have the knowledge to help you improve, and discard all unwanted counseling.

Here’s a bonus thought for you to add to this list. Have fun. You put yourself in this position of being self-employed because you thought it would be fun. Whatever you’re doing should be a passion. It should provide you with joy and rewards.

It should be FUN! Take a few minutes after reading this to do an honest self-assessment. Are you exhibiting signs of Horrible Boss Syndrome?

If you are, then resign from that wretched boss and find a new one that will encourage and reward you. The good news is that it’s the same person just with a different mindset, attitude, and charm.

• 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.

People in business Former Harrison executive returns with CHI Franciscan Thomas A. Kruse, a former Harrison Medical Center executive, has been named chief strategy, integration and innovation officer for CHI Franciscan Health.

Thomas Kruse will have accountKruse ability for systemwide strategy and regional business development; strategic planning; marketing, communications and commu-

nity relations; clinical and operational integration; and bringing innovation to care delivery and customer expectations.

“I’ve had the privilege of working with Tom Kruse and witnessed firsthand his ability to craft and implement creative strategies that help organizations reach their goals,” said Ketul J. Patel, CHI Franciscan Health chief executive officer who joined the medical system in February.

Most recently, Kruse was executive vice president and chief strategy officer at Hackensack University Health Network and Medical Center in New Jersey. During his tenure at Hackensack he facilitated multiple mergers and affiliations and two

joint ventures with for-profit partners.

Kruse was in Bremerton from 2007-11 as vice president and chief strategy officer at Harrison Medical Center, which joined the CHI Franciscan system in 2013.

“I’m thrilled to have this opportunity to return to the Pacific Northwest and join CHI Franciscan Health,” said Kruse, who will join CHI Franciscan Health May 18.

CHI Franciscan Health (www.chifranciscan.org) is a nonprofit health system based in Tacoma, which operates eight hospitals and more than 100 primary and specialty care clinics in Pierce, King and Kitsap counties.

Bainbridge bookshop hosts event with Northwest authors Eagle Harbor Books on Bainbridge Island will welcome 16 Northwest authors for the nonprofit Seattle7Writers event Fill Your Summer Bookbag Bookfest on Saturday, May 30, from 3-5 p.m.

This will be the first Seattle7Writers event in Kitsap, and the money raised will go to Kitsap Regional Libraries.

The event will feature book signings, author-baked sweets, and drawings for books and literary items. Perhaps the best see people | 16

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16 |MAY 2015

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Beset by financial woes, bakery closes to reorganize Owner ends online fundraising campaign aimed at saving Bainbridge Bakers

By Tim Kelly KPBJ editor A popular Bainbridge Island establishment temporarily closed in late April, after Bainbridge Bakers employees stopped getting paychecks, allegations surfaced of employee theft, and an online crowdfunding campaign was launched to raise $100,000 to save the business. But the fundraising effort on the gofundme website was canceled less than two weeks later by the bakery owner, whose public communication of late has been only on social media.

The Facebook-driven drama swirling around Mike Loudon’s business began in late March. As recently as March 23, the bakery’s Facebook page had a post highlighting the 29th anniversary of the original Bainbridge Bakers in Winslow Green, and

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part, though, is the chance to mingle and converse with a diverse group of Northwest writers.

Mostly from points west of Seattle, the featured authors inclued Elizabeth George (internationally best-selling mystery author), William Dietrich (who shared a Pulitzer Prize in 1990 for the Seattle Times’ coverage of the Exxon Valdez oil spill), Susan Wiggs, Suzanne Selfors (Washington State Book Award-winning author of children’s books), Carol Cassella, Jennifer Louden, Thor Hanson, poet Kelli Russell Agodon, debut novelists Adrianne

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MEEGAN M. REID / KITSAP SUN File

Above: Mike Louden in better days at Bainbridge Bakers in 2013.

Left: The bakery/café at Winslow Green has long been a popular spot, but it was temporarily closed in late April. touting the bakery’s second location that opened in spring 2014 at Island Gateway next to the Bainbridge Island Art Museum. “SO much more to come in 2015!” the post promised.

However, six days later came the Facebook announcement that the Island Gateway location was not meeting projections and

Harun and Bridget Foley, as well as popular fiction writers Erica Bauermeister, Rebecca Wells, Kathleen Alcala, Megan Chance, Laurie Frankel and Kevin O’Brien.

The authors’ books will be available for purchase at Eagle Harbor Books, and the authors will sign and inscribe them.

Seattle7Writers encourages and promotes Northwest literature with the rallying cry of “Read Local.”

As part of the its outreach, the nonprofit organization helps stock “pocket libraries” throughout the city in homeless shelters and food banks. More information is available at www.seattle7writers.org/events.

would be closed during the month of April for “restructuring.” The plan was to expand the kitchen and reopen as “a full-service restaurant with beer, wine and spirits.”

However, Loudon told the Kitsap Peninsula Business Journal on May 1 that he was able to terminate his lease at Island Gate-

New manager joins Kitsap Bank in Port Ludlow Kitsap Bank has hired Jan Ralls as branch manager of the Port Ludlow location.

Ralls comes to the bank with over 14 years of experience, most recently with Jan Ralls Union Bank in Port Townsend.

Kitsap Bank, headquartered in Port Orchard, operates 20 locations throughout Western Washington.

way, and he’s working with the property owner to find another operator to take over there.

The Winslow Green bakery had posted a sign April 20 saying the café was serving only a limited menu, and later that week the bakery closed at midday April 23.

A notice on the door said it would remain closed through April 26 to

work on “reorganization.”

The bakery was still closed as of May 1, but Loudon told the Business Journal he hopes to reopen as soon as possible, and said he is continuing to have meetings about financial and operational restructuring of his business. see bakery | 18

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technology | charles keating

Mission accomplished — and more to come

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hen West Sound Technology Professionals (WSTPA) started in 2000, our goals were relatively simple: to host local meetings on technology so people didn’t have to ferry to Seattle for peer-to-peer or educational forums; to aggregate and link up tech talent for potential collaboration; to remind all in the post-dotcom era that tech was still relevant; and to ensure public and private sector entities would look more to local vendors as an option versus reflexively sending technology project opportunities and dollars elsewhere.

From those simple needs, a 501(c)3 was formed and hundreds of technology meetings held, spurring entrepreneurs and other startups that that grew here, others that left, and some that returned. As a group we also participated in hundreds more meetings representing our region in statewide and out-of-area gatherings. We held 13 summits with international and national speakers, legislators, even our current Gov. Jay Inslee, who was a frequent presenter and supporter of WSTPA, technology and innovation.

At one time, our members came from eight counties and included most of the major employers in the public, private and nonprofit sectors. They included geeks and non-tech business folk, tinkerers, educators, mentors, leaders, elected officials — a real coalition.

Early on, we also became closely involved with helping to shape and lobby technology and innovation policies. ba k ery | f rom 16

The gofundme campaign — which had collected more than $7,000 — was launched April 15 by Ben Goldsmith, who had worked at the bakery since September and was one of the employees who had not been paid in recent weeks. In a plea for support posted on the site, he wrote “If we remain unable to both square away our financial stresses and recover from the massive theft, Bainbridge Bakers will be forced to close.”

An anonymous post March 30 on the bakery’s Facebook page about financial troubles, including suspected theft at the business, prompted a response from Loudon, who acknowledged that “We are suffering from some significant employee theft that seriously disrupt-

In partnership with Technology Alliance as a Technology Alliance Associate, we sponsored and supported Washington Learns, Excellent Schools Now, and other STEM initiatives that advocated for computer science as a graduation requirement. In Kitsap, we introduced and popularized the Hour of Code, tripling participation the second year and sparking districtwide partnerships and funding for curriculum programs with Code.org. As a partner with Olympic College, we helped launch four-year Information Technology degrees and initiated a partnership between our association, Olympic College, West Sound Technical Skills Center and the world-renowned DigiPen Institute of Technology to bring DigiPen’s ProjectFun summer workshop to the area in 2014 so high school students could take classes in computer gaming and gain early college credits.

If imitation is the sincerest form of flattery, then many others are paying us compliments. In the last few years, numerous groups and initiatives have started up on programming, robotics, maker movements, gaming conferences, STEM showcases, and hopefully more to come. Even if a current or former member did not start one of these, perhaps we have inspired or crossed paths with them. And whatever their source of inspiration, we sincerely welcome and acknowledge all those stepping forward to create more opportunities for our region.

As our innovation and technology economy continues to grow, we need more students and worker retraining, more people skilled in disaster recovery and pre-

ed our first quarter cashflow.” However, apparently nothing has been reported to authorities, other than a report to Bainbridge police of $159 taken from the till in January, according to community news website InsideBainbridge.com.

The website posted an article after the gofundme effort launched, and quoted former employees who said they left because of not getting paid. The employees quoted in that article gave accounts of Loudon’s erratic behavior and questionable business practices as the bakery struggled; some alleged that the owner made under-the-table cash payments to some employees when he couldn’t make payroll.

That provoked a vigorous rebuttal on Facebook from Loudon, who had declined an interview request be-

fore the InsideBainbridge article was published. He wrote that “Much of the information in the article is false,” though he did not respond to any specific allegations.

