Tri-Cities Area Journal of Business -- August 2018

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August 2018

Volume 17 • Issue 8

Foreign investor plan offers developer capital, path to U.S. BY JENNIFER L. DREY

for Tri-Cities Area Journal of Business

Diversity

Pasco documents historic African American properties Page 13

Nonprofits

How will state’s new campaign finance laws affect nonprofits? Page 27

Real Estate & Construction

Goose Ridge winery expands bottling lines Page 49

She Said It “Dozens of studies have shown that diversity is just good business – it increases creativity, innovation and better problemsolving.” - Lisa O. Armstrong Bechtel National Page 19

A program linking foreign investors with cash-seeking U.S. developers has contributed millions of dollars of financing to Eastern Washington projects — including ones in Richland and Walla Walla — and created jobs throughout the state at venues including hotels, wineries and resorts. And for the investors, it has created a pathway to permanent residency in the United States. The Immigrant Investor Program, or EB-5 program as it is commonly known, provides permanent visas to foreigners who invest in a new commercial enterprise in the United States that creates at least 10 permanent full-time jobs for U.S. workers, according to U.S. Citizen and Immigration Services, or USCIS, which oversees the program. Spouses and unmarried children also receive the visa benefits under the program. For U.S. developers, EB-5 provides a new source of capital. The minimum investment is $1 million, though that number is dropped to $500,000 in underserved geographic areas where the unemployment rate is 150 percent of the national average rate or higher. For rural areas and other areas of high unemployment, that means jobs. In 2017, the U.S. Department of Commerce estimated there were jobs created for each immigrant investor using the program. “When these projects get going and are done right, they create a lot of jobs in our state,” said Robert Haglund, research analyst with the state Employment Security Department. The majority of EB-5 investments are facilitated by USCIS-approved regional centers, which are public or private entities that sponsor capital investment projects available to EB-5 investors. There are currently 908 approved regional centers in the United States, 67 of which are in Washington state. A regional center can facilitate projects anywhere in the country, not just its home state. uINVESTOR, Page 47

Higher prices for lumber, aluminum and concrete are among the materials contributing to the increased cost of new construction across the Tri-Cities.

Materials, fees pushing up cost of Tri-City homes

BY ROBIN WOJTANIK

for Tri-Cities Area Journal of Business

The rising price of building materials and other costs continues to drive up the price of new homes being built in the Tri-Cities, pushing sale prices up as much as 20 percent in some cases. “I’m building the same home right now that I finished on a different lot two years ago and the same home costs $15,000 more to build,” said Kyle LaPierre, owner of LaPierre Enterprises. He says the lumber and truss packages cost him significantly more than they once did because of taxes levied on Canadian lumber. The National Association of Home Builders reports that framing lumber and the cost of installing it amounts to about 18 percent of a home’s selling price. “Everything gets passed on to the consumer,” LaPierre said. Cutting labor costs

isn’t as simple since that’s where builders find profit margins, and builders aren’t forced to eat the cost of higher materials while the local housing market is still hot. Costs are also rising locally due to a shortage of available lots. Jeff Losey, executive director of the Home Builders Association of Tri-Cities, said there’s been a slowdown on platting subdivisions, a government process that allows lots to become available to builders and developers. This can leave consumers with fewer options for builder choices since most available lots are already owned. Buyers may be limited to build exclusively with the company that currently owns the lot. “If you want a custom home and don’t have the land already, it’s going to be tough,” Losey said. The increased demand has driven up the cost of lots just in the past 10 years. uCONSTRUCTION, Page 4

RCCH names new Trios CEO, financial officer in wake of sale BY TRI-CITIES AREA JOURNAL OF BUSINESS STAFF

Two experienced hospital executives have been named to head up the new Trios Health leadership team. The changes come on the heels of the Trios Heath sale to RCCH HealthCare Partners of Tennessee on Aug. 4. The hospital is now operated as a joint venture between RCCH HealthCare Partners and UW Medicine, called RCCHUW Medicine Healthcare Holdings LLC. This means RCCH now operates and manages Trios Southridge Hospital, Trios Women’s & Children’s Hospital and Trios Medical Group, with UW Medicine providing clinical and quality expertise. The

change, effective Aug. 3, affects about 1,100 providers, clinicians, support staff and volunteers. The Kennewick Public Hospital District will retain oversight of Trios Adult Day Services. The hospital district, which will no longer have operational responsibilities for Trios Health, will continue but with a revamped community health mission, including community health outreach and programs, according to Trios officials. John Solheim, who has 35 years of hospital leadership experience, will be the new chief executive officer at Trios. Jason Hotchkiss will be moving from a sister RCCH facility to serve as Trios’ chief financial officer. uTRIOS, Page 26

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