A slew of comments followed on his Facebook page, most of them supportive of Loudon, who has long been active in the local theater community, but some comments were critical of him.

Loudon didn’t respond to any comments, but added his own dramatic Facebook touch when he posted the Rud-yard Kipling poem “If,” with its famous opening line: If you can keep your head when all about you / Are losing theirs and blaming it on you…

• This story will be updated at kpbj.com when there are further developments.

paredness, more information security workers, and more public involvement. At this point “mission accomplished” makes sense, even if much more lies ahead. We are at least on the road.

As for what’s next, since switching to quarterly meetings, our first meeting in February on Open Data launched discussions and efforts regarding how to leverage data sets to create opportunities — something that may lead to a fall hackathon event. Next up is our May 20 luncheon panel at Bainbridge City Hall that will include Poulsbo City Councilman Ed Stern (who also serves on many regional and state boards), and Jonathan Friebert, director of external affairs for Microsoft and its lead for Voices for Innovation. The meeting is free and open to the public (registration encouraged and a box lunch available for a nominal fee). Details and registration are at www.westsoundtechnology.org.

Having seen the demand generated by Hour of Code, one element missing — apart from classes in school — was a yearround opportunity to engage youth. Toward this end, WSTA recently launched the first CoderDojos in our area, which provide always-free coding classes for ages 8 to 18. The first www.WestSoundCoderDojo.com (WSCD) meeting was May 2 on Bainbridge Island, and within a couple

of days of opening registration, student space was almost full.

The goal is having CoderDojo classes on most Saturdays throughout the year, but the difference between this initiative and WSTA is it will be community-owned and driven by volunteers. As such, future events and future chapters are in your hands. Already, interest in a Port Townsend chapter has been discussed. The curriculum is not hard to master, starting with simple visual scripting based on Scratch, a language created

by MIT and popularized by Hour of Code, but as it grows it branches out into visual design and virtual environments, other languages and more. As parents and instructors we all learn, but it is nothing but amazing what kids can create in just a short amount of time.

Donations of appropriate space to host meetings, loaner laptops, and of course volunteers toward sustainable efforts are always appreciated. We hope you can get involved in helping drive a high-tech future for the West Sound region.

• Charles Keating is president of Keating Consulting Service, Inc. (www.kcsco.com), an IT consulting firm serving global clients since 1983. He is also a partner in K2 Strategic Solutions (www.k2strategic.com) and Professional Options (www.professionaloptions.com), and current president and co-founding member of West Sound Technology Association (www.westsoundtechnology.org).

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human resources | Julie tappero

Ramifications of a wage transparency policy

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once had a boss open a drawer and point out a file telling me it contained a spreadsheet containing information on everyone’s salaries.

“You are welcome to look at it, but it can become the source of great discontent,” he told me. In the years I worked for him, I never looked in the file. I loved that job, respected my boss, and I didn’t want that to change. For me, ignorance was bliss.

But today, wage transparency is actually a trending topic, both in the private and public sector. President Obama recently signed an Executive Order that prohibits federal contractors from retaliating against employees who elect to discuss their compensation. The White House Fact Sheet describes this as a “critical tool” to encourage pay transparency to help combat wage discrimination.

In the private sector, pay transparency is more commonly found in tech start-up companies. Much has been written about businesses such as Buffer and SumAll where employees have access to the wages of everyone in the company, all the way up to the CEO. But it is not something new.

Whole Foods has had a policy of wage transparency since 1986.

There are many factors that enter into wage decisions. Consider Russell Wilson.

Few Seahawk fans would deny that he is the most valuable player on the team. But has he been the highest compensated? No. Why not? Not because his position wasn’t one of the most important, but because when he was hired he didn’t have the experience and reputation to negotiate the highest salary. When we make compensa-

tion decisions, oftentimes many variables are considered, even some that are intangible. In the example of the company Buffer, they use a straight formula on which pay decisions are made. It’s based on Job Type times Experience plus Location. But in our own companies, is it always that simple and straightforward?

In a small company, you might have several managers, all at approximately the same level. For instance, an accountant, an operations manager, a human resources manager, and a purchasing manager.

The jobs might require the same amount of education and experience. So would it follow that they all were paid the same?

But what if it is extremely hard for you to find a qualified accountant, and in order to attract a candidate you have to increase the salary? Would that mean all the others get a salary increase too? How do you handle it if one has a special skill that gives your business an edge against the competition?

Not every company with wage transparency utilizes a strict formula like Buffer does. Many make it very performancedriven and this requires the company to have a culture of trust and openness.

When an employee asks “why her and not me?” the supervisor needs to be ready to talk about performance expectations and to have a clear and open dialogue about how or if the employee can increase their wage.

Whether or not you decide to have an environment that embraces wage transparency, remember that the NLRB protects employees’ rights to “act together to improve their pay…,” which is the definition of protected concerted activity. This applies even in a non-union environment.

business briefs Hearing set on Poulsbo housing development A public hearing is scheduled for May 14 in Poulsbo on a proposed residential development of 85 single-family housing lots along Noll Road on the city’s east side.

The hearing is scheduled for 10 a.m. in Council Chambers at Poulsbo City Hall, 200 NE Moe St. The area of the proposed development is a wooded area of approximately 18.6 acres northeast of the corner of Noll Road and Langaunet Lane. The site has two access points, one off Noll Road and the other from Langaunet Lane. The project will be served by city sewer and water.

The applicant is Leroy Christiansen of Seattle, who is represented by consultant Norm Olson of N.L. Olson & Associates in Port Orchard.

This Noll/Mesford proposal was scheduled to be reviewed at a Planning Commission meeting May 5. The commission will

provide a recommendation to the Hearing Examiner. For more information, call the Planning Department at 360-394-9748 or email eberghoff@cityofpoulsbo.com.

Business forum to be held in Port Orchard this month The monthly Kitsap Business Forum will be held May12, when the presentation will be “Business Hacks: Tricks, tips, tools and resources you’ll wish you had known sooner.”

The panel for the discussion will include Megan May of Kitsap Regional Library, Tom Eckman of the University of Washington, and Kathy Cocus of Kitsap Economic Development Alliance.

Please RSVP to KitsapBusinessForum. com. This forum will be held at a different location than its usual site for this month only. The forum will be from 7:30-9 a.m. at Park Vista Senior Living, 2944 SE Lund Ave. in Port Orchard.

So if one employee wishes to share their pay rate with another, or even discuss it on their Facebook page, as a means of improving their pay, you cannot retaliate against them.

If your business doesn’t embrace full wage transparency, it’s good to remember that we live in a world of instant information and information sharing. Your employees can go on numerous websites such as Glassdoor.com or Salary.com to figure out what a company’s salaries are, or even what the salaries are within your business if it’s big enough. And in a day and age where people share their most innermost thoughts and private issues on Facebook, sharing salaries and other private issues are just not as big of a deal anymore.

I queried business acquaintances to get their reactions on this topic and responses were very mixed. Some felt it would help solve gender pay discrimination, some felt it would encourage higher performance, some felt it was an invasion of privacy, while others believed there were too many variables that had to be considered. Interesting to note, though, that In a formal survey of HR professionals by Challenger, Gray and Christmas, 55 percent were in favor of some form of salary transparency.

If your company wants to move to more transparency, a step in that direction can

be transparency about pay ranges, the factors considered in salary decisions, and providing employees with information on the context and strategies utilized by management in overall compensation.

Armed with this information, employees will have the ability to understand what they can do themselves to increase their pay through their performance.

Several years after my previous experience wherein I chose not to see everyone’s wages, I was in a different job where I again had access to all wage information. Not long after taking that position I learned I was making half of what my predecessor had made. Confident in my performance, and believing in my self-worth, I requested a very large raise, which I received.

I’m not sure what the moral of the story is. If you do choose to exercise wage transparency in your business, some employees will probably choose to remain ignorant and some will no doubt arm themselves with information and utilize it to help themselves progress. And, in some cases, discontent will probably be the result. Ensure that your wage decisions are fair, consider your company culture and values, and do what is in the best interest of your entire enterprise.

• 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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Simpson closing its lumber mills in Shelton; hundreds to lose jobs SHELTON (AP) — After nearly a century of operations, Simpson Lumber is closing its mills in Shelton and cutting most of its 270 jobs in the area.

The two Shelton-area mills — along with one in Dayton, northeast of Walla Walla — are being sold to Sierra Pacific Industries, based in Anderson, California, KMAS-AM radio in Shelton reported. Sierra Pacific said in a statement that it doesn’t intend to operate them but instead will build a state-of-the-art mill and lumber-planing operation in Shelton, to open in 2017.

“The decision to sell was extremely difficult because Shelton has always been in the heart of our lumber manufacturing business, and we have enjoyed great support from the Shelton community,” Simpson Chairman Colin Moseley said in a statement. “I am confident that officials at Sierra Pacific Industries will enjoy a similarly collaborative spirit in Shelton.”

Simpson Lumber sent its workers 60day termination letters. In addition to

severance pay, the company said it’s trying to secure government economic aid or job retraining for them.

Mason County has already been struggling to emerge from the recession, and its 7.8 percent unemployment rate is higher than the statewide average of 5.7 percent, according to data from the Washington Employment Security Department.

Simpson says it will continue to operate Simpson Door Co., which employs 188 people in nearby McCleary. It’s also hanging onto its railroad properties, tracks, tidelands and other properties in the Shelton Harbor area, and it’s considering how it might put those facilities to different use.

Sierra Pacific is a family-owned forest products company that owns and manages nearly 3,000 square miles of timberland in Washington and California.

“We appreciate the opportunity to bring the next generation of lumber manufacturing to Shelton,” Sierra Pacific President George Emmerson said.

business Briefs Strong first quarter for jobs in Kitsap County

Manchester could be getting a microbrewery

Kitsap County is enjoying its highest job levels since 2008.

An average of 86,500 people worked for employers within the county in the first quarter of 2015, a 3 percent improvement from the same period of 2014.

Employment was up about 2 percent from last year among private companies in Kitsap and 4 percent among government agencies, according to data from the state Employment Security Department.

On the private side, some of the largest gains came from the areas of retail trade and leisure/hospitality.

The growth in government jobs was largely from federal employment, which increased from about 16,400 in the first quarter of 2014 to 17,400 in the first quarter of 2015.

General employment among Kitsap County residents showed slight improvement in the first quarter.

An average of 108,373 county residents were employed during the first three months of the year, an increase of about 540 from the same period of 2014.

The labor force — the total number of people working or seeking work — was also up slightly in the first quarter, despite a dropoff in March.

Kitsap County finished March with a 5.7 percent unemployment rate, reflecting a modest gain in employment and the dip in the labor force.

Two entrepreneurs hope to open a microbrewery and restaurant in Manchester by the summer of 2016.

Cody Morgan and Ludomir Wanot are cofounders of the aptly-named Manchester Brewing Co. Morgan, an avid homebrewer, is developing the beer lineup.

The partners have begun applying for the necessary licenses. They’ve also picked a location, a vacant two-story building on Colchester Avenue.

Wanot said codes in Manchester require them to open a restaurant before they begin selling beer. They plan to install the brewery on the ground floor of the building and open the restaurant upstairs.

The duo have an investor lined up for the project and plan to launch a Kickstarter campaign soon. Wanot said Manchester is a growing hub that seems primed for more business development.

“I think it will be a really nice crowd,” he said. “It’s a great area.”

See the Manchester Brewing Co. page on Facebook for updates.

Kitsap’s brewery scene is buzzing this year. Silver City, Slaughter County and Sound are all in the midst of major expansions. Two breweries are under construction in Bremerton, and another is planned in Silverdale.

— From the “Minding Your Business” blog by Tad Sooter at kitsapsun.com

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Poulsbo kitchen store owner retiring, closing business But if and when the state adopts a $15 wage law, Kitchen Karousel will be just “a memory,” said Lucas, who didn’t consider selling her business when she retires.

“I did not even try,” she said. “We’re just liquidating everything, and (the store) is just going to go away.”

No final closing date has been set, and Lucas said that will be determined by how quickly the store’s in-

By Tim Kelly KPBJ editor Kitchen Karousel’s 20-year spin in downtown Poulsbo is coming to an end.

Owner Sharon Lucas started a going-out-ofbusiness sale in April at her kitchenware store and plans to close sometime this summer.

“I started this as an empty nester, and I’ll be 66 in September,” Lucas said.

“I’m ready to retire; my husband’s been retired for awhile and it’s time to do things together.”

The decision to close the store wasn’t one she mulled over for long, she said. As recently as January, she went to a big gift show in Seattle and restocked her inventory after the Christmas season.

“I didn’t think about it until March,” Lucas said.

“I just decided now’s the time.”

She did say the upcoming renewal of a three-year lease on her Front Street storefront was a factor.

“I didn’t want to do it

MEEGAN M. REID

Sharon Lucas is preparing to close her Kitchen Karousel store after 20 years in Poulsbo. for three more years,” she said. “Also, rumor has it that downtown Poulsbo is going to be torn up (for street work) next year, and I don’t to want go through that again.”

Something else on the horizon has Lucas and other small business own-

ers concerned — a possible increase in the state’s minimum wage to $15 an hour in the future.

“It’s been on a lot of our minds down here on Front Street. I think it’s going to affect everybody,” she said.

“It’s going to come out of the consumer’s pocket, but

Insurance costs force charter bus operator to shut down

By Tim Kelly KPBJ editor The owner of Agate Pass Transportation has decided to close the charter bus business, saying that soar-

Passengers wait to board the Frog Hopper, a Bainbridge Island tour bus operated

by Agate Pass Transportation in 2013, at Bloedel Reserve.

Steve Zugschwerdt/ Kitsap Sun file

ing insurance costs for the company’s 14 vehicles have become unaffordable.

Les Bagley, a retired Kitsap Transit bus driver who started Agate Pass Transportation eight years ago,

said his company operated buses only during the summer tourist season, but starting this year would be required to have insurance coverage on the vehicles year-round.

we don’t want that to happen.”

She said her cost of goods from vendors in Seattle will increase because the city approved raising the minimum wage there to $15 an hour, an increase that is being phased in over the next few years.

“We’ve been fighting this for almost four months now,” Bagley said recently. “The problem we’ve run into is the insurance companies say if you own a bus, you have to insure it all year, not just for the summer months.”

Bagley said four years ago his company paid $19,500 a year for bus insurance and was able to remove vehicles from the policy during the off-season months when they weren’t being driven, but that insurance company withdrew from the Washington market. Also, Agate Pass added more buses to its fleet in recent years, and its insurance costs last year rose to $57,600, which Bagley noted was nearly one-third of the $186,000 in gross revenue for his business.

Then Zurich Insurance, which had insured Agate Pass the last few years, decided it would not renew the bus company’s coverage for 2015. see buses | 36

ventory is cleared out.

She’s enjoyed her time running Kitchen Karousel, which she started in 1995 because there wasn’t a shop downtown at the time that sold kitchen items.

“It’s been a good place to be for 20 years,” Lucas said, “but I’m ready to move on now.”

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Score mentoring | ken sethney

How do you find customers and help them find you?

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ne sure-fire way of finding new customers is to have current customers refer them to you.

That’s hardly surprising, as referrals are typically the top source of new business for any company. So how does a small business just starting out find those first customers and start the coveted cycle of referrals?

A good first start is to develop a comprehensive marketing plan in step with your business plan. You’ll have a good, detailed profile of your target market, and how they shop for products and services like yours. The characteristics of that market will then dictate how to attract the attention of those customers, whether its stra-

tegic advertising, networking at professional conferences and associations, or contacting previously identified decisionmakers.

There are also tools to help those potential customers find you more easily. The most important one is a well-designed website. It should be professional in appearance with your company name and contact information prominently displayed, easy for visitors to navigate, and filled with content containing keywords typically used in Internet searches for your type of business.

Social media can also be a helpful tool in finding new customers. Blog posts and tweets on topics of interest to your customers are a good way to populate search engine results with your company name.

Platforms such as Facebook and Linked-

regional economy | john powers

Busting through the glass ceiling, leaning into the future

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udy Mentor Eagleson, Jan Angel, Anne Blair, Linda Brown, Kathy Cocus, Chris Endresen, Becky Erickson, Carol Evanoff, Charlotte Garrido, Elizabeth Gilje, Doña Keating, Jessica Kennedy, Erin Leedham, Patty Lent, Mary McClure, Linda Niebanck, Chris Rieland, Elizabeth Wilson, Linda Web and Julie Tappero.

What are the common denominators shared by these two dozen dynamic Kitsap community leaders?

They have effectively leaned into and conquered many challenges, including bias — gender bias — along their path to senior leadership; and they all have served on the board of directors of the Kitsap Economic Development Alliance.

In addition, many (like Judy Mentor Eagleson this year and Julie Tappero last year) have been recognized as “Women of Achievement” and “Women of Influence.”

While it’s true many of these individual leaders have been singled out for their community work as women, what is equally true is that all of these leaders made a difference not because of their gender, but because they were fearless and tireless in their dedication to making a difference in their respective enterprises and our collective community.

My Irish grandmother, Cecilia Daley Keenan, taught me to always tip my hat to a lady out of respect for their central role

in the family and society ... and because that’s what gentlemen do. Today, on the eve of Mother’s Day, I take my hat off to these leaders out of respect and admiration for what they have accomplished, not just as women and mothers, but specifically for the immense contributions they have made to our communities and our local economy.

It has been my good fortune to have worked with virtually all of these accomplished community leaders by collaboratively championing broad-based economic development opportunities throughout Kitsap County. The recent recognition by the YWCA of Judy Mentor Eagleson as a “Woman of Achievement” caused me to pause and reflect on the history of our Kitsap Economic Development Alliance and express my appreciation for the many pioneering contributions by this corps of exceptional leaders. As I review the many leadership contributions that have sustained and strengthened our alliance since its creation in1983, and its reconstitution in 2007, in particular, I think about the critical role Kathy Cocus, Charlotte Garrido, Mary McClure, Chris Rieland, Julie Tappero and Elizabeth Wilson played in refocusing our purpose and re-energizing our or-

WWW.KPBJ.COM Check it out!

In offer both free visibility and, if desired, advertising options to give you an even higher profile.

Though social media offers an instant Internet presence, it does not always translate into instant results. “Unfortunately, there is no magic bullet; it is trial and error with every marketing initiative,” advises Internet marketing and social media consultant Dan Beldowicz. “The better you know your target market and the better you align the information to make an emotional connection with them, the better the chance you have of converting fans into customers.”

Even in this social media-driven world, there remains a variety of simple, lowcost ways to connect with customers that don’t require an electronic device. Among them: Watch for events that may bring your potential market together. This includes events that might attract your target customers, as well as other companies in your business.

Follow up with people you meet after meetings. If they don’t need your services now, ask if there’s a better time to contact them, or if they have business associ-

ates who could use what you sell.

Work your personal network. Ask friends if they know of people who can use your services. You could offer a finder’s fee for referrals that turn into jobs, but many people may consider a cup of coffee or dinner reward enough.

Ask for feedback when prospects don’t buy. Use what you learn to make needed changes in your approach, whether it’s in person or online.

ganization for generations of leaders to come.

Eagleson is a recent and prime example of a community leader recognized for her exceptional service to the community on a variety of fronts. Just a cou- Judy Mentor ple of weeks ago, Judy was Eagleson recognized as a “Woman of Achievement” by the Kitsap YWCA. Among her many contributions to the community, Judy was recognized for her service on numerous boards: HMC Mathis Guild, Central Kitsap High School Alumni Association (founding member), Kitsap County Home Builders Association (president), Poulsbo Chamber of Commerce, Kitsap Economic Development Alliance,

and Olympic College Foundation. She does all this while serving as CEO of the Mentor Company and co-owner of J.J.’s Fish House in Poulsbo.

Join me in congratulating Judy Mentor Eagleson, and her many pioneering peers, for all they have done, and will continue to do, to contribute to a more prosperous, healthy and just community here in Kitsap County. Judy, I take my hat off to you and your peers — thanks for all you do for so many, and thanks for your service to the Kitsap Economic Development Alliance.

On Kitsap!

• For more help with valuing your small business, contact SCORE — Mentors to America’s Small Business. 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, email kitsap@ scorevolunteer.org, call 360-328-1380 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 midsize companies throughout the country. Contact him via email at ken.sethney@scorevolunteer.org.

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

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federal contracting | STeve shapro

Projects at Kitsap bases create small business opportunities

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o maintain and improve its bases and facilities in Kitsap County, the Navy awarded $662 million in construction contracts between 2012 and 2014. These contracts were for construction projects at the shipyard and Naval Hospital in Bremerton, the submarine base in Bangor, the fuel depot in Manchester, and the Naval Undersea Warfare Center in Keyport. While many of the contracts were awarded to companies from outside the county, they provide local businesses many excellent opportunities as subcontractors and suppliers. Knowing exactly which firms are being awarded the prime construction contracts enables local businesses to network and position themselves for future business opportunities.

In May 2012, the Navy awarded the $331 million construction contract for the new Explosives Handling Wharf at Bangor. It is part of a $715 million project that includes the new wharf, related facilities and mitigation of environmental impacts.

It is one of the largest military construction projects undertaken and the largest in the county. The prime contractor, EHW Constructors of Virginia Beach, Virginia, is a joint venture consisting of Skanska USA, American Bridge Co. and the Nova Group, with work scheduled to be completed in January 2016.

Even a large joint venture such as EHW Constructors will not self-perform all the work on a large project such as the Bangor wharf, so there are subcontracting opportunities. Most prime contractors are interested in identifying qualified small businesses, not only for current projects, but also for the future when they bid on new work. With less than a year to go on the Explosives Handling Wharf, its likely that the number of subcontracting opportunities are not as great as when the project was in its beginning stages, but Skanska, American Bridge or Nova Group will probably bid on future work for the Navy.

Among the EHW Constructors joint venture partners, Nova Group has responsibility for subcontracting and their website (www.novagrp.com/subcontracting/)

provides contact information and current subcontracting opportunities. As a separate company, Nova Group was awarded another $25.4 million for waterfront projects at Naval Base Kitsap over the past three years.

Also between 2012 and 2014, the Navy awarded $46.2 million in construction contracts to Watts Constructor of Honolulu for work on Naval Base Kitsap. This includes a $9.3 million contract for construction of portions of the Integrated Water Treatment System at the shipyard, which will enable the Navy to meet mandated discharge limits on contaminants.

Other work awarded is for pier pile repairs at a number of waterfront locations.

Watt’s website, (www.wattsconstrucors. com) lists current projects where they are looking for subcontractors, including two in the Puget Sound region. While bidding will be closed before this column is published on these two specific projects — an airfield apron extension at Whidbey Island and fire station upgrades at Bremerton — firms interested in other subcontracting opportunities should periodically check the website.

Last year, Absher Construction of Puyallup was awarded a $25.1 million prime contract for energy efficiency upgrades on Naval Base Kitsap. They had previously done other projects on Kitsap bases including construction of a 150-unit, eight-story high-rise bachelor quarters and parking garage at Bremerton. Stephanie Caldwell, Absher’s small business program manager, said the company “is committed to identifying small business sources and ensuring that they are given opportunities to provide subcontract services, supplies and materials in support of Absher’s prime contracts.” She went on to say that subcontractors or suppliers that would be like to be considered by Absher should contact her directly, a clear indicator of the importance Absher, like many large businesses doing business with the Navy, assigns to meeting their subcontracting responsibilities. As in the case of other prime contractors, their website (www.absherco.com) provides points of contacts and current projects they are bidding, such as seismic upgrades to one of the large shops at the shipyard in

DOLLARS AWARDED (2012-­‐2014) FOR PROJECTS AT KITSAP BASES (Firms highlighted in blue are large businesses) $331,372,767.00 EHW CONSTRUCTORS, A JOINT VENTURE (Virginia Beach, VA) $46,292,154.88 WATTS CONSTRUCTORS, LLC (Honolulu, HI) $28,242,741.78 WASHINGTON PATRIOT CONSTRUCTION (Gig Harbor, WA) $25,460,476.00 NOVA GROUP, INC. (Novato, CA) $25,116,000.00 ABSHER CONSTRUCTION CO. (Puyallup, WA) $24,103,801.44 BLACKHAWK VENTURES, LLC (San Antonio, TX) $18,540,651.00 COBURN CONTRACTORS, LLC (Montgomery, AL) $12,814,105.25 LCC-­‐MZT TEAM IV (Homedale, ID) $12,772,000.00 BURR-­‐MZT JOINT VENTURE (San Clement, CA) $10,774,273.00 VETERANS NORTHWEST CONSTRUCTION LLC (Seattle, WA) $9,982,773.45 ADVANCED TECHNOLOGY CONSTRUCTION CORPORATION (Renton, WA) $9,569,032.25 NEWTON BUILDING & DEVELOPMENT, LLC (Bremerton, WA) $9,505,259.62 P & L GENERAL CONTRACTORS, INC. (Oak Harbor, WA) $8,220,801.84 NEWTON/SEVERSON 8(A) JV (Bremerton, WA) $6,259,442.44 PACIFIC TECH CONSTRUCTION, INC. (Kelso, WA) $5,081,259.02 VET INDUSTRIAL INC (Bremerton, WA) $4,005,180.63 RHD ENTERPRISES, INC. (Tacoma, WA) $3,499,746.23 FARROW CONSTRUCTION SPECIALTIES, INC. (Tacoma, WA) $3,236,215.48 PERFORMANCE SYSTEMS INC. (Fruitland, ID) Bremerton.

The list that follows includes many firms that have been awarded construction contracts for projects at Kitsap bases over the prior three years. The ones that are highlighted in blue are large businesses. When the Navy solicits contract proposals from large businesses, they require firms submitting bids to develop subcontracting plans that detail how they will maximize subcontracting opportunities for small businesses. The Navy considers the plans when making the decision to award contracts. After the contract is completed,

the Navy assesses how well the prime contractor did meeting its small business subcontracting goals. These assessments are reviewed and considered before awarding future work.

The subcontracting plans the Navy requires include a description of how the prime will reach out to small businesses and identify potential subcontractors. To assist them in identifying qualified small businesses, large business websites generally include points of contacts and lists of opportunities they are currently bidding. see contr acting | 30

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a drawing that included some green space that would enliven and improve the area and bring more liveliness to Judson Street,” she said.

Shelly Cox, owner of Gig Harbor Copy and Mail, said her business would be one of those displaced, but that if that happened, she would likely move into a portion of the old QFC space that’s still empty.

“Having to move would be a big thing for me and I’d probably lose a lot of customers. But I do want to stay here (in the shopping center),” she said. “I just wish QFC had never left.”

Barnes said that several of the drawings showed the vacant QFC space being turned into a minimall where many of the displaced businesses could buse s | f rom 2 6

Bagley said he tried to find other insurance, but there are only a handful of companies that write policies for buses in Washington state, and the least expensive coverage he found would have cost about $120,000 a year.

However, insurance agent Ken Shimomura, who’s been Bagley’s agent for Agate Pass Transportation the last four years, explained that the higher rate is for insurance on the secondary market, which is much more expensive.

Shimomura, who’s with DW Ferguson & Associates in Kingston, is the agent for numerous charter transportation operators in the Seattle area. He said the insurance companies “anticipate that these are not going to be 12-month-ayear businesses,” and build in a discount on the annual rate accordingly.

He also explained that passenger transportation businesses must have an insurance filing with the state Utilities and Transportation Commission, and the UTC requires fulltime coverage for all licensed vehicles.

“Every one of my other tour companies, limo and charter bus companies have 12-month policies,”

WWW.KPBJ.COM relocate.

“The OPG folks were pretty clear that they want to work with all the retailers. And they consider 7 Seas as their anchor tenant. The brewery was part of every single rendering they showed,” Barnes said.

One thing the tenants all agree on is that something has to be done at the shopping center.

“The post office end especially is pretty run down and it would be great to have it fixed up,” Barnes said. “Just about any thing that would bring more people downtown and attract more people to this center will be a good thing.”

Pat Schmidt, president of the Downtown Waterfront Alliance, agreed and said that the alliance is eager to hear what the community wants.

“We’re looking forward

to learning more about this exciting proposal. We know that downtown businesses attract visitors and new residents to Gig Harbor and the well-planned redevelopment of the Milgard property will play a critical role in the future economic vitality of the downtown waterfront,” Schmidt said.

Rose acknowledged that the usual first response to any possible change is fear, “and getting consensus is always challenging.

“That’s why we’re starting really early on this, with no pre-conceived plans,” he said. “We’ll be sharing some ideas at the public meetings because you can’t just show up with nothing. But they’re ideas only and we just want to find out what the community wants.”

Shimomura said.

He added that even if the UTC didn’t require yearround coverage, “If insurance companies were to issue policies on a seasonal basis, the rates for those vehicles during the season they operate would be much more expensive than stretching payment out over 12 months.”

Agate Pass has provided charter buses for outdoor summer weddings on Bainbridge Island that have a lot of guests arriving on the Seattle ferry. The company also has provided bus shuttle service for Bainbridge Island’s Fourth of July celebration on Winslow.

Agate Pass buses also were used for the Frog Hopper island shuttle service set up two years ago by the Bainbridge Island Chamber of Commerce, though demand for that service dropped last year when Kitsap Transit started offering enhanced dial-a-ride service on Saturdays with its Access buses on Bainbridge.

Mickey Molnaire at the chamber office said Agate Pass Transportation’s closure will have some impact on local tourism this summer.

“It probably will to some degree, unless someone else steps in and does it

instead,” she said, adding that the chamber will try to find a replacement for the Fourth of July shuttle service. “As far as large groups, that leaves a hole, definitely.”

Agate Pass has 12 buses, a 15-passenger van and a handicapped access van, and Bagley said he will try to sell the vehicles to pay some bills the company owes.

He made the decision to close his business last month because he had to let potential customers know he couldn’t book their charters for this summer.

Bagley said he contacted the state insurance commissioner’s office, the Federal Motor Carrier Safety Administration and elected officials about his insurance situation, but found no viable options.

“If I could find an insurance policy that would insure the comp for $5 million in liability I’d be fine, but nobody wants to insure companies, they want to insure buses,” he said.

“I’ve gone every direction I can think of; it’s just exasperating.”

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business Briefs Franciscan Health offers sports/ orthopedics specialty care at three centers TACOMA – CHI Franciscan Health now offers Franciscan Sports, Orthopedics and Spine Health Centers in Tacoma, Lakewood and Silverdale. The new center offers patients sports injury evaluation and treatment, musculoskeletal and orthopedic assessments, as well as screening, evaluation and referrals for degenerative back conditions and acute back injury as well as care for all aspects of spine health.

The centers are staffed by medical specialists and are designed to serve patients who are active athletes, workers with ergonomic-related pain, laborers who do heavy lifting or deliveries, and individuals whose jobs require long hours of standing, bending or twisting.

“Our new center provides patients easy access to clinical staff for a comprehensive evaluation of their condition,” says Eula Ramroop, associate vice president of contr acting | f rom 2 9

ding. For example, Absher Construction’s bid room, which is accessed from their website, provides a brief description of the project and individual points of contact for each of the construction trades they are seeking.

The firms that are not highlighted on the list are themselves small businesses. To minimize the administrative burden placed on them, they are not required to develop detailed subcontracting plans with specific goals. There is, however, language in their contracts requiring them to maximize subcontracting opportunities for oth-

orthopedics for CHI Franciscan Health.

“For those patients that don’t require surgery we can provide them with a care regimen that will get them back to work or back participating in their favorite activity as soon as possible.”

The Franciscan Sports, Orthopedics and Spine Health Center will operate at three locations: • St. Joseph Outpatient Center, 1617 J Street, Tacoma • St. Clare Specialty Center, 11307 Bridgeport Way SW, Lakewood • WestSound Orthopaedics, PS Urgent Care Center, 4409 NW Anderson Hill Road, Silverdale (spine assessments only) To contact any of the Franciscan Sports, Orthopedics or Spine Health Centers, call 253-426-4604 or 253-426-4608. Walk-in appointments are welcome.

CHI Franciscan Health (www.chifranciscan.org) is a nonprofit health system based in Tacoma, operating eight acute care hospitals and specialty care clinics in Pierce, King and Kitsap counties, including Harrison Medical Center in Bremerton and Silverdale.

er small businesses. Since a small business can selfperform as little as 20 percent of the work on a construction contract and still be considered for small business set-aside contracts, there are ample subcontracting and teaming opportunities.

Looking for, identifying and networking with potential prime contractors for subcontracting opportunities can be daunting for a firm looking to the federal sector for the first time. The effort has been somewhat simplified by requiring large businesses to develop specific plans for subcontracting and outreach with specific small business goals.

This incentivizes them to reach out and seek qualified small businesses as subcontractors, which results in more subcontracting opportunities for local small businesses.

• Former Navy contracting officer Steve Shapro recently founded Seabeck Research, a consulting firm providing information and analysis to companies interested in government contracting work. He is a former Deputy for Small Business for the Navy, promoting small business participation and supplier diversity efforts in support of Navy contracts. His website is www.seabeckresearch.com.

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kitsap ptac | mona carlson

Prime contractors: Don’t take a loss; understand field overhead

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n 1989 the Western Division of Naval Facilities Engineering Command (now NAVFAC, SW) prepared a manual entitled “Overhead Policy Guidance for Construction Contracts” which outlined options for distribution of overhead costs. Unfortunately it has never been updated. While many of the principles detailed in the manual remain valid, the basis for calculation of field office overhead (FOH) is seriously outdated and deficient. Many contractors, especially small or disadvantaged businesses, and Government Contracting Officers still use these formulas in cost negotiations on modifications. Following some of the guidance results in a financial loser for prime contractors who don’t fully understand how to compute FOH expenses and what they are entitled to.

The conflict is in the methodology identified as “NAVFAC Alternate Method.”

Both the manual and the Naval Facilities Acquisition Supplement (NFAS), NAVFAC’s supplement to the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulations (DFAR), allow for use of a set percentage markup (in lieu of actual expenses) on modifications less than $650,000 (the NFAS has updated the $500,000 value of 1989). Both of these documents allow for a set rate of 10 percent markups for FOH on the prime’s work, 3 percent markup for Home Officer Overhead (HOOH) on prime’s work, and 5 percent markup for the prime contractor’s overhead on subcontractor work. It’s easy. No fuss, no muss. No lengthy evaluation of overhead expenses by either party, because for most (including government contracting specialists) understanding overheads in construction remains a great mystery.

While the regulations allow this method on modifications with upper and lower limits, it has become standard practice to apply it to all contract actions regardless of the value. The obvious question is “Why is this a problem?” Well, there are two significant deficiencies in this outdated methodology that are keeping contractors who use this method from recovering their actual costs and remaining profitable.

First, in 1989 most construction companies self-performed the majority of the

work. Subcontracting was limited to incidental trades or suppliers. Receiving 10 percent FOH and 3 percent HOOH on the majority of the work (i.e., prime work) was not unreasonable. Receiving 5 percent markup to cover the expenses to administer purchase agreements and small subcontracts was considered a handler fee instead of an overhead expense and again not considered unreasonable.

However today, the preponderance of contracts are awarded to small businesses who only self-perform 10 to 30 percent of the contract work, subcontracting out the majority of the work. In many cases, the prime contractor performs no other duties other than contract management — which is in fact the overhead functions subject to this equation. Therefore all change-order work would only allow a markup of 5 percent on the subcontractors’ work. Let’s not forget that the 5 percent rate includes both the 3 percent HOOH, leaving only 2 percent for FOH which is not consistent with cost accounting procedures and is unreasonable. Contractors can’t recover their administration costs and the project starts to become a financial burden.

Second and more importantly, administrative costs (overheads) on a government contract have changed drastically. Allowable cost elements in the 1989 Manual for FOH include 13 relatively simple items such as the superintendent, timekeeper, site cleanup, janitorial, etc. Comparatively, typical administrative costs on today’s contracts — which may include extensive environmental controls, elaborate scheduling programs, dedicated safety personnel (sometimes more than one), specialty inspectors, engineering support, project management personnel, separate trailers, partnering, etc., — can add up to 36 or more cost elements. The pool of expenses is growing, but not the percentage of the cost to the project.

Currently, on a $4 million contract with 365-day duration, relatively straightforward FOH expenses can exceed $500,000 or 13 percent of the overall contract costs. Don’t forget there is another 8 percent — a more realistic rate — for HOOH. If the contractor on this contract was only performing contract administration with 80 to 90 percent of the work subcontracted, he would lose 16 percent on each change order. Of course, if the contract suffers no time delays where additional overheads would be required to continue to perform — while not profitable

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— the contractor is not harmed. However, if time delays occur (more often than not) and the contractor is required to incur additional overhead expenses he cannot recoup, he starts to work at a loss.

Until the government updates these rates to match the more burdensome overhead requirements it is imposing and adjusts the distribution methodology to align with cost accounting procedures, the burden to end this madness lies with the prime contractors. If you are a prime contractor who does not understand overhead rates, get training or hire a contract administrator that does understand construction overheads. The success of your business depends on it. Don’t forget that your contract administrator is an allowable cost that can be included in your FOH.

Need help? Kitsap PTAC is offering a free class on Overhead Pricing on May 13 from 9-11 a.m. It will be well worth a couple of hours of your time. Call 360-3779499 or visit kitsapeda.org/ptac for more information.

• Mona Carlson has over 30 years’ experience in government contracting, recently working as a supervisory contracting officer for NAVFAC NW (Naval Facilities Engineering Command, NW). In addition to being a PTAC counselor, she also works as a government contracting consultant with Blue Ink Consultants. To learn about the PTAC program, contact Kathy Cocus at KEDA at cocus@kitsapeda.org.

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Founder of longtime charity golf event beats cancer Experimental vaccine key to recovery of retired businessman who started Bellringer tournament

By Tim Kelly KPBJ editor Nothing puts a kink in your retirement plans like a cancer diagnosis.

When Gene Kennedy retired as president of Land Title Co. in 2012 after 40 years with the Silverdale-based company, he and his wife, Marion, planned to travel, as many couples do at that stage of their life. And Kennedy, a Bremerton native who’s an avid golfer, looked forward to spending a good amount of his time on the fairways, at home or away.

Unfortunately, those plans went awry like a tee shot sliced into the trees, and Kennedy spent much of the last couple years in hospitals and clinics after doctors found two tumors in his brain. He had surgery to remove the larger one, but the other tumor was inoperable, and Kennedy faced a grim prognosis.

Thanks to an experimental treatment recommended by a neuro-oncology specialist at Seattle’s Swedish Medical Center, though, he beat the odds. And last month on his 69th birthday, Kennedy was able to play nine holes at McCormick Woods in Port Orchard. It was his first round of golf since his cancer diagnosis two years earlier.

“Gliobastoma is very aggressive,” he said, describing his battle with cancer during an interview at his McCormick Woods home. “The usual prognosis is three to nine months. I had a friend who died of it, so I was pretty scared, obviously.”

As fearful as he was then, he’s grateful and relieved today, since his most recent MRI in March showed the smaller brain tumor has shrunk to nearly undetectable size. The experimental vaccine suggested

by Dr. Tara Benkers, along with a conventional regimen of chemotherapy and radiation treatments — and untold prayers and positive thoughts sent his way by family and friends — are what saved him, Kennedy said.

After a long-planned trip to Hawaii in late April, he planned to be on hand as his wife and their son participate in the Seattle Brain Cancer Walk on May 3.

He expressed his deep appreciation for

Photo courtesy Land Title Compan y

Gene Kennedy, second from left, joined friends (from left) Tommy Brobst, Ken Kambich, Cris Larsen and Steve Green (front) at the 2014 Bellringer charity golf tournament.

Kennedy, who is recovering from brain cancer, started the tournament when he was president of Land Title Company. He retired from the company in 2012.

“Gliobastoma is very aggressive. The usual prognosis is three to nine months. I had a friend who died of it, so I was pretty scared, obviously.”

Gene Kennedy, diagnosed with an inoperable brain tumor in 2013 “the care, the concern, and the humor” of all his caregivers, particularly the staff at the Ivy Center for Advanced Brain Tumor Treatment at Swedish.

During his long business career, Kennedy was a well-known civic leader and philanthropist. He recalled how he once proposed erecting a dome-like covering over a couple blocks in downtown Bremerton — a concept he came up with for revitalizing downtown when he was Chamber of Commerce president in the 1980s. That didn’t pan out, but his idea for a charity golf event

grew from a casual beginning and blossomed into the Bellringer tournament that has raised a substantial amount of money for local food banks over the last 25 years.

“I think it’s probably right around $100,000 raised over the years,” he said, though he didn’t envision that level of fundraising success for what started as an impromptu benefit.

“Back then it was just eight of us sitting around at Kitsap Golf & Country Club,” Kennedy recalled, “and I said let’s all throw in $20 and play a round of golf, and I’ll take the money down to the Bellringer fund.”

The annual Bellringer campaign has been a community fundraiser for nearly a century and is run by the Kitsap Sun during the holiday season, with all donations shared among area food banks.

The Bellringer golf tournament grew into an annual event with Land Title as sponsor. Kennedy said it’s unique among charity golf events because it’s the only one not held in summer — Bellringer golfers tee off on the Thursday after Thanksgiving.

The tournament’s impressive run might have ended after Kennedy’s retirement in 2012, the only year it was not held since

its inception. But the following year, after friends and former business associates in the community learned of his cancer diagnosis, a group led by McCormick Woods general manager Sean Cucciardi decided to bring the Bellringer tournament back to honor Kennedy, who was going in for surgery on his brain tumor in December 2013.

“We said let’s resurrect the Bellringer, because it meant so much to him,” Cucciardi said.

Although the group started organizing just a couple weeks before Thanksgiving for the 2013 event, they got a phenomenal response for the revived tournament at McCormick Woods, which will continue hosting the event.

“Gene’s been such a figurehead in the community, and given so much to our community,” Cucciardi said. “To plan an event two weeks out and have 120 people show up, that shows how much people love Gene Kennedy. They turned out because of what he’s done for those 25 years.”

Kennedy wasn’t able to play golf in his weakened condition, but he did attend, which made the gathering especially poignant.

“None of us thought he’d be around in 2014,” Cucciardi said.

The tournament was to continue as Kennedy’s legacy, but a joyful group of golfers welcomed his unexpected return last November, when the event set a fundraising record of $6,712. Now he looks forward to being one of the Bellringer golfers again in future years.

“I’ve always believed that as a business person and a corporate entity in the community, it’s your duty to give back every chance you can,” said Kennedy, who remains active in Land Title Co. as a member of the board.

Being able to attend the 2014 Bellringer tournament, he said, “was one of the most gratifying things I’ve ever done, and I had nothing to do with it. It was my family praying for me, and the doctors and technicians at Swedish that gave me this gift. I just am blessed that event came together.”

He will continue to get a monthly injection of the vaccine, which is still in clinical trials. His condition, which at its worse left Kennedy frequently disoriented and with debilitating eyesight, continues to improve. He takes regular walks with Bella, a Shitzuh who’s his “comfort dog.”

“I’m extremely grateful to everybody who’s been involved in supporting me,” he said, “medically, spiritually and emotionally.”

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business commentary | dON brunell

Insurance commissioner moves against Association Health Plans

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magine you have a product that customers love. It’s top quality, affordable and meets or exceeds all state and federal benefit standards. Better yet, your product fills a void in the marketplace that left people vulnerable and unprotected.

Now, half a million people in Washington use your product and your customers gladly buy it year after year. Nevertheless, a government regulator steps in and tries to put you out of business.

Why? That’s a good question.

The product we’re talking about is health insurance coverage for people who work for small businesses. They’re called Association Health Plans and the regulator after them is state Insurance Commissioner Mike Kreidler. It is difficult to

figure out why Kreidler is acting this way, especially since the association plans continue to satisfy people’s insurance needs.

Some that were up for renewal in December or January were disapproved by Kriedler, and now a number of AHPs are filing suit against his office.

Association Health Plans passed the legislature with bipartisan support and were signed into law by Gov. Mike Lowry, a Democrat, in 1995. They were designed to help small employers provide high-quality, affordable health insurance for their employees and families. The law allows associations to band their small member companies together so they have the same purchasing power as big companies.

Today, 20 years later, AHPs are working well. More than a half-million people in Washington are insured through AHPs, and small employers are clearly happy

with their plans. In fact, many AHPs report that more than 90 percent of the employers renew their coverage.

The success of AHPs is not surprising.

People covered by association health plans have access to top doctor and hospital networks, and they cannot be denied coverage because of a pre-existing condition. In fact, all the benefits mandated by state and federal law, including the Affordable Care Act, are covered.

AHPs also provide a level of support and service not otherwise available to small employers. The ability to offer high quality, affordable health coverage through association health plans helps small employers compete.

AHPs fill a critical void in the marketplace. Historically, 40 to 45 percent of the employers in association health plans previously couldn’t afford to provide health coverage for their employees. Now they can, thanks to the foresight of Gov. Lowry and the Legislature.

In fact, national surveys of health insurance in 2011 and 2012 by AHIP, a national insurance trade association, ranked Washington the second-most affordable state in the nation for firms with five or fewer employees and fifth-most affordable

guest column | port orchard bay st. association

Community’s downtown businesses thriving together

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t another lively meeting of the Port Orchard Bay Street Association (POBSA) in April, president Bobbie Stewart, owner of Olde Central Antique Mall, shared that we are now more than 75 members strong. Our association, comprised of merchants, building owners, city officials and those committed to the economic vitality of downtown Port Orchard, continues to thrive. Just over five years ago, POBSA counted less than 35 members among downtown merchants. Our growth, and most importantly our effectiveness and success, is no accident.

POBSA serves its members: we organize events that include all of us, market our members’ businesses, coordinate with other community and regional activities, and engage with community stakeholders and leadership whenever necessary.

There is a secret recipe to our success, one that we are more than happy to share.

Our primary ingredient is unity of purpose, seasoned with the belief — manifest in our actions — that each of our members

benefits when another prospers and succeeds. Conversely, when one of us grows and builds more customers and activity, the advantage is shared with our POBSA partners. And finally, we always keep in mind that, in the end, it is the community — our customers, residents and visitors — that we serve.

An example of some of the activities and plans that are in the works: • Downtown Port Orchard cleanup parties, beautification efforts and holiday decoration projects.

• Monthly art walks, beginning in April until fall, featuring renowned local and regional artists, live music and the kind of energy and enthusiasm that makes this event grow each month.

• Our special Ladies Night Out, a semiannual event providing shopping, dining, entertainment, gifts, prizes and just plain fun.

• Our annual events include the Taste of Port Orchard and Hogfest, a nationally sanctioned BBQ event that will begin this

September.

• We coordinate with and provide support to our farmers market, Fathoms ‘O Fun events, Chimes and Lights celebration, Jingle Bell Run, Classic Car Cruz and more.

Port Orchard is alive with energy and activity, and POBSA members help make this happen. We believe this is just the beginning, and in the years to come expect more businesses to open, new members to join us, and our association to sustain its vibrant role as long as we stick to our key ingredients — unity of purpose and reciprocal support of each member.

This month we also note two milestones.

Last April, former POBSA president and one of the cornerstones of POBSA, Darryl Baldwin, succumbed to a long battle with cancer. Darryl was a uniting and encouraging spirit, and early on helped us embrace the commitment to community and selflessness that built this organization.

A celebration of his contributions to our lives and community was held just a few weeks ago at Moondogs Too, the popular Bay Street establishment that Darryl created and where POBSA still convenes for our monthly meetings. We miss him dear-

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for firms with 50 or fewer employees.

If AHPs provide such high-quality, affordable health coverage, why does the commissioner want to get rid of them?

That’s a good question.

In reality, Commissioner Kreidler prefers single-payer, government-run health care such as the Canadian system. When he moved to undermine AHPs in 2007, a court ruled he did not have the legal authority to do so. But apparently that was just a bump in the road for him.

If small employers are happy with their association health plans and half a million people have good coverage because of AHPs, why is the commissioner unhappy?

Good question.

But rather than applaud AHPs for providing coverage, Kreidler is moving against them, stripping people of their coverage. In these uncertain times when the Affordable Care Act is struggling and key parts of it are being challenged in court, that just doesn’t make sense.

• Don Brunell, retired president of the Association of Washington Business, is a business analyst, writer and columnist. He lives in Vancouver and can be reached at at theBrunells@msn.com.

ly, and his inspiration still lives in our actions and purpose.

Another occasion will also be celebrated in Port Orchard — the first anniversary of the Port Orchard Pubic Market.

The POPM has become a much-needed centerpiece for our downtown, offering a place to mingle and socialize, a fullservice meat market, seafood and wine purveyor, restaurants, chocolate and ice cream shop, juice bar, and an array of vendor stalls — and employment for more than 35 managers, waiters, chefs, butchers and staff. On May 30, POPM will be celebrating its first anniversary with a day of special celebration, treats, products and entertainment. Please stop by and visit the rest of us as well — boutiques, art galleries, antique shops, jewelers, restaurants and so much more.

We look forward to sharing some of our POBSA goodwill with you at one of our events, or just on a weekday afternoon when you find yourself popping in and out of our members’ establishments on Bay Street. And if you’d like to join us for breakfast and a healthy dose of vision and inspiration at Moondogs Too on the third Thursday of each month, you may just become our next member!

• This column was submitted by the board of directors of the Port Orchard Bay Street Association. For more information about POBSA and activities/events, visit www.pobsa.com.

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car Review | cadillac elr

New EV offers plug-in luxury

By Lary Coppola For KPBJ

P

olitical correctness has obligated every auto manufacturer to have at least one electric vehicle (EV) in its lineup. The Cadillac ELR is General Motors’ luxury entry into the fray — it’s second. While most automakers sell either battery-only plug-in vehicles such as the Nissan LEAF, or gas-electric hybrids such as the Toyota Prius, only GM is offering two extended-range electric vehicles (EREVs) — the Chevy Volt and now the Cadillac ELR. The ELR, a plug-in luxury sport coupe, is based on the Volt EREV platform and powertrain.

On the upside, the ELR is true to Cadillac’s luxury heritage, offering athletic handling, stronger performance and much more visual appeal than the Volt, not to mention the luxurious interior and abundance of lavish features you expect from Cadillac. On the downside, it’s basically a two-seater featuring a small back seat and a nearly $80,000 sticker price ($77,690 as tested.)

Cadillac began building its brand image around the Art and Science theme — luxury and technology — with the 1999 Evoq concept sports car, which evolved into the Cadillac XLR — basically a Corvette in edgy Cadillac trim. It was followed by the game-changing CTS sports sedan, which eschewed the jellybean look with its distinctive, sharply chiseled lines. It was a high-stakes gamble that paid off big for GM, reigniting a declining brand into something as hip as anything European or Japanese. Lincoln should have been so bold.

Both luxury and technology have evolved since then, and the ELR takes that theme to new heights. Boasting a Cadillac-style leather interior, handling-enhancing Continuous Damping Control with selectable ride modes, and Regeneration-on-Demand — using steering-wheel paddles to slow down the ELR while regenerating energy back into the battery — and a lot of other technology not available on the Volt.

Due to the high battery cost, purely elec-

Tesla charges into home battery market despite challenges FOSTER CITY, Calif. (AP) — Tesla CEO Elon Musk is trying to steer his electric car company’s battery technology into homes and businesses as part of an elaborate plan to reshape the power grid with millions of small power plants made of solar panels on roofs and batteries in garages.

“Our goal here is to fundamentally change the way the world uses energy,” Musk told reporters gathered April 30 in

tric vehicles are expensive, plus having the dual disadvantages of limited range and long recharge times. There’s also “range anxiety” — a term GM has trademarked — meaning the fear of running out of juice before you can recharge. Parallel hybrids, which efficiently blend battery electric and gasoline engine power, cost less than EVs but more than conventional vehicles.

The advantage of an EREV is those first 30-40 miles are on battery — using no gas. Short commutes to work and overnight recharging can theoretically avoid using gasoline at all. However, if the battery runs down, the fuel-efficient engine will take you as far as a tank of gas can — eliminating range anxiety. There’s no need to recharge until the next convenient opportunity. The major disadvantage is the high cost of a large, expensive battery, dual propulsion systems, and the hardware and software that make it all work.

Model Lineup: The Cadillac ELR comes in just one model and trim level. The highlight of the leather-lined cabin is the Cadillac User Experience (CUE) — an 8-inch tablet-like color LCD touchscreen infotainment and navigation system, with multi-configurable displays. Also standard are 16-way adjustable heated front and fold-down rear seats; a kickass Bose 10-speaker premium audio system; Keyless Access and pushbutton start with Adaptive Remote Start; Advanced Continuous Damping Control suspension; Regeneration-on-Demand; 20-inch all-season tires on chrome alloy wheels; front and rear LED lighting; and 10 air bags.

The limited options are 20-way adjustable seats in semi-aniline leather; FullSpeed-Range Adaptive Cruise Control with Auto Collision Preparation; Intellibeam Headlamps; Crystal Red Tintcoat paint; and a Luxury Package that adds Rear Cross Traffic and Side Blind Zone Alerts; and 20-inch ultrabright machined aluminum wheels.

Walkaround: The ELR practically mirrors the 2011 Cadillac Converj concept coupe. The intense wedge profile features Cadillac’s two-door coupe’s signature — chiseled creases, rounded edges,

forcefully raked front and rear glass, and big 20-inch wheels pushed out to the corners. Headlamps and taillights are finely detailed vertical slits housing LEDs, and door handles hide in recesses behind the doors. The battery charge port resides on the driver’s-side front fender, while green pulsing lights on the outside mirrors flash while charging, going dark when finished.

Interior: The plush interior is worldclass — luxurious, quiet and well-crafted with chrome and wood accents. A leather/ suede microfiber-trimmed steering wheel and suede microfiber headliner enhance the leather-trimmed seats, while choreographed LED accent lighting adds nighttime ambiance. There’s even a powerassisted console cup holder cover.

The center of the dash is home to the aforementioned 8-inch color touchscreen that houses CUE, and runs all of the climate, audio and navigation functions via voice command or a finger swipe.

Instrumentation is customizable, with classic circular speedometer or modern digital readouts — with or without energy usage data. Pushing the power button lights up a multifaceted display detailing battery state-of-charge, EV range and matching fuel-level and fuel range.

Under The Hood: Like the Volt, the ELR utilizes a 1.4-liter, four-cylinder engine driving a 5.5-kW generator. It powers the drive motor when the 16.5-kWh lithium-ion battery pack is exhausted.

That powerplant pushes out 295 lb.-ft. of torque, and the propulsion system lets it dig deep into its battery for stronger performance on demand.

The engine powers an electric generator — not the drive wheels — most of the

time. Both run on just battery power for the first 30-40 miles. Then an 84-horse 1.4-liter gas four-banger fires up to drive a 55-kW generator to keep them going. Total system output is 162 horses and 295 pound-feet of torque.

Cadillac claims the electric-only range is 37 miles on the battery (depending on weather conditions, terrain and how you drive), plus another 303 miles after the gas engine starts, for a total range of 340 miles.

Behind The Wheel: Driving the Cadillac ELR on a wide range of terrains, we found it to be a charming ride. Doing the 0-60 drill in about 8 seconds, it’s quick enough to be fun, with handling surprisingly good on winding two-lane blacktops — despite its almost 4,000-pound curb weight.

We were able to average just about 33 miles on electric over a combination of terrain. Driving uphill depletes the battery quickly, while coasting downhill replenishes it. Driving in Sport mode for a feisty romp on some twisty two-lane blacktops on the Olympic Peninsula, then harder still in the shadow of Mt. Walker along the adjoining curvy roads on the back side of Hood Canal, using the Regeneration-on-Demand paddles (instead of the brakes) to slow for curves, was some serious fun.

Whines: Rear visibility is somewhat restricted due to the wedge shape and steeply raked glass.

Bottom Line: If you like edgy styling, sporty driving dynamics, with the ability to run on battery power a lot of the time — and can afford a sexy-looking, feature-laden luxury sport coupe that’s both fuel-efficient and fun, the ELR is the ride for you.

Hawthorne, California.

Although Tesla will make the battery called “Powerwall,” it will be sold by a variety of other companies. The list of partners includes SolarCity, a solar installer founded by Musk’s cousins, Lyndon and Peter Rive. Musk is SolarCity’s chairman and largest shareholder.

As with Tesla’s electric cars, which start around $70,000, the battery might be too expensive for most consumers. The system will carry a suggested price of $3,000 to $3,500, depending on the desired capacity. That could discourage widespread adoption, especially for a product that may only have limited use.

“I don’t believe this product in its first incarnation will be interesting to the average person,” conceded Peter Rive, SolarCity’s chief technology officer. Rive, though, still expects there to be enough demand to substantially increase the number of batteries in homes.

Musk is so encouraged by the initial demand that he believes Tesla and other future entrants in the market will be able to sell 2 billion battery packs around the world — roughly the same number of vehicles already on roads.

It will take a long time to get there. Tesla hopes to begin shipping a limited number of Powerwall batteries this summer in

the U.S. before expanding internationally next year.

The long-term goal is to reduce the world’s reliance on energy generate from fossil fuels while creating regional networks of home batteries that could be controlled as if they were a power plant.

For now, the battery primarily serves as an expensive backup system for customers during blackouts. for customers like David Cunningham, an aerospace engineer from Foster City, California. He installed a Tesla battery late last year to pair with his solar panels as part of a pilot program run by the California Public Utilities Commission to test home battery performance.

2015 Cadillac ELR

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MAY 2015 | 39

car review | 2015 toyota corolla

Still the benchmark of its class

By Lary Coppola For KPBJ

T

here are lots of good reasons why the venerable Toyota Corolla has been the world’s most popular compact for almost a half-century — in spite of ever stronger competition from South Korea as well as Japan, Europe and the U.S. Since debuting in 1966 as a roller skate-size compact, Toyota has sold more than 40 million Corollas worldwide, with sales continuing strong. The 2015 version marks the second year of Corolla’s 11th generation, which enjoyed its first redesign since 2008 in 2014.

Following Toyota president and CEO Akio Toyoda’s decree that Toyota “… will build no more boring cars,” the redesigned Corolla is certainly more stylish than any previous Corolla. The CEO keenly understands that every single upgrade, large or small, is critical to maintaining Toyota’s top position in the red-hot compact segment.

Facing intense competition not just from traditional rivals Nissan and Honda, but now directly in the crosshairs of the Kia Forte and Hyundai Elantra with their 100,000-mile bumper-to-bumper warranties, as well as Subaru, Chevy and Buick, living up to Toyota’s well-earned reputation for mechanically bulletproof, affordable, quality compacts is more critical than ever.

Model Lineup: The 2015 Corolla comes in 10 trim levels. The base Toyota L offers A/C with dust and pollen filter; fabrictrimmed six-way adjustable driver’s seat; four-way adjustable front passenger seat; 60/40 split fold-down rear seat; tilt/telescopic steering wheel with audio and Bluetooth hands-free phone controls; instrumentation with speedometer and tach, odometer, tripmeters, outside temperature, current/average fuel economy, and cruising range; power door locks and windows with automatic locking; rear window defogger; day/night rearview mirror, overhead console with map lights, 12-volt auxiliary power outlet; two front and rear cup holders.

The LE, LE Eco and Eco Plus upgrade to and/or add: automatic climate control with dust and pollen filter and push-button controls; backup camera with projected path; cruise control; phone voicecommand controls on the steering wheel; TPMS, eco indicator, one-touch 3-blink lane change turn signal indicator, and warning messages; metallic interior trim with chrome door handles and color-keyed door panel piping; multi-function in-key remote keyless entry system with lock, unlock, panic and trunk-release functions; and remote illuminated entry.

LE and LE Eco Premium add Softextrimmed 8-way power-adjustable driver and 4-way adjustable front passenger heated seats with seatback pocket; Smart Key System on front doors and trunk with

push-button Start, remote keyless entry with lock, two-stage unlock, panic, and trunk-release, and a rear spoiler.

The S either adds or upgrades to fabric-trimmed 6-way adjustable driver and 4-way adjustable passenger seat with sport bolsters, and sport fabric inserts; leather-trimmed tilt/telescopic 3-spoke steering wheel with paddle shifters and audio, and Bluetooth hands-free phone voice-command controls; sport instrumentation with speedometer and tachometer, coolant temperature, TFT Multi-Information Display with customizable settings, odometer, tripmeters, outside temperature, current/average fuel economy, cruising range, average speed, elapsed time, shift-position; and TPMS, eco-indicator.

The S Plus and S Premium offer all of the same premium features only in different combinations as the L-series. Depending upon the model, also available are a tilt/slide power moonroof, and alloy wheels.

Standard safety features on all models include anti-lock brakes, electronic brakeforce distribution, brake assist, Smart Stop Technology, electronic stability control, traction control, tire pressure monitor, advanced eight-airbag system, seatbelt pretensioners, lower anchors and tensioners for children. A rearview camera is included on upper trim levels.

Walkaround: No one has ever accused Toyota of being a style leader, yet the redesigned Corolla, with its distinctive front fascia design, boasts well-rounded contemporary small-car bravado. With the 3.9-inch-longer wheelbase, it’s also almost half an inch lower and wider as well. So while still a compact, its exterior proportions have changed to improve appearance, utility and interior room, resulting in a sleekness never before associated with Corolla.

The clean bodylines, which include LED headlights, produce extremely low coefficient-of-drag numbers, translating into considerable fuel savings at highway speeds.

Interior: The increased length created a corresponding increase in cabin space — and comfort — including rear seat legroom on a par with some full-size cars.

The front seats are firm, comfortable and supportive with well-fitted side bolsters and good lumbar support, while the increase in length adds front seat adjustment travel.

Interior materials are high quality, with nice soft-touch surfaces throughout. Instrumentation on our Corolla S was a three-gauge layout that includes the speedometer and tach, along with standard gauges that are easy to read in low light or bright sun.

There’s even more trunk space — 13 cubic feet — thanks to Corolla’s increased length, while the 60/40 split rear seats allow for stowing long cargo.

2015 Toyota Corolla Under The Hood: Despite utilizing the same 1.8-liter inline-4 powerplants as the 2013 models, the new Corolla boasts a gain in EPA fuel mileage numbers across its entire line. Our test vehicle Corolla S delivered the EPA-certified 42-mpg highway rating — the highest among gas-powered compacts with an automatic transmission.

Behind The Wheel: Having driven the redesigned 2014 last year, the 2015 Corolla offered little in the way of surprises. However, it provides an undeniably improved driving experience over the previous generation.

Handling and braking are much improved and the Corolla’s electric pow-

er steering offers good feel and responsiveness. The brakes, despite the rear drums, deliver straight and true braking, although like most small cars, produce very pronounced dive under heavy braking.

Though generating a fair amount of road noise on less than ideal pavement, the ride was smooth and controlled even at freeway speeds and more.

Cornering was excellent, minimizing body roll, so while it’s no sports sedan, the Corolla’s athletic driving feel is akin to some higher-priced small European sedans.

Whines: The heavy-looking black rectangular mass of dashboard seems out of place in a car this size, taking far more cabin space than it should.

Bottom Line: The 11th-generation Corolla is actually pretty fun to drive. With new levels of comfort and dramatic improvements in ride and handling, it’s more than basic transportation. Thanks to traditional Toyota quality, reliability and value, it’s still the benchmark for this class.

40 |MAY 2015

